Friday, September 28, 2007

snapshot 9/28/07

Why Amazon Will Do Nothing To Help The Music Industry
I say that this new digital music storefront will do nothing to help the recorded music industry. Why? Because Amazonmp3 will not grow recording industry revenue. This is the critical point. Here is my rationale:

I don't believe that any more than an infinitesimally small portion of the digital music market has not bought a download because they couldn't find the right store. The available supply of music downloads exceeds the demand.

Top 5 Places To Buy DRM Free Downloads
1. Amazon - This download store just opened, but it’s all DRM free mp3’s all of the time. While - like the other DRM free stores it does not have all of the major label product (only EMIa nd some Universal thanks to old school thinking at Warner Music Group and Sony BMG) - Amazon offers 2.3 million mp3’s at prices ranging from $.89 to $.99 and most albums from $4.99 to $9.99.

2. eMusic - You have to buy a subscription starting at $9.99 per month for 30 tracks and you won’t find any of the major label product from EMI and Universal available at Amazon and elsewhere, but after that if you like indie or niche music, at 33 cents per track or less you can’t beat the price.

3. WalMart - Yup. There’s no indie product available, but they’ve got lots of tracks from both EMI and Universal and most of them are priced at $.88.

4. Rhapsody - These guys do music subscriptions and streaming better than anyone else. On the DRM free download front, however, you’ll only find EMI product and a little bit of indie. But given their recent partnerships with MTV and Verizon, you can expect interesting changes ahead.

5. iTunes - In many other ways iTunes leads the pack, but not so in DRM free downloads. Sure they sell some tracks without the usual copy restrictions particularly from EMI. But there is almost no indie product and the tracks you buy are coded in a special Apple program that while “DRM free” is only designed to play within the iTunes software and on the iPod unless you burn it onto a CD.

Will Mobile iTunes Impact The Carriers Who Sell Over The Air Music?
But in the future, as Apple’s iPhone and iPod Touch user base grows, the carriers could be in trouble if for two reasons — the shopping and playback experiences. Using the iTunes Wi-Fi Music Store to purchase music is incredibly simple, playing it on the iPhone or iPod Touch is quite satisfying, whereas buying music from the carriers and playing it on small phones can be cumbersome and unpleasant, depending on the device.

With the iTunes Wi-Fi Music Store, and with Nokia’s recent announcement that it will be selling music over the air, it’s apparent that manufacturers are going to make a run at the carriers and the revenues of their online music stores. In the short term, this run may not significantly impact Verizon, AT&T, Sprint, and T-Mobile in the U.S., but over time a fun, easy shopping experience and superior playback may win out.

Thursday, September 27, 2007

snapshot 9/27/07

DVD burner for downloads ; Sonic Solutions' Qflix technology will let people put movies from the Internet onto disc.
Sonic Solutions Inc. of Novato, Calif., said it had won approval for its technology, which makes it possible for people to record homemade DVDs containing the same copy protection found on professionally made DVDs. The approval came after protracted negotiations with the DVD Copy Control Assn., a consortium of movie studios, consumer electronics companies and computer makers. The technology opens the door for download services from the likes of Inc. and Wal-Mart Inc. to let customers burn movies they buy to DVD, then watch them on television or portable DVD players. Those services still represent only a fraction of the revenue generated by movie rentals and sales.

Microsoft touts boxes that bring computer content to TVs; available soon for $300+
Microsoft Corp. and its hardware partners are trying to bridge the divide between home computers and TV sets this holiday season with the release of several "media extenders." These TV set-top boxes will connect wirelessly to computers running the Home Premium or Ultimate flavors of Windows Vista and enable users to use their TV sets to watch movies, TV shows and Internet video that is stored on their computers.

Amazon MP3 store: better than iTunes?
The first reviews of Amazon’s MP3 store , which offers DRM-free tracks at prices that are generally cheaper than the iTunes Store, are in -- and most have come down in favor of the new service relative to Apple's offering. Machinist says that the Amazon transfer-to-device experience nearly matches iTunes, despite its Web-based nature. "The store is on the Web, but after you download a small companion program -- works on Windows and Mac -- you can reproduce the same one-click experience you've come to love in Apple's store (the app automatically adds purchased files to iTunes or another favorite music player).

Amazon's store also lets you search for and preview music just as easily as in iTunes."Also worth considering is Amazon's track record in selling items online, which predates Apple's efforts considerably. The Motley Fool, commenting on Amazon's chances for success in the digital music download space says "Amazon sold $10.7 billion worth of merchandise last year -- $7.1 billion in the form of media -- but at issue here is more than just respect for Amazon's girth. Amazon is a trusted source in music. Now it also happens to offer the better deal. If you have a choice of paying $0.89 on Amazon for a higher-quality track with no DRM, or $0.99 for a lower-quality track with portability restrictions, where will you turn?"

Sony music available on imeem
Sony BMG Music Entertainment is joining Warner Music Group in making its music available on the social media network EMI, which is in talks with the Internet service, is expected to follow shortly.

The San Francisco-based imeem allows users to share music and video content and shares ad revenue with labels whose content is on the site. Webco, which launched the service in June, also has deals with indie labels such as Nettwerk, Matador and XL Recordings, plus the distributors IODA, the Orchard and Redeye Distribution.

Yahoo Leadership Meeting Tomorrow; Premium Music Services to be “De-emphasized”
Our sources are telling us that tomorrow afternoon Yahoo CEO Jerry Yang will be holding a confidential meeting for all Yahoo execs (vice presidents and above, called the “leadership team”) to map out his strategic plan for the company going forward. This is the next step in executing on his promised 100 day plan back in July.

S eparately, the company will shortly (today) be announcing a strategic shift away from premium services in the music groupin Vince Broady’s entertainment group, which includes music, games, TV, movies, OMG. Nothing will be shut down; however, people and money (marketing dollars) are moving to other areas of Yahoo. The company will focus on free content over premium services, which are not performing well (music subscription sales in particular are said to be lagging). The changes have been occurring over the last week, look for a Yahoo announcement later today.

iTunes Wi-Fi Music Store for iPhone
T he big news for iPhone users, however (those that survived the update, that is), is the iTunes Wi-Fi Music Store. Here are my impressions after spending a few minutes with it. T his is a very nice piece of software: Speedy, simple and similar enough to the "full"version of the iTunes Store that there's no learning curve at all. Feel free to share your own experiences in the comments.

Disney Mobile bites the dust
The Walt Disney Co. pulled the plug Thursday on its Disney Mobile phone service. Disney said the service will no longer be available after December 31, but it might offer some of the specially designed software and applications through another wireless operator.

Wednesday, September 26, 2007

snapshot 9/26/07

MTV, Real, and Wal-Mart Shake Up Digital Music
The digital music industry is headed for a crossroads, as more stores and record labels try out DRM-free music sales, and as some of the bigger names in digital music team up to offer a new service. MTV and Real Networks announced in August that they would create a new music service based on Real's Rhapsody service and MTV's music content and packaging. Verizon will deliver portions of the service through its V Cast music offering. Verizon will eventually allow for tunes purchased through V Cast to be accessible through a Rhapsody account and for transfer of music from a Rhapsody account to a mobile phone.

Meanwhile, Rhapsody and Wal-Mart began selling DRM-free selections from Universal's music catalog, and Real Networks CEO Rob Glaser believes that 2008 will be the year DRM-free goes mainstream for purchased digital music. Recently, Apple debuted a new iTunes Wi-Fi Music Store that lets iPod Touch and iPhone owners purchase songs directly on their devices. The devices will also enjoy free Wi-Fi access at Starbucks locations in 2008.

More on the Amazon MP3 Store
So why Amazon is even bothering with a music download store, given that “everyone knows” the iTunes Store is a loss-leader that Apple offers just to sell more iPods? Because that’s bullshit. Apple is making good money from the iTunes Store. So, ballpark-estimate-wise, it’s safe to say Apple gets about 30 cents per song sold — and even more for songs sold in euros, given its current strength against the dollar. On July 31, Apple announced that they’d sold the three-billionth song from the iTunes Store. Three billion songs times $.30 per song is $900 million.

A nd, iTunes Store music sales are growing — fast. Apple announced the two-billionth song sold just six months earlier. Even if the acceleration stops, which it won’t soon, Apple is already selling two billion songs per year, for $600 million in revenue.

