Is the digital hub doomed? If the Hollywood-driven legislation surrounding digital television becomes law, Apple’s freedom to create innovative products that blur the line between computers and entertainment devices could be shut down. Plus, Simon Spence starts a look at branding, something Apple has excelled at over the years. In the news, we note the iPod 1.2 update, AOL for Mac OS X, and a Mac OS X version of CMS’s ABSplus backup solution.
iPod 1.2 Supports iTunes 3, Jaguar — After showing off iTunes 3 and the new iPod models at July’s Macworld Expo (see our coverage beginning in TidBITS-639), Apple has released the iPod Software 1.2 Updater for owners of existing iPods. A new Browse menu adds the capability to search your song library by genre and composer (provided that information is included in the songs’ ID3 tags), as well as by artist, song, and album title. The software also adds support for Audible.com audio books along with the Sound Check feature introduced in iTunes 3, which balances the volume of tracks imported at different sound levels. The iPod now includes on-screen visual feedback to indicate when it is safe to unplug the FireWire connection from your Mac. And, in preparation for the release of Mac OS X 10.2, the iPod now includes a calendar for synchronizing with the upcoming iCal, a clock to keep track of time (though you can view the time only by navigating to the Clock menu item; we want to see it also displayed on the main Now Playing screen in a future version), and an alarm for events requiring attention. The iPod 1.2 Software Updater is a free 6.7 MB download. [JLC]
CMS ABSplus Adds Mac OS X Restores — CMS Peripherals has updated its Automatic Backup System Plus backup solution so it can now restore a Mac OS X system to working order, as it has been able to do with Mac OS 8.6 and Mac OS 9 since its initial release at Macworld San Francisco in January of 2002 (see "Macworld Expo San Francisco 2002 Superlatives" in TidBITS-612). The ABSplus combines a FireWire hard drive with custom firmware and software that enables it to back up changed files on a Mac as soon as it’s plugged in. The ABSplus can now boot a Mac in Mac OS X using the backed-up system’s files, something that also wasn’t previously possible. There’s no question the ABSplus offers unparalleled ease-of-use for fast backup of an individual Mac, but keep in mind that it keeps only the latest version of each file. ABSplus units using FireWire bus-powered laptop hard drives are available in sizes from 10 GB to 60 GB for prices ranging from $240 to $700; larger desktop units that require external power sport 40 GB to 160 GB hard drives and cost between $300 and $600. [ACE]
AOL for Mac OS X — America Online has released America Online for Mac OS X, a native version of the client software used to access AOL’s proprietary online services. AOL for Mac OS X features a new interface built on Aqua, and integrates support for QuickTime 6, Apple’s forthcoming iChat instant messaging software, and new Web browsing software using Netscape’s Gecko HTML engine. AOL for Mac OS X also enables users to access their Favorite Places, email, Buddy Lists, and Address Books from any computer. The software requires Mac OS X 10.1 or higher and either a modem or Internet access; it’s free to current AOL members. [GD]
The Most Important Rule: Build Products People Want.
iMovie, iPod, iPhoto, iTunes, television tuner-cards, composite video out, CD burners on laptops, flat-screen iMacs, Cinema displays, and QuickTime… seemingly every quarter, Apple ships another drool-worthy technology that further erodes the tenuous division between "entertainment devices" and computers.
Since 1979, Apple has broken every rule in business. It shipped a personal computer at a time when computers were million-dollar playthings of universities, insurance companies, and defense contractors. It introduced a commercial graphical interface to a market filled with power-nerds who sneered at the ridiculous idea of "friendly" computers. It brought video to the desktop, wireless to the home, and the biggest, sexiest titanium notebook ever made to laps everywhere. It put freaking open-source Unix underneath its legendarily easy-to-use operating system!
Apple has broken every rule except the most important one: build what your customers want to buy. Since 1979, Apple has achieved its every success by selling the stuff that people like you and I want to buy. Since 1979, Apple’s failures (Remember the Apple III? The Newton? The Cube?) have been products that simply didn’t sell well enough.
Today, Apple – and every other technology company – is in danger of losing its right to make any device that it thinks it can sell. Hollywood, panicked at the thought of unauthorized distribution of movies captured from digital television sets, is calling for a new law that would give it ultimate control over the design of every device capable of handling digital television signals.
