We've talked in the past about Apple's quite arbitrary approval process for apps via its walled garden, noting at times that Apple just likes to keep out competitive apps. At least one company is questioning whether or not this is legal. Via Hypebot, we learn that Simfy (often called the Spotify of Germany) has complained to German regulators that Apple has not yet approved its iPad app, despite having submitted it months ago. The company pointed out that Apple has already approved an iPhone app from the company, and it seems strange that it's been stalling so long on the iPad app. Of course, given the timing of the announcement of Apple's new iCloud music service, Simfy certainly seems to feel that this move was anti-competitive. Of course, on the flip side, that's what you get for relying on a mostly closed platform. Time for Simfy to see if it can figure out a way to make an HTML5 web app instead.

This is from a little while ago, but I'm just catching up on some older stories. Reader Rabbit80 points us to the news that Nokia has finally put its "Comes with Music" program out of its misery and shut it down. Comes with Music was actually an interesting idea: you buy a phone and for 12 months you get free music downloads. At a conceptual level, this sounds great: you're using the abundant (free music!) to make the scarce (mobile phone!) more valuable. But, like everything, a good idea can be marred by the execution. And, in this case, the execution involved the major record labels demanding that "Comes with Music" really mean "Comes with DRM'd Music." A year and a half ago we pointed out that Comes With Music was really getting very little uptake, and the decision to kill it off just confirms how weak the pickup was.

Nokia says that it was the DRM that was the real killer:

"The markets clearly want a DRM-free music service."

And, of course, there was nothing stopping the labels from allowing a DRM-free service, but they still have this infatuation with DRM, even though they finally came around to ditching the DRM on MP3 sales.

That said, this little real world experiment once again seems to highlight how the claim that "people just want stuff for free" is a myth. Here was a case where people could get the music they wanted for free... but it came limited and so they weren't interested. It's rarely about people just wanting stuff for free. It's often about the restrictions or the convenience of things. The price is nice, but it's rarely the key factor, despite what some industry folks would like to claim.

As a whole bunch of you have been submitting, apparently Apple yanked Grooveshark's iPhone app after receiving a complaint from Universal Music, one of the record labels who has sued Grooveshark, and is claiming that it has not properly licensed the music. Grooveshark has argued for years that what it's doing is legal, but multiple record labels have disagreed. Still, Apple wants to keep the major record labels happy, so bye-bye Grooveshark. Perhaps they should explore creating a web app and putting it on something like the OpenAppMkt, since that's outside of Apple's control...

Nokia got a lot of attention when it launched its "Comes With Music" concept -- where you buy a phone that comes with "free" all-you-can-eat music downloads for one year. Of course, the music comes wrapped in annoying DRM, though the music will keep playing (thankfully), after the year is up. Still, it seems like people aren't buying for the most part. A recent report shows only 107,000 users worldwide. This must be a blow to the major record labels who always seem to insist that "free music" drives pretty much every other business model. For example, BPI continues to insist that ISPs are basing their own business model on people sharing "free music." And you have record labels who are pissed off because they think that video games Rock Band and Guitar Hero aren't paying enough for all the benefit they get from the music. And, of course, there are all those collection societies claiming that every business that plays any kind of music needs to pay more, because it must be all that music that brings in the business. Well, it looks like Nokia is proving them all wrong. The music, by itself, doesn't seem to attract all that much business at all. Perhaps everyone should be asking for a refund.

AdAge has a long article trying to puzzle out why Apple potentially "sacrificed iTunes" in approving Spotify's streaming music app. Oddly, while the article touches on a few of the reasons, I don't think it clearly highlights what seems like the most obvious reasons:

1. As we noted when the app was approved, Apple appears to be somewhat gunshy, following the FCC inquiry into why it "blocked" Google Voice on the iPhone (and, yes, Apple still insists it didn't actually block the app, but Google says otherwise). Given the scrutiny, Apple probably realized that it was in for some serious political trouble if it blocked an app like Spotify, which would have received a lot of press attention. Oddly, the AdAge article doesn't mention this at all.
2. Apple has always viewed iTunes as something of a loss leader to help it sell more iPods and iPhones. If someone else can help sell more of the devices, then more power to them. Though, the fear, of course, is that something like Spotify works on other devices too.
3. But this brings up the final reason: I would bet that the folks at Apple are pretty damn sure that they can outlast and out-innovate Spotify. Spotify hasn't shown much ability to make money, and while it has become a press darling as a music app, I wouldn't be surprised to find out that Apple's quietly been working on its own version of a Spotify-like offering built directly into iTunes. And, given Apple's standard operating procedure, if that's the case, there's a good chance that the Spotify-like iTunes will be even better than Spotify itself.

So, I don't think it's that confusing why Apple approved Spotify (and Rhapsody). I'd argue that the first reason was the biggest driver. Without the FCC investigation, it wouldn't have shocked me if Apple had denied the app if only to buy itself time. But, I would expect that sooner or later, Apple will come out with its own streaming version of iTunes with very strong integration into the iPhone, and suddenly Spotify won't look quite as interesting.

You would think that the entertainment industry might look back at its rather long history of failed attempts to stop technological innovation from interfering with their business models and realize the sheer futility of trying to stop people from doing what they want to do, and could have learned that embracing what technology allows is a better path. But... that never seems to happen. Apparently the recording industry is now so worried that unauthorized file sharing on mobile phones is the next big threat, that rather than working on ways to use that to their advantage, they've teamed up with the Japanese gov't (note: not Japanese consumer electronics makers) to develop a system to break mobile phones if users are caught listening to unauthorized music.