Like Amazon's DRM-Free Music Downloads? Thank Apple
Edgar Bronfman, Jr., the Warner Music Group chairman, told Goldman Sachs investors in New York last week he was considering removing DRM from Warner's music downloads -- this just months after suggesting Warner would never abandon DRM. He blamed Apple for the apparent change of heart.
"We need some online competition" for Apple's iTunes Music Store, Bronfman said.
He conceded the iPod is "the default device" and iTunes the "download

The self-created headache for the industry is that the highly popular iPod and new iPhone only play music protected by Apple's proprietary FairPlay DRM solution or music that isn't protected at all. And Apple chairman Steve Jobs has repeatedly balked at licensing FairPlay for use on competing download services or devices. That meant music companies had to choose between using iTunes or going DRM-free. The industry stood by and allowed most of its music-download sales to come from Apple. Recognizing opportunities lost to Apple's dominance, the music industry is moving toward throwing DRM overboard in a bid to open up new retail markets and promotional opportunities.

Making P2P pay: Grooveshark review
Grooveshark is a radical new service that attempts to fuse community services and P2P music file sharing with a product that will motivate users to share music files and simultaneously accrue credits towards music purchases from the process. Subscribing to Grooveshark turns your own personal library of music into a music store available to family, friends and any other passing consumers that you can draw in. The service is an ambitious attempt to commercialize a P2P distribution with social networking model of distribution.

Grooveshark requires the user to download a Java app that interfaces between the Web service and your library of tunes. The site operates like a music laundering service, no questions are asked as to where the tracks came from, but when one of your contacts chooses to download the track from your computer, Grooveshark will bill your contact for the full cost of the track and then pay a share of the money to the label and credit a portion to your account against future purchases.

Wal-Mart studies environmental impact of DVD distribution
Wal-Mart is partnering with the Carbon Disclosure Project on a pilot program that will study the amount of energy used to bring products including DVDs to its store shelves. The nation’s No. 1 retailer of DVDs, Wal-Mart is examining procurement, manufacturing and distribution processes with the goal of coming up with ways the retailer and its vendors can reduce harmful emissions on the environment.

Amazon's MP3s Contain Watermarks, But Not the Privacy-Invading Variety's new MP3 store watermarks its MP3s, but only with information stating where the songs were purchased, not who did the purchasing, according to the online uberstore. That's the good news.

My DVD Business! It’s Melting, Melting … Melting
The salad days when you could rush dross like “Police Academy: Mission to Moscow” and “From Justin to Kelly” out of empty theaters, onto digital media and into the living rooms of those willing to actually sit through them are over. Total DVD sales are down 7% so far this year. Which is a far cry from the double-digit growth the industry enjoyed just two years ago. High-definition DVDs were supposed to offset this decline, but the silly format war between the HD DVD and Blu-ray supporters has curbed adoption of the next-generation format. Worse, according to analysts, the sparring between the two camps is likely to continue for another 18 months. Which means sales of high-definition discs likely won’t be substantial enough to improve studio revenue this year or next.

Tuesday, September 25, 2007

snapshot 9/25/07

Amazon launches early version of music service Inc launched an early version of its highly anticipated digital music download store, which is seen as a potential rival to Apple Inc's dominant iTunes system. Amazon's store, named "Amazon MP3," allows users to buy music without copy protection technology, so that the songs can play on a variety of devices including Apple's iPod. Most songs are priced from 89 cents to 99 cents, with more than half of the 2 million songs priced at 89 cents, the online retailer said in a statement.

U.S. music companies, concerned about piracy enabled by file-sharing Web site, are mulling new business models with a goal of increasing digital revenue as CD sales drop more sharply than anticipated. They also hope to create alternatives to iTunes to boost their negotiating power against Apple when licensing contracts are renewed.

Press Release

The iFlop
Six months later iTV is a flat-out iFlop. Renamed Apple TV upon launch, the ballyhooed box has sold perhaps 250,000 units--far behind the 1 million sold for the iPhone, which was priced twice as high and has been on the market less than half as long. Apple, which declined to let FORBES interview Jobs and other execs for this story, provides detailed sales data for the iPod and other digital wonders but won't reveal any numbers for Apple TV; apparently the truth is too humiliating.

What’s the Future of the Music Industry? A Freakonomics Quorum
It strikes me as ironic that a new technology (digital music) may have accidentally forced record labels to abandon the status quo (releasing albums) and return to the past (selling singles). I sometimes think that the biggest mistake the record industry ever made was abandoning the pop single in the first place. Customers were forced to buy albums to get the one or two songs they loved; how many albums can you say that you truly love, or love even 50% of the songs — 10? 20? But now the people have spoken: they want one song at a time, digitally please, maybe even free (yikes: big can of worms, which is addressed ably below).

So what really happened to the music industry, and what will it look like in five or ten years?

Amazon's new site design: what's different?
Don't expect any drastic changes. Most of the updates are cosmetic. For example, you can choose categories to search and browser through a navigation panel on the left side of any screen. You know, pretty much just like you can do now. The difference is you'll be able to choose categories and subcategories by hovering your mouse. No more waiting for a fresh page to load. Overall, it's a bit more web 2.0-ish. Don't be surprised if you don't see the new site the next time you load The new design is being rolled out slowly, and may not be available to all users right away.

Monday, September 24, 2007

snapshot 9/24/07

Starbucks to give away music as new service starts
Starbucks Corp said on Monday it will give away millions of songs via downloads starting next month as it launches a wireless music service with Apple Inc. From October 2 to November 7 at more than 10,000 U.S. Starbucks locations, customers can receive "Song of the Day" cards redeemable on Apple's iTunes store for a complimentary song hand-selected by Starbucks Entertainment, the company said. Starbucks said it will give away 1.5 million downloads per day for a total of more than 50 million free songs. Customers will have until the end of the year to redeem the song on iTunes.

Album art gets short shrift in digital marketplace
In today's digital music environment, album art -- like liner notes, lyrics and other extras considered commonplace in the physical world -- exists as a mere afterthought, if that. Its primary purpose is to serve as icons when shoppers scroll through vast music libraries on the computer or iPod.

There's no reason digital distribution channels can't spark the greatest innovations in cover art since the days of the vinyl LP. Animated album covers, interactive booklets and liner notes that link to other Web sites and multimedia material, customized album art where fans can place their own images -- all are possible in the digital distribution future.

Virgin drops Windows Media-based music download service
Virgin Group Ltd. will shut down its online music subscription and download service in the U.S. and U.K. next month, leaving one less competitor for Apple Inc.'s iTunes Music Store.

Classical fans must give in to downloads
Though classical music makes a respectable showing in iTunes, executives for compact disc purveyors from ArkivMusic to Brilliant Classics say their consumers are suspicious of downloads, fearing their music will be somehow swallowed up by their computer. Or, given the often-superior sound quality of compact discs, they don't see the point.

Yet given the low-margin, long-view profits that have made classical music almost un-American in its lack of market performance, the digital domain is the best news in years - especially since the demise of CD retailers that once sustained the classical industry, such as Tower Records.

AnywhereCD To Shut Down
AnywhereCD, the San Diego-based digital music retailer headed by's Michael Robertson, is shutting down. According to an email from Robertson, the firm is officially shutting down in a few days, when the firm's contract to sell both CD and digital versions of Warner's music tracks expires. AnywhereCD allowed people to buy both CDs and DRM-free, MP3 versions of the same album through an online store. The idea was to provide both an MP3 and a physical CD for one price, however Robertson was only able to launch with Warner Music, and other labels had not signed on to try the idea.

Curacao/MusicNet deal aims to boost digital sales
This may partly account for the lag in digital sales of Latin music. According to Nielsen SoundScan, less than 1 percent of all digital albums sold so far this year were Latin. In contrast, Latin music accounted for 7 percent of all albums sold. A new alliance between Hispanic retailer La Curacao and content provider MusicNet will address both problems simultaneously, promoting online sales of Latin music and sales of media players and computers to Latin buyers.

Under the Curacao/MusicNet partnership, slated to go into effect by December, MusicNet will provide content for Pasito Tunes, a Hispanic-focused digital music service. Pasito will offer a music subscription service and a download store, both accessible on computers and portable media players. Pasito will have access to MusicNet's 4.5 million tracks but will appeal to Hispanic buyers with its own editorial voice.

