Hacker’s New iPod Code Could Change Online Music Business

But as the iPod celebrates its fifth birthday this month, there’s one thing about the ubiquitous device that has irked a lot of users: they can only put songs on the player that have been downloaded off of Apple’s own iTunes store.

The restriction, caused by a copyright protection system known as FairPlay, isn’t used by anyone else in the industry. So if you have an iPod and want to add music from a different and non-compatible store onto your playlist, you’re out of luck.

And if you bought songs from Apple, they couldn’t be put on a rival firm’s music player, either.

And that’s the way it stood until Jon Lech Johansen came along.

The 22-year-old hacker claims to have created a method for getting around Apple’s system, a development that could mean big headaches for the computer company, big profits for the hacker and big choice for  you.

Others have tried to circumvent Apple’s seeming monopoly before without much success. Why should anyone believe Johansen?

He comes with a lot of hacker street cred. The Norway native is the same person who cracked the system that stopped users from copying DVDs.

He did that when was just 15 and gave the information away free on the Internet, much to the dismay of Hollywood.

This time, he plans to sell the rights to his handiwork so that others will be able to dispense music on different sites that will be playable on the iPod.

You only have to look at the numbers to see what a big business Johansen may have.

The iPod has a stranglehold on 60 percent on the market. Because of that, iTunes has grabbed 88 percent of all legal song downloads in the U.S. alone.

And such a big shake-up could change the entire industry.

At least one unnamed client has already signed on for the technology. 

“What he did was basically reverse-engineer FairPlay,” explains Monique Farantzos of DoubleTwist, the company that plans to license the code to businesses. “This allows other companies to offer content for the iPod.”

But won’t Apple be able to sue the boy wonder for his discovery?

Maybe not. And it all has to do with Johansen’s idea of reverse engineering the process.

“There’s a certain amount of trouble that Apple can give us, but not enough to stop this,” insists Farantzos. “We believe we’re on good legal ground, and our attorneys have given us the green light on this.”

“There is a lot of untested legal ground surrounding reverse engineering,” agrees Fred von Lohmann of the Electronic Frontier Foundation, an advocacy group.

Apple has so far refused to comment publicly, but unless its attorneys can find a legal loophole, the company has to be sweating this one.

In an era of slumping computer sales, the iPod and the songs you can buy for it have accounted for much of its huge profit increase over the last half a decade.

And this news definitely won’t be music to its ears – no matter where it’s been downloaded from.