Thursday, February 28, 2008

snapshot 2/28/08

Facebook Adds Music & Film Launch Pages
Facebook has just launched two new "Pages" for music and film designed to lure more musician and film makers and ease the way for them. The new templates include applications specifically designed for music and film like a review app, tour dates app, the ability to sell tickets and merch, a Flash player, music player and co-branded Facebook applications from sites like Fandango and iLike.

Mobile Music On $17.5B Track Despite Ringtone Decline
The global mobile music market is expected to rise to more than $17.5 billion by 2012, driven by subscription music services and full-track downloads, according to a new report by Juniper Research. “I think it’s fair to say that 2007 marked the tipping point as far as mobile music adoption was concerned," says report author Dr Windsor Holden. "Far more subscribers began downloading and subscribing to music content in developed markets, and it must be said that that the publicity surrounding the iPhone launch undoubtedly contributed to consumer awareness of mobile music services per se.”

Apologize' by OneRepublic Only the Second Song to Pass the 3,000,000 Mark in Downloads
The 3rd hit single from Timbaland's platinum album, Shock Value, as well as the first single from their own album, Dreaming Out Loud, OneRepublic's "Apologize" has become only the second song in history to score 3,000,000 digital song downloads, following "Crank That (Soulja Boy)" from Soulja Boy Tell'em earlier this year. The Timbaland mix of the first single from OneRepublic's debut album, Dreaming Out Loud (Mosley Music Group/Interscope Records), officially surpassed the milestone the week ending February 17 (Billboard issue date of March 1), according to SoundScan.

Digital Percentages Accelerating Rapidly at Majors
Major labels want their digital percentages to rise. But recent figures from top-level executives suggest that digital percentages are starting to accelerate at an uncomfortable rate. At the Digital Music Forum in New York this week, a pair of helpful figures emerged. Ted Mico, head of Digital at Island Geffen A&M, revealed a digital revenue percentage of 40 percent. And Thomas Hesse, president of Global Digital Business & US Sales at Sony BMG, shared a global digital percentage of between 35 and 40 percent. Both figures cover online and mobile sales.

Universal Buys Univision Music
Universal Music Group has purchased Univision Music Group, which includes Univision’s music recording and publishing division. The buyout gives Universal a commanding lead in the Latin marketplace in North America, but is subject to regulatory approval.

Univision Music Group is the largest Latin label in the US and includes Univision Records, Fonovisa Records, Disa Records and La Calle with close to a 40% marketshare according to Nielsen Soundscan’s year-end numbers for 2007. In turn, Universal’s Latin labels, Universal Music Latino and Machete, have a combined 14% marketshare. Their combined numbers will have Universal controlling half of the Latin music landscape in the United States. Univision’s holdings also include Univision Music Mexico and Univision Music Publishing.

Wednesday, February 27, 2008

snapshot 2/27/28

Make money by investing in your musical taste
The digital revolution might be making it harder for record labels and retailers to make money out of music, but the decline in album sales has spawned a new type of investment that is attracting fans and investment banker types alike. has financed 13 bands, earned 40,000 "scouts" more than 40,000 pounds ($79,700) and landed hundreds of investors some rosy returns since its launch seven months ago.

Interview: Brad Duea, President, Napster; Hybrid Subscription-Downloads Business An Advantage
Basically, Duea agreed that the concept of a DRM-free subscription service, at least one that allows a user to port music onto a device, doesn’t make sense, since there has to be a limitation on how that music is used and kept. He did note that the company is experimenting, on the mobile side, with subscription purchase services. So, for example, a mobile user might pay a set fee to buy a number of tracks each month. As for when the DRM-free store will open up, the official word is still in the first half of this year.

During the panel, Duea mentioned that after years of losses, Napster is finally pushing into positive cash flow, though I was curious how this squared with statements in the company’s 10-q filings, about the company benefiting from an impasse in establishing rates and paying music publishing fees. He admitted that the company could go back to being cash flow negative depending on the rate that is established and the level of investments the company makes this year, but overall, they’re standing by claims that Napster will generate cash this year.

Digital Music Biz Consolidation Predicted
The digital-music business should expect a spate of consolidation during 2008 and 2009, predicts London-based research firm Point Topic in a new report. The firm says that, in a global sector which has more than 498 digital-download services currently operating in over 40 markets, digital-music services with robust business models are expected to survive by being acquired by the major digital-music players, while the weak ones collapse.Among the major digital-music companies Point says are expected to embark on an acquisition spree are mobile-phone maker Nokia, PC software giant Microsoft, and RealNetworks Inc-operator of U.S.-based subscription-funded service Rhapsody. Point Topic calculates that legal digital sales currently account for nearly 30% of the total U.S. music market, and for about 20% of the business in Europe. In total, it estimates that digital music generated $2.9 billion in revenues in 2007, a 40% jump from 2006.Apple's iTunes Music Store continues to dominate the digital-music sector in the United States, United Kingdom, France and Germany.

Music exec: "Music 1.0 is dead."
Consider the statements that were made today without controversy:
  • DRM on purchased music is dead
  • A utility pricing model or flat-rate fee for music might be the way to go
  • Ad-supported streaming music sites like iMeem are legitimate players
  • Indie music accounts for upwards of 30 percent of music sales
  • Napster isn't losing $70 million per quarter (and is breaking even)
  • The music business is a bastion of creativity and experimentation

Tuesday, February 26, 2008

snapshot 2/26/08

NPD: ITunes No. 2 Music Seller in US
Apple Inc.'s online iTunes music store is now the number-two music retailer in the U.S. behind Wal-Mart Stores Inc. as measured by unit volume, market researcher NPD Group said Tuesday. The market researcher began tracking music sold stateside during the middle of 2006. In the fourth quarter of that year, Best Buy Co. took second place behind Wal-Mart, while Target Corp. took third place and Apple's iTunes store fourth place, NPD analyst Russ Crupnick said. For the full year 2007, Best Buy came in third and Target fourth, he said.

Crupnick called Apple's move to the number-two spot "fairly understandable given the pressure that's been on CDs and the almost 50-percent growth in digital downloading in the past year." About 10 percent of music acquired in the U.S. was through legal downloads in 2007, and consumers who bought digital music legally through pay-to-download Web sites grew by 5 million to 29 million in 2007, NPD said Tuesday.

Meanwhile, an estimated 1 million consumers did not buy CDs in 2007, and 48 percent of U.S. teenagers didn't buy any CDs during the year, up from 38 percent in the year before, according to NPD data.

Top Indie Artists Embrace AimeStreet's Fan Driven Pricing
Starting today, thousands of tracks from indie label leaders Beggars, Matador, and Polyvinyl will be available on AimeStreet at prices determined by the site's fan driven service. All songs on Amie Street are initially free to download and then rise in price based on popularity up to 98 cents. Cat Power, Interpol, The New Pornographers, Sigur Rós, Pavement, Yo La Tengo, Devendra Banhart, Belle and Sebastian and more join fan-driven pricing movement.

