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March 03, 2005
Sony "Walkman"
Posted by Dana Blankenhorn
Sony released its Walkman phone yesterday.
It is what it is, a phone with a half-gigabyte of storage in it, enough room for about 500 songs.
Those songs are subject to Sony's DRM, just as iPod songs are subject to Apple's. Both now face the wrath of France because their DRM schemes are incompatible. Unfortunately for France, another unit of the government had previously ruled the link between its proprietary format and its iTunes store is OK so this is going nowhere.
And the Walkman phone is going nowhere in the market.
Why?
Because the French anti-trust people didn't see through the implications of what they were doing.
There isn't room in the market for a lot of competitors if each competitor brings its own DRM to the party. Consumers will accept one light DRM, but they won't buy incompatible DRMs if they can help it. (They did when they bought 8-tracks, then tapes, then CDs, but they were young and stupid then.)
A proprietary DRM limits competition by its nature. That's why people are bidding the price of Apple stock to the stratosphere. The market knows this.
So no one with an iPod is going to buy a Walkman phone. And they're going to tell their friends to avoid it as well.
End of market.
Comments (5)
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. leon on March 3, 2005 10:46 AM writes...
"So no one with an iPod is going to buy a Walkman phone. And they're going to tell their friends to avoid it as well."
Not strictly true; a mate of mine has an iPod mini and wants a new phone. He doesn't use it as much I use my 4th Gen 40gig iPod and sees this new phone as more to his liking.
Permalink to Comment2. Brad Hutchings on March 3, 2005 11:07 AM writes...
You should look into the details of Sony's DRM and formats the player plays. I would bet that users can still rip songs from CD or download from nefarious places on the net (MP3) and play on the Sony unit, just as they can on the iPod. The DRM, if any, comes from music purchased at the Sony Connect Online store or iTMS respectively. Online sales still account for about 2% of the market of music sales, with projections of about 5% in a year. For the foreseeable future, the DRM "wars" only affect those people who (a) purchase music, and (b) purchase most online in a downloadable format.
The bigger problem for Sony is that it isn't a huge player in the phone space. Apple has dipped its toes into the phone market with partner Motorola -- the fruits of that tree hitting the market late this year. Apple has turned the historical uncertainty of whether it is a hardware or a software company into a present and future value with the "music or music player company" question. By doing so, Apple can farm out the iPod software and content to hardware manufacturers in other markets. Sony, by contrast, seems to be pushing Connect to fuel its 20-year-old Walkman franchise (more like "brand"). Not much flexibility to outsourse with that kind of configuration.
Permalink to Comment3. Jesse Kopelman on March 3, 2005 05:35 PM writes...
Brad, when Dana said a Sony phone he meant Sony-Ericsson. Sony-Ericsson has about the same market share as Motorola.
Permalink to Comment4. Brad Hutchings on March 3, 2005 07:45 PM writes...
My bad Jesse. I should have known that. In shopping for a new phone and plan from Sprint and Verizon a couple weeks ago, I didn't find any Sony-Ericsson phones! Lots of Sanyo, Kyocero, Samsung, Nokia, Motorola, etc. Not one single Sony-Ericsson. Hmmmm...
Permalink to Comment5. steve on March 4, 2005 05:33 PM writes...
I've spent some time looking at what people put on their mp3 players and the importance of online stores.
In the iPod world about 15% say that iTMS was a major reason for their getting an iPod. When you look at what is on the average iPod, you find about 5% of the tracks are DRM'ed ITMS.
What *is* interesting is most people with iPods are converting their CDs to cleartext aac. Any secondary or replacement player for these people is going to have to play cleartext aac.
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