TidBITS#603/29-Oct-01 ===================== After days of speculation about Apple's new non-Mac device, the mystery was resolved as the iPod, a beautifully small MP3 audio player that sets a new standard in its field. Jeff Carlson contributes a hands-on review, and looks at the one thing that may prevent the iPod from being the hit it deserves to be. Also in this issue, Dan Kohn looks at why encryption won't protect online revenue streams, and we note the release of Windows XP and IPNetSentry 1.3. Topics: MailBITS/29-Oct-01 iPod Makes Music More Attractive Steal This Essay 2: Why Encryption Doesn't Help Copyright 2001 TidBITS Electronic Publishing. All rights reserved. Information: Comments: --------------------------------------------------------------- This issue of TidBITS sponsored in part by: * READERS LIKE YOU! You can help support TidBITS via our voluntary <- NEW! contribution program. Special thanks this week to Anton Rang, Dan Peckenpaugh, and Jerrell Wilson for their generous support! * APS Tech -- 800/395-5871 -- Burn a full CD in less than five minutes with the APS CD-RW 16x10x40 FireWire Plus. FireWire and USB ports let you easily connect to all recent Macs. Order at: * WinStar Northwest Nexus. Visit us at . Internet business solutions throughout the Pacific Northwest. * Small Dog Electronics: iBook G3/500 256/10/CD-RW: $1,279 <--------- NEW! Power Mac G4/733 QuickSilver 128/40/CD-RW/GeForce2 MX: $1,599! iMac G3/600 256/40 GB/CD-RW/56k Snow or Graphite: $1,079 Norton SystemWorks: $79 802/496-7171 * Network Troubles? Track down connection problems with the 12 <----- NEW! handy Internet tests in IPNetMonitor. Get the information you need to diagnose and fix problems! Rated 4.5 mice by Macworld. Only $30! Sustainable Softworks: * NEED TRAINING? Call MacAcademy, the nation's oldest Macintosh <---- NEW! training company. Self-paced computer and software training delivered by CD-ROM and video formats. Download a catalog at: or call 800/527-1914 --------------------------------------------------------------- MailBITS/29-Oct-01 ------------------ **Microsoft Releases Windows XP** -- Microsoft last week released Windows XP, the first version of the Windows operating system that melds the industrial-strength underpinnings of the Windows NT/2000 line with the more consumer friendly features and interface of the Windows 95/98/Me line. Reactions have been decidedly mixed, with some reviewers enthused over the new interface, built-in tools, and improved reliability, while others have complained that XP feels sloppy and unfinished in places, doesn't support many existing peripherals, and includes troubling links to Microsoft's .NET services. From the perspective of the Macintosh user forced to use a PC, Windows XP is probably a good thing, given that many of the changes made to the obtuse Windows interface resonate more with a Macintosh approach to human interface design and implementation. Upgrades are available, but realistically, they're probably not worthwhile for machines bought more than a few years ago, given possible problems with older hardware and the low cost of new PCs. As to how Windows XP and Mac OS X compare, well, that will take some time to determine, especially given that Apple has made Mac OS X a fast-moving target, whereas Microsoft tends to release notable operating system revisions less frequently. [ACE] **IPNetSentry 1.3 Goes Beyond Personal Use** -- Sustainable Softworks has released IPNetSentry 1.3, the latest version of their personal firewall and intrusion detection software (see "Macworld SF 2001 Trend: Personal Firewalls" in TidBITS-564_ for more information on personal firewalls). New in version 1.3 are enhancements that improve performance in high-traffic environments, such as increased efficiency for the payload inspection feature that stops Code Red and Nimda worm traffic, more aged filters (2000, up from 250) that track intrusion attempts and block future similar attacks, an option to close intruding TCP connections, and the capability to avoid all disk access functions for use in high-performance network environments. The upgrade is free to registered users. [ACE] iPod Makes Music More Attractive -------------------------------- by Jeff Carlson In the promotional video Apple created for its new audio player, Apple Vice President of Industrial Design Jonathan Ive says, "Our goal was to design the very very best MP3 player we could." Looking at the iPod, it's obvious that they've succeeded - but at $400 a pop, the big question is whether the iPod will turn into a success story like the iMac or a painful lesson like the G4 Cube. **Open the iPod Bay Doors, HAL** -- The iPod is a stainless steel, 6.5 ounce portable music player. Thanks to a slim 5 GB hard drive, the device measures only 2.4 inches wide, 4 inches tall, and less than an inch thick. The drive is capable of storing roughly 1,000 MP3-formatted songs (or more, depending on compression rates), transferred to the device over a FireWire connection. Apple claims that the bandwidth provided by FireWire can transfer a CD's worth of music in ten seconds, while one's entire MP3 collection would take between five and ten minutes (provided your collection will fit). The iPod also supports WAV and AIFF formats and has upgradable firmware for adding support for other audio formats. With its 32 MB memory cache, the device boasts 20 minutes of "skip protection," though the RAM is better thought of as a huge cache that lets the disk spin down, saving battery life. The iPod runs on a built-in lithium polymer battery capable of