Avenue A Razorfish 2008 Digital Outlook Report
  • Only a few years ago, a Web site’s home page was the most prime piece of digital real estate a publisher could offer. Not so much today, however. The relevance of the home page as a media buy is on the wane. Search, social networks, blogs, and RSS (among a host of other online sources) are driving more and more users deep into today’s Web properties. Now, the majority of consumers bypass a site’s home page completely.
  • Every page is now a home page, each of which will have a wider reach, a lasting shelf life, and the ability to attract a new audience like never before. To capitalize on this, ensure that every page has a strong, clear global navigation scheme and related content that is visibly promoted. And don’t forget to make sure that display advertising gets prominent, above-the-fold, home-page-like treatment (300x250 rectangles and 728x90 leaderboards). Remember, every page can be accessed in any conceivable manner and in any conceivable order—you can’t design properties to control user flow anymore.

BandLoop Hopes To Streamline Band/Fan Communication
BandLoop is like a stripped-down version of MySpace that has eliminated everything except show announcements and blog posts, in order to offer a more streamlined conduit for show and other information to flow from bands to their fans. Add a show to your MyLoop list, and you'll be able to sign in any time to see the latest concert calendars and messages from your bands -- assuming the band has BandLoop on its radar, and is entering this information. The site also acts as a hinge between the band's various presences elsewhere on the net (Deerhunter's BandLoop page links to the band's website, MySpace page, YouTube videos, Hype Machine entries, page, imeem page, and Wikipedia entry).

Research firms urge Hollywood to oust Apple
Two research firms -- Park Associates and Entertainment Technology Center at USC -- have released a document urging Hollywood to use Apple's own tactics of offering low-cost TV shows and feature films for mobile media devices in an effort to reap profits on their own, cutting the Cupertino-based company out of the equation. "Hollywood shouldn't let Apple make all the money, especially since they are the ones making the movies," said John Barrett, director of research at Parks Associates. "Judicious use of free mobile content can help drive ticket and DVD sales." The white paper specifically details steps to achieve profitable distribution of mobile content on mobile platforms and devices, without Apple's help.

Monday, February 25, 2008

snapshot 2/25/08

Random House Audiobooks To Skip Encryption
In a bid to bolster sales by attracting new retail outlets, one of the country's largest suppliers of audiobooks plans to begin publishing its titles without encryption protection. Bertelsmann AG's Random House Audio unit informed literary agents Thursday that its audiobooks will be sold without DRM encryption beginning March 1. In September, Random House Audio made 500 DRM-free titles available on eMusic and concluded that none of the titles ended up on file-sharing networks as pirated material. The Random House decision was reported on the Boing Boing Web site.

Random House is following in the footsteps of major music labels that have moved to sell their products online without DRM protection. One advantage for consumers is that they will now be able to easily move their audiobooks from one digital device to another, something that has traditionally been difficult. "We need to sell digital downloads through all online retailers," said Madeline McIntosh, publisher. "If we insist on using DRM, our audiobooks can't be sold to consumers who have iPods unless they buy them from Audible or iTunes."

Free On Demand Music Spurs Growth
CBS owned says it has had a unique listener bump of 92% in the four weeks since the launch of their free on-demand music service. In addition, unique visitors continued to show sustained growth, up 59%, and page views increased 58%. says it has 21 million active users worldwide monthly.

Studios Are Trying to Stop DVDs From Fading to Black
Movie studios are fighting back by taking a page from the Internet playbook. Indeed, the centerpiece of the market rejuvenation effort is something 20th Century Fox calls “digital copy.” Fox DVDs, starting last month, now come with an additional disc holding a digital file of the title. Consumers can download the file to a computer in about five minutes — far less time than via the Internet — and then watch the movie there or transfer it to their iPod.

But John Freeman, an industry analyst, sees the effort as a stall tactic. Although digital copies are “a step forward,” he said, that step is tantamount to Hollywood admitting that its lucrative hard-goods business is growing obsolete. Today, digital files on discs; tomorrow, mass downloading straight from the Internet.

Subscription Gets Religion; Praiseworthy Application Launches
Devout Christians are now being treated to a music subscription service specializing in faith-based music. The service, called GospelDepot (, is powered by MediaNet Digital division MusicNet in partnership with Ways & Means Entertainment. The platform, currently in beta ahead of a March launch, features artists like tobyMac, Shirley Caesar, Kirk Franklin, Steven Curtis Chapman, Natalie Grant, and BarlowGirl. Participating labels include EMI Christian, Integrity, Verity, Word, and Malaco.

Like other subscription offerings, GospelDepot offers on-demand access to a massive catalog, though permanent downloads require a 99-cent payment. In the secular world, that approach has experienced mixed success, though a more targeted pitch could yield different results. "We are finding that certain segments of the market want a customized service that focuses on their musical and entertainment tastes in particular," explained MediaNet president and chief executive Alan McGlade.

Friday, February 22, 2008

snapshot 2/22/08

Firefox crosses 500 million download mark
t's an arbitrary but interesting milestone for the open-source Web browser, whose development is overseen by Mozilla but that's also developed and extended by a large number of outside programmers. In September 2007, Firefox crossed the 400 million download mark, indicating an average rate a bit shy of 20 million per month at present.

Digital Payment CEO Doesn't Like MySpace's Rumored Free Music Plan
Rumor has it that MySpace will soon join imeem and in offering free, ad-supported music from all four major labels, in exchange for revenue split somewhat along the lines of what the site already does with Sony/BMG music videos. Just because the advertising-supported business model has worked for some of the industries that have made the move into the e-content space, like newspapers, for example, doesn't mean that it will necessarily work for the music industry.

Ad-based models typically allow listeners to access the music on specific sites but don¹t allow them to convert, save or download the music. The average on-the-go consumer wants to put it on their iPod, have it in their stereo, and play it in settings where they may not have Internet access ­ without a download option and combined with the additional annoyance of short advertising clips, listeners are going to turn to other music providers, even if it isn't free.

The rumored MySpace ad-based site is an interesting idea in theory, but in order to draw in enough unique visitors to make it worthwhile for the record companies, I think ultimately a combined ad-based and priced model will be more successful. Allowing users to listen on the site with ads and also providing the option to download for a fee will combine the best features of both options. The bottom line is that while free music is nice, people want music when, and how, they want it, and ad-based models can't provide that experience.

Black Crowes Prime March 4th Release With Internet Blitz
he Black Crowes are releasing “Warpaint” their first new album in 7 years on March 4th and heading out on tour. To get their fans juiced up they’re blitzing the net with new content on their pages on Myspace, Facebook, video on YouTube, a new single “Goodbye Daughters Of The Revolution,” a widget plus a “countdown to release date” ticker on their web site.

Thursday, February 21, 2008

snapshot 2/21/08

EFF critical of Flash Video DRM
In a recent blog post, the Electronic Frontier Foundation’s Seth Schoen lays out a number of criticisms of Adobe’s push to introduce Digital Rights Management (DRM) technology into its Flash Video and accompanying Flash Media Server products.

If DRM was to become commonplace for Flash Video (the dominant format for streaming video on the Web e.g. YouTube) then it would stifle competition and dramatically hinder the burgeoning “remix” culture that the Internet has spawned, argues Schoen.

