Monday, June 30, 2008

snapshot 6/30/08

Rhapsody to challenge iTunes by embracing the iPod
Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless, Rhapsody said on Monday. The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods.

Rhapsody also will be the music store back-end to MTV's music Web sites and iLike, one of the most widely used music applications on social networking site Facebook. Rhapsody executives describe the strategy as "Music Without Limits." They said it would be backed by a marketing blitz worth up to $50 million in media space over the next year in part by leveraging co-parent MTV's TV networks and Web sites.

Apple's Complete My Album emerges as marketing tool
But in the past few months, labels and artists have begun releasing multiple tracks in advance of an album's street date to promote new releases, relying in no small degree on Apple's iTunes Music Store's Complete My Album feature to convert them into full-album sales -- in some cases with striking effectiveness. Despite the entire album's being leaked online just weeks before its availability, "Tha Carter III" racked up first-week sales of more than 1 million. What's more, 10 percent of the album's sales were digital, up from less than 1 percent for Wayne's past titles. And the most eyebrow-raising statistic? Fifty-two percent of the album's sales on iTunes came through Apple's Complete My Album function.

The Complete My Album feature is simple: iTunes users who buy single tracks from any given album can opt to purchase the remaining tracks on the set for a prorated price. Apple introduced the option at the end of March 2007 and since has seen conversion rates of around 10 percent. But those rates could start climbing now that acts like Lil Wayne, Jason Mraz, the Cure and the Jonas Brothers are using the feature as a marketing tool. Rather than just releasing singles digitally in advance and leaving fans to figure out for themselves how to fill in the blanks when the full album is released, these acts are encouraging the practice by explaining how it works via their iTunes profiles, MySpace pages and personal Web sites.

Verizon Wireless gets Rhapsody music subscriptions
Verizon Wireless is introducing Rhapsody's subscription music service Monday, allowing its customers to download as much music as they want to their phones for $15 per month. The service will work with seven current handsets and three to be launched soon, including the third version of the popular music-oriented LG Chocolate.

Open an account and your first album is on us
Shopping for music online just got easier. The new Rhapsody MP3 Store lets you listen to entire songs before you buy them*, provides recommendations, and delivers high-quality MP3s that can be played on your iPod or any other MP3 player. If you’re one of the first 100,000 to create an account by Independence Day, we’ll automatically apply a $10 credit to your first album purchase. The credit must be used by midnight Pacific time, July 4, 2008 – so sign up and start shopping today. Limit one per household. *Full-length song plays are limited to 25 per month for non-Rhapsody members.

A Digital Music Store That Sells More Than Just MP3s
Hot Topic, a chain of stores that sells clothing and accessories inspired by music and pop culture, plans to start a digital music store called ShockHound. By the time it is introduced in August, ShockHound will have permission to sell MP3s from at least three of the four major labels, the company says, as well as hundreds of independent labels. Hot Topic is starting ShockHound with a very different strategy from its competitors. Like most online stores, it plans to sell songs for 99 cents and albums for $9.99, prices at which profit margins are low. But just as Apple uses the iTunes store to drive sales of high-margin iPods, ShockHound is trying to use MP3s to help sell the kind of profitable band T-shirts and accessories it carries in stores.

“For us, music merchandise is where the profit is,” said Hot Topic’s president, Jerry Cook. “The reason we carry CDs in the stores is that to be in a music-centered business and not have music would be a contradiction. And you can’t be an online music store and not have MP3s.” Unlike Hot Topic’s stores, which favor CDs and clothing from bands identified with its suburban goth aesthetic, ShockHound will sell music and merchandise from a wide array of acts in every genre. It expects to sell T-shirts from more than 1,000 bands, as well as a wide selection of other kinds of clothing, accessories and vinyl records.

Project Red lays groundwork for subscription music service
Project Red is going to be providing some music for that Bono-approved iPod Nano of yours. The high-profile nonprofit, which donates a chunk of profits to combat AIDS in Africa, will be launching a subscription music service this fall. The as-yet-unnamed service will launch in September, according to The New York Times, and cost $5 per month.

It's structured like a newsletter: each week, members will get an e-mail with two MP3s--one an exclusive song from a well-known act and the other from an emerging artist--as well as a "Crackerjack surprise" (say, a video) and an update on how Project Red's charity money is being put to use. The songs are DRM-free, so you won't have to own a "Red" iPod in order to listen to them.

Friday, June 27, 2008

snapshot 6/27/08

Napster faces proxy battle from three shareholders
Three shareholders of digital music service Napster Inc are seeking election to the board, saying current management had not been aggressive enough in battling rival Apple Inc and Internet piracy.

Perry Rod, Thomas Sailors and Kavan Singh are preparing an independent proxy after their May 21 application to Napster's board for nomination was rejected on June 13, according to a regulatory filing with the U.S. Securities and Exchange Commission on Thursday.

Blockbusters stomp on the long tail, Harvard study finds
Meanwhile, our research also showed that success is concentrated in ever fewer best-selling titles at the head of the distribution curve. From 2000 to 2005 the number of titles in the top 10 percent of weekly sales dropped by more than 50 percent--an increase in concentration that is common in winner-take-all markets. The importance of individual best sellers is not diminishing over time. It is growing....

Is most of the business in the long tail being generated by a bunch of iconoclasts determined to march to different drummers? The answer is a definite no. My results show that a large number of customers occasionally select obscure offerings that, given their consumption rank and the average assortment size of offline retailers, are probably not available in brick-and-mortar stores. Meanwhile, consumers of the most obscure content are also buying the hits. Although they choose products of widely varying popularity, top titles generally form the largest share of their choices. (The wide appeal of these top titles is, of course, what makes them popular in the first place.)

B&W Music Club
The B&W Music Club is a subscription based service which provides its members with an exclusive album every month in Apple Lossless Compression. The idea is simple, record the album in one of the most advanced recording studio around and distribute it in a lossless format so that you can hear the music as it was intended. A yearly subscription will run you around $67 which is about $5.50 an album which isn't bad considering the quality you'll be getting.

Thursday, June 26, 2008

snapshot 6/26/08

Radiohead releases live video album on iTunes
Radiohead has released a live video album exclusively on iTunes to coincide with the band's run of U.K. outdoor concerts. "In Rainbows -- From the Basement," made available Tuesday, features the British rock band performing its current album at the Hospital studio in London's Covent Garden.

Sony to start digitally distributing movies before they come out on DVD
As you may know, Sony owns a movie studio. That studio is releasing a big budget Will Smith superhero movie this Summer called Hancock. When Hancock is available to buy in a few months, guess where you will first be able to buy it? Not iTunes, not even DVD, but Sony’s own digital distribution service to be launched this Fall, Sony chief executive Howard Stringer told an audience in Tokyo this morning.

This is part of Sony’s plan to make its television and video game divisions profitable once again. Its new Bravia line of televisions will be able to receive downloads via the Internet without hooking up to cable or satellite. The same will likely be true for its Playstation 3 video game console, which will roll out its digital movie download service this summer. If it can get access to Sony movies before they are released anywhere else, that could certainly help the company move more units — as well as give it a foothold in an arena it’s already late to: Digital distribution in the living room.

Napster Activists: Company Worth At Least As Much As Last.Fm
Back in May we mentioned that three subscribers/shareholders of Napster had launched an improbable proxy fight hoping to get themselves representation on the company’s board. That still looks like a pretty tall order for the trio, though they’ve filed an interesting analysis on why they’re pressing their case. The core argument: Napster’s market value is basically zero (market cap minus saleable assets), yet CBS (NYSE: CBS) paid $280 million for Given that Napster should be able to do everything can do and more, and it actually has real paying customers, the company should be valued higher. The fact that it’s not valued higher, say the shareholders, is due to a “lack of confidence in governance.”