This is bad news for any company that wants to collapse the distinction between entertainment devices and computers. Digital hub projects are exciting, but they’re also squarely in Hollywood’s cross-hairs. The more your Mac acts like a television device (think of TidBITS’s April Fools spoof iTiVo coming true, or El Gato’s new EyeTV) the more your Mac will be subject to regulations that are meant to control "only" digital television (DTV) devices.
We’ve seen some coarse attempts to reign in technical innovation from the likes of Senator Fritz Hollings (D-SC), whose Consumer Broadband and Digital Television Promotion Act (CBDTPA) is also known as the "Consume, But Don’t Try Programming Anything" bill. There’s a far more insidious threat to your rights to buy a Mac that does what you want it to do: regulations intended to speed the adoption of digital television are in the offing, regulations that will have a disastrous effect on Apple and every other computer manufacturer.
Digital Television and Hollywood — Here comes digital television. Digital television uses a lot less radio spectrum than the analog TV system we use today. If all broadcasters were to switch to digital, the U.S. government could auction off the freed-up spectrum for billions of dollars. Understandably, the FCC is big on getting America switched over to digital, so much so that they’ve ordered all analog broadcasts to cease in 2006, provided that 85 percent of Americans have bought digital sets.
Hollywood says that digital television will make it too easy to make digital copies of its broadcast movies and redistribute them over the Internet. Never mind that digital TV signals eat up to a whopping 19.4 megabits of data per second, well beyond the ability of any current Internet user to redistribute without compressing the video to the point where it’s indistinguishable from analog shows captured with a TV card. Never mind that you can always hook up a capture card to the analog output of a digital set and make a near-perfect copy.
Never mind reality. In Hollywood’s paranoid fantasy, digital television plus Internet equals total and immediate "Napsterization" of every movie shown on TV. So the Motion Picture Association of America (MPAA) has threatened to withhold its movies from digital television unless Something Is Done.
This has given the feds The Fear. If there aren’t any movies on digital television (the argument goes), no one will buy a digital TV set, and if no one buys a digital TV, the feds won’t be able to sell off all that freed-up spectrum and turn into budget-time heroes. So Something Will Be Done.
Perfect Control Makes Imperfect Devices — In November of 2001, at the request of Representative Billy Tauzin (R-LA), the MPAA’s Copy Protection Technical Working Group spun off a sub-group, called the Broadcast Protection Discussion Group (BPDG). It’s an inter-industry group with representatives from the movie studios, consumer electronics companies, computer companies, broadcasters, and cable and satellite operators. The BPDG’s job was to consult with all these industries and draft a proposal that would set out what kinds of technologies would be legal for use in conjunction with digital television.
The BPDG started off by ratifying two principles:
All digital TV technologies must be "tamper resistant." That means that they need to be engineered to frustrate end-users’ attempts to modify them. Under this rule, open-source digital television components will be illegal, since open-source software (like Darwin, the system that underpins Mac OS X) is designed to be modified by end-users.
To be legal, a digital television device must incorporate only approved recording and output technologies. Some system will be devised to green-light technologies that won’t "compromise" the programming that they interact with, and if you want to build a digital TV device, you’ll need to draw its recording and output components exclusively from the list of approved technologies.
Hollywood Never Gets Technology — The entertainment industry has a rotten track record when it comes to assessing the impact of new technologies on its bottom line. Every new media technology that’s come down the pipe has been the subject of entertainment industry lawsuits over its right to exist: from player pianos to the radio to the VCR to the MP3 format and the digital video recorder, the industry has attempted to convince the courts to ban or neuter every new entertainment technology.
In 1984, Hollywood lost its suit to keep Sony’s Betamax VCR off the market. The Betamax, Hollywood argued, would kill the movie industry. In the words of MPAA president Jack Valenti, the VCR was to the American film industry "as the Boston Strangler is to the woman home alone." The most important thing to emerge from that case was the "Betamax doctrine," the legal principle that a media technology is legal, even if it can be used to infringe copyright, provided that it has substantial non-infringing uses.
That means that even though a VCR can be used to duplicate and resell commercial video cassettes illegally, it’s still legal to manufacture VCRs, because you can also use them to time-shift your favorite programs, a use that is legal. That’s why the iPod exists: You can create MP3s legally by ripping your lawfully acquired CDs with iTunes. That you can also illegally download MP3s from file-sharing networks is irrelevant: the iPod has a substantial, non-infringing use.