Vivendi Launches Zaoza. A Preview To Total Music?
Universal Music's Vivendi has launched a subscription-based mobile content service called Zaoza that charges $4.50 a month for unlimited downloads including music, ringtones, games and videos. The service works with most cells and services except the iPhone. Content partners at launch include Sony BMG and several larger EU indies. The site already has 100,000 beta users in France and launched in Germany and the U.K. will follow this year. In a departure from competitors, there is also a social networking component that allows users to share downloads with five friends.

Vivendi says that it is considering an expansion into the US. There Zaoza might find itself competing as a kind of cellular version of the Total Music concept being floated by Universal's own Doug Morris. Combine the two services and Vivendi Universal could change the game. But this can only happen if the world's largest music company can move the ball forward more rapidly then it has in the past.

Grammys Give Album Sales A Boost
s usual, many of the artists who appeared on the February 10 Grammy Awards saw a big spike in record sales the following week. A performance is usually a sure fire way for an artist to spark interest in their latest work, and this definitely proved true for Amy Winehouse, who has had some image problems recently as she entered rehab. However, Winehouse pulled it together for her live-via-satellite performance and put on one of her best television performances yet, not to mention the fact that she won five awards. The coup was enough to push her album Back To Black all the way up from #24 to #2, selling 115,300 copies, according to Nielsen SoundScan. However, she couldn't quite top Jack Johnson, who held on to the #1 spot for the second week in a row with Sleep Through The Static.

Herbie Hancock, the surprise winner for Album of the Year with River: The Joni Letters, rocketed to #5 on the chart after being at #159 the week before. His trophy-winning album sold almost 54,000 copies. Daughtry was shut out at the Grammys, but sales of their self-titled album still rose by 43 percent from the previous week, landing it at #15. The Foo Fighters' Echoes, Silence, Patience and Grace won a pair of Grammys and sales went up 160 percent, while performer Carrie Underwood saw a 43 percent increase in sales of Carnival Ride. Rihanna's Good Girl Gone Bad went up 60 percent, and Kanye West's Graduation went up 74 percent. John Legend also performed on the show and saw his Live From Philadelphia set jump from #62 to #12 with a 209 percent increase in sales. Even John Fogerty, who performed with Jerry Lee Lewis and Little Richard as part of a Cornerstones Of Rock segment, saw his latest album, Revival, reappear in the Top 200 at #152.

IDJ, Flycell Partner For Mobile Service
Island Def Jam Music Group has launched the first-ever label-centric mobile subscription service in a deal with mobile and online media company Flycell. IDJ Mobile will offer subscribers exclusive online and mobile content, including ringtones, graphics and games, along with label news, artist mobile blogs and sweepstakes for backstage concert passes and other prizes. The service launched today (Feb. 20) with exclusive ringtones and other content from Kanye West -- its first flagship artist. IDJ plans to add content from Rihanna in the next week. IDJ will be available for $9.99 a month to mobile customers of Sprint, T-Mobile, Verizon Wireless, AT&T, Virgin Mobile, Boost, Alltel, Cellular One, Metro PCS and Suncom.

More Listeners, More Money: Online Radio Growth Continues
Internet radio isn't the biggest earner online, but its appeal continues to grow. Just recently, Accustream iMedia Research pointed to a 26.1 percent increase in total listening hours in 2007 to 4.85 billion. That is drawing more advertiser interest, though the group credited heavyweights Clear Channel and Citadel Broadcasting for drawing the most advertising visibility. In total, internet radio billings topped $80 million in 2007, according to the group, almost triple sales of $26.9 million in 2006.

Additionally, the internet radio industry is also spinning video-based advertisements, which yielded an additional $12-15 million last year. AOL-owned Shoutcast grabbed the most attention last year, with 48.4 percent of total listening hours, according to the ranking. Other top-ranked destinations included Clear Channel Online, Yahoo Music, AOL Radio Networks and Pandora.

iTunes Rental availability outperforms promises
Many of our readers are noticing that rental titles reach iTunes more quickly than expected. Didn't Apple promise new titles 30 days after the DVD release? TUAW reader Robbie Taylor wrote in to let us know that Michael Clayton hit the iTunes "shelves" within just a day or so of its February 19th store release.

'Juno' DVD to be sold in Starbucks
The box office hit "Juno" will be the first Fox Home Entertainment DVD to be sold at Starbucks coffee outlets in the United States, the studio said Wednesday. The DVD will be released April 15. In the latest box office rankings offered by Box Office Mojo, "Juno" was No. 7 after 11 weeks.

iLike Launches Artist News Stream - Users Triple since Last July To 22 Million
San Francisco/Seattle based music service iLike launched a “news feed” for favorite artists this week. Users can now see exactly what their favorite artists are up to - when they go on tour, release new songs or videos, etc, the news is presented to them in the feed.
Users can select their favorite artiest via the iLike website or on their social network applications. Or the service decides what you like based on your playing habits on iTunes (they have an iTunes plugin - if you listen to a song ten times, it thinks you like the artist).

Apple, Starbucks sued over custom music gift cards
A Utah couple acting as their own attorneys have filed a lawsuit against Apple and Starbucks over the retailers' recent "Song of the Day" promotion, which offers Starbucks customers a iTunes gift card for a complimentary, pre-selected song download.

In a seven-page formal complaint, James and Marguerite Driessen of Lindon, Utah say they developed in 2000 (and successfully patented in February 2006) a utility dubbed RPOS, or retail point of sale, for Internet merchandising. The concept, which forms the heart of the infringement lawsuit, would allow gift cards for pre-defined items that can be sold at a brick-and-mortar store but used online; customers could redeem a card for a dining room set or a DVD, for example.

Wednesday, February 20, 2008

snapshot 2/20/08

Rental Redefined: eMusic Strikes Avis Partnership
Rent a car, get some independent MP3s. That is a proposition being presented by eMusic and Avis, an unusual pairing. According to information shared Tuesday, Avis renters will be given access to a handful of free downloads supplied by eMusic. Additionally, eMusic will offer a collection of playlists geared towards seasons, destinations, and other pertinent themes. "Music and driving go hand-in-hand, so eMusic is the perfect way for our customers to find songs to capture the mood of their trip," explained Becky Alseth, senior vice president of marketing for Avis Budget Group.

For eMusic, the partnership broadens the potential audience, though Avis renters may represent a suboptimal target. Instead of mainstream artists, eMusic caters towards more independent content and less-recognizable artists. Incidentally, Avis was once paired with iTunes, though that contract was not renewed according to one source. Elsewhere, Avis blends XM Satellite Radio into a limited number of premium rental models, part of a deal first announced in 2003.

New details on MySpace's music play
News Corp. has tested the record industry's interest in a site that would offer music in several different ways, including ad-supported downloads and streaming to PCs, according to a source with knowledge of the talks. This may be why PaidContent reported that News Corp. was proposing an ad-supported download service while the blog Silicon Alley Insider said the company was backing a streaming service.
News Corp. has also broached the idea of a streaming service that featured a prominent "Buy Now" button that allowed users to purchase songs off the site, another source said.

