January 12, 2010

NCR Corp., MOD Systems Launch MP3 Kiosks

NCR and Mod Systems announce MP3 kiosk. Targets small MP3 players which would seem to be a relatively static market compared to smartphone generation. This is one of those apps that has teased the industry for years but has always been eclipsed by next tech/social wrinkle.

LAS VEGAS — For NCR Corp. and MOD Systems, movies were just the beginning.

The pioneers of digital movie kiosks launched a new kiosk Jan. 11 that offers 5 million DRM-free MP3 downloads to SD cards, USB drives, and even directly to portable music players.

“We’re going to roll this out very widely in 2010,” said Anthony Bay, chairman and CEO of MOD Systems, during the International Consumer Electronics Show in Las Vegas. “We’ll be putting these out faster than we did the movie kiosks.”

He said the companies are looking at high-traffic areas to place the music kiosks, like airports, convenience stores and supermarkets, in addition to media retailers.

“The rate of decline in CD sales is consistent with diminishing retail shelf space for music, which drives consumers to look online for music purchases and takes retailers out of the digital music growth opportunity,” Bay said about the market for the kiosk technology.

Rest of article

Posted by staff at 10:31 AM

March 09, 2009

Music download to iPOD

willie.jpgVideo: Bob French of Mix&Burn does a nice demo of the new FYE kiosk at PMA demonstrating download to iPOD at kiosk. Video link
Posted by staff at 12:52 PM

February 26, 2009

KIOSK Information Systems and Mix & Burn release new MP3 music download service for kiosks

Louisville, CO – February 26, 2009 -- Music on the go is about to get even more rampant with the announcement of a recent contract between KIOSK Information Systems, Inc. (KIOSK) and Mix & Burn, LLC. The agreement affords new levels of self-service download functionality – specifically, KIOSK is now offering a full DRM-free content library with direct to device download on a self-payment / self-service kiosk.

Even the most demanding music buff can have a selection field day in the Digital f.y.e. Music Store, powered by mix&burn®. The kiosk’s track library features three million DRM-free MP3 tracks from all the major labels, including Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI Music. Indie artist fans can select content from the largest Indie aggregators including IODA, The Orchard, and CD Baby. It’s the equivalent of a cow in a content cornfield, providing everything from mainstream radio hits to rare & hard to find songs.

Selections made off the kiosk can also be independently transacted on the kiosk – browsing, payment, and direct to device download are all menu driven functions created for consumers in an unattended environment. As transactions complete, the labels and their artists are simultaneously compensated for the use of their content. The MP3 downloads are compatible with the vast majority of iPod® products, USB/memory cards, and MP3 players. Music purchased plays immediately on the device, and transfers easily to add to a user’s home computer library.

Music is the latest feature to be added to KIOSK’s full line up of multifunction café capabilities. Through ZOOX Stations, a KIOSK subsidiary devoted to development and manufacturing of pay-for-use kiosk technology, a single kiosk café can now offer music download, photo printing, internet /email access, office software, and casual user gaming. KIOSK CEO Rick Malone stated, “Adding music download features ultimately enables any broadband-connected kiosk to attract more customers and location traffic by providing continuously refreshed content through digital music downloads. With the new direct to device MP3 format, consumers get instant purchase gratification – three words that go a long way toward feature adoption.”

About Kiosk Information Systems:
KIOSK is a world leader in design, manufacturing, service and support of standard and custom self-service terminals. KIOSK is the OEM manufacturer of self-service terminals for Wal-Mart, USPS, Sony Photo, CitiBank, US Transportation Security Administration, and many other Fortune 500 clients. KIOSK solutions can be found in virtually every self-service vertical market, and are among the most recognized deployments in the world. www.kiosk.com.

About Mix & Burn LLC
Since 2003, Mix & Burn LLC has helped retailers capture the demand of the digital entertainment consumer by operating digital music kiosks in brick-and-mortar retail stores. Mix & Burn LLC provides a content and software bundle, which enables retailers and kiosk operators to instantly offer a huge catalog of digital content in their stores. Mix & Burn LLC customers include chain stores such as f.y.e. and superstores such as Borders.

iPod® is a registered trademark of Apple Inc.

Posted by staff at 08:48 AM

January 06, 2009

Music - iTunes losing DRM going to tiered pricing

Apple announced at final Macworld that iTunes is going DRM-free by end of this quarter. Pricing for songs will be 69 cents, 99 cents and $1.29 and the record companies pick that. Apple joins Amazon in the no-DRM-anymore world.

Apple cuts copy protection and prices on iTunes - The Denver Post

Apple cuts copy protection and prices on iTunes
By JESSICA MINTZ AP Technology Writer
Posted: 01/06/2009 11:10:06 AM MST
Updated: 01/06/2009 12:26:16 PM MST

SAN FRANCISCO—Apple Inc. closed its final appearance at the Macworld trade show Tuesday by cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and disclosing that soon every track will be available without copy protection.

Apple's top marketing executive, Philip Schiller, said iTunes songs would come in three pricing tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.

Apple offered the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management" (DRM) technology that limits people's ability to copy songs or move them to multiple computers. By the end of this quarter, Apple said, all 10 million songs in its library will be available without DRM.

While iTunes is the most popular digital music store, others have been faster to offer songs without copy protection. Amazon.com Inc. started selling DRM-free music in 2007 and swayed all the major labels to sign on in less than a year.

The iTunes updates marked the highlights of Schiller's stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. But Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Apple shares slipped $1.18, 1.3 percent, to $93.40 in afternoon trading.

Schiller also unveiled a Macbook Pro laptop with a larger screen and unwrapped new versions of two software packages for Macs, including the iLife multimedia programs.

For instance, iPhoto '09 can recognize faces and sort photos based on who's in them. GarageBand '09 includes videotaped, interactive music lessons given by Sting and other musicians. Apple also added more professional video editing features to iMovie '09.

Apple's answer to Microsoft Corp.'s Office productivity suite, called iWork, also got a makeover, including zippy new ways to add animation between slides in the Keynote presentation software. And Apple unveiled a "beta" test version of a Web site for sharing documents, iWork.com. Unlike Google Inc.'s online documents program, however, Apple's version does not allow people to edit documents in a Web browser.

Apple said the new 17-inch Macbook Pro, which costs $2,800 and adds to the existing 13-inch and 15-inch models, will start shipping at the end of January. Perhaps the biggest twist is the laptop's battery, which is designed to last longer on each charge—up to seven or eight hours—and work after more charges than older batteries. But the battery will be sealed inside, and the owners won't be able to remove and replace it.

Jobs' decision not to attend Macworld sparked a new round of fears that the CEO, a survivor of pancreatic cancer who has seemed gaunt in recent appearances, was in worsening health. To put the questions to rest, Jobs said Monday he is getting treatment for a hormone imbalance that caused him to lose weight, and urged Macworld attendees to relax and enjoy the show.

Posted by staff at 12:31 PM

January 05, 2009

Digital music kiosks - HMV to keep faith with high street despite collapse of rivals

MUSIC giants HMV are to defy high street gloom by giving two flagship Scots stores a hi-tech makeover and open new shops. Rivals Zavvi and Woolworths have collapsed as music fans do their shopping on the web.

source link

But HMV are to expand in Scotland by reopening branches of indie chain Fopp.

And they want to cash in on the internet revolution by selling downloads, gadgets and concert tickets in their shops.

HMV, who say business in Scotland is booming, plan to introduce hi-tech Next Generation stores in Glasgow and Edinburgh.

Spokesman Gennaro Castaldo said: "You'll still find a comprehensive range of music, films and home entertainment.

"But we'll now introduce social hubs where you can access your favourite music sites or MP3 kiosks to download new songs.

"Using chip-and-pin technology you can listen to virtually every bit of music that is digitally available.

"If you like it you can keep it and the cost will vary between 59p and 79p a track. Many young people download at home but we don't want them to be a lost generation.

"We'd like them to come into our stores and treat them as more of a social space to hang out."

Castaldo added that HMV were keen to revive some Fopp outlets to appeal to indie music fans. Most of the chain's stores closed in 2007 but HMV rescued its Glasgow and Edinburgh shops.

He said: "We're keen to keep the whole spirit of Fopp alive. We want to keep the indie essence and Scottish roots of the store - but run it independently from HMV."

Posted by staff at 12:34 PM

March 20, 2008

People in the News - Andy Egan

Hard to not notice Andy Egan of MaxBox. He's been invited onto the British Olympic council and will work with them to raise the £18,000 needed for each athlete to compete in Beijing.