The BPDG proposal compromises the Betamax Doctrine. Under Betamax, Apple can make any device it wants to, without having to design it so that it can never be used to infringe – it is enough that some of the uses for the device are non-infringing. Crowbar manufacturers aren’t required to design their tools so that they can never be used to break into houses – it’s enough that crowbars have some lawful uses. It’s impossible to make really good, general-purpose tools that can’t ever be used illegally – Betamax lets manufacturers off that impossible hook.
A Veto Over New Technology — Consumer electronics and IT companies were willing to go along with the idea that devices should be tamper-resistant, and that there should be some criteria for deciding which outputs and recording methods would be permitted. Each company had its own reasons for participating.
Two groups now have proprietary copy-prevention technology they want to build a market for: Hitachi, Intel, Matsushita, Sony, and Toshiba are members of the "5C" group, and Intel, IBM, Matsushita (Panasonic), and Toshiba are members of the "4C" group. Since the 4C and 5C technologies have been blessed by Hollywood’s representatives to the BPDG, a mandated BPDG standard will make it illegal to sell less-restrictive competing products, and so by participating in BPDG, the 4C and 5C companies could shut out the competition, guaranteeing a royalty on every DTV device sold.
Other companies, like Philips and Microsoft, have their own copy-prevention technologies and were anxious that if they didn’t play ball with the BPDG, it would be illegal for them to sell DTV devices that incorporate their technology.
Finally, the computer companies became involved because they saw the BPDG as a way of setting out an objective standard that they could follow, and in so doing, be sure that they wouldn’t be sued into bankruptcy if their customers figured out how to use their technology in ways that Hollywood disapproved of. But then Hollywood dropped its bomb. When it came time to setting out the actual criteria for DTV technology, Hollywood announced that it would consider only one proposal: new DTV technology would be legal only if three major movie studios approved it.
The tech companies at the BPDG had been there with the understanding that the BPDG’s job was to establish a set of objective criteria for new technology. Those criteria might be restrictive, but at the very least, tech companies would know where they stood when they were planning new gizmos.
Hollywood suckered the tech companies in with this promise and then sprang the trap. No, you won’t get a set of objective criteria out of us. From now on, every technology company with a new product will have to come to us on its knees and beg for our approval. We can’t tell you what technology we’re looking for, but we’ll know it when we see it. That’s the "standard" we’re writing here: we’ll know it when we see it.
The Endgame — The BPDG co-chairs submitted their final report to Rep. Tauzin, the Congressman who had asked for the BPDG to be formed at the beginning. The report was short and sweet, but attached to it was a half-inch thick collection of dissenting opinions from the likes of the Electronic Frontier Foundation, the Free Software Foundation, and Digital Consumer, as well as commercial interests like Philips, Sharp, Zenith, Thomson, and Microsoft.
Missing from the report were objections from any computer manufacturer. The information technology industry took its lead from Intel, which has an interest in the 5C and 4C technologies, and is quite pleased at the idea of a BPDG mandate becoming law. Apple, which has previously been outspoken on the subject of a free technology market, was silent, as were IBM, HP, Dell, Gateway, and all the other general-purpose computing companies who have the most to lose from a BPDG mandate.
The Future — It’s bleak. On 08-Aug-02, FCC Chairman Michael Powell announced that the FCC would open proceedings to mandate the BPDG proposal, turning this "standard" into the law of the land. Without any computer companies willing to carry the banner for the freedom to innovate, to make Betamax-legal technology without oversight from the film industry, the BPDG mandate will almost certainly come to pass.
The BPDG world will be extremely hostile to the digital hub concept. Think about a high-definition digital video suite of iMovie tools. These tools will exist to capture, store, and manipulate high-definition video streams – streams from camcorders, TV sources, and removable media like DVDs. They might support cable-in or a DTV antenna so that your digital hub doesn’t require a stand-alone TV. And they’ll need a DVD burner/reader and drivers.
Incorporating a tuner and a DVD player/burner into a Mac is just the kind of thing that scares the daylights out of the BPDG. If you expect to be able to play your existing DVDs on your Mac, let alone record shows that you get off cable or an antenna and play them on your TV set, think again.
Hollywood wants to be sure that you can’t do anything with video from TV or cable without the film studios’ permission. So while you may want to be able to stick a DVD full of home movies into your Mac and edit a five minute short for your distant relatives to download from your iDisk, Hollywood wants to be sure you won’t be able to do the same with that episode of Buffy you recorded from the TV. When your distant relatives download your home movies to their computers and burn them to DVD, Hollywood wants to be sure that what they’re burning is really a home movie and not a Law & Order episode that slipped through the cracks and made it onto a Web site.