Tuesday, February 19, 2008

snapshot 2/19/08

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Friday, February 15, 2008

snapshot 2/15/08

Beatport To Launch Hip-Hop Download Store Beatsource Today
Beatport, the leading dance music download store, is set to launch Beatsource, their online store devoted to Hip-Hop and urban music today. After several months of promotional teases, the store is now ready for prime time.

Report: iTunes more popular than illegal file sharing
A recent report from market research company NPD Group shows that purchasing music from Apple’s iTunes Store is more popular among 9- to 14-year-olds (also called tweens) than illegally downloading music over the Internet. However, even though iTunes is making gains against piracy, the issue of illegally sharing music is still strong.In the report, NPD said that 70 percent of tweens are now using legal means to download music. iTunes, the most popular such service for this age group, was used by 49 percent of those surveyed.

The Eagles' Comeback Record Certified 7X Platinum
The Eagles' comeback record, Long Road Out Of Eden, was certified seven times Platinum by the RIAA in January for over seven million copies sold. Country artists were the big winners for the month, as Carrie Underwood's "Before He Cheats" became a double-Platinum digital single and "Jesus Take The Wheel" went Platinum as a digital single. Superstar Garth Brooks saw his newest best-of set, The Ultimate Hits, go five times Platinum.

News Corp. Working On Music ‘Hulu’ For MySpace
paidContent has learned that News Corp (NYSE: NWS). is pursuing a music joint venture for MySpace—similar to Hulu, its video joint venture with NBC Universal (NYSE: GE), but with variations on the theme. The constant in both instances is content for equity. Under this scheme, MySpace would be the operator with the major music labels—Universal Music Group, Sony BMG, Warner Music Group (NYSE: WMG), EMI—as content providers and equity partners. MySpace would be a distributer but, like Hulu, the idea would be a mixed portal-distribution experience. Music would be DRM-free and ad supported. No label has signed yet but a source familiar with the situation said that could change in a matter of weeks. The theory is that once one signs on, the rest will follow. (EMI would seem a likely candidate but Sony (NYSE: SNE) BMG already has an interesting deal with MySpace.) That doesn’t always work but, as Amazon (NSDQ: AMZN) has shown, it can.

MySpace, which claims more than 7 million bands with on MySpace Music, has explored and experimented with numerous ways to capture the full value of music to the site, including a recent limited test of ad-supported music downloads. Music has been at the core since the beginning and remains a major driver. Last fall, MySpace and Sony BMG set up a revenue-sharing partnership for sponsorships and ads with the label’s artists’ video and audio content within MySpace.

The Complete Guide to iTunes Movie Rentals, Part 1
Rented content is restricted to only being stored in a single place at any given time. Unlike purchased content, which is synchronized from your main iTunes library onto your iPod, iPhone, or Apple TV, and can easily be in several places at once, rented content must be moved from your iTunes library to whichever device you want to use it on. If you decide later that you want it on a different device, you must move it back to your iTunes library, and then move it back out to the new device. To make matters even more complicated, you have to actually be connected to the iTunes Store and logged in using the account that was used to rent the content in question.

  • No specific facility is provided for moving a rental from one iTunes library to another. Copying the file between libraries manually will not work, as the authorization keys will not be updated—the resulting video will import into the secondary iTunes library, but will not play regardless of computer authorization. The only way to accomplish transferring content to another iTunes library seems to be via an iPod or iPhone - a much more convoluted process than should be necessary.
  • In terms of iPod support, iTunes rented content is presently only supported on the current model iPods—the iPod classic, iPod nano (video), iPod touch and iPhone. Rented content cannot be transferred to or viewed on a fifth-generation iPod.
  • Supported iPod models and the Apple TV must be running recent firmware versions. The Apple TV requires the major 2.0 update, while the iPod classic and iPod nano require v1.1 firmware, and the iPod touch and iPhone require v1.1.3 firmware. The $20 application package for the iPod touch is not required to enable rental support.
  • Content rented on the Apple TV 2.0 interface can only be stored and viewed on that specific Apple TV. It cannot be transferred back to your iTunes library, or transferred to a different Apple TV device.
  • High-Definition content can only be rented from the Apple TV 2.0 interface. It is not available via the iTunes application itself.

Thursday, February 14, 2008

snapshot 2/14/08

Borders opens bookshelves to digital services
But follow the table of books snaking off to the right, and you'll come face-to-face with Borders' newest retail strategy: a digital center where you can download music or books, burn CDs, research family histories, print pictures and order leather-bound books crammed with family photos - with help from clerks who know how to do those sorts of things and won't embarrass you if you don't.

Borders, the nation's second-largest bookstore chain, hopes to reverse years of sluggish sales by reinventing itself as a hub for knowledge, entertainment and digital downloading. Exhibit A is the new store that will open to the public here Thursday - the first of 14 that Borders plans to unveil this year. Borders' plans underscore the anxiety in the bookstore industry, which has been hurt by the growing footprint of online-only sellers. allows on-video ads from iTunes, more
Hoping to create a new way for even amateur video providers to make money, Overlay.TV says it has developed a new platform that can integrate ads into the content itself in an unintrusive way. The self-title service takes Flash-based videos from many common video sites (including MySpace and YouTube) and lets users create clickable areas in a video that tie into related ads; ads can be as subtle as links hovering over products that are already part of the video or as conspicuous as normal ads, Overlay.TV says. The resulting videos can then be embedded anywhere that accepts normal HTML code such as blogs or social networking sites.

Importantly, the service does not require the major content deals that are often needed with other sites. Overlay.TV has already established its own affiliate networks that includes roughly 600 significant advertisers who will provide click-through revenues; this involves direct links to Apple's iTunes Store for songs and videos as well as more conventional purchases from Amazon and Wal-Mart. The feature is also said to be less intrusive as viewers are not forced to view the ads. Overlay.TV is live today and is free to use.

Publishers File Suit Against MediaNet
everal members of the National Music Publishers’ Association have filed a class action lawsuit against MediaNet seeking damages, a declaratory judgment and injunctive relief "to put an end to MediaNet's willful and ongoing copyright infringement". MediaNet delivers the downloads and tech that powers online stores for Yahoo!, HMV and others. Publisher plaintiffs include Sony/ATV, Peer International, Frank Music and MPL.

The suit argues that MediaNet was originally covered under a 2001 agreement when it was owned by record labels, the company has refused to enter into a new agreement since 2005 when it was bought by private equity firm Baker Capital in 2005.

AirSpun, Inc. Launches Social Music Discovery and Music Video Features to Help Fans Connect with Top Indie Bands
Fan web-pages and widgets, "sounds like" search, social networking, and music video features complete new suite of music discovery tools at The latest developments connect serious music lovers directly with new bands that match their musical tastes. Fans in the AirSpun community can now influence which bands top the charts and receive free radio promotions.

