Thursday, January 31, 2008

snapshot 1/31/08

Amazon to buy Audible for $300 million Inc said on Thursday that it reached an agreement to buy Audible Inc, a provider of digital audiobooks, for $11.50 a share, in a deal that bolsters the online retailer's offerings of audio downloads. Amazon values the transaction at about $300 million, including Audible's cash and short-term investments.

Audible's over 80,000 programs, including audiobooks from authors such as Stephen King and Jane Austen, may complement Amazon's growing digital music store that offers songs without copy-protection technology known as digital rights management.

Slacker ships Wi-Fi Portable players
Slacker today ended months of delays with news that it began shipping the Slacker Portable. True to the original concept, the company's inaugural player is built around the notion of the device as both an online and offline radio station. Although users can still load their own content, the player is built to automatically download and play preset or user-made content channels over Wi-Fi; while users have less control, it provides an effectively unlimited stream of new, relevant music which is still accessible for hours while offline, Slacker says. Each track is accompanied by extended details about the artist.

The initial model is built around a 4-inch LCD with side-mounted controls and loads a user's personal collection over USB; currently, the device can load MP3 and WMA tracks from Windows PCs and supports both Mac OS X and Windows for synchronizing the radio stations over the wireless link. In their finished versions, the players start at $200 for a model with 2GB of storage that holds 15 stations' worth of music (or 1,500) songs and can hold up to 500MB of personal content. A 4GB version at $250 grows the radio content to 2,500 songs while offering 1.5GB for personal media, and a $300 8GB model supplies 4,000 stations while setting aside 4GB for personal content.

iTunes passes RealPlayer in unique users
According to data from Nielsen Online, iTunes has passed RealPlayer in unique users to become the second most popular streaming media player on the market, trailing only Microsoft’s Windows Media Player. The data shows that iTunes was the only player with a positive growth rate over the last year, growing nearly 27% from Dec. 2006 to Dec. 2007 to an estimated 35.7 million unique users. Windows Media Player grew only slightly over the same time period, to nearly 76 million estimated unique users. Usage of the standalone Quicktime Player fell slightly over the period, while RealPlayer usage fell 17.5%.

Nearly half of U.S. kids use iTunes
A new report from the NPD Group has found that nearly half of U.S. kids download music from iTunes. The group estimates that up to 70% of U.S. kids aged 9-14 download music in a given month, with 49% using iTunes. Another 26% use Limewire, while an estimated 16% download music from MySpace. The NPD Group blames parents who let their children use the web unsupervised for the high percentage of illegal downloads. “The music industry hoped that litigation and education might encourage parents to keep better tabs on their kids’ digital music activities,” said NPD analyst Russ Crupnick in a statement releasing the reports results, “but the truth is many kids continue to share music via P2P.” According to Crupnick, two-thirds of these kids who use the internet do so unsupervised, while another 59% say they download music on their own, without parental supervision. “Findings in this report suggest that the industry can still do more to promote specific ways children can obtain digital music legally, through pre-paid accounts and gift cards,” Crupnick added. “Another potential way to reach kids is through industry-sanctioned, ad-supported Web destinations where kids can obtain digital music safely and legally.”

5 Free Downloads A Month From Rykodisc
Indie label Rykodisc is celebrating its 25th anniversary with 5 free downloads via its website @ posted on the 25th of each month. The first 5 downloads highlight the label’s rich history with world music. Artists to be featured include Nigeria’s juju master King Sunny Ade, world renowned guitarists Ali Farka Toure & Ry Cooder, the sophisticated instrumental sounds of Toumani Diabate, Baka Beyond from the rainforest of Cameroon, and Taj Mahal & Toumani Diabate.

Independents Tap Off-Deck Upstart Txttunes, Skip Plastic
When it comes to paid downloads, content owners have always found themselves competing with free. But younger fans with limited credit card access have another serious reason not to buy.That is an issue being addressed by New York-based Txttunes (, a company that shifts the billing entirely onto mobile accounts. The company offers paid downloads online, but skips the plastic by directly billing an active phone. Txttunes is not an OTA (over-the-air) proposition, at least not yet, though songs can easily be transferred from PC to phone after purchase.

Just recently, Txttunes broadened its proposition by striking deals with two independent heavyweights. The first involves leading digital distributor The Orchard, which delivered its entire MP3-based catalog to Txttunes. "We look forward to reaching out to fans who don't have access to credit cards and want to connect with their favorite artists by cell phone," explained Txttunes chief executive Matt Coleman. Another deal involving CD Baby is almost a carbon copy. Collectively, the companies offer an immense independent catalog, and a major boost for Txttunes. Both deals also involve artist-specific widgets, as well as mobile-based community features. Txttunes curently offers US-based billing through Verizon, AT&T, Sprint, Boost Mobile, Alltel, and others.

Luddite and paranoid - why the big record labels failed at digital
In the past few years the indies have organised, and successfully fought mega-mergers in the European Courts; they licensed the original Napster, and shunned DRM en masse. More recently, the indies have pioneered a one-stop stop for global digital licensing, Merlin, something beyond the organisational abilities of the RIAA.

So after hearing from IFPI chairman John Kennedy here this week, you'd expect a very different view of the music business from Martin Mills, chairman of British indie the Beggars Group - and you'd be right. Radiohead recently signed a deal with Beggars' label XL to release the In Rainbows CD. [history]. Mills helped create IMPALA, the indies' European trade association, which successfully challenged the Sony BMG merger in 2006, and the proposed Time Warner-EMI merger in 2001. He was awarded an MBE in the New Year's Honours list.

Stanford, iTunes release Lively Arts gift cards
Stanford University is teaming up with iTunes to provide Lively Arts gift cards, a sampler card that offers attendees to the Lively Arts events 10 free downloads of featured artists. The iTunes sampler card will be given out from January 25th until March 15th at the various events, and will also be available to users through various campus services. Students who can't attend the Lively Arts events can pick up a complimentary card at the Stanford Bookstoor, Tresidder Express, Track House Sport Shop, The Stanford Shop, and The Bookshop at the Cantor Art Center.

Wednesday, January 30, 2008

snapshot 1/30/08

Sony BMG MP3’s Up On Amazon
A quick search on Amazon today found thousands of DRM free mp3’s from Sony BMG artists ranging from Bob Dylan to The Foo Fighters to George Winston. Some acts only had full album downloads available with a “Comin Soon” on individual mp3 tracks.

In the next few days as the rest of the Sony BMG catalog is added as DRM free (which means you can move around and copy them without restrictions), Amazon will be the only download service to offer the music of all four major label groups (SonyBMG, Universal, Warner Music Group, and EMI) in unrestricted mp3’s.

Yahoo Chopping 1,000; Premium Music Threatened
Yahoo officially announced plans to trim 1,000 workers on Tuesday, a number that falls below earlier estimates. Yahoo cofounder and chief executive Jerry Yang announced the reductions during the latest earnings call, one that revealed a substantial fourth quarter profit drop. During the call, the company did not detail specific cuts, though president Susan Decker alluded to reductions in "premium music," a category that includes the subscription-based Yahoo Music Unlimited.

Is The Tippin Point Toast? Music Marketing Needs To Change...Again
For the last several years, the concepts laid out in the best selling book "The Tipping Point" have driven marketing campaigns in general and music marketing in particular. But new studies raise serious questions about the validity of the book's core theories.

The Tipping Point particularly touted the importance of Influentials - well-connected individuals who amplify trends by sharing their opinions with their social networks. Just get these trend-setters on board and the rest will follow. It's a seductive concept particularly in the viral interconnected world of social MySapce, Facebook, Twitter, imeem and the entire social networking universe.

