snapshot 1/21/08

iPhone spurs Web traffic, if not music sales
In data provided to the New York Times, Google disclosed that it received more traffic from iPhones this Christmas than from any other mobile device, despite owning only 2 percent of the smart-phone market and less than 1 percent of the overall mobile-phone market. That means that while fewer people own iPhones, those who do possess the device use it to access the Internet much more than those with competing handsets.

What's not clear is whether the iPhone's slick design and simple user interface has proved useful for other functions -- such as buying music. Although iPhone users can purchase songs from iTunes when in range of a Wi-Fi hotspot, Apple declined to reveal how many have done so. To date, downloading music to mobile phones has not proved a popular activity. According to a recent M:Metrics study, 20 percent of mobile users internationally listen to music on their mobile devices, but 83 percent of them are sideloading the music from their computers or from other devices rather than downloading it from a mobile music service.



HBO to let subscribers download TV shows, movies
Time Warner Inc pay TV channel HBO will launch a service on Tuesday to let subscribers download movies and television shows over the Web, joining a crowded market for video on the Internet. The service, HBO on Broadband, will make its debut with a much larger library than its cable-based on-demand service in a stab at satisfying increasingly mobile and choosy viewers.


Is Up-Selling Apple's New iTunes Strategy?
Buried in a press release that European distributor PIAS finalized a deal to deliver 44,000 tracks to be sold in DRM free AAC on iTunes was this:
"This new global agreement with iTunes Plus will also see [PIAS] Digital offering a range of new ‘added value’ digital services as part of the deal, including bundling incentives with Ticketmaster and the ability to buy ringtone versions of the repertoire sold via iTunes."


Creating amazing music blog experiences (Yahoo)
Today we're releasing a piece of very early, very experimental (possibly dodgy) alpha software -- a desktop application called Blog Remix written using Adobe AIR. Blog Remix immerses you in an active music blog experience. It merges blog posts and MP3s and lets you mix together different tracks or blog entries from your favorite MP3 blogs. Save the mix for yourself, or share it with the rest of us as an XSPF playlist, podcast, or feed (using Atom, my personal favorite syndication format, or RSS).


Alltel Makes Mobile Music Even More Ubiquitous
US-based mobile carrier Alltel is now moving closer towards total music ubiquity, thanks to an over-the-air (OTA) PC synchronization service. The concept, called Alltel Music by Celltop, allows users to easily grab PC-based content through wireless channels. That follows an earlier Alltel embrace of PC-based sideloading, a move that tapped into the most common consumer storage repository for digital music collections.

The OTA synchronization service takes the concept one step further, and skips the need for wired sideloading sessions. Instead, users can simply connect to their PC library wirelessly, select tracks or playlists, and enjoy their music via streaming and downloading. That sounds great for consumers, though it continues to shift the energy away from dedicated, OTA download purchases - a disappointing revenue generator in the United States.


iTunes DRM-Free Licensing Moves Continue, PIAS Latest
Outside of EMI, major labels continue to refuse DRM-free licensing on the iTunes Store. The holdout mostly amounts to gamesmanship, and many executives expect a DRM-free licensing nod after a period of months. In the meantime, Apple has been quietly licensing DRM-free content from various independents and digital distributors, and beefing the protection-free iTunes Plus in the process.

It's not hard to convince independents to go DRM-free. That's been their digital language for years, and iTunes simply represents a bigger venue. Already, independent labels and distributors like Sub Pop, Nettwerk, IODA, and The Orchard have licensed iTunes, part of two-million strong iTunes Plus catalog.

And just this weekend, Brussels-based PIAS Entertainment Group licensed roughly 44,000 DRM-free tracks from its roster of 200 labels. PIAS, which offers a range of services to its member labels, will offer its content as unprotected AACs at 99-cents each - just like the other labels. Value-added offerings involving Ticketmaster and iTunes ringtones are also being bundled.


Don’t believe the low bit-rate ‘HD’ lie
Standard definition 480i DVD movies are typically 5 to 8 mbps (megabits per second) MPEG-2 whereas these so-called HD wannabes weigh in at a pathetic 1.5 to 4 mbps of 720p H.264. Apple’s new HD service is capable of 4 mbps which simply isn’t enough to be considered HD. XBOX360 downloads are 6.8 mbps 720p VC-1 so they’re semi-decent borderline HD. Marketing will push the nicer sounding “720p” aspect of the video but they don’t tell you it’s way too compressed to offer good video fidelity. Blu-ray has a maximum bit-rate of 40 mbps while HD DVD offers a maximum of 28 mbps. Over the air broadcasts can be up to 24 19.38 mbps.

So the bottom line is that so-called “HD” video from Microsoft’s XBOX360 HD download service and Apple’s new Apple TV service or any other web download service is simply not HD by any respectable definition. These companies cannot and should not use the “HD” name with video that is lower fidelity than standard DVD.


Little Ears Are Big Bucks for Music Players
Nearly one-third of digital-music-player users these days have to be in bed before 9 p.m., and that's opened a market for specialized players and ancillary products -- not to mention exploding demand for kid-themed video and music content. "The average age of first use of portable digital-music players has declined over the last three years," said NPD analyst Anita Frazier, who recently conducted a study called "Kids and Digital Content."

Some 31% of kids ages 6 to 10 now use digital-music players, with iPod as the brand of choice for 54% of them. Most cited the Nano as the version they use. And loaded onto those digital-music players owned by youngsters ages 2 to 14 are an average of 125 songs, 10 TV shows and 15 movies, Ms. Frazier said.

"By third grade, half of the kid population in grade school has an MP3 player," said Paul Metz, senior VP at C&R Research. There are a host of reasons why: a proliferation of parental hand-me-downs, more kid-friendly player choices at lower prices, and the long-held kid truism of wanting to be more like older kids and grown-ups.

Target Quietly Moves Into Digital Music, Finally; Sony BMG Deal
Target, the big-box retailer, is finally moving into digital music, with the low-key launch of a SonyBMG album. The new album from John Legend, ”Live From Philadelphia” launched exclusively in Target stores last week, and is also available in MP3 format through Target.com.

This new promo also ties into Target’s deal with SonyBMG, where the music label is debuting DRM-free MP3 music cards. The site also says the store is powered by digital music provider HipDigital. Not sure if Target will add other such promotions from here on and make this into a full-fledged music service, or will just restrict itself to SonyBMG digital music for now. My guess: mainly digital promotions. Full fledged music services from rivals aren’t thriving, and Apple (NSDQ: AAPL) has the download market to itself.

The 19-song download is retailing for $9.99, which for a full MP3 album is certainly on the lower side. No singles at this point. By comparison, the Eagles’ 20-song Long Road Out Of Eden sells exclusively at Wal-Mart for $10.88 as an MP3.The Legend album is slightly higher quality—320kbps compared with 256kbps for Wal-Mart.