Customers Ask: Is Apple Going Rotten?
But over the past two weeks, Apple's fans have been grumbling that the company they knew and loved is transforming into another Microsoft, making short-sighted, anti-consumer decisions and carelessly releasing products with user experience-diminishing problems. In response, an increasingly angry erosion of Apple's brand loyalty is beginning, with complaints mounting all over the Internet, including on the company's own discussion forums. This time, it's not just a cadre of Microsoft fans trying to anonymously stir up trouble for the Cupertino-based company, but rather legitimately upset Apple customers who are threatening boycotts of current and future iPod, iTunes, and Mac offerings.

Put aside Apple's $200 iPhone price drop, which generated a lot of anger but was quickly resolved by the company, and bugs in both new iPod and iTunes software, which the company is certainly working to repair. Instead, consider just four of the issues that are still largely unresolved by Apple, and the extreme anger and disappointment that its customers have been expressing as a result.

RADAR, next-generation media browser, launches at DEMO
MetaRADAR, a San Bruno, California company, is likely to turn some heads at DEMO when it unveils RADAR, a sleek new interface for browsing media on the web. While we haven’t been able to get our hands on the product, a quick demo reveals that the company has successfully created a means to browse and share media — news, videos, photos, data from your social networks, etc — in a rapid fire yet seamless experience that gives you quick access to all of the above without requiring you to fuddle with tabs or the like. The company calls it a “MediaMasher.”

Barrier-bustin' Internet may lead to a music industry "middle class"
In one of the final sessions of the Future of Music Policy Summit, panelists discussed how the music industry is going through a process of "disintermediation," where fewer steps stand between artist and audience, thanks to social networking and Internet distribution. "Someone spoke earlier about a 'musician's middle class,'" said Tim Westergren, founder of "In this world, you don't need to be a full-time professional musician." Instead, the speakers noted that it's possible for amateur musicians or independent bands to reach new and unexpected audiences over the Web.

Vivendi labels Apple’s contact terms ‘indecent’
Speaking at a media gathering in France, Vivendi Chief Executive Jean-Bernard Levy called the terms of Apple’s iTunes Store contract “indecent,” claiming that the iPod maker’s share of iTunes sales is too large. “The split between Apple and (music) producers is indecent ... Our contracts give too good a share to Apple,” Levy said. He also called for variable pricing, stating “We should have a differentiated price system.” In July, Vivendi’s Universal Music Group announced that it would not renew its long-term iTunes contract, deciding instead to renew its music distribution contracts with Apple on a monthly basis.

Microsoft Zune Patent Reveals Playlists/Music Over WiFi
A recent unearthed Microsoft patent details a preference based music service, where suggested music is directly pushed to your Zune based on your currently playing tunes. The selection would be forwarded to the device over WiFi, finally putting the Zune's WiFi function to some good use. Whether this will be linked to a conventional music store is not clear, but the work seems to be related to earlier filed patents.

The sharing fun does not stop there; the patent further describes a service that would enable playlist sharing between yourself and your imaginary friend, for whom you purchased a Zune. Essentially, the system would allow Zune users to subscribe to one another's playlists, which would automatically update every time you hit up on a WiFi hotspot.

Snocap Widget vs. Widget
Snocap widgets are for single song downloading. To purchase an album over ten songs, it would be cheaper to go to iTunes or another download store (and cheaper yet to purchase at eMusic if available there). The James Blunt widget -- the one case that exists to date -- allows for only an album download. (I cannot say if future widgets will similarly offer only album downloads.)

The file formats offered by the two companies is another key difference. Snocap allows artists/labels to choose between MP3 or protected WMA files. In the case of's James Blunt widget, the tracks are downloaded directly to the purchaser's iPod (and a CD is sent via snail mail). The tracks cannot be moved off the iPod to another device or to a computer. In effect, allows Warner Music Group to sell iPod compatible music that dead-ends at its destination. Since the songs are not placed on the user's hard driver, the tracks will not end up on file-sharing networks.

Former Ramone sues over song downloads
Richard "Richie Ramone" Reinhardt, who performed with the Ramones between 1983 and 1987, sued Wal-Mart Stores Inc., Apple Inc., RealNetworks Inc., the band's management and the estate of its lead guitarist, claiming he had never fully signed over the rights to the six songs he wrote for the group.

Specifically, Reinhardt said there was never any written deal authorizing the sale of those songs digitally. He said he is owed at least $900,000 in royalties, and asked the court to issue an injunction preventing further use of his compositions without permission.

Thursday, September 20, 2007

snapshot 9/20/07

Market Spotlight: Online Music
Until recently, many consumers associated buying music online with companies like Apple Inc., RealNetworks Inc. and Napster Inc. But recently the digital music space is starting to get a lot more crowded, with new and upcoming offerings from Inc., Nokia Corp. and SpiralFrog Inc. — plus existing and changing services from wireless operators like Verizon Wireless.

It's unclear whether any of the services will dethrone Apple's iTunes, but offerings from Apple and other players in this growing field highlight two emerging trends: There is a growing availability of tunes free of DRM, or digital rights management, technology that hampers copying tunes, as well as tracks that are downloadable over the air to cell phones.

Some sites, like Apple's iTunes Store and Wal-Mart Stores Inc.'s online music store, are tinkering with DRM-free offerings, and newcomer Amazon promises to offer tracks free of copy protection technology as well.

Apple’s iPod Touch Is a Beauty of a Player Short on Battery Life
But it seems ridiculous to me to sell a powerful device with Wi-Fi and a huge screen, and to leave out things like an email program, even though you can use Web-based email programs. I assume Apple was concerned that the less costly Touch might compete too much with the iPhone if it had these features. In fact, if somebody can jam a voice-over-Internet capability into the iPod Touch, it might be more of a threat to the iPhone, which is tethered to a single cellphone carrier, AT&T.

The company claims that the Touch can play music for up to 22 hours and video for up to five hours on a single battery charge, even with Wi-Fi turned on. But in my tests, using factory settings, music playback lasted just under 17 hours and video playback lasted just over four hours. Nearly every other iPod I’ve tested, including the new Nano, handily beat Apple’s battery claims.

Popkomm Panelists: Music, Auto Industries Must Align
Vehicles will drive a viable revenue stream for record labels in the coming years, panelists said at the "Auto Mobile Music: The Dashboard Jukebox" session today, on day one of Popkomm, the international music and entertainment conference being held in Berlin. The event runs September 19 - 21.

"Personalized downloads to the car will become a viable business model," Hirsch added.
When we talk about filling the car up, we could be talking about filling it up with music," Roberts said.

Poll: Radio Listening Is Staying Stable
Sixty-three percent of American adults listen to the radio every day, says a new survey from American Media Services. And the number among 25-34 adults is even stronger: 79 percent tune in to radio at least once a day. Seventy-two percent of Americans say they're listening to the radio as much or more now than they did five years ago, and they're still tuning in in the car: 74 percent of Americans turn on the radio when they get in the car, including 72 percent of 18-24 adults and 80 percent of 25-34s.

Online music distributors: song licensing a painful and expensive process
At a breakout session for the Future of Music Policy Summit in DC this week, online music distributors complained that licensing music for digital retail is still far too complicated, and blamed this complication for the paucity of online distribution outside of the US market.

When Rhapsody and other services ask for a list of songs available for licensing instead of filing individual requests, they're told that the information is proprietary, said Quirk. The problem is only exacerbated by very poor metadata and recordkeeping among music labels, Potter added.

Between the secretive practices of music licensing agencies and the heavy penalties for any infringement, they said, it's hard enough to operate inside the US, much less across national borders, as each country comes with its own set of legal tangles. Not to mention, said Quirk, the problem of a subscription-service customer who travels to another country where the set of licensed rights can vary in ownership, scope, or even availability.

eMusic Adds Remote For Easier Track Transfer
Popular DRM-free download subscription service eMusic which specializes in indie music has launched a new application dubbed eMusic Remote which syncs traks with the three most popular media players - iTunes, Windows Media Player and Winamp.

