Friday, May 30, 2008

snapshot 5/30/08

BurnLounge Burnt? Few Signs of Life Remain
The once-promising BurnLounge now appears totally dead, the result of an unsuccessful model and an ongoing federal investigation. Late last year, sources pointed Digital Music News to an impending shutdown and serious layoffs. Now, a visit to produces a page that simply states, "this account has been suspended," a sign of things gone wrong.

The BurnLounge model empowered members to sell downloads in a highly-decentralized way. After paying various sign-up and account fees, sellers started selling paid downloads while keeping a percentage of the final sale. The model was designed to push paid downloads into every nook-and-cranny of the internet, though the company derived most of its revenues from sign-up and account fees, not download payments.

That caught the attention of the Federal Trade Commission, which started investigating BurnLounge on charges of creating a pyramid scheme. The company ultimately forged a cooperative agreement, one that called for serious modifications to the model. Eventually, the destination was shuttered, though it remains unclear exactly when operations were terminated.

Sony's Stringer: The Vanishing Album Is an Issue
Consumers prefer singles, mostly from illegal channels. But even on paid platforms like the iTunes Store, a-la-carte downloads trump album purchases. The shift is old news, though labels remain unable to replace the once-powerful album bundle. "The problem with the iPod model is it is a singles model, and the album stands for a body of work," commented Sony chief executive Howard Stringer at D6, a tech-focused conference hosted by the Wall Street Journal. "The vanishing album is an issue I worry about, but maybe I am old," Stringer continued, according to notes shared by paidContent.

EMI says yes to music on the go
EMI has opened up its catalogue to the airport market by allowing music from its artists to be sold in MEDIAnywhere's download kiosks. The kiosks, designed by British company MEDIAnywhere for use in airports, allow consumers to plug in their digital music device and download music on the spot. The first of these kiosks to open are situated in Fiumicino airport in Rome. However, MEDIAnywhere expects to open another 350 kiosks in 26 European airports within the next two years.

The company has invested more than $5m (£2.5m) in the design and marketing of the kiosks, which have touch screens and easy to use interfaces. "The MEDIAnywhere kiosks are a fantastically convenient and compellingly simple way for music lovers to get the music they want when they are out and about, without the need to be at their PC," says EMI Music UK head of digital sales Graeme Rogan.

Mötley Crüe Song Sells More on Xbox Than On iTunes
Now the rock band Mötley Crüe (yes, they are still alive) is getting in on the action as well. They released a single from their latest album, Saints of Los Angeles, both in the video game Rock Band and as download on iTunes, Amazon and elsewhere. In the first week that the digital single was available for sale (the physical album won’t be released until June 24), it was downloaded 47,000 times on the Xbox alone compared to 10,000 times on iTunes and other digital download stores on the Web.

Thursday, May 29, 2008

snapshot 5/29/08

EMI May Be For Sale, HQ Shift To LA
According to London's Evening Standard Terra Firma's Guy Hands is said to be open to offers to unload his record division and hold onto the more lucrative publishing arm. He also is considering consolidating US operations in LA rather than the current NYC. Its all part of move to help investors recoup some of the almost $5 billion they paid for EMI rather than ask them to be patient through what Hands sees as a long term turn-around.

Borders Group Reports Q1 2008 Results; Operating Cash Flow Improves by $133 Million
Music declined by 25.8% as negative sales trends continued and the company implemented a planned reduction in inventory and floor space devoted to the category.

Is Apple changing course on variable pricing?
Thus we are left with a question: Is HBO the exception to the rule on iTunes, or is Apple changing the rule? With its usual Kremlinesque approach to public relations, Apple isn't explaining the change. But sources at several major studios who spoke on condition of anonymity, citing the sensitive nature of negotiations, say Apple has changed its tune on iTunes.

Finally! Somebody (Vudu) extends movie-rental deadline beyond 24 hours
Vudu, the movie-on-demand service with its own set-top box, has upgraded its software to version 1.5 — ho hum — but this upgrade includes the ability to extend the rental past the 24-hour deadline. Vudu now allows you to extend the rental period for $2 off HD movies and $1 off regular flicks. The option is available for a week after the movie expires; once chosen, you have another 30 days to watch, 24 to 48 hours (depending on the film) after you hit play. The extension is available only once, although we wish it was without an additional cost.

Soundflavor Wants To Be IMDB For Music
Soundflavor has relaunched as a consumer-friendly database of song information that will provide users with a one-stop-shop for song information, videos, and recommendations. The site sports a clean interface and offers a slew of search options that make it easy to find a particular song or artist. Users can browse and filter their searches by genre, decade, or even by the subject of the lyrics. After choosing a song, the user is presented with a mashup of related information, including artist bios from Wikipedia, recent news headlines, store links to purchase the song, and flickr photos. Some independent songs are available for free, while the rest can be purchased on iTunes or Amazon.

Over the last five years Soundflavor has compiled a comprehensive database of metadata on over one million songs, but up until this point the information was primarily used by other companies that license music. The company brought on Dave Pell , who was previously just an investor, as its VP of Product Design to make the site more accessible to the consumer audience. Pell is known for his past work on sites including Rollyo and Addictomatic . Soundflavor has raised a total of $5.8 million since it was founded in 2003.

Wednesday, May 28, 2008

snapshot 5/28/08

Amazon Ready To Unbox Video Streaming For Digital Movies
Jeff Bezos leaked a little nugget of news during an interview on stage at the D conference this morning: Amazon is getting ready to release a pay-per-view streaming service for movies.

The music biz's digital flops - a short history
Since the record industry first noticed that some of the kids were using the internet in the mid-90s, it's flopped from one puddle to the next. Despite a desperate need to evolve - guys, the pond is drying up, do try to breathe - recording industry strategy has flopped from one muddy puddle to the next, and a muddy puddle is quite a good metaphor for the latest survival strategy: advertising supported music which 'feels like free' to the consumer.

Rock's New Economy: Making Money When CDs Don't Sell
CD sales are no longer the yardstick the band uses. While hip-hop and pop artists ranging from Jay-Z to Britney Spears have long used recordings to sell every- thing from perfume to liquor, rockers are only just starting to think of album sales as a component — rather than the sum of — the commercial equation. Spoon have been actively licensing their music for use in films, television shows and a Jaguar commercial, making money, gaining exposure and moving up from clubs to 3,000-seat venues.

DRM-Free Music: Too Little, Too Late
Much to some readers' chagrin, we don't believe that the music labels' belated embrace of DRM-free music -- tracks without digital locks, which consumers can copy as much as they want, and play on any digital music player -- will help the business out of its lengthy slide. Our central thesis:
  • Most online music buyers don't have a problem with DRM, because most of them buy their music from Apple's store and play it on some combination of iTunes/iPod/iPhone (AAPL). Which means the common complaints about DRM -- that, for instance, it prevents them from playing the music they bought on other brands of music players -- never come up.
  • Most online music consumers don't have a problem with DRM, because they don't buy music at all, but rip it from their CDs (or their friends' CDs) or nab it from P2P filesharing networks. So they don't deal with DRM, period.

Amazon's Music For The Price Of A Latte will augment its digital music and video business, which currently sells content on a per-unit basis, with a for-pay streaming service "in a couple of weeks," Amazon Chief Executive Jeff Bezos said Wednesday. "A few different (business) models can be supported" in digital music, Bezos said. He did not provide prices for the service, but possibly indicated a range. "If people can skip a latte that day and have it for free, they will," he said. Electronic music and video, he said, is a "very serious" business for Amazon.

Blockbuster Planning In-Store Downloads, Not At Home Streaming?
This is an interesting turn to the Blockbuster media streamer rumor we heard last month. The Hollywood Reporter says Blockbuster will be going for the in-store kiosk download scheme where customers can download a movie within two minutes onto portable devices (we're thinking iPods as opposed to USB hard drives).