This is sobering stuff for music promotion and marketing. The industry has known for years that no amount of money can create a real hit or a career that lasts. Perhaps the future of the music industry is less about telling consumers what's hot and more about listening to what fans are telling us they want to hear.

Q&A: We7 CEO Steve Purdham
Following this week’s Qtrax fiasco, ad-supported music download services are very much in the spotlight. UK-based We7, backed by Peter Gabriel, is once such offering, enabling users to download free MP3s that have a short (and targeted) audio advert embedded at the start of each track. The ads then auto-expire after four weeks of listening, allowing users to re-download a ‘clean’ version of each track.

Amazon Earnings Call Details: Web Services Use Up More Bandwidth Than; The Kindle is a Hit
At the very end of the call, Bezos was asked about the shift in media from physical to digital and how that will impact Amazon. Media accounted for 59 percent of Google’s sales last quarter (or $3.3 billion), and Amazon is moving aggressively to offer digital movies, music, and books. Bezos thinks this move to digital will eventually pay off:

When media was largely physical, it made sense to buy it in the physical
world. But as media becomes digital it does not make so much sense to buy them
in the physical world. The bulk of the sales now are in the physical world. So
our relative advantage over time should improve.

Tuesday, January 29, 2008

snapshot 1/29/08

U2 manager takes Internet providers to task
Paul McGuinness, longtime manager of rock band U2, has called on Internet service providers to immediately introduce disconnection policies to end illegal music downloads and urged governments to make sure they do. He spread the blame between record labels that "through lack of foresight and planning allowed a range of industries to arise that let people steal music"; Silicon Valley companies that create marvelous devices but "don't think of themselves as makers of burglary kits"; and governments who "created a thieves' charter" by agreeing that ISPs should not be responsible for what passes along their pipes.

Distributor to Distributor, IODA Goes Dealmaking
Independent digital distributor IODA has now added seven new distributors to its clientele, according to information disclosed Monday in Cannes. The new clients span Europe, Australia, and the US, part of an increasingly international roster. Creative Vibes, Darla, Integral, JetStar, Malaco, Rev Distribution, and Tesco are now tapping the IODA digital distribution infrastructure, a move that opens access to roughly 350 digital retailers, mobile outlets and subscription services.

The deals call for IODA to offer a custom-branded version of its Rightsholder Dashboard, which enables automated selection and management of distributed content. For IODA, that amounts to an extension of existing distribution infrastructure, and a less hands-on - and more scalable - expansion approach. "IODA is a technology company, not just a digital distributor," explained Tommy Couch, Jr., general manager of Malaco Records. "This makes a big difference as it enables them to simultaneously offer the strongest technology platform for marketing and distribution while leveraging deep industry relationships and music industry experience."

White Labeling Finds Religion; EMI, Passalong Join Forces
EMI Christian Music Group (CMG) has now tapped Nashville-based Passalong Networks on a white label offering, according to deal points disclosed Monday. The partners have jointly created, a backend offering that features content from EMI CMG, Warner Music Group's Word Entertainment, Sony BMG's Provident Music Group, and various independent labels.

The ready-made Christian download store is being offered to retailers, radio stations, and other religious organizations interested in a customized storefront. "EMI CMG is already well established in the Christian market and together we can offer retailers, radio stations and other associations a powerful, easy and effective way to offer a good value proposition for consumers," explained Dave Jaworski, cofounder and chief executive of Passalong.

Young Eschewing CDs For 'Archives' Project
"I know it's in technical production now, but it's only coming out on Blu-ray and DVD," he said during an interview at the Sundance Film Festival, where he and his Crosby, Stills, Nash & Young bandmates unveiled their "Deja Vu" documentary. "There won't be CDs. Technology has caught up to what the concept was in the first place [and] how we're able to actually present it. But there's no doubt it will come out this year."That's right: no CDs, a format Young has long despised due to its audio limitations. Instead, Young is utilizing DVD capabilities to present an interactive "time line" for the music, allowing users to experience articles and film clips from a song's given era as well as ephemera like lyric sheets.

NY Daily News, EMI To Offer Free Downloads To Readers
The New York Daily News and EMI have cooked up a promo for this Sunday (Super Bowl) and Feb. 10 (Grammys): three free downloads for readers of each day’s NYDN. Each copy of the paper on those days will have an insert with a unique code that can be keyed in at for three downloads from a library of more than 120,000 songs, including some from Grammy-nominated artists. One of the songs is a Ringo Starr exclusive from his new album Liverpool 8.

Just once, I’d like companies doing these promos to be straight about the results. Apple-Starbucks, Amazon-Pepsi, NYDN-EMI—how many people actually take advantage of the free downloads? And how many like me, who literally wind up throwing codes away because of expiration dates in small print or the like? (A considerable amount of iTunes-Starbuck cards never even made it to consumers—at least if the stacks I saw at stores are a legit indication—but no way to figure that out anecdotally.)

Monday, January 28, 2008

snapshot 1/28/08

Qtrax backtracks on claims of music label deals
Qtrax, a new free music download service, backed off claims that it has deals with all four major music companies after Warner Music Group denied it had agreed terms with the start-up.

Sony Ericsson cuts deals with 10 music labels
Mobile phone maker Sony Ericsson said it had signed deals with 10 music labels to add content to its PlayNow service, which lets users download music via their mobile phones. T he venture said in a statement late on Sunday it had signed deals with Sony BMG, Warner Music Group (WMG.N), EMI, The Orchard (ORCD.O), IODA, The PocketGroup, Hungama, X5Music, Bonnier Amigo and VidZone.

Amazon to begin international roll-out of MP3 store
Online retailer Inc said on Sunday it will begin an international roll-out this year of its digital music store that offers songs without copy-protection technology known as digital rights management. Amazon said it is the only retailer to offer DRM-free MP3s from all four major music labels as well as thousands of independent labels. Amazon MP3, launched in September 2007, offers DRM-free MP3 music downloads, which now includes more than 3.3 million songs.

Charlatans choose Radiohead-esque album promotion
British rock group The Charlatans are the latest to experiment with an online music giveaway. The alternative rock band, known for such songs as "One to Another" and "Weirdo," said on its Web site that fans will be allowed to download its latest album, You Cross My Path, free of charge starting March 3. The music can be downloaded from the band's Web site or here. The album's digital distribution will be followed by the release of a physical CD beginning May 19. This will include the sale of a vinyl box set.

Exclusive Interview With RoyaltyShare's Steve Grady
Music industry technology provider RoyaltyShare has launched a new lower cost direct digital distribution platform for independent record labels which could eliminate the need for digital aggregators like The Orchard and IODA. (full Royalty Share story here). Just prior to today's announcement I spoke to RoyaltyShare president and COO Steve Grady from MIDEM about the new potentially game changing service.

Nokia to Share Revenue of Bundled Music With Mobile Operators
Nokia Oyj, the world's biggest maker of mobile phones, will share revenue with phone operators from a program to sell handsets with unlimited music access, Nokia's head of entertainment said. The Finnish company unveiled in December the ``Comes With Music'' program, which will allow customers to buy a phone with a year of unlimited access to millions of tracks included in the purchase price. Nokia agreed to offer tracks from Vivendi SA's Universal Music Group, and is in talks with other major labels.

Beyond the Album
Then there's the medium itself: In the digital age, physical CDs have become a clumsy way to package songs, a plastic spacesuit for the journey between the digital environment of record-company servers and the digital environment of a consumer's PC, iPod or phone. Now throw in the fact that consumers have resented the music-CD formats for years, deriding CDs as typically a couple of good songs and a bunch of filler, or asking why a movie soundtrack often costs more than the movie itself. Call the first contention unfair and the second ignorant of the different economics of the movie and music industries if you wish, but good luck convincing consumers in your local Best Buy.

