snapshot 1/15/08

EMI faces 2,000 job cuts
Guy Hands, the private equity owner of EMI, plans to cut up to 2,000 jobs at the ailing British music company, in a plan to rebuild the group which has sparked fury from some of its biggest acts. The worldwide cuts will come at EMI's troubled recorded music division, which has some 4,500 staff of a group total of around 5,500. The shakeup, in which between 1,500 and 2,000 jobs will go, is designed to boost its roster of talent and increase Internet sales while reducing costs by 200 million pounds ($393 million) a yea


Pepsi Stuff and Amazon MP3 Bring DRM-Free MP3 Music Downloads to the Masses: More Music for More People on More Devices
Pepsi and Amazon.com are teaming up on Pepsi Stuff, a massive collect-and-get program where consumers can download the most DRM-free MP3 music available anywhere. Four billion specially marked Pepsi packages will allow people to collect points and redeem them for music from Amazon MP3 that can be played on virtually any digital portable device (including iPod(R)), organized in any music management application, or burned to a CD. Beginning February 1, consumers purchasing Pepsi products can "bank" their points on PepsiStuff.com and redeem them for music on Amazon MP3. Amazon MP3 offers Earth's Biggest Selection of a la carte, DRM-free MP3 music downloads, with over 3.25 million songs from more than 270,000 artists. Five points earn consumers one MP3 song download from the libraries of EMI Music, SONY BMG MUSIC ENTERTAINMENT, Warner Music Group and tens of thousands of other music labels. Pepsi's biggest promotion ever makes its debut on the Super Bowl.


Apple announces iTunes movie rentals with every major studio
In turn, Apple will be launching iTunes movie rentals in partnership with Touchstone, MGM, Miramax, New Line, Lionsgate, Fox, Warner Bros. Disney, Paramount, Universal and Sony. That means every major studio will be offering their movies for renting via iTunes. 1,000 films will be available to rent by the end of February, and new releases will be added 30 days after the DVD goes on sale. Users can watch the movies on their Mac, Windows PC, current iPods and the iPhone. Movies will start instantly, taking less than 30 seconds to buffer. As with other movie rental services including Vudu and Amazon's Unbox, customers will have 30 days to start watching the film, and 24 hours from the moment they start it before it expires. Movies can be transferred from the Mac to an ipod while being watched, however you can only play the rented movies on one device at a time. For pricing, library titles will cost $2.99 USD, while new releases are priced at $3.99 USD.

Admitting that everyone has missed the boat on bringing movies from the Internet to a TV, Apple announced an update to the Apple TV device. Users will be able to rent and buy movies and television shows directly from their TV, along with music from iTunes. Photos can now be pulled from Flickr and .Mac, and videos watched from YouTube. HD versions of movie rentals -- the lower prices are for DVD quality -- will cost $3.99 USD for library titles and $4.99 USD for new releases. "The quality is unbelievable," Jobs said. 100 movies are available today in HD, with more to be added later.

The new Apple TV has an updated user interface that allows users to preview movies directly from the device, and see what other people have rented. The device is no longer tethered to iTunes, which was a major drawback of the original Apple TV, although it can still sync with iTunes as before.


Pepsi, Amazon Step Forward; Universal Music Steps Back
Pepsi and Amazon are now locked-and-loaded for Super Bowl Sunday, according to promotional details shared Monday morning. But Universal Music Group is staying home, thanks to stalled negotiations. In a statement, Pepsi and Amazon pointed to participation from EMI Music, Sony BMG, Warner Music Group and "tens of thousands of other music labels," though the list unmistakably omitted Universal.

A sidelined UMG means less available content, and more disappointed participants. Other aspects could also cool enthusiasm, including a points-based system that requires participants to collect multiple caps to redeem downloads. The "collect-and-get program" involves four billion caps, according to the companies, though five points translate into a single download. That could result in a low redemption rate, especially given modest conversion percentages on more traditional, one-to-one programs.

Additionally, points can also be applied towards bigger-ticket items. "We're also broadening the prize pool to include Amazon Unbox TV downloads, electronics, apparel, DVDs and CDs," explained Cie Nicholson, senior vice president and chief marketing officer of Pepsi-Cola North America. The promotion, called Pepsi Stuff, will feature Justin Timberlake.


Apple and Fox announce iTunes-ready digital copies on discs
It's not exactly a new idea, but Apple and Fox have just announced that DVDs from the studio will include iTunes-ready digital copies of the movies from here on out. That feature (which thankfully comes at no extra charge) will first be available on the Family Guy Blue Harvest disc, which will pack a file that you can "instantly move to iTunes." From there, you'll be able to view it on your computer, iPod, iPhone or Apple TV, with a unique code provided to ensure that you don't spread it around any further. Somewhat interestingly, while Fox's Jim Gianopulos mentioned both DVD and Blu-ray in his presentation, the official press release (linked below) seems to indicate that the digital copies will only be on DVDs, at least for now.


Borders Preps For Sole Control Of Online Bookstore; Considers Selling MP3 Downloads
As the clock on Borders’ website alliance with Amazon ticks to a close in April, the retail bookshop company is gearing up for its solo run. Borders began testing its new e-commerce site late last year. The new website is viewed as crucial part of its year-long bid to turnaround a series of financial losses. Among the ways Borders hopes to compete with Barnes and Noble, as well as its soon-to-be erstwhile partner, Amazon, is by trying to offer great degrees of interactivity, Reuters reports.

-- Added services instead of low prices: In particular, Borders is looking for ways to sell MP3 downloads. The company wants to extend its current “mix and burn” service, which allows consumers to come into a store and create their on CDs from a variety of songs. As for achieving greater interactivity, Borders is working on a “concept” or specialty store within the larger site. Borders also wants to let the 23.5 million members of its loyalty rewards be able to take advantage of the service online, something else that hasn’t been available. One thing it’s not interested in is being the lowest-priced operator. Rob Gruen, EVP of merchandising and marketing at Borders, tells Reuters that the bookseller is betting that more services, not lower prices, will draw consumers.


Why Steve Jobs has pulled one over on the entire movie rental industry
With services like Movielink, Netflix, and Vudu, the opportunities seem endless for companies that endeavor to turn the corner in the movie rental business. And while all of these companies positioned themselves in the market, Apple was quietly lurking in the shadows, ready to pounce on January 15, 2008. Now, there's no guarantee that Apple's service will truly re-create the industry, and we can't know for sure that iTunes movie rentals will become a success. But if you ask me, the writing is on the wall. Not only will iTunes movie rentals easily surpass any other service's revenues within the next quarter, it will usher in a breath of fresh air that has been lacking in this industry for quite some time.