Source Link

MaxBox’s Egan joins the British Olympic team

Thursday, 20 March 2008
Andy Egan, the chairman of digital retail kiosk firm MaxBox, has been invited onto the council of the British Olympic Association Appeal 2008.

MaxBox, which markets ‘off the shelf’ digital retail services such as mobile top-ups, games and music downloads, was recently bought out of Felix Group PLC by Egan after the firm went into administration.

It has since enjoyed a positive second lease of life and has just signed a distribution deal with TCSJOHNHUXLEY Europe to place 5000 kiosks in casinos and gaming centres worldwide.

In his new Olympic role Egan will be working with the British Olympic Association (BOA) to raise the �18,000 needed to support each athlete that is aiming to compete in Beijing.

100% of the funds raised go directly towards ensuring that UK sportsmen and women will be able to compete on equal terms with the best in the world.

To contact Egan see the MaxBox website.


Posted by staff at 05:53 AM

January 18, 2008

Entertainment Multi-media Kiosks: MaxBox is Back!

Can't keep a good man down! Andy Egan liked the company so much...he bought it back. Andy and his team will be exhibiting the latest kiosk in the MaxBox stable - the US built MaxBox Americano - on the TCS John Huxley stand in ICE on stand number 3000.

MaxBox – He liked it so much….he bought back the company!!

MaxBox Digital Retail Ltd launches at ATEi/ICE 2008, 22nd to 24th Jan

Andy Egan, the ideas man behind the iconic MaxBox digital retail kiosk, gives a roaring kick start to 2008 with a newly branded company.

Andy, founder of Felix Corporation Ltd and Felix Group plc bought back the company from the administrators on 11th January and will be celebrating the rebrand to MaxBox Digital Retail Ltd at ATEi/ICE Earls Court, January 2008.

Andy and his team will be exhibiting the latest kiosk in the MaxBox stable - the US built MaxBox Americano - on the TCS John Huxley stand in ICE on stand number 3000.

Andy Egan is looking forward to taking advantage of the opportunities created in 2007 and moving ahead for a successful 2008:

“I was very frustrated and disappointed about what happened at Felix Group but I firmly believe in the MaxBox business models that my colleagues and I were rolling out. I have been delighted with the response both corporately and personally to the announcement that I am back with MaxBox Digital Retail Ltd to finish what I started, to make MaxBox the pre eminent supplier of kiosk solutions and leader in the digital retail market”


For further info about MaxBox kiosks, digital retail, bespoke kiosk design, digital content licensing, MaxBox lite and for interviews and photography contact Jill Taylor at MaxBox Digital Retail Ltd 01565 831100. [email protected]

Visit http://www.themaxbox.com

Posted by staff at 09:13 AM

January 17, 2008

Music Download Kiosks at Borders

These things just won't go away but then why should Amazon have all the fun? That is a question that executives at Borders Group are asking themselves - and the answer could include an MP3-based download store. "We know that the customer is downloading music," Borders executive vice president of merchandising and marketing Rob Gruen recently told Reuters. "We're looking at how do we incorporate that into the whole process." Borders is currently testing in-store CD-burning kiosks, according to the report.

In fact, Borders may be cooking a number of etailing ideas once its relationship with Amazon ends in April. Currently, Amazon powers online purchases on Borders.com, and both parties split the revenues. An independent Borders destination is currently in beta. LINK

Posted by staff at 07:28 AM

December 11, 2007

Another music download machine concept bites the dust?

Article in Manchester Evening News in U.K. lays out scenarios for Andy Egan and Felix now that they are re-evaluating business model and Egan has stepped down.

Has Andy's luck finally run out? - Business - News - Manchester Evening News

Has Andy's luck finally run out?


HE has always lived life to the max, but his dream of creating an international phenomenon with his digital retail kiosk, has come crashing down.

Andy Egan, a former stuntman and promotions king, quit as chief executive of the Felix Group, after differences over strategy emerged between him and chairman, Richard Rose.

Now, the future of the company he founded back in the late 1990s hangs in the balance after a statement to the stock market by Mr Rose he had begun a `detailed review of the viability of the group's business model' sparked a major sell-off of the its shares.

The stock tumbled 80 per cent and shares in the Rostherne-based group were suspended last week. At the same time it was announced Mr Egan was stepping down.

Sources said there had been a `difference in view' between Mr Rose, who had recently taken on an executive role, and Mr Egan over the group's future and viability of its leading product, Max Box.

It is a retail kiosk with cashpoint, digital photo processing, gaming and shopping functions, such as ordering flowers.

Mr Egan believed Max Box was going to be an international hit because, until its launch, consumers had access to digital services such a photo processing and mobile-phone top-ups `but nobody had put it all in one box' and it offered retailers a `100,000 sq ft megastore from one square metre'. He even had his sights on cracking the North American market through licensing deals.

It was a concept the City and investors bought into - Mr Egan managed to secure private equity investment before Felix reversed into Chestn ut, a shell set up by serial AIM entrepreneur Michael Edelson. It floated in 2004 at 20p per share with a market value of £24.7m. Shares rocketed to more than 70p, but later nose-dived to around 4p. Mr Egan has said the major fall, which wiped £50m of the company in one day, came when it announced that a working partnership with Alliance & Leicester had lapsed, which he claims was misinterpreted by the institutional investors as collapsed.


The stock recovered slightly - buoyed by announcements that retailers were trialling the Max Box.

In June of this year, it announced Odeon Cinemas was trialling it in 19 venues, with a view to rolling out nationally.

In October, it issued an upbeat statement announcing a deal with T-Mobile to trial Max Box in 18 stores, while Mr Egan's dream of breaking into the US market seemed closer when it secured a licensing agreement with US group Kiosk Information Systems. The granted it the right to install Felix software on its own kiosks worldwide. The group also signed a licensing deal with ABK Group, which provides leased laptops to university students and staff. A PC version of the Max Box was to be incorporated into 1,600 laptops.

At the time, the group acknowledged the deployment of kiosks into shops had been slower that anticipated, 120 had been installed by October 2007, but after raising £4.15m in funding, it had started to generate more income. In the year to May 31, turnover was only £81,000 with pre-tax losses of £5.4m.

However Mr Rose seemingly does not share Mr Egan's faith in the long term viability of Max Box and said: "We have been placing trial kiosks with various high street multiples in order that both parties may evaluate the commercial returns.

"We have also been enhancing and adding applications to the portfolio of Max Boxes already established with the objective of achieving a near-term break-even position.

"The results of these initiatives have been disappointing, particularly when the cost and time of providing central support and marketing is taken into account."

Mr Rose has asked KPMG to carry out a review of the business model, and it is hoped it will be completed this week.

Mr Egan began his career as a stuntman after being persuaded by a BBC camera crew to ditch his canoe and go down a white water river on a lilo

During the 1980s, he worked on the Noel Edmonds Late Late Breakfast Show. When he lost part of his hand in a firework accident, he decided to move into promotions and set up Sky High Promotions. The business was behind a number of high-profile initiatives including the BT and BP share launches.However, in 1999 he came up with a plan to cash in on the new premium phoneline phenomenon and developed a game called Everyone's a Winner.

It was a simple concept where callers paid £4.50 for a 90-second phone call but were guaranteed to win a prize worth double the cost of the call. Andy then went to games maker Sega and asked them to design a kiosk version of Everyone's a Winner. The kiosk was launched in partnership with the Laurel Pub Company, operator of the Hogshead brand, in June 2004, and a year later the group expanded its products to include digital photo printing and mobile top-ups, and the Max Box was launched. But Max Box has so far failed to set the world alight, users says it is too slow, while others believe the concept was flawed, asking why would people want to take a trip to a cinema or into town to order flowers or download ringtones when they can do it over the web from their homes

Some now believe the Max Box itself will be scrapped and the company will focus on its selling its software through licensing deals.

However others were more scathing. Nigel Mills, director at WH Ireland, says the best outcome the group can hope for it is that someone uses it as a shell to reverse into.

He says: "However, there are plenty of shell companies knocking around that are clean as opposed to inheriting people's rubbish. Felix is the Latin word for lucky - but it looks like its luck has run finally run out."

Posted by staff at 07:51 AM

September 11, 2007

Music kiosks - Starbucks goes wireless with iTunes iPod

starbucks.jpgNext test iteration for Starbucks is now the wireless iPods, iPhones, etc. Announcement on Wednesday was made of new agreement. Starbucks had been one of the pioneers trying music burning to CDs in the past.

Sip Starbucks, access iTunes

By Melissa Allison
Seattle Times business reporter

If you like what you hear over Starbucks' sound system, get ready to download it.