The plan is to have a fee of about $10 a month as well as a free device, but the pilot test in the Dallas area will only work with Archos players. Individual movie rentals will be $3.99, but if you're going to have to go down to the store AND pay about the same amount for a movie as you do already, why not just rent a DVD?

Metallica Repents, Sort Of
The band has a long, storied history of clashing with fans online, but along with its label, it hopes to make amends with a new website called Mission: Metallica, offering fans a chance to "experience the new album before it's done" that will offer its upcoming album in the unprotected MP3 format -- no digital rights management attached. When the two-years-in-the-making album is finally ready to be released, members of the site will be able to download it in the DRM-free MP3 format (320 Kbps) -- quite a big step for the band that sued the original Napster. The album will also be available in vinyl and CD formats, each of which will also come with release-day digital download versions. Fans have several options when signing up for Mission: Metallica, from free all the way up to $125.

Tuesday, May 27, 2008

snapshot 5/27/08

Rock acts ringing up sales via video games
Games like "Rock Band" and "Guitar Hero III" have proved their ability to breathe new life into classic rock sales. But can they do the same for new music? Last month, Motley Crue decided to find out. The band placed its new single, the title track from "Saints of Los Angeles," for sale as a downloadable track on "Rock Band" well in advance of the album's release date, which has been pushed back to June 24. The only other place to obtain the track was iTunes.

According to data provided by the band's management, Tenth Street Entertainment, the track was downloaded more than 47,000 times via the Xbox 360 version of the game alone in the first week after it became available. By comparison, the same track received slightly more than 10,000 downloads via digital services like iTunes and Amazon, according to Nielsen SoundScan.

Aloha, Mr. Hands: What I would do with EMI’s new music business
In a nutshell: With the disappearance of advantaged label competencies such as superior production, distribution, and marketing, reconfigure your labels to be based around affinities and focused narrowly enough to serve roughly the same audiences from release to release. The labels would be very small teams responsible for fan cultivation, focused and direct marketing, and A&R. They would rely on EMI for service, support, and tools (generic marketing would happen on the EMI mothership, for example).

Borders Group reopens its independent online bookstore
Despite the overwhelming dominance of Amazon and Barnes & Noble in the online bookstore space, Borders Group today opened its own independent retail store on the Web. The launch of the new takes place a little over two months after Borders announced it might put itself up for sale.

Borders, however, will reportedly move ahead with its next generation Web site -- along with related plans around integrating technology into its brick-and-mortar stores -- regardless of whether an acquisition takes place. A BetaNews check of all three major online book retailers this morning revealed Borders offers one feature that's prominent on Amazon and that B&N appears to still lack: audiobook downloads. Check out this example, which includes a prominent "WMA" download option.

Liberty Pulls Back from Vongo Internet Movie Service
In the race to figure out how movies will be delivered over the Internet, one of the more promising efforts, Vongo from Liberty Media’s Starz Entertainment group, has floundered. Liberty said it will still offer the standalone Vongo service, but will now focus its marketing efforts on a version, called Starz Play, through existing cable and satellite operators.

For $9.99 per month, Vongo gives its users unlimited streaming of movies over the Internet. Because it has access to the films on the Starz cable channel, its movies tend to be a little older than the $3.99 pay-per-view titles on Apple’s iTunes and Amazon’s Unbox, but much newer than the films on the Netflix Internet streaming service. (Vongo also has a pay-per-view option for newer films.)

Creative scraps Wi-Fi player, focuses on design
Creative has for now shelved its plans to develop a Wi-Fi capable player, the company's Nordic product manager Jan Hvidberg has revealed in an interview. The senior official confirms the one-time existence of the ZEN Share but says that there were "technical complications" developing the player that prompted the company to drop the project. The executive doesn't rule out the possibility of a future player with wireless but for now shelves hopes of an immediate release.

Korean music format MT9 tries to replace MP3 - with a karaoke twist
MT9 was developed by South Korean engineers at Electronics and Telecommunications Research Institute (ETRI) in association with venture company Audizen, and the format has been dubbed "Music 2.0." Its creators hope to see MT9 replace MP3, but that lofty goal will likely be replaced by one more attainable: becoming the standard for karaoke.

The main difference between MT9 files and other commonly-consumed audio formats like MP3, WMA and AAC is that MT9 is essentially six channels of unmixed audio packaged within the format's own mixer. The advantage is complete flexibility in playback, enabling players to adjust -- or remove -- any channel independently. Vocals, chorus, piano, guitar, bass and drum each have their own track contained in the MT9 audio file. Like MP3, the format has no digital rights management built in.

Apple still has biggest slice of the MP3 pie
Apple remains high atop the list of portable media player makers as measured during the first quarter of 2008.
· Apple 71%
· SanDisk 11%
· Microsoft 4%
· Sony 2%
· Creative Labs 2%

MP3 players losing muscle
The MP3 player industry - otherwise known as the iPod market - seems about to go from being a rock star to a has-been. While still strong, sales have slowed and even begun to decline in some markets. Prices, particularly on the low end, are plunging, typically an indicator of slacking demand.

Friday, May 23, 2008

snapshot 5/23/08

Deathwatch: GameStop Dumps the Zune Because Nobody Wants It
The Zune Social may be winding down. One big retailer, GameStop, has decided to stop selling Microsoft’s digital music players because of a lack of demand. From :
"We have decided to exit the Zune category because it just did not have the
appeal we had anticipated,” said a GameStop spokesperson. “It (also) did not fit
with our product mix."

Sony BMG Dives Into Controversial MP3 Sales Model (requires subscription)
In selling MP3s directly to U.S. retailers, Sony BMG Music Entertainment is testing a controversial business model. Since it switched away from digital rights management to the open MP3 format earlier this year, Sony BMG is providing its content to Amazon through what is know as an "agency" or "commission" model, sources say and Sony executives privately confirm. In this model, Sony BMG is actually the seller and sets all retail prices on its content while Amazon acts as Sony BMG's agent and gets a commission on the sale.

But so far Amazon is the only merchant that has agreed to it. In fact, sources say the agency model is a point of contention in the negotiations between Wal-Mart and Sony BMG, which is why the latter is the only major that has not yet achieved a signed MP3 deal with the giant discounter. Some familiar with the Amazon deal say that if Sony BMG can't convince other retailers to accept the model, it would have to revert to the wholesale model for Amazon.

Adieu to the true audiophile?
And it's not because they don't like music. Quite the opposite, actually. The popularity of online streaming music sites, rise of music blogs, and skyrocketing digital music sales from places like iTunes,, and show that young people are voracious music consumers.

Home audio sales have been in decline for the past half decade, and have drooped even lower in recent years. Home CD player sales totaled $36.2 million last year, but that's 35 percent below 2005 sales figures. Home speaker sales are down 2 percent, but home shelf systems sales are down 40 percent in the same time period, according to data gathered by the NPD Group.

Napster to expand reach to 6 million AT&T customers
Napster, the pioneer in online music downloading, said its subscription service will become available to between 5 million and 6 million AT&T mobile phone customers in June. "When AT&T turns this on, we will have access to 5 million subscribers virtually overnight," Napster Chief Executive Officer Christopher Gorog said Thursday in an interview. AT&T will inform subscribers about the Napster service in "a couple of weeks," he said. Los Angeles-based Napster, is focusing on increasing subscribers through deals with mobile carriers such as AT&T in the United States and NTT DoCoMo in Japan. Although AT&T announced it would offer Napster service last October, Gorog said few mobile phones capable of downloading music were in use at the time.

Should Music Startups Give Equity to Copyright Holders?
Online music startups have two options in the race to profitability: They can get permission from all relevant copyright holders before uploading a single song, or they can rely on a combination of luck and the Digital Millennium Copyright Act until they are either acquired or earn enough to pay for proper licensing.

