Circuit City + Napster

Ah, the definition of insanity... trying the same actions repeatedly while hoping for a different outcome each time.

reviewjournal.com -- PR Newswire Press Releases: "Starting April 29, 2007, consumers can sign up for Circuit City + Napster at http://www.circuitcity.com/napster and gain unlimited access to millions of songs on their PCs and compatible digital music devices for $14.95 per month. New subscribers will receive the first month of access free of charge, along with five free song downloads. Consumers will also find information about Circuit City + Napster and the introductory offer at Circuit City stores nationwide and on Circuitcity.com."

Just a a recap, a few years ago Circuity City bought FullAudio/MusicNow and subsequently let them die on the vine until they sold it off to AOL at the end of 2005. As we all know, AOL brought on several hundred thousand subscribers before deciding to get out of the game and sell those subscribers to Napster. Now, Circuit City does a deal with Napster to try again.

I understand why retailers feel like they need to be in the digital music game, but I don't see the incremental value for the consumers. What's next... Circuit City + Netflix?

TwittyTunes

Another cool addition from our friends at Foxytunes...

TwittyTunes - Post your tunes to Twitter using FoxyTunes, and more...: "TwittyTunes is a FoxyTunes companion Firefox extension - it allows you to post your currently playing songs to Twitter. As a bonus, you can also post the websites you're visiting, videos you're watching and more!"

You should be able to see it in action on my sidebar. I'm listening to The Shins from Rhapsody.com, it is inserting it - along with a tinyurl link to Foxytunes Planet - where you can click and then see a bunch of related content from/about The Shins from YouTube, Wikipedia, Flickr, etc.

Unfortunately, the link isn't clickable from the Flash widget, but if you click through to my account on Twitter, it is clickable there.

SaveNetRadio

Savenetradio.org: "Listeners, Broadcasters, and interested parties - Sign the Petition - Support Internet Radio

Recent government action has dramatically increased the fees internet radio companies must pay to play the music you enjoy and threatens the future of internet radio. You can help, let your voice be heard."




Dear [recipient name was inserted here],

As a fan of Internet radio, I was alarmed to learn that the Copyright Royalty Board has decided to raise music royalty rates by 300 to 1200 percent. For most webcasters the new royalties exceed their revenue and they simply will go bankrupt and stop webcasting.

The silencing of Internet radio would be a blow to listeners like me who enjoy the wide variety of choices only available via Internet radio. This will kill the great diversity of music that I hear over the Internet and all the independent artists who have a difficult time breaking through on other forms of radio.

I respectfully request that Congress look into this matter and take action to prevent it. Please understand that time is of the essence since the new royalty rates are retroactive to January 1, 2006 so they will cause immediate bankruptcies if they become effective for even one day. Please don't let the music die.

Have you signed yet?

Net radio operators lose a round | News.blog | CNET News.com

Sigh...

Net radio operators lose a round News.blog CNET News.com: "In a potential blow to Internet radio services, a federal copyright panel on Monday largely upheld a contentious decision that would elevate royalty fees Webcasters must pay to record labels. "

I'm not sure when the Copyright Royalty Board and the RIAA will realize this, but after spending years trying to encourage legal and royalty paying music services, they are very close to succesfully killing most of them.

When users can no longer get free, ad-supported, music guess where they are going to turn?! Free "gray" services that don't generate a dime for the labels or their artists.... now they just get a bigger piece of the incredible shrinking pie.

Rolling Stone's Community Play

Sounds like Rolling Stone wants to be in the music community space...

Rolling Stone to Jump on MySpace Bandwagon | We Want Media: "Rolling Stone is the 'authority figure' for judging music (just check out all their Wikipedia links), which doesn't reflect this generation's obsession with consumer-generated content. Blanchard plans to launch a separate site that will be a social network for music fans, complete with profiles and the ability to have a say in their 'Best of' lists. Blanchard called it the 'American Idol version of lists.' Let's hope Sanjaya doesn't make it on any of those."

I'm not sure how this will fly... I haven't read Rolling Stone in a long time, and those I know that do don't belong to any social networks. Are the audiences mutually exclusive? Not sure, but RollingStone.com does benefit from a relationship with Rhapsody (where all readers can benefit from Rhapsody's 25 free streams/month). Actually, from what I hear, RollingStone.com is actually developed and maintained by Real Networks, with Rolling Stone editors just providing the content. Could the same type of relationship be in store for this new site? If Real was indeed working on social features, I hope they roll it out on Rhapsody.com first... I'd like some more there.

WiFiPod on the Way?

This makes me think there is some real validity to the rumors around a subscription plan for iTunes....