Remote automatically moves eMusic downloads to your preferred player for easy transfer to digital music devices like your iPod. The application provides an all-in-one browsing and downloading experience for eMusic users. Smartly Remote is based on open source technology that works on Windows, Linux or Mac OS X and could also be used bu independent programmers to create additional applications and add-ons.

iPhone & iPod: contain or disengage?
But why is the iPhone locked to a single carrier, so I can't travel internationally with it? There's really only one viable reason: Apple wanted a share of the carrier's profits, which meant giving AT&T an exclusive deal. Which meant, we get screwed so Apple can make more money. It's that simple.

But since Apple is so close to the record companies, and they are already so grumpy with Apple, Apple did a deal that benefits record companies and Apple. Not artists, certainly not consumers. In order to use a 15-second snippet of some random song, I now must buy it not once, but TWICE. The amazing thing is that I must buy it THREE times if I own the song on CD -- I have to buy a DRM'ed version from the Apple Store, then buy the the ringtone, on TOP of the CD I already bought.

Hollywood Readying Burn-To-DVD Downloads But Do We Care?
A little birdy told us that last night, the DVD Copy Control Association met in a smoke-filled room and ratified the CSS Recordable (aka DVD Download) profile, meaning movie studios may soon release movies that you download, burn to disc and then use almost exactly like standard DVDs. It's not a new DRM—it's actually the same CSS that was cracked long ago. I assume the bare minimum requirement for this would be a hardcore broadband connection and a DVD burner, so who is the target customer?

Video Ezy to work with Apple on kiosk-style movie downloads?
It's not clear how much of this is optimistic name-dropping and how much is real, but Australian video retailer Video Ezy (they just bought Blockbuster Australia) has announced that it's in talks with Apple, as well as several other suppliers, on a kiosk-style movie delivery system that would allow customers to download up to 40 movies onto an iPod and then pay as they watch. The system, called eBox, would still require you to actually visit a retail location, a compromise Video Ezy says is required because broadband speeds still aren't high enough to support a pure download model. We can see why Apple would be an attractive partner -- download on your iPod, watch on your Apple TV certainly seems feasible -- but true to form, Apple Australia refused to comment.

Wednesday, September 19, 2007

snapshot 9/19/07

Zune 2 "source" leaks launch date and specs
According to reports from a "source" inside Microsoft, a new batch of Zunes (AKA Zune 2, Draco, Scorpio, etc.) are due out on October 16th (just in time for the holidays), in both flash memory- and hard drive-based forms. The new, smaller, flash Zune (the Draco) will be hitting shelves in pink, red, black, or army green colors, will have a 4GB or 8GB capacity, and will feature a "squircle" (the source's term, not ours) for navigation, which won't have a center button but can be pushed, "From any side." The hard drive-based player (the Scorpio) will be available in 80GB, sports the soon-to-be infamous "squircle," and touts a screen which the source claims is "awesome" for video.

We7 vs. SpiralFrog. Exclusive Interview With We7's Steve Purdham

  • We7 is DRM-free vs SpiralFrog which is Windows Media Player DRM only
  • We7 tracks will play on iPods, Zunes, phones, in fact any MP3 device vs SpiralFrog’s which play only on limited devices
  • We7 means you own the MP3 forever vs SpiralFrog where you lease the songs by renewing your membership every 30 days
  • We7 download is fast vs SpiralFrog isn’t
  • We7 graft a small (10s) targeted audio ad to each track vs SpiralFrog slows the download and shows a video

The AudioFile: basics of uncompressed digital audio
But what are those principles? When we talk about bits and samples, what do we mean? In this article, we'll take a look at the very basic process of turning audio into a digital file and the variables that affect it.

Goldman Sachs Communacopia: Edgar Bronfman, CEO, WMG: Labels Need Equity In ‘MTV Of The Internet’
At the Communacopia conference, Warner Music Group CEO Edgar Bronfman reiterated the message he sent Monday yesterday at Convergence 2.0: the music industry is not dying, but needs to develop new business models and get away from the simple sale of recorded music. Once again, he stated his company’s plans to do more in areas like touring, fan clubs and artist management. He was asked about the role of the music label in a world where social networks provide a ready-made avenue for artist promotion. In this regard, Bronfman contends labels are best positioned to manage an artist’s use of social networking channels.

As for recorded music sales, Bronfman is hopeful that iTunes will finally see some competition from the likes of and Wal-Mart; he also mentioned free music site LaLa, which has a relationship with WMG. He said that in retrospect, the labels might have been smart to demand an equity stake in the iPod/iTunes business and that it would be a mistake for the “MTV of the internet” to emerge without strong participation (an ownership) from the labels.

Album Buyers Show Up...And Buy CDs
A couple things stuck me about the first-week sales totals for Kanye West, 50 Cent and Kenny Chesney. First, like many people I was surprised by the quantity of sales. West's Graduation sold 957,000 units, an incredible amount in a year when album sales are down 14%. 50 Cent's Curtis moved 691,000. Obviously the manufactured rivalry between the two rappers spurred sales. Chesney's Just Who I Am: Poets and Pirates moved 387,000, a number that would be for #1 in a typical week.

Last week, Kanye West's digital sales represented 14% of total sales. For 50 Cent and Kenny Chesney, the numbers were 8% and 9%, respectively. What those numbers tell me is those artists' labels and distributors did an good job moving the CD and getting sell-through (though I don't know what was shipped on each title). The albums' digital shares were good but lower than I expected. As a point of comparison, Grey's Anatomy Vol.3 debuted at #16 with sales of 26,000 and a digital share of 43%. Maroon 5's It Won't Soon Before Long has sold 1.24 million units in 17 weeks and has a digital share of 18%.

Tuesday, September 18, 2007

snapshot 9/18/07

AOL to test personal pictures, video, music site
Time Warner's AOL will test a free service that lets users consolidate on one Web site their personal photos, videos and music that are now scattered across multiple computers and Web sites. The new site, Bluestring, combines elements of video- sharing sites such as Google Inc's YouTube, online picture sites such as Yahoo Inc's Flickr service and music sites with AOL's online storage division Xdrive.

Warner Music to sell Blunt album on MySpace
Warner Music Group Corp will sell a new album by the artist James Blunt through News Corp's Internet social network MySpace, the Financial Times reported in its online edition.

U.S. consumers will be able to listen for free beginning on Tuesday to Blunt's entire album from his MySpace webpage, the report said. They can purchase a download for $9.99 that will play on Apple Inc's iPod, and will also receive a compact disc version in the mail, the report said.

Music industry looks to new models to boost sales
The U.S. music industry is becoming more open-minded about working with online music stores from the tiniest start-up to, hoping to boost digital music sales and erode the dominance of Apple Inc's iTunes.

Their goal is: to increase digital revenue as CD sales drop more sharply than anticipated; and to create alternatives to iTunes to boost their negotiating power against Apple when licensing contracts are renewed.

Yet, as a measure of how difficult it is to gain traction in this market, Lala only has one deal with a major label, Warner Music Group. Lala also offers to send fans free CDs of digital albums they buy from its site, and also plans to give them a chance to "return" downloads they do not like.

Mixaloo reinvents mix tapes
Until now. Mixaloo is a service that blends social networking and music, letting you build your own play lists and share them through widgets that you can post on your MySpace or Facebook page. Even better, this method of making mix tapes is completely legal and won't even cost you 45 cents for a blank. Plus, if you can create a mix that somehow appeals to the masses, rather than just your sweetheart, you can actually score some bank in the process.

The widget itself is rather interactive, giving options to hear sample tracks, buy the entire mix, send it to a friend, or gift it to a friend. In order to buy or gift the mix tape, the buyer will need to create a Mixaloo account. Mixaloo keeps track of all the mixes you’ve created to sell, and those you’ve purchased. For promotional purposes, others can also grab the widget to place on their blogs or social networking profiles. As it’s powered by ClearSpring, there are easy, one-click options for the widget to be added to the various networks including LiveJournal, Blogger, MySpace, Facebook and more.

Radiohead Blows Off ITunes, Sells Full Albums in MP3 Format
There are currently only three Radiohead songs available on iTunes, all as part of soundtracks and compilations. But head over to 7digital, and you'll find all of Radiohead's albums plus some early singles, available in the 320 Kbps, DRM-free MP3 format.

According to an EMI, Radiohead refuses to distribute via Apple -- even through Apple's DRM-free iTunes Plus store -- entirely because of Apple's policy of selling tracks individually. Prices are in UK pounds, but 7digital apparently lets you purchase albums from Radiohead, EMI's other artists, and other bands from anywhere in the world using a credit card or Paypal.

