Sony, HP, Apple, Google: Who is on Your Side?

Continuing with a theme, this week I’d like to focus on companies that misact with respect to consumer rights. Last week we went into some detail on Sony’s despicable recent actions which compromised consumers’ rights and safety. This is all related to the idea that power corrupts. As the time comes to make your holiday purchases, it would be a good idea to look beyond the rhetoric this year and find out which companies really are acting against your best interests — and choose accordingly.

Why is this important? Your rights are under siege, and the attacks are incredibly broad. At one time you could create mix-tapes of songs you bought and share that tape with friends; now, in many cases, you can’t. You used to be able to copy movies to other formats so you could watch them on trips; now that is increasingly difficult and may even be illegal in some areas. It used to be OK to tape TV and radio shows and watch or listen to those tapes whenever and wherever you wanted; in the new digital age that is starting to look impossible.

While it certainly makes sense for consumers to have to pay a reasonable fee for the media they consume — and pirating anything is clearly wrong, there is a clear line between “reasonable” and gouging. When faced with money decisions, some executives make very bad decisions. The end result is generally the death of their companies or industries but as they slide, they take a lot of consumers with them. I don’t want to be one of those consumers.

Let’s talk about four major companies that are active in the tech space on consumer rights. I think you may be surprised at some of my conclusions.

Sony: Anticipating Additional Problems

This is a difficult time for Sony. With revenues falling and the anticipated delay of the PlayStation 3 until after next year you would think the firm would be moving to protect its customers just to ensure their loyalty. Unfortunately, that is simply not the case.

After placing malicious software intentionally onto some of their most popular music discs they first argued they did the right thing, then argued that people had no real right to know what they did. Then they “temporarily” suspended shipments, and late last week, after a number of class action law suits were filed against them, they were finally forced to do the right thing and recall the discs. The message Sony leaves behind is that they were sorry they were caught.

Sony’s reward is an increasingly strident call that the firm be boycotted. This call is exemplified on a Sony Boycott Web site, a Sony Boycott online petition, and of course, once the Mac folks discovered that Sony wasn’t just targeting Windows with their infected discs, they joined in as well. Hopefully others will learn a lesson from Sony’s experience — though I have my doubts.

What is unfortunate is that Sony isn’t a cohesive company. There are units inside the firm that are probably as disgusted by these actions as you and I are, but the firm is clearly led by an executive who approved these activities and that has become a problem for all of us.

Sony has two high-profile products coming down the pike. The first is Blu-ray, a high-capacity optical disc technology that promises great things but may be killed off by Sony before it is born, and the other is the Playstation platform.

First, with regard to the Playstation, Sony’s portable player, the PSP, had the potential to take Apple’s iPod off the most desired list this season. But Sony’s movie-and-music implementation has been so poor that the PSP has underperformed expectations. With the unveiling of the Playstation 3 possibly slipping until 2007 we don’t yet know what the impact of digital rights management will be on that platform but, based on what we’ve seen from Sony so far, we can probably conclude it will be crippled by their corporate disregard for customer needs much like the PSP was. It may also contain some spyware that we may never know about now that we’ve gone through the music disc fiasco.

HP: No Conflicts

HP is a large company. It is good to be skeptical as to whether a large company has consumers’ interests at heart. However, at this point it’s clear that HP’s interests and yours coincide at a point where there is no apparent conflict, and this may make them a much safer vendor to buy from this year.

This month HP stepped up and asked the Blu-ray Disc Association to adopt technologies already accepted by the HD-DVD group which protected user rights indicating that, if the Blu-ray folks didn’t agree, HP would switch sides. This is putting HP’s resources where consumers’ interests are — and for us, is very important. What happened? The Sony-led Blu-ray Disc group said no, and this may end up causing Blu-ray to fail when it otherwise had a clear shot at owning the space.