USI and Foxconn reportedly to make Wi-Fi iPod: "Apple plans to launch new iPods featuring Wi-Fi in the second half of 2007. Universal Scientific Industrial (USI) will produce the Wi-Fi modules and Foxconn will perform as the OEM system assembler, according to Taiwan portable music player component makers."

While it's certainly possible that the WiFi could just be so that users can buy and download directly to their iPod - it's far more interesting when can stream, share or download entire tracks on demand (like the Zing-powered Sansa Connect, MusicGremlin or Zune).

An Apple a Day?

Rumors are popping up again that Apple could move into the subscription music business. I don't know if there is any validity in this, or whether it is just a clever ruse by Intent MediaWorks' CEO to get some press coverage, but either way it's interesting.

Media Biz Apple changes its iTune? «: "Les Ottolenghi, CEO of INTENT MediaWorks, a digital distribution system that works with peer-to-peer networks, said he’s had meetings with people from Apple and he believes the company will announce a subscription service for iTunes within the next six months. “I think Apple is seriously considering a subscription offering right now even though they will probably tell you otherwise,” he said. Spokespeople for Apple were not immediately available for comment."

When this rumor first surfaced a couple of years ago, the whispers were that it would be really hard for Apple to pull off without a major change to their iPod hardware. One of key components of a portable subscription plan is that the hardware must have a secure clock to enforce the business rules (so that you have to keep paying in order to keep listening). The word was that the iPods of a couple generations ago didn't have the secure clock, so a subscription plan from Apple at that time would force all users to upgrade their hardware. Now, a couple of years - and Nano and Shuffle models - later the boys and girls from Cupertino have had time to slowly add the required hardware components to their current product line that this could now be a possibility without alienating their entire customer base. After all, everyone has already upgraded themselves and if they haven't, isn't it just about time?

Why would they even consider it now? Well, subscription services keep you locked into a specific ecosystem - something Apple may be looking for again considering EMI's move (and the other majors possibly following) into unprotected MP3s breaks their existing lock and key of Fairplay protected tracks. Indubitably, it would be pretty cool if the iPhone rolled in conjunction with a subscription service - which by definition supports "sharing" with other subscribers. So, it's feasible that one iPhone user could "beam" tracks to another - and more.

I know lately all I do is speculate about what Apple may be up to, but given their history, when June 11th rolls around there will be far more to the story than just "iPhone now available". Mark my words.

FT.com - Music labels ask Apple to adopt subscription

Feeding the rumor mill...

FT.com / Companies / IT - Music labels ask Apple to adopt subscription: "The world’s biggest music companies are expected to ask Apple to introduce a music subscription service to its iTunes digital media store as part of negotiations to renew their agreements with the computer company.

Those discussions will begin in earnest next week when Universal Music, the largest record company, sits down at the bargaining table with Apple. Universal’s competitors, Sony-BMG, Warner Music and EMI, have either commenced talks with Apple already or are poised to do so, according to people close to the matter."

Where the hell am I (again)?

Sorry for the lack of posts this week. Things have been a bit hectic lately, and I've got a lot of cool stuff I want to talk about (but they aren't quite cooked enough to talk about them).

In the meantime, the interesting stories this week were:

• Amazon/eMusic (rumored) Deal Squashed
• Sansa Connect (powered by Zing) Launched with Yahoo Music
• Goombah goes after Finetune
  
• Finetune launches a desktop player

Enjoy!

How Price Sensitive Are You?

It should be no surprise that the recent EMI announcement has spurred lots of discussions of late. In general, most people I've talked to are excited by the prospect of buying DRM-free tracks. If you take subscription models out of the discussion, you'd be hard-pressed to find anyone who wouldn't want more rights and freedom associated with the content they buy, regardless if they ever plan to exercise those rights.

The real nut of the discussion is whether you think it is worth a 30% premium. If I bought tracks (which I don't because a subscription service better serves my needs), I think I would gladly throw down another 30 cents on each track. Or - as the labels indubitably hope will happen - I'd just buy the whole album which are offered sans DRM without the premium.

But, I think the stipulation above is the key to it all... for people that currently buy tracks, I think they will pay the premium. The real question is, will those people that don't buy pay more for the same rights and content they currently get (for free). This is very similar to the recent announcement about Rhapsody raising their prices. It's a near-term win in that they will generate more revenue out of their EXISTING users. But I'm not convinced either will actually generate more users (certainly not the Rhapsody price change).

I recently read an interesting paper by economist Will Page arguing that the price of recorded music is quickly moving towards zero. I can see the logic in the argument, but it got me wondering... we, as consumers, seem to love to pay for things that are virtually free. How does the music industry learn from this?

At work, there is free coffee provided for those who want it. Yet, everyone goes and pays $2/cup for Starbucks. Same for water.... their are water fountains all over this country. Remember when we used all drink from them? Now everyone walks right by the free water fountains on their way to pay $1/bottle for the same stuff. Why do we do this? There is some perception that the quality is better for these premium products, even if that's not the case (Consumer Reports rated McDonald's coffee higher than Starbucks, but which do you drink?).

