snapshot 1/7/08

Napster moves to MP3-only music download format
Napster Inc, one of the largest digital music retailers, said on Monday it would start selling downloads in the MP3 format from the second quarter of this year in the latest blow to copy protection for songs bought online.

Napster had sold songs protected with Microsoft Corp's Windows-based digital rights management (DRM) to prevent buyers from illegally making multiple copies or distributing songs to other users.


Philips partners with Rhapsody music service
Dutch electronics group Philips is to partner digital media company RealNetworks in online music in a move to bolster its position in North America and help revive RealNetworks' music business.

Philips and RealNetworks will offer a unified music download service to home audio systems as well as portable music players from a single provider, filling what they argue is a gap in the market. The two companies plan to launch the Rhapsody service for Philips devices in North America around the end of the first quarter, executives said at the Consumer Electronics Show in Las Vegas on Sunday.


Sony BMG trades plastic cards for downloaded tunes
Sony BMG Music Entertainment on Jan. 15 becomes the last major record company to sell downloads without copy restrictions - but only to buyers who first visit a retail store. The No. 2 record company after Universal Music will sell plastic cards, called Platinum MusicPass, for individual albums for a suggested price of $12.99. Buyers enter a code from the card at new Sony BMG site MusicPass.com to download that card's album.


Motorola buys Soundbuzz to expand music offerings
San Francisco - Motorola will acquire online music store Soundbuzz in a bid to expand its mobile music offerings in Asia, the company said Monday. Terms of the deal, which is expected to close during the current quarter, were not disclosed. Motorola hopes the acquisition of privately held Soundbuzz will make it the top online music seller in Asia, Chapman-Banks said, citing Soundbuzz's existing relationships with recording companies as well as mobile operators in India, Australia, Singapore, and other countries in Asia.


Labels see new online music options
When you're not inclined to give your product away for free, make your customers believe they're getting something for nothing. That's the thinking behind some of the offerings music fans may see this year as the recording industry scrambles to offset losses from plunging CD sales and find new sources of revenue when many consumers simply download music for free.

Among the business models music fans are likely to see more of: music subscriptions bundled with the price of Internet access, and services like Nokia Corp.'s upcoming Comes With Music, which would give users of select mobile phones a year's worth of unlimited access to music, for no extra charge.

One, dubbed the CD-View Plus, lets customers access a trove of additional content when they go online. Another is digital gift cards, which enable users to download specific albums, something Starbucks already sells. Music fans are also likely to see more albums released in multiple versions, such as pricier deluxe or limited-editions, and more albums pre-loaded onto small, portable storage devices such as thumb drives attached to rubber bracelets.


Apple Closes In on Hollywood
But the buzz is heavy that Jobs and most of the big studios are nearing compromise on key sticking points that have prevented iTunes from offering most of the new and old movie titles consumers see at Blockbuster, Netflix, and Wal-Mart Stores . Studio executives, forced into silence by Apple's ultra-uptight nondisclosure agreements, aren't talking, and neither is Apple.

The betting is that Jobs, who previously balked at paying the studios more than $14 for each movie sold through iTunes, has agreed to pay closer to the $17 wholesale price Hollywood gets from "physical" DVD sales by Wal-Mart and other retailers. Some of the studios, meanwhile, appear to be backing down from their refusal to allow online downloads of new movies until a month or so after DVDs of those films arrive at stores.


ADA Acquires Insound.com
The Alternative Distribution Alliance, an independent distributor owned by the Warner Music Group, has acquired indie music lifestyle store Insound.com, sources confirm.While it marks the first time that ADA or the Warner Music Group has purchased a retail operation, ADA made the move to expand its capabilities by providing a digital-store solution to its labels and to its indie accounts, according to sources familiar with the deal. ADA apparently will use the Insound digital sales infrastructure as a back-end to allow its labels and indie accounts to open their own online download stores.


Soundscan Sales—Cocktail Chatter
A recap of 2007's best selling albums, label market shares, current and catalog shares and genre market shares. Via Coolfer


Yahoo Is Clearly Up To Something Big Around Music
There have been rumors that Yahoo Music is preparing to launch a big new product sometime soon. And when I read this overview of a presentation given by Yahoo Music’s VP of Product Development Ian Rogers last month it basically confirmed it for me: expect something new and interesting from Yahoo Music in the near future.

But he went further this time, saying “We’re in the process of redefining what Yahoo! Music is, and making it the Music destination in Yahoo!’s successful image.” He also says Yahoo isn’t a music retailer and suggests they won’t be in the future.

So what are they up to? He is championing the merger of content (which is what the labels control) with context (all the great user generated content around the passion of music - Last.fm popular songs, MySpace content, blog posts around new music, etc. This is a well of useful contextual information that helps people decide what they want to consume. He calls for the evolution of open standards to facilitate this goal - making media “a first-class object in HTML,” agreeing on ways to describe collections of media objects (playlists), standards for sharing user data, and defining services (search, resolution of media between services, and purchase or provisioning).


Terra Firma Plans Movie Theater Events for EMI Artists
The Telegraph reported that Terra Firma is planning to broadcast live music events of EMI artists at movie theaters. An EMI spokesperson confirmed the report. The company owns Odeon and UCI, the largest theater outside of North America, and is looking to use this new format as a part of its transformation.

"Coldplay, the Spice Girls and other performers signed to the EMI label will be given the option of broadcasting a live concert to screens in dozens of cities. The format would be used to launch new albums, with fans, media and music executives invited to the screenings and given the option of picking up the CD or film of the concert on their way out of the cinema."


Death of DRM Could Weaken iTunes, Boost iPod
While industry analysts said Apple probably will lose market share in digital downloads as the majors gravitate away from DRM, the resulting increase in online music sales outlets will likely create a larger market for the ubiquitous iPod and emerging iPhone.

The iTunes market share will decline, predicted Phil Leigh, an analyst with Inside Digital Media, but the move away from DRM "will probably stimulate demand for the iPod."