ten hours of continuous playback. It can be recharged to 80 percent capacity in about an hour, and to full strength in 3 hours. Since it uses FireWire, the pod charges when connected to your Mac; it can also store other data like an ordinary hard disk when the iPod is put into FireWire disk mode. The iPod isn't by any means the first hard disk-based MP3 player on the market (see "Archos Jukebox 6000 Challenges Nomad Jukebox" in TidBITS-592_ for a comparison of two other models), but it's the best looking and offers support for multiple languages (currently English, French, German, and Japanese). The iPod also includes an AC adapter that connects via FireWire cable (also included) and a set of earbud headphones. Apple is now taking pre-orders for the iPod, which will be available 10-Nov-01. Adhering to Apple's minimal design aesthetic, the iPod has a two-inch-square backlit monochrome LCD and a large circular area containing four buttons (Play/Pause, Forward, Reverse, and Menu), a scroll wheel that rotates in both directions, and a button in the center for selecting the highlighted item. A button on top, marked Hold, locks the controls so you don't accidentally switch songs by bumping the unit (which is likely: the iPod doesn't have a belt clip, so it will be living in your pockets). The interface is truly a gem (and not just because it uses the venerable Chicago typeface). Pressing any button turns the iPod on and displays the top-level list of options. You can choose a playlist, artist, or song; access the device's settings; or select About to view information about the iPod. (This is also where the designers added an Easter egg: with the About screen visible, press and hold the central button for a few seconds to activate a version of the game Breakout.) Use the scroll wheel to highlight items in the list and push the central button to make a selection. To go back up a level in the hierarchy, press the Menu button. Holding the Menu button for two seconds activates the screen's LED backlight, which is a surprisingly bright white (not the cool blue shown in Apple's promotional video) - the iPod can literally light your way home. While you're playing music, you can view the time remaining in a song by pressing the central button and change the volume by rolling the scroll wheel. If the iPod is not playing, it automatically turns off after two minutes, or you can turn it off manually by pressing and holding the Play/Pause button for two seconds. Other features in the iPod's software include a sleep timer to stop playing automatically after a user-specified amount of time and the capability to turn off the clicking noise associated with rolling the scroll wheel. I'm surprised the software doesn't include a way to balance the audio manually between left and right headphones, or any type of equalizer presets found in other devices, but I'm willing to be a bit lenient for this 1.0 version. **Syncing Beneath the Sound Waves** -- If the iPod were just another device to which you copied songs, it wouldn't be nearly as interesting. One of the main draws is automatic synchronization between the iPod and iTunes 2 (available in early November as a free download for Mac OS 9 and Mac OS X). When the iPod is connected to the Mac for the first time, iTunes can transfer your entire music library; subsequent connections can automatically synchronize the music and playlists on the device and on the Mac. You can also choose to move songs from your Mac to the iPod manually. However, you can't copy songs from the iPod to your Mac in iTunes, according to Apple's iPod FAQ and my own testing (the Show Song File option under the File menu is also disabled when you're browsing the iPod). iTunes uses the serial number of the iPod and identifies your iTunes music library to determine to whom the device belongs. When I plugged it into my PowerBook G4, I got a dialog telling me that my iTunes music library didn't match the one stored in the iPod, which had been loaded by my friend Glenn Fleishman (who's reviewing the iPod for the Seattle Times). My options were to use my music library instead, which would have erased the device and synchronized my songs, or to continue without switching ownership. Since I was only borrowing the iPod briefly, I opted not to synchronize, which displayed the iPod's songs in iTunes locked and grayed-out. To add my own songs, I had to bring up the iPod's preferences in iTunes (by clicking a special button that appears in the lower-right corner of iTunes when the iPod is connected) and switch to manual mode. From there I was able to add my own songs, which was as speedy as Apple advertises. Copying a CD's worth of music took around 13 seconds (the iPod takes a few seconds to initiate the connection); copying 102 songs (about 398 MB) took a minute and a half; and copying the rest of the songs on my PowerBook, 3 GB worth, took 11 minutes. I wasn't able to max out the drive's total storage capacity, 4.6 GB, but according to the iPod FAQ, iTunes detects that your library won't fit and prompts you to synchronize selected playlists or switch to manual mode. **FireWire Burning in Your Pocket** -- The iPod uses FireWire to connect to your Mac, so you can mount it as a regular hard disk on your desktop. Apple has kept the audio playing portions separate from the data storage features by storing music files in an invisible folder, so even if you copy MP3 files to the drive via the Finder, the iPod won't play them. Even though Apple isn't heavily pushing the FireWire disk mode feature, it's an important bonus. You