As you choose media products vendors to buy gifts from this year, selecting those companies who have your best interests at heart should be your first choice. There are a lot of consumer electronics vendors to choose from, but I have a hard time finding any that have gone as far as HP in this case just did to protect your rights.

Apple: On the Right Side for Now

Apple has also shown their willingness to fight for your rights. Apple was first to bring out a useful pay-for-play service and currently dominates the MP3 player space. They have steadfastly refused to bow to the pressure from the music brokers to raise prices and continue to focus like a laser on the user experience. We are already rewarding them handsomely with our buying behavior — however, now we seem to be getting mixed messages.

Recently EMI, one of the largest of the music firms, went public with their prediction that Apple would begin charging more for hot tunes and less for older titles. This was a clear slap in the face to Apple. It is apparent they made these statements without Apple’s approval. This does not suggest that Apple is willingly folding but it may be far down the path of being forced to fold. As Apple goes, the other music services will have to follow and virtually none of them have been fighting as hard to hold the line. I don’t think Apple should be penalized for bowing to a superior force but if you have a choice, buying CDs from vendors other than EMI and Sony would probably be in your best long-term interest.

Apple does lock you in to iTunes and appears to be using the Trusted Platform Module, or TPM, component in their new Intel platform to tie the OS to the hardware you buy from them. The TCG (Trusted Computing Group ) has been working its butt off trying to distance TPM activity from DRM implementations but Apple does not belong to this organization and is therefore not bound by their guidance.

While we hope this is simply to assure that the alpha version of the Intel-based MacOS does not get widely distributed, there is an increasing belief that Apple will be locking their software to their hardware. Even MIT’s Media Lab has raised this as an issue. This is generally considered anti-consumer behavior, and once again, this points to the fact that choosing companies that don’t have conflicts like this is the best way to ensure they keep your best interests at heart. With music, Apple is clearly on your side; as they move to the next generation of converged CE appliances and their own conflicts become evident that may not continue to be so.

Google: Evil — But They May be Your Kind of Evil

A few weeks ago I pointed out that Google was demonstrating behavior that might make them the next Evil Empire. However most of this behavior seems focused on the media or content owners. From a consumer standpoint the problems relate to company’s need to demonstrate results for advertisers. This advertiser focus is slowly resulting in consumers being less able to trust the results of their Google searches. Advertisers do have to pay for this service somehow and I’m not aware of a feed service that we could better trust. It does create a concern, however. Frankly, I’m not sure if the impact of this is even meaningful at this point. But, for Google, as possible future heir to Microsoft’s crown, this behavior is troubling.

Why it this pertinent to this discussion? Because Google appears to be secretly building something. Based on the types of staff they are hiring, one possibility is that they are planning on entering the PC business with a revolutionary box initially targeted at the consumer market. This product would be tied back to the massive high-speed network acquisitions they have made and would probably be based on a Linux derivative in embedded form. What you would buy is an appliance PC that could easily be as far ahead of the MacMini as the Mac was ahead of the IBM PC when it was launched.

With a subsidized price point that could make the highly publicized US$100 PC look expensive I suggest we take a really hard look at where the money is coming from before we get too excited — and make sure this thing really is in our best interest. In my experience, “free” often comes with a high hidden cost and we need to be assured we know what that is before we go nuts.

Remember, too, both Oracle and Sun believed they knew how to build the next- generation PC. Oracle is out of the thin-client business and Sun’s SunRay1 is an industry joke. This is just to remind you that it takes more than a great idea to make a successful product, but Google has already done the impossible several times and I’m not going to bet they won’t do it again.

Choose Wisely

Executives are often faced with making difficult decisions. Ensuring these executives understand the downside of forgetting their customers’ needs is not only in our best interest, it turns out to be in the executives’ and their companies’ best interest as well. As Sony is undoubtedly learning this month, preventing a mistake generally is vastly less expensive, for everyone involved, than correcting it. Every holiday season your personal dollars have power. This year, use that power to reward the firms that stand up for your rights and avoid rewarding those that trample them.