By their math, even if you just valued Napster by breaking it up—selling all its assets and paying off its liabilities— the company would be worth $1.79 per share, compared to the $1.45 per share, or $69 million market value it trades at now.

Wednesday, June 25, 2008

snapshot 6/25/08

AT&T to boost online content distribution
AT&T said on Tuesday it wants to expand its business of delivering online media, moving into more direct competition with specialized content delivery companies like Akamai Technologies Inc and Limelight Networks Inc.

Starbucks (SBUX) Dumping CDs, iTunes Gift Cards (AAPL)
Starbucks, which has been scaling back its once-grand ambitions to turn itself into an entertainment hub, is about to shrink its plans yet again. We hear that by September, the chain will have dumped almost all of its in-store music retail offerings.

That means no more "spinner" racks offering multiple CD choices to latte-buyers. And that also means no more gift cards and promotional giveaways for Apples iTunes (AAPL). Instead, we're told, the coffee chain will offer just four CD "slots" per store. But it will also continue to offer free Wi-fi access to Apple's online music store and may continue to try to sell entertainment online.

Amie Street Lands Big Content Deal With The Orchard
Amie Street , the music store that features dynamic pricing that varies according to a song’s popularity, has secured a deal with digital music distributor The Orchard , which holds a catalog of over 1 million songs. For the time being not all of The Orchard’s music labels will be taking part in the deal, but Amie Street hopes to have them all finalized in the near future.

..And iTunes Album Totals Could Be Smashing
Coldplay could smash iTunes album sales records this week, based on information floating Tuesday. Hits Magazine pegged iTunes-specific sales of Viva La Vida at more than 275,000 during the recent week, a figure that would double a previous record-setting total from Jack Johnson.

In February, Johnson accomplished digital album sales of more than 137,000 on Sleep Through the Static. Overall, the Johnson album sold 375,000 units in its first week. More recently, Apple pumped millions into a Coldplay-focused iTunes campaign, one that appears to be producing rich dividends.

Whatever happened to Microsoft's DRM plan?
Asked if the world has been spared a Microsoft digital rights management machine, Anderson responded in an e-mail: "Wrong--WMP (Windows Media Player) and the surrounding stuff that MS hopes will enable it to do to the HDTV market what Apple did for MP3s."

RedAntenna tries to play fair
Though still in beta, RedAntenna has begun signing up indie bands and small record labels to start using its e-commerce widget--RedAntenna calls it a ShopLet--to sell directly to consumers from their own Web sites or their MySpace profile page. RedAntenna handles the transaction and product distribution in exchange for a 7% fee

While other e-commerce providers offer similar services--SnoCap comes to mind--U.S. business development manager Freddy Nager told Media Wonk RedAntenna hopes to go SnoCap one better for artists by letting creators set whatever price they want for their content and by keeping its own commission low. SnoCap has a fixed price schedule and takes a bigger cut of the sale.

Skip The Video Store -- And Mailbox; Netflix Makes DVDs Obsolete; With its $99 video player, the movies-by-mail pioneer poised for yet another shift
With its low-cost set-top box for streaming movies from the Internet, Netflix may have succeeded where others have failed. The Netflix Player by Roku has enjoyed brisk sales since it was launched on May 20, company officials say. Roku, a privately held company in Saratoga, Calif., sold out its initial supply of Netflix boxes and has been ramping up production to meet demand. Netflix and Roku wouldn't give sales figures.

Ubuntu community head tests music economics with open content
Ubuntu community manager Jono Bacon, an independent musician and prominent figure in the open-source software community, is starting a new solo music project through which he aims to explore the challenges of distributing music under a Creative Commons license. He hopes that his efforts will bring some clarity to the copyright debate and provide real answers about how open content might change the economics of the music industry.

Renew That Library Card: DC Public Library Starts Lending DRM-Free Audiobooks
ffering something for free doesn’t guarantee people will make the most of it. The latest example: eBooks distributor OverDrive says providing DRM-protected audiobooks to public libraries in the WMA format has discouraged iPod-centric users so it is expanding its catalog to DRM-free MP3s as well. The new program starts today at the District of Columbia Public Library with five more libraries to follow. It’s a small number compared to OverDrive’s arrangements with about 7,500 libraries to distribute its catalog of 20,000 DRM-protected digital audiobooks.

The MP3 audiobooks are tied to specific libraries so users will still need a card from their local branch. And even though MP3s are not copy-protected, users have to agree to borrowing terms. When the lending period is over—different branches have different terms—access to the software expires and a prompt is sent ordering users to delete the files.

Tuesday, June 24, 2008

snapshot 6/24/08

Spain to adopt media player tax on July 1st
Spain will be one of the next countries to adopt a so-called "iPod tax," Billboard writes. Formally known as the "digital canon," the tax will go in effect on July 1st, and apply to all electronic devices (and their media) capable of storing, copying or recording sound and images, even to the extent of applying to printers, scanners and ink cartridges. The fee levied against manufacturers will vary depending on the particular device; while ellphones with MP3 playback will warrant a levy of €1.10, dedicated MP3 players will cost an extra €3.15 each.

The tax is meant to compensate artists and publishers for the alleged costs of piracy, but has been extremely controversial in Spain, and fought against by the likes of electronics makers and consumer groups. It was in fact intended to be imposed 18 months ago, but was delayed due to debate.

Hands on: Zoomii breathes life into Amazon's bookshelves
Zoomii, in a nutshell, is a visual bookshelf browser for over 19,000 books from Amazon's catalog, though it can search for over 162,000 titles. Instead of browsing through flat lists of book titles and their cold statistics, Zoomii stacks books in shelves alphabetically by author, organized by genre. You can click and drag across Zoomii's landscape of shelves, zoom in and out with your scrollwheel, and click a book's cover for basic statistics from Amazon, including the ability to add the book to your cart or wishlist.

eMusic Wants to Get into DRM-Free Video
eMusic, the MP3-only music seller, is trying to break out into offering video, CEO David Pakman told NewTeeVee on Friday. But the company would only do so if networks and studios would agree to let it sell DRM-free MPEG-4 files.

snapshot 6/23/08

Rap stars weigh their options as record deals end
As a string of high-profile hip-hop artists near the end of their record contracts, a question looming over their pending free agency isn't which major label they'll sign with but whether they should sign with a major. While few rappers can match the pull and marketability of the former Def Jam president, big names like 50 Cent, LL Cool J and OutKast will soon be on the market as well. Although they may ultimately re-sign with major labels, their camps have indicated that they are at least contemplating the possibility of a future without a major-label deal.

iTunes Store Dominates Music, and Movies May Be Ne
On Thursday, Apple passed yet another significant milestone at its iTunes Store. The company announced that music fans have purchased and downloaded more than five billion songs. Movies could be the next digital medium to realize those numbers. The iTunes Store is the largest music retailer in the U.S., according to the NPD Group. And iTunes customers are now renting and purchasing more than 50,000 movies every day, according to Apple.

Analysts said Apple's decision to give consumers the ability to turn previously purchased tracks into complete albums at a reduced price, and seamless integration with iPod and iPhone, has helped its cause. "This is just further evidence, if any is needed, that the recorded music business is headed toward Internet distribution," said Phil Leigh, a senior analyst at Inside Digital Media. "Apple is already selling more music than Wal-Mart."