can take your music library with you, sure. But what about tossing a copy of your email folders on the hard disk, or encrypted sensitive documents, or software registrations protected by one of the password-storage utilities? With a 5 GB hard disk in your pocket, you don't need to carry Zip disks or copy large files over the Internet when you need to be in more than one location. The only minor downside to using FireWire disk mode is that you must manually remove the hard disk from the Finder's desktop (or use the Eject button in iTunes) before unplugging the iPod to avoid potentially losing data. **iTunes 2** -- The new version of iTunes adds more than iPod compatibility. In addition, iTunes 2 finally incorporates a 10- band equalizer (which was in iTunes's predecessor SoundJam). Users can choose from 22 preset configurations, or manually adjust the settings and create your own presets. You can even associate different EQ presets with individual songs (bring up a song's Get Info dialog box, click the options tab, and select an equalizer preset). EQ boosts may introduce distortion into your music, depending on the music you're playing and how the recording was mastered - if that happens, use the Preamp slider to lower the volume before iTunes applies equalization. iTunes 2 also burns MP3 CDs that store over 150 MP3 files per disk and features a crossfader that overlaps playback of different songs rather than leaving a bit of silence between them. Under Mac OS X, clicking the iTunes icon in the Dock adds controls for repeat and shuffle play to the options for playing tunes. According to Apple's Web site, iTunes burns audio CDs up to twice as fast as before, but since I don't have a CD-burning Mac, I wasn't able to test this. The program also adds the generically named Sound Enhancer, a slider in the iTunes preferences that veers from low to high. The lowest value seem to disable the feature entirely, but the higher you go, the more separation iTunes introduces into the stereo field, much like the "3D" effects on some portable stereos. Sound Enhancer can introduce some distortion and weird artifacts, but it may make music sound clearer or better defined, particularly over small speakers or at low volume levels. **iPod Mac-only** -- Apple is taking some flak for the fact that the iPod works only with FireWire-equipped Macs - Windows machines and Linux boxes need not apply. There has been a lot of speculation about this decision, since it would seem suicidal for Apple to ignore the vast Windows market with a product that shouldn't inherently require a Mac. Cross-platform users have already expressed dismay at being left out, though as others have noted, if the Windows machine in question has external speakers, it's no harder to plug those speakers into the iPod than it is to plug the iPod into a computer. Steve Jobs said that Apple would look into making the iPod Windows-compatible in the future, but he also said that the product took only nine months from conception to completion, and such a short product cycle may simply not have left room for adding Windows compatibility. It's also possible Apple chose to avoid the Windows market to avoid availability problems heading into the holiday season - if the Toshiba 1.8" hard drives inside the iPod are in short supply or if Apple wasn't positive of its ability to meet demand, why not just focus on the core market of Mac users? It's not as though avoiding the Windows market is unusual for Apple - Apple didn't make it easy for Windows users to use the AirPort Base Station even though the necessary information and software to do so soon became available. I suspect the same will happen with the iPod - someone will figure out how to write to the appropriate spot on the hard disk from any FireWire-enabled Windows or Linux computer and the necessary drivers will then spread widely. And as with the AirPort Base Station, other companies will undoubtedly follow Apple's design lead and undercut Apple's prices, so it makes more sense for Apple to focus on creating the best possible experience for Mac users instead of diluting its efforts across multiple platforms. **I Saw, I Paid, iPod** -- I honestly think Apple has created the best portable audio player on the market. It's sharp, it's elegant, it makes me wonder why I thought having a Rio 500 with 64 MB of RAM was cool. But it costs $400, which will be the iPod's biggest stumbling block. Granted, you can argue that everything is priced $100 too high, so I'll skip everyone's first fantasy that goes something along the lines of, "If someone were to give me an iPod for free...." The problem with a $400 iPod is that the price is actually justified, yet at the same time too high. When you look at the iPod's specs, and when you take into consideration its industrial design and size (smaller is almost always more expensive), the price is fairly reasonable. And when you note that just the Toshiba 1.8" hard drive itself costs $400, the iPod is almost a steal. As Marshall Clow noted in TidBITS Talk, you can think of the iPod as a free MP3 player wrapped around an extremely portable hard drive. But you can't ignore the playing field, paying $400 for an MP3 player is on the high side of acceptable, even if it's the best MP3 player ever devised. Most people I've talked to say that at $250 or $300, they'd have already put an order in. But $400 stretches the boundaries of how much to spend on an audio player, especially when Creative's Nomad Jukebox 20 GB player stores 4 times the capacity of the iPod at the same price. People may