Album fans, take heart: Dispensing with the album as a consumer item doesn't necessarily mean tossing it aside as an art form. Do today's readers think less of Charles Dickens' novels because they first appeared as serials? Radiohead is an album-oriented band, but wouldn't its recent experiment with "In Rainbows" have generated as much or even more buzz if the songs had appeared over time? Would fans of "Sgt. Pepper's," "The Wall" or "American Idiot" think less of those albums if the first journey through their component songs had taken weeks or months?

Direct-to-DVD Releases Shed Their Loser Label
But it’s not another failed straight-to-video movie collecting dust in Blockbuster. “Beta House,” which reached stores late last month, was made specifically for a DVD release and is likely to end up more profitable for Universal Studios than some of the company’s theatrical releases. The film, which cost less than $10 million to make, is expected to sell more than a million units — in line with two previous “American Pie” installments that were produced specifically for DVD release, according to Universal. That translates to sales of about $30 million before adding revenue from rentals and the sale of distribution rights to cable networks.

Hollywood’s new direct-to-DVD strategy rests on calculating a sequel’s chances at the multiplex. Three big-screen “American Pie” movies rained money on Universal, selling more than $750 million of tickets worldwide, according to Box Office Mojo. But Universal had a decision to make when it came to approving a fourth installment for a theatrical release. The third film, “American Wedding,” cost $55 million plus tens of millions more to market — far more than its predecessor. Yet its ticket sales were 28 percent lower.

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. 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 music streaming
According to a release from CBS on Friday, there were 85 percent more unique listeners on on Wednesday, January 23--the day that CBS Corporation and 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 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 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., ( 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.

Thursday, January 24, 2008

snapshot 1/24/08

Global music sales fell around 10 pct in 2007
Sales of music fell at a faster rate in 2007 than 2006 despite digital sales soaring, and the gatekeepers of the Web must act if the industry is to beat piracy, the international trade body said on Thursday. Global digital sales grew by around 40 percent in 2007, the IFPI group said, but this was not enough to offset the sharp fall in CD sales, meaning the overall market is expected to be down around 10 percent for 2007.

Digital sales now account for an estimated 15 percent of the global music market, up from 11 percent in 2006 and zero in 2003. In the United States, online and mobile sales now account for 30 percent of all revenues.

Yahoo discussing online music deals: report
Web portal Yahoo Inc is in early discussions with major record labels to offer an online music service, the Associated Press reported. The report, dated late Wednesday, quoted two unnamed record company executives and said details are still being negotiated and that Yahoo could offer the MP3 files either for sale or for free as part of an ad-supported service.

HP to make Sony DVDs; It will create copies of the studio's films and TV shows on demand.
Hewlett-Packard Co. plans to announce today that it has signed an agreement with Sony Pictures Home Entertainment to create made-to-order DVDs of some of the studio's movies and TV shows. The agreement, whose terms were not disclosed, boosts Palo Alto-based HP's ambition to play the middleman in the future of how entertainment is distributed.

Separately, HP has started a DVD production business and already has agreements with 40 content partners for 5,000 titles, including classic science fiction movies, exercise videos and children's series. The titles aren't on sale yet, but HP said it planned to soon announce partnerships with websites that would sell these made-to-order DVDs.

Only 25% Of 2007's Top Live Acts Were Under 30
Why is this scary? Everyone keeps saying “thank God The Police put their differences aside last year” or “lets hope Led Zeppelin does a full on world tour next year”. Sure, this is great for now, but it ignores the 800 pound gorilla in the room: these guys aren’t recording anything new, and eventually, the Zeppelins, the Van Halens, the Billy Joels and Paul McCartneys and Mick Jaggers of the world will not be able to tour any more. Or their fans will be too old to climb the steps in the arena. Or big box retailers will stop carrying CDs altoghther, and these older acts targets audiences will stop buying their music instead of venturing online. Or all of the above. And when this happens, music is in serious trouble.

The long tail is largely to blame here. When these old bands came up, they were the entertainment. Their concert was the thing going on in any given city that night, their appearance on a late show was the thing to watch that night (think The Beatles on Ed Sullivan). Now, there is just too much going on at any given time to get that sort of attention.

John Legend’s “Live From Philadelphia,” which is being sold exclusively at Target, sold 33,000 to debut at No. 7.

38 free/cheap music sites — Welcome to the fray, Qbox!
Ever since Napster brought free MP3s mainstream — and subsequently garnered the wrath of the Recording Industry Association of America — the music industry has been reeling. No single strategy for listening to music online has come to dominate the market, as record labels, managers, artists, fans, Apple’s music offering, Internet radio and recommendation companies all jockey for position. But one thing is clear above all the din: Fans will not be denied their music — and most want it free.

Music network Qbox is the very latest to join the fray of companies hoping to stake a claim in this market. It’s releasing its beta Friday. It gives users who search for musicians in Wikipedia or Google a Qbox icon on their screen, which they can click to then hear music to go with the artist information that comes up in their search results.

With such a variety of services on offer and so many developments within those services, it’s hard to tell. But in an attempt to give you some perspective on what the various free, or at least cheap, music offerings are — whether for the computer, mobile phone, or even the Nintendo Wii — we’ve compiled a list. We tell you what the service does, what its business model looks like, and whether it lets users stream or download, among other things. The most useful categories may be 1) what we’ve termed “musicability,” or how easy can you find the song you want (this may be the best way to pick a potential favorite), and 2) “genre,” or how easy it is to search through a particular genre of music. Both are rated on a scale of 5.

snapshot 1/23/08 Announcement: Free On-Demand Music Platform
I’m here at Studio 19 at CBS (NYSE: CBS) headquarters, as unveils its new direction: a free on-demand music streaming platform. Some quick details, from a press release that’s just been passed around:

  • The company has signed deals with all four major record labels and 150,000 independents to offer free streaming of full length music.
    The platform will be ad-supported.
    Each track can be listened to just three times; this was buried at the end of the release and it wasn’t mentioned until the Q&A. Following that, CBS Interactive chief Quincy Smith came to the stage and said the company was looking to extend this.

What advertisers get: ‘A mini billboard space beside every song’. Even without a login, the company will be able to deliver ads. Artists and labels will get a cut of advertising revenue; even independent artists can upload their tracks to and get paid when their music is listened to. CBS will use its ad sales resources to pitch advertisers. And right now, they’re confident that there will be plenty of advertiser interest. The site is also looking to rank highly on search engines when users search for an artist. More at the Last.FM blog

iPoll results: iPod owners' raves, rants, and pans
First, Apple must be doing something right, more than three quarters of the folks who responded own more than one iPod. Families seem to accumulate little armies of iPods--they pass from hubby to wife to the kids--and from adult children back to their parents. So the average number was probably three 'Pods per family. Some people have actually lost count and don't know for sure how many they've owned. One guy proudly announced he has 26 iPods. And sure, I heard from more than few souls happy to remain iPod-less. Zune owners are the most vocal about their avoidance of all things Apple.

I was surprised just how few people mentioned video, only a handful ever cited watching movies or TV shows, so despite the technology advances, iPods are still mostly music players. Sure, my poll is a small survey, but if it turns out to be true that almost nobody watches video on their Pods I'd be happy about that. I gather most iPods don't last very long--two or three years is about it. Battery related problems are the most common ailment, followed by screen and hard drive issues. I'm part of the small group still happily using their first and only iPod. A lot of you buy refurbished iPods to save some bucks. launches full album streaming, announces subscription service
Online streaming service is making a few major announcements today. The good news is that you can listen to practically any song you like, even full albums for free. The bad news, is you can only listen to a track three times before a notice pops up suggesting that you sign up for's upcoming subscription based service.The CBS-owned music discovery/online radio service has signed deals with all the major record labels, and also has a system in place to pay independent musicians as well. will pay artists each time a song is streamed, with revenue coming from advertising and the upcoming subscription service. No word on how much subscriptions will cost.