Let’s rock!
The concert industry was once the poor relation of the record business. “It used to be that the tour was there to sell the record,” says David Glick, a former lawyer who last year set up Edge Performance VCT, a £20m fund for investing in live music. Now, with compact disc sales collapsing, it is the other way round.

In an age of media fragmentation, digital disruption and rampant piracy, live music is one of the few parts of the entertainment industry to be enjoying impressive growth. In the US alone, ticket sales grew by 16 per cent last year to $3.6bn, up from $1bn a decade ago according to Pollstar, one of the few research firms attempting to measure the fragmented business. The audience has grown by 50 per cent in that period and average ticket prices have more than doubled.

Several connected factors share the credit for this turnround. An expanding audience has allowed promoters to push up ticket prices, tempting more artists out on tour, creating demand for ever more elaborate shows and attracting investment in a new generation of venues to cater to concert-goers who would never be seen dead in Harlesden.

The Orchard + DMG. Can Two Losers Make A Winner?
An SEC filing related to the merger of The Orchard with Digital Music Group reveals two digital music distributors loosing money. (SEC) In 2006 The Orchard, which as a private company did not have reveal financial details, had a net loss of $5.97 million on revenue of $14.9 million for an accumulated loss of $16.5 million.

DRM Questions Continue, Experimental Data Remains Foggy
Content protection remains a difficult puzzle piece for the music industry, and scant data is perpetuating the confusion. At the Digital Rights Strategies forum in Manhattan, top executives professed that little is known about the impact of recent, DRM-free sales experiments from majors EMI and Universal Music. And a confusing patchwork of DRM-free partnerships is further complicating the analysis.

EMI - and Apple for that matter - have declined to release data from the iTunes Plus experiment, making an early-stage assessment mostly impossible. And DRM-free experiments involving portions of the Universal Music Group catalog remain incredibly early-stage, and equally difficult to analyze.

An unexpected comparison emerged from Snocap, a core component of MySpace MyStores. The service allows artists to sell content from their profile pages, and offers the option of MP3-based or protected sales. According to Ali Aydar, chief operating officer at Snocap, most artists choose MP3s, though a minority - including Warner Music Group - broker in protected content. "Pound for pound, MP3 sells more," said Aydar, perhaps an obvious outcome.

Apple's success ruined everything
"Apple is using encryption to do what Ma Bell used to do with the phone network: wall people in," InterTrust CEO Talal Shamoon said in the opening session, setting the theme for the day. "It frustrates consumers and it feeds piracy because it doesn't allow consumers to do what they want to do."

"I can't believe I'm saying this but the real bad guy here isn't Microsoft, it's Apple," InterTrust's Knox Carey chimed in. "You can license Microsoft's DRM."

What will it take to create the middle-class musician?
Westergren: The vast majority of musicians exist in that they are the working poor. They spend a lot of time playing around the clubs...spend whatever little money they earn on their music equipment and they're basically starving, you know? They're all trying to get the attention of a big record label, because that's traditionally the only means for them to get exposure to enough people to make a career out of it.

Monday, September 17, 2007

snapshot 9/17/07

Distribution of your content is controlled
One of these days, the music and video content control industries are going to figure out why the barrage of derisive comments a few years ago have turned to consumers' embarrassed glances at the ground when far-reaching claims are made about limiting the spread of music, movies, software or any other data.

So far, the industry has never won a single battle in the content distribution control war; every technological measure has been defeated before the market life cycle of the media expires. And that's when it functions as designed; Microsoft's own Windows Genuine Advantage software control system fell over this past week, resulting in both denied access to purchased software and widespread sharing of information on how to bypass it. If your business model depends on the secrecy of information for more than a few days or weeks, you'd be better off looking at contractual and behavioral curbs rather than playback control or watermarking technologies. Digital rights management will never work.

EMusic to sell audiobooks for download
Digital music download service eMusic said on Monday it will offer audiobooks for download starting on Tuesday. The company, which describes itself as the world's second-largest digital music service after Apple's iTunes, said it will offer more than a thousand audiobooks, with hundreds more to be added each week. eMusic said its customers can sign up for monthly subscriptions priced at $9.99 for one book or $19.99 for two books, and get one book free as part of an introductory offer. New eMusic customers will be offered an audiobooks subscription with one audiobook free if they sign up within 14 days, the company said.

SpiralFrog Challenges iTunes with Free Music Downloads, an ad-supported, free music and video download site, officially launched on Monday. The site, which was in beta testing for months, allows anyone to access and download files from a library of more than 800,000 songs and 3,500 videos.

BTW, their site doesn’t appear to be able to handle the traffic… Site requires a download manager install and provides a Facebook application of “Top Downloads” The site requires only that users register on the site and log in once a month (otherwise the DRM'd files go belly up). DRM rules are that your tunes can’t be burned onto a CD and can only be placed on two media players at a time, also SpiralFrog's content won't work on your Mac or your iPod.

Sony BMG, Starwood Hotels in harmony on music pact
Sony BMG Entertainment has entered into an exclusive partnership with Starwood Hotels & Resorts Worldwide to develop uniquely branded music- and entertainment-based programming for hotels that fall under the Starwood banner. Under the long-term deal, Sony BMG will work closely with Starwood to create in-house song playlists, digital music stores, in-room TV offerings, customized compilation albums, live entertainment experiences and more.

Another goal is to create compilation CDs that will be sold at each hotel. At a price of $20, a compilation for W Hotels -- including such acts as Goldfrapp, Nina Simone, DJ Krush and Dirty Vegas -- has already been developed. Sony BMG and Starwood will share revenue on each CD sold. Starwood is also giving Sony BMG a free in-room TV channel that will be looped with approximately 60 minutes of artist interviews, short-form music videos and other exclusive programming. "We'll also have snippets of our long-form concert videos that are sold on DVDs," Rosen said, noting that viewers will be given the option to purchase the full concerts via pay-per-view.

Apple’s Ringtones and Copyright Law
pilsner.urquell writes "Apple's interest in defending the rights of the consumer has cost them a lot of grief in the ringtone market.'John Gruber of the Daring Fireball cites Engadget, which reported that the RIAA wanted to be able to distribute ringtones of its artists without having to pay them big money to do so. It won a decision last year before the Copyright Office saying that ringtones weren't derivative works, meaning they didnt infringe on the copyright of the songwriter.' The piece goes on to explain the tense relationship between Apple content holders regarding ringtones and other pieces of IP, such as in the recent withdrawal of NBC." Via slashdot

Winamp goes where iTunes doesn’t dare
On the 10th of October at 10:10am, Winamp 5.5 (PC-only) will be released sporting two new and potentially controversial features: support for mp3 blogs and the ability to stream your music collection over the Internet (a Beta version is available here).

Microsoft adds Slingbox-like capability to its Media Center PCs
Using the newly acquired (but not new) WebGuide component -- created by a gentleman named Doug Berrett -- you can now tune into your Media Center content from any place you have web access. The software actually goes beyond what Slingbox is capable of, giving you full control over your system remotely, allowing you to set record times, change schedules, and generally go buck-wild, even from a mobile phone or WiFi equipped PDA. Ballmer and Co. also added an ITV function to MC PCs, though apparently all it does is offer C-rate "internet" content for MCE users. Clearly, what's exciting here is WebGuide -- the software is free, and presuming you already have your system up and running, you could be "slinging" video around before you know it.

Friday, September 14, 2007

snapshot 9/14/07

Revolutionary label to focus on streaming as downloads falter
A record label which uses Creative Commons licences and allows consumers to choose how much they pay for music is focusing on streaming music because its downloading business has dipped dramatically.

Magnatune founder John Buckman told technology law podcast OUT-LAW Radio that the company would soon release streaming products to earn revenue from the growing number of its customers who are streaming its music rather than downloading and owning it.

US online video popularity keeps climbing
People in the U.S. have steadily increased the amount of time they spend watching videos online, as Google’s YouTube remains by far their preferred video site, according to a study. In July, almost 75 percent of U.S. Internet users watched videos online, up from 71.4 percent in March, according to comScore Networks.

