Napster, Microsoft in Flap over Music Service

Apple’s iTunes/iPod music suite is the darling not only of the record labels, thrilled to be selling digital music, but also among the ever-growing set of faithful users. For all three groups – Apple, the labels, and users – digital music life couldn’t be much better.

However, all is not well for Microsoft and Napster, the team hoping to punch a sizeable hole in the iTunes market.

On Tuesday, Napster CEO Chris Gorog lashed out at Microsoft’s technical inability to create a seamless music environment – from purchase to download to player – saying that it has seriously hindered Napster’s ability to grow, according to this Reuters story.

The problem, which one assumes Gorog is starting to realize, is that there may be no way for Microsoft to fix the problem, for two reasons.

The first is that Microsoft’s basic business structure, which relies on creating a platform that hardware and software makers can build upon, makes it virtually impossible to create one environment that is click-and-play. Apple, on the other hand, controls the entire music environment from beginning to end, enabling all customers to have the exact same experience.

The second is that legal issues prevent any real innovation from happening on the technical side. Over the last six years, I’ve spent a good deal of time with record label executives and members of the RIAA and the ASCAP and BMI licensing groups, many of whom have been vilified (sometimes by me) for their lack of foresight in the digital music realm. However, it’s hard for me to believe that any of them, despite their continued legal wrangling with file-trading networks and the like, believe that hamstringing competing services – particular after participating in Apple’s success – is good for their long-term business.

That may be the case, however, thanks to the complex licensing issues and ongoing litigation emanating from the music industry. Technology companies spend much of their time trying to devise systems that not only do not infringe on court-tested copyright laws, but also don’t come anywhere near infringing on untested copyright law. In that environment – for better or worse – the only services that can be expected to come out will be, by and large, flawed consumer products.