My Experience With Amazon’s MP3 Download Service
First let me say that I went into this review not hoping for much and was instead pleasantly surprised. So, before I go on, let me say that I think for many people Amazon offers a fair alternative to the iTMS. And if you are willing to go through a few more steps then it is definately worth it. Now on to the rest of the review. The selling point that convinced me to give Amazon's service a shot was that they sell DRM-free songs in MP3 format. Some of their songs are also a little bit cheaper (by a dime) but the though of saving 10¢ wasn't really what persuaded me to give them a try. For me it was the joy of knowing that I can do whatever I want with my music without having to first un-cripple it.

Movie studios consider rentals on DVD release
As one of their most lucrative sources of revenue stagnates, several Hollywood studios are considering something that would have been unthinkable even two years ago: renting films to cable subscribers and Internet users on the same day they're released on DVD.

11 Billion Videos Viewed Online Monthly
134 million people in the us went online to watch an astounding average of 81 videos for a total of 11 billion videos in April, the latest figures released by comScore.
  • 71% the total U.S. Internet audience viewed online video
  • The average online viewer watched 228 minutes of video
  • 18-34 year olds were the heaviest viewers watching 287 minutes each
  • 82.1 million viewers watched 4.1 billion videos on YouTube
    - 49.8 videos per viewer
  • 46 million viewers watched 481 million videos on MySpace
    - 10.4 videos per viewer
  • The average online video duration was 2.8 minutes

For Tom Petty Fans, the True Sound of Vinyl, Also Captured on a CD
The vinyl version of the new album from Mudcrutch, the recently reunited band from the early ’70s that features Tom Petty, comes with a CD that buyers can play in their cars or rip to make MP3 files. Those who do will notice that it is abnormally quiet — and that the CD holder instructs listeners to play it on a good stereo and turn it up.

The e-Book Test: Do Electronic Versions Deter Piracy?
For example, my own publisher, O’Reilly, is about to offer a bunch of its bestsellers for sale on the Amazon Kindle. Early next month, the company will also start selling electronic versions of certain books with no copy protection. For a single price (cheaper than the printed-book price), the package will include the book in three formats: PDF, Mobipub (compatible with the Amazon Kindle), and Epub (soon to be compatible with the Sony Reader).

Topspin flips the music subscription model
Like a side project of revered indie stars, Topspin features former stars from Yahoo Music, Digidesign, and Real Networks taking charge of the changing record industry landscape. The company is helping build a platform that, in part, allows consumers to subscribe directly to the artist rather than to some music service.

In addition to being able to sell their own products individually, musical acts can offer "subscriptions" to their entire catalog for a single or recurring fee. The artists Topspin has worked with so far that are offering such subscriptions include Jubilee (ex-Icarus Line, NIN, Queens of the Stone Age), Josh Rouse, and The Dandy Warhols.

Amazon E-Book Sales To Hit $2.5 Billion In 2012; Will Add $330 Million To Op Income: Analyst
CEO Jeff Bezos has been famously tight lipped on anything to do with data on the Kindle. Just about the only hard stat ever given out is that of the 125,000 titles the company sells in both physical and electronic forms, the electronic ones account for 6 percent of unit sales. Other than that, it’s been all speculation. We’re not expecting any hard numbers for a long time, so here’s some more speculation: Pacific Crest analyst Steve Weinstein argues that global e-book sales at Amazon could reach $2.5 billion by the year 2012.

Friday, June 20, 2008

snapshot 6/20/08

Chant #1 Classical Before CD Release
I have seen the future of music and it looks like Chant. Chant - Music for the Soul on Decca debuted at #1 on the Billboard Classical Chart and remains the #1 classical release at the iTunes Music Store. Chant, a niche recording even by classical standards, made it to #1 as a digital only release exclusively through the iTunes. The recording will be released physically in-stores nationwide on Tuesday, July 1st. enters the iPhone realm through the back door
The firm responsible for building the database upon which the Internet radio service is built, has created software to enable iPhone users to use -- if they want to risk it. Even though the iPhone has obvious ties to its iPod roots, the availability of streaming music for the device has still has remained something of a mystery. NPR has a streaming news service, and Pandora has brought its Pandora Everywhere Platform can be used on the iPhone, but very few other alternatives are available to users. is a music site built upon the Audioscrobbler engine, where users are able to stream music to their PC and save ratings on Apple's iTunes music service. Now owned and operated by CBS, the service uses a custom made algorithm that analyzes a user's music ratings and will be able to provide music bases on a user's music interests. The service is available for free to jailbroken iPhones and iPod Touch MP3 players. "Jailbroken" is a term used for unlocked iPhones that are able to run third-party applications, at the risk of voiding the iPhone's warranty and possibly turning the device into a shiny black-and-silver brick.

The MobileScrobbler service offers users a number of capabilities, including: to queue songs while offline and have them automatically submitted when they first connect; to listen to's radio service over Wi-Fi or EDGE; to tag songs; to view album artwork; to cache data for offline viewing; to see the stations your friends are listening to; and to "scrobble" songs as a user listens to them -- which means, they get added to users' personal profiles.

Ex-Yahoo Music GM Ian Rogers Launches Topspin Media
Ian Rogers , the former GM of Yahoo Music, has finally taken music startup TopSpin Media out of stealth mode. The new company will offer a marketing software platform for music artists to maximize their fanbase and brand exposure. TopSpin Media describes itself as a technology company (not a “marketing services” company) aimed at helping artists better market themselves. For now TopSpin’s platform is only available to a few select artists, but the company plans to eventually open it to “anyone who would like to make a living from their art”. You can read more about the company on its first blog post here.

Movie Booth DVD rental kiosks head for UK, Ireland
DVD rental kiosks have been lighting up pharmacies and supermarkets across the US, but it seems that UKers and Irish lads / dames will soon have the great, great privilege of interfacing with Movie Booths in the near future. This particular unit doesn't seem all too different from other variations we've seen, boasting a simple touchscreen display and a built-in android tasked with fetching your selected title and spitting it out for a nominal (read: undisclosed) fee. Apparently, trials have been deemed a success in outlets like Tesco, Centra and Applegreen, thus paving the way to see these pop up everywhere by the year's end.

Thursday, June 19, 2008

snapshot 6/19/08

France clamps down on Internet piracy
France moved Wednesday to clamp down on Internet piracy with a bill that would set up a new agency to track down cybersurfers who illegally download music, videos and movies from the web. The legislation would set up a new administrative body that would receive complaints from the music and film industry and track down offenders through Internet service providers. An e-mail warning would be sent to suspected downloaders followed by a registered letter. After two strikes, offenders would risk losing their Internet subscription for up to a year.

Apple has Sold Over 5 Billion Songs on iTunes
Apple announced today that they had sold over 5 billion songs on iTunes. According to data from the NPD Group, iTunes remains the number one music retailer in the US. iTunes features the largest online music catalog with over eight million songs. Apple also reveals that customers are buying and renting over 50,000 movies every day making iTunes the most popular online movie store as well. iTunes now houses over 20,000 TV episodes and over 2,000 films including over 350 in high definition.

Amazon Brings ‘Gold Box’ Sales Initiative To Online Music Store
In an effort to promote their MP3 Download store, Amazon has developed two initiatives for MP3 album downloads. The Friday Fives promotion will discount five select titles to $5 per album. Amazon will then experiment on various price points for other albums, some will be reduced to as low as 99-cents, which has been dubbed Russian Pricing based on the now-defunct AllOfMP3 model. That is part of a fresh sales experiment, one that complements already-discounted tags on a number of albums.

