snapshot 2/19/08

‘DVD’ Jon’s DoubleTwist Gets Funding For iTunes Circumvention
SF-based DoubleTwist, the DRM-fighting startup from famed hacker “DVD” Jon Lech Johanson, has raised funding from Skype-backer Index Ventures, reports FT. After an unfulfilled partnership with fellow traveler Michael Robertson, Johanson launched DoubleTwist in 2006, with the goal of letting third parties understand Apple’s (NSDQ: AAPL) DRM, essentially rendering it useless (though technically not breaking it). Now it sounds like his company is engaged in more garden variety DRM busting, allowing users to convert bought iTunes tracks into unprotected file formats. It’s also launching its obligatory Facebook app for file sharing. While various anti-DRM apps have been available for some time, the company is aiming to reach a mass, non-technical audience. That being said, with more and more online retailers selling DRM-free MP3s, the market for this service may be dwindling.


'American Idol' songs and performances to be available on iTunes
Fans of American Idol will be able to download their favorite performances thanks to a new agreement between the hit television show and Apple Inc. The show's producers and Cupertino-based Apple announced Monday that music performances of 'Idol' semifinalists will go on sale this week on iTunes for 99 cents per song. Full video of the top 12 contestants will be available through the online music store starting March 11 for $1.99. The songs and videos will be posted to iTunes the day after the show airs on Fox.


The Complete Guide to iTunes Movie Rentals, Part 2
As of right now, it’s fairly obvious that Apple distributes its video content in only two general formats—“standard-definition” and “high-definition.” Because the company is dealing with the challenges of converting a back catalog of titles for viewing on higher-quality displays, “standard-definition quality” will vary with the title; for the time being, it’s safe to assume that the quality of any given standard-definition movie will be the same regardless of whether and how it is downloaded from Apple TV or iTunes.

The restriction on transferring standard-definition purchases from the Apple TV into the iTunes library appears to be a purely artificial one at this time. Other than DRM issues, there are no reasons why a standard-definition movie rented directly on the Apple TV could not be played on another Apple device. It is of course possible that this may change in the future if Apple adds a third tier of video format to their iTunes catalog, since the Apple TV’s specifications clearly list native 720 x 480 support—DVD-quality video.

Practically, what this means is simple. If you’re concerned about video quality, buying or renting DVDs is still a smarter choice than buying or renting standard-definition movies from the iTunes Store. This is even more true in the case of audio quality, as Apple’s standard-definition movies are universally encoded in compressed stereo and virtually every commercial DVD from a major studio today includes some form of multi-channel surround sound. What the iTunes Store and Apple TV offer is simple: convenience. A few clicks and seconds, rather than minutes or hours of driving in your car or a mail truck, separate you from watching a new video. And there’s no conversion time required to make the video play on an iPod, iPhone, or Apple TV. If you value convenience over quality, standard-definition iTunes Store rentals are “close enough” options for now, and over time, they’ll only get better.


Flash Drives: The Newest Option for Digital Music
Several artists are experimenting with offering new releases on USB devices packed with extras like videos and ringtones. The Mars Volta joins a growing number of recording artists who have experimented with USB releases in recent months, among them Jennifer Lopez, Ringo Starr and Matchbox Twenty.

More are expected in coming months. Austin-based All Access, the company behind USB releases from Matchbox Twenty and Starr, has signed deals with EMI, Warner Music Group and Universal Music Group to make USB bracelets for other artists.


Super Bowl boosts digital sales for Petty and others
The New York Giants weren't the only ones to come away from Super Bowl XLII with a storybook ending. Artists who were tied to the game through live performance or inclusion in advertisements also notched impressive victories, especially on the digital front.

But that's just the tip of the iceberg. Petty collects his biggest trophy this week for halftime show entry "Free Fallin"': The track shifted 63,000 digital copies, a gain of 305 percent, and bows at No. 10 on Hot Digital Songs. "I Won't Back Down," "American Girl" and "Runnin' Down a Dream," which made up the rest of Petty's halftime set, all registered similarly notable climbs in the digital realm.

The spot, really a segment of a video for the new Grannis single "Message From Your Heart," finished dead last on the Ad Meter. But Grannis, who won not just the airtime but also a recording contract with Interscope, moved 15,000 downloads of the track this week, a 118 percent increase from the previous week.


'DVD Jon' frees your media with DoubleTwist
Beginning Tuesday, the first product from his company, DoubleTwist Ventures, will enter open beta. Called DoubleTwist, it's a free desktop client that essentially allows any kind of music, photo, or video file to be shared between a long list of portable media players, and through Web-based social networks.

Instead of iTunes songs or videos taken with a Nokia N95 remaining locked on the phone, DoubleTwist software allows for dragging, dropping, and syncing of different media formats no matter the device.