The problem for the music industry is that virtually no one cares about audio quality (in terms of bitrate), and even less can tell the difference - particularly when listening through a pair of 20 cent earbuds, or even a $200 "home theater in a box" system. There are people who claim that audio quality matters and that they can tell the difference between 192kbps MP3s and 128kbps MP3s. Yet, if they really cared about audio quality they wouldn't be listening to MP3s in the first place (it is a very lossy compression scheme). Freedom, portability and interoperability trump audio quality every time.

Don't get me wrong, I applaud EMI and I hope that the other majors follow suit. Actually, I think the other labels *have* to follow suit for the consumers to benefit. Having different content with different rights is going to confuse the hell out of people in the near term, and unfortunately the labels suffer under the delusion that consumers know and/or care what label an artist is on (and what that label's parent company is). It's like asking a moviegoer what studio put out the movie they just watched. Why would they care?

I don't claim to have the answers, but I certainly have a lot of questions....

Player of the Day

The song, by Paolo Nutini, is not bad, but the real star is the snaggable flash player.

Napster Passes 800K Subs

It seems like Napster's customer acquisition strategy is paying off for them. First they scooped up Virgin Digital's subscribers, then the 300,000+ subscribers that were near and dear to my heart...

Napster Offers Enthusiastic Revenue, Subscriber Snapshot — Digital Music News: "For Napster, the AOL Music Now acquisition helped to transform the subscription total completely."

This puts them out front in the subscriber race, followed by (in my approximation) Rhapsody, Ruckus, Yahoo Music Unlimited and MTV's Urge.

I actually don't think the shakeout is done yet. I'm guessing that we will see some more subscriber fire-sales from companies that don't want to invest anymore money chasing customers.

The Other Shoe: Amazon & eMusic?

Is the other shoe precariously dangling? Is it possible that all of this happens at once, or is this some cruel April Fool's joke that has gone on a day too long? Hypebot is now reporting that Amazon could buy (or have already bought) eMusic in the next day or so.

hypebot: Has Amazon bought eMusic? What Announcement Does EMI & Apple Have Planned For Monday Morning?: "The chatter is hot and heavy again that #2 digital download site eMusic is very close to being sold. Speculation is flying hotter than ever before that a sale is virtualy complete and that Amazon is the purchaser. Some even have an announcement happening on Monday or Tuesday. Neither company responded to Hypebot's weekend inquiries for comment."

The timing makes sense. Once the labels start selling DRM-less content, then they can quickly turn on an iPod compatible store (which would undoubtedly sell even more iPods). As for as a competitor goes, Amazon is probably the most appealing to Apple, because even if they lose (or song sales), the win (on hardware sales).

What a fun Spring this is turning out to be...

EMI, Apple & Free Range MP3s

Thud. That's the sound of the first shoe dropping....

EMI Music Launches DRM-Free Superior Sound Quality Downloads Across Its Entire Digital Repertoire

LONDON--(BUSINESS WIRE)----EMI Music today announced that it is launching new premium downloads for retail on a global basis, making all of its digital repertoire available at a much higher sound quality than existing downloads and free of digital rights management (DRM) restrictions.

The new higher quality DRM-free music will complement EMI's existing range of standard DRM-protected downloads already available. From today, EMI's retailers will be offered downloads of tracks and albums in the DRM-free audio format of their choice in a variety of bit rates up to CD quality. EMI is releasing the premium downloads in response to consumer demand for high fidelity digital music for use on home music systems, mobile phones and digital music players. EMI's new DRM-free products will enable full interoperability of digital music across all devices and platforms.

I've seen other stories saying that The Beatles catalog is *not* included in this intial release, but I'm sure as the story continues to develop today we will learn more.

I made a prediction a couple of months ago about "The Perfect Storm" involving Apple, EMI and The Beatles. I originally predicted this to all happen in February, but know I have a sneaking suspicion that the June 11th iPhone release date would make a great day to announce The Beatles catalog availability...

ACM Recommender Systems 2007

I have the honor of participating in the upcoming ACM Recommender Systems 2007 Conference as a member of the Industry Program Committee, which at this point also includes:

• Francisco J. Martin (co-Chair), MyStrands
• Todd Beaupre, Yahoo! Inc
• Rafael Camargo, Motorola, Inc
• Maikki Frisk, Nokia Corporation
• Jason Herskowitz, AOL Inc
• Kaushal Kurapati, Ask.com
• Dominic Pride, France Telecom, SA"

To learn more about it, or if you or your company is interested in particpating, you can find more info here.

