snapshot 4/4/08

Universal extends music market share: report
Amy Winehouse and Mika helped Universal Music extend its dominance of the recorded music sector in 2007, taking its share of the market to almost 30 percent, according to new research. It grew its market share of the recorded music market to 28.8 percent from 25.7 in 2006. Sony BMG was second with 20.1 percent, ahead of Warner at 14.4 percent and EMI with 10.9.

It grew its market share of the recorded music market to 28.8 percent from 25.7 in 2006. Sony BMG was second with 20.1 percent, ahead of Warner at 14.4 percent and EMI with 10.9.


Movie download services bypass discs
Forget DVDs. Several services now let you download movies and play them right on your TV -- no disc needed. The services require you to shell out several hundred dollars for special hardware first; they also demand a bit of set-up, and rely on a fast Internet connection.

There is remarkable price uniformity among Apple TV, Xbox Live and Unbox. Newly released movies cost $4 to rent, with hi-def versions going for a dollar more.


Kindle boosts tiny e-book market
More than four months after Amazon.com released the Kindle, no one is sure whether the latest e-book reader is really hot — or not. But publishers believe that the Kindle has helped, if not revolutionized, the tiny electronic market.

Publishing officials are reluctant to discuss sales figures, but say that they have seen double digit increases in e-book sales since the Kindle's release, including renewed interest in downloads on the Sony Reader. Sales for the most popular books are in the hundreds, comparable to the number for the Sony, which came out in 2006.


Wal-Mart Pulls SonyBMG & WMG Downloads
WalMart.com has gone mp3 only without product from SonyBMG and WMG. EMI and Universal catalog has been available DRM-free on the site since late summer.

Digital Music news first noticed the take-down last night and Hypebot confirmed that whether its a newcomer like Sean Kingston or a top selling icon like Madonna, artists from SonyBMG and WMG are only available on the mega-retailer's download site as part of compilations released by other labels. CD's form these labels are still on sale online and in stores.

Sources at other download retailers have told Hypebot for months that the majors are making unreasonable demands in exchange for going DRM-free. The mighty Wal-Mart, whose download store has never gained traction despite offering lower prices, apparently decided that enough was enough. Wal-Mart knows that what's good for the customer - in this case low priced DRM-free mp3's - is good for business.


CD Sales an Improper Proxy for Measuring Purchased Music Demand
Every now and then I see a commentary on the music industry that notes reduced CD sales (especially to young people), and then goes on to blame the RIAA’s attacks on Napster (NAPS), lawsuits against down loaders, etc, as the cause. The basic idea is that young people are so angry with the record companies that they’re refusing to buy CDs, and that the music industry dug its own grave by not embracing file sharing, suing people, etc. While I respect many of these commentators greatly, I think they’re missing the boat as they’re not considering how young people actually listen to music these days.

The problem with the above argument is that it basically assumes that CD/DVD players are the preferred music listening device amongst young people, or that the preferred method of acquiring music is via a CD. In truth: iPods/MP3 players, followed by personal computers, are the most popular listening devices. A lot of people my age don’t even own stand-alone stereo systems, as they listen to all of their music on their iPods or on their computers. Even if they own CDs, the bulk of them are burned from their digital music collections, as opposed to being pre-recorded.


Major players rewrite the music business
The song may remain the same, but a chorus of digital developments may be reshaping the struggling music industry's business model. On Thursday, News Corp.'s online social networking powerhouse MySpace launched a new competitor to iTunes with three major labels.

Earlier in the day, Apple said that its iTunes Store has surpassed Wal-Mart to become the No. 1 music retailer in the U.S. With more than 50 million customers, iTunes has sold more than 4 billion songs and features the world's largest music catalog of more than 6 million songs, Apple said. Napster also had positive news to share Thursday, saying that it expects to report fiscal fourth-quarter revenue of $31 million, beating Wall Street estimates and the $29.1 million recorded in the year-ago period. Napster also said that it had about 760,000 subscribers at the end of March.

The most significant development, however, involves Live Nation, which is taking its largest steps yet in its transformation from a concert promoter into a full-fledged music company. The firm is close to a broad-based $150 million deal with Jay-Z that would cover recordings and touring, it said. The deal would even be bigger than similar recent blockbuster agreements with Madonna and U2.


Something Important Is On The Horizon In The Music Business
Having ceded the file based music opportunity (mp3s and drm’d file formats) to Apple, the recorded labels are now getting hip to the much bigger opportunity, streaming music.
Here’s what we need. We need someone to create an easy to search streamable library of all the recorded music in the world. We need to be able to grab a track and embed it on our blog. We need to be able to see how many people played it. We need others to be able to crawl these user pages with the embedded music and create algorithms based on who posted it, how often it was played, and how often it was reblogged and linked to. The services that do all of that need to be able to play the music that flows out of these social algorithms in the same way. This all has to be licensed and legal and it has to result in money flowing to the artists. If you put the music on your blog, you should have two choices. Allow the ads to be served into your music or your page or both by the service you got the music from. Or deal with the monetization yourself and pay the royalties you owe. Most people will do the former but some will do that latter.


Amazon.com mp3 vs. iTunes
When it first launched, direct comparisons of the Amazon.com mp3 store with Apple's iTunes store were difficult, largely because of major differences in their respective catalogs. (Amazon launched without any titles from Warner Music Group or Sony BMG.) Several months later, there's much more overlap between the two stores. Here's what the top-20 digital albums looked like for both stores on Wednesday morning, April 2nd:

It's a 50% overlap, with 10 titles appearing on both lists. Of the non-overlapping iTunes titles, all except the pre-order of Madonna's "Hard Candy" are available from Amazon.com mp3, while the NIN Ghosts release (#6 at Amazon.com) isn't sold in iTunes. Hence, it seems likely that the major differences -- at least at the top of the digital album charts --- are more likely the result of customer habits, demographics, and prices, as opposed to product availability

As for prices, across the board, all 10 overlapping best sellers were cheaper at Amazon.com. Nine of the albums are selling for $8.99 and one title is $9.99, for an average Amazon.com price of $9.09. Over at iTunes, the album prices range from $9.99 to $14.99, with an average iTunes price of $11.59 for these 10 albums.


The DRM-Free Drag... Why a Broader Rollout Remains Elusive
Major labels have now ditched DRM, right? Not exactly. Despite a number of high-profile deals over past year, the digital sales landscape remains a patchwork of protected and unprotected content. And the culprit appears to be a combination of politics, strategic gamesmanship and cautious observation, despite strong consumer disinterest in usage limitations and iPod incompatibility.

But according to one major label executive, the sluggishness is happening for a reason, one rooted in strategic competitive licensing. That means tilting the playing field more towards the benefit of labels, and targeting the attack against influential online retailer Apple. "Mostly they are just rewarding the 'comers'," the executive said. "Basically, those they think can make a real run at iTunes."