Beginning Oct. 2, the Seattle-based coffee shop chain will launch a program that allows customers to access Apple's iTunes Wi-Fi Music Store with no connection fee or hot-spot login.

A feature called "Now Playing" will show customers what's playing over the sound system and let them buy it from iTunes for the usual price — 99 cents per song.

Music can be downloaded to wireless iPods, iPhones, Macs and PCs with iTunes installed, but not to non-Apple portable digital music players.

The Starbucks-Apple service was announced the same day that Apple unveiled a new version of its popular iPod media player with wireless Internet access: the iPod Touch. The Starbucks icon will light up on the iPod Touch whenever a user nears a Starbucks coffee shop that has wireless access.

Financial terms of the partnership between Starbucks and Apple were not disclosed.

Kiosk test

The wireless music program arrives more than a year after Starbucks ended a long-running test of music-downloading kiosks at dozens of stores in Seattle and Austin, Texas. The kiosks can be used to burn songs onto personalized CDs for about $9 each.

Customers told Starbucks they preferred wireless access, said Ken Lombard, president of Starbucks Entertainment.

Read rest of story

Posted by staff at 01:36 PM

July 16, 2007

Self-Service Technology -- DRM -- the saga continues

A program has surfaced that strips DRM off of tracks purchased from the Zune Marketplace, or traded via Wi-Fi. What makes this more significant is the optional Zune subscription which allows users to download almost all the Zune Marketplace.

From Zunescene.com

These days it's hard to keep digital media locked up in any format. Our Zune ears recently heard tell of a program that strips DRM off of tracks purchased from the Zune Marketplace, or traded via Wi-Fi. What makes this more significant is the optional Zune subscription which allows users to download almost all the Zune Marketplace.

We decided to download and test the Zune DRM stripper for ourselves to see if it actually works. In fact, it was so effective that we have decided not to publish any direct links to it.

Below is a snapshot of a Marketplace track with removed DRM.

zune hack

Posted by staff at 12:17 PM

July 09, 2007

Music Download -- BurnLounge Changes Model

BurnLounge eliminates signup/membership and account management fee's as major revenue and shift it towards sales of actual music downloads. That's a real shift in ROI for them but it makes the FTC happy.

BurnLounge, FTC Strike Cooperative Agreement

BurnLounge has now forged a cooperative agreement with the Federal Trade Commission (FTC), one that involves an overhaul of the current business model. According to BurnLounge executives, the company will eliminate the aspects of its networked sales approach that raised FTC concerns. The BurnLounge model will still rely on a distributed sales structure, though it will not pull revenues from signup and account management fees. Instead, the group will allow sellers to open stores for free, and shift rewards more heavily towards sales of the actual music download commodity. Despite a potential market for paid downloads, the company was previously earning most of its revenue from membership-related costs.

That structure raised concerns that BurnLounge was running a pyramid scheme, and other aspects related to the company incentive program strengthened the case. Shortly after the FTC charges surfaced, BurnLounge quickly triggered shifts in both its leadership and broader model, and ultimately escaped a more involved punishment. "With this hearing behind us, we are aggressively moving forward and will focus on our new free model to help fuel the next evolution of business growth to better benefit our employees, artists, partners and independent retailers," said Grant D. Johnson, the newly-placed chairman and chief executive officer of the company. BurnLounge executives pointed to a formal FTC announcement over the next few days.

BurnLounge, FTC Strike Cooperative Agreement — Digital Music News

Posted by staff at 10:42 AM

June 13, 2007

Kiosks Research - Business Model for Digital Music

Extensive article on Business Week discusses the changing business model regarding digital music and points to eventual destination we think of telcoms and mobile devices.

Digital Music: In Search of Biz Model

Digital Music: In Search of Biz Model
As the Big Four record labels embrace digital downloads they must become more user-friendly and market to the Asia mobile crowd

by John C. Tanner

Once the scourge of the music industry, digital downloads are now officially "the way forward" for the "Big Four" record labels - EMI, SonyBMG, Universal and Warner Music, which together control over 70% of the world's recorded music - now that they have numbers to justify it, anyway.

Two years ago, music labels were making virtually nothing from digital music. By the end of 2005, digital music generated $1.1 billion in revenues in 2005 - almost triple from 2004 - which accounted for 6% of revenues earned that year, according to the International Federation of Phonogram and Videogram Producers' (IFPI) 2006 Digital Music Report.

What's more interesting is that the music industry is well aware that digital music is increasingly becoming a mobile phone play, not least because ringtones - which count as digital music - accounted for 40% of digital music dollars last year. And it's only going to get bigger.

Certainly this isn't news to the mobile industry. The iPod has shown the value of porting digital music to media players, and handset makers have long since set their sights on making phones the default media player of choice for users (see "One of these is the future of digital music", p. 16).

Meanwhile, 2006 has seen a rash of new music services launched by cellcos worldwide. In Asia alone, all cellcos in China, Korea and Japan have music download services, as do most cellcos in Hong Kong, and in markets from Indonesia to Australia. SK Telecom went as far as launching a groundbreaking joint venture with Warner Music last month for a South Korean mobile download service. Others have partnered with third-party music services like Soundbuzz, which has cellco partners in Australia, Singapore, India and Hong Kong.

That's the good news.

The catch is that while demand for digital music is skyrocketing, the business case is still rickety for mobile operators, as well as other service providers that want to offer music download services. Few doubt that there's money to be made from mobile music services. What's less certain is how big everyone's slice of the pie will be, and how the music labels can balance consumer demand with copyright controls that may not always work in the consumers' interests.

The monetization issue is tricky not least because at the end of the day music is just one content purchase option among many, says Marcel Fenez, Asia-Pacific leader of Entertainment & Media Practices at PriceWaterhouseCoopers.

"Music is competing for consumer entertainment dollars from other sectors, and they are all growing much faster," he says.

For example, video games will grow 13% CAGR in the next few years, driven by online and wireless sales, while pay TV content revenues will grow 10%. Sports revenues will grow 8%, and film 6%.

"In terms of content growth, you're in a competitive world, and it's all being delivered the same way - via broadband and mobile," Fenez says, though he does point out that mobile music will be a $1 billion business in Asia by 2010.

However, one chief issue for mobile music services is that mobile music is driven largely by ringtones, not full track downloads. This isn't necessarily a bad thing in the sense that ringtones, ringback tones, music video clips and even music karaoke have been successful to varying degrees.

On the other hand, the full-track model is the one most players across the value chain are chasing.

This has been the case in Korea, Asia's hottest digital music market, according to Philip Kim, managing director of investment and advisory firm IRG Ltd.

"Korean users aren't paying for full song tracks. People spend money on devices, games, avatars, but not music," Kim says, although he does add that music clips do bring in revenues.

Koreans aren't the only ones not paying for full tracks. A March survey from research company Synovate covering key North Asian markets found that while two-thirds of users under 25 had downloaded music, only 27% paid for it. Across all demographics, that figure was 17%. In China, only 15% said they'd paid for digital music.

On the bright side, the same Synovate survey reports that 42% of respondents intend to buy digital music in the next year.

However, for cellcos hoping to offer full-track music services the biggest challenge may not be getting to users to pay so much as acquiring the rights to the content in the first place.

The music licensing regime is almost horrifically complex. Start with the basic premise that every song has at least two copyrights (one for the music and lyrics, and one for the actual sound recording), and the fact that these rights can be held by multiple licensing societies, as well the producers and musicians. Operators that want to license music from, say, Warner/Chappell (the music publishing arm of Warner Music Group) have to obtain separate licenses from at least 25 different collection societies just for the European market.

Ian Chapman-Banks, VP of Motorola Asia Pacific, as well as its North Asia GM of marketing and business development for mobile devices, can testify to the difficulty of acquiring song licenses. Motorola had to get clearances for all of the 10,000 tracks it offers on its MotoMusic.com music download Web site, which launched in China last year.

"It took us a year to get those 10,000 songs licensed," he says.

Chapman-Banks admits that one reason for this was Motorola's inexperience with the music licensing game. "This was a new business for us, so the learning curve was quite steep.

Adding further to the complexity is that the various elements in the music value chain - from labels and publishing groups to operators and even the artists themselves - are still fiercely debating the terms and percentages involved in the digital music business model.

Lachie Rutherford, president of Warner Music Asia-Pacific (and chairman of IFPI Asia Pacific), admits that the current licensing regime is "very complicated and not user-friendly. I don't know how to deal with it, but clearly we'd better think of something."