Sony, Universal Layering Watermarks Into Amazon MP3s
Sony BMG and Universal Music Group are both layering watermarks into Amazon MP3s, according to information confirmed by Digital Music News this week. But unlike more detailed watermarks found last year on iTunes Plus, these identifiers are mostly anonymous. "Our watermarks simply identify the retailers offering the tracks," explained Peter Lofrumento of Universal Music Group. "They are not transactional watermarks, which contain the identities of downloaders (or their devices)."

Sony BMG - the last of the four majors to license MP3s to Amazon - echoed that explanation. But EMI Music is not using any watermark identifiers, according to information confirmed by the company on Tuesday. Warner Music Group did not respond to various requests for information, though the label is also understood to be forgoing the identifiers.

A brave new world: the music biz at the dawn of 2008
Given the years of declining revenues at the major labels and the constant stream of stories in the mainstream press about music's decline, you'd be forgiven for thinking that the music industry's pallbearers are already lined up and waiting in the hallway. But music isn't on its deathbed yet; in fact, people are listening to more artists than ever before, on more white earbuds than ever before, in more places than ever before. They're just not paying as much.

Don't put all the blame on file-swapping, either, or chalk the problems up to an inability to "compete with free." Digital music sales soared in 2007, and in fact, the total number of "units" moved during the year increased over 2006. eMusic, the number two music download service in the US behind iTunes, doubled its own projections for the Christmas season, pushed out 10 million tracks in the month of December, and added 50,000 new paying customers in the last six months.

The album, the single, and inertia
It's worth noting that the album is far more a creation of technology and custom than of art. Columbia produced the first 12-inch, 33 1/3 RPM vinyl "long playing" record in 1948. (According to Wikipedia, the term "album" relates to the fact that the relatively short 78 RPM records that preceded LPs were kept in a book "album.") Although 45 RPM singles (in particular) were popular during the 1950s and early 1960s--such singles generally had a "hit" on the A-side and a less popular song on the B-side--LPs continued to define a great deal about how music was released. Even cassettes and CDs didn't change things much as these new formats adopted about the same capacity as the LP.

However, there are more subtle types of inertia. Whole sets of practices from booking studio time, to promotion, to going on tour have grown up around the chunk of music that is the album. On the other hand, the nature of digital distribution--and the flat-pricing scheme that Apple has fought for successfully (even though it doesn't really make economic sense)--tend to drive us towards hits-driven downloads, Long Tail notwithstanding.

DRM-Free Music Spells Trouble?
"Many opponents of DRM have been overjoyed at recent efforts to free media from its grip. But PC Mag Editor-in-Chief Lance Ulanoff believes the whole world has gone mad. His view is that our digital economy will collapse this way, and it could be followed by countless others. 'The music industry's moves have been terrified reactions to staunch the bleeding of millions of dollars in revenue down the drain. For maybe a year, music companies thought they had the situation under control, but then album sales tumbled. Retailers, musicians, and some music-industry execs thought DRM was the culprit, and they soon joined the chorus of consumers calling for its head. Now consumers are getting their wish, and the music industry will continue to crumble. Giving up control of content and giving it away free are not rational ideas in a market economy, yet everyone's cheering.'"

Tuesday, January 22, 2008

snapshot 1/22/08

Trans World closing Johnstown facility and Ohio distribution center; 80-plus jobs being added in Albany
Trans World Entertainment Corp. is closing its distribution center in North Canton, Ohio, and a fixture facility in Johnstown, N.Y., as it cuts costs following another disappointing holiday shopping season. Trans World will rely on its distribution centers in Albany, N.Y., and Carson, Calif., to supply its 800-plus retail stores, most of which operate under the f.y.e. (For Your Entertainment) brand. The company expects to hire 80 to 100 new employees at the Albany distribution center to handle the increased workload, said Chief Financial Officer John Sullivan. Trans World has been struggling with declining sales as more consumers turn to computer downloading and big-box stores to purchase music. Total sales for the 11-month period that ended Jan. 5 fell 12 percent, to $1.19 billion. Comparable store sales fell 9 percent during the period, the company has reported.

gBox Gets Angel Funding For Distributed Music Store
Cupertino-based gBox, the maker of a music download widget, has raised unspecified angel funding from Swiss firm b-to-v, reports Alarm:Clock Euro. The gBox widget can display a wishlist of music tracks that third parties can then purchase. The company has a deal with Universal to distribute DRM-free music and it plans to expand into non-music items in the future. It also plans to establish a digital currency that marketers can use for promotions. gBox is a spin-off of content/rights vendor Navio.

Apple sells more than 22 million iPods during Q1
Reporting its first quarter financial results today, Apple said it sold 22.1 million iPods during the holiday quarter — a 5 percent increase compared to the same quarter last year, and a new single-quarter record for iPod sales. It also sold 2.315 million iPhones in the quarter, bringing the total number of units sold up to above 4 million. The company posted revenue of $9.6 billion and net quarterly profit of $1.58 billion, or $1.76 per diluted share, compared with revenue of $7.1 billion and net quarterly profit of $1 billion, or $1.14 per diluted share in Q1 2007.

Monday, January 21, 2008

snapshot 1/21/08

iPhone spurs Web traffic, if not music sales
In data provided to the New York Times, Google disclosed that it received more traffic from iPhones this Christmas than from any other mobile device, despite owning only 2 percent of the smart-phone market and less than 1 percent of the overall mobile-phone market. That means that while fewer people own iPhones, those who do possess the device use it to access the Internet much more than those with competing handsets.

What's not clear is whether the iPhone's slick design and simple user interface has proved useful for other functions -- such as buying music. Although iPhone users can purchase songs from iTunes when in range of a Wi-Fi hotspot, Apple declined to reveal how many have done so. To date, downloading music to mobile phones has not proved a popular activity. According to a recent M:Metrics study, 20 percent of mobile users internationally listen to music on their mobile devices, but 83 percent of them are sideloading the music from their computers or from other devices rather than downloading it from a mobile music service.

HBO to let subscribers download TV shows, movies
Time Warner Inc pay TV channel HBO will launch a service on Tuesday to let subscribers download movies and television shows over the Web, joining a crowded market for video on the Internet. The service, HBO on Broadband, will make its debut with a much larger library than its cable-based on-demand service in a stab at satisfying increasingly mobile and choosy viewers.

Is Up-Selling Apple's New iTunes Strategy?
Buried in a press release that European distributor PIAS finalized a deal to deliver 44,000 tracks to be sold in DRM free AAC on iTunes was this:
"This new global agreement with iTunes Plus will also see [PIAS] Digital offering a range of new ‘added value’ digital services as part of the deal, including bundling incentives with Ticketmaster and the ability to buy ringtone versions of the repertoire sold via iTunes."

Creating amazing music blog experiences (Yahoo)
Today we're releasing a piece of very early, very experimental (possibly dodgy) alpha software -- a desktop application called Blog Remix written using Adobe AIR. Blog Remix immerses you in an active music blog experience. It merges blog posts and MP3s and lets you mix together different tracks or blog entries from your favorite MP3 blogs. Save the mix for yourself, or share it with the rest of us as an XSPF playlist, podcast, or feed (using Atom, my personal favorite syndication format, or RSS).

Alltel Makes Mobile Music Even More Ubiquitous
US-based mobile carrier Alltel is now moving closer towards total music ubiquity, thanks to an over-the-air (OTA) PC synchronization service. The concept, called Alltel Music by Celltop, allows users to easily grab PC-based content through wireless channels. That follows an earlier Alltel embrace of PC-based sideloading, a move that tapped into the most common consumer storage repository for digital music collections.

