snapshot 1/23/08

Last.fm Announcement: Free On-Demand Music Platform
I’m here at Studio 19 at CBS (NYSE: CBS) headquarters, as Last.fm unveils its new direction: a free on-demand music streaming platform. Some quick details, from a press release that’s just been passed around:

• The company has signed deals with all four major record labels and 150,000 independents to offer free streaming of full length music.
  The platform will be ad-supported.
  Each track can be listened to just three times; this was buried at the end of the release and it wasn’t mentioned until the Q&A. Following that, CBS Interactive chief Quincy Smith came to the stage and said the company was looking to extend this.

What advertisers get: ‘A mini billboard space beside every song’. Even without a login, the company will be able to deliver ads. Artists and labels will get a cut of advertising revenue; even independent artists can upload their tracks to Last.fm and get paid when their music is listened to. CBS will use its ad sales resources to pitch advertisers. And right now, they’re confident that there will be plenty of advertiser interest. The site is also looking to rank highly on search engines when users search for an artist. More at the Last.FM blog


iPoll results: iPod owners' raves, rants, and pans
First, Apple must be doing something right, more than three quarters of the folks who responded own more than one iPod. Families seem to accumulate little armies of iPods--they pass from hubby to wife to the kids--and from adult children back to their parents. So the average number was probably three 'Pods per family. Some people have actually lost count and don't know for sure how many they've owned. One guy proudly announced he has 26 iPods. And sure, I heard from more than few souls happy to remain iPod-less. Zune owners are the most vocal about their avoidance of all things Apple.

I was surprised just how few people mentioned video, only a handful ever cited watching movies or TV shows, so despite the technology advances, iPods are still mostly music players. Sure, my poll is a small survey, but if it turns out to be true that almost nobody watches video on their Pods I'd be happy about that. I gather most iPods don't last very long--two or three years is about it. Battery related problems are the most common ailment, followed by screen and hard drive issues. I'm part of the small group still happily using their first and only iPod. A lot of you buy refurbished iPods to save some bucks.


Last.fm launches full album streaming, announces subscription service
Online streaming service Last.fm is making a few major announcements today. The good news is that you can listen to practically any song you like, even full albums for free. The bad news, is you can only listen to a track three times before a notice pops up suggesting that you sign up for Last.fm's upcoming subscription based service.The CBS-owned music discovery/online radio service has signed deals with all the major record labels, and also has a system in place to pay independent musicians as well. Last.fm will pay artists each time a song is streamed, with revenue coming from advertising and the upcoming subscription service. No word on how much subscriptions will cost.


Sony, Universal Layering Watermarks Into Amazon MP3s
Sony BMG and Universal Music Group are both layering watermarks into Amazon MP3s, according to information confirmed by Digital Music News this week. But unlike more detailed watermarks found last year on iTunes Plus, these identifiers are mostly anonymous. "Our watermarks simply identify the retailers offering the tracks," explained Peter Lofrumento of Universal Music Group. "They are not transactional watermarks, which contain the identities of downloaders (or their devices)."

Sony BMG - the last of the four majors to license MP3s to Amazon - echoed that explanation. But EMI Music is not using any watermark identifiers, according to information confirmed by the company on Tuesday. Warner Music Group did not respond to various requests for information, though the label is also understood to be forgoing the identifiers.


A brave new world: the music biz at the dawn of 2008
Given the years of declining revenues at the major labels and the constant stream of stories in the mainstream press about music's decline, you'd be forgiven for thinking that the music industry's pallbearers are already lined up and waiting in the hallway. But music isn't on its deathbed yet; in fact, people are listening to more artists than ever before, on more white earbuds than ever before, in more places than ever before. They're just not paying as much.

Don't put all the blame on file-swapping, either, or chalk the problems up to an inability to "compete with free." Digital music sales soared in 2007, and in fact, the total number of "units" moved during the year increased over 2006. eMusic, the number two music download service in the US behind iTunes, doubled its own projections for the Christmas season, pushed out 10 million tracks in the month of December, and added 50,000 new paying customers in the last six months.


The album, the single, and inertia
It's worth noting that the album is far more a creation of technology and custom than of art. Columbia produced the first 12-inch, 33 1/3 RPM vinyl "long playing" record in 1948. (According to Wikipedia, the term "album" relates to the fact that the relatively short 78 RPM records that preceded LPs were kept in a book "album.") Although 45 RPM singles (in particular) were popular during the 1950s and early 1960s--such singles generally had a "hit" on the A-side and a less popular song on the B-side--LPs continued to define a great deal about how music was released. Even cassettes and CDs didn't change things much as these new formats adopted about the same capacity as the LP.

However, there are more subtle types of inertia. Whole sets of practices from booking studio time, to promotion, to going on tour have grown up around the chunk of music that is the album. On the other hand, the nature of digital distribution--and the flat-pricing scheme that Apple has fought for successfully (even though it doesn't really make economic sense)--tend to drive us towards hits-driven downloads, Long Tail notwithstanding.


DRM-Free Music Spells Trouble?
"Many opponents of DRM have been overjoyed at recent efforts to free media from its grip. But PC Mag Editor-in-Chief Lance Ulanoff believes the whole world has gone mad. His view is that our digital economy will collapse this way, and it could be followed by countless others. 'The music industry's moves have been terrified reactions to staunch the bleeding of millions of dollars in revenue down the drain. For maybe a year, music companies thought they had the situation under control, but then album sales tumbled. Retailers, musicians, and some music-industry execs thought DRM was the culprit, and they soon joined the chorus of consumers calling for its head. Now consumers are getting their wish, and the music industry will continue to crumble. Giving up control of content and giving it away free are not rational ideas in a market economy, yet everyone's cheering.'"