Luckily, there are initiatives underway to try and simplify the licensing process. Warner/Chappell Music has launched its Pan-European Digital Licensing (PEDL) initiative, under which it hopes to create a one-stop shop licensing service by authorizing a handful of designated collection societies to grant pan-European digital licenses.

Meanwhile, the newly formed Digital Data Exchange (DDEX) - a US-based organization founded by 11 charter members, including the Big Four, Apple, Microsoft, RealNetworks and ASCAP - plans to create voluntary standards that tackle the problem of back-office incompatibility between cellcos, collecting societies, music publishers and record labels, which is "creating a log jam and increasing costs for the transition to digital distribution."

Even so, licensing isn't the only element that's user-unfriendly. The use of DRM and copy-control software remains a controversial point that pits a legitimate need to protect copyright against a smooth user experience. Many users have become increasingly frustrated with the revelation that music they download from iTunes and other music services is not easily transferable to other devices and are often incompatible with other players.

The mobile music scene is likely to be no different. For example, customers of MotoMusic.com can only play their tracks on the first Motorola handset they transfer them to. Also, the songs are encrypted and unlocked using downloaded keys that the users pay for via SMS. The trouble is that if the user changes handsets (or loses the handset), they must pay for another key to listen to the track again.

Nokia's music phones have similar properties, although Jawahar Kanjilal, director of multimedia experiences at Nokia Asia Pacific, says the user doesn't have to be penalized when they change handsets. "Features can be enabled so that if you lose or change your handset, customer service can identify which songs you have already paid for and reactivate them," he says.

However, the bottom line, says Tom Jacobs, director of research for the "Voodoo Sciences" section of Sun Microsystems, is that mobile consumers aren't happy with DRM in practice. And neither, ironically, are the music labels.

"Consumers have been resistant to licensing terms and technologies, and many will be happy with digital music until they buy a new music player and discover that they can't transfer any of the music they downloaded from iTunes onto it," Jacobs says.

Ironically, he says, the problem isn't label greed or paranoia over piracy but the lack of interoperability between proprietary DRM solutions. "The music labels are looking for something better than a proprietary system that locks music onto a particular device."

The even greater irony is that DRM for mobile has been standardized for some time under the Open Mobile Alliance, whose DRM 2.0 standard was finalized last year. However, adoption of OMA DRM 2.0 has been seriously hampered by - of all things - arguments over patent royalties. The MPEG Licensing Authority - one of the two chief patent pools in the standard - has been charging royalties of $1.00 per handset, which many cellcos have rejected as too high.

"That went over like a lead balloon for the GSM operators, which started evaluating proprietary solutions from other vendors that were able to offer lower prices, but then you're back to the problem of interoperability," Jacobs says.

Sun, characteristically, is proposing a federated, network-based approach to DRM as a solution, where DRM rights are tied to a network ID rather than a device. Since digital music players connect to the network either directly or by proxy via a PC, rights can be validated and renewed every so often just by logging on. Sun has also launched Open Media Commons, an open-source, royalty-free model that works independently of any particular piece of software or OS, and is submitting the technology to various standards bodies.

Whatever the solution to DRM, it has to be something that consumers will accept. Thanks to the SonyBMG rootkit incident, some consumers may find any level of DRM unacceptable. However, Jacobs says that many consumers are already coming to terms with some (if not all) of the restrictions that come with digital music.

"If you look at the Apple model, you can only burn a song so many times and people got over it," he says. "I think that as long as it's done right and is as easy and unobtrusive as possible, end-users will accept it more."

User-friendliness applies to more than just DRM - it's also necessary to keep consumers from turning to the file sharing networks and sites offering unlicensed content that make DRM necessary in the first place, says Doug Kaplan, VP of Asia-Pacific at Real Networks.

Indeed, one key finding of the Synovate survey was that 86% of respondents said the music industry could do more to help them get more digital music, such as better searchability,

Consequently, value-add is another strategy being developed by various players in the mobile music value chain to attract users.

"One of the big questions now is, how does the handset become the album experience of 30 years ago?" says Chris White, senior director of global product marketing, music, mobile devices business at Motorola. "Things like rich content, artwork, info on the songs, lyric sheets - we can bring that to the mobile device. We'd like to work with the music labels to learn how to bundle that kind of content, because the download is going to be a complete experience, not just a 99 cent song."

PCCW, which launched its full-track music download service "Moov" last month, is going for a community-based approach to value-add, says Janice Lee, executive VP for TV marketing and content management at PCCW.

"One strategy we're pursuing is to add value to the content that pirates can't, such as personalized playlists and creating communities that allow customers to share songs and playlists with each other," she says.

PCCW is also looking at a converged strategy where its music content is synced with its mobile and fixed-line offerings. Cellcos like SK Telecom, KTF and KDDI have similar strategies in play.

Warner Music's Rutherford agrees that value-add is the way to go, and says that the music labels are now recognizing that the pure digital music format is changing their product line and creating new opportunities in the process.

"The Apple model is boring," he says. "With handsets here, you can get the album if you want it, but you can also get the videos, interviews with the artists and producers, or whatever. Calling this another distribution channel is to miss the opportunities here."

However, he maintains that it's everyone's responsibility to make digital music a success, not just the labels that control it.


* -- Tough competition from games, video and other media

* -- Licensing music is a labyrinthine process

* -- Costly DRM standards = proprietary device lock-ins

* -- Most users paying for clips, not full tracks

And it may not be the iPod - at least not until it gets wireless connectivity.

A report released last month by Yankee Group forecasts that the fate of MP3 players will depend on replacement cycles as markets saturate. By 2008, only 10% of MP3 player purchases in the US will be first-time purchases.

Moreover, the other 90% of sales will be driven by devices that feature voice telephony and Internet connectivity, the report says.

ABI Research has reached a similar conclusion, as mobile phones designed for playing music start hitting the market with greater memory capabilities than ever. Many new handsets support removable flash memory cards with capacities that match or exceed the lower-end MP3 players on the street today. The Nokia N91 comes with 4 GB of memory. Samsung's SGH-i310 has twice as much disk space.

"As the cellular handset becomes the one device that the world carries, the standalone MP3 player may well be left behind," says Alan Varghese, ABI Research's principal analyst of wireless semiconductor research.

Varghese adds that while high-end digital music players are packing as much as 60 GB of memory, there's "a point of diminishing returns beyond which a user doesn't care whether the device can store 2,000 songs or 7,500."

Such data echoes the message put forth by handset makers that have been enabling a range of music features in new cellphones, from Sony Ericsson's Walkman phones to Motorola's new ROKR E2, due for launch later this year. Nokia is also promoting music apps not only via handsets such as the N series of multimedia phones, but also service applications like AirAlbum and Visual Radio, which have been commercially launched in seven markets each.

Handset makers say the numbers are in their favor. Apple is expected to sell 80 million iPods this year, while the handset industry will sell well over 900 million mobile phones - over two-thirds of which will have music player functions.

"The iPod started the wave, but we will be shipping 80 million handsets with music players in them this year, and 150 million with FM radios," says Jawahar Kanjilal, director of multimedia experiences at Nokia Asia Pacific.

Posted by staff at 08:47 AM

May 17, 2007

Music download content to be available via Amazon

Amazon Confirms Digital Music Store Plans, EMI Jumps Aboard. "Every song and album in the Amazon.com digital music store will be available exclusively in the MP3 format without digital rights management (DRM) software," the company stated.

Amazon officially confirmed its intentions to open a digital music store on Wednesday, a disclosure that largely coincides with earlier information. Several weeks ago, executives pointed Digital Music News to an MP3-based destination, one that will launch with or without major label support. That protection-free agenda was reaffirmed by the official Amazon announcement. "Every song and album in the Amazon.com digital music store will be available exclusively in the MP3 format without digital rights management (DRM) software," the company stated. "Amazon's DRM-free MP3s will free customers to play their music on virtually any of their personal devices — including PCs, Macs, iPods, Zunes, Zens — and to burn songs to CDs for personal use." The etailing giant pointed a vague launch date of "later this year," an expanded window that offers more licensing time to holdout labels.

Jumping on board immediately is EMI, which signaled its involvement alongside the broader announcement. The major will offer its entire catalog DRM-free, and tracks will carry higher fidelity levels than conventional, DRM-protected tracks. EMI did not offer details on its pricing plan, though it appears that its downloads will carry an elevated, $1.29 tag. EMI is the first major to join the Amazon play, part of a larger DRM-free initiative. Earlier, the company announced a DRM-free deal involving iTunes, though it remains unclear if the pair will launch this month as planned. EMI is one of 12,000 labels joining the Amazon push, a critical mass that will exert continued pressure on remaining majors to reconsider protection-based strategies. "Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device," said Jeff Bezos, founder and chief executive of Amazon. "We're excited to have EMI joining us in this effort and look forward to offering our customers MP3s from amazing artists like Coldplay, Norah Jones and Joss Stone."

