In the latest issue of SmartMoney magazine, Wall Street Journal columnist Walter Mossberg explores the relative merits of iTunes and its competitors, including Napster and Yahoo Music, in an article titled “Rent vs. Own.”  Essentially the article compares the Apple AA3 format with Windows Media, with a heavy focus on Windows Media’s Plays for Sure subscription support.

The article has so faulty a premise (starting with its title) and so many misleading statements, that I felt compelled to challenge many of his points.  The full text of the original article is here and my rebuttal to it follows:

>> In the download model championed by Apple, the music service functions like a physical record store. You choose a track, pay 99 cents, and you own it. <<

This is precisely that model that most of Apple’s competitors follow as well.  The fact that many of them also offer subscription services does not diminish this.  Only one or two of the online music stores available through Windows Media Player require a subscription before you can buy tracks.

>> As long as you abide by the restrictions, which are designed to thwart mass copying by pirates, the song will play anywhere you want to hear it forever, with no further payments required. <<

Again, all purchased tracks from Apple’s competitors are provided on this basis as well.

>> This rental model has attracted a solid audience, but it is nowhere near as popular as iTunes — not even close. That may be because the rental model is far more complicated and restrictive than iTunes, and has several big downsides. <<

This premise of “iTunes or rental” presents a false dichotomy.  If people find the “rental” model too “complicated,” they can choose to ignore it and consider only the purchased track model.  Where is the downside in this?

>> Also, the rules for rental songs are more restrictive than for owned downloads such as Apple offers. At Yahoo, for example, you can store each song on only three computers, versus Apple's five. And you can install each song on only two portable devices, versus an unlimited number at Apple. <<

The number of PCs you can store your purchased tracks on varies by service.  MusicMatch (now owned by Yahoo) and Napster allow you to store tracks on up to 3 PCs; MSN Music allows up to 5.  Purchased tracks from any service can be copied an unlimited number of times to compatible portable devices.

>> At the Apple service, every song is a 99-cent download you can own, but at rental services, there are different kinds of songs. Some can be both rented and purchased (for that extra 79 cents each); others can be either rented or bought outright, but not both. Some songs can only be "streamed" — that is, they can be played directly from the Internet, but not downloaded, even on a rental basis. And some can be rented, but not streamed. You get the picture. <<

Actually, on Napster, most “rental” tracks can be downloaded, streamed, or purchased.  I have come across only a few that can be “rented” and not purchased.  It is true that some tracks are available for purchase only, and cannot be downloaded or streamed for free.  But on iTunes, all tracks have this limitation!  Does Mossberg really think that the additive option to subscribe to Napster or other services somehow diminishes their tracks-for-purchase offerings?

>> Another huge downside of the rental services is that the songs they rent — and even the ones they sell outright for the extra 79 cents — cannot be played on the world's best and most popular portable player: Apple's iPod…the rental-service songs are encoded in a format owned by Microsoft, Apple's rival, and Microsoft software is required to play them on a portable player. <<

With Apple’s scheme, iTunes locks you into iPod, and vice versa.  With Windows Media, an array of online stores provide tracks compatible with a wide array of players from a host of different manufacturers including Creative, iRiver, and Dell.  Most Windows Media players are offered at lower costs than iPod, based on hard disk or flash memory size.  The players and many of the services offer their own software, but you also give you the choice of using Windows Media Player as the single software tool for purchasing or subscription downloading or streaming of tracks, for playing them on your PC and for copying them to your portable player.  The Windows Media format has created a market, while Apple has created a monopoly.  Need I expand on the irony here?

>> Apple won't build the necessary Microsoft compatibility into the iPod. <<

Bingo!  I wholeheartedly agree with that observation.  The question is whether or not this is a defensible decision.

>> …the rental model is better for people interested in sampling a wide range of music without a large out-of-pocket expense. That might make it attractive to curious but cash-poor students, for example. The rental services also have many more "community" features than iTunes does, features that allow friends and families to share music recommendations, see what others are listening to and discuss music. So they may be better for people who view music as a social activity. <<

I’m not a cash poor student, and I’m not a teenager yearning to use my online music service as a chat or sharing tool (not that there’s anything wrong with that).  There’s no question in my mind that music is a social activity, but my guess is that Mossberg is using the word “social” in a condescending teenage-gabbing sense of the word and does not mean to invoke the spiritual, uplifting power of music.