The monthly time spent watching videos went up to an average of 181 minutes per viewer in July from 145 minutes per viewer in March, according to comScore. People in the U.S. are also watching more video clips. In July, the average user watched 68 clips, up from 55 clips in March. Overall, almost 134 million U.S. Internet users watched a little over 9 billion video clips in July, up from 126.6 million people and a little over 7 billion clips in March.

Hands On: iTunes Wi-Fi Music Store
The interface is responsive, songs download as fast as the normal iTunes store and the Wi-Fi store is designed in a clean and logical manner. It is easy to move through the interface and find what you're looking for. The store is organized into for basic categories—Featured, Top Tens, Search, and Downloads.

The Wi-Fi store lacks some of the cooler features of its full-fledged brethren. Free download of the week is absent, no celebrity/featured playlists, and no spotlights that break down an era/artist/genre in depth. It's certainly not a necessity, but going through these features is a good time killer, and would be nice if you needed to kill time away from your computer.

Thursday, September 13, 2007

snapshot 9/13/07

Sprint to offer online shopping on cell phones
Sprint Nextel Corp customers can now use cell phones to shop for everything from shoes to televisions in a new service the No. 3 wireless company has launched to boost revenue.

The company said on Thursday it is providing a mobile Web portal for shoppers to compare prices or buy about 7 million products from 30 online retailers, including Wal-Mart Stores Inc, Target Corp and

Yahoo to distribute music series through MTV: report
Yahoo Inc has agreed to distribute an online music performance series through a high-definition channel from Viacom Inc's MTV, the New York Post reported in its online edition on Thursday. The deal marks a rare instance in which material first designed for the Internet is coming to mainstream television, the report said. "Nissan Live Sets" comprises seven to eight songs from a featured artist, taped in high-definition in front of a live studio audience of about 300 fans, the report said.

Music Buyer 2.0 - More Of Them But They Each Spend A Lot Less
An analysis of combined data from the Bridge Ratings data and the US Census Bureau showed that despite the popular belief that fewer people are buying music; there is actually up-tick in the number of music fans. Its just that they are each spending a whole lot less.

Amazon's Kindle e-book reader and wireless service launching October 15?
Amazon's little secret that could -- the Kindle -- looks to have a solid launch date. October 15th is the day thanks to Les Echos' press release issued at the launch of their "e-paper" digital newspaper. Of course, it's all just a rumor at the moment but it certainly matches the timeline reported by the New York Times just last month.

Britney Bomb Stirs Online Records at
The resulting traffic poured online for the footage, and landed at for the replay. On Wednesday, MTV pointed to full-day, unique visitor volumes of 8.7 million the day after the awards. That is a one-day record for the destination and a fourfold increase over volumes from last year. Unsurprisingly, streaming video was the main attraction online. According to the data, clocked 17.4 million streams the day after, a three-fold increase over last year and another record. The awards were first broadcast on Sunday evening.

Hispanic Retailer La Curacao Pushes Digital Music Store
Hispanic retail chain La Curacao is now pushing into digital music, and tapping MusicNet to power the play. Information on the tie-up surfaced Wednesday, though the store is not scheduled to launch until the end of this year. The store will be called Pasito Tunes, and lean heavily towards Hispanic artists. Like other MusicNet clients, Curacao will combine subscription and download elements, and allow access online or on-the-go. Focus genres will include Salsa, Merengue, Cumbia, Tex-Mex, Reggaeton, Bachata, Rancheras, Baladas, and Spanish pop, among others.

Are Technology Limits In MP3s and iPods Ruining Pop Music?
If it seems like you are listening to music more but enjoying it less, some people in the recording industry say they know why. They blame that iPod that you can't live without, along with all the compressed MP3 music files you've loaded on it.

Those who work behind-the-mic in the music industry -- producers, engineers, mixers and the like -- say they increasingly assume their recordings will be heard as MP3s on an iPod music player. That combination is thus becoming the "reference platform" used as a test of how a track should sound. (Movie makers make much the same complaint when they see their filmed images in low-quality digital form.)

Amazon To Launch Music Service Next Week?
The much-anticipated music service from Amazon could go live as early as Tuesday, has learned. The company has been testing the service internally for the last several weeks, and is presenting the results to Amazon CEO Jeff Bezos for final approval.

According to one well-placed source, his approval will mean an immediate launch on Tuesday. However it could be delayed for weeks if he is not satisfied. Additionally, Amazon has taken the unique step of selling music only in unprotected MP3 format. While this means that only tracks from EMI and certain releases from Universal Music Group, not to mention a number of independents, will be available, they also will work with the iPod. Warner Music Group and Sony BMG have not yet agreed to sell their music without DRM protection. Amazon also is planning a tiered pricing scheme that will sell new releases at one price, and older tracks at another. In all, the Amazon digital service will have four pricing tiers, which major labels find attractive.

iTunes users experience downloading issues
Many iTunes users are reporting a growing problem involving purchases from the iTunes Store. According to messages from iLounge readers and user reports on Apple’s support website, customers are purchasing, and paying for, songs that refuse to download. When users try to select “Check for Purchases”, they receive an error message stating “Unable to check for purchases. iTunes Store unavailable. Please try again later.” At least three separate threads on Apple’s Discussion Boards document the issues. The problem appears to be widespread, with similar issues being reported by users of the iTunes Store in Canada, the UK, Germany, Austria, and Finland, as well as the US. Apple has yet to make any official statement regarding the issue.

Apple iPod touch
It would also be nice if the WiFi store offered video purchases, too—it's currently music-only. And, yes, the earbuds still suck. But those are my only complaints—and they are minor. The relatively hefty $300 and $400 price tags for 8 and 16 GB, respectively, don't bug me either. Why? This is probably the best portable media player ever made.

Gracenote Acquires Musicphone Technology Platform and Extends Mobile Music Service to AT&T and Virgin Mobile USA
While consumers continue to enjoy music services on their mobile phones, they're increasingly using handsets to identify songs heard in restaurants, clubs or on their car stereo and then purchase ring tones, songs, wallpaper and other related content. Through the acquisition of Musicphone technology, Gracenote®, a decade-long leader in music identification, makes this capability available to all major mobile carriers and handset manufacturers.

New WinAmp targeted at iTunes?
AOL's next version of WinAmp is built to draw users away from iTunes, according to advance information supplied to Wired. Version 5.5 beta (link active by 4PM Eastern) will reportedly feature a look much closer to the Apple player to ease newcomers into the software while still allowing the skins and other customizable visual elements that have defined WinAmp since its release in the 1990s. It should also sync and manage music for iPods without requiring a plug-in, though like any non-Apple software the AOL jukebox won't play or transfer protected FairPlay songs due to Apple's access limits.

Some of iTunes' minor features will also be shared but with important enhancements, the WinAmp team noted. Similar to Orb, users will have access to their music or video catalogs through a web-based interface through an Internet connection, bypassing the local network restriction of Apple's Bonjour networking. A playlist sharing function should also allow users to send an e-mail or SMS text message that produces a customized stream. Other WinAmp-specific features will include automatic "scraping" of MP3 blogs to download linked songs and hotlinks to concert ticket purchases or videos aggregated through AOL's services.

A Baffling New Phenomenon: Customized Ringtones
"Pop song ringtones from T-Mobile and Sprint cost $2.50 apiece; from Verizon, $3. You don't get to customize them, choose the start and end points, adjust the looping and so on. Incredibly, after 90 days, every Sprint ringtone dies, and you have to pay another $2.50 if you want to keep it. Verizon's last only a year. Three bucks for a 30-second snippet that lasts a year—when you can buy the entire song online for $1 and own it forever? What am I missing here? How is a 30-second, time-limited excerpt worth three times as much as the full work forever? Does this not enter the heads of the people who are paying $5 billion a year?"

No, I'm sure that, if you follow the ringtone gravy train to its source, you'll find record-company executives. There they'll be sitting, rubbing their hands together with glee and hoping that their young customers don't identify the ringtone industry for what it is: the last great digital rip off.

Tuesday, September 11, 2007

snapshot 9/11/07

NewsCorp won't pull videos from iTunes
News Corp has no plans to pull its television shows from iTunes like NBC Universal, but echoed the media industry's calls for Apple to offer more flexible pricing, a top executive said in an interview on Tuesday.

Classic rock songs take on modern form
But dig deeper and you'll find classic-rock chestnuts from as far back as three decades, including Journey's Don't Stop Believin' and Lynyrd Skynyrd's Free Bird, a sign that baby boomers' love for the music of their youth goes on and on and on and on, no matter how modern the medium.

