snapshot 1/18/08

Cell phones and virtual worlds morphing shopper ways
Virtual worlds, mobile coupons and bar-code readers on cell phones are the next technology wave that U.S. chain stores must ride if they hope to stay competitive in the fast-changing world of global retail.

The lines between merchandiser and technologist are certainly blurring," said Philip Schoonover, chief executive of consumer electronics retailer Circuit City Stores Inc (CC.N), where store and call center staff use tablet PCs to search the Web alongside consumers.


Writers strike sends viewers to DVDs, video games
According to a survey released Thursday from new-media consultancy company Interpret, TV viewership has suffered because of the strike, particularly for dramas and sitcoms. Interpret finds that 27% of respondents are spending less time watching network series and 12% are watching less cable and satellite series.

Conversely, 43% of respondents say they are spending more time watching DVD movies and 23% say they're watching more TV-DVDs. Another 26% say they are spending more time playing video games.


'Rock Band' pumps up music sales
Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

"Hopefully it helps evolve music to not just a linear art form but a more interactive art form," says Van Toffler of MTV Networks. MTV Games publishes Rock Band, along with Electronic Arts. "You look at a lot of 20-year-olds who are reticent to plop down $20 for a CD, yet they don't mind paying $25 for a DVD or $50 for a video game. … We're seeing the audience really embrace hearing new music for the first time or engaging with classic rock songs in a new way."

New songs are available weekly for Rock Band. And musicians and bands are lobbying to get their songs in the game. "As opposed to us being the aggressor, a lot of the classic bands and the biggest bands in modern music history are approaching us now to be in the game," Toffler says.


The Macworld Flipside: Apple's iPod Sales Growth Slowing
iPod sales growth is slowing. Year-over-year sales growth has declined for the past three consecutive quarters: From 50% in the Dec. '06 quarter to 17% in the Sept. '07 quarter. If Apple hits the Wall Street consensus when it delivers Q1 results on Jan. 22, it will sell a record 24.7 million iPods. But that means y/y sales growth will be just 17% again. A year ago, Apple reported that Q1 iPod unit sales increased 50% y/y; in the Dec. 2005 quarter, y/y growth was 207%. (See chart below.)


Wolfgang's Vault Invests In Daytrotter
Wolfgang's Vault, the online home for live music, announced today a substantial investment in online indie music destination, Daytrotter. This partnership will enable Daytrotter to grow its audience for unique recordings from undiscovered indie rock artists, and continue offering the existing and new archive additions of recordings as free mp3 downloads.


SellaBand Strikes Heineken, Orchard Deals
Bands are typically cash-strapped and starving, and that makes it difficult to produce high-quality releases and tour. Labels - independent or major - have traditionally offered early-stage financing, though serious sales downturns have dried that source considerably. Against that backdrop, alternative financing vehicles have emerged. That includes SellaBand, a concept that encourages fans to contribute funds to their favorite developing artists. The populist approach sparked a distribution deal with Amazon UK in December, and others are now stepping forward.

Just recently, independent digital distributor The Orchard has agreed to push successfully-financed groups. On the branding side, Heineken Netherlands has agreed to sponsor live events and compilations featuring winning acts. SellaBand offers $10 shares in a band, and offers production and studio expertise once a group crosses $50,000.


Variable Pricing Awaits Online Classical Connoisseurs
A softer voice comes from Indianapolis-based Digonex Technologies, which has been pushing user-driven, dynamic pricing for years. That probably sounds scary to established content owners - especially given the broad availability of free music online - though Digonex has been slowly striking deals.

The latest involves classical label Naxos, which is planning to thread Digonex into a limited experiment next month. Digonex will dynamically generate download pricing on roughly titles, using real-time, consumer demand data. The concept will involve MP3s, according to the companies, a move that improves the value of the offered music. "The pilot program with Naxos and Digonex will help us continue our commitment to further developing our customer-driven business model," said Justyn Baker, executive director of Licensing for Naxos.


Industry Plays Card Game: Will the Gamble Pay?
Starbucks also offers a selection of artist-specific cards at checkout, both on the promotional and paid level. Those cards are drive traffic towards the iTunes Store, part of a growing partnership between the companies. Now, Sony BMG is trying its hand. The company recently unleashed a limited selection of gift cards containing MP3s from top artists. That program, called Platinum MusicPass, officially went live on Tuesday. That represents another attempt to offer some oxygen to music retailers, though it remains unclear if the gamble spark greater sales.

Elsewhere, a lesser-known firm is also broadening the format. Just recently, Nielsen Soundscan started counting card-based albums from New Jersey-based Dropcards, a longtime presence in digital download cards. "The interest, over the course of the last few years, in selling these cards at retail has been overwhelming," the company explained.


TheSixtyOne - Music discovery service
TheSixtyOne is a music service for both artists and music lovers to share and discover new music. Incorporating elements of a digg-like voting system, custom playlists, and an internal point system for rewards - TheSixtyOne is some of the most fun we've had with music in awhile. It works like this: you make yourself an account on TheSixtyOne, as either a listener or an artist. As a listener, you are given a number of points which you can use to "bump" songs you like. If you happen to discover a song that other people vote for after you do, you are awarded with additional points. You can't really do anything with these points other than vote for more songs, but other users will see you as a high-profile listener and as such have more "influence."Artists that sign up have an opportunity to give their work some exposure, network with fans and other artists, and get their music "bumped" to the top. Artists can also opt to release their music as free MP3 downloads or sell them as DRM-free Amazon MP3s.


Out with the CD, in with the drive: record store attracts worldwide buzz
Indiedrive is unique in that it offers music albums on 1 GB high-end USB flash drives, instead of CDs. The drives, which can plug into the USB port of a computer, DVD player or gaming console, are about the size of a small key and can hold much more than a CD; the idea is for artists to load them with songs, photos, videos, even ring tones.

Although the flash drives, most priced around $20, cost more than a CD, consumers basically get the music album for free because they can download it onto their computer and then re-use the flash drive for other purposes. At indiedrive.com, customers can browse flash-drive albums similar to searching for CDs at a record store. The Website includes sample songs, photos and descriptions of artists, including links to their homepages.


Yahoo May Be Looking To Buy Israel’s FoxyTunes
Rumors popped up here in Silicon Valley that Yahoo is in negotiations to buy Israel-based FoxyTunes. The Foxytunes core service is a Firefox plugin that allows users to control their favorite media players from the browser. It has a small but loyal following, who also use their tangential services (an email/blog signature tool and FoxyTunes Planet, a site that aggregates music information).

The acquisition makes some sense given Yahoo recent overt signals that they are shaking things up in music. Last week they launched a new, stripped down, easy-to-use web based MP3 player as well. The technology that FoxyTunes has created could certainly be used to further that agenda.