Copyright holders occasionally sue new businesses into the ground or, as is growing more commonplace, use legal pressure to force maturing startups into surrendering an equity stake. MySpace seems to have agreed to exactly such a deal, cutting the major labels in on an equity level, partially in return for Universal Music Group dropping its copyright-infringement lawsuit against the company.

CinemaNow comes to Windows Media Center
And then we got a friendly email from CinemaNow letting us know that starting today you could access the service through Windows Media Center, which is actually kind of awesome. You'll need to register for a CinemaNow account to use the service. And of course, you'll need Windows Media Center, which is built into Windows Vista Home Premium and Windows Vista Ultimate. You should be able to find the CinemaNow icon in the More TV section. If you don't see it, go into your Media Center settings and force your computer to download updates.But with CinemaNow making its 3400 feature length films, 3000 TV episodes, and 2900 music videos available, we're going to say better late than never.

Update: As we've been reminded, this is not the first time you've been able to access CinemaNow from Windows Media Center. The company released a plugin for earlier versions of MCE which you could download and install in order to watch movies using the media center "10 foot interface." To our knowledge, this is the first time CinemaNow has been available to all Windows Vista MCE users without a separate download though.

Trans World Posts Q1 Loss, Music Sales Slide
Trans World, which operates f.y.e., Suncoast and other retail chains, posted a $11.8 million first quarter loss. Total sales dropped 19% to $233 million and same-store revenue dropped 6%. Same-store music sales dropped 23% on a comp basis while sales from the top 50 titles dropped 30% on a comp basis. CD sales accounted for 37% of revenue, down from 44% the year before.

The company has been searching for success with in-store digital kiosks. It will soon test a music download service at stores in Albany, NY and the Mall of America in Bloomington, MN. The service, which has yet to have tracks from all four major music groups, will reportedly download music to iPods and other portable music players. Although the article does not mention formats, the implication is the service will offer MP3 files. Trans World has tried to get its Mix & Burn kiosks off the ground for a number of years but has appeared to have little to no success. A year ago the company said the kiosks were showing "promising, but still inconclusive results." Monday's article in the Albany Business Review says the Mix & Burn kiosk at the Albany store "was shrunk and moved to a corner as part of a recent downsizing of the store."

The Marginal Value of the Long Tail
Just how often would I delve further than five million tracks into a download store's catalog? To find out I selected 16 albums to compare at five stores: MP3, eMusic, iTunes, Napster and Wal-Mart. The albums were a mix of titles I recently purchased (both CD and digital), CDs randomly pulled from a rack next to my computer and a couple local artists from Nashville that have independently released EPs.

Of the stores that carry major labels, had the lowest prices, followed by Napster, iTunes and then Wal-Mart.

The Latest from Lala: The Return of the Dime Store
I received an e-mail today from, touting the new features it will roll out next week as part of a site redesign. You can preview it here. The big one is the new "a la carte" streaming option, where you pay 10 cents for the right to stream a single track as many times as you want:

Thursday, May 22, 2008

snapshot 5/22/08

Napster Shareholders' Plan To Save Company: Put Themselves On The Board
Napster is in a tough spot: Still losing money, unable to get any traction for its core subscription service, hoping against hope that selling DRM-free downloads will somehow give it a lift. Perry Rod think he has the solution: Put him and two of his buddies on the Napster board. Well, good luck with that. But if Perry and pals do get on the board, here's what Napster CEO Chris Gorog can expect to hear about -- "specific areas of immediate concern include, but are not limited to":
  1. positioning, developing, and perhaps transforming, the Napster brand with a strategy that better explains and promotes the value proposition,
  2. further development of an in-home music solution with additional AV hardware manufacturing partners
  3. capturing the attention of adult music consumers who wish to avoid piracy and could benefit from multiple family members on subscription,
  4. utilizing the viral effects of social networking combined with streaming to promote the brand and the value proposition,
  5. better utilization of relatively inexpensive but creative marketing opportunities available in today's internet marketplace, and
  6. cost effective outsourcing opportunities.

Reading the E-Leaves With Amazon's Bezos
Condé Nast Portfolio contributing editor Kevin Maney interviewed Bezos before a packed auditorium at New York University's Stern School of Business. The following is an edited transcript.

Apple Daydreaming: Report Predicts Move Toward Home Devices
Forrester's conclusion: While much of Apple's great successes have been mobile products such as the iPod and the iPhone, the company will seek to colonize rooms throughout the home.

Among the new products Forrester predicts Apple will create are wall-mountable digital picture frames with small high-definition screens and speakers that wirelessly play media, including photos, videos and music, stored on a computer elsewhere in the home. Such products already exist, but Apple could put its own twist on them -- for example, by adding its design panache and a touch-sensitive screen that lets viewers flip from image to image with a finger swipe, a la the iPhone.

Forrester also thinks Apple could extend into the home the technical assistance currently offered by "Genius Bar" personnel in Apple retail stores. Apple in-home installation services will become especially important as its array of products for the home grows. "The complexity level here can be quite daunting if you have five or six of these different devices," says J.P. Gownder, one of the Forrester analysts who wrote the report.

Peter Gabriel's new audiophile subscription site
Peter Gabriel's Real World Studios has launched a download service with high-end British speaker manufacturer Bowers & Wilkins. It's called the B&W Music Club, and it offers exclusive monthly albums to members, recorded at Gabriel's Real World Studios in southwestern England and downloadable in a "loss-less" file format with CD-quality sound. Subscribers pay just under $67 for a year (that's about $5.60 per recording), or about $47 for a six-month run. Subscribers can download one album per month.

Recordings are dedicated live sessions and they're DRM-free. Two months after the music is offered to Music Club members, B&W will return the album rights to the artists. Right now, you'll find Skip McDonald's Little Axe album on the B&W site. B&W is also offering free trial memberships. Check the site for more details. Gabriel commented, "This collaboration with B&W is unique as far as I know. It's going to allow a lot of interesting projects to happen. For artists, Music Club is a dream proposition because they get some great time in the studio, access to really good recording facilities, and can experiment without being committed to anything or anyone beyond a month with B&W."

JamBase Adds imeem and to Growing Roster of Syndication Partners: Powering Live Music Show Listings Across the Web
Fans, musicians and promoters alike require a new set of tools to accommodate this shifting business and entertainment model. In response to the increased demand for live shows and the need of music fans to find information about shows and musicians, JamBase (, the largest database for live music show listings and ticket information, announced today that imeem and are joining the roster of content syndication partners who will carry live show information provided by JamBase.

Through its syndication partners—which also include iConcertCal, Rhapsody and Zvents—JamBase expands the reach of its content to more than 35 million monthly unique visitors. With JamBase’s open API, developers and users can share JamBase data in various formats and locations online, making JamBase’s comprehensive live music data pervasive across the Web. Together with JamBase, these syndication partners drive a shared mission to support live music by making it easy for fans to connect.

Wednesday, May 21, 2008

snapshot 5/21/08

AOL Music Launches Genre-Specific Destinations
AOL Music, among the most heavily-trafficked music destinations, has now launched a pair of genre-specific sites. The first is The Boot (, a country-specific site, and The Boom Box (, a destination dedicated to hip-hop and r&b. That is part of a broader, genre-geared strategy, one that already includes PopEater ( It also includes Spinner (, which has been recast into an indie-focused website.

The destinations collectively jump into the music-focused blog arena, an area that frequently features genre- or scene-specific coverage. The AOL Music sites are being filled with video and song premieres, news, photos, and interviews. The destinations are being monetized by advertising, according to the company.

Microsoft pitches Zune-based ad service
Microsoft on Thursday revealed its plans for an advertising network built into its Zune media players, offering advertisers a direct line to consumers through the device. Yahoo writes that the company demonstrated the concept using a phony Doritos mockup. In the example, a user could befriend a musician through the Zune social page on a Doritos’ sponsored concert to view news and updates on the artist’s profile.

