snapshot 3/19/08

Apple Working On A “Radical New Business Model”: Flat-Rate iTunes: Report
http://news.yahoo.com/s/nm/20080319/tc_nm/apple_music_dc_3
This sounds similar to what Nokia, Omnifone and some others are working on in Europe: giving away music for free to users, and the handset/service providers pay the premium, only in Apple’s (NSDQ: AAPL) case the premium would be passed onto consumers. In easier language, also called subscription services...so much for the “a radical new business model.”

The FT story says Nokia (NYSE: NOK) is offering almost $80 per handset to music labels, divided according to their market share, to subsidize the service for users...and giving it to users for free. However, Apple has so far offered only about $20 per device, the story quotes sources and labels are balking at the lowball offer. There could be two variation of the business model, the FT story says: Subscriptions, which would work only for its iPhone devices, where it has a monthly billing relationship with customers, and a bundled-in model (markup on these devices) would work with iPhones and with iPods. Presuming that each of these would have different compensation models for labels.


DRM is added to Flash with new rights management server
With today's rollout of the Adobe Flash Media Rights Management Server, Adobe is unabashedly targeting a product specifically at movie studios, big corporations, and content providers anxious to protect their IP.

"Flash Media Server 3 has content protection for streaming video over RTMP. But the Media Rights Management Server protects video downloaded in FLV or MPEG4," said John Landwehr, director of Adobe's security solutions strategy, in a briefing for BetaNews "The DRM can continue to work even when you're playing back video offline." But to make this happen on a desktop or mobile PC or Mac, you can't use a garden variety Flash player. Instead, downloading content from the new DRM server requires installation of either the new Adobe Media Player or a custom video application running on Adobe's recently released AIR software.


Music functions off-limits to iPhone SDK developers
Any functionality related to music playback is inaccessible by the iPhone SDK, a new report claims. While the SDK allows access to many other functions of iPhone and the iPod touch, such as dialing, the camera and Internet access, The Inquirer writes that any components connected to iTunes are off-limits, preventing developers from accessing one of the most popular features of the phone, next to web browsing and Google Maps.

Apple has not spoken about the restriction, but it is suggested that this may be a way of blocking third-party alternatives to the Wi-Fi Music Store, which would undermine Apple's music sales. This may have the unintended side-effect, however, of stopping the creation of enhancements to music functions, such as native versions of the iLike or Last.fm plug-ins.


Apple could split device sales with music labels
As part of a deal to offer devices featuring preprogrammed music, Apple would have to agree to share sales revenue from the devices with the labels, says a source close to the deal. Cutting the labels in on iPod or iPhone revenue would mark a sharp turn in Apple's strategy. The deal being discussed by the labels and Apple calls for the company to license the music and also "kick in a piece of the device sales," said the source. The Apple device, which hasn't been determined yet, would come preprogrammed with a certain amount of music that after a period of time, perhaps six months or a year, would roll into a subscription type of service plan, the source said.


Songkick Debuts Live Music Recomendation Destination
Songkick scans the web, blogosphere and a user’s music library, and alerts users whenever a band that they like or may like is playing in their area. For every concert listed, Songkick provides one-click access to ticket vendors, providing convenient price comparison for music fans.


SanDisk launches Sansa Sessions -- music distribution by microSD, what else
SanDisk just dipped its toe into the digital content distribution waters with the launch of Sansa Sessions. Of course, this isn't an on-line storefront, it's flash-based naturally in support of SanDisk's core business. As such, the US-based program relies upon microSD cards to distribute DRM-free tracks of unspecified quality from more than 50 "emerging artists" on more than 30 labels. At the moment, the featured artists include All Time Low, Ladytron, Magnet, Nada Surf, Of Montreal and The Coup. SanDisk has tied a free, 55 track microSD "sampler" card (of el cheapo 512MB capacity, presumably) to the purchase of its 8GB Sansa Fuze MP3 player. While the $0 cost and DRM-free aspects of Sansa Sessions are certainly appealing to us, this seems best fitted as a record / artist promotional tool than it does a replacement for web-based or over-the-air music distribution.


Ebooks Catalog OverDrive Adds MP3 Audiobooks; Borders Signs On First
Ebooks distributor OverDrive is expanding its online catalog to include MP3 audiobooks, the company told us. Publishers who are participating in OverDrive’s audiobooks program include Random House Audio, Blackstone Audiobooks, Hachette Book Group and Books in Motion, among others. The MP3 titles, which naturally come without copy protection software, will be added to OverDrive’s existing catalog of roughly 20,000 DRM-protected digital audiobooks and over 100,000 eBooks.

Borders is the first bookseller to agree to sell OverDrive’s MP3 at its dedicated Borders Audiobooks channel. For Borders, this is one more initiative that it hopes will round out its website, which is concluding a digital overhaul by the end of this month. OverDrive’s audiobooks, however, won’t be available until May.


Starbucks caters to digital crowd with social-networking site
Starbucks has launched My Starbucks Idea, an electronic suggestion box where people can offer up their best ideas for making the already ubiquitous coffee retailer even more successful. You could say the company is as aggressive with its Internet campaigns as it is with its prices. There is Wi-Fi in the stores, they let you log onto iTunes to see what song is playing in the store and download it, let you use text messaging to find the nearest store, and they gave away free digital songs for a month last year. You can offer up ideas, vote on other peoples' ideas, and get feedback from Starbucks employees. The company says it will consider implementing the most popular ideas.


eMusic: Apple's bundled-music device would be anticompetitive
Apple is in for a fierce legal fight should it ever release a device that offers all-you-can-eat music, according to David Pakman, CEO of rival digital music service eMusic.

"It smells like classic Sherman Antitrust Act to me," Pakman said. "I only know what I've read but the plan sounds very similar to the tying practices Microsoft used with Windows/Explorer. And Microsoft is still paying the penalties for that one."