>> But for most people, it's no contest: Right now iTunes and the iPod are the better choice in digital music. <<

I beg to differ.  Subscription services offer a great way to expand your horizons and listen to music you don’t own.  As you listen to the tracks you have purchased, you can click on links to artists that your service has determined have an affinity to what you’re listening to.  From there, you can check out the artists’ discographies, pick an album, and start listening to it without plunking down more money and without having to wait for it to download.  If you like what you hear, then you can buy it.  I have done so many times, and have been very happy with my purchases because I knew what I was buying.

And here’s a whole dimension that Apple doesn’t even care to cover: owners of Windows Media Center PCs who are Napster subscribers can do all of this from their remote control, on their television (with a specially designed user interface that is living room-friendly) and listen to the music on their audio/home theater equipment.  Portable players and earbuds are great (I have a Creative Zen 6GB player and I like it a lot), and music on PC speakers can be remarkably good, but getting the music on my own amplifier and speakers makes the other options sound just plain tinny.  I suppose you could hook your Apple notebook up to your stereo, but it’s just not going to be integrated nearly as well as a Media Center PC.

There’s no question that the iPod is hugely popular and incredibly well designed, both from a technology and an industrial design perspective.  Apple is heavily dominant in the portable music player market and probably will be for some time.  About 25 years ago, there was another dominant player: the Sony Walkman.  “Walkman” was then, as “iPod” is now, the generic noun for all products in the category.  Sony had a great cash cow product that eventually became commoditized and irrelevant.  Sony of course has survived, but they also had numerous other market-leading products like Betamax VCRs, Trinitron TVs, and mass market and high-end audio equipment.  The Betamax died, but the PlayStation has arguably become even more important, especially as games for the console now command budgets and revenue comparable to major motion pictures.

Apple doesn’t have this kind of diversified product line.  In fact, iPods are starting to represent the lion’s share of the company’s revenue.  Will the iPod eventually be “Betamaxed” or “Walkman-ed?”  Will Apple become a one-trick-pony like Palm?  Will it suffer a similar fate?  Walter Mossberg owes his readers the courtesy of exploring these issues fairly, honestly and more thoroughly.

I have an EVDO cell modem from Verizon Wireless, which I use primarily to get online and get work done when I'm on a train, or in some stationary position where there is no WiFi access.  The EVDO service, marketed by Verizon Wireless as "Broadband Access," and officially called 1xEVDO, is a 3G successor to the 1xRTT service Verizon Wireless introduced a few years ago.  1xRTT was barely as fast as a 56K dial-up connection, and I used it as an "in a pinch" solution when I needed to get online at any speed.  EVDO service meanwhile, hovers around 500Kbps and can "burst" at speeds of up to 2Mbps.

I am traveling this weekend for a wedding being held at the Bel Air Hotel.  For reasons too boring to go into, I am actually staying at the hotel as well.  You can imagine things are a bit expensive here: the cashews from the mini bar are over $22 and the movies are $15 a piece.  After a ridiculously overpriced breakfast, on the way into the room, actor Ray Fiennes walked right past us; not surprising then that incidentals seem to cost more than the rooms themselves.

Hey, don't get me wrong: it's a lovely serene place and the black tie wedding tonight will be picture-perfect.  The fact remains, however, that I need to get online and the in-room high-speed Internet access is $12.95/day.

Well, it's EVDO to the rescue.  I get a nice strong signal in the room, and I'm online with bandwidth running at a healthy clip.  The EVDO service is starting to be offered in a sufficient number of markets such that people may soon start using their own modems to avoid hotel broadband charges the way they now use their cell phones to do likewise with in-room telephone service.

Verizon Wireless needs to do two things to see this service enjoy wider adoption and see themselves enjoy the profits that are certain to result: optimize or completely phase out "dormant mode" (which causes the modem to disconnect after a short period of inactivity, then try to reconnect quickly upon subsequent network requests) and lower the monthly unlimited price from the current $79.99 to $49.99 or less.  These two changes, in combination with a wider network build out, could convert hordes of subscription WiFi customers and start to attract mainstream consumers.  A bundle deal with Verizon DSL (a service offered by Verizon Communications, not Verizon Wireless, which could be a spoiler) could even help Verizon compete with the cable companies.