How can this be accomplished? Once the video is on a DVD, a Web site, or your hard disk, neither your Mac nor your TV can tell the difference between Buffy and your holiday videos. There’s no easy answer, and lucky for us, the Betamax doctrine says that just because someone might do something illegal with El Gato’s EyeTV or a real iTiVo, it doesn’t mean you can’t have one. It’s enough that there are legal things that can be done with the technology.
But absent any way to achieve Hollywood-grade perfect control over the technology’s use, the BPDG simply won’t let it come into being. It will be illegal to manufacture this device.
Hollywood’s approval of an iTiVo will be contingent on its "tamper resistance" (so long, Mac OS X, hello again, Mac OS 9!) and its operating system will have to include a facility for marking files that can’t be streamed over an AirPort card or Ethernet port (forget sitting in your bedroom watching video stored on a server in your living room!). The entire operating system and box will have to be redesigned to prevent unauthorized copying of Hollywood movies, even if that means your own digital video data can’t be backed up, sent to a friend, or accessed remotely.
If the entertainment industry had gotten its way, we wouldn’t have radios, TVs, VCRs, MP3s, or DVRs. Business Week called Hollywood "some of the most change-resistant companies in the world." No one should be in charge of what innovation is permitted, especially not the technophobes of the silver screen.
A Glimmer of Hope — For all the likelihood of a BPDG mandate becoming law, it’s by no means inevitable.
One technology company – Apple, IBM, AMD, Gateway, Dell, HP – could stall the process. All it would take is a public statement of opposition to the BPDG, a breaking of ranks with Intel and the other companies who are seeking to secure a market for their copy-prevention technologies, and the FCC would be confronted with infinitely more uncertainty about a BPDG mandate than it currently faces.
There are already a couple million DTV devices in the market that will be nearly impossible to accommodate under the BPDG mandate; another 12 months and there will be 10 million or more, and it will be too late to try to lock down DTV without permanently alienating DTV’s most important customers.
Apple has been a strong champion of its customers’ right to buy and use innovative technologies in innovative ways. If any company has the rule-breaking courage to stand up to Hollywood’s bullying, it’s Apple. If we’re very lucky, Apple will agree. One press conference where Steve Jobs gives the MPAA what-for would likely derail the FCC’s consideration of the BPDG process – maybe forever.
Mac users are fiercely loyal to the Macintosh, and Apple has always responded with new Macs with innovative features. Let’s hope that they won’t forget us now that there’s pending legislation that could hamstring both Apple’s entire digital hub strategy and the ways we already use our Macs with tools like iMovie, iDVD, and the SuperDrive.
(For further reading, I encourage you to read the following Web sites and articles: the EFF’s BPDG weblog, "Consensus at Lawyerpoint"; Rep. Tauzin’s memo to the BPDG representatives; the EFF’s letter to Rep. Tauzin; the New York Times on the BPDG’s final report; the EFF’s comments on the BPDG’s final report; a summary of the EFF’s comments on the BPDG’s final report; and the BPDG final report.)
[Cory Doctorow is Outreach Coordinator for the Electronic Frontier Foundation. He’s been using Apple computers since 1979 and has a 27-pixel-by-27-pixel tattoo of a Sad Mac on his right bicep. He won the John W. Campbell Award for Best New Science Fiction Writer at the 2000 Hugo Awards, and his first novel, Down and Out in the Magic Kingdom, will be published by Tor Books next Christmas. He is the co-editor of the weblogs Boing Boing and Forwarding Address: OS X and is a frequent contributor to Wired.]
Branding is big business at the start of the 21st century. We are constantly drawn to (or repelled from) images and messages from companies who ask us to believe them, join them, or react to their products in a certain way. A brand at its best is a call to the consumer, a request for us to be part of a style that it embodies.
Few companies have proven as successful at branding as Apple, to the point where the Apple logo was reportedly once the sixth most-recognized in the world – an amazing feat for a company that doesn’t have even a tenth of the personal computer market. For better or worse, we Mac users are all participants in Apple’s highly successful branding strategy. But because Mac users are generally far more knowledgeable about Apple than are customers of other companies, I think we should also understand just how branding works, how Apple has built their brand, and how this all ties in with Apple’s recent forays into retail stores. In this article, I’ll look at the role of branding; future installments will look more closely at Apple’s approach to branding.