The second part of the promotion features specialty pricing on selected titles, often to bargain bin levels. For example, Coldplay’s X&Y recently dropped to $1.99. This new strategy, developed to build some excitement to downloaded music in the same manner the Gold Box brought to general junk merchandise, will complement their already-discounted tags on a number of albums.

A brief history of the album's recent decline in value
Mired in what will soon be an eight-year downturn, the music business has not only struggled to sell CDs, but has failed to find a consistent price point for new albums. is bringing the cost of an album to new lows, having publicized Tuesday its sale price of $1.99 for a piece of Coldplay's catalog.

Less than 10 years ago, it was common for albums to cost $15 and above. Apple helped redefine what the price of an album could be in the minds of consumers, but Steve Jobs' company is far from the only reason that albums are costing less and less.

Israelite Confirms Royalty Rates Breakthroughs
The publishers, record labels and digital music providers have hammered out a settlement on two of the five royalty rates currently scheduled to be set this October by the U.S. Copyright Royalty Board (CRB), according to National Music Publishers' Assn. president/CEO David Israelite. But the details will remain confidential until they are presented to the three U.S. judges sitting on the board, who must approve and set the rates, Israelite added at the trade association's annual meeting, held in New York at the Marriott Marquis on June 18.

So far, the three sectors have reached an agreement on the rates for limited downloads and Internet streaming, but they could not reach a settlement on the other three rates: digital permanent downloads, physical product and ringtones. Consequently, each sector will file briefs and documentation supporting their respective stances by July 2, with closing arguments expected to be made by July 4. Then, the three U.S judges on the board are expected to announce the new rates for the next five years in October, according to a slide that accompanied Israelite's presentation.

DEG identifies solutions in DVD supply chain
The Digital Entertainment Group’s first study on the state of the DVD supply chain highlighted a number of areas where retailers and studios can work together to achieve a smoother and more profitable flow of product to store shelves. Theodore Garcia, media and entertainment lead at management consultant Capgemini, which conducted the study for DEG, said the exercise had several goals, including to take cost out of the supply chain, leverage investment in I.T., speed adoption of new technologies such as RFID and learn from other industries.

Underscoring the importance of supply chain improvement is the statistic, cited by Garcia, that returns of unsold product to studios from retailers has been as high as 25%. The final report identified 17 opportunities for “collaborative improvement” between retailers and studios, Garcia said. Among them: on-hand inventory accuracy, forecasting, packaging, shipping, score-carding and merchandising.

A Day After 'Launch,' Major-Label Tunes Scarce on Qtrax
The wait for Qtrax's free, legal P2P service continues, as over 24 hours after the site was scheduled to launch with music from EMI and Universal Music Group, a great deal of music from both labels continues to be unavailable for download from the service and an apparent network bug is causing the player to crash when trying to play the music that is available.

Wednesday, June 18, 2008

snapshot 6/18/08

We will pay for music if you leave us alone
"The music industry should draw great optimism from this groundbreaking survey," said Feargal Sharkey, head of BMR. "First and foremost, it is quite clear that this young and tech-savvy demographic is as crazy about and engaged with music as any previous generation. Contrary to popular belief, they are also prepared to pay for it, too. But only if offered the services they want."

Diversify or die, claims PWC report
In one of the most extensive reviews of the global entertainment and media (E&M) market to date, management consultants PricewaterhouseCoopers are predicting that spending on all forms of recorded music – from physical formats through to digital distribution on mobile phones - will fall from $33.4bn (£17.1bn) in 2007 to $32.5bn (£16.6bn) in 2012, representing a 0.6% compound annual decline over the next four years.

PWC predicts greatest falls will be felt in the US (-5.3%) followed by EMEA (-1.5%), although there will be slight increase in sales in Latin America and Asia Pacific where broadband penetration per household still has to pick up pace and where mobile downloading is still in its infancy.

Lil Wayne Cracks 1 Million With 'Tha Carter III'
Lil Wayne becomes the first artist since 50 Cent in 2005 to sell more than 1 million copies of an album in a single week, according to chart reports issued tomorrow (June 18) morning by Nielsen SoundScan. in its first week on the market, the rapper's "Tha Carter III" sells just over 1 million units. The last album to top that milestone was 50 Cent's "The Massacre" in March 2005.

Kid Rock Boycotts iTunes, Champions P2P
The digital music revolution has been compromised, according to Kid Rock, because digital music stores and record labels still manage to hoard the lion's share of music revenue. He advises fans to download his music for free from P2P services, although he himself doesn't have to. "I don't steal things," he told the BBC. "I'm rich." As for everyone else, he says, "Download it illegally, I don't care. I want you to hear my music so I can play live."

Rock's tirade was apparently precipitated by a request from his record label, Warner Music Group's Atlantic Records, that he publicly denounce file sharing. His response: "Wait a second, you've been stealing from the artists for years. Now you want me to stand up for you?" Ouch.

TuneCore Opens Digital Aggregator Platform
Flat fee distributor TuneCore is launching a new service which enables other music companies to offer worldwide digital distribution using TuneCore's infrastructure. Now using Google's open API any music company like management, merchandisers and record labels can act as a digital aggregator. From their own sites, these middlemen can, for example, offer the opportunity for artists to "sign themselves" at a variety of costs and benefits including worldwide digital distribution.

Microsoft Relents on Killing MSN Music DRM Authenticaton...For a Few Years
"On April 22, Microsoft notified you that as of August 31st, 2008, we would be changing the level of support for music purchased from MSN Music, and while your existing purchased music would continue to play, you would no longer be able to authorize new PCs and devices to play that music. After careful consideration, Microsoft has decided to continue to support the authorization of new computers and devices and delivery of new license keys for MSN Music customers through at least the end of 2011, after which we will evaluate how much this functionality is still being used and what steps should be taken next to support our customers. This means you will continue to be able to listen to your purchased music and transfer your music to new PCs and devices beyond the previously announced August 31, 2008 date. Microsoft continues to recommend that you back up your music on CD or hard drive along with other important data."

Tuesday, June 17, 2008

snapshot 6/17/08 strikes Universal Music video deal added more than 12,000 full-length music videos to its site today following a deal with Universal Music covering the group's artists including Amy Winehouse, Jay-Z, Nirvana and Kanye West.

Swift Plans Wal-Mart Package
The Wal-Mart exclusives continue with a special release by country star Taylor Swift on July 15. Beautiful Eyes will be a CD/DVD package that will be displayed not only in the music section but also on a custom L.e.i. Jeans promotional display in the clothing section of stores. Earlier this year Swift signed an endorsement deal with Jones Apparel Group to be the face of the back-to-school advertising campaign for L.e.i., a Wal-Mart exclusive brand. The CD will have two exclusive songs and a number of new versions of previously released songs. The title is currently available for pre-order at the Wal-Mart website for $11.88.

Bertelsmann invests in ImageSpan’s technology for automating royalty payments
ImageSpan hopes to make a mint by counting up the pennies that artists and media companies are owed every time someone downloads a song or plays a video over the internet. One of the nightmares of the digital age is how to track what an artist is owed by all of the people who use that artist’s work online. Currently, that problem of tracking usage and royalties is solved using an army of attorneys. It often takes a year to settle the books.

Now, Sausalito, Calif.-based ImageSpan promises to automate that process so that royalties can be calculated in seconds instead of a year using internet standards such as XML to track content usage. Its product, LicenseStream Creator, is available for a subscription of $40 a year; a pro version is $99. The improvement in efficiency explains why one of the world’s biggest media companies, Bertelsmann, has led an $11 million second round of investment in ImageSpan.