AirSpun's new social music tools help fans connect with others who like the same music, discover new bands using the new "sounds like" search, and create an audio player widget to embed in their social networking sites (such as MySpace and Facebook). Music fans can influence which songs and bands reach the top of the charts and help them earn free radio airtime by including their music in a free fan widget. AirSpun's rapidly growing community of indie bands, artists, and labels is nearly 16,000 strong and consists of original recording artists actively selling and marketing their music.

Once Again, Digital Album Sales Get Top Billing
Music fans prefer one-off downloads, but digital album sales are now making a more serious impact. Just recently, heavy digital album sales boosted the Juno soundtrack to the top of the charts, and gave Rhino Entertainment its first number one.
This past week, Jack Johnson enjoyed substantial album sales, and a similar, top-place finish. Specifically, Johnson shifted 375,000 copies of Sleep Through the Static (Brushfire), of which 37 percent were digital. The digital album sales total of 137,000 is a new record, according to Nielsen Soundscan. The result also helped to raise US-based weekly sales totals by 11 percent, though cumulative totals remain 14 percent below comparable, 2007 sales.

Steve Jobs rules the recording industry. Now what?
One of those places is Apple's iTunes online music store. For several days last week, the top-selling track on the store was Yael Naim's "New Soul," a song available, at least to U.S. audiences, exclusively via iTunes. The exclusivity isn't a big deal -- the store is powerful enough to offer plenty of high-profile exclusives -- but the reason "New Soul" became a hit is a big deal. "New Soul" was a hit solely because it appeared in Apple's commercial for the MacBook Air. Until the 1980s, record companies looked to radio to break new artists. Until five years ago, the place to launch new performers was music video. For most of this decade, the breakdown of traditional music channels has led to new songs being noticed via video games, television shows, and -- most of all -- commercials. Whoever is programming the music for Apple's television commercials may be, right now, the most powerful talent scout in the record industry.

How did Apple gain all this power? The record companies, desperate, vain, and stupid, handed it over. As Michael Hirschorn wrote in the March Atlantic (I'd link to his terrific essay, but the venerable Atlantic tends to get around to uploading new articles to its website weeks after they appear in print), "Steve Jobs shanghaied and basically destroyed the CD business. The major record labels, in giving Apple's iTunes the right to sell individual songs for 99 cents each, undermind their own business model -- selling bundles of songs gathered together into something called an album for up to $20 a pop -- because they didn't see that people were about to consumer music in an entirely new way. The labels saw iTunes as free money; 'ancillary,' in the legal vernacular. Jobs took their cheap music and used it as a loss leader to sell his expensive iPods, and the traditional music business now lies in tatters." The punch line, of course, is that the record industry is trying to shut out Apple by selling music online elsewhere such as Amazon -- for a mere 89 cents per cut.

YouTube to become affiliate seller for iTunes and AmazonMP3?
Buried inside YouTube’s large CSS file are two very interesting images found by the blog Googlified - one is a button for the iTunes Store, the other for Amazon’s MP3 store. These seem to indicate that YouTube is gearing up to become what amounts to an affiliate seller for these two stores.

If that is the case, it’s a very smart move on Google’s part. YouTube is the medium by which many people watch music videos and musical performances - as of right now if someone likes a song they would have to remember the name of it, open their music store of choice and search for it. These buttons will provide one-click access to purchases, which you can be sure will drive more sales.

Wednesday, February 13, 2008

snapshot 2/13/08

Motley Crue rocker Vince Neil had 110-million reasons to smile for his birthday blowout weekend here—just two days earlier Vince, Tommy Lee, Nikki Sixx and Mick Mars signed a $100-million+ mega deal to produce three albums and perform three world tours for the giant LiveNation entertainment conglomerate.

Omnifone introduces MusicStation Max, continues push for new music-industry business model
U.K. music download provider Omnifone has expanded its MusicStation program by offering a new service, aptly named MusicStation Max, where cell phone buyers can download an unlimited amount of music from all four major labels for “free.” Free, of course, means handset manufacturers will build the cost of the MusicStation Max plan into their devices, sell them to the carriers, who will resell them to consumers along with a special music, voice, and data plan. We can assume that “special” means more expensive as music is added to voice and data.

With MusicStation Max, consumers can download music directly to their cell phones for 12 to 18 months, depending on the plan chosen, after which they will have to purchase another Max phone (and plan) to keep downloading. If they choose not to re-up, they still own their downloads and can use them on the device originally purchased or on a computer but not on other devices such as an iPod or Zune.

UMG Talks Temporal Pricing, Utopian Future
Interesting post at MocoNews from the World Mobile Congress. Rob Wells, Universal Music Group SVP of Digital, talked about the goals of the company with an almost cinematic flair.The start and endgame for Universal and, indeed, the industry worldwide, is providing consumers with blanket access through a celestial jukebox anytime, at home, in the car. This is the next step in the utopian future for music... And this about temporal pricing:
If an artist has just delivered an album from studio, we could potentially
deliver it to a limited number of users for a higher price. It’s something we’re
quite keen to develop; for example, through our own B2C channels - artists

Report: Imeem acquires Snocap
Social network, Imeem, has acquired struggling music-licensing company, Snocap, the company cofounded by Shawn Fanning of Napster fame, according to a published report TechCrunch, citing an unnamed source, reported that the deal is being finalized this week.

Wharton Study Finds ILike Users Acquire 250% More Music In Month After Registration
The Wharton School of the University of Pennsylvania, a leading business school, and iLike, the web's leading social music discovery service, today announced initial results of an ongoing research collaboration: that long-term iLike users added nearly 250% more music per month to their libraries in the first month of using iLike. One of the top drivers of affiliate sales to the iTunes Store, iLike helps over 20 million registered users discover new music they like, and makes it easy for them to buy that music via retail links. The study indicates that the significant increase in people's music consumption may be attributed to the iLike Sidebar ( for iTunes and Windows Media Player.

Tuesday, February 12, 2008

snapshot 2/12/08

MWC Debates DRM
The digital rights management debate moved to the mobile space today, as delegates at the GSMA Mobile World Congress in Barcelona heard Larry Moores, senior VP global product management for Real Networks, call for DRM-free music to be made more widely available. While all four major labels have experimented with DRM-free music online, most mobile downloads still come with some form of the technology.

"The problem should have been solved last year," agreed Moores, "But it's a business problem not a technology one. DRM free content is an ongoing experiment and the expectation is that [sales] volume is going to increase and start mitigating for declining physical sales. If that isn't occurring a year from now and free sharing of music is running rampant, DRM could come back. The dream won't happen unless we generate revenue today."

Better Than Free
The internet is a copy machine. At its most foundational level, it copies every action, every character, every thought we make while we ride upon it. In order to send a message from one corner of the internet to another, the protocols of communication demand that the whole message be copied along the way several times. IT companies make a lot of money selling equipment that facilitates this ceaseless copying. Every bit of data ever produced on any computer is copied somewhere. The digital economy is thus run on a river of copies. Unlike the mass-produced reproductions of the machine age, these copies are not just cheap, they are free.

