Apple Threatens Real

Apple has released a statement in response to Harmony:

“We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod(R), and we are investigating the implications of their actions under the DMCA and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real’s Harmony technology will cease to work with current and future iPods.”

Along with piracy rhetoric, we now get evil hacker rhetoric.  Since when is reverse engineering unethical?  Oh right – since the DMCA, which Apple is predictably waving around.  Let me remind you that Real was one of the first companies to sue the creator of an interoperating product under the DMCA, so it’s not as if they’re the innocent defenders of innovation here.  This could make for a fine DMCA battle royale, with copyright holders caught in between.  Or it could fade away – we’ll see.  (For more on the legal, business, and social welfare perspective on these issues, see also an earlier Harmony specific post, earlier posts on the iPod-iTunes tie and the Berkman Center’s iTunes Music Store Case Study.)

I certainly believe Apple’s threat to alter FairPlay/iPod/et. al. so that Harmony-made songs can’t play.  We’re bound to see some back-and-forth on the tech side.  There was some discussion yesterday about the mechanics of the DRM and whether altering iTMS songs would affect Harmony-made songs.  Hymn co-creator Jon Johansen chimed in saying that Harmony “generates a new user key which is added to the key store on the iPod.”  On his blog, he cited a posting by a supposed Real codec engineer.  If this is the case, can Apple simply update the iPod software to cut out Harmony?

Also, see‘s coverage of Apple’s statement.  Forrester Research also has an analysis up with some predictions of what’s to come.  Forrester predicts that Microsoft will try to create something similar to Harmony, but I doubt it.  They’ve been doing just fine licensing WMA out to everyone; they don’t need to get WMA songs onto the iPod.  Only if Microsoft’s DRM/media side ended up in the desperate state that Real’s in would they make such a move.  However, I do agree that this is going to be a tricky situation for Apple to deal with. Short run, the iPod is probably running too strong for this to matter. But, long term, as cheaper, alternative players come out, Apple will probably have to make some adjustments.  Finally, Forrester notes that Real created Harmony with the record label’s consent and thus the question of copyright holders suing Real under the DMCA is probably moot, as I had assumed.

BusinessWeek has an editorial (via with some useful nuggets surrounded by some plainly silly arguments (the author argues that an open standards approach to digital music never worked and Apple saved the industry, when the music industry never even tried such an approach).  From a business perspective, the author may be right that it’s in Apple’s best interests to end Harmony.  In any case, PaidContent is right that the hidden gem in this article is this quote from Napster’s Chris Gorog: “We’re going to look at [licensing Harmony from Real] very carefully,” he says. “If Apple doesn’t fight it, and the technology works, we’d be seriously interested. But Apple will most likely fight it.”

Remember, though, Harmony does not convert WMA (which Napster uses) to FairPlay-AAC.  It only moves from Helix-AAC to WMA and FairPlay.  Gorog would need to talk to Microsoft about a WMA to FairPlay converter, I’d assume.  I don’t think he has the power to create a Harmony-like converter for Napster.

More coverage of the business questions for Apple from CNN Money (via

2 Responses to “Apple Threatens Real”

  1. Jon Lech Johansen
    July 29th, 2004 | 8:59 pm

    Just for the record, my comment was based on a very quick analysis of the Harmony software and not on the comment by the Real codec engineer.

    “If this is the case, can Apple simply update the iPod software to cut out Harmony?”

    There is currently more than one way for Apple to distinguish a Harmony FairPlay file from an Apple FairPlay file. Apple will probably release an iPod firmware which disables playback of Harmony v1 PlayFair files, RealNetworks will respond with an update to Harmony which works around Apple’s changes – and around we go.

    How often can Apple afford to issue firmware updates? If they don’t have any new features or improvements in the pipeline, will they release a firmware update with nothing new but Harmony blocking?

  2. jbelkin
    July 31st, 2004 | 4:52 pm

    Real is really just trying to confuse the issue and get media attention.

    What they’re claiming is bogus anyway. To convert Real tracks to load onto your ipod – burn them to a CD and then load using any of 6 formats – slightly more work but hardly oppressive.

    So, there’s no really ‘lock’ anywhere preventing REAL users from also using their ipod.

    The reality is that it’s only LOCKED if YOU don’t want to unlock it. At any point, if Apple stops selling AAC files, you can convert it a CD that will play on BILLIONS of devices worldwide!

    Then what is “Harmony” really doing except creating ‘disharmony,’ doubt and trying to ride on the coat-tails of all the work Apple has done?

    Basically, Apple has set valet parking in their mall. As a consumer, there are advantages and disadavantages to valet parking as with buying tracks from the itunes music store but like valet parking, if convenience over-rides your other decisions, then convenience it is.

    Real has decided that to set a competing valet service within Apple’s parking lot – in the real world, it would be a quick settlement on property rights and right-of-way … in the digital world, because people are less likely to see the larger picture, it’s easier for Real to cloud the issue. In the valet parking situation, if Real tries to set up on someone else’s property and cries restraint of trade – that would be easy to dispute.