Once added to the friends list, users could also email the profile to friends, as well as downloading selected tracks from the website for playback on the Zune. When the recipient receives the email through Microsoft’s Hotmail service through their mobile phone, a brief ad will trigger, followed by a short game similar to Asteroids. Provided the user does well at the game, they earn a coupon for a free bag of Doritos chips, with map directions to nearby stores that sell the chips.

HP to run DVD, download service for PTA
Hewlett-Packard, which folded the movie download store it ran for Wal-Mart in December, is getting back into the business, this time partnering with The Parent Teachers Assn. and the Boys and Girls Club of America to launch kid-friendly online video stores. The stores will launch today with 10,000 DVD titles and nearly 1,000 movie downloads from every major studio for sale. HP plans to add movies from its manufactured-on-demand service to the selection in the coming months. Quietly Rolls Out New Beta Features, Points to Expanded Subscription
The site's little-publicized music subscription service costs $3 per month. In its current iteration, the basic subscription removes ads, shows who's been cruising your profile, lets others listen to your station and allows faster access during peak usage hours. says it will continue offering this basic subscription, but that an upcoming subscription package will include unlimited access to the catalogs of all four major labels plus 150,000 indie labels and artists. As of now, users can listen to any artist/label-uploaded track up to three times for free (songs that have been heard three times will still play on the site's radio stations).

But this beta, currently available only to current basic subscribers, is about much more than just the upcoming subscription package; it involves a full redesign, adding powerful features for playing, sharing and adding music to your library from anywhere on the site. To those ends, the site has added a new player at the top of every page that lets you play whatever music is listed there, so there will be "hopefully no more digging around for play buttons and radio stations," Donovan said. Every music page has also been set up to encourage sharing with friends or adding songs to your library. You can also browse your friends' libraries and add tracks from there. In addition, the beta lets users manually add songs and artists to their libraries in addition to having them added automatically, or "scrobbled," via iTunes or their preferred media player. This will let you expand your music collection purely through, rather than acquiring the music elsewhere and scrobbling it into your library.

Pew/Internet Study Offers Insights Into Consumer Behavior
A new study by the Pew/Internet & American Life Project titled "The Internet and Consumer Choice: Online Americans Use Different Search and Purchase Strategies for Different Goods" (main page, 42-page PDF of study) examines how Americans use the Internet to buy music and search for information. It offers great insight into the importance of pre-Internet mass media like TV and radio as well as traditional word of mouth, and it shows how different age groups have different preferences for formats and pre- and post-purchase behaviors.

Search For Information
· Only 7% of respondents said online information had a major impact on music purchases.
· Of the respondents that made the music purchase online, only 22% said online information had a major impact on the purchase decision.
· 86% of music buyers find out about music through TV, radio or movies.
· 64% of music buyers find out about music through family, friends or co-workers.
· 56% of music buyers find out about music through online tools such as artist websites or streaming samples.
· Only 42% of music buyers said online information helped them save money on the purchase.
· 51% of respondents said online information had no impact whatsoever on their music purchases, 37% said it had a minor impact and 12% said it had a major impact.

· 82% of respondents (69% for people under 35) said they still buy all (62%) or most (20%) of their music in the CD format.
· 15% (27% for people under 35) said half the music they purchased were individual digital files.

Amazon's Blue Light MP3 Special
That $1.99 Van Morrison album I bought on Friday is back to its regular price, but it looks like MP3 -- in addition to its weekly $5 deals -- now has a regular daily special: Yesterday it was a Green Day collection for $2.99, today it's a live album from BB King for $3.99.

Tuesday, May 20, 2008

snapshot 5/20/08

Napster rolls out MP3 store in challenge to iTunes
Napster Inc., the digital music service, on Tuesday opened the world's biggest MP3 download store with more than 6 million songs in a direct challenge to Apple Inc's iTunes store. The new Web-based music store will have digital songs from all major music labels as well as thousands of independent labels. The MP3-format songs will be compatible with the vast majority of digital media devices and mobile phones including Apple's popular iPod as well as its iPhone.

Before now Napster has focused on selling all-you-can-eat monthly streaming music subscription packages but has struggled to win over the majority of fans who want to be able to transfer songs they like on to a portable device such as the market-leading iPod. The new Napster service tries to take on Apple's dominance in digital music by offering fans more songs without copy protection or digital rights management (DRM). Most of the six million songs on the iTunes Music store are available with Fairplay DRM, which prevents the songs from being played on most portable players other than the iPod.

Most songs on the service will be available for 99 cents each and $9.95 an album. Though Napster will be hoping to take on iTunes it will try to do so by being compatible with Apple's service. According to executives, MP3 songs bought on the Napster Web-based service will be automatically synched into a user's existing iTunes music library if they use that library.

Napster is also selling MP3 packs
  • 15 MP3s for $13.95–Save over 5%
  • 25 MP3s for $21.95–Save over 10%
  • 50 MP3s for $39.95–Save nearly 20%

Netflix offers movie downloads; stock upgraded
Netflix Inc said on Tuesday it will offer a device for just under $100 to let people transfer movies to their televisions, while a Lehman Brothers analyst raised his rating on the company's stock, sending shares up more than 9 percent. Netflix said that it and partner company Roku will offer a device that lets Netflix subscribers "stream" movies and television episodes to their TVs. The player costs $99.99, Netflix said in a press release.

There are no extra charges or viewing restrictions and people can "watch as much as they want and as often as they want without paying more or impacting the number of DVDs they receive," Chief Executive Reed Hastings said in the statement. The player is about the size of a paperback book and requires an Internet connection. It also works with wireless Internet connection systems through Wi-Fi technology. Users can fast-forward and rewind the video streams with a remote control, Netflix said. The Netflix service offered through the Roku player offers more than 10,000 movies and television episodes, Netflix said.

Monday, May 19, 2008

snapshot 5/19/08

Apple Wants More Mobile Music From Labels
As part of Apple’s efforts to improve on the shortcomings of its popular iPhone, the company has approached some of the major music labels to try to expand the variety of ringtones and other musical features available on the device, several label executives said last week. The negotiations are very active right now and a final deal has not been set, said the executives, who requested anonymity so as not to disrupt the ongoing talks.

Also under discussion is whether Apple can sell songs from its iTunes store directly to iPhones over the cell-phone broadband network. With the next generation of phone expected to use much faster 3G technology, this is technically feasible. Here too, music labels argue that they should be paid more for an over-the-air download than a standard track bought over the internet, where the wholesale price is about 70 cents.

Pennywise, Poundwise: MySpace Free Experiment Pays Off
But others, including Pennywise, are also pushing gratis concepts and helping to define best practices in the process. In March, Digital Music News reported that the band attracted 500,000 takers on a free album giveaway driven by MySpace Records. That figure eventually notched to 640,000, according to MySpace, though 400,000 actually completed the process to secure the MP3s. "On top of the 400,000 downloads, we've scanned over 20,000 albums in the US and another, roughly 25,000 overseas," MySpace Records executive J. Scavo told Digital Music News on Friday. The giveaway officially ended in April.

Now, the band is seeing some meaningful results, boosted by the MySpace project. That includes a well-charting single, and according to Scavo, significant jumps in concert tickets, tour guarantees, and merchandise sales. After playing sold-out dates in Japan and Australia, the group is now hosting shows in the United States through mid-June. And the band is being factored into the Vans Warped Tour this summer. "If you ask them, their career has been revitalized far beyond their expectations," Scavo said.