Posted by staff at 07:45 AM

May 07, 2007

research -- Music consumers buying less physical media

Rather than consumers tiring of physical CD media causing accelerated downturn for retailers, a new report proposes that the real reason is that the process of discovery is more often occurring outside the retailer and thus fewer impulse buys. Retailers need to be champions of discovery is solution. Also bigbox numbers.

Aisles have been poorly populated at physical music retailers for years, part of a pronounced shift away from CD purchases. The consumer migration, tame in previous periods, has suddenly accelerated this year, causing a fair amount of anxiety among retailers, labels and distributors. But what exactly is causing consumers to move so aggressively away from physical product? One explanation is that consumers are simply rebelling against a heavily-bundled package, one that forces playlist order and less-desirable album cuts. A highly related explanation is that digital files, and the iPods that house them, represent a far more convenient and satisfying listening experience, one that is more in-tune with music fans today.

Both are strong factors, though researcher NPD recently challenged their importance. "Consumer rejection of the CD is not the cause of the current accelerated sales decline," the group asserted during a recent presentation at the retail-focused NARM in Chicago last week. According to the researcher, deficiencies at retailers are a major source of the problem. The group noted that music consumers are usually discovering artists and songs outside of retail locations, a major missed opportunity. That means far less impulse purchasing, a significant driver of record label revenues across various platforms. According to the findings, just 13 percent of new music buyers make artist discoveries in retailers themselves, noticeably less than figures of 37 percent for traditional radio and 25 percent for personal recommendations. The solution, according to NPD, is for retailers to return to being "champions of discovery," a role that can be achieved by stronger selection, merchandising and promotion. Meanwhile, the deletion of Tower Records from the retail landscape is also playing a role in the downturn, especially for consumers that have not replaced their once-trusty outlets.

NPD Presentation

More Music news

Big-Box Retailers Edging Chains, Independents This Year

Big-box retailers are edging out chains and independents in music sales this year, according to information recently disclosed by Nielsen Soundscan. The data, shared with attendees at the annual NARM convention in Chicago last week, highlights the large and growing muscle that retailers like Wal-Mart now carry. According to the data, big-box - or mass merchant - retailers have claimed 39 percent of sales this year, compared to a 38 percent grab by chains like Trans World Entertainment. Meanwhile, non-traditional retailers retained an impressive 17 percent share, while independents pulled 7 percent. Typically, chains contribute a majority of music sales, though the absence of heavyweight Tower Records is undoubtedly causing the mix to shift.

Last year, both chains and mass merchants finished with a 41 percent share, though historical trends suggest that big-box retailers will widen their lead in the coming years. In 2001, for example, chains retained a 54 percent of total sales, while the big-box sector pulled a far-less impressive 28 percent. Of course, the shares being discussed are for a quickly-declining product, though the bleeding at mass merchants is far less severe. According to the Soundscan data, chains shed 12 percent in 2006, while mass merchants lost a less critical 4 percent. Meanwhile, the asset mix could change substantially depending on how retailers like Wal-Mart approach physical product moving forward. Recent information suggests that Wal-Mart is considering a sharp reduction in product, a response to decreased consumer demand.

Posted by staff at 10:41 AM

April 18, 2007

KIOSKS Case Study -- Music Download Burning Kiosks

Nice writeup on latest deals and developments in the music download kiosk scene. The market still remains unclear as the writer notes but we do have to keep track of these things...

source link

The music-focused kiosk market has been treading water for years, and it remains unclear if a solid business play exists. Even heavyweights like Starbucks have been frustrated by the possibilities,MediaATM largely because of incompatibilities with the iPod and a consumer attraction to home-based music discovery and acquisition. But despite the setbacks, deals and developments continue to emerge. The latest comes from Mediaport Entertainment, a Salt Lake City-based provider of media delivery islands for audiobooks, music, games, ringtones, and other assets. Just recently, the company tied with Power Music, a supplier of workout-related soundtracks and compilations, to push its kiosk solution into fitness centers. The deal leverages existing Power Music relationships, and promised a blend of content from both Mediaport and Power. Gym members can download mixes, and the duo will share a piece of the revenue with the club. "This puts us closer to an anytime, anywhere solution to downloading musical favorites," commented Helen Seltzer, chief executive of Mediaport.

The initiative will run into a number of competitive threats, particularly from iTunes. A typical workout often includes pre-loaded iPod content, pulled from an iTunes synchronization prior to the start of a session. iTunes users can easily createMediaATM playlists featuring high-energy and inspirational songs, though Apple also offers a number of workout-specific mixes through its Nike+iPod initiative. Others will simply tune into any number of televisions planted around the typical gym, though adventurous types may download mixes from Mediaport-powered MediaATMs, especially given the level of customization for body-conscious customers. The group will position 30-minute workouts for $7.99, and individual downloads for 99-cents each. The initial rollout will happen in Utah before a broader expansion in the United States.

Story by news analyst Alexandra Osorio.

Posted by staff at 02:03 PM

April 02, 2007

Technology -- DRM and Apple and iPods

It had been telegraphed in advance for several weeks and it finally happened. iTunes now offers music tracks with no DRM. It's noteworthy that the non-DRM will be offered side-by-side with the DRM version. They will charge more for delivering the song without DRM. DRM is one of the hangnails of the music industry which has crimped sales for last three years.


EMI and Apple will now sell DRM-free catalog on the iTunes Store, according to a joint announcement issued today. The move is groundbreaking, and shatters a previously ironclad commitment to digital protections by the major labels. The decision means that well-known tracks from artists like the Rolling Stones, Norah Jones, Lily Allen, and Janet Jackson can now be downloaded in a protection-free format, an approach that eliminates usage and sharing restrictions. The company pointed to a refreshed product line that will feature "a much higher sound quality than existing downloads," and one that will be "free of digital rights management (DRM) restrictions". Specifically, the label will offer its catalog to digital music stores in a range of higher bitrates, including CD-quality fidelities. According to Steve Jobs, the DRM-free offering will be exclusively unveiled by iTunes in May. Other stores will offer the DRM-free catalog at dates thereafter.

The move represents a major shift, though several asterisks are dangling. The tracks themselves are being branded as "premium downloads," and will carry an elevated price tag above "standard," DRM-protected tracks. Instead of a standard, 99 cent, 79 pence, or 99 euro price tag, the premium tracks will be priced at $1.29, 0.99 pence, or €1.29. Both premium and standard tracks will sit alongside one another, and consumers will have the ability to upgrade their standard versions by simply paying the difference. That approach breaks an iTunes commitment to uniform pricing and format, and conflicts with earlier philosophies expressed by Jobs. But during the unveiling, Jobs noted that the offering means greater choice, and a more fine-tuned offering. "We think our customers are really going to appreciate this," Steve Jobs said. "iTunes will continue to offer its current catalog at the same price, alongside the DRM-free, higher quality versions." Jobs also disclosed that the iTunes Store has now sold more than 2.5 billion tracks.

Nice analysis by Paul Resnikoff

If you thought DRM was complicated, try DRM-free! At least, the brand of DRM-free being spun by EMI Music and Apple. Sure, you can have your freedom, but you have to pay the price! And if you don't know what DRM really is - like so many consumers out there - then you are now confronted with a more complicated iTunes Store. Newbies usually call more experienced friends for help in times like these, but doesn't that ruin the simplicity that Apple is so good at? If a mother has to dial her son at college to figure out why there are two prices for the (seemingly) same track, doesn't that make iPod+iTunes unnecessarily complicated and annoying? Can your grandma really understand what's going on now?

Jobs is famous for being consumer friendly, but the movement suddenly shifted into reverse! During the joint announcement, EMI chief executive Eric Nicoli pointed to research that showed that consumers are willing to pay extra for protection-free music. "In all of our research, consumers tell us overwhelmingly that they are willing to pay a higher price for tracks that work anywhere," he said. But just where did that focus group come from? On the digital streets, the opposite preference is being blared in the billions. Jump onto Limewire, and consumers are strongly expressing a preference for DRM-free tracks at a price tag of $0! Does that make a more expensive offering by iTunes suddenly attractive?

That's not to say that some consumers will pay more. But the number of consumers that will pay more for higher fidelity and flexibility represent a fraction of the current buying public. And the buying public represents a small fraction of the downloading mass. In other words, premium tracks at a higher price will appeal to a niche within a niche. And that sideshow will lessen the impact of iTunes, which gained so much traction based on its uniformity and simplicity.