The OTA synchronization service takes the concept one step further, and skips the need for wired sideloading sessions. Instead, users can simply connect to their PC library wirelessly, select tracks or playlists, and enjoy their music via streaming and downloading. That sounds great for consumers, though it continues to shift the energy away from dedicated, OTA download purchases - a disappointing revenue generator in the United States.

iTunes DRM-Free Licensing Moves Continue, PIAS Latest
Outside of EMI, major labels continue to refuse DRM-free licensing on the iTunes Store. The holdout mostly amounts to gamesmanship, and many executives expect a DRM-free licensing nod after a period of months. In the meantime, Apple has been quietly licensing DRM-free content from various independents and digital distributors, and beefing the protection-free iTunes Plus in the process.

It's not hard to convince independents to go DRM-free. That's been their digital language for years, and iTunes simply represents a bigger venue. Already, independent labels and distributors like Sub Pop, Nettwerk, IODA, and The Orchard have licensed iTunes, part of two-million strong iTunes Plus catalog.

And just this weekend, Brussels-based PIAS Entertainment Group licensed roughly 44,000 DRM-free tracks from its roster of 200 labels. PIAS, which offers a range of services to its member labels, will offer its content as unprotected AACs at 99-cents each - just like the other labels. Value-added offerings involving Ticketmaster and iTunes ringtones are also being bundled.

Don’t believe the low bit-rate ‘HD’ lie
Standard definition 480i DVD movies are typically 5 to 8 mbps (megabits per second) MPEG-2 whereas these so-called HD wannabes weigh in at a pathetic 1.5 to 4 mbps of 720p H.264. Apple’s new HD service is capable of 4 mbps which simply isn’t enough to be considered HD. XBOX360 downloads are 6.8 mbps 720p VC-1 so they’re semi-decent borderline HD. Marketing will push the nicer sounding “720p” aspect of the video but they don’t tell you it’s way too compressed to offer good video fidelity. Blu-ray has a maximum bit-rate of 40 mbps while HD DVD offers a maximum of 28 mbps. Over the air broadcasts can be up to 24 19.38 mbps.

So the bottom line is that so-called “HD” video from Microsoft’s XBOX360 HD download service and Apple’s new Apple TV service or any other web download service is simply not HD by any respectable definition. These companies cannot and should not use the “HD” name with video that is lower fidelity than standard DVD.

Little Ears Are Big Bucks for Music Players
Nearly one-third of digital-music-player users these days have to be in bed before 9 p.m., and that's opened a market for specialized players and ancillary products -- not to mention exploding demand for kid-themed video and music content. "The average age of first use of portable digital-music players has declined over the last three years," said NPD analyst Anita Frazier, who recently conducted a study called "Kids and Digital Content."

Some 31% of kids ages 6 to 10 now use digital-music players, with iPod as the brand of choice for 54% of them. Most cited the Nano as the version they use. And loaded onto those digital-music players owned by youngsters ages 2 to 14 are an average of 125 songs, 10 TV shows and 15 movies, Ms. Frazier said.

"By third grade, half of the kid population in grade school has an MP3 player," said Paul Metz, senior VP at C&R Research. There are a host of reasons why: a proliferation of parental hand-me-downs, more kid-friendly player choices at lower prices, and the long-held kid truism of wanting to be more like older kids and grown-ups.

Target Quietly Moves Into Digital Music, Finally; Sony BMG Deal
Target, the big-box retailer, is finally moving into digital music, with the low-key launch of a SonyBMG album. The new album from John Legend, ”Live From Philadelphia” launched exclusively in Target stores last week, and is also available in MP3 format through

This new promo also ties into Target’s deal with SonyBMG, where the music label is debuting DRM-free MP3 music cards. The site also says the store is powered by digital music provider HipDigital. Not sure if Target will add other such promotions from here on and make this into a full-fledged music service, or will just restrict itself to SonyBMG digital music for now. My guess: mainly digital promotions. Full fledged music services from rivals aren’t thriving, and Apple (NSDQ: AAPL) has the download market to itself.

The 19-song download is retailing for $9.99, which for a full MP3 album is certainly on the lower side. No singles at this point. By comparison, the Eagles’ 20-song Long Road Out Of Eden sells exclusively at Wal-Mart for $10.88 as an MP3.The Legend album is slightly higher quality—320kbps compared with 256kbps for Wal-Mart.

Friday, January 18, 2008

snapshot 1/18/08

Cell phones and virtual worlds morphing shopper ways
Virtual worlds, mobile coupons and bar-code readers on cell phones are the next technology wave that U.S. chain stores must ride if they hope to stay competitive in the fast-changing world of global retail.

The lines between merchandiser and technologist are certainly blurring," said Philip Schoonover, chief executive of consumer electronics retailer Circuit City Stores Inc (CC.N), where store and call center staff use tablet PCs to search the Web alongside consumers.

Writers strike sends viewers to DVDs, video games
According to a survey released Thursday from new-media consultancy company Interpret, TV viewership has suffered because of the strike, particularly for dramas and sitcoms. Interpret finds that 27% of respondents are spending less time watching network series and 12% are watching less cable and satellite series.

Conversely, 43% of respondents say they are spending more time watching DVD movies and 23% say they're watching more TV-DVDs. Another 26% say they are spending more time playing video games.

'Rock Band' pumps up music sales
Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

"Hopefully it helps evolve music to not just a linear art form but a more interactive art form," says Van Toffler of MTV Networks. MTV Games publishes Rock Band, along with Electronic Arts. "You look at a lot of 20-year-olds who are reticent to plop down $20 for a CD, yet they don't mind paying $25 for a DVD or $50 for a video game. … We're seeing the audience really embrace hearing new music for the first time or engaging with classic rock songs in a new way."

New songs are available weekly for Rock Band. And musicians and bands are lobbying to get their songs in the game. "As opposed to us being the aggressor, a lot of the classic bands and the biggest bands in modern music history are approaching us now to be in the game," Toffler says.

The Macworld Flipside: Apple's iPod Sales Growth Slowing
iPod sales growth is slowing. Year-over-year sales growth has declined for the past three consecutive quarters: From 50% in the Dec. '06 quarter to 17% in the Sept. '07 quarter. If Apple hits the Wall Street consensus when it delivers Q1 results on Jan. 22, it will sell a record 24.7 million iPods. But that means y/y sales growth will be just 17% again. A year ago, Apple reported that Q1 iPod unit sales increased 50% y/y; in the Dec. 2005 quarter, y/y growth was 207%. (See chart below.)

Wolfgang's Vault Invests In Daytrotter
Wolfgang's Vault, the online home for live music, announced today a substantial investment in online indie music destination, Daytrotter. This partnership will enable Daytrotter to grow its audience for unique recordings from undiscovered indie rock artists, and continue offering the existing and new archive additions of recordings as free mp3 downloads.

SellaBand Strikes Heineken, Orchard Deals
Bands are typically cash-strapped and starving, and that makes it difficult to produce high-quality releases and tour. Labels - independent or major - have traditionally offered early-stage financing, though serious sales downturns have dried that source considerably. Against that backdrop, alternative financing vehicles have emerged. That includes SellaBand, a concept that encourages fans to contribute funds to their favorite developing artists. The populist approach sparked a distribution deal with Amazon UK in December, and others are now stepping forward.

Just recently, independent digital distributor The Orchard has agreed to push successfully-financed groups. On the branding side, Heineken Netherlands has agreed to sponsor live events and compilations featuring winning acts. SellaBand offers $10 shares in a band, and offers production and studio expertise once a group crosses $50,000.

Variable Pricing Awaits Online Classical Connoisseurs
A softer voice comes from Indianapolis-based Digonex Technologies, which has been pushing user-driven, dynamic pricing for years. That probably sounds scary to established content owners - especially given the broad availability of free music online - though Digonex has been slowly striking deals.