"When you see some of these older songs there, it is a reminder to you that it isn't just kids who are buying downloads," says Billboard's director of charts, Geoff Mayfield. "It is something adults are getting into, too."

Re-authorizing your computer for Ringtones
You authorized your computer to your iTunes account long, long ago. So why don't your iTunes Ringtones sync to your iPhone? Turns out that you're going to have to reauthorize your computer to allow it to use ringtones. Yes, not only do you have to sign a new terms of service to buy that ringtone but you also have to add a separate authorization.

Apple unleashes iPhone ringtones feature via iTunes (first look)
Once you've purchased a participating song from iTunes, including previously purchased participating songs, it costs 99 cents to make up to a 30-second segment of that song into a ringtone and then sync it onto your iPhone.But when the service went live early Tuesday morning, tracks from many of the music industry's biggest names -- such as Dave Matthews, Jay-Z, U2, Black Eyed Peas and 50 Cent -- were not available for the ringtone feature. Albums from other artists were similarly fragmented in terms of which tracks could be used with the service. For instance, a 14-track "Greatest Hits" album from punk rock band The Offspring revealed 10 songs that could be made into iPhone ringtones. However, the 4 omitted tracks comprised the group's most popular singles, including "Self Esteem" and "Come Out and Play."

Music makers introduce hybrid, multimedia CDs
DISC DELIGHTS: For many people today, "home base" for music is their computer. It's where they shop, swap and download tunes. And it's also where they increasingly listen -- perhaps on one of those better, after-market computer speaker setups that offer upgraded performance at a reasonable ($50 to $300) price. To court this crowd, the music industry isn't just making more of its catalog available online. This season, music labels are also introducing two new hybrid, multimedia-oriented disc formats. These offer extra value for computer-centric consumers who might still be tempted to buy packaged media.

GOING DIZZY: Just out from the Disney organization's Hollywood Records label is the first CDVU+ disc, a self-titled album from the teen-rocking trio the Jonas Brothers. Put the product (pronounced "CD view plus") in a conventional CD spinner and the disc plays normally. But insert it in a computer to open a variety of sight and sound enhancements.

WARNER'S TAKE: Seeing DVD rather than CD as the packaged music media choice, Warner Music Group has been pushing a variety of DVD-based multimedia solutions like DVD-Audio and flipper DVD/CD hybrid discs.

Napster Quietly Buries Free, Ad-Supported Initiative
Napster has quietly buried its free, ad-supported initiative, and shifted its emphasis towards paid platforms. In May of last year, Napster unwrapped its free streaming service at, and padded the offering with advertisements. "With a vision to empower music fans in a legal environment, with an open, all-inclusive platform, we are very excited to share our new free music experience at," said Napster chief executive Chris Gorog during the unveiling.

But the offering has since disappeared from, where users can only access the paid platform. In response to inquiries, Napster told Digital Music News that the free service is now offered through, though this alternate address has not been linked from the main page. In fact, the shift towards the less-prominent happened in May of this year with little fanfare.

Report: Price Cut Bumped iPhone Sales Three-Fold
Piper Jaffray's Gene Munster, whose 50-hour survey of Apple (AAPL) stores produced the most definitive estimate of iPhone sales to date, has combined his data with yesterday's report that Apple sold its 1 millionth iPhone on Sunday to calculate the effect of last week's 33% price cut.

By Munster's reckoning, Apple and AT&T (T) were selling an average of 9,000 iPhones a day before the price reduction, which would have put their quarterly sales at 594,000 as of Sept. 5. The two companies had already sold 270,000 phones in the previous quarter. To reach 1 million by Sept. 9, they would have had to sell 136,000 more phones, or 27,000 a day -- a 200% increase.

Taking On The iPod
SanDisk, the Milpitas, Calif., maker of flash memory and USB drives, has managed to accomplish what technology giants like Sony, Samsung and Microsoft failed to do: snare a sizable chunk of the U.S. market for portable digital media players.

And while Apple's iPod accounted for 71% of U.S. unit sales during the first six months of this year, according to NPD Group, down from 76% during the same period last year, SanDisk was a very distant, but still impressive, second, with 10%, share, up from 9% a year earlier.

Apple TV May Be Updated to Include iTunes Music Store
Mac Rumors is reporting that the next Apple TV update will probably let you access the iTunes Store direct from your armchair, without having to go via your computer. Loop Rumors is also corroborating the buzz, saying it's going to happen soon.

Applying the People Meter to the musical future
Last week, The Wall Street Journal had a story about Arbitron's People Meter, a new portable device that helps the radio ratings measurement company determine the exact amount of time a user spends listening to particular radio stations. Radio stations insert an inaudible signal that only the device picks up, and testers are supposed to carry the devices at all times, so regardless of where they listen (work, home, car, grocery store), the People Meter knows. This is more accurate than the old way of asking radio listeners to record their habits in a paper diary--users tended not to record every station change or stations they heard inadvertently.

In Philadelphia, one of the first two markets where the People Meter is being used, it's finding that users listen to more radio than was previously thought, switch stations more often, and listen to more classic rock and less urban contemporary. (Although the latter point may be because many younger users aren't carrying the meters as much as Arbitron expected--a problem that's caused the company to offer refunds if it can't meet promised sample sizes.)

Universal Music Sketches Subscription Concept, Details Emerge
The more comprehensive subscription plan, called TotalMusic, would require buy-in from ISPs and mobile access providers. According to numerous executives familiar with the plan, it would also force opt-in among existing ISP subscribers, a structure that automatically bumps monthly access charges in exchange for a subscription-based music plan. Just last week, a Universal Music representative confirmed the initiative, but declined to offer any details.

But one source within the label did offer more information, and noted that TotalMusic is just one of several concepts currently being sketched. Meanwhile, a source within the mobile industry expressed grave doubts about the future of the initiative, and pointed to a plan that has been circulating unsuccessfully for months.

iTunes search now auto completes
It looks like Apple has unleashed another new iTunes feature tonight, in addition to ringtones. Now when you search the iTunes Store using iTunes 7.4.1 (haven't tried it in an older version) the search offers up some auto complete options.

Rhapsody America Offers Mixed Format Landscape
hapsody America sparked its consumer campaign at the VMAs on Monday, the beginning of a broader splash ahead. But format specifics are mostly in flux at the destination, thanks to a gradual DRM-free dip by major labels. Currently, Rhapsody is offering a portion of the Universal Music Group catalog DRM-free, part of a larger experiment by the label. But Rhapsody has yet to incorporate DRM-free tracks from EMI, and it remains unclear when that catalog will surface.

In a conversation Tuesday, a Rhapsody representative declined to discuss specifics on EMI, though a broader push away from protected formats is definitely underway. "We definitely look forward to offering DRM-free songs for download purchase from every label," the representative said.

Web Stores Tap Product Reviews
Retailers have long admired Web pioneer Inc.'s product reviews -- in which consumers rate books and other products -- for the way they help persuade shoppers to make online purchases.

As online shopping matures, retailers are turning their attention to building consumer loyalty, which they hope translates into higher sales. Product ratings and reviews -- particularly when they are written by consumers, whom prospective buyers appear to trust -- are a useful tool to meeting that goal. Merchants say ratings and reviews boost sales, increase customer satisfaction, and reduce returns.

When it comes to music fans, iLike faces Myspace
ILike, by far the most popular music application on Facebook, has started overtaking MySpace in sheer number of fans registered for some top music artists.
The young Seattle company is being coy on specifics, but consider this: Artists like Nickelback, Modest Mouse and Kayne West now have many more fans/friends on iLike than they do on the giant network MySpace. Name an artist, and there’s almost a 50-50 chance they’ll be more popular on iLike.

Monday, September 10, 2007

snapshot 9/10/07

Apple sells one millionth iPhone
Apple Inc (AAPL.O) said on Monday it has sold its one-millionth iPhone, just days after cutting the price of its smartphone by $200 and a few weeks ahead of the expected date to reach that target. The device, launched to much fanfare 74 days ago, combines a mobile phone, Internet browser and music and video player. Apple has said it will sell 10 million by the end of 2008.