Dealzmodo: Amazon MP3 Albums For $1.99 (Starting With Coldplay)
Amazon is launching a pair of new discounts for their MP3 album downloads, ''Daily Deals'' and "Friday Five." Daily Deals are deeply discounted albums—today that deal is Coldplay's X&Y for just $1.99. And Friday Five are five albums discounted to $5 every Friday through the weekend. If you're looking to (legally) expand your MP3 collection, these cheap Amazon tracks seem like a pretty good way.

eMusic Raising Subscription Rates; Entry Level Affected
eMusic is now raising rates on its entry-level subscription tier, according to details shared by the company. The online music store bundles a pre-set number of downloads into various monthly packages, a cross between a-la-carte and subscription offerings. A formal announcement will be shared with existing subscribers later this morning, and changes go into effect July 17th. Newer subscribers will experience the elevated rate immediately, according to plans revealed to Digital Music News. The changes specifically affect eMusic Basic, a first-level plan that currently offers 30 monthly downloads for $9.99. That price point will move to $11.99, though existing subscribers will be given an extra 10 downloads per month to soften the blow. For some Basic subscribers, the modified package translates into a monthly allocation of 50 downloads for $11.99.

Discussing the changes, eMusic chief executive David Pakman pointed to continued improvements and steady pricing. "It's been about five years since we bought the business and changed the pricing last," Pakman told Digital Music News. That period witnessed the addition of millions of tracks and a major editorial overhaul.

Tuesday Odds and Ends
If you were wondering how was going to handle 10-cent credit card transactions -- it won't. I just did the 79-cent upgrade from a "web song" to an mp3 file (for the lead-off track on this album) and saw the following message:

About your Lala walletIt wouldn't make sense to charge your credit card for every 10¢ purchase, so we ask that you add funds to your wallet in dollar amounts of your choice. This enables you to then continue to easily add web songs with a single click. The funds you add to your wallet can also be applied towards the purchase of web albums and MP3s. We will never add funds to your wallet without asking you first.

Monday, June 16, 2008

snapshot 6/16/08

Digital challengers to MP3 format face high hurdles
Much like the Dvorak keyboard, new digital music formats pose a challenge even as they offer solutions. The Motion Pictures Experts Group, otherwise known as MPEG, will meet this month in Germany to consider making a new digital audio format called MT9 an international standard. Developed by the South Korean company Audizen, the MT9 format -- commercially known as Music 2.0 -- splits an audio file into six channels, such as vocals, guitar, bass and so on. Users playing the track can then raise or lower the volume on the different channels like a producer on a mixing board, to the point of isolating a single item.

From a technical perspective, replacing MP3 with a new digital music standard would be rather easy. Digital retailers in a matter of months could refresh their entire database with music containing the new format -- just as Napster and Wal-Mart quickly switched from digital rights management to non-DRM formats.

Stones move rocks Terra Firma
The Rolling Stones are on the verge of ending their 31-year relationship with EMI, dealing a blow to private equity owner Terra Firma, led by Guy Hands, which acquired the label in a £3.2bn deal last summer. Sources say the group is close to clinching a deal with Live Nation, the world's largest concert promotion firm, which would market its back catalogue, depriving EMI of around £3m a year. Live Nation, which last year poached Madonna from Warner, would also take highly profitable merchandising and touring rights for future Stones shows, some of which have grossed as much as £750m.

Average Teen Stores 842 Stolen Tracks on their iPod
In a recent study by British Music Rights, 14- to 24-year-olds were polled as to how much stolen music they carried around on a daily basis. The finding was that almost half of said music was never purchased. 842 of the 1,770 tracks held on the average digital music player were reported as stolen—that's 48 percent.

First look: Songbird 0.6 open source media player
The open source Songbird music player took a big step forward on Friday with the official release of version 0.6, which significantly improves performance, augments support for media player devices, and reduces the program's memory footprint. Another noteworthy new feature is support for editing music metadata.

ENTERTAINMENT; Studios editing video strategy; Some are testing offering online and cable rentals on the same day as DVD releases to boost sales.
As one of their most lucrative sources of revenue stagnates, several Hollywood studios are considering something that would have been unthinkable even two years ago: renting films to cable subscribers and Internet users on the same day they're released on DVD. And in an even bigger change, some Hollywood studios now want to open a new "window" -- offering high-definition versions of movies for rental viewing in the home ahead of their DVD release -- if the Federal Communications Commission grants cable and satellite companies permission to block in-home copying.

AOL Turns the iPhone into an Expensive Radio
Buy an Apple iPhone and download the new AOL Radio application. It will connect to AOL’s servers by way of the cellular network. The phone’s GPS system will monitor signals from satellites orbiting 12,000 miles in space in order to determine your location. This will automatically determine your location and tune to the digital stream from the nearest CBS station. AOL Radio on the iPhone will be free to users, with audio advertising inserted in the radio streams. There may be graphic ads in the application later.

The Bargain Bump
When MP3 began running its daily "blue light special," I assumed it would feature older, back-catalog titles. But some of the bargain albums are recent, big-name releases -- today it's Madonna's Hard Candy album for $3.99.I'd love to find out exactly what kind of bounce is getting with these daily specials, though it seems pretty clear that the reduced price is moving some additional units: As of this afternoon, the album is #7 on Amazon's top mp3 albums chart, but it's only in the #50 spot over at the iTunes store... UPDATE: As of Thursday morning, it's #1, and still priced at $3.99.

Pearl Jam offers streaming 'bootlegs'
Pearl Jam, a band with a reputation for delivering great live performances, is offering to sell "bootleg" recordings of the group's concert shows. Fans can go to and purchase streaming downloads or burn-to-order CDs of each of the band's performances during its 2008 concert tour, which launched last week in Florida. Internap is overseeing the audio streaming. Each concert performance will sell for $9.99 (MP3) and $14.99 (FLAC) and be made available two weeks after the performance. … Pearl Jam is offering the music free of digital rights management. This means fans can burn the songs to disc or transfer them to their digital music players.

Sony BMG Downloads Still Missing at Wal-Mart...
Sony BMG and Wal-Mart remain at an impasse over paid downloads, months after disagreements first surfaced. Downloads from artists like Alicia Keys, Sean Kingston, and Sara Bareilles are still "not available for download," according to checks this weekend. The gap follows a shift by the mega-retailer towards an MP3-only marketplace, a move that initially cause licensing delays with Warner Music Group and Sony BMG Music Entertainment.

Thursday, June 12, 2008

snapshot 6/12/08

Play-along video game genre amps up music industry
Tapping on fake instruments and screeching into microphones connected to video game consoles has become lucrative for both the music and gaming industries. Downloadable tunes for music-based games "Guitar Hero," "Rock Band" and "SingStar" have become as vital as iTunes itself — and one of the last ways to expose youngsters to classic rock.

The genre will evolve again later this month when game publisher Activision and developer Neversoft release "Guitar Hero: Aerosmith," the first such play-along rhythm game pegged to one music group, instead of featuring a multi-artist compilation more akin to one of those "Now That's What I Call Music!" albums.

Free Music Service QTrax: Launching (Again) June 18
After an embarrassing false start last January, QTrax is just about ready to try again. The service now says it will begin offering free and legal downloads on June 18. As of now, though, QTrax will still only be able to offer music from two of the big four music labels: Universal Music Group and EMI; it has yet to reach deals with the recorded-music divisions of WMG or Sony/BMG.