The latest involves classical label Naxos, which is planning to thread Digonex into a limited experiment next month. Digonex will dynamically generate download pricing on roughly titles, using real-time, consumer demand data. The concept will involve MP3s, according to the companies, a move that improves the value of the offered music. "The pilot program with Naxos and Digonex will help us continue our commitment to further developing our customer-driven business model," said Justyn Baker, executive director of Licensing for Naxos.

Industry Plays Card Game: Will the Gamble Pay?
Starbucks also offers a selection of artist-specific cards at checkout, both on the promotional and paid level. Those cards are drive traffic towards the iTunes Store, part of a growing partnership between the companies. Now, Sony BMG is trying its hand. The company recently unleashed a limited selection of gift cards containing MP3s from top artists. That program, called Platinum MusicPass, officially went live on Tuesday. That represents another attempt to offer some oxygen to music retailers, though it remains unclear if the gamble spark greater sales.

Elsewhere, a lesser-known firm is also broadening the format. Just recently, Nielsen Soundscan started counting card-based albums from New Jersey-based Dropcards, a longtime presence in digital download cards. "The interest, over the course of the last few years, in selling these cards at retail has been overwhelming," the company explained.

TheSixtyOne - Music discovery service
TheSixtyOne is a music service for both artists and music lovers to share and discover new music. Incorporating elements of a digg-like voting system, custom playlists, and an internal point system for rewards - TheSixtyOne is some of the most fun we've had with music in awhile. It works like this: you make yourself an account on TheSixtyOne, as either a listener or an artist. As a listener, you are given a number of points which you can use to "bump" songs you like. If you happen to discover a song that other people vote for after you do, you are awarded with additional points. You can't really do anything with these points other than vote for more songs, but other users will see you as a high-profile listener and as such have more "influence."Artists that sign up have an opportunity to give their work some exposure, network with fans and other artists, and get their music "bumped" to the top. Artists can also opt to release their music as free MP3 downloads or sell them as DRM-free Amazon MP3s.

Out with the CD, in with the drive: record store attracts worldwide buzz
Indiedrive is unique in that it offers music albums on 1 GB high-end USB flash drives, instead of CDs. The drives, which can plug into the USB port of a computer, DVD player or gaming console, are about the size of a small key and can hold much more than a CD; the idea is for artists to load them with songs, photos, videos, even ring tones.

Although the flash drives, most priced around $20, cost more than a CD, consumers basically get the music album for free because they can download it onto their computer and then re-use the flash drive for other purposes. At, customers can browse flash-drive albums similar to searching for CDs at a record store. The Website includes sample songs, photos and descriptions of artists, including links to their homepages.

Yahoo May Be Looking To Buy Israel’s FoxyTunes
Rumors popped up here in Silicon Valley that Yahoo is in negotiations to buy Israel-based FoxyTunes. The Foxytunes core service is a Firefox plugin that allows users to control their favorite media players from the browser. It has a small but loyal following, who also use their tangential services (an email/blog signature tool and FoxyTunes Planet, a site that aggregates music information).

The acquisition makes some sense given Yahoo recent overt signals that they are shaking things up in music. Last week they launched a new, stripped down, easy-to-use web based MP3 player as well. The technology that FoxyTunes has created could certainly be used to further that agenda.

Thursday, January 17, 2008

snapshot 1/17/08

Praise the Lord online: Major hymn book goes digital
Churches across the world are able to sing the Lord's praises online after the launch of the first major digital hymn book on Thursday. Mission Praise -- which has sold more than two million copies as one of most popular hymn books in Britain and around the world -- is now available at

Visitors to the site will be able to search through more than 1800 songs and -- for an annual subscription of 40 pounds ($79) per book -- download words, sheet music, accompanying audio backing tracks. They can also create playlists for their own orders of service which can be saved and shared with others online.

Rolling Stones sign Universal album deal
Veteran British rock band the Rolling Stones has signed an exclusive worldwide recording agreement to release its next album through Universal Music Group, prompting speculation that it could leave EMI.

The Strong Will Survive at EMI
It remains to be seen whether EMI's reorganization of its music division, announced Tuesday, will matter to consumers. But if we can take EMI and its parent, Terra Firma Capital Partners, at their word, the changes could improve the way talented rock and pop musicians and their music will be discovered, nurtured, recorded and marketed by the struggling giant.

As for the rest of its new strategy, a major corporation should be able to, as EMI puts it, "monetize" the value of the artists' work by finding additional sources of revenue. And given that EMI is home to such brands as Astralwerks, Blue Note, Capitol and Capitol Nashville, Virgin and various EMI-named brands, it must have some redundancy in sales and marketing. The silo mentality encourages the segregation of consumers, and I'd contend that there are jazz artists on Blue Note who would appeal to Virgin's rock base and that Astralwerks has several electronica artists who might find an audience among modern jazz fans.

ITunes Movie Rentals and Netflix Online: Different Markets
After chatting with Reed Hastings for a few minutes, I realized that the services are very different. Netflix gives subscribers to its DVD-by-mail service the option of streaming movies on their computers as well. On Monday, the company said it would eliminate the time limits it had imposed on this service, which varied by price plan. Now anyone with the $8.99-a-month plan or higher can watch as many of its 6,000 movies as they have time for.

To reach this price point, Netflix is simply not offering the sort of recent releases that are the stock in trade of video stores, cable pay-per-view systems and most likely iTunes. Rather, Mr. Hastings said, it has mostly older titles, for which the studios want less money.

Netflix, moreover, is limited to letting people watch movies on their computers while they are connected to the Internet. No portable players. No easy way to watch on a big-screen television. No way to download a movie to a laptop to watch on an airplane. Later this year, the service will be on a set-top box sold by LG. But unless LG has something amazing up its sleeve, it’s hard to imagine that it will be able to get significant penetration with a standalone box.

Music firms' DRM-free strategy yet to have an impact on digital sales - S&P
Standard & Poor's Rating Services said music labels are looking for alternative ways to boost digital sales to offset physical format sales declines, but it is uncertain whether the proliferation of music without digital rights management (DRM) will help to boost overall digital sales. S&P quoted Nielsen Soundscan as saying US CD album sales fell 19 pct in 2007 comparted with a 7.6 pct decline in 2006, while 2007 US digital track sales growth slowed to 45 pct from 65 pct a year earlier and digital album sales increased 53 pct in 2007 compared with 101 pct a year earlier. Until a viable competitor for Apple's iPod emerges, it is unlikely DRM-free download offerings will increase digital sales beyond the growth generated by penetration gains by the iPod, S&P said.

Will iTunes rentals play on a 5G iPod? Nope.
The long-rumored iTunes rental service is finally up and running. For many users, the most attractive part of the service (and certainly the only part that really sets it apart from any of the other online rental options) is the ability to transfer your rental to an iPod, iPhone/iPod Touch, or third-generation Nano for playback on the go. Actually, let me rephrase that: your iPod Classic, iPhone/iPod Touch or third-generation Nano. That's right boys and girls -- if you are one of the millions who have 5 and 5.5G iPods with video, no iTunes rentals for you. I suppose that's one way to get people to upgrade.

Borders May Add MP3 Downloads. Amazon Answers
Amazon's answer to all of this competition? We hear they are in talks with a myriad of partners who want to use Amazon to sell music. The online retailer already has a hugely successful affiliate program that it has extended to include downloads.

Cell carriers cutting big music deals
Some of the biggest-selling recording artists are signing deals that make a single wireless provider the exclusive carrier for some or all of their music -- be they ringtones, ringback tones or whole-song or video downloads. Artists and labels see the deals as a way to maximize download profits and to heighten exposure as they solicit bids from rival carriers, according to industry experts. And wireless carriers, eager to convince music fans that they have access to the best content, are more than willing to write big checks.