Backstage Seeks To Distribute Free Music For The Long Tail
That’s the premise of an attempt by Grant Blakeman and the Backstage project, a startup that seeks to present bands with an easy way to grow their listener bases through the distribution of free music and video downloads. Built squarely upon the concept that the release of music albums and singles need not directly cost the prospective fan - or even the existing follower - anything other than his or her attention, consideration, and basic personal information like name, area of residence, and email address, Backstage presents bands with the option to create pages through which to promote recordings, DRM-free, with audio fidelity reaching as high as 320kbps, for a small fee: $12, $24, or $36, depending on desired download limit. (150, 500, or 2000 downloads, respective to the price plan, with file size limits of 50MB, 75MB, and 100MB. Per-download overages are $0.02-0.03.

Music promotion via Backstage can work one of two ways. People can first pay a visit to the site, where they can download albums, and subsquently be listed to receive tour announcements and other relevant updates about artists through email. Or, if a event is planned, artists can purchase cards ($50-$210, depending on quantity) to distribute to attendees, who in turn can venture to Backstage to grab downloads of songs they may or may not have heard at the live performance.

Rock's New Economy: Making Money When CDs Don't Sell
For Austin rockers Spoon, 2007 was a breakthrough year — but not because they sold a lot of records. Ga Ga Ga Ga Ga, their album on the indie label Merge, garnered more radio play than any disc in their 15-year history and earned them an appearance on Saturday Night Live. So far the disc has moved just over 250,000 copies, according to Nielsen SoundScan — about half of what Spoon's manager, Ben Dickey, believes it would have sold even five years ago. "But as far as the band is concerned, the record is a hit," says Dickey.

The reason? CD sales are no longer the yardstick the band uses. While hip-hop and pop artists ranging from Jay-Z to Britney Spears have long used recordings to sell every- thing from perfume to liquor, rockers are only just starting to think of album sales as a component — rather than the sum of — the commercial equation. Spoon have been actively licensing their music for use in films, television shows and a Jaguar commercial, making money, gaining exposure and moving up from clubs to 3,000-seat venues.

Music 1.0 Score Card
Record Label Market Share 2007 -
  • Universal 28.8% (up from 25.7 in 2006)
  • Sony BMG 20.1%
  • Warner 14.4%
  • EMI 10.9%.

The value of physical and digital recorded music sales fell 8.3% in 2007 to $18.9 billion. Of that, digital sales rose to $2.9 billion from $2.1 billion in 2006, equivalent to slightly less than 15% of total sales.

Subscriptions Picking Up Steam
Typical music subscription services have yet to move out of niche status and have pretty much performed below everyone's expectations. Other types of subscriptions, on the other hand, are proving to be an increasing popular purchase option. eMusic is the most popular and most obvious of the download subscriptions, and Audio Lunchbox has a similar product offering, but a number of artists and labels are finding new ways to capitalize on consumers' desire for music in bulk. Earlier this month, Magnatune launched download memberships that give buyers access to its entire catalog. A streaming membership costs $9 per month and an all-you-can download membership costs $18 per month (there are three-month and annual options). For the download plan, files are offered in WAV and MP3 formats. Magnatune founder John Buckman wrote about the download plans at his blog and said daily revenue increased 150% before the subscriptions were even announced. In another post, he showed the results of a survey in which 45% of respondents said they would be interested in signing up for a CD club.

Speaker company Bowers & Wilkins has just launched a music club that once a month gives subscribers exclusive album downloads in lossless files. Each album will be recorded at Real World Studios in Bath, England, with which Bowers & Wilkins has a partnership. Membership costs $39.95 for three months or $59.95 for six months. Equal Vision Records is offering a 2008 Release Subscription. For $60 (plus shipping for the first shipment) the buyer gets a CD of every Equal Vision title released in 2008 (expected to be from seven to ten titles) and an Equal Vision t-shirt.

Negotiations Leak: Could Variable iTunes Pricing Be on the Table?
Steve Jobs wants to extend Apple's lead in online music sales to the mobile market, and the 3G iPhone expected next month positions them to make the iTunes store available everywhere you have signal. Jobs also wants in on the ringtone and ringback tones business -- thoroughly impulse buys which become feasible on the iPhone only if purchasing can be done outside of a hot spot. Trouble is, he needs some new deals from the record labels to make this happen. The record labels have some demands of their own -- chief among them variable pricing. As music licensing negotiations between Apple and the labels continue, the labels hope to trade mobile delivery for variable pricing, according to a New York Times' record label executive source.

TouchTunes pushes Usher with iTunes pre-order
TouchTunes is giving away iTunes material as part of a multi-pronged promotional strategy, according to an announcement. Visitors to bars and other public places can now queue Usher's "Love in This Club Part II," from one of TouchTunes' digital jukeboxes; by agreeing to submit an e-mail address, they can pre-order Usher's new album on iTunes with three bonus tracks, and meanwhile download the single, plus the original "Love in This Club" music video. The album otherwise goes on sale May 27th.

Gabriel launches music download service for purists
The subscription-based music club will offer users one new, exclusive album per month, delivered in a "lossless" music format that provides CD-quality sound, one of the best recording formats currently available. The service promises to offer subscribers an eclectic mix of music from established acts as well as up-and-coming artists. It's aimed at music aficionados and audiophiles who value high-quality recordings, but who aren't currently catered for by online music services. Most download sites sell songs that have been digitally compressed to reduce the size of the file and make it quicker to download, but this process also diminishes the audio quality of the recording. Lossless tracks, by contrast, are optimised for fast downloads without compromising sound quality.

Friday, May 16, 2008

snapshot 5/16/08

Rock's New Economy: Making Money When CDs Don't Sell
The reason? CD sales are no longer the yardstick the band uses. While hip-hop and pop artists ranging from Jay-Z to Britney Spears have long used recordings to sell every- thing from perfume to liquor, rockers are only just starting to think of album sales as a component — rather than the sum of — the commercial equation. Spoon have been actively licensing their music for use in films, television shows and a Jaguar commercial, making money, gaining exposure and moving up from clubs to 3,000-seat venues.

Album sales are down 25 percent since 2000, leading to widespread predictions of the record business' demise. But smart artists and managers are finding new ways to reach fans and make money. "For some bands we represent, there's more licensing income than record sales," says Carol Sue Baker, whose Ocean Park Music Group has been connecting independent artists with music supervisors for movies, TV and advertising agencies since the early 1990s.

Music Services Compared
Wal-Mart might still offer only a no-frills service, but it’s come a long way in three years. Then again, although the uber-retailer’s prices are cheap ($0.88/track for WMA format songs, $0.99 for MP3), there’s still a lot working against it for anyone who’s serious about music, including a library that’s pretty much limited to big names and major new releases only. Where family-friendly edits of tracks exist as well, that’s what they’re guaranteed to carry, so be warned, parental advisories definitely do apply! Also, you can’t search for a track in MP3 or WMA format.

Congrats Chris, that’s the most factually inaccurate review to date!

Handleman Negotiates Financial Breathing Room...
Physical music distributor Handleman Company negotiated some financial breathing room this week, instead of facing the default gauntlet. The company renegotiated its recovery loan package downward, while preserving enough liquidity to keep the lights on.
According to details shared Thursday, the company reduced its financial loans from $223 million to $163 million, based on revised projections and commitments. "The amended credit facility will help ensure that we have sufficient liquidity to operate our business as we continue to take action to address the rapid and dramatic change under way in the music industry," explained Albert A. Koch, president and chief executive of the company.

Thursday, May 15, 2008

snapshot 5/15/08

Phone-wallets still years away
The new technology which enables small payments from mobile phones by just flashing the handset is likely to reach masses only around 2012, when one phone from five sold will be equipped with the technology.

Consumers will be able to use a phone as a wallet or as an access card simply by waving it over a wireless reader -- and in some cases punching a PIN number into the phone -- similar to how travelers in Tokyo and London access public transport.