This is Verizon's fight to lose.  Their overwhelming number of cell towers throughout the country and the quality of EVDO technology should put a stake through the heart of public subscription WiFi.  The question is whether Verizon and Verizon Wireless can learn to adopt aggressive marketing and pricing tactics to make the service a true success.

He’s tied together my Sunday morning and late night television viewing habits and now he’s invading my digital media world.  Fareed Zakaria, who is the Editor of the International Edition of Newsweek magazine (and who is a columnist in the US Edition) now has his own show.  I started watching and listening to Mr. Zakaria during his frequent appearances on ABC’s This Week with George Stephanopoulos, and enjoy him even more during his guest appearances on Comedy Central’s The Daily Show with Jon Stewart.  He’s incredibly bright and articulate, and as an Indian Muslim, his take on everything from Al Qaeda and the military actions in Afghanistan and Iraq to globalization and the Indian off-shore revolution have a lot of credibility.

Now, instead of being merely a guest and consultant, Mr. Zakaria has his own show, Foreign Exchange with Fareed Zakaria.  The show airs on PBS, but at least in New York, the show airs only on a digital channel that is available to owners of digital televisions or subscribers to digital cable.  In New York, WNET’s digital companion service Thirteen World, which is carried on Time Warner Cable’s DTV digital service on channel 715, airs the show a few different times per week.  But the digital distribution of the show goes one step further, in that the most current episode and past broadcasts are available as streaming video, in either Windows Media or Real Video formats on the show’s Web site.

While the show is still finding its rhythm and voice, as is Fareed Zakaria as a host, I highly recommend the show.  Virtually all the guests so far have been extremely intelligent and well-spoken.  Given the virtual collapse of critical, vigilant insight in mainstream American news media, this show is a beacon of hope for fans of unfettered analysis and real debate.  Interestingly, the show is produced under something called the Creative Commons License, which apparently (forgive my ignorance) allows the show to be freely copied and distributed for non-commercial purposes, provided proper attribution is made and the content is unaltered.  I find this concept intriguing, as I do its ironic parallels with Open Source software, of which I am not a terribly avid proponent.

I've been to several Microsoft conferences before, but they've all been technical.  This is my first time at the Partner conference and I'm finding it surprisingly productive and helpful.  While the conference is low on technical information, there are still important announcements being made here, and a high concentration of people who want to talk to each other, and who aren't bashful about wanting to make money.  Once you understand that this is the premise of the whole event, the conversations move fast, and you can get straight to the point, without having to worry that your business motives are somehow in bad taste.

I've been here two days, so the following items are not breaking news, but they're still pretty fresh, and you might find them useful.

• BizTalk Server 2006, which was to "launch" on November 7th with Visual Studio and SQL Server 2005, but not RTM until the 1st half of calendar 2006, will apparently now only be "announced" at the November 7th event and will now launch and RTM in the first half of next year.
• The product code named "Maestro," which ties together SQL Server Reporting Services, SQL Server Analysis Services and SharePoint, will officially be called Microsoft Scorecard Manager, and will ship in the fall.  All attendees of the WWPC got a ready to run Virtual PC image of the current beta bits.  I haven't set mine up yet but will soon and will report back.
• The next version of InfoPath will allow deployment of forms to a Web server and provide for a full form-fill-out experience in the browser without the InfoPath client needing to be installed on the user's machine.  My take: watch for InfoPath's integration with BizTalk and SharePoint to tighten immensely and its suitability to human workflow applications to be especially high.  It will come as close to a killer app as an infrastructural product like it possibly could.
• Microsoft CRM 3.0 will ship before the end of the year, and will supposedly be in beta open to all partners by September.  The 3.0 moniker is somewhat silly, given that the current version is 1.2.  Microsoft wants you to believe that this is the proverbial 3.0 "they got it right" version, even though it's really only the 2nd major release.  From what I saw of it today, it beats its competition and will do well on the market.  It also still leaves room for improvement.  Here's what I found out:
  • CRM 3.0 offers a total of three clients: a browser client, a "light" (thin) Outlook-based client that hits the CRM server, and a "heavy" (thick) Outlook client that runs against a local database, much like version 1.2's CRM Sales for Outlook client.  As in 1.2, even the Outlook clients are HTML based, but they are heavy-duty AJAX clients (my term, not Microsoft's).
  • Unlike 1.2, the 3.0 Outlook clients integrate tightly with Outlook's inbox, contacts and calendar.  In 3.0, the Outlook clients are 1st-class clients and the browser client is the secondary one.
  • A marketing module has been added.  I know little about it so far.
  • The thick Outlook client uses its own replication scheme, rather than SQL Server replication, supposedly making it much faster and more reliable.  For reasons I cannot fathom, this client will continue to use MSDE (2000) and not SQL Server Express (2005).  I was told the reason for this is that the CRM team believes they will RTM before SQL Server 2005 does.  While I'm intrigued that this might mean the product will be ready in October, I still think the MBS and SQL teams could and should have coordinated better on this.  I was told the server can be Yukon-based, so this inconsistency lies only with the heavy Outlook client, but I still think it's unfortunate.
  • Apparently, all non-programmable customizations are now done in the product itself; no more using MMC snap-ins for editing and publishing the schema.  I was told the Web Services API is more unified and simplified and offers greater IntelliSense support in Visual Studio.
• All WPC attendees got a full, non-eval copy of Virtual Server 2005, and will get a copy of SQL Server 2005 (not sure which version...I'm betting Standard) when it ships.