Despite Leaks, Lil Wayne Album Selling Strong
The recently-released Lil Wayne album could push past 900,000 during its first week, according to projections circulating Wednesday. First-day estimates landed at 423,000, per data compiled by Nielsen Soundscan. That rivals broader, full-week totals from the top-selling albums of the year, specifically Mariah Carey's E=MC2 (463,000) and Usher's Here I Stand (433,000). The Lil Wayne album, Tha Carter III, was leaked earlier this month by a member of the mixtape community.

Interview with Microsoft’s Robbie Bach, part 1, on Zune
Robbie Bach is the president of the multibillion-dollar Entertainment & Devices Group at Microsoft. The group is closing in on a big fiscal year end on June 30. The company has projected that the group will be profitable this year for the first time since its inception in 2005. One of the products that isn’t profitable yet is the Zune media player. A challenger to Apple’s iPod, the Zune is so far a quixotic attempt to unseat Apple in making cool music devices that capture the buzz among consumers.The Zune is just one of many products within Bach’s domain, where the common theme is “connected entertainment.” VentureBeat was part of a small group of reporters that recently got to quiz Bach about all of his businesses, from Zune to the Xbox 360. This edited transcript is the first of several parts and focuses just on the Zune business.

Live Nation's Leaders Battle Over Strategy
A fierce battle has broken out among top executives at Live Nation Inc. over the concert-promotion company's ambitious strategy to reshape the struggling music industry by making wide-ranging but expensive deals with artists such as Madonna and Jay-Z. The battle is over the limits of that strategy, in which Live Nation has pledged hundreds of millions of dollars to a handful of performers in return for exclusive rights to release their recordings, promote their concert tours and sell T-shirts and other merchandise bearing their images.

Sharp declines in recorded-music sales have made it tough for traditional record labels to survive by selling music alone. So a variety of players are attempting to build broader businesses around each artist, such as touring and merchandising, which traditionally have been handled by separate entities, creating a turf war among music labels, concert promoters and ticket companies all angling for the same deals.

Jayhawks and Apple Team Up for iTunes Giveaway
The performing arts center of the University of Kansas, the Lied Center, today announced a partnership with Apple to distribute 50,000 special Lied Center iTunes cards to people in the Midwest US. Each of the special cards provides free downloads of 20 songs by artists who will be performing at the Lied Center during the 2008-09 season.
The exclusive card, available at the Lied Center Ticket Office, provides a way for the Lied Center to attract new patrons and give existing ones a way to capture a foretaste of the upcoming season. The free music downloads available with the card include artists such as Phillip Glass, Laurie Anderson, and the Turtle Island String Quartet.

Sony BMG signs mobile-marketing deal with Mozes
Sony BMG, one of the top four recording companies, has signed a deal with Mozes, a start-up that connects communities through mobile phones. Mozes will hand Sony BMG music artists a way to communicate with fans through text and voice messages. He says Mozes only sends messages to people who have opted into the program. If you're a hard-core fan of musician Teddy Geiger, Porter says, you'll want him texting you with his next concert date or leaving a voice message about an upcoming release (Geiger uses the service, Porter said).

Wednesday, June 11, 2008

snapshot 6/11/08

Pearl Jam and Verizon go mobile for live bootlegs
Pearl Jam has struck a deal with Verizon Wireless' V Cast service to sell select tracks from the authorized live bootlegs that will be available in conjunction with the band's upcoming summer tour, which begins Wednesday (June 11) in West Palm Beach, Florida.

Under this extension of Pearl Jam's long-running live bootleg program, three tracks from each show (excluding Bonnaroo) will be available immediately afterward via V Cast and -- one as a free mobile download and two others for purchase. All V Cast tracks will be "dual downloads," meaning that once purchased, they are sent to both the mobile phone and the user's computer. They will feature Verizon's existing digital rights management (DRM) system and will also be sold as ringtones and ringbacks.

Merlin claims 8% share of US market
Merlin, the world’s first global rights body for independent music, now claims to have captured 8% of the US market. The organization has seen its membership swell to over 12,000 and now represents the repertoires of independent US music market leading labels and distributors, including Koch, Epitaph, IODA, Beggars and Concord.

CDs Have Another Thing To Fear: Vinyl?
There has been no doubt that CD sales have been declining due to the growth of digital music. Well, CDs are now being flanked by an old format: vinyl. Although vinyl LPs have always enjoyed a niche popularity with dance djs and indie rock fanatics, large mass-market retailers like Fred Meyer are starting to stock vinyl versions of albums in response to broad increasing consumer demand for the "obsolete" format. Though vinyl enthusiasts claim that the analog sound from records is of higher quality than that of their digital counterparts, audiophiles are not necessarily the ones leading this resurgence in vinyl demand. Consumers like the larger format's liner notes and the nostalgic experience of owning and playing a vinyl LP -- both things that cannot be replicated with the digital version of a song. Unlike the declining sales of CDs, Vinyl LP sales are expected to grow 60% this year over last year. However, the actual volume of vinyl sold (1 million albums sold versus 450 million for CDs) is very low, so clearly the resurgence is not an indication of a shift in consumer's primary demand. That said, as more consumers are exposed to the music, the market for related non-digital goods will grow, and the increasing demand for vinyl albums is yet another indication of this trend.

Grammy winning record producer says CD quality isn't good enough
Producer T Bone Burnett talked passionately about sound quality, or lack thereof on a radio program, Soundcheck, from WNYC on Monday. Turns out Burnett's no fan of CDs or downloads, stating that CD's inadequate sampling rate loses too much of the sound he heard while making and mixing records. He put it this way, "We've been fighting digital sound since it came out twenty years's gotten to a place that's harder to listen to."

To fix the problem Burnett wants his future projects, like the new John Mellencamp album he produced that's due in July, to come out on DVD-Audio, with a bevy of formats including 24 bit/96 kHz WAV files, uncompressed 16bit/44.1kHz files, AAC, and MP3, so you can pick the level of fidelity that works for you. Burnett claims you'll finally get to hear the music as he intended when he made the record in the first place. "It's all part of what makes music feel good."

Disney busts out of iTunes ghetto, tries on-demand experiment
While the existence of P2P networks has yet to force open the vault, Disney has made other concessions to the modern world, including the creation of oddly-enticing MMOs for teens and kids. But when it comes to one of the company's core assets—movies—Disney has in some ways taken a safer path. It has partnered with iTunes, where it managed to move four million movies in two years, but it hasn't yet embraced the brave new on-demand streaming video culture that has grown up in the past couple of years at sites like Hulu and networks like ABC and CBS. Hulu, in particular, now offers a wide range of films (with the requisite ads) for streaming whenever you need a cinematic fix.

Disney has now announced its own foray into the world of streaming, though it will keep total control over the experience and will tie it to the Wonderful World of Disney show on ABC. Here's how it works: seven films are shown on TV throughout the summer, and free streaming versions of the movies are available from Monday to Friday of the following week. What's more, the films appear to have no ads apart from a single pre-roll advertisement. Finding Nemo is streaming throughout this week, and when I checked it out, I was treated to an upfront Cocoa Pebbles Cereal ad, which I'm told is "part of a good breakfast." Ugh. Once that was out of the way, though, I could watch the entire film, in fullscreen, for free. Quality was good, though no one will mistake this for a DVD.