be more willing to put up with a larger device without the iPod's sleek design, superior interface, and long battery life if it will save them $100 or more. So what do you think? Check our home page for this week's poll, which asks how much would you seriously consider paying for an iPod. I'll be interested to see how the iPod fares, especially once there are enough units available so potential customers can see and touch iPods for themselves - Apple's advertisements are enticing, but you can't get a sense of the iPod's tiny size until you actually hold (and operate) it in one hand. Steal This Essay 2: Why Encryption Doesn't Help ----------------------------------------------- by Dan Kohn "Doveriai no proveriai." (Trust but verify.) - Russian proverb, as quoted by Ronald Reagan Even as content becomes a public good, content creators (or at least the publishing and recording industries that claim to represent them) have been led to believe that encryption can protect their revenue streams. As I noted in the first of these essays, they are lambs being led to the slaughter. Why is all content becoming a public good? It has realistically been nonrival for some time now, meaning that I can copy your CD of music or software for a few pennies or less, and you are in no way disadvantaged. (Of course, the author of that content may feel quite disadvantaged by this "theft," but as long as I don't scratch your CDs, there's no reason for you to care that I borrowed them for a few minutes.) In fact, the central concept of digitization - converting all content to streams of zeros and ones - entails making it infinitely copyable without any loss of quality, the very essence of nonrival goods. What has only become clear in the last couple years (although the Recording Industry Association of America - the RIAA - still has its head in the sand) is that digital content is also nonexcludable. Of course, tens of millions of dollars have been spent on a variety of means to make digital content uncopyable. Supposedly unremovable watermarks are embedded in images to detect copies (e.g., SDMI and Macrovision), content is encrypted so that it can only be viewed through an authorized player (e.g., DVD CSS and Microsoft's and Real Network's digital rights management systems being used in the music industry's Napster competitors, PressPlay and MusicNet), or some form of registration is required for activation (e.g., Office and Windows XP). **Encryption Is Ultimately Futile** -- The problem with the security of these approaches is that, as cryptographer Bruce Schneier points out, there are basically only two types of users: regular ones against whom _any_ form of copy protection will work, and experienced hackers, whom _no_ form of technology can stop. Your technophobe mother represents the first category, and your geeky nephew exemplifies the members of the second category. Why can't the hackers be stopped by encryption? If the challenge were just to transfer a file from one point to another without letting someone get to see its contents, encryption is up to the job. But, consumers don't listen to or watch encrypted versions of content. (I have, and it looks like static). They watch the regular, unencrypted version. So, somewhere close to the user, the content must be decrypted. And that decryption process typically runs on a PC, where experienced hackers can watch it work one instruction at a time, and change those instructions to enable the unencrypted content to be copied. Phrased differently, as long as the intention is ultimately to deliver the content to the customer (and hopefully even the RIAA is still trying to do that), then it's impossible to stop wily hackers from getting at the content in its unencrypted form and having their way with it. "Trying to secure [digital goods] is like trying to make water not wet," Schneier said recently. "Bits are copyable by definition." In early 2000, a 16-year-old in Norway named Jon Johansen was upset because he wanted to be able to play DVD movies in his Linux box's DVD drive, but the movie industry had not authorized any players for Linux. So, working with several anonymous contacts on the Internet, he cracked the copy protection scheme used by all DVDs, enabling them to be played on his machine and, incidentally, to be copied endlessly and perfectly. (The Norwegian police actually confiscated his computer at the request of the Motion Picture Association of America several days after he distributed the code on the Internet, providing a classic example of tardy barn door closing.) More to the point, one could ask what chance any copy protection scheme has, when random 16-year-olds with an Internet connection can succeed in breaking it in their spare time. But the news for authors such as myself, who might want to get paid for our work, gets worse. There are many in the music industry who believe that a 98 percent copy protection rate would be just fine, the same way that department stores calculate a presumed level of spoilage (i.e., stolen goods) in their inventories. That works for department stores because their goods are rival, so that even if a few shoplifters get their items for free, everyone else still has to pay. The problem for the RIAA is that nonrival content means crack once, run everywhere. That is, all it takes is one smart hacker to defeat the copy protection schemes for everyone. Then, your nephew can either distribute his hacks in an easy to use format that even your mother can install, or, more directly, he can just distribute the unencrypted content. **Advertising Support?