About a year and a half ago, Apple rolled out iTunes and it lit a fire in the music industry. It provided music in a way that was both secure and inexpensive, and it was seemingly easy to use. This combination, even on the tiny Apple installed base, was enough to put the service in the spotlight and, a few short months later, companies like Music Match and products like the revitalized (and made legal) Napster entered the market for a piece of the related revenue pie.
However, all was not perfect in this little garden of digital music Eden. There were two competing music standards (three if you counted Sony) and the Digital Rights Management schemes were simply not compatible with each other. On top of this, there was a new federal law called the Digital Millennium Copyright Act (DMCA) that made it illegal, and incredibly expensive, to remove the DRM component from any of the songs that were downloaded.
The "New" Problems
The combination of these two problems got in the way of users who wanted to mix and match music players, or might, at some future time, want to change music services. You see, if you had iTunes from Apple you could burn CDs and you could use the most popular hard drive player ? the Apple iPod ? but you couldn't use this downloaded music on any of the automotive products, or another brand of portable music player.
On the other hand, if you had Napster, Music Match, or any of the other music services, you could also burn CDs and you could use most hard drive-based MP3 players with the exception of the industry leading iPod.
Now there is a work around: You can create a CD with your downloaded music and then "rip" the CD (basically put the music back on your PC) and that would remove the DRM from the song, putting you in solid violation of the DMCA. This is a similar risk to what would happen if you downloaded the music from the Web in the first place, which makes the paying-for-music thing kind of silly.
Solutions
However, Starbucks and Hewlett-Packard got together and came up with a better idea. If you go to a participating Starbucks outlet, you can, or soon will be, able to select your music and pay for it through a localized online service; while you're sipping your coffee, they will make a CD for you that you can play in your car until you get home and rip the songs to your PC.
There is no DRM attached to the songs, anymore than there would be had you purchased the CD at a music store. This means you not only can legally put the songs on any music player your want, but you can use any music service your heart desires and, should your hard drive fail, you will always have the original CD.
With the exception of the fact you need to physically go to a Starbucks (at some future point you'll likely be able to preorder your CD over the Web and pick it up over the phone) this should provide a much better value than the current Web-based solutions.
One Future of Digital Music
The future of this service is expected to be a subscription model where you bring in your MP3 player and simply have it "filled up" so your music is never stale, where you can order songs initially off your laptop in a Starbucks and eventually from the Web at home, and where your active profile results in automatic suggestions for either the CD-based or MP3 player-based services. One could also assume that movies will be a later addition to this service.
This solution showcases the creative thinking of both Starbucks and HP; both saw the potential of combining Starbucks locations and newly-purchased music properties with HP's technology to create something better than what anyone else currently offers. That the service is built on Starbucks' successful WiFi (Wireless Networking) rollout and HP's recent partnership with Apple and the iPod shows that both firms were aggressively thinking about the future and just as aggressively executing on their collective visions.
It will be firms that can both see and execute on opportunities like this that will define success as we approach the second half of the decade.
Rob Enderle is the principle analyst for the Enderle Group, a firm focused on emerging personal technologies in the 21st century.