Forrester: Digital Music To Surpass CD Sales By 2012
Half of all music sold in the US will be digital in 2011 and sales of digitally downloaded music will surpass physical CD sales in 2012, according to a new report by Forrester Research, Inc. (Nasdaq: FORR). Digital music sales will grow at a compound annual growth rate of 23 percent over the next five years, reaching $4.8 billion in revenue by 2012, but will fail to make up for the continuing steady decline in CD sales. In 2012, CD sales will be reduced to just $3.8 billion.

“This is the end of the music industry as we know it,” said Forrester Research Vice President and Principal Analyst James L. McQuivey. “Media executives eager to stay afloat in this receding tide must clear the path of discovery and purchase, but only hardware and software providers can ultimately make listening to music as easy as turning on the radio.”
MP3 player adoption. The average MP3 player is only 57 percent full, suggesting that the devices are underutilized, while more of the devices are being bought by households with more than one MP3 player. Moving forward, a majority of MP3 players will be sold to households that already have one.

DRM-free music. With the four big music labels now committed to eliminating digital rights management (DRM), DRM-free music will extend beyond pioneer Amazon.com to Apple iTunes and the other major online music sites.
Social networks. DRM-free music enables every profile page on MySpace.com or Facebook to immediately become a music store where friends sell friends their favorite tracks.


Analyst: music industry should help people share music
Hey, Mr. Music Executive: scrap your preoccupation with CD sales and start looking for ways to help people share, yes share music, focus more on developing and profiting from artists, and forget about subscription services and ad-supported music. These are the conclusions of James McQuivey, a Forrester analyst, according to a report titled "The End Of The Music Industry As We Know It" issued on Tuesday.

That's a fitting title because the report reads like an obituary. Tower Records, a music Mecca for decades, has already closed but McQuivey argues the real death blow to the industry will come when Wal-Mart, Best Buy and other large retailers begin scaling back shelf space for CDs.

McQuivey, a former professor at Boston University, tells record executives to cheer up because there are ways to rise from the ashes. He says first, the industry should quit fooling around with music subscriptions and ad-supported models. People want to own their music and downloads has won. Only 7 percent of adults on the Web say they have ever tried a subscription service, according to the report.

Sharing is vital, according to McQuivey, because it makes new music discovery easier, which the Web was supposed to make a lot easier but so far, has tanked. In this effort, he sends a special shout out to Slacker, a personal online-radio service. "The gold medal for 2007 (in music discovery) should have gone to Slacker," McQuivey wrote. "(The) portable device provides instant access to radio-formatted music that can easily convert to a digital download with the click of a button. This model combines the simplicity of the radio experience with the power of music ownership."


'World's Largest Record Collection' for Sale on eBay
A physical music collection purported to be the largest in the world is on sale on eBay, with a minimum reserve bid of $3 million. The collection includes more than 6 million songs on 3 million records and 300,000 compact discs. Every genre of American music is represented: rock; jazz; country; R&B; blues; new age; Broadway and Hollywood; bluegrass; folk; children's; comedy; Christmas, and more. No other collection in the world –- publicly or privately held -- even comes close.

More than half of the recordings in this incredible collection are NEW, with individual records worth hundreds or thousands of dollars each on the collectibles market. Covering many decades of music, the collection includes 78s, 45 singles and EPs, LPs and CDs. While there are an estimated 6 million unique recordings, there are also many duplicates, which can be sold to recoup some of the cost of the collection without diminishing the collection's historical value.


With HD DVD dead, Blu-ray's next threat is digital downloads
HD competition still looms for Blu-ray in the form of HD downloads. With devices such as the Xbox 360 and Apple TV capable of delivering high-definition content to your living room over the Internet, it's quite possible that many consumers will look to sources other than Blu-ray players to get their HD fix. So far, that market is off to a lumbering start, but as download speeds improve and more consumers become accustomed to the idea of getting their content delivered digitally, the potential for growth is enormous.

Blu-ray is the decided winner in the battle against HD DVD and is guaranteed to be the physical HD format of choice going forward—there's no doubt about that. But the proliferation of high-speed Internet access and increasing availability of download services means that Blu-ray is going to face challenges that VHS and DVD never did when they were at the same stage of their lifecycles.


Rumor: Microsoft announcing Netflix service through Xbox Live
Michael Pachter, an analyst with Wedbush Morgan, had this to say about a possible deal. “A partnership with Netflix gives Microsoft a partner that already streams movies to over 7 million subscribers through their PCs, and encourages these subscribers to sign up for the Xbox Live service in order to stream movies to their TVs.”

Netflix spokesman Steve Swasey was quoted earlier as saying, “Netflix intends to be in a lot of boxes that get into the TV, whether its game systems or set-top boxes or next-gen DVD players. We want to be in a 100 devices to get the Internet to the TV.”