Where Is Apple’s Rental Service for Music?
One quick last word on Macworld and what Steve Jobs didn’t do. The technology that enables movie rentals also could enable music rentals — or, in other words, a music subscription service like Rhapsody. The technology behind this is that iPods need to have a tamper-proof clock in them so that content can be vaporized after its expiration date. The first models didn’t have this feature; the new ones do.

Report: music phones spur adoption of mobile music consumption; we say “hogwash”
According to a new study by M:Metrics, 83 percent of the mobile music consumed in France, Germany, Italy, Spain, the U.K., and the U.S. is “sideloaded”, meaning it comes from another source and is transfered to the phone via a computer. With this is mind, the answer for buying music directly from the carriers or certain handset makers is, for now, “no.”

Classic albums get another go-round with deluxe reissues
n the music business, the search for new revenue streams hasn't shut the tap on the same old songs. Reissues represent a robust and self-replenishing enterprise in an industry beset by piracy and unpredictable consumer tastes.

Most noteworthy in this year's crop is the 25th anniversary reissue of Michael Jackson's Thriller, out Feb. 12 with such extras as the previously unreleased For All Time and bonus remixes of Wanna Be Startin' Somethin' (with Akon) and Billie Jean (with Kanye West). Arriving Jan. 29 is the reissue of Beck's 1996 Odelay, expanded to two CDs with previously unreleased tracks. Not to be confused with the controversial deluxe edition (those pricier embellished CDs rushed into stores mere months after the bare-bones original), reissues arrive years or even decades after the initial release and tend to be a cause for celebration, particularly if superior sound, significant catalog discoveries or a format upgrade brightens the package.

Wednesday, January 16, 2008

snapshot 1/16/08

Alltel Beefs Up Cell Phone Music Service Celltop
U.S. cellular carrier Alltel Wireless and mobile application developer mSpot on Tuesday introduced a new service for wirelessly synching music stored on PCs to mobile phones. Alltel's Music powered by Celltop is a service that lets subscribers access their music libraries from mobile phones. Celltop is Alltel's new technology, based on Qualcomm's Brew uiOne platform, which uses customizable "cells" to serve up content to subscribers. Cells are applications like call logs, text messaging, ringtones, news, weather, stocks, and sports scores that can be customized to appear on a phone's mail screen by clicking a phone's soft key.

Music by Celltop uses software developed by mSpot, called Remix, which synchs music stored on PCs wirelessly to a phone. Subscribers can listen to the music as it's being downloaded. Remix then saves the music on the phone's memory card and more can be added depending on how much a memory card can hold, according to mSpot. But it only works with music that is not protected by Digital Rights Management, meaning music that is not restricted to authorized viewing or playback of copyrighted material. The service costs $4 with a one-month subscription or $10 with a three-month subscription and it's currently only available on Motorola's Moto Rokr Z6m phone. Alltel plans to launch the service on other Celltop-based phones in the first half of this year.

Blockbuster shares drop on Apple news
Shares of Blockbuster Inc. plunged nearly 17 percent on Tuesday after a new threat emerged to the world's largest chain of movie-rental stores: Apple Inc. announced it now offers movie downloads via iTunes.

iTunes rentals and the system date
We got an interesting tip from "Jack", who noted that you could affect the time remaining on an iTunes movie rental by altering your system time. I gave it a shot to be sure. It's true, if you're willing to offset the date on your computer until you finally have time to watch that movie, you can get past the 30-day time limit.

It was also noted that if you fast-forward your calendar to the due date of a rental, iTunes will remove the movie from the library but apparently not from your drive. That seems odd to me, but that's the way it works, at least if you switch the date up yourself. And sure, you could get a little creative with a DVR and some streaming output, but the price isn't so bad to me that it warrants the extra effort.

en2go International Inc Appoints Steve Wozniak to its Board of Directors via hypbot
Former Apple head Steve Wozniak has joined former EMI digital exec Ted Cohen on the management team of digital entertainment application developer en2go.

The free music revolution could start with Jook
However, at the Great Digital Experience, a preshow event held the night before the tradeshow opened, we got a peek at gaming peripheral maker Razer's subsidiary Jook. Its music solution, also called Jook, aims to bring music sharing into the realm of social networking. In short, Jook wants to turn any portable music player into a personal radio station enabling anyone, regardless of their player, to wirelessly transmit songs to people around them. To effect that, the technology utilizes two parts... a wireless transmitter that plugs into any digital music player (the sample we saw was a dock plugged to the base of an MP3 player), and an indicator unit that seems to be integrated into the headphone cable.

Jill Sobule The Latest Musician To Embrace New Music Business Models
Last month we wrote about musician Kristin Hersh embracing a version of the new business model we suggested for musicians way back in 2003. It's a model where the musician can actually embrace file sharing and do better because of it, by focusing on using the file sharing to sell more scarce goods, such as specific songs or access to the musician. One of my favorite ideas in that discussion was that the musician could offer up that he or she would play a backyard concert for a supporter. I've yet to see anyone else pick up on that suggestion... until now. Well-known singer-songwriter Jill Sobule has just announced her plans for a new album and it involves a website that allows people to buy in at different levels from $25 (you get the CD before it's released) all the way up to $10,000 (you actually get to sing or participate on the CD). At the $5,000 level, Jill will come and perform at your home. I still think the lowest level ($25) is a bit too high, but the various levels and the rewards at each level do seem about right for the model. It's not clear how Sobule feels about file sharing on top of this, but it's clear that she's really embraced this new business model -- so I'm hopeful that it works out for her.

Hands-on with iTunes movie rentals: quirky and restrictive, but dead easy
Despite the few quirks we experienced, the steps required to rent from iTunes were dead simple and the ability to play the movie after just a few minutes of clicking "rent movie" was a big plus for our Type A personalities. Assuming you have the bandwidth that is. Sure, we're not talking HD video or 5.1 audio here. Nevertheless, the quality was surprisingly good when displayed full-screen on our 30-inch, 2560 x 1600 pixel display -- even when sitting at keyboard-length from the monitor. Perhaps the most telling result of our experience is this: we're tempted to rent again, soon.

iPhone, iPod touch updates are incremental, welcomed, and point to future
With the last update, an icon was added to give users access to the iTunes Wi-Fi Music Store, allowing them to order music directly from the phone. One small improvement here is that you can now pay for your purchases by redeeming gift cards (entered at the iTunes store), particularly valuable for parents who don’t want to give their kids a credit card.

While you cannot purchase or rent movies or TV shows directly (download times would be considerably long), Apple has made it easy to rent content through iTunes and transfer it to the iPhone. When connected to iTunes, a video tab appears. Select the movies you want to transfer and sync. On the iPhone side, content is distinguished as purchased or rented. As movie rentals on iTunes are timed — 30 days to watch from the time it’s rented to a 24-hour window to watch — the interface lets users know how many days are left until the movie expires. The update also allows users to navigate movies by chapters, just like they can when viewing DVDs.

iTunes Grammy contest: Pick the winners, win 10,000 iTunes songs
Tunes and iGoogle are giving away 10,000 iTunes songs to a select contestant who correctly predicts the Grammy award winners (or who gets the closest). Simply download the iTunes Grammy contest iGoogle gadget, add it to your iGoogle home page, and make your prognostications. You'll automatically be entered in the contest. For you gadget haters, there's even a printable sweepstakes form to fill out and mail. iTunes is also holding a daily Grammy trivia sweepstakes; the winners will receive iTunes store credit redeemable for 10 songs.

iTunes and Apple TV rentals and purchases: what you can (and can't) do

Recording industry should brace for more bad news
The big problem that EMI, and by extension the rest of the industry, faces is the sudden stampede of brand-name artists away from the traditional recording companies. The Eagles are with Wal-Mart, Madonna left Warner for Live Nation, a concert promotion company. EMI has lost Paul McCartney and Radiohead, and Coldplay is said to be threatening to leave. Last week the label's biggest seller, Robbie Williams, announced that he too would be leaving the label. All pretty devastating.

