Wired News has an interesting article speculating that the iPod will be the new CD. The impetus behind this assertion is the recent settlement of the “15-year legal spat over the ‘Apple’ trademark” between Apple Computer and Apple Corps, the Beatles’ music company. The immediate reaction at most media outlets is the prediction that The Beatles’ catalog will finally be available for sale through the iTunes Music Store soon. However, the article reveals that there is a much larger implication:
Flash-memory drives are now so cheap, software companies are starting to use them to ship software. H&R Block, for example, is selling the latest version of its tax-preparation software on a flash drive for $40 – the same price as the CD version. How much would it cost Apple to add a few music chips and some cheap earbuds?
Apple was prevented from doing this until now by the 15-year-old contract between Apple Corps, the Beatles’ music company, and Apple Computer. This contract precluded Jobs’ Apple from acting as a music company and from selling CDs or “physical media delivering prerecorded content … (such as a compact disc of the Rolling Stones’ music).”
Apple has been selling music as downloads for years, of course, but thanks to this clause, the company couldn’t sell an iPod with music already loaded onto it.
That’s why the U2 special-edition iPod ships with a voucher for downloading the band’s catalog online. The Beatles contract prevents Apple from pre-loading the U2 iPod with U2’s music.
That is undoubtedly going to change. Apple will soon offer a range of iPods pre-loaded with tunes.
First up will likely be the widely rumored Beatles special-edition Yellow Submarine iPod, tipped to be released in just over a week on Valentine’s Day.
This could spawn an entire new paradigm for music distribution, or at the very least result in some cool cross-promotions. We’ll soon see…