Sure, Steve Jobs gets a win, and a potential domino effect involving other labels. The move will help to de-pressurize the regulatory standoff happening in Europe, and Jobs has now shifted the focus onto remaining labels Universal, Warner, and Sony BMG. Think that iTunes is non-interoperable? Just pay a little more, and you can dribble your ball on any court! Or, stay within the walls of iPod+iTunes at the existing price.

rest of story

Posted by staff at 11:15 AM

March 08, 2007

KIOSKS - Fast casual dining restaurants go decaf on music kiosks

Nice article on Fast Casual about music download burning kiosks with a little bit of data.

by Bill Yackey * • 06 Mar 2007

Someone once said that as General Motors goes, so goes it with America. While no one is ready to compare Starbucks with the automotive giant, one should not deny the Seattle-based coffee chain its due when it comes to discerning the cultural Zeitgeist.

This may be true especially when it comes to kiosks that allow users to burn custom CDs or load a venti dose of Coldplay onto an MP3 player.

In 2004, Starbucks unveiled digital music kiosks in several of their highest-grossing stores, including numerous locations in their home city of Seattle and in Santa Monica, Calif. At the time of the launch, Starbucks had plans to expand the rollout to 2,500 stores through 2006, but after two years of testing, the company pulled the machines from 35 of the 40 stores that had them.

And while some QSRs have had success in Europe with devices that allow patrons to load up on songs and salads at the same time, attempts in the U.S. have fared no better than the Starbucks deployment.

Is it time to take music-burning kiosks off the menu?

Listening to record stores

John Timmons looks like what he is. Tall, thin, with blond hair as wild and flowing as a Jimi Hendrix riff, he fits the image of a record-store owner. His shop, ear X-tacy, on a trendy stretch of traffic jam in Louisville, Ky., is the perfect backdrop. Music dilutes the noise of CD cases being flipped by listeners scanning for titles. Mixed among the aisles are end-caps with music-themed mugs and toys, and racks with T-shirts that in some places in this conservative town would draw a scowl.

In a nod to the technology that has overtaken his passion since the days of vinyl and large, cardboard jackets, Timmons has installed a Touchsystems listening station at the front of store that lets customers sample clips of CDs. What he does not have, however, is a kiosk for those customers to download their selections for a fee to a CD or an MP3 player.

“If we put a kiosk in, we would have to sell an ungodly amount to recoup our expenses,” Timmons said. “They are very expensive, and the money we would get back for each song would not be very much. I see how money can be made with kiosks, but the financial model doesn’t work for me.”

That is the dilemma facing all potential deployers of music-download kiosks, whether their business model is fast casual or retailer. At the beginning of the decade, the kiosks promised a fun and convenient way for music fans to take advantage of the confluence of digital music, cheap burning technology and the advent of portable playing devices. Users would gain access to a vast library of songs, even those no longer being published. Deployers would have virtually unlimited, “long tail” inventory.

But the promise began to fade as fast as a Britney Spears marriage, however, when the market got a load of a new device called an iPod, and suddenly even technophobic senior citizens could take Barry Manilow MP3s with them when they went mall-walking.

Francie Mendolsohn, president of Rockville, Md.-based Summit Research Associates Inc., believes the kiosks are as out as Kevin Federline. She said that digital media kiosks have already matured to their full potential and have little room to grow.

“It doesn’t look like a terribly promising thing,” said Mendolsohn, who tests and consults on kiosks. “There was a lot of excitement for them at one point, but they won’t last all that long.”

The market for kiosks existed before iTunes began to take over the online realm, but by the time manufacturers got enough funding to ramp up deployment, Apple’s online store owned an 80 percent share in the online-retail market.

rest of article

Posted by staff at 08:37 AM

February 03, 2007

Kiosks Case Study -- music cd mp3 burning in retail

News that Starbucks is evolving its music strategy to "walk into a Starbucks and fill up your MP3 player". Starbucks dropped the CD experiment and instead opened dedicated music section on iTunes. At a talk held jointly by Bloomberg and the Levin Institute, Starbucks' chair Howard Schultz said the beverage giant would soon begin testing and deploying a system that would let its customers add music to their jukeboxes.

source link

Starbucks has been spinning music offerings for years, though the larger strategy continues to evolve and unfold. The coffee giant is notoriously deliberate and slow-rolling in its initiatives, and company executives are open about an ongoing experimentation process. Several years ago, Starbucks installed a limited number of CD-burning "media bars" in various locations, though it remains unclear if that concept will expand. More recently, the company created a dedicated section with the iTunes Store, though Starbucks has yet to offer a comprehensive iPod solution. Part of the reason is that the Apple player exists within a closed system, a puzzle that has confused digital music strategies at a number of companies.

Now, it appears that Starbucks is attempting to wrestle the portability demon. Just recently, Starbucks chairman Howard Schultz pointed to a system that would allow in-store music downloading to portable MP3 players, though additional details were not offered. "Within 12 months, probably, you're going to be able to walk into a Starbucks and fill up your MP3 player with music," Schultz said. That has stirred speculation of just what the company is planning, and whether an opportunity exists for an iPod competitor like Zune. From a larger perspective, it remains unclear if consumers will want to fill their devices outside of their homes, unless the offered content represents a compelling and easy addition to an existing collection. Meanwhile, a shift towards MP3-based sales by major labels would open iPod access, and propel the Starbucks music strategy considerably.

  • Seattle Times "Schultz discusses MP3 potential for Starbucks"
  • AppleInsider "Starbucks visitors to sip iTunes downloads?"

    Posted by staff at 09:37 AM
  • November 21, 2006

    Content Channels - eMusic Hits 100 Million Downloads

    With all the talk about Zune and iTunes, the "no-DRM" solution from eMusic notes that they are nearing the 100 million download mark. Its worth noting the iTunes hit the Billion downloads-to-date mark recently and that the sharing services still see over a billion downloads every week. eMusic delivers its music in Open MP3 format (unlike the Windows WMA DRM or Apple's Fairplay).

    Independent digital download store eMusic is nearing the 100 million-mark, a milestone that should arrive within "the next few weeks". eMusic started its download ticker on November 1st, 2003, the point at which the company moved away from an unlimited monthly download model. Ahead of the accomplishment, the company has tapped pop rock group Barenaked Ladies to pen a song for the winner, a unique digital commission. The lucky downloader will also receive a lifetime eMusic subscription, and inclusion within an upcoming print advertising campaign.

    eMusic has long billed itself as the number two paid download provider behind iTunes, and the latest tally helps to validate that claim. eMusic is catered towards a targeted audience, one that prefers lesser-known indies over blockbuster artists and smash hits. Depending on the specific tier, the company offers its users a fixed number of downloads per month, part of a hybrid subscription and download model. And eMusic offers all of its tracks as open MP3s, enabling iPod compatibility. Meanwhile, Apple has crossed the 1.5 billion mark on its iTunes Store, a number that eclipses eMusic and other competing download providers. Others like Napster, MSN Music, and RealNetworks have not shared download figures.

    Posted by staff at 07:18 AM

    October 26, 2006

    Music kiosk - MOD signs a new retailer

    MOD Systems signs a new retailer (identity undisclosed but not in Minneapolis) and has new method for downloading from kiosks to handhelds wirelessly (and still satisfy DRM). Secure DVD burning is now facilitated and they have a new incoming board member (Warren Lieberfarb known as father of DVD).

    Retail Kiosks Dispense Custom Digital Tunes

    By Laurie Sullivan, TechWeb Technology News

    CDs and DVDs hogging retail shelves could go the way of free glassware at the gas station.

    MOD Systems Inc. has developed software that lets consumers download and pay for digital content from kiosks directly onto portable media players--with no cables attached.

    The software for kiosks will serve up music, movies and video games and more, but MOD Systems Chairman Anthony Bay said the first undisclosed retailer to deploy the system early next year will offer tunes. The news was released Tuesday at the Digital Hollywood Fall conference in Santa Monica, Calif.

    "Retailers are looking for technology to help them make a move toward offering more digital content in stores," said Anthony Bay, MOD Systems chairman. The software lets consumers choose individual songs for download to digital media player or burn to a CD.

    Not only does the software give consumers more choices for digital music, but it also frees up shelf space for fast-selling items without completely eliminating slow-moving content from stores. Analysts also believe the kiosks will reduce product returns.

    Less inventory and more choices could help retailers improve razor-thin profit margins by reducing capital tied up in physical inventory that could sit on the shelves for months.

