Friday, January 25, 2008

snapshot 1/25/08

Apple quietly extends iTunes rental limit
Although Apple has said it is confident that users are enjoying iTunes rentals, widespread critique began to form regarding the 24-hour rental period. Users insisted that it was simply not enough time to finish a movie due to a busy lifestyle, while others were exploring methods that would circumvent the time limit. Macworld.com notes that Apple has quietly extended the duration of movie rentals to allow users the opportunity to finish watching a film.

Supposedly, once a movie has started to play on a mobile device, the 24 hour period does indeed start counting down, but will stay on a specific screen until users acknowledge the completion of the film. Underneath the text "This rental has expired. You can resume to finish your movie." the window displays two buttons, "Resume" and "Delete"; the former allows the user to play the rest of the film while denying access to the rest of the device, while the latter removes the expired movie from storage.


CBS reports early success with Last.fm music streaming
According to a release from CBS on Friday, there were 85 percent more unique listeners on Last.fm on Wednesday, January 23--the day that CBS Corporation and Last.fm announced the service--than there had been on the previous Wednesday. The next day, Thursday, saw an 80 percent increase from the previous Thursday, which CBS took as evidence that it wasn't just a single-day phenomenon.

Actual traffic to Last.fm hasn't jumped quite so much: CBS reports 27 percent more unique visitors and 45 percent more page views over the same time period. That suggests that existing Last.fm visitors are indeed tuning into the new music offering, but that it might not be boosting membership numbers quite yet. Claiming early success, however, is important PR for CBS: many have lost faith in ad-supported streaming music. Once hyped as the solution to both peer-to-peer piracy and the iTunes monopoly, enthusiasm has faded as start-ups like SpiralFrog have made disappointing debuts.


Netflix keeps its faith in DVDs, but looks ahead to VoD
By-mail movie rental pioneer Netflix posted its fourth quarter earnings, with favorable results. But in its quarterly conference call, the company gave DVD about five more years before it ceases to be the dominant format.


Global Digital Music Sales Up 40 Percent, But Overall Sales Down 10 Percent
The sale of digital music globally hit $2.9 billion in 2007, up 40 percent from 2006. But, as we’ve seen in the U.S. alone, that was not enough to offset the 10 percent decline in overall music sales to 17.6 billion, according to a report by the International Federation of the Phonographic Industry. Digital sales now account for 15 percent of the global market. Compared to other industries, music is second only to games in its transition to digital revenues.

In the U.S., however, digital sales account for 30 percent of industry sales, according to the IFPI. (Nielsen SoundScan, however, says digital music accounts for 23 percent of sales in the U.S., based on different data). The report also looks at mobile sales of digital music, including ringtones. While online sales of digital music in the U.S. are nearly double those of mobile sales, there is some evidence that gap might close (or even reverse) as mobile data networks become faster. In Japan, for instance, 91 percent of digital music sales are mobile and 40 percent are full-track mobile downloads (the rest are ringtones).

Other stats from the report:
  • There are more than 500 legal music services worldwide, ten times as many as four years ago.
  • About 6 million individual digital songs are available legally.
  • 1.7 billion digital tracks were downloaded legally last year, up 53 percent.
  • Tens of billions of songs were swapped illegally.
  • The ratio of unlicensed tracks to legal tracks downloaded is 20 to 1.

SpiralFrog(TM) Surpasses 1 Million Unique Monthly Visitors
SpiralFrog, Inc., (www.spiralfrog.com) the free, ad-supported Web-based music service that launched on September 17th in North America, today announced the site hit one million unique monthly visitors and is expected to exceed 1.2 million uniques by the end of the month, according to Google Analytics.


DRM-Free Music Spells Trouble
The digitization of everything changed all that. Now we're acutely aware that we really do not own any of the content we consume. We access or play an instance of it, but ownership lies really with the creators or, if they signed the rights away, to the media conglomerate that sold the right to consume it—on a limited basis—to you. Thanks to digitization and the Internet, replication on a massive scale became super-easy. This led to file sharing, Napster, lawsuits, the demise of Napster, its rebirth, the introduction of DRM, and now DRM's slow demise.

Both giving away content free of charge and taking everything away from consumers if they cancel fly in the face of everything we know about a functioning economy. People will become dissatisfied. Artists will stop making content because they're not getting paid. When there is no content, people will stop buying gadgets to consume that content. In short order, one part of our digital economy will collapse, and it could be followed by countless others.

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