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AT&T to hunt down pirates… anyone else realize this is part of Apple iPhone deal?
So the big news today is that AT&T is now going after their customers who illegally pirate and steal music. Techmeme has all of the various links and it appears that the LA Times has the lead.
Times staff writer James says, "AT&T Inc. has joined Hollywood studios and recording companies in trying to keep pirated films, music and other content off its network — the first major carrier of Internet traffic to do so. The San Antonio-based company started working last week with studios and record companies to develop anti-piracy technology that would target the most frequent offenders, said James W. Cicconi, an AT&T senior vice president."
I reviewed most of the links on Techmeme and I was very surprised to see that no one mentioned that the Apple deal might have something to do with this. In 2 weeks, nerds and geeks will line up for hours as if a new Krispy Kreme was opening to get their hands on an iPhone. Well what do we know about the iPhone? It comes with an iPod which (work with me here) holds songs from iTunes where you can buy music and videos! Hello!
Simple Columbo logic makes me realize that while AT&T is helping the industry on the whole, Apple will certainly benefit from this. While the stories seem to talk about hardwired home Internet connections, AT&T's recent completion of their Cingular acquisition makes me believe that Mr. Jobs should benefit nicely from this.
Even if Apple has nothing to do with this, they should certainly see a side benefit from it.
Duncan believes customers may switch to another provider, but that is much easier said than done. Basically it's either cable or dsl, dsl sucks because you need a local phone line and normally you have one cable provider only. So switching costs are very high.
I am not sure yet whether AT&T is doing the right thing or the wrong thing. I am torn in the middle. If a customer is using their service to commit a crime, don't they have a responsiblity to report that?
Is my viewpoint right or wrong? Do you think AT&T is doing the right thing or the wrong thing? Leave your thoughts in the comments.
Hi,
Sorry to correct, but Apple business is/was in hardware. The first time ever Apple has made benefits while selling music over iTunes it was this last trimester and that was after negotiating hard with the Credit Card processing companies a reduction on the cost per transaction.
If you add the wholesale price, the bandwidth, infrastructure, operational cost and credit card processing… you end up over the 1$ per song.
So, business is (or was) in Hardware.
Apple is trying to shift that for sure, they want to get benefits also from iTunes, and is why they are putting pressure on the credit card companies. Also if they have more volume, the operational cost and infrastructure per download will be lower…
Finally with the iTunes plus they has increased the price by 30%, but not the cost, so the margin will be also better.
The price of 1$ it was an smart strategy, as they knew it will block any legal competitor, as there is no margin, no business unless you sell the hardware…
Now that they have the market, now they are looking from other sources of revenue
See you
I hate to break it to you but I am pretty sure the only place apple makes money is on the hardware. Apple is a hardware company and they HARDLY undercut other mp3 players. They are actually much more expensive for less storage. Take for instance, a 4gb nano. You are talking about $180. 4gb of flash memory runs about $40 easy. So a majority of the rest of the money is profit.
They make nothing off the music they sell because the record labels take most of it and they only make enough to cover their costs of running the store.
Sure, it’s the iPhone! Apple always stated that they profit from the sales of the songs, not the hardware. They propably make huge losses on each iPod sold, covered by the profits they make from the songs they sell. Hence they’re able to undercut the competition, which explains their dominance ion the marketplace.
You opened my eyes to this! Brilliant!
Consider AT&T subscribers that are engaging in other illegal activities over their networks (think trading photos). They have always had the right to “do something”, only now are they exercising that right. The same goes for all of the ISP’s out there; it is a responsibility rather than something they just decide to do.
Regarding Apple’s iPod, the business model is similar to Tivo’s subscription. They sell the units at cost (or below) and rely on the subscription to bring in the cash. I still think that Apple is at least making a little money from an iPod sell due simply to how mass produced they are.
i think the issue is more pressure on the network from the bandwidth issues, not people pirating stuff via their apple products. Apple doesn’t care as said above about the idea of people dumping in non-itunes content into their ipods. if they had, and had originally restricted ipods to apple purchased content it would have flopped BIG time. less than 5% of content on iPods is purchased via itunes.
I think they don’ have to do this and the fact that they haven’t until they have a vested interest is a double standard.
up until this point they haven’t cared about it so why start now?
I would switch just because its too big brother like for me. Once it hits the press that they have turned over a 79 year old grand mother and the media gets a hold of it they will lose far more business than the new business will bring in.
I think reading between the lines here they might have been forced into this as part of the deal to get the content in the first place.
What’s next. Being ticketed by Porsche because I was speeding in a car they built?
Gimme a break. Anything anti-customer will catch up with a company. I download and pay for songs from itunes and avoid these issues. Let the music industry fight its own war.
Privacy matters, as long as this is stated in the User Agreement they have the perfect right to do so. This will also limit the number of customers they have if the customer’s intent is to use the service for illegal matters.
Other ISP’s have chosen not to get involved unless ordered by the court. Let the music industry handle their own problems.
Boycott them, its the only way to get their attention.
I’m going with a different cell company Monday.