• Red Herring, Monday, June 23, 2008 11:30 AM

According to a new report from eMarketer, Apple's iPod is partly to blame for the collapse of the music industry, having set the tone for a "rats nest of restrictions and incompatibilities" that put the stop on music's growth. Paul Verna, the report's author, says that end-user confusion played a major role, as music fans were forced to sort out an explosion of confusing and incompatible formats, players, restrictions and retailers. Thus, Apple's iPod has been a "double-edged sword" for the industry, having contributed greatly to the splintering of the music biz with its closed ecosystem, Verna claims.

Meanwhile, digital rights management, which restricts the number of devices where users can copy their music in an attempt to stamp out music sharing, has played arguably the biggest role in hindering digital music sales. Apple popularized DRM by moving away from the MP3 file format to adopt its own FairPlay DRM standard.

Big music initially thought that digital downloads would make for plummeting CD sales, but it hasn't turned out that way, Red Herring points out, as digital revenues haven't come even close to making up for CD sales losses.

Read the whole story at Red Herring »