Good stuff at this show.  IBM should watch its back, and Oracle should accelerate its Project Fusion or get ready to give up its lunch money to MBS.  Microsoft "gets" the enterprise, the desktop, and about 57 different ways to make them work together with ever-decreasing effort.  And they've got a very pumped partner community ready to bring their technology to customers.  2006 should be a very good year for the Microsoft stack.

This may sound too good to be true, or at least too good to work well, but it's for real.  If you have a media PC, go to http://www.orb.com, create an account, then download the client (really server) software onto your Media Center PC.  It downloads and installs pretty quickly, asks you a few config questions and then starts up.  You'll see a small, green Orb icon in your tray, and your media machine will feel a bit sluggish, but after a few minutes that will dissipate.  At this point, go to your router and open up outbound TCP ports 82, 85, and 86 (in your router's port triggering menu) for your media PC's IP address.  (You did give it a static IP, didn't you?)

Next, go to any PC with Windows Media Player and IE or FireFox (preferably outside your home network for a decent test), point your browser to http://my.orb.com, and login.  You now have access to all your media: music, home videos, photos and, yes, recorded TV (not just the ability to schedule recordings)!  You even have the ability to watch live TV from your media machine's tuner (though I found this to be glitchy), delete recorded shows and program new ones. 

Oh, and for music, Orb recognizes your already-created playlists.  And my understanding is that Orb works with any PC, not just Media Center gear. 

I used my Verizon EVDO cell modem to test an "oustside" connection that varies between 600Kbps and 1Mbps. The music came in at a crisp 128Kbps stream and sounded great; the video definitely had digital artifacting, but it was very watchable and the sound was great, as was my ability to seek to different parts of the recording without totally messing up the buffer.  Orb's software streams your content in Windows Media format, and does so at a bitrate that is optimized for what it has determined your host and client connection speeds to be.

Did I mention this ain't from Microsoft, and the site appears to use Java Server Pages?  Hey, I'm not implying anything, I'm just reporting the facts.

One more test you might want to try: try logging in to your Orb account from your SmartPhone!  The UI is nicely optimized for SmartPhone screens; I tried it on my Samsung i600 which runs the mobile edition of WMP 9 and recorded TV shows worked quite well the first time I tried it.  They also worked very badly when I was trying to demo it to my friend the next day.  Mind you, I don't pay for any kind of fast Internet access on my phone...I just get Verizon Wireless's Quick2Net "1G" service that, if I'm lucky, gets a 56K connection.  The speed tests that Orb performed during my failed demo told me I have a 14K connection...so I can't blame the unimpressive results on Orb.  The fact that it worked well the first time is impressive in and of itself.

And again, all this is for free.  Apparently, some syndicated content from Sony Pictures and others, which you will see injected in the UI's menus is what pays for all this.  We'll have to see if it lasts.  And if the live TV feature ends up creating legal hassles.  If not, I hope and expect to see something similar and "official" from Microsoft on MSN or WindowsMedia.com soon.  With broadband connections available in many hotels, this may really catch on with road warriors who have media PCs.

It also may end up causing some bandwidth problems for those hotels, but fiber optic to the curb connections should take care of that!