Branding Basics — How rational are you when you walk into your local mall? How often have you researched products from rival companies and at the last minute opted to go for A over B based on a gut feeling or instinct? As much as technology companies try to sell you the promise of reliability and quality, very few manage to win the hearts as well as the minds of the consumer. The ultimate goal of the marketer is to inspire consumer confidence to such an extent that potential customers will choose one product above all rivals. When they think about the technology in question, do consumers think of one company first and benchmark all alternatives in relation to this product?
Good branding can help a company ensure that customers return and continue to purchase from them – brand loyalty is the highest reward in an age of fickle decision-making and a dazzling array of merchandise from which to choose. A brand is built up through a range of different elements such as commercials, the retail outlet where the goods are purchased, the way a product works, and the post-sales support.
However, as much as a company will seek to control all these elements to ensure a consistency for the customer, total control is impossible. A company builds and controls a product, but the brand evolves from the interaction between the company and the consumer. The company makes a set of claims and proposals about itself, and consumers react to these messages; the brand lies between the two. Perception is the key to a brand – it starts with what the company says or does, but is inevitably modified, sometimes significantly, by the way customers interpret the message.
Perception can be harsh. A company that attracts bad news or reviews for an aspect of their business can be perceived as failing in all other areas. Through bad public relations, poor customer service, or flaws in basic implementation, a technology brand may build a perception around it that is disproportionate to reality. Microsoft is a good example. Although to date the antitrust legal proceedings have had little or no impact on the structure of the company, they have negatively impacted the Microsoft brand. While the case and its final outcomes are still being debated, the company remains intact with its business and products untouched. However, if in its advertising Microsoft claimed to be open, enthusiastic to competition, or a guardian to fair play in the marketplace, the majority of consumers would reject such a message thanks to Microsoft’s brand being tarnished. The products remain unaffected, the company remains unaltered, but the connection between the organisation and the consumer has been damaged. Apart from any legal ruling to date, Microsoft is perceived to have acted unfairly. This view appears to have entered the consciousness around Microsoft’s brand and is now part of what it represents in the mind of the public.
Brand Bosses — There is often an uneasy relationship between a strong brand and its custodians, the managers of the company. For a much-loved brand, the custodians are often treated with skepticism by loyal consumers who have bought the products for far longer than the current crop of top employees have been in position. Remember what happened to Coca-Cola in 1985 when they tried to change the formula of the product and altered the taste? The resulting consumer revolt was met with a quick backtracking and release of Classic Coke to accommodate the consumer reaction. Coca-Cola learned that breaking the unwritten contract between brand and consumer risks long-term damage.
If a company plans to alter its products, it should make sure the change fits with the brand. In 1998, British Airways discovered that selling their airline seats at low prices was negatively affecting the company’s brand identity, which was about quality, service, and making the passenger feel special. So British Airways launched Go!, a low cost carrier that offered budget seats between European destinations. Go! sought to be fun, youthful, cheerful, and cheap – a very different brand proposition from that of British Airways.
It was essential that British Airways did not blend the two individual brand messages together into one combined entity. Doing so would have led to a perceived diluting of the British Airways brand and its heritage, and as seen in the case of Coca-Cola, perception can have a harsh backlash.
Brands vs. Products — A brand is also separate from the product or company that it is linked to. Apple (the company) builds the iMac (the product), but both of those are distinct from Apple (the brand). Everything Apple does, says, publishes, and advertises contributes to the building of the company’s perceived identity, the brand. For many companies, the brand is the corporation’s most valuable asset. During the early nineties, at a time when Apple’s management was seen to be making poor decisions and when the company had lost focus, a large proportion of users remained loyal to the brand, even if they were highly critical of its custodians.
These loyal users are in many ways ambassadors of the brand, and the recent move from the free iTools to the subscription-based .Mac service risks stretching this relationship too far. It strains the goodwill of Apple’s brand ambassadors and wastes some of Apple’s hard-won brand capital.
In purchasing a computer we consumers are influenced in numerous ways. The machine’s technical specifications are of course important, but how many people who purchase based on brand loyalty will justify an already-made decision by quoting specs? Branding and the values that become embodied in a brand can have a decisive influence over us as consumers, whether or not we realize it.
In the next installment of this series on branding, I’ll look more closely at the Apple brand and show why Apple is unique in the computer industry in the way it has taken advantage of strong branding.
[Simon Spence is head of research and information technology at Alexander Dunlop Ltd., a brand consultancy working with multinational corporations to define brand identity. He also provides Mac consultancy to small businesses and educational establishments in Ireland.]