Apple files patent for custom iPhone merchant apps
The iPhone and iPod touch may eventually have custom applications tailored to merchants they visit, a published Apple patent filing hints. As detailed by AppleInsider, the proposed concept calls for a local wired or wireless network at a business, with one or more routers such as an AirPort Extreme. Somewhere on site would be a central server, offering custom information and applications for Apple "media devices" that enter wireless range. "For example, assuming the establishment is a restaurant, local server may provide a menu to media device," the filing reads.

Possibilities for other businesses include broadcasting the likes of ads, event calendars and product information, or music, in a manner similar to that begun with Starbucks. At movies and concerts however people could additionally buy tickets and soundtracks, or even receive material such as directors' commentaries or foreign-language translations.

Analyst:'s Kindle to generate $750 million by 2010
Calling it the iPod of the book business, CitiGroup analyst Mark Mahaney says the Kindle e-book reader will generate three-quarters of a billion dollars for in less than two years. His calculations assume that unit sales will grow from 189,000 by the end of this year to 2.2 million units in just two years. By then he assumes the price of the device will be just below $300. Mahaney also points out that Amazon does have the largest selection of e-book content.

How Apple is changing DRM
Ironically, the music companies are now abandoning DRM because it worked too well. Apple wouldn't license its version to rivals - so the best-selling iPod drove the iTunes store to its present position, where it is the third-largest music retailer in any form in the US. Rosenblatt says that record labels "have been desperate to find a viable competitor to Apple and iTunes". Industry sources suggest that Apple's iTunes store has more than 70% of the UK download market, and growing. "The record companies don't like dealing with Apple, because Apple is in a position where it can dictate the economic terms and dictate the business models," says Rosenblatt. "What's going to draw people away from iTunes? One answer is to get rid of DRM."

Wake up and smell the Doritos™ - Avril Lavigne's manager
Copyright is over, and musicians should make themselves as pretty as they can for big brand advertisers, says top music manager and label boss Terry McBride. "Discovery of new music in the digital economy will be synonymous with consumption". The money will come from ad-supported music services and subscriptions.

Actually free music will become "an upsell technique for other music related products, e.g. concert tickets, clothing, music or artist branded physical products," reckons McBride. The recorded music helps establish a larger commercial presence. And don't forget micro-monetisation of P2P recommendations, he writes.

CloudTrade: Free, Legal Music Sharing on Your Smartphone
CloudTrade has announced that music from its first two label deals is now available for trading on its mobile file-sharing network. Users can trade about 250 songs from CloudTrade's label partners: ATO Records (Radiohead's U.S. CD distributor) and the jam-band-friendly Sci Fidelity Records.

Wednesday, May 14, 2008

snapshot 5/14/08

Josh Rouse Launches Membership Only Digital Download Store
This month acclaimed singer songwriter Josh Rouse is set to release the third volume in his Bedroom Classics EP, series. With Bedroom Classics, Vol. 3, Josh continues to build upon the successful series of EPs that has allowed him to take adventurous leaps with his sound over the years.

The first Bedroom Classics EP (2001) was limited to 750 copies fast becoming a collector's item for his long time fans (currently going for well over $100 on Ebay). This new installment marks another groundbreaking chapter, as it is truly self released; only available directly from Josh himself, off his newly launched membership based digital download store at

Now through June 1st, there's a premium membership package priced at $99.99, which includes a CD copy of the EP along with a 2 CD "Bootleg", set and, once it's completed, an early copy of Josh's next full length release. These are limited to just 750 copies and once their gone, a "digital only" membership will be offered for $29.99.

Betting On Mobile Phones Won't Save The Recording Industry
The recording industry hasn't had much of a strategy for dealing with the changing marketplace over the past decade (and, no, I don't consider lashing out and suing music fans as a "strategy"), so far be it for them to start now. That's why it's amusing to see articles about how the recording industry honchos are now betting on a new generation of mobile phones to save them. Funny how that works. This is the same group of executives who will claim that the phones themselves have no value without the music -- and yet here they are hoping and praying that the devices will save their industry.

But the real problem is that this isn't a strategy. It's wishful thinking. It doesn't involve any actual insight into what's happening in the market. It doesn't involve any proactive movement towards accepting new business models and changing the way business is done. It's merely the old way of thinking, trying to figure out what the "next" platform will be on which to sell music. It went from vinyl to cassette tape (we'll skip 8-track) to CD to computer... and now they want it to go to mobile. But they're missing the fact that the more popular mobile devices get, the sooner it is that we'll see file sharing apps for mobile devices pop up. Rather than waiting and praying that some new platform will be the savior, isn't it time that the industry started taking lessons from the past 10 years, and worked towards adapting to the age of digital content?

Developers Say Adobe Is Delaying Online Music Apps
Some developers of audio applications see online music mixers, studios and instruments as the next wave of music creation. The two biggest trends in music are online distribution and social networking... why not combine them further upstream

For developers working on online music creation applications, Adobe's Flash is the natural option, in part because it's installed on over 97 percent of internet-enabled PCs according to Adobe. However, the audio application developers behind Adobe, Make Some Noise say the company needs to get with the program, so to speak, if it wants Flash to be the go-to platform for online music creation.

Tuesday, May 13, 2008

snapshot 5/13/08

Scarlett Johansson album debuts on Imeem
Although it isn't in full release until next week, social-media site Imeem is streaming the album live in advance. You can't actually download it, but you can listen to the whole thing for free…

Music Sites Choosing Amazon Over iTunes
Yesterday Emmis announced a pact with iTunes for downloads from its radio station web sites. The deal is part of a growing trend as music and social networking sites search for ways to monetize traffic beyond advertising. But iTunes is increasingly a second choice as Amazon appears poised to finalize a variety of partnerships. Universal mp3 compatibility is a factor, but so is the web retail giant's extensive credit card database. Ease of use and trust dominate when purchasing online.

The major labels are also motivating some download store partnerships. If they are going to license a fledgling music discovery service or social network, the majors want to be certain that discovery can lead to purchase. Napster and Rhapsody are barely a factor in these talks. Their slow crawl towards DRM-free appear to have left them out of this race altogether

10-Q Watch: RealNetworks Lays Out Risks Of Rhapsody America
RealNetworks’ 10-Q for the quarter ended March 31 should be required reading for anyone going into a complex JV or the online music business. Line by line, it lays out the risks of the Rhapsody America joint venture with MTV Networks, all the more interesting giving RealNetworks CEO Rob Glaser’s admission last week that Michael Bloom, the MTVN Urge exec who has been running the JV since it was formed, has gone back to MTVN. In his place, at least for now: Glaser.

As the 10-Q details, Real, with its 51 percent of the JV, has the right to appoint the GM but certain activities require unanimous approval—items like a budget, some capex, affiliate transactions—and failure to agree could cause harm. It gets more blunt: ”Neither we nor the current management of Rhapsody America have extensive experience in managing and operating complex joint ventures of this nature, and the integration and operational activities may strain our internal resources, distract us from managing our day-to-day operations, and impact our ability to retain key employees in Rhapsody America.” That’s not the only issue musically speaking: Licensing fees, competition by rights holders, and more, larger subscription churn rates and more, Real is careful to mention them all.

1,000 more jobs to be cut at EMI
EMI'S owner, Guy Hands, is planning to axe up to 1,000 more jobs at the music company. Mr Hands, who runs buyout firm Terra Firma, told senior EMI directors last week that the company's headcount at its recorded music division will need to be reduced to around 2,000 people from 4,500, according to sources.

Emmis, Apple sign iTunes affiliate deal
Emmis Communications has announced a new affiliate deal signed with Apple, under which its Interactive division's Storefront technology will be tied to the iTunes Store, and in turn sold to other companies. Storefront lets radio stations -- mainly those owned by Emmis -- create custom online shops, particularly for the purpose of selling tracks as they are played live on air. The company claims that many alternatives only direct listeners to separate sites, instead of letting them pull music straight into local software.