In a real sense, these are eight things that are better than free. Eight uncopyable values. I call them "generatives." A generative value is a quality or attribute that must be generated, grown, cultivated, nurtured. A generative thing can not be copied, cloned, faked, replicated, counterfeited, or reproduced. It is generated uniquely, in place, over time. In the digital arena, generative qualities add value to free copies, and therefore are something that can be sold. Immediacy, Personalization, Interpretation, Authenticity, Accessibility, Embodiment, Patronage, Findability

Is Microsoft's PlayReady ready to go yet?
Announced one year ago at 3GSM in Barcelona, PlayReady is Microsoft's DRM solution for mobile content providers. Now one year later, more partners have announced planned deployments...but it has seen no rollouts yet. PlayReady strives to provide the mobile content industry with an easily deployable implementation that cover any mobile hardware or software. Though Microsoft announced in 2007 it had partnered with Telefonica, O2, Verizon Wireless, Bouyges Telecom, and Cingular Wireless (now AT&T), a whole year went by without a single rollout.

NBC report blames poor album sales on iPod, iTunes
Album sales have declined rapidly in recent years, and Apple bears a large responsibility, NBC claims. The TV network notes that although R&B singer Alicia Keys debuted her new album at the top of the Billboard album charts last week, this amounted to only 61,000 or so discs, nearly the lowest amount for a number-one album in Billboard history. Album sales fell 15 percent as a whole in 2007, the sixth annual decrease since 2000; artists who were once able to sell 10 to 15 million copies of an album may now be fortunate to reach 1 million.

The reason, says NBC, is that people are switching en masse to digital downloads, as evidenced by sales of 120 million iPods since 2001. More critically, people are often choosing to buy songs individually, instead of collections that may contain mediocre tracks or filler. Purchases of individual tracks are said to have grown 500 percent within the last three years. Imagery and language in the report implicates iTunes, which is the largest source of digital music sales and frequently ties people to iPods through use of Apple's FairPlay DRM restrictions. On the iTunes Store, people can buy most tracks for 99 cents, cheaper even than would be possible with a CD single.

eMusic Selects Launches As "Curated Boutique Music Space"
Music has launched eMusic Selects, a "curated boutique music space" on their site to showcase unsigned and underexposed new artists. Each month, eMusic's staff will handpick up to two deserving artists for high profile visibility to eMusic's 400,000 subscribers. The acts will be featured prominently on eMusic's homepage and receive editorial coverage on the eMusic Selects page and blog and subscribers can grab free download from each act. The artists must agree to provide their often previously unreleased music exclusively to eMusic in the digital format for 60 days

Apple TV Take 2 now available
  • HD/Standard Def movie rentals
  • the ability to purchase items from the iTunes Store directly from the Apple TV
  • Flickr/.Mac photo browsing
  • Browse the iTunes Podcast directory from the Apple TV

Monday, February 11, 2008

snapshot 2/11/08

Random House to sell books by the chapter online: report
Random House Publishing Group, the world's largest book publisher, is planning to test selling individual chapters of a popular book to gauge reader demand, according to a report in the Wall Street Journal. Random House, a unit of German media giant Bertelsmann, will sell the six chapters and epilogue of "Made to Stick: Why Some Ideas Survive and Others Die" for $2.99 each according to the report.

Timbaland, Verizon making mobile music together
Hitmaking hip-hop producer Timbaland ("Shock Value") has announced a deal with Verizon Wireless to make the first "mobile album," which will be exclusively available to subscribers of V Cast, Verizon's mobile entertainment service. As Verizon's mobile producer in residence, Timbaland will produce one song per month throughout 2008. Each month, he will work with a different artist on a track while touring the country on the Verizon Mobile Recording Studio Bus, which will also capture making-of footage for V Cast subscribers on a dedicated Timbaland channel. He will perform in some tour cities to be announced, and Verizon will select subscribers to visit the tour bus in other cities to watch him work his magic.

Classical artists embrace digital culture
When British violinist Tasmin Little announced in January that she would be giving away her "Naked Violin" album as a free download, she tapped into a growing trend: classical music artists and retailers utilizing digital formats and business models. Thousands of tracks have been downloaded, and monthly page impressions on Little's Web site have increased from 5,000 to 150,000 since the announcement.

Classical fans are certainly purchasing more music digitally; in the United States, digital classical album sales surged 47.7 percent in 2007, accounting for 7 percent of the genre's 18 million total album sales, up from 4.4 percent the previous year, according to Nielsen SoundScan. Classical digital album sales burst through the 1 million barrier for the first time with a total of 1.2 million units.

Guy Hands to open EMI back catalogue
G uy Hands is throwing 300,000 of EMI's music tracks open to advertisers, TV producers and computer games makers in a bid to cash in on its vast back catalogue. EMI has struck a deal with London-based Ricall, which is poised to launch several EMI websites around the world allowing music-hunters to license its music much more easily. Terra Firma sees the so-called ''synchronised licensing" market - in which media companies pay to use music in their productions - as a key way of offsetting sliding compact disc sales.

360 + Change: Labels Pushing Harder on Broader Deals
Survival now depends on the execution of broader deals, according to many executives. The latest industry buzz surrounds the "360-degree deal," and the term carries more substance than hype. The reason is that the music business is far broader than recordings, and labels have been missing downstream profit opportunities for decades. That includes money from touring, merchandising, and advertising, among other areas.

Now, majors are pushing 360-degree deals quite aggressively, according to executives close to the negotiations. Just recently, one platinum-selling manager told Digital Music News that majors are almost exclusively interested in 360-degree relationships. And even if that is secured, investments in artists - new or old - are being made very carefully. "They go over and over the album, until they are positive it will work," the manager relayed.

Universal Music Starts Skinning, Ponders Mobile Modules
As an alternative, the Modu structure enables users to customize their phones with "jackets," an approach that allows a phone to reflect individual personalities and moods. Modu starts with a stripped-down device, the basis for a customized experience. That spells opportunity for media companies trying to crack the finicky youth market, including Universal Music Group.

Just recently, Universal started exploring the creation of artist-specific jackets, possibly for delivery by the end of this year. But the jackets themselves are more than just cosmetic covers. According to the pair, the jackets will contain design aspects inspired by the artist, but they will also include pre-loaded content and even music subscription offerings. That is part of a broader Modu customization agenda, one that includes an ecosystem of compatible consumer electronics add-ons.

Friday, February 8, 2008

snapshot 2/8/08

Spin Magazine Free Online
Spin has partnered with MySpace for a new free online interactive full edition of the popular music magazine. Rumor has it they’ll try to make us all pay for it in 12 months. (Good luck with that.) But for now you can enjoy all the music news and gossip any one sane person could handle. Check it out.

Thursday, February 7, 2008

snapshot 2/7/08

Major labels 'face DoJ antitrust probe'
Two major labels have been served notice of a fresh antitrust investigation, a music business newsletter reports today. MusicAlly's daily Bulletin suggests that the as-yet-unlaunched TotalMusic service, currently backed by Universal and Somy BMG, has prompted notices from the US Department of Justice. The report suggests all four major labels have been contacted.

