Microsoft vs. Sony-BMG

Could Microsoft parlay its Windows monopoly and notoriously ineffective security to benefit its nascent media business?

<p>In a brilliant move this weekend Microsoft <a href="http://www.eweek.com/article2/0,1759,1886122,00.asp?kc=EWRSS03129TX1K0000614">announced</a> it will add the <a href="http://www.sysinternals.com/blog/2005/10/sony-rootkits-and-digital-rights.html">Sony Rootkit</a> to the list of software Microsoft AntiSpyware removes.  This is good news all around - unless you’re Sony.</p>
<p>The Security Paranoids of the ‘Net have been calling this a ‘rootkit’ - an appelation pooh-poohed by the MSM, and to some degree by the security software community.  Spyware is peddled by the sordid second-rate companies, not big brands - or so the thinking goes.   This didn’t stop Californians from filing a <a href="http://www.theregister.co.uk/2005/11/10/sony_sued_for_rootkit/">class action lawsuit</a> against Sony but their case is now substantially stronger.  With Microsoft’s lead here, the other anti-spyware vendors will fall into formation using Microsoft’s move as the justification for going after spyware from a major consumer brand.</p>
<p>So, did Microsoft blaze this trail simply because it was the moral course of action?  We should live in such an idyllic world, but as so often these things are - it’s somewhat more complicated than that.  Microsoft has been talking of making its media play for some time now.  It believes that the the market held by iPod and iTunes are its dominion and they have released several press stories about how Bill Gates thinks the Creative (or the Windows Media-Licensed Player du jur) is much better than the iPod.  Microsoft is itself selling music via its MSN presence which is the default homepage on every Windows installation.</p>
<p>One of Microsoft’s main competitors in this arena is - wait for it - Sony BMG - with its <a href="http://connect.com">Connect</a> service, which sells music price to the iTunes model.  Today, for most companies, all the money is in the sale of the portable player - for Apple the iTMS is break-even or just slightly better (they send 65 cents of each 99 cent song to the record labels) - but for Sony BMG - the sales of their own songs are nearly all profit.  At some point Apple will be able to negotiate a better deal with the labels, having proven the business is real, but Sony already has that advantage and more with its substantial music properties.  Microsoft is predominately in Apple’s position - it doesn’t own the music properties.  So, Sony BMG is a real problem for Microsoft when it comes to competing on cost.</p>
<p>Now then, most if not all states have computer trespassing laws and/or Anti-Spyware laws, per se, as do most other western countries (though the rootkit is known not to have been shipped in the UK).  What more could Microsoft ask for on Christmas than to have a significant competitor tied up in court battles in 50 states and numerous countries facing very stiff mandatory fines per CD shipped?  All it would take would be for all the Spyware vendors to agree unanimously that the Sony rootkit is, in fact, spyware - finding a judge to disagree with that body of experts would be a herculean task.</p>
<p>So the answer to, “Could Microsoft parlay its Windows monopoly and notoriously ineffective security to benefit its media business?” is a resounding, “Yes".  And with style.