Sony BMG releases more DRM-free music
Sony BMG, one of the top four recording companies, is releasing more DRM-free songs through a partnership with Dada USA, a mobile-entertainment company based in Italy.

Songs from Sony BMG artists such as the Foo Fighters, Kelly Clarkson, and The Strokes, will be offered through a new music service, Dada Entertainment, where users can pay $9.99 to obtain 15 tokens. Each token can be redeemed for a music download or ringtone or other content such as games or wallpaper. The unprotected MP3 files can be transferred to an iPod, mobile phone, or any other digital music-playing device, the companies said Tuesday. Over-the-air downloads aren't ready yet, but Dada said in a statement that it expects to launch that in coming months.

Imeem Unseats Yahoo as Top US Music Streaming Site
Imeem has taken over Yahoo's throne by becoming the number one streaming music site in the United States. Yahoo, which had acquired large music sites like Broadcast, Launch Media and Musicmatch in order to become the top-ranked music streaming site in the country, has slipped into second place behind imeem in Compete's list of the top 20 US streaming music sites for the month of March.

Imeem's expensive label deals, which allow it to offer on-demand music from all four majors plus indies -- combined with emphases

Monday, May 12, 2008

snapshot 5/12/08

Music industry hopes upgrades boost mobile sector
Perhaps no single device has had more impact on mobile music than Apple's iPhone. While only 6.7 percent of overall mobile customers use their phone to listen to music, rising to 27.9 percent for smartphone users, a full 74.1 percent of iPhone owners reported using the device as an MP3 player, according to M:Metrics.

The majority of this music, however, is transferred from the computer, rather than purchased through the phone and downloaded wirelessly. That may change this summer once Apple unveils what many expect will be a new version of the iconic device, featuring access to high-speed third-generation (3G) wireless networks.

HBO might be coming to iTunes, with flexible pricing is reporting that you might soon be able to find Tony Soprano in the iTunes Store. HBO, the premium cable channel known for their original programming, is in talks with Apple to add their programming to the iTunes Store.

This is good news for fans of HBO shows, but the real story here is the deal that HBO has reportedly managed to wrangle out of Apple. Portfolio's sources say that Apple has agreed to flexible pricing for HBO, which might mean we'll have to pay more than $1.99 per episode for that content. This is the structure that NBC, and many other studios, would love but Apple has been resistant to in the past.

Amazon Unbox on TiVo getting HD content
TiVo users have been able to rent and buy movies from's Unbox service for over a year now, but lately the service has felt a little outdated compared with competitors like Vudu and Apple TV, which offer HD downloads. Well, thanks to a comment by TiVo's VP of product marketing, Jim Denney, it seems like that's going to change soon. In an article on TV Week, Denney claims TiVo and Amazon will announce HD capabilities "in the not too distant future."

Music & Money: Will They Ever Learn to Dance?
In a discussion Thursday at the SanFran MusicTech Summit, venture capitalists acknowledged the incredible sexiness of the space, though they also recognized a treacherous path towards success. "The bar is a bit higher on music investments, and there tends to be an oversupply of ideas and entrepreneurs in the space," said Toni Schneider of True Ventures. "There is still that prize out there of figuring it all out, though it is risky and a lot of money has been lost. So people are very, very gun-shy."

Not only that, but successful growth frequently involves complicated and risky legal pitfalls. In fact, the less-than-legal route is now becoming a viable and recognized strategy. "The standard playbook in digital music is to infringe like crazy, get to scale, and gain some leverage against labels," explained Tim Chang, a principal at Norwest Venture Partners. "Once you get their attention, they come knocking with a lawsuit, which is basically foreplay to a licensing deal. At that point, you go raise venture money and try to pay off the labels, and convince them to convert some of that infringement suit penalty into strategic equity."

Music Revenues Move Up at RealNetworks; Gaming Moves Out
RealNetworks revenues improved during the first quarter, thanks partly to music-related increases. During the three-month period ending March 31st, music-related revenues bumped 12 percent to $38.1 million. Broader revenues increased 14 percent to $147.6 million, and most units showed gains during the period.

The music increases happened despite stagnant subscriber levels. The company reported a music-specific subscriber total of 2.675 million, level with year-ago totals. The figure lumps subscribers across Rhapsody and RadioPass, a combination that makes an isolated analysis difficult.

Activision SEC filing via Coolfer
From Activision's May 8th earnings call: "Consumers have already downloaded more than 15 million individual songs for Guitar Hero."

Friday, May 9, 2008

snapshot 5/9/08

CDs Get Into the Groove, Do Music the 45RPM Way
This is a story of a not so environmentally friendly, but rather groovy repurposing idea: reusing CDs as records (remember them?) At the UK's Futuresonic festival last week, a guy named Aleks Kolkowski had his vintage record-cutting machine ready to carve sound tracks into old CDs and DVDs. People simply had to turn up with an old disc and a sound file and he'd "overwrite" the CD with a track ready to be played on a turntable.

Zune reaches 2m sales; flat versus iPod
As part of its recent Zune update, Microsoft has revealed that it has sold two million of the music players since their launch in November 2006, revealing relatively flat growth for the device lineup. Although the company originally promised and slightly exceeded a target for its first million sales between the original launch date and June 2007, the company has largely remained silent on its data for its players in nearly a year.

Interview: The Former Hedge Fund Owner Who Teamed with Tutu for Free Music
"Steve Jobs -- quote me – does not give a shit about music. Because what he's done is bifurcated the music business. No longer is the test of an artist's work the embodiment of an album, what is considered as consumable are single songs, and that's because of the Apple platform. He's a genius, the only thing he cares about is selling his platform."

Thursday, May 8, 2008

snapshot 5/8/08

Warner Music Group 2Q loss widens on increased expenses
Warner Music Group Corp., whose artists include R.E.M., Madonna and Green Day, said Thursday that higher costs and a shift to digital music resulted in a wider second-quarter loss and it suspended dividends. Shares tumbled more than 20 percent, or $1.87, to $7.18 in morning trading.

For the period ended March 31, the New York-based recording company reported a loss of $37 million, or 25 cents per share, compared with a loss of $27 million, or 19 cents per share, a year earlier. Losses from continuing operations totaled 23 cents per share in the latest period. Revenue grew 2 percent to $800 from $784 million a year earlier.

Microsoft Sends Indie Labels Bonus Checks
Microsoft recently sent substantial one time bonuses to some digital distributors and independent labels. The checks appear to be the company's answer to criticism of payments as high as $1 per player extracted by Universal and other major labels granting permission for Zune's music sharing functionality. In an email sent earlier this week to label and artist partners obtained by Hypebot, The Orchard wrote that Microsoft "made a corporate decision to demonstrate their commitment to the independent sector in a manner we all appreciate: rather than simple lip service, they wrote a check". The digital distributor plans to share the revenue with content providers in a "Zune Bonus".

Warner Music, Wal-Mart Work It Out... MP3s Online
Warner Music Group has now licensed MP3s to Wal-Mart's online music store, according to information confirmed Wednesday. During a presentation at the annual gathering of the National Association of Recording Merchandisers (NARM) in San Francisco, Warner Music Group executive vice president of Digital Strategy and Business Development Michael Nash announced the shift. "I'm pleased to announce today that we have just started a very important partnership with respect to MP3 download sales on Wal-Mart," Nash said.

On Wal-Mart's store, MP3s can now be purchased from a variety of high-profile, Warner Music Group artists, including Metallica (Elektra) and Missy Elliott (Atlantic). The move ends a logjam between the parties, one that rendered Warner content unavailable.