Yahoo! Music Doesn’t Want You to Forget the Lyrics
Yahoo! Music is testing the waters with a few such options: offering lyrics to “tens of thousands” of songs through Gracenote’s Lyrics Program; and FoxyTunes, a browser plug-in that essentially takes control of any media player to locate additional and related content. Both offerings are part of a complete redesign of the company’s music Website, which provides, in addition to digital music, content like music videos (more than 17,000), nearly 100 streaming radio stations, concerts, music news, and blogs. FoxyTunes, available as a download at, is a plug-in that is compatible with the Firefox and Internet Explorer browsers. Once downloaded, it allows you to change tunes or other content from virtually any media player without having to close your current browser window.

Yahoo! Music’s homepage now includes on-demand music, videos, themed radio and video stations, and exclusive artist features. Users will be given music video recommendations based on an accumulation of their ratings, tastes, and interests. An embedded music player has also been added so users can post their favourite videos on their own Websites or blogs; and a drag-and-drop video playlisting tools makes it easy to create personalized video selections. Concert listings will also be provided via a wiki.

The Bargain Bump
When MP3 began running its daily "blue light special," I assumed it would feature older, back-catalog titles. But some of the bargain albums are recent, big-name releases -- today it's Madonna's Hard Candy album for $3.99.
I'd love to find out exactly what kind of bounce is getting with these daily specials, though it seems pretty clear that the reduced price is moving some additional units: As of this afternoon, the album is #7 on Amazon's top mp3 albums chart, but it's only in the #50 spot over at the iTunes store...

Court Rules That Selling Promo CDs Is Perfectly Legal
There was a big win for copyright and the concept of the first sale doctrine today, as a court has ruled that record labels cannot stop the sale of a promo CD just because it's stamped with a message that says "not for resale." We had discussed this case last summer, when it was first filed. Universal Music was trying to prevent a guy selling promo CDs on eBay. He had bought them at various music stores. Universal claimed that because the CDs were stamped with that "not for resale" message, they really retained ownership of those CDs and no one could sell them. This would go against the very concept of the first sale doctrine, and, thankfully the court agreed, trashing Universal's weak claim that just by writing a note on any piece of content, it could ignore copyright law and retain ownership of the good forever.

Tuesday, June 10, 2008

snapshot 6/10/08

Bertelsmann wants to sell Sony BMG stake to Sony
German media group Bertelsmann is in talks with Japanese partner Sony on the sale of Bertelsmann's half in their jointly owned music company Sony BMG, a newspaper said Tuesday. Each has owned half of the music publishing firm since 2004, and Sony has an option to buy should Bertelsmann decide to sell its stake, the Frankfurter Allgemeine Zeitung newspaper said, without identifying its source.

SanDisk buys MusicGremlin for music service
SanDisk today said it has bought out MusicGremlin for an undisclosed amount. The deal is meant to give the Sansa player manufacturer access to the smaller company's still rare direct-download subscription service, which allows members to download an unlimited number of songs each month to the player itself via Wi-Fi rather than first transferring them to a PC. The features will have a "key role" in future Sansa devices, according to SanDisk's Sansa Senior VP Daniel Schreiber.

The California company briefly tried offering a similar feature in the past through its Sansa Connect player, which tapped Yahoo's then-active unlimited music subscription service for nearly the same functionality. The closure of Yahoo's service this year will require SanDisk to search for a new partner for any future projects.
Such features have been considered one of the primary advantages of the MusicGremlin and SanDisk players over rivals; users of Apple's iPod touch can download songs but must pay by the track or album, while the Zune has had Wi-Fi since 2006 but has been limited to temporary song swaps between local users as well as wireless synchronization when the player is docked. Newcomer Chinese firm Haier's Ibiza Rhapsody is currently the only active player on the market beyond MusicGremlin's to allow direct subscription downloads.

DVD retailers increase game sections
DVD retailers are scoring with videogames, but some predict film merchandising may be squeezed as stores make room for the fast-growing category. There has never been a hotter period for the videogame industry, with the largest variety of consoles ever available at one time, note retailers. Next generation Wii, PlayStation 3 and Xbox 360 bump elbows with handhelds Nintendo DS and PlayStation Portable, along with earlier generation PS2. First-quarter DVD spending was basically flat versus the same time last year. Total game sales are up 31% year-to-date through April over the comparable 2007 frame, according to NPD Group.

To get in on the action, several DVD specialists have expanded their game offerings. Virgin Megastores carved out special Microsoft-branded sections in 2007. Newbury Comics, which previously dealt only in used games, last year began selling new titles in about half of its 27 stores. Two years ago, began with a small selection of ‘rated E for everyone’ games. More recently, it has expanded to games in all ratings.

No New Music Download Method On New iPhone
However, at least at this point, the device has no different method of buying and downloading music. Just like the original iPhone, the only way users can access and download music from the iTunes music store is via the WiFi connection. Downloading content over a wireless operators network—which the faster 3G iPhone would certainly allow—generally means sharing the price with the operator, something Apple has been less than enthusiastic about doing.

Stateside Albums: The Sales Story Keeps Getting Worse
US-based album sales are continuing to drop precipitously, according to recent Nielsen Soundscan data. The downward trend is being mirrored globally, part of a worldwide shift away from the physical disc. During the most recent reporting period, weekly sales moved to 7.24 million units in the United States, a 13.4 percent drop from the comparable period last year. The weekly plunge is not an isolated incident, as the year-over-year downturn now stands at 16.5 percent. The comparative data is based on a relatively depressed 2007, one that witnessed a 15 percent album sales decline. The United States represents the largest recorded music market, according to IFPI rankings.

Monday, June 9, 2008

snapshot 6/9/08

As CDs Decline, Wal-Mart Spins Its Strategy
Veteran rockers AC/DC are set to become the next major band to sell a new album only through Wal-Mart Stores Inc., according to people familiar with the matter, a move that highlights the growing music-industry clout of Wal-Mart. The AC/DC deal, however, comes at a time when the retail giant -- the largest seller of compact discs in the nation -- is signaling it may rock the music world by stocking fewer CDs. Such a move is part of a trend that would further accelerate the already steep decline of CD sales as consumers make the transition to digital music.

Such deals exemplify the kind of special treatment Wal-Mart increasingly seeks -- and receives -- from artists and record labels alike. These constituencies are willing to risk their relationships with competing retailers to keep Wal-Mart happy. Unlike the Eagles or Journey, AC/DC is under contract to a major record label, Sony BMG's Columbia Records, which brokered the pact with Wal-Mart and will also benefit from sales there. Columbia's decision to sell a major new release at only one chain has the potential to alienate retailers left out. (One competitor unlikely to complain is Apple Inc.'s digital iTunes Store, where AC/DC has never made its music available.)

Will flash memory cards emerge as the next CD?
This story is about the CD and its likely successor. The music industry - dragged kicking and suing into the 21st century by controversial Internet file-sharing technologies like Napster - is still adapting to the new reality. As more music is downloaded, CD sales have declined for years.

So what gizmo will replace the CD? Or will anything? The iPod and other MP3s, after all, come equipped with memory and functionality that require nothing akin to a disc. If SanDisk Chief Executive Eli Harari has his way, CDs will indeed have a physical replacement: tiny flash memory cards that already plug into many cell phones and other devices.

Labels eye variable pricing for digital sales
Arguably the No. 1 item on record labels' to-do list for the year is, "Establish variable pricing for digital downloads." As luck would have it, the No. 1 item on the to-do list of digital music services not named iTunes is converting their library to digital rights management-free sales. So it comes as no surprise that the labels have made an openness to variable pricing a prerequisite of any DRM-free licensing negotiations.

CDs remain the most popular source of music, at 32%, followed by FM radio (31%) and dropping sharply to paid online music services (8%). Peer-to-peer services follow closely behind at 5%. For those who did pay for music, 33% downloaded between 10 and 50 songs in the six months preceding the survey, while 26% downloaded less than 10.