Rhapsody Raises (?!) Prices

You guys know I am a big fan of many of the new free on-demand streaming offerings that are popping up out there (Streampad being my current fave). Most of these do the hard work of scouring the web for the content, aggregating it, and presenting it to you for easy consumption.

On the back of this trend, Real goes and does exactly the opposite of what most would expect, they are *raising* prices for their Rhapsody streaming service.

mediaor: "For the first time in six years, Real is raising the price of a Rhapsody Unlimited subscription (without portable playback privileges) from $10/month to $13/month, although users who spring for a year-long commitment to the service can lock down the current price, according to an email sent to subscribers last night."

I don't doubt that this will generate more short-term revenue. Most of their current subscribers will stick around, and now Real will get a couple more bucks a month for each. But, I'm not sure maximizing revenue out of a relatively small audience is the best way to go. Maybe this is part of a larger strategy (I'm sure it is). As an upsell "ad free" tier from a free, ad-supported, service could make sense. Maybe they will normalize to a single paid tier and give everyone portable support - generate some sales for a particular device.

Now that I think about it (gotta love stream of consciousness blogging), this could be something they are being forced to do by the labels. The new class of wi-fi connected devices (from Nokia, Sandisk and others) put the traditional pricing tiers into a sort of no-man's land. The labels want more money for portability (hence all the "to go" tiers are an extra $5/month), but we now live in a world where you don't need "sync" licenses for your content. You can stream it directly to your Wi-Fi connected device. This enables the same use case that the labels want a premium for. This was of course a short-sighted distinction of tiers by the record companies. When does a PC become a "mobile" device? What is a UMPC? How about the OQO? What about a phone that runs a heavy OS (e.g. Windows Mobile)? Those lines continue to blur, and now we've reached a point where you can no longer tell them apart.

As I'm writing this, I'm guessing that a formal announcement and launch of the Sansa Connect (powered by Zing). That would be pretty sweet actually, I'd buy that...

FoxyTunes Planet launches

For those of you that didn't check out the Foxytunes Planet beta, you should check it out now that it has launched.

FoxyTunes Blog » FoxyTunes Planet launches: "Each page on FoxyTunes Planet aggregates music information and rich media from all around the Web and allows you to instantly access all the great things that are out there – be it artist radio stations, recommendation services, videos, photos, reviews and so on."

For my detailed coverage of Foxytunes, you can find it here:

http://globallistic.blogspot.com/search/label/foxytunes

MediaMaster - Xdrive for Music

MediaMaster looks like a fairly standard remote storage service with a 2.0 tune up. The video says it all.



I was getting errors when trying to upload the assets, although it did a good job of matching the metadata to go and pull the album art. Once you get it up there, you can then embed various playback/playlist widgets into the site of your choice.

My problem with this use case (and most remote storage solutions) is that it is a fairly high-involvement ask of the consumer. You have to manually keep your remote storage in sync with your local drives if you want your latest stuff up there and available. Not a big deal if your your library doesn't change much, but if you download a lot this can quickly turn into an unusable solution. Xdrive doesn't quite have the widgets and singular music focus, but they do have an auto-sync utility that you can set to make the task much easier.

Subdizing Music Subscriptions

This deal would be far more interesting if it meant that AT&T subscribers could stream any Napster content directly to their phone, but subsidized subscription pricing for all-you-can-eat sideloaded content is a good start.

AT&T Teams Up With Napster, Delivers Access To 3 Million Song Tracks Across Multiple Screens, Devices: "Strike up the band. AT&T Inc. (NYSE: T) and Napster (Nasdaq: NAPS) today announced a new offer that gives customers free unlimited access for one year to more than 3 million song tracks through Napster To Go(R) -- a $180 value -- allowing consumers to customize playlists on their PC and seamlessly transfer favorite tunes to compatible wireless phones and music devices. This move further blurs the line between communications and entertainment as well as wireless and wireline services."

This is what the subscription services need to really start getting some traction. Virtually "invisible" billing for their music. Bundled into their bill as just another line item.... caller id, data plan, music, etc.

Ultimately, I think it would be interesting to see new drop-dead-simple pricing tiers to exist.

1. Stream anything you want for free (ad supported and/or with the premium buried in the wireless carrier's data plans)
2. Download anything you want (unprotected MP3) for $1/pop for sync/burn/offline access
   

If you want to get crazy, then offer an ad-free version of the streaming service for a few dollars a month. But, I think if someone could pull off a model they'd really have a value proposition that would really resonate with consumers. It's basically the iTunes model but with full-tracks instead of 30-second samples, that is accessible from a web browser, and works with any/every device. Isn't that everything you could ever ask for?

iRack

Speaking of Apple and Steve Jobs, someone forwarded me this spoof today from MadTV. Enjoy....