Just recently, Wal-Mart shifted exclusively to MP3s, and removed any DRM-protected content. That mirrors a successful, MP3-or-nothing stance by Amazon, a move that eventually resulted in DRM-free licenses from all four majors. The recent licensing development leaves Sony BMG as the only major that has not licensed MP3s to the Wal-Mart Music Store.

Desmond Tutu Venture Emerges... Free Music For All
A music startup involving Archbishop Desmond Tutu has now emerged, complete with an open access ethos. SOS Records, at, currently offers content from a limited group of artists. Early names include Naomi Striemer, Mario Winans, and Idrissa Diop, though artists are being encouraged to upload their content to the destination.

Then, fans vote on which artists should ultimately be signed and recorded by SOS. SOS eventually plans to offer a fresh, free MP3 every day, and the broader model includes paid, physical product. Backing the concept is Steven Nowack, a former hedge fund manager.

An Alternative Approach to Marketing Rock Bands via Techdirt
The New York Times has an interesting profile of Fueled by Ramen, a record label that has managed to thrive at a time a lot of other labels are struggling.

Wednesday, May 7, 2008

snapshot 5/7/08

Microsoft May Build A Copyright Cop Into Every Zune
First, Apple insists that all TV shows have an identical wholesale price so that it can sell all of them at $1.99. NBC wants to sell its programs for whatever price it chooses. Second, Apple refused to cooperate with NBC on building filters into its iPod player to remove pirated movies and videos. Microsoft, by contrast, will accept NBC’s pricing scheme and will work with it to try to develop a copyright “cop” to be installed on its devices.

Coldplay’s Free “Violet Hill” Downloaded Over 2 Million Times
According to EMI, Coldplay’s “Violet Hill” was downloaded more than 2 million times during the one week free promotion. When it was initially offered on April 29th, Coldplay’s servers were inundated with requests causing it to crash. However, despite the problems, the track was reportedly downloaded 600,000 times on the first day.

WalMart Adds WMG MP3's. Napster May Be Next.
The Warner Music Group family of labels has widened its full catalog mp3 offering to include Previously Amazon was the only North American based download provider with the catalog.

Is Amazon MP3 Thinking Elastic?
My friend said his label's experience with Amazon could well point to some relief for the music industry down the road: "As soon as we wise up and realize that online albums are worth about $5, the music industry will be fixed."

Tuesday, May 6, 2008

snapshot 5/6/08

Microsoft brings TV shows from NBC, others to Zune
Microsoft Corp said it will start offering television shows for its Zune portable media device, more than two years after Apple Inc introduced the feature for its iPod player. Microsoft's Zune has one thing that Apple's market-defining iPod and accompanying iTunes store does not -- TV programs from General Electric's NBC Universal.

Those shows and more than 800 TV episodes including Comedy Central's "South Park" and MTV's "The Hills" will be available at the Zune store starting on Tuesday for the equivalent of $1.99 in Microsoft points that must be purchased in advance.

Warner Music Group Plays with the Price of Music
The price of digital music could be in flux. Warner Music Group plans to run a test starting this month that will alter the price of certain songs on a number of unspecified online music stores to reflect demand.

Like an artificially intelligent version of Amie Street, Warner's partner on the project Digonex "gathers sales data in real-time, analyzes purchasing behavior, and sets new prices that hit the 'sweet spot' where consumer demand and market potential meet." Nettwerk Records experimented with the same system last year, charging 33, 66, or 99 cents for singles, and between $3.30 and $10 for albums.

WMG Set To Broaden DRM-Free Offering
As Digital NARM opens in San Francisco today, sources are pointing towards Warner Music Group broadening its DRM-free mp3 offering beyond Amazon. Variable pricing appears to have been a major reason for the hold-up including demands by WMG, Sony BMG and Universal for higher prices for new and hit product. With WMG dropping demands that most download stores would not agree to, plus mp3's from EMI and the indies, a tipping point should be near that forces Sony BMG (who are rumored to be close to following WMG's lead) and Universal (whose offering is unpredictably selective) to follow.

Panelists: Music retailers must expand to video, online to survive
Also on Monday, NPD presented the findings of a consumer survey studying reactions to new hybrid CD products. Many of these choices mixed a physical disc filled with songs, plus exclusive access to bonus video content. With Music Video Interactive (MVI), tunes sit within a physical DVD that also serves up bonus Web site material. NPD's survey showed that younger consumers had a relatively strong affinity for the product. Teens are considered the most notorious music pirates, according to NPD. Yet 44% of survey respondents ages 13 to 17 said they would definitely and/or likely purchase an MVI album.

NPD also singled out the USB Memory Drive as a product to potentially enhance CD sales. Upscale adults ages 45-54 seem enamored with this music alternative, according to NPD. This consumer type also is valuable for retailers, because they tend to buy more during one shopping trip than any other age demographic.

A bridge to the future of the iPod
Apple is at a crossroads in the evolution of the product that arguably saved its bacon. Without the iPod fueling Apple's profits and investments, we probably wouldn't have spent the past year talking about Apple's surging Mac business or its game-changing iPhone.

After years of double-digit gains, iPod growth has finally trailed off. The market is arguably saturated: do you know anyone who wants to take their music on the go who hasn't bought an MP3 player? But at the same time, the iPod is undergoing a bit of a revolution: it's morphing from a simple music player to a full-fledged computer.

IODA Unveils Branded Download Stores
IODA, the global leader in digital distribution, marketing, and technology solutions for the independent music industry, today announced the general availability of IODA Label Stores™, a unique download storefront solution that enables labels and artists to sell digital music directly to consumers. The announcement was made at the NARM 2008 conference in San Francisco. IODA Label Stores expands upon the company’s existing suite of integrated marketing and distribution products and services with another way for independent artists to grow their businesses. Fully integrated into the company’s industry leading Rightsholder Dashboard, IODA Label Stores operates seamlessly with IODA’s catalog management, accounting, and marketing tools.

NARM Notes: Nielsen Numbers, Talk of a Hybrid CD
The NARM website is hosting a PDF of the Nielsen presentation titled "State of the Industry." Lots of juicy numbers if you're into that kind of thing. Lots of positive spin as well. "Consumers made 1.6 billion purchase decisions in 2007 (1.3 billion in 2006)," it says on page three. Other interesting tidbits: 450,344 albums (80% of the total) sold fewer than 100 units in 2007 (page seven); 1,000 of the 570,000 albums that sold at least one unit account for 50% of all sales (page eight); and 37% of all album sales in 2007 were from new releases -- the lowest percentage since SoundScan was launched (page eight).

Barnes & Noble and Zinio take magazines digital for those who just can’t leave the computer
Today, the world’s largest bookseller, Barnes & Noble, is attempting to bring the magazine back — in the digital world. (Barnes & Noble’s website) has teamed up with electronic publisher Zinio to sell subscriptions for more than 1,000 magazine titles. Subscriptions will be available both in digital and regular formats at prices up to ninety percent off the newsstand price. The digital version will be available to start reading just minutes after purchase.

Qtrax finally signs major record label
On Tuesday, the company announced it has inked a deal with Universal Music Group, the largest of the four major record companies. The partnership comes four months after the labels denied the company's claim that they had agreed to supply music for the site.

The Day The MSN Music Died
"The Electronic Frontier Foundation says that Microsoft has "betrayed" MSN Music customers and wants the company to make things right by issuing an apology, refunds, and eliminate digital rights management technology from the Zune music player. Microsoft stirred some controversy last week by announcing that it would no longer issue DRM keys for defunct MSN Music after August 31. This effectively will prevent former customers from transferring their songs to new devices after the deadline. Customers could potentially lose their music if they get a new computer or if the hard drive crashes on their current one. EFF, an advocacy group for Internet users, said in a statement that it sent a letter to Microsoft Chief Executive Officer Steve Ballmer on Tuesday outlining steps the company should take, such as issuing refunds and launching a publicity campaign to educate former MSN Music customers about their options."