snapshot 10/11/07

iPod classic: the last hurrah for HDD-based iPods?
The latest incarnation of the classic iPod appears to be a stopgap measure targeted solely at consumers who make extensive use of storage capacity, but at the same time signals the beginning of the end for hard disk drive (HDD)-based iPods, according to a new report from iSuppli Corp. However, the Classic’s dated features suggest stopgap measures that are likely to limit the product’s longevity and success in the market, iSuppli believes. The firm tentatively forecasts that iPod Classic shipments will start with a bang this holiday, rising to about 3.1 million units in 2007. However, growth will likely slow markedly after that, with shipments rising by only 12.9 percent to reach 3.5 million in 2008.

In contrast, combined shipments of the new NAND flash memory-based iPod nano and touch models are expected to amount to 26 million units in 2007, rising to nearly 40 million units in 2008 -- a 52 percent increase. iSuppli believes Apple will continue to take advantage of the 50 to 60 percent annual reductions in flash memory pricing to maintain or decrease its production costs, while doubling its players’ storage capacity every year with the solid-state storage technology as the HDD iPod slowly fades into the distance.


Madonna latest superstar to dump traditional label deal
A 10-year, $120 million pact that would bring all of Madonna's music business into the Live Nation fold is close to being signed. The non-traditional deal has been rumored for months, but the Wall Street Journal unveiled particulars in a story on its website Wednesday. Madonna would receive a mix of cash and stock and give Live Nation the rights to sell three studio albums, promote concert tours, sell merchandise and license her name.


Music Industry Five Alternative Business Models

• Free
• Pay What You Want
• Pay by popularity
• Subscription
• Music Tax

Report: Teens Moving From P2P To Paid Services
The results of a teen survey, conducted by financial analyst firm Piper Jaffray, revealed young music fans are slowly accepting paid online music sources over P2P filetrading. P2P is still the primary way they acquire music, but its market share fell to 64% from 72% last fall. Meanwhile, 36% of teens said they now buy music from online services, up from 28% last year. Of the paid services used, iTunes remains the primary resource, but it's market share is slipping at 79% from 91% last year. However it's not Rhapsody or Napster making up the difference, which each hold a 2% share of attention. Instead, the "other" category is now 16% of combines usage -- which includes sources like eMusic, Amazon.com and mobile music stores. Exactly which of these service is making up the lag in iTunes' share is not clear, as the company did not ask the teen users to identify their alternative sources.


Infinite Storage for Music
Last week I spoke on a panel called “The Paradise of Infinite Storage”, at the “Pop [Music] and Policy” conference at McGill University in Montreal. The panel’s title referred to an interesting fact: sometime in the next decade, we’ll see a $100 device that fits in your pocket and holds all of the music ever recorded by humanity.

This is a simple consequence of Moore’s Law which, in one of its variants, holds that the amount of data storage available at a fixed size and price roughly doubles every eighteen months. Extrapolate that trend and, depending on your precise assumptions, you’ll find the magic date falls somewhere between 2011 and 2019. From then on, storage capacity might as well be infinite, at least as far as music is concerned.


"First music store" in Facebook is fool's gold
In the case of MediaMouth, formerly Digital Kiosk Technologies, they are staking their claim to the "First Music Store Inside Facebook." The only problem? MediaMouth's store is not what you would think.

MediaMouth is trying to shift out of its failed business of burning CDs via kiosks, an efforts that will remind some of K-Tel Records attempts to reinvent itself as a dotcom. Its "Music Store" doesn't sell digital tracks. Instead, it creates a playlist which the company then burns to a disc and mails to the purchaser. CD-burning kiosks didn't work, so why would this? As they say, the problem with instant gratification is that it's not fast enough. By adding the extra step of sending a CD in the mail, MediaMouth has, improbably, made a bad business model worse.


MusicGiants Adds New Collections To DRM-Free Offerings
MusicGiants, the leader in HD downloads, has added the Naxos, PentaTone Classical Music Collections and Razor & Tie labels to their ever expanding catalogue of HD music without digital rights management (DRM).