How that's done is where the real science kicks in, which is why even those labels pushing for variable pricing most aggressively are still only in the test phase. The latest is Warner Music Group (WMG), which last month began a trial of a dynamic pricing system from Digonex. The company's system recommends raising or lowering the price of a track and/or album based on a variety of factors. In some cases, new releases selling very well may get priced higher, but so might catalog items appealing only to the die-hard fan willing to pay more. In other cases, the system recommends lowering the price of even new releases to spur more sales.

According to PassAlong CEO David Jaworski, the system on average priced full albums $1.18 less than what other services were selling them for -- between $4 and $6. Singles pricing also fell on average. However, revenue from the tracks included in the program increased an average of 122%, with some individual singles' sales spiking up to 500%.

Microsoft Looks To Improve Windows Mobile Music
Microsoft is well aware that one of the key allures of Apple's iPhone is its music-playing abilities. To counteract that, the software giant said it will focus on improving the music features on its Windows Mobile operating system for smartphones. Lees said the mobile music market represents a huge opportunity since consumers bought 10 times more music-enabled cell phones than iPods. Other studies forecast the market to hit $11 billion in three years.

Secret Life of Bebo’s online drama
Bebo is linking up withUniversal Music to create an online drama based on the music industry as part of a broader effort by the social networking site to bolster its music offerings. The Secret Life of Sam King, will tell the story of a junior Universal employee who starts her own record label and will feature artists and music from the world’s largest record company.

Lil Wayne & Universal Embrace Musicane
Universal Motown artist Lil Wayne will sell downloads of is new release, Tha Carter III directly to fans via his website, blog and social network pages using the Musicane widget - a viral player with embedded commerce capability. Musicane's network of websites, widgets and media players. To date, Musicane has generated over 50 million impressions and created incremental retail sales around album release campaigns of up to 55%. Recently, Musicane garnered attention for its distribution of Saul Williams' newest album The Rise and Fall of Niggy Tardust. Nine Inch Nails frontman Trent Reznor came out in support of the company's distribution services in an interview with New York Magazine.

Lil' Wayne's Musicane widget will be posted on all of his official sites offering fans a chance to buy the entire album and/or individual songs directly from his page. The player will also stream previews of the album, promotional interviews and, in the immediate future, merchandise and other products. The digital music downloads sold via Lil' Wayne's Musicane will be 320 kbps DRM-free MP3's.

Radio’s Popularity Declining Unevenly
Over the last 10 years, the average share of Americans listening to radio at any given time has shrunk about 14 percent, or 2.3 percentage points. Teenagers account for a well-recognized chunk of that decline. But Larry Rosin, a radio consultant with Edison Media Research in Somerville, N.J., points out that college graduates are also far less likely to listen to radio than nongraduates, a gap that has widened with time.

Rap star Ludacris launches online record label Wemix
Christoper Bridges, the rapper and actor better known as “Ludacris,” has put his celebrity power into an online music community called Wemix. The recently launched startup isn’t your run-of-the-mill music site. It’s a community for unsigned talent in the music industry — singers, songwriters, rappers, musicians and producers — who can register, create profiles and upload their original music. Users can offer tips and pointers, as well as collaborate on new songs. And recognition as a top performer on Wemix could get an artist a chance to collaborate with well known artists (like Ludacris himself) and jam out demos.

CBS spins digital record label
CBS will launch a digital record label in January, signing artists with the goal of breaking them via television show placement, iTunes and the Eye web's broadband channel. CBS Records will be launched primarily utilizing the existing infrastructure of CBS Entertainment and CBS Interactive. It will operate as a newly created unit within the entertainment division based in Los Angeles. The label will debut with three artists -- Boston rock act Senor Happy; Will Dailey, a John Mayer-ish singer-songwriter, also from Boston; and P.J. Olsson, an established indie-rock artist -- and is looking to sign another five acts in the first year.

Reading into Kindle, Sony Reader numbers
Are electronic readers really getting that big? An Oxford University Press executive crunched some numbers, and he says combined sales of’s Kindle and Sony’s Reader Digital Book (what a name) will reach 1 million by the end of the year. He came to that conclusion by looking at sales numbers of electronic books as well as the e-ink screens that both readers use. And, he points out, some “good old-fashioned guess-timation.” And hey, what about reading books on cell phones?

Friday, June 6, 2008

snapshot 6/6/08

Paying for free content
This, of course, is what a lot of folks--whether as a way to justify music piracy or otherwise--have been saying for years about the business model for music. It's (supposedly) OK if you can't sell a lot of CDs (or iTunes downloads) any longer. Krugman notes that, according to a recent Rolling Stone article: "Downloads are steadily undermining record sales — but today’s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through 'publishing, touring, merchandising and licensing'."

Sony Completes Acquisition Of Gracenote
Sony has completed its acquisition of Gracenote formerly known as CDDB. Gracenote’s existing business will continue to operate separately, and Gracenote will continue to develop new technologies in existing as well as new areas of operation. The senior management team will remain with the company. Gracenote powers leading services including Apple iTunes, Yahoo! Music Jukebox, Winamp; home and automotive products from Alpine, Panasonic, Philips and Sony; and mobile music applications from Samsung, Sony Ericsson, KDDI, KTF, Musiwave, and others.

Coldplay's new Capitol album Viva La Vida
which will be released June 17 is the #1 pre-order in iTunes history. Insiders feel it's a lock to beat the 140k first-week sales record set by Jack Johnson's Brushfire/ Universal Republic album, Sleep Through the Static, set in February. (HITS via EMI)

Tunecore Cuts Some Fees
Starting June 20th, flat rate digital distributor TuneCore will deliver a single track into any 11 digital stores of the customer's choice for a flat rate of $9.99. Current stores include: iTunes US, iTunes Canada, iTunes Japan, iTunes Australia/New Zealand, iTunes UK/Europe, AmazonMP3, eMusic, Napster, Rhapsody, LaLa, and Groupie Tunes. Shockhound and Amie Street will be added in the near future.

Warner Music Group pulls catalog from
Warner Music Group has pulled its entire catalog from, a company spokeswoman confirmed Friday. Warner Music would not comment on the reason for leaving, but the label's departure is certainly a setback for the social-networking site. Warner was the first of the major labels to do a deal with offers an on-demand streaming service that's free to members but has been seriously hamstrung by limits placed on song playback. At rival Imeem, users can listen to free streaming music as many times as they want. Silicon Alley Insider reports that Warner Music licensed its music to on a month-to-month basis and hasn't renewed it.

Thursday, June 5, 2008

snapshot 6/5/08

Review: Netflix Player vs Apple TV
Roku's new dedicated box for streaming content from Netflix's Watch Instantly service offers a fairly large but somewhat eclectic variety of decent quality movies and TV programs at a very reasonable price, particularly for existing Netflix subscribers. While frequently pitted against Apple TV, the two products are actually more complementary than directly competitive. Here's how they stack up.

Qbox Indexes Music Of Social Web
Now in beta, Qbox indexes the music on MySpace, YouTube and Bebo and empowers users to search, organize, and listen to the entire catalog of music available through a single point of access.
  • Qbox's Qplayer is an ultra-light download and unobtrusive desktop player that provides on-demand access to over 21 million songs from MySpace, YouTube, and Bebo - with more supported sites to come.
  • Meanwhile, offers library and playlist management, and acts as a collaborative database of streaming music, continually edited and improved by users and artists.