Think of it like an automated "three strikes" plan for your phone:

Details are scarce, but apparently the system would consist of a central database which contains information about music which is authorized to be downloaded. This system would be responsible for verifying that cellphone users weren't downloading illicit music. Those that do would be sent warning messages.

But of course, simple warnings aren't enough for the music industry. The report claims that the music capabilities of cellphones could be disabled for persistent infringers.

Once again, the entertainment industry would prefer to break any new innovation rather than learn to adapt.

There are a bunch of different mobile music services out there (and more popping up every day). Some involve getting downloads to your phone, and others involve streaming (and, of course, there are things like ringtones and ringbacktones for specific functions). But Music Ally points us to a new service launched with Orange UK (and Universal Music) that will let users dial a voice call to hear some music. Basically, you call into an IVR system, and get a variety of options on what playlist you want to listen to. There's some functionality where you can set up your own playlist on a computer, and then access it via the IVR. Of course, the service is quite limited, especially in that it only has Universal Music music right now. The article describes the service as "free" but also targeting "pay as you go" customers, which makes me wonder if people are paying for those voice "minutes" that they'd use (which could add up). Perhaps I'm missing something? I also would think the very limited selection is an issue. Still, it's fascinating to see someone try such an experiment to get around some of the other barriers -- especially for folks with lower-end phones that don't have all the bells and whistles and app stores of higher end phones.

Having used Spotify a bit, I can definitely see how some people think it could potentially replace iTunes completely. It basically acts like an iTunes that has access to millions of songs at no additional cost (and, yes, it's all licensed and legal). The songs are streamed, but you almost never notice it. It really does feel just like iTunes, while also having "Pandora-like" features for creating specialized stations or sharing others' playlists. Unfortunately, it's only available in the UK for now, though the rumor is it will be available in the US before the end of the year. However, where things could get really impressive is with Spotify's mobile app. For a few months, there's been a YouTube video of Spotify Mobile on Android: The demo highlights the fact that you can sync any playlist for "offline" play, solving the biggest question about weak mobile signals on the go, or how you use it on a plane or somewhere without wireless access. With offline syncing, it's basically everything that an iPod can do -- with access to 6 million songs without having to pay for each individual song. But, of course, Android is still a limited platform. The big fish these days is the iPhone App Store, and Spotify has now submitted an iPhone app for approval, which raises all sorts of questions. With Apple's history of rather arbitrary rejections -- including ones for things Apple has deemed "competitive" -- will it block Spotify as a rather direct competitor to iTunes? That would be very unfortunate, and again demonstrate the risk of a closed platform.

That said, the initial reviews of the iPhone app seem quite strong. Eliot Van Buskirk at Wired loves the syncing feature, and warns that "you'd have to pry it out of my cold, dead iPhone before I'll delete it from my phone." Meanwhile Music Ally points out that Spotify has uploaded a video of the iPhone app as well: It really does look pretty slick. So now the ball's in Apple's court. I have no idea if Spotify can survive as a business (and I suspect that the royalty rates the music industry wants will make that difficult), but it is great to see more innovation in the space. Now we get to see how Apple feels about that sort of innovation.

When talking about the success of musicians adopting business models around the economics we discuss here, people often complain that it "only works for big artists" or "only works for the little guys," so much so that someone dubbed the exceptionalism as "Masnick's Law." I admit that it was easy to feel this way when Trent Reznor launched the Nine Inch Nails iPhone app. How many less well known artists would benefit from (or be able to develop) their own mobile app? Well, a company called Gigdoggy recently launched a mobile "Fanteraction" platform that lets bands easily create mobile websites for their gigs. In a blog post chronicling a show in which the platform was used and promoted, the first artist to play didn't really push it, but the second artist, Greg (one of the creators), made a point of explaining it to people. Basically, by queueing up each song on the site, an artist is able to provide lyrics and additional information that the audience can access via a mobile device while enjoying the performance. It's web-based, so it's accessible from different platforms without the need for downloads (or the risk of getting banned by Apple). Greg was able to get some people interested and following along. One audience member even prompted him when he forgot the lyrics to a verse! The platform is in its early stages, but it'll be interesting to see how it develops and what people do with it. At the very least, it's a good illustration that you don't need to be playing in stadiums to find a use for this sort of thing.

The pop band The Presidents of the United States of America have released a special iPhone app that contains all of the music from all of their albums, as well as additional rare and unreleased music and images. The whole thing costs $3 -- which certainly blows the old $1/song model out of the water. It's worth noting that one of the band members is now VP of the software company that made the app... and the band actually owns all the rights to its own music -- so that made all of this much easier. Also, it's a bit unclear how the app works exactly, but it certainly looks like the music is locked (hello, DRM!) inside the app. That's annoying.

There have been a few other bands that have experimented with similar "album in an app" type models before, and it's certainly an experiment worth watching. However, by itself, I'm not sure how scalable the model really is. If other bands do this using different apps, then you have to run each one separately and you lose out on the benefit of a central control system for all your music. And, if it really does involve DRM, then bands may just jump on this and alienate fans yet again. Still, if a "standard" and open way of doing this was established, such that bands could have their own apps easily interoperate, and the music wasn't locked down, you could see some interesting models emerge. For example, imagine getting an app that actually kept you updated on a band? Every time they release a new song or add new artwork, it automatically is added to your collection across different devices. That would be a useful application. Unfortunately, this particular app only seems to be a tiny step in that direction (and due to DRM, perhaps a step in the wrong direction).