    "Brick and mortar big-box and specialty music retailers by necessity need to grab onto a piece of digital music sales or their time on this planet is limited," said Aram Sinnreich, managing partner of Radar Research LLC, Los Angeles. One example he gave: Music retailer Tower Records, after 46 years in business, was sold to a liquidator earlier this month.

    The demand for digital music is growing. U.S. sales of digital singles rose 71.3 percent, to 286.3 million between January and June 2006, while the numbers of CDs, DVDs, vinyl records, cassettes and other physical music formats shipped declined 15.7 percent to 277.6 million from the year-ago period, according to the Recording Industry Association of America (RIAA).

    rest of Techweb article

    Info on Digital Music News

    WeblogsInc report

    Posted by staff at 07:55 AM

    October 17, 2006

    Digital Jukeboxes go Interactive

    Jeep has recently launched a funky sales campaign, one that now includes digital jukeboxes created by San Francisco-based Ecast.

    The auto manufacturer has been spinning an urban-inspired, fresh blitz across print and television, one that includes bobblehead dolls and heavy hip-hop beats. In bars and restaurants, digital jukebox users are being offered an interactive experience that places the Jeep Compass at the center of the action. After purchasing a track, the jukebox allows the buyer to customize the SUV with different colors, wheel trims and sound systems. Jeep also captures a user email address in the process.

    The campaign is a rather novel experiment for both Ecast and Jeep, though early results seem positive. On Monday, Ecast reported that 8.3 percent of song purchasers are opting into the Jeep customization process, and the average stay is 53 seconds. Meanwhile, over 3,000 users are leaving their contact information every week. "This is our first foray into place-based, digital media networks ― and we are very happy with the initial results," said Jay Kuhnie, director of Jeep Communications. The campaign, which involves about 8,000 jukeboxes across the United States, is the first between Ecast and an automotive manufacturer. Advertising agency PHD helped to thread the deal for Jeep.


    Posted by staff at 10:49 AM

    September 15, 2006

    Digital Music Watermarks instead of DRM

    A German company is offering MP3 files for download, unencumbered by DRM (digital rights management). Instead, Akuma discourages copying by adding a unique "watermark" to each download.

    German music download store uses watermarks, not DRM | InfoWorld | News | 2006-09-15 | By John Blau, IDG News Service

    German music download store uses watermarks, not DRM
    Akuma hopes to break into crowded market by taking softer approach to copyright protection

    By John Blau, IDG News Service

    September 15, 2006

    A German company is offering MP3 files for download, unencumbered by DRM (digital rights management). Instead, Akuma discourages copying by adding a unique "watermark" to each download.

    Major record labels have mostly chosen DRM to protect their copyrights, limiting the number of copies buyers can make of a downloaded track, and restricting the music players they can use to listen to it.

    However, Akuma is taking a softer approach: The music store sells MP3 files which can be played on almost any digital music player, but adds a unique tag to each download using watermark technology from Germany's renowned Fraunhofer Institute for Integrated Circuits, which helped create the MP3 audio compression algorithm.

    The watermark technology makes slight changes to the data in sound files, such as a higher volume intensity in a tiny part of a song, that are undetectable by even the best trained ears, according to Fraunhofer researchers. However, if unauthorized copies of a download turn up on, for example, peer-to-peer file sharing networks, the watermark allows Akuma to identify the purchaser of a file and take action against them.

    "Around 40 percent of the labels we offer are embedded with watermarks," said Sascha Hottes, a managing director of H2 Media Factory, which launched Akuma. "This is the compromise we've reached with labels that are willing to release their titles in the MP3 format and not in Microsoft's Windows Media Audio format with its DRM technology."

    As part of its service, Akuma monitors songs embedded with a watermark against illegal distribution on P-to-P services, according to Hottes. "We monitor P-to-P networks on a random basis," he said.

    Around 350,000 songs, mostly from independent labels, are currently available on the Akuma portal, with 700,000 planned by the end of the year. The roster includes artists such as Katie Melua, Toni Braxton, Simply Red and Deep Purple.

    A single song title costs €0.89, ($1.13) an album €4.49. Customers have various payment options: online, direct debit, telephone invoice and PayPal.

    Akuma offers MP3 files in a quality similar to CDs, with bit rates (a measure of sound quality) from 192Kbps at the low end to 320Kbps at the high end.

    Like eMusic.com, the German music download store hopes to break into a crowded market by making song downloading a piece of cake. The German portal requires no special download software and places no restrictions on the choice of music player, including the iPod from Apple Computer.

    Customers can make as many copies of the songs as they like, burn them to CDs and transfer them onto multiple portable music players.

    The akuma.de portal is now available in a beta version to registered users.

    Posted by keefner at 10:53 AM

    July 19, 2006

    Trying to Capitalize on Music Download

    One of the newer entrants in music download business is BurnLounge and they seem to have their supporters and also their critics. I think the adage "if it sounds too good to be true, it probably isn't..." is always good advice.

    BurnLounge - Still Ripping Consumers Off?

    Posted Jul 19th 2006 5:04AM by Gordon Finlayson

    Last month, TheDigitalMusicWeblog exposed the growing concern in the digital music industry over the questionable practices of BurnLounge, a digital music sales service that appears to have more in common with a pyramid selling scheme than legitimate digital music stores. Since we posted that article we've seen a storm of controversy erupt in our forums as fans of the company go head to head with those who feel that BurnLounge is giving the digital music industry a bad name.

    BurnLounge markets itself as a community based digital music download service which allows users to construct their own personal digital download stores to make profits from sales of music, but in reality it operates like a multi-level marketing scheme where the only real profits are derived from sign-up and subscription fees. Higher level users receive a share of revenue from any affiliates that they personally sign up to the BurnLounge, which includes both revenue derived from digital download sales through the affiliates stores and also the sign-up or subscription fees that the affiliate generates. With subscription fees ranging anywhere between $29.95 to a whopping $605.35 per year, there's plenty of money at stake.

    Since downloads from the service are priced on a similar level to iTunes, and BurnLounge offers no significant additional functionality, I think that the the real business model is about sign-up fees, not about downloads, and a fair few of our readers appear to agree. Since posting this article, we've been inundated with feedback which has tended to fall into two opposing camps - the first from people who have been ripped off by BurnLounge, the second from BurnLounge zealots writing in to defend the service. The BurnLounge zealots were surprisingly uniform in their sunny responses, and occasionally sounded more like Kool Aid drinking cult members than legitimate business people, while the stories told by disaffected users are a very story altogether.

    We here at the DigitalMusicWeblog think that people should give BurnLounge a wide berth - but you can make your own mind up with this sample of comments from our readers:


    All info seems to support a finacial collision is on the way for all working retailers involved with Burnlounge. This, simply means people will become rich with this company. All power players will have critics and supporters. BURNLOUNGE, I applaud you and I'm a Huge supporter and will sign the dotted line today... - Jack Pope

    It never ceases to amaze me how ignerance and lack of education paves the way for those who live in glass houses and there stone throwing antics. - Michelle

    BurnLounge is CHANGING the entire distribution channel for music and entertainment. Before, companies held the key to distribution... now we do. Anyone can get involved. This is one of the most amazing things to hit the music and entertainment industries... - LT

    ..this company WILL change the way music is bought, sold, and distributed! Just wait and see in about 2 weeks when they will have over 1 million downloads. Can you say, move over iTunes? - Rose

    We Will Succeed By Attracting To Ourself The Forces We Wish To Use, And The Cooperation Of Other People. We Will Eliminate Hatred, Envy, Jealousy, Selfishness, And Cynicism, By Developing Love For All Humanity, Because We Know That A Negative Attitude Toward Others Can NEVER Bring Us Success. We Will Cause Others To Believe In Us, Because We Will Believe In Them, And In Ourself. We Will Start Today. - Kris

    This is a solid company with a great concept. Many people will benifit from this. Some of you obviously won't. Do any of you download music "legally"? Or are you part of the slimewire camp that thinks everything should be free. - Chris

    Do not sweat the negative people in life. There will be plenty of people who have hangups about making money...ignore them. You all have entrepreneurial spirit. I applaud you. - Anonymous

    I am so glad that I got in on the ground floor. Yes, I took a risk with my $500.00 but thats a risk that could make me live in comfort for the rest of life. - CAMERON

    Burnlounge will allow you to copyright your own music and sign a deal so you can sell your own music from your own store. Not to mention they have some of the biggest names in the industry invested into this company. Do some research. - NM


    The name is appropriate. A lot of people are going to get burned by BurnLounge. The chances that your average Joe will sell enough on BurnLounge to cover the annual fees are slim to none. - Eric Hamilton