TotalMusic, described by Rick Rubin back here, is reported to be a low-cost, multi-platform subscription service to be offered to consumers through ISPs and device manufacturers. The plan has few of the restrictions traditionally attached to subscription services, with the service provider or hardware manufacturer subsidising some or all of the mooted $5 monthly fee. and Universal Music Enterprises Team Up for Unique Valentine's Day Promotion Featuring Musical E-Cards with Classic Original Recordings, Photo Puzzles, and More!
The first e-cards featuring original versions of hit songs are offered in's Music store just in time for Valentine's Day. These e-cards are not only free but they have a creative twist available only a few places online -- classic original music. Along with the choice of one of 12 classic original recordings by popular artists, the card can be personalized with a photo puzzle that when put together unlocks a secret written message from the sender. The free musical e-cards are also offered without the photo puzzle element. Customers can go to through Valentine's day, February 14.

Music websites are fighting to be free
Social music sites Imeem and — which offer on-demand, ad-supported free music — have grown rapidly to 20 million monthly users each. Their success has the music industry seriously exploring the viability of ad-supported, free music as the next big business model for online music. says it will launch a subscription service later this year. While ad-supported on-demand online music is clearly striking a chord, the category is so new that few analysts have factored in its growth. For now, JupiterResearch projects a $3.5 billion digital music industry by 2012, from nearly $2 billion in 2008.

Apple sued over iTunes Allowance features
Restricted Spending Solutions has filed a patent suit against Apple over the iTunes Allowance function on its web-based iTunes store. The feature allows members and friends to create accounts for automatically transferring chosen dollar amounts via a credit card to a recipient's iTunes Store account for use by the recipient. RSS cites its own patent, which describes a computer-based method for allocating funds in pre-established accounts for use by customers by creating a customer account file containing a record of funds deposited and limiting how the funds may be spend on audio and video entertainment.

Study: Blogging about music may triple its sales
A study by NYU Stern business school professor Vasant Dhar and partner Elaine Chang shows correlational evidence that blog posts increase online sales of recorded music. The study observed 108 albums over a course of eight weeks, and concluded that the amount of blogs about a certain album can actually predict how well it will sell. It also suspected that the amount of MySpace friends a particular band has acts as a "badge of popularity," actually generating more interest through that number alone.

Dhar and Chang found that of blogs, social networks, consumer reviews, online media and mainstream media, it was the blogs that had the most significant effect on sales. When more than 40 "legitimate" blog posts are made, sales of independent albums were three times higher than average, and five times higher if they were major label releases. They also found if blog chatter exceeds 250 posts, sales were six times higher than the average, regardless of being major label releases or not.

Wednesday, February 6, 2008

snapshot 2/6/08

Google planning China online music tie-up: report
Web search leader Google Inc is planning to boost its presence in China by tying up with a Chinese online music company to provide free music downloads, The Wall Street Journal reported on Wednesday.

The report, quoting people close to the situation, said Google was in the late planning stages of a venture and will likely offer access to tunes from three global music companies as well as dozens of smaller brands. The service could start in the next several weeks barring any last-minute problems, it said.

Warner Music posts $16M loss
Recording company takes first-quarter loss on higher expenses and goodwill impairment charge, but revenue beats Wall Street's forecasts. Warner Music Group Corp., whose artists include Led Zeppelin and Josh Groban, posted a first-quarter loss Wednesday, hurt by higher expenses and an impairment charge. The recording company reported a loss of $16 million, or 11 cents per share, compared with a profit of $18 million, or 12 cents, in the previous year. The results included an $18 million goodwill impairment charge, which reflects the reduced current value of an asset, as well as increased selling, general and administrative expenses.

First Review of Sony BMG's MusicPass MP3 Card
This writer tested several cards including Ultimate Santana, a collection of 18 tracks and three bonus music videos. began to automatically download four songs at once, but due to the large number of tracks and high file size (the videos were around 80 megabytes each) I ran out of time before all the material had transferred. Upon logging in again later, the site remembered me (via the pin/serial numbers) and picked up where it had stopped. Before long I was sweating on a spin bike grooving to “Oye Como Va” on my iPhone iPod.

Other items of note (from the post and the MusicPass FAQ:

  • Each card has a scratch-off PIN code and serial number combination that are entered at the MusicPass site.
  • After the consumer has downloaded the album, there is an opportunity to purchase a complete catalog album from the same artist.
  • Said Sony BMG Nashville's VP of Digital Business,"They have to be activated at the register just like any other gift card purchase."
  • The cards have no expiration date.
  • The files are watermarked with "a unique code indicating that they belong to Sony BMG" but no personal information.
  • Users are not required to enter anything other than the PIN code and serial number. An email address is optional (to receive artist info).

To watch a video about the MusicPass cards, go to the website and click on the "What Is MusicPass?" link.

Pirated by iTunes, Artist Turns to BitTorrent
The Flashbulb, aka Benn Jordan, became so outraged when he discovered that iTunes was effectively pirating his music, that he uploaded copies of his latest album to BitTorrent. TorrentFreak caught up with Benn to learn more about the decision to stop distributors and ‘coked-up label reps’ from getting all the cash.

Cablevision Will Let You Watch Movies The Day Of Their Release, If You Buy The DVD
We were surprised that even Apple was forced by the movie industry to delay the release of online movie downloads until a month after the DVD release. This seemed totally pointless and self-defeating by the movie industry (though, hardly the first time that's happened). However, it looks like Cablevision has discovered an interesting workaround to this "window" between releases: it's launching a video-on-demand (VOD) system that will let you watch movies the day they're released on DVD. The trick? You need to actually buy the DVD first, via Cablevision. Then, while you're waiting for the physical DVD to arrive in the mail, you're free to watch the movie via the VOD offering. Of course, this sounds something like what the original used to do, allowing people to access MP3s of CDs they just bought, while they wait for the CD to arrive. And, as I'm sure many of you remember, the entertainment industry sued and actually won that lawsuit.

Earnings: Napster Slims Losses In Q4; Revs Gain 15 Percent; DRM-Free Downloads By June
Napster narrowed its net loss to $2.8 million ($0.06/share) in Q4, compared to a net loss of $9.5 million ($0.22 /share) last year. Revenues continued to grow, reaching $32.8 million, up 15 percent from Q406’s $28.4 million. The company may also be starting to arrest subscriber losses, which were down less than 1 percent compared to Q307. The online music service also offered a look at its with cash holdings on a consecutive basis: by the end of the quarter, Napster had $69.3 million in “cash, cash equivalents and short-term investments,” an increase of $900,000 from the prior quarter.

Earlier this week, Napster bumped up subscription prices from $9.95 per month to $12.95 monthly - a 30 percent hike. Aside from that, Napster has also been focusing on building up its mobile services outside the U.S., particularly in Japan and Latin America. For the full year, the company’s revenues were up about 18 percent to $96.6 million from $89.1 million. However, total cost of revenues were also up, rising from $57.4 million to $68.4 million, a 19.2 percent increase.

-- Conference call: Chairman and CEO Chris Gorog began by saying he believes that the shift to the MP3 format will make things less complicated for consumers and for Napster, as the company prepares to offer DRM-free downloads at its download store within the first six months of this year. He twice boasted that Napster reduced its ad spend in Q4, yet still managed to generate more subscription trials, which he presented as proof that the company’s subscription is working. He believes the introduction of MP3 sales will attract more users to its subscription service.

