The Ethics of iTunes

1
The Ethics of iTunes
Tony Morris CSE 601
2
Some Statistics

• 4,000,000,000 Songs
• 125,000,000 TV Shows
• 7,000,000 Movies
• Movie rentals

3
Whats The Big Deal?

• Large Market Share
• Digital Rights Management
• No chance for competition
• Price setting
• Monopoly?

4
Large Market Share

• More than 70 of digital music downloads
• 80 of music downloads in UK
• Largest catalog of digital media
• Why is this bad?

5
Digital Rights Management

• FairPlay
• Can only listen to music or watch shows/movies on
  authorized machines
• Maximum of 7 CD copies of any playlist containing
  songs purchased from iTunes
• Songs can only be played on a computer with
  iTunes or an iPod, no other mp3 device supports
  FairPlay

6
No Chance For Competition

• Market share is too large
• Hard to integrate into iTunes society
• Cannot use existing iTunes or iPod user bases
• Have to rely on new users informing others of
  advantages over Apple products

7
Price Setting

• All songs sold online are now 0.99
• All TV shows sold online are 1.99 per episode
• Movies sold online range between 10 and 20,
  less than DVD prices

8
Monopoly?

• In 2001, the U.S. Government brought anti-trust
  lawsuits against Microsoft, claiming them to be a
  monopoly
• To be defined as a monopoly, Microsoft had the
  following characteristics
• Large Market Share
• No realistic chance for competition to enter
  market
• Price setting

9
What Now?

• Open Format
• Off-brand MP3 players can use iTuness expansive
  library
• iPods can be used by other music downloading
  services
• Market prices driven down from competition
• iPod sales would increase

10
Drawbacks to Open Format

• Piracy, Piracy, Piracy
• P2P networks
• Impossible to stop
• Already an issue?
• Easy to remove FairPlay from files
• Difficult for movies and TV shows, but still
  possible
• Piracy has been around since Betamax and VHS,
  just easier now that there is no hardware
  involved

11
Solution

• Open format to competitors
• Deal with piracy issues
• Look like the good guy
• Watch stocks raise
• Be ethically right
• Party like its 1999

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ThanksAny Questions?