I don't know if Williams will sign with another record label or not. I really doubt it. The bottom line is that music has lost its economic value to consumers. But it still has emotional value. People will never stop listening to music. They've just stopped paying for it. So the challenge comes in figuring out how to capitalize on that emotional value. There are lots of ways to do that and guys like Williams, Clark, and Enthoven are sure to find them and transform the landscape.

IODA To Labels: No Deals With Imeem & LaLa
In a letter to its labels this week, digital distributor IODA recommended not granting licenses to prominent net services imeem, LaLa and others that offer full song streams due to inferior royalty structures. The distributor's struggles underscore that even in Music 2.0, there are vast inequities which leave indie labels fighting for position behind the major labels and their large catalogs.

Tuesday, January 15, 2008

snapshot 1/15/08

EMI faces 2,000 job cuts
Guy Hands, the private equity owner of EMI, plans to cut up to 2,000 jobs at the ailing British music company, in a plan to rebuild the group which has sparked fury from some of its biggest acts. The worldwide cuts will come at EMI's troubled recorded music division, which has some 4,500 staff of a group total of around 5,500. The shakeup, in which between 1,500 and 2,000 jobs will go, is designed to boost its roster of talent and increase Internet sales while reducing costs by 200 million pounds ($393 million) a yea

Pepsi Stuff and Amazon MP3 Bring DRM-Free MP3 Music Downloads to the Masses: More Music for More People on More Devices
Pepsi and are teaming up on Pepsi Stuff, a massive collect-and-get program where consumers can download the most DRM-free MP3 music available anywhere. Four billion specially marked Pepsi packages will allow people to collect points and redeem them for music from Amazon MP3 that can be played on virtually any digital portable device (including iPod(R)), organized in any music management application, or burned to a CD. Beginning February 1, consumers purchasing Pepsi products can "bank" their points on and redeem them for music on Amazon MP3. Amazon MP3 offers Earth's Biggest Selection of a la carte, DRM-free MP3 music downloads, with over 3.25 million songs from more than 270,000 artists. Five points earn consumers one MP3 song download from the libraries of EMI Music, SONY BMG MUSIC ENTERTAINMENT, Warner Music Group and tens of thousands of other music labels. Pepsi's biggest promotion ever makes its debut on the Super Bowl.

Apple announces iTunes movie rentals with every major studio
In turn, Apple will be launching iTunes movie rentals in partnership with Touchstone, MGM, Miramax, New Line, Lionsgate, Fox, Warner Bros. Disney, Paramount, Universal and Sony. That means every major studio will be offering their movies for renting via iTunes. 1,000 films will be available to rent by the end of February, and new releases will be added 30 days after the DVD goes on sale. Users can watch the movies on their Mac, Windows PC, current iPods and the iPhone. Movies will start instantly, taking less than 30 seconds to buffer. As with other movie rental services including Vudu and Amazon's Unbox, customers will have 30 days to start watching the film, and 24 hours from the moment they start it before it expires. Movies can be transferred from the Mac to an ipod while being watched, however you can only play the rented movies on one device at a time. For pricing, library titles will cost $2.99 USD, while new releases are priced at $3.99 USD.

Admitting that everyone has missed the boat on bringing movies from the Internet to a TV, Apple announced an update to the Apple TV device. Users will be able to rent and buy movies and television shows directly from their TV, along with music from iTunes. Photos can now be pulled from Flickr and .Mac, and videos watched from YouTube. HD versions of movie rentals -- the lower prices are for DVD quality -- will cost $3.99 USD for library titles and $4.99 USD for new releases. "The quality is unbelievable," Jobs said. 100 movies are available today in HD, with more to be added later.

The new Apple TV has an updated user interface that allows users to preview movies directly from the device, and see what other people have rented. The device is no longer tethered to iTunes, which was a major drawback of the original Apple TV, although it can still sync with iTunes as before.

Pepsi, Amazon Step Forward; Universal Music Steps Back
Pepsi and Amazon are now locked-and-loaded for Super Bowl Sunday, according to promotional details shared Monday morning. But Universal Music Group is staying home, thanks to stalled negotiations. In a statement, Pepsi and Amazon pointed to participation from EMI Music, Sony BMG, Warner Music Group and "tens of thousands of other music labels," though the list unmistakably omitted Universal.

A sidelined UMG means less available content, and more disappointed participants. Other aspects could also cool enthusiasm, including a points-based system that requires participants to collect multiple caps to redeem downloads. The "collect-and-get program" involves four billion caps, according to the companies, though five points translate into a single download. That could result in a low redemption rate, especially given modest conversion percentages on more traditional, one-to-one programs.

Additionally, points can also be applied towards bigger-ticket items. "We're also broadening the prize pool to include Amazon Unbox TV downloads, electronics, apparel, DVDs and CDs," explained Cie Nicholson, senior vice president and chief marketing officer of Pepsi-Cola North America. The promotion, called Pepsi Stuff, will feature Justin Timberlake.

Apple and Fox announce iTunes-ready digital copies on discs
It's not exactly a new idea, but Apple and Fox have just announced that DVDs from the studio will include iTunes-ready digital copies of the movies from here on out. That feature (which thankfully comes at no extra charge) will first be available on the Family Guy Blue Harvest disc, which will pack a file that you can "instantly move to iTunes." From there, you'll be able to view it on your computer, iPod, iPhone or Apple TV, with a unique code provided to ensure that you don't spread it around any further. Somewhat interestingly, while Fox's Jim Gianopulos mentioned both DVD and Blu-ray in his presentation, the official press release (linked below) seems to indicate that the digital copies will only be on DVDs, at least for now.

Borders Preps For Sole Control Of Online Bookstore; Considers Selling MP3 Downloads
As the clock on Borders’ website alliance with Amazon ticks to a close in April, the retail bookshop company is gearing up for its solo run. Borders began testing its new e-commerce site late last year. The new website is viewed as crucial part of its year-long bid to turnaround a series of financial losses. Among the ways Borders hopes to compete with Barnes and Noble, as well as its soon-to-be erstwhile partner, Amazon, is by trying to offer great degrees of interactivity, Reuters reports.

-- Added services instead of low prices: In particular, Borders is looking for ways to sell MP3 downloads. The company wants to extend its current “mix and burn” service, which allows consumers to come into a store and create their on CDs from a variety of songs. As for achieving greater interactivity, Borders is working on a “concept” or specialty store within the larger site. Borders also wants to let the 23.5 million members of its loyalty rewards be able to take advantage of the service online, something else that hasn’t been available. One thing it’s not interested in is being the lowest-priced operator. Rob Gruen, EVP of merchandising and marketing at Borders, tells Reuters that the bookseller is betting that more services, not lower prices, will draw consumers.

Why Steve Jobs has pulled one over on the entire movie rental industry
With services like Movielink, Netflix, and Vudu, the opportunities seem endless for companies that endeavor to turn the corner in the movie rental business. And while all of these companies positioned themselves in the market, Apple was quietly lurking in the shadows, ready to pounce on January 15, 2008. Now, there's no guarantee that Apple's service will truly re-create the industry, and we can't know for sure that iTunes movie rentals will become a success. But if you ask me, the writing is on the wall. Not only will iTunes movie rentals easily surpass any other service's revenues within the next quarter, it will usher in a breath of fresh air that has been lacking in this industry for quite some time.