Tuesday, February 5, 2008

snapshot 2/5/08

Apple unveils higher capacity iPod, iPhone models
Apple Inc on Tuesday introduced models of its popular iPod touch handheld computer and iPhone with double the memory available in previous versions. Apple, which said in January it had sold more than 4 million iPhones since sales began last June, says the iPhone will now also sell with 16 gigabytes of memory.

The iPod touch, a wireless touch-screen device that plays music and videos, adds a 32 gigabyte model. Both devices will sell for $499, Apple said. Apple will continue to sell its iPhone with 8 gigabytes of memory for $399, and two lower-capacity versions of the iPod touch, 16 gigabytes and 8 gigabytes, for $399 and $299, respectively.

Sales Bath Continues In January, Double-Digit Declines
The recording industry tailspin continued in January, a development that places more pressure on label reinvention plans. The month featured a 10.3 percent year-over-year decline in album sales in the United States, a drop that falls below an already-depressed 2007. For the period ending January 27th, cumulative album sales topped 30.6 million, according to figures released by Nielsen Soundscan.

As usual, the digital story showed gains, though growth rates are slowing. During the month, downloads increased 28 percent over the same period last year. That represents a more subdued gain over previous periods, and suggests a possible sales plateau ahead. In 2007, downloads increased 45 percent to 844.2 million units. Meanwhile, CD-specific sales were positively scary in January, dropping 15.9 percent to nearly 25.5 million units.

Reble, Reble, I Like Your Playlist
Reble is a scrappy YCombinator startup. The software is built on the Jabber open-source instant messaging platform You are basically IMing with your friends and hooking into their iTunes or other music library. You can only see the music of friends on your contact list, and can only stream a song if no one else is listening to it at the same moment. It is a one-to-one system.

But the more friends you invite, the bigger the music library that you can access. The software only works on Windows machines right now, and only streams DRM-free MP3s. Eventually, it will let you buy songs that you like from digital music stores like iTunes or Amazon.

...And Then There Were Two, actually, three. That is Rhapsody, Napster, and Microsoft as the remaining major players in the on-demand subscription music service business. This deal more or less mirrors what Napster and AOL did, and Rhapsody and MTV did, not all that long ago. Jupiter remains as bullish as anybody on these services, which are awesome products that, so far, only appeal to a niche audience of music aficionados. We're projecting the $235M market (US, 2007) will grow to $600M in 2012, but we did lower our forecast a bit, as the business has remained sluggish and we've learned more about customers who subscribe. That forecast is in comparison with $1.1B in US downloads projected to hit $2.8B in five years.

Yahoo hopes to migrate its customers -- we estimate several hundred thousand -- over to Rhapsody during the first half, and will offer pro-rated refunds if necessary. SanDisk's very cool WiFi Sansa Connect device for YMU is history. While the potential of Yahoo's marketing clout behind the Rhapsody service is there, I've got to admit it didn't make YMU a leader. Yahoo did a few TV ads and plenty of promotion on its Music web channel -- which continues to be a great, ad-supported business for Yahoo -- before it soured on the subscription business and decided to narrow its focus. The proof will be in the execution of that joint marketing, and in integrating other Rhapsody services into Yahoo Music (and vice versa, if it makes sense).

Monday, February 4, 2008

snapshot 2/4/08

Yahoo says Rhapsody will handle its digital music
Internet media company Yahoo Inc said on Monday its music service will now be handled by Rhapsody America, an on-demand subscription service run by RealNetworks Inc and Viacom Inc. Yahoo, which previously said it would replace its in-house built Yahoo! Music Unlimited service, said it would migrate customers to Rhapsody over the coming months, while allowing subscribers to access their music library from a new Rhapsody account. Yahoo Music's monthly subscribers, who currently pay around $9 a month will eventually have to pay around $12.99 a month for Rhapsody when their existing contracts expire.

Super Bowl XLII Stuns; Music-Related Ads Proliferate
  • As expected, Pepsi and Amazon proved a potent combination, thanks to a quick-moving ad spotlighting Justin Timberlake. The Pepsi Stuff spot featured Timberlake being magically dragged around town by a Pepsi-sipping fan, a teaser for a massive redemption program involving Amazon and its MP3-based download store.
  • But superstar artists weren't the only ones featured during the game. Developing singer-songwriter Kina Grannis, winner of the Doritos "Crash the Super Bowl" contest, enjoyed an amazing promotional showcase during the first quarter. Grannis recently signed with Interscope.

If Yahoo can’t do it . . .
The deal leaves Rhapsody, Napster and Microsoft's Zune Pass as the last subscription services standing, with Zune Pass being available only to consumers who buy a Zune MP3 player. Previous casualties include MTV's Urge, AOL's MusicNet, Sony Music and Universal Music Group's Pressplay, and Circuit City's MusicNow. Put another way, some of the biggest names on the Web, the music industry and electronics retailing have ventured into the subscription music market, only to be forced into retreat.

Breaking: In The Middle of The Storm, Yahoo! Acquires Israeli FoxyTunes
A couple of weeks ago we reported several rumors of acquisition of Israel-based FoxyTunes a Firefox plugin that allows users to control their favorite media players from the browser. According to several sources the acquisition has been completed for an undisclosed amount of money. This happens as Yahoo decided to shut down its premium music service and reroute it to Rhapsody. Prior to Microsoft’s acquisition offer, Yahoo was intending to open an R&D center in Israel: FoxyTunes would probably become the intial operation. It is unclear however for now what would happen in the case of an acquisition by Microsoft.

Slacker Portable Player. Like Pandora To Go.
The system starts with the Slacker Radio service and 2 million songs organized into 100 pro stations, 10,000 artist stations and an unlimited number stations that you create. Like Pandora, your stations evolve over time by rating your favorite songs and banning artists or songs you don’t like. You can even fine tune your stations to play older or newer music, more hits or more eclectic music, or to help you discover more artists.

With the addition of the new Slacker Portable you automatically connect to Slacker over Wi-Fi when in wireless range or USB and instead of streaming, the player fills itself up with your selected music. This means you don’t need a continuous connection to play Slacker Radio. There are ads inserted into the streams but you can eliminate them by paying a monthly fee.

Go To The Movie, Get The Soundtrack For Free
Mark Cuban, who has actually been at the forefront of many of these ideas (and, also happens to very involved in the industry, though more on the independent side) has an interesting new suggestion. He points out that only a small number of people actually buy the soundtracks associated with movies -- but if you want to attract more people to go to the movie, why not give them the ability to download the soundtrack of any movie they go see in the theaters. Put a special code on the ticket stub that takes them to a download store -- and on that store include the soundtrack as well as extras, such as the script from the film. Obviously, this content will be spread around and can be accessed by others, but many will value the fact that by seeing the actual movie they get access to the official content. As Cuban notes, this can also be a win for the music industry, as a portion of the movie ticket sales can be used to compensate them as well.