New Apple products, services on holiday horizon
Not content to rest on its laurels, Apple has unveiled its master plan to extend its digital music dominance into the coming holiday season. Here is how the latest:

What it is: A Wi-Fi-enabled, touchscreen carbon copy of the iPhone in every way except that it has no phone functionality. For the first time, users can search, browse, sample, buy and download music from the iTunes service directly from a portable device -- no computer needed. The company will release a software upgrade for the iPhone in the coming weeks to allow the same. What it means: The company's decision to make the iTunes music store accessible via Wi-Fi marks perhaps the most significant evolution of the iPod/iTunes juggernaut since it made a Windows-compatible version of iTunes.

What it means: Although the companies may play this up as a music discovery move, it's really about the Wi-Fi. With more than 5,800 hotspot locations, Starbucks is the largest single provider of Wi-Fi Internet access in the country. The deal gives users free access to the T-Mobile Wi-Fi network in participating Starbucks locations, meaning there is no need to log in or pay to browse the iTunes service. While only 600 Starbucks locations in New York and Seattle will support the feature when it goes live October 2, the partnership could serve to educate users on the relatively new concept of accessing iTunes via Wi-Fi -- in much the same way that the "American Idol" partnership with Cingular taught Americans how to text-message.

What it is: Allows users to create a custom ringtone from any of the 500,000 songs in the iTunes catalog approved for ringtone use, for an additional 99 cents. At press time, Warner Music Group and Sony BMG confirmed that they were providing music for the service. Sources close to the situation say Universal Music Group is not participating at this time. What it means: Ringtones were noticeably missing from the iPhone debut this summer. While this new service fixes that problem, it's also led to complaints about consumers paying an additional fee to create a ringtone out of a song they already own -- particularly when multiple programs are available online to create ringtones out of existing files for not only the iPhone, but many other devices as well.

Music industry betting on 'ringle' format
As the recording industry wakes up from its summer slumber and starts thinking about what will motivate the consumer for the holiday selling season, the major labels are getting ready to launch the "ringle," which combines the mostly defunct single format with ringtones. Each ringle is expected to contain three songs -- one hit and maybe one remix and an older track -- and one ringtone, on a CD with a slip-sleeve cover. The idea is that if consumers in the digital age can download any tracks they want individually, why not let them buy singles in the store as well? It also enables stores to get involved in the ringtone phenomenon.

Sony BMG Music Entertainment, which came up with the ringle idea, and Universal Music Group are going to be the first out of the box with ringles. The former will unleash 50 titles during October and November, while UMG will have anywhere from 10 to 20 titles ready. The Recording Industry Association of America has approved the "ringle" name, and there is an industrywide logo to help brand it. But except for Sony, each major still needs to cut a deal with a digital aggregator to allow consumers to redeem the ringtone.

Sources suggest the ringle will carry either a $5.98 or $6.98 list price, while the wholesale cost to retailers will be less than $4. If it's $5.98, ringles will have a 31 percent gross margin, shy of the 35 percent profit margin that CD albums carry nowadays; if it's $6.98, that would give retail a 42.7 percent gross margin, similar to the profit margin cassette and vinyl albums enjoyed back in the day. On the plus side, big retailers like Wal-Mart, Target, Best Buy and Amazon have agreed to support the configuration, although all of them may not be ready to do so at launch date, sources say.

Apple Slip-Up A Further Hint At Imminent iTunes Movie Rental Offering?
An apparent slip-up on iTunes Store’s customer complaints facility seems to lend further credence to earlier reports Apple will unveil a movie rental service via the store this fall. Mac developer David Watanabe and Engadget both found references to a “RentalMovie” content type alongside “Movies” and “Ringtones” in the store’s problem reporting page; the facility lets customers inform Apple if they have not received the download, if the quality is insufficient etc. in June reported Apple was in discussion with studios including Walt Disney and Paramount to launch a movie rental offering this fall, with movies costing $2.99, expiring after 30 days and able to be transferred to devices like an iPod or iPhone. iTunes Store already offers movies for sale at $14.99 for new titles. It wouldn’t stretch the imagination too much to see Apple also bringing rentals to the lounge via Apple TV.

Is Yahoo Music Down For The Count?
Management has promised a major restructuring with "no sacred cows" and informed rumors suggest that this could mean a major overhaul or even the closing of Yahoo! Music. Even as Rhapsody, iTunes and Amazon have unveiled new initiatives, Yahoo! has stayed silent; perhaps unable to react because of shifting top management or perhaps following Napster's wait and see attitude.

In the rapidly evolving digital music marketplace waiting can be deadly and it is possible that Yahoo Music will allow its self to be left in the dust. But it is hard to imagine that Yahoo! could consider itself a broad based consumer service without a strong music component. The Yahoo Music service is among those expected to be trimmed and its fee-based subscription music offering overhauled or shuttered, the report said.

Rhapsday Sets Us Straight On Their New MP3 Directory
I posted earlier in the week regarding Rhapsody’s new MP3 Directory designed to make it easier to find which songs they are offering DRM-free. While I applauded the move I noted that it was not as easy as one would like to find mp3’s in the general Rhapsody music storefront. Matt Grave’s of Rhapsody’s parent company Real wrote to say:

“…there actually is a way to see if a song you’re looking for is available as an MP3, but it’s not in the search results. instead, you need to go to the album page where the songs are available. if you look at the right side of the interface, there is a “buy” button that allows you to purchase downloads. when a song is available as an MP3, this button will read “buy MP3.”

this is just a preliminary version of our MP3 store. we’ve gotten good feedback so far from subscribers but we’ll be refining and improving things in the coming months. thanks for the feedback.”

Get your Grooveshark on: new P2P service will give users a cut of the sales
A new peer-to-peer music service developed by a "team of enterprising college students" has a novel twist on the music sales business: give users a cut of the sales. Grooveshark is currently in beta and claims to have signed a number of independent labels up for its service. All the sales traffic will go over a P2P network, and users will be "rewarded" for sharing their music.

50 Cent Sprinkles Digital Exclusives Ahead of Album Release
Heavy-selling rapper 50 Cent is now sprinkling a number of digital teasers ahead of a Tuesday album release. The album, dubbed Curtis, is already being primed by a Justin Timberlake collaboration, as well as a well-timed face-off with Kanye West. Both artists will release their albums on the same date, a nice perk for retail and a boost for both artists.

That Kanye rivalry played a major role in the recent MTV Video Music Awards, though digital promotions are just as important. In that light, MySpace recently began streaming the 50 Cent album in its entirety. The destination is also offering a series of interview exclusives. And last month, the artist sparked a do-it-yourself video challenge on YouTube. Meanwhile, 50 is being heavily demanded on Eventful (, a destination that allows fans to request artist appearances in their hometown or college campus.

Elsewhere, Rhapsody is offering an exclusive track, "Moving On Up," and fans can grab an MP3-based, pre-release album download on the 50 Cent website ( That is part of a broader, DRM-free experiment being triggered by Universal Music Group, one that currently excludes the iTunes Store.

Rhapsody America Splashes at Video Music Awards
As promised, the recently-launched Rhapsody America threaded itself throughout the MTV Video Music Awards on Sunday, the beginning of a broader promotional push. The joint venture between MTV Networks and RealNetworks, first unveiled last month, pointed to the VMAs as a consumer launching pad. The spots featured performance clips from the Foo Fighters, Kanye West, and Fall Out Boy, and pointed to Rhapsody as the place for music online. As previously indicated, the venture carries the simpler Rhapsody title for consumer purposes.

The future of DRM
This point brings us to the key difference between perfect DRM and commercially practical DRM--a commercial solution merely requires that pirated content is clearly distinguishable from authorized content by ordinary users. Although many people are willing to play pirated content, most aren't.

But none of these technical requirements address the social drawbacks of DRM. No matter how well implemented, DRM will always annoy some people, and will always present one more potential source of problems. I think we'll find that some--and perhaps most--kinds of digital content can be profitable even without effective DRM. Just because something's possible doesn't mean it's necessary...but if DRM is necessary, at least it's possible.

OKCool, the First Facebook Record Label?
.After developing the application, the developers decided that it wasn't enough to have developed the delivery mechanism, they wanted a say in the music as well, and so OKCool Recordings was formed. Since launching the label and the Facebook application just a week ago , OKCool has been joined by Web savvy label SMtv Music and drum and bass artist DJ Krust and other labels are approaching Pushhit every day.