Well, this is an interesting idea. According to CNET News, Microsoft is working on some serious changes to its online music service, including this doozy of a feature:
The tentative features of the new service–which is still under development–include advanced community aspects and playlist-sharing. But sources say Microsoft is also considering a more direct attack on Apple, seeking rights from copyright holders to give subscribers a new, Microsoft-formatted version of any song they’ve purchased from the iTunes store so those songs can be played on devices other than an iPod.
OK, now I want the recording industry to really, really think about the implications of this. If I pay a digital music provider to download a track, I’m actually paying two fees. One is a royalty to the artist and the publisher, which is passed through the music service. The other is a fee to the music service for providing the media to me. In this case, Microsoft is apparently arguing that you and I should only have to pay once for the digital rights to a song, regardless of the format it comes in. If iTunes passed along a payment on my behalf, then I have purchased the rights to play that tune, and Microsoft or Rhapsody or Yahoo or whoever should be able to provide that track to me as well. All they have to do is establish that I have already paid for the digital rights to that song.
Here’s where the argument gets sticky. Right now, when I buy a CD, I have the right to rip a copy of it to my hard disk for my personal use. I can make a backup copy of the CD media. I can make a custom mix of tracks, burn it to a CD, and play it in my car. I can copy all those tracks to my personal music player. Using the logic of this rumored Microsoft proposal, I already paid for the digital rights to this song when I bought the CD; my payment was passed to the publisher and artist by the record company from whom I bought the CD. So why can’t I get Microsoft-format digital copies of any music in my CD collection, just by proving to Microsoft that I own the original CD?
Can any of the copyfighters out there tell me what’s wrong with this idea?
(Thanks to Digital Media Thoughts for the pointer)
Ed Bott 
This idea (of yours) of “I own the CD, now let me have the digital file” sounds like what MP3.com – I think it was – tried all those years ago, where you could stream anything you owned; all you had to do was prove to MP3.com you owned the CD by putting it in the drive.
The music industry buried MP3.com under the hugest lawsuit.
This idea of Microsoft’s sounds bizarre, expensive, and probably won’t work. You have to persuade people to switch from their iPod, and from iTunes, and to something else that is probably less cool than the iPod, which doesn’t integrate so well with whatever app it is.
Microsoft can float this idea, but the reality is that until some company comes up with an integrated player + jukebox + store, it’s not going to be a fair fight.
Charles, I’m cewrtainly not defending Microsoft here. All I’m saying is that if they can convince the record industry that this model is acceptable, they should really think about going a step further. Which they won’t because they like nothing more than having their customers pay two, three, or ten times for the same product (see albums / cassettes / CDs for historical precedent).
And no, this does not imply someone has to switch from iPod / iTunes. Why can’t someone have multiple music players? Someone might love his iPod as a player but want to use a subscription-based service on the PC itself. Apple doesn’t offer subscriptions, so voila, another company steps in. It would be convenient in that case to be able to add your purchased tracks to that collection.
And the record industry may have landed on MP3.com with a thud, but comparing that upstart to Microsoft is really not fair. Microsoft has orders of magnitude more resources and the ability to make a deal that MP3.com never could.
I don’t think that Microsoft is simply going to do it without paying the recording industry. I doubt the recording industry would let them, and without industry permission it would be a violation of copyright law. I think Microsoft is going to eat the cost as part of a promotion to switch. See my post here: DRM and Lock-In: Apple vs. Microsoft
What’s wrong with the idea? How do I prove I own the CD? By actually having the CD? If I own (or at least have possession of) the CD, why do I care about online music services? I can just make my own rips. I control the format and quality, avoid the DRM which is certain to accompany any such download and best of all, I don’t have to pay and pay and pay and pay and pay for my music.
None of which will stop MS from doing whatever they’re going to do even if they lose money hand over fist doing it. This scheme might help them gain a little ground, but I have to agree with Charles: Microsoft will have to persuade people to desert the iPod/iTunes dyad. I just don’t see how they can do that.
There is not one DMP out there with the same cachet as the iPod. We can argue features and price and performance until we’re blue in the face, but it doesn’t change the simple fact that Apple is squarely in the number one spot here, and that shows no sign of changing any time soon.
Unseating Apple in the DMP arena won’t be as easy as unseating Netscape was on the web. People have an actual monetary investment in Apple hardware and music. No-one’s going to run off an buy a Dell Jukebox simply because Microsoft tells them they can re-download their music in MS’s particular format. A $400 music player is not a web browser. It’s going to take more than a vague promise of a better user experience to get people to switch.
Bruce Anderson says, “If I own (or at least have possession of) the CD, why do I care about online music services? I can just make my own rips.” This is not always true. I just bought a Nickelback CD, that I wish to listen to on my iPod. The disk is copy protected and comes up with a Macromedia Flash licence agreement in order to rip it. Then it only will rip into WMA format through the flash software. I tried to Rip it through iTunes and Windows Music Player (both of which wouldn’t even recognize the CD in the drive. MusicMatch recognized it, and ripped it but it came out scrambled. The thing that is really annoying is in tiny print on the back of the CD, it says “may not play on iPods. “May not”? Does anyone else have an iPod that plays WMA files – doubt it. So now ‘ve paid $22 for the CD and $11 for the iTunes files. Who’s ripping who off here?
Until the Music Companies stop us from using legally paid for music in legal ways (personal use), the public is not likely to be encouraged to legally pay for music.