Every time you glance down at your Apple iPod to scroll through your music collection, much of the data you are presented with comes from Gracenote's massive database of artists, song titles, and other text and metadata. When you search for music in Apple's iTunes client, the results are largely based on data from Gracenote. And, if you still buy or own CDs, when you slot a disc into a 'Net-connected computer and fire up iTunes, Gracenote is the service that presents you with the names and titles of the tracks.
Clearly, Gracenote's service is central to Apple's sprawling ecosystem of entertainment software, hardware, and services. So when I read the news that Sony is buying Gracenote for $260 million, I wondered how this will change the relationship between the two companies. Sony is itself a major player in the entertainment industry, and the two companies have several points of friction involving iTunes. They include pricing for iTunes music and competition for TV and movie downloads.
While there are alternative music databases that Apple could conceivably use -- a TechCrunch commenter called "Jack Bauer" points to the open source Musicbrainz project, AMG Lasso, and a database that Microsoft employs -- I doubt these products have the breadth of Gracenote's holdings. Gracenote dates back to the mid-1990s, when it was known as CDDB, and is the dominant service, thanks to its age and its connections with iTunes and other online music services. Over the years Gracenote has gained a reputation for using intimidation to threaten competitors and customers. Sony itself has some nasty history -- remember the Rootkit fiasco?
As for Bauer's claim that Apple could "easily" create its own database or switch to one of the Gracenote alternatives, that's a stretch. If it were easy, cheap, and made sense, Apple would have made a switch long ago.
Make no mistake: The Gracenote purchase does give Sony leverage over Apple that it did not have before. The question that has yet to be answered is whether Sony will play nice with Apple, or try to turn the screws a bit.