** If content can't be made excludable (and thus easily charged for) via encryption, perhaps there are other ways to build business models around content. What about advertising? After all, broadcast television is essentially nonrival and nonexcludable, and it's financed by advertising. Unfortunately, no. First, as they have become ubiquitous, banner ads have dropped dramatically in effectiveness, as measured by click-through rates, which have fallen from 4 percent to 0.1 percent. This is not too surprising, given that most people hate banner ads and do everything to try to ignore them. Ad rates for some large sites have fallen correspondingly from 40 cents per impression to less than 0.1 cents, one of the primary causes of the many new applications of former dot-com employees for Starbucks barista positions. And for content providers, the news grows still worse. The downturn in the economy has made it harder, particularly for publications without loyal readers, to attract advertisers, even at the lower ad rates. Then there's software such as WebWasher that automatically detects the banner ads on any given Web page and strips them out, which incidentally causes the page to load faster (just as a 30 minute television sitcom can be viewed in 22 minutes without the ads). Ad blocking software replaces the ads that are supposed to be funding the content with blank space, which is what content providers' revenue models are starting to look like. The software is not perfect, but it's getting better and is already effective enough to strike fear into the hearts of content publishers and advertisers. Even the soap companies that have funded so many years of daytime drama may start reconsidering their advertising budgets over the next decade, as digital video recorders such as TiVo become increasingly common. These enable viewers to have their favorite shows easily stored to a hard drive, where they can be conveniently replayed at the time of the viewer's (rather than the programmer's) convenience. Imagine setting your own viewing schedule rather than having it dictated by snotty network executives in LA and New York. Plus, these devices let you skip right past the commercials with a few clicks of the remote, thereby crumbling the foundations of 50 years of a profitable broadcast industry. New PC-based recorders such as SnapStream even support sharing recorded shows across the Internet, enabling video to take its place next to MP3s on the new peer-to-peer networks that are quickly replacing Napster. Why schedule your evening around a broadcast schedule and sit through brain-numbing commercials, when the show is available whenever you want it with the commercials already edited out? A world full of digital video recorders is one in which the couch potato is liberated from the slings and arrows of network programming (how dare they put that promising new show against Survivor!), and once again is empowered to make real choices about how, when, and what to watch. [For more on TiVo, see Andrew Laurence's two-part article series "TiVo: Freedom Through Time Shifting" and be sure to read the in-depth TidBITS Talk discussion on how personal video recorders are changing advertising. -Adam] Are there any categories of content from which individuals can be excluded? Only two that I can see. The first is showing movies at movie theaters. With a significant investment in digital distribution, and an even bigger investment into physical security at the theater, studios should be able to distribute movies without them immediately being copied onto the Internet (but watch out for those 16-year-old projectionist/hackers). The other category would appear to be Web services, where software is split into components that are loosely coupled and distributed across the Internet. Since you're interacting with numerous other computers, your identity can be continually reaffirmed (what Microsoft is planning with Hailstorm), making it nearly impossible to avoid paying. But any software that supports a disconnected mode (such as an operating system), can be easily (by hacker standards) modified so that it no longer "calls home" to ensure authenticity. The registration system for Windows XP was cracked so that running a simple program will remove the requirement for online activation, six months before the software was even released. Content won't truly be a pure public good for another ten years or so until broadband home Internet connections are ubiquitous, making it trivial to transfer large files around. But, since the process is already accelerating (Napster began with college students who already have broadband connectivity, and some new peer-to-peer file sharing services are designed explicitly for downloading very large files in the background), it's worth asking why anyone will create content when the old models for getting paid don't work. The answer will have to wait for another essay. [Dan Kohn is a General Partner with Skymoon Ventures. His writings are announced through and can be discussed through .] $$ Non-profit, non-commercial publications may reprint articles if full credit is given. Others please contact us. We don't guarantee accuracy of articles. Caveat lector. Publication, product, and company names may be registered trademarks of their companies. This file is formatted as setext. For more information send email to . A file will be returned shortly. For information: how to subscribe, where to find back issues, and more, email . TidBITS ISSN 1090-7017. 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