    This company is a major scam, and I wouldn't be surprised if there is an FTC crackdown on them soon enough. - Jerimi

    Burnloungers always try to come up with some half-baked argument, but in reality, all they see is that they can scam others into joining Burnlounge to take a piece of the $600 up front payment. - Tony Zeoli

    I have been on BurnLounge for a few months now and its alot of hype. I haven't made a dime from my record sales. - Christopher Valdez

    Burnlounge is a scam. And all of you that are supporting it are slimy people. Let me just say this again - Burn Lounge is HUGE pyramid scheme.. ...I drank the koolaid. I was sucked by 2 of my friends into joining at the mogul level. And have made a total of 50 cents in return. - Buyerof SnakeOil

    ...its way hard to make money off of downloads at only 2 cents per download- youd have to sell over 500 songs a month just to make back your monthly fees. - BlueFishTShirts.com

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    Recent Posts

    * BurnLounge - Still Ripping Consumers Off? (7/19/2006)
    * XM asks for dismissal in RIAA suit (7/18/2006)
    * Virgin targets newbies to digital music (7/18/2006)
    * iPods in the workplace, security threat? (7/18/2006)
    * Guerrilla marketing for bands, and it doesn't involve Myspace (7/18/2006)

    Reader Comments
    (Page 1)

    1. LMAO! I've been involved in a few forums speaking on BurnLounge's "business model". First of all the cultish followers of Burn Lounge never seem to directly answer questions on how they will actually make money besides signing up other members or have any idea about ecommerce conversion rates, promotion and the like.

    But yet if you speak out against the model,
    1. you're a "hater" because they're taking a chance instead of sitting on the sidelines
    2. they point out that there are major corporations putting money into BurnLounge so it can't be a scam

    It's totally amazing the baselss argumentents these people use in defense of BurnLounge while dodging any real sort of mathematical questions about how they're going to make money!!

    Across all of the forums on many different sites, they just keep repeating the same shtick. Like an online cult or something!

    Posted at 8:50AM on Jul 19th 2006 by Musica360.com 0 stars

    2. LMAO! I've been involved in a few forums speaking on BurnLounge's "business model". First of all the cultish followers of Burn Lounge never seem to directly answer questions on how they will actually make money besides signing up other members or have any idea about ecommerce conversion rates, promotion and the like.

    But yet if you speak out against the model,
    1. you're a "hater" because they're taking a chance instead of sitting on the sidelines
    2. they point out that there are major corporations putting money into BurnLounge so it can't be a scam

    It's totally amazing the baselss argumentents these people use in defense of BurnLounge while dodging any real sort of mathematical questions about how they're going to make money!!

    Across all of the forums on many different sites, they just keep repeating the same shtick. Like an online cult or something!

    I don't see BurnLounge as a company that will be in business for the long haul. MLM's don't last forever and once they become saturated the only ones who will have truly made any money are Burn Lounge from all the "moguls" who signed up and the very first ones who jumped in it and signed up a ton of people.

    Posted by keefner at 07:50 AM

    Digital Music and Virgin

    Virgin Digital is targeting newbies to digital music in the UK with its new Virgin Digital Music Download Starter Pack. Includes inexpensive player.

    The starter pack includes a low end player, five "free" downloads and "easy-to-understand" instructions. The player isn't exactly state of the art, but it does offer 256MB of space, a USB interface and ample amounts of Virgin branding, just in case you forgot where you got it from.

    It's not a bad deal at £29.99, but I wonder just how many people that wouldn't be mp3 player owners will be enticed by the offering. Enticing or not for the technophobic, the Virgin starter kit is available now at Virgin stores in the UK.

    source link

    Posted by keefner at 07:47 AM

    January 20, 2006

    Background -- New Report on Digital Music

    Digital, Mobile Music Revenues Top $1.1 Billion in 2005
    Global trade group IFPI has just issued a bullish report on digital music, pointing to sales of 420 million paid downloads in 2005. That is more than double the level of downloads in 2004, and twenty times the volume in starter-year 2003.

    Meanwhile, the report indicated that mobile music sales hit $400 million, bolstered by the increased adoption of 3G-based services and higher-quality ringtones. Subscription services are also seeing gains, moving from 1.5 million to 2.8 million subscribers last year. According to the group, overall sales of digital music formats accounted for $1.1 billion worldwide in 2005, or 6 percent of label revenues. Digital music catalogs have recently surpassed two million tracks on many services.

    The IFPI review also approached sticky subjects like illegal file-sharing and DRM protections. Citing a survey across 3,900 European internet users by Jupiter Research and Ipsos, the IFPI claimed that legal buying is now as popular as peer-to-peer file-sharing in two major European zones, the UK and Germany. In those countries, the number of recurring legal buyers exceeds regular file-sharers by one-percent, per the data. The group also pointed to successful litigation and education campaigns, which it predicts will transform file-sharing into a fading threat. But converting P2P users into paying customers will be difficult, and the group conceded the file-sharing activity remains robust. According to the organization, the efforts "may not translate directly to a corresponding reduction in file-sharing numbers," and data within the report showed that the total available number of illegal files available online remained level year-over-year. Meanwhile, the IFPI remained supportive of DRM protection strategies, even in the wake of the disastrous rootkit imbroglio at Sony BMG. "The biggest challenge with DRM technologies is to make them operate smoothly enough so that they are largely invisible to consumers and this remains a very significant problem in the current digital music market," the group observed.

    European Synopsis

    FPI European Digital Music Survey - Summary

    A new consumer survey by IFPI1 shows that for the large majority of people in Europe, digital music - be it legitimate or illegal - is a new concept. Only 11% of European internet users swap files on P2P networks. Fewer, around 6%, regularly (i.e. on a monthly basis) download from P2P networks.

    Legal downloading is clearly at an early stage in Europe. Only 6% of internet users have bought from an online music store, while 4% - less than one in twenty - does so regularly. Some 14% of internet users overall have downloaded music from either a legal service or P2P network.


    Legal buying is now as popular as P2P use in the two major European digital markets, the UK and Germany. Here the number of regular legal buyers exceeds regular illegal file-sharers (5% compared to 4% in both countries). File sharing penetration (again based on monthly activity) is highest in Sweden at 15%. Spain and France are in the next tier at 11% and 8% respectively of all internet users (France has the largest absolute number of file sharers). So in France, Spain, Sweden, more users go to P2P networks, but legal online buying is growing.

    There is note on Executive Summary and also Facts and Figures.

    European Synopsis pdf

    Posted by keefner at 07:42 AM

    Digital Music Report 2006 - Facts and Figures

    Some selected Facts and Figures from the IFPI Report on Music in 2006

    The Digital Music Report 2006 - Facts and Figures

    19 January 2006

    * Record company revenues (trade revenues) reached $US 1.1 billion in 2005 showing a threefold increase on 2004 ($US 380 million).

    * Digital music (online and mobile) represents approximately 6% of overall music sales

    * Mobile music sales are not far behind online, with revenues roughly split (60-40 as at H1 2005).

    * 420 million single tracks were downloaded in 2005 globally - more than double the number downloaded in 2004 (156 million).

    US: 353 million single tracks downloaded (up from 143 million) [Nielsen SoundScan]
    UK: 26.4 million single tracks downloaded (up from 5.8 million) [OCC]
    Germany: estimated 21 million single tracks downloaded (up from 6.4 million) [IFPI Germany]
    France: estimated 8 million single tracks downloaded (up from 1.5 million) [SNEP]

    * The number of users of subscription services, such as Rhapsody and Napster, increased from 1.5 to 2.8 million globally in 2005.

    * Online song catalogues doubled to over 2 million tracks on the major services.

    * Globally there are now over 335 legitimate online services, up from 230 in 2004 and 50 two years ago. In Europe alone the number of services reached 200 in 2005, up from 150 in 2004.

    * Mobile sales in Japan totalled $US 211 million, or 96% of digital sales in the market, in the first nine months of 2005. Single track downloads reached 4.3 million during the period.

    * Mobile phone subscriptions reached 1.5 billion in 2005 - a 50% increase on 2002.

    * Globally there is an estimated 70 million subscribers to 3G. Jupiter estimates that by 2010 3G penetration will reach 60% in Europe.

    * Satellite radio subscriptions reached over 9 million in the US alone - three times as many as the number of global subscription services users. Over 475 million people globally receive Digital Audio Broadcast services (DAB).

    * The number of infringing music files available on the internet at any one time is estimated at 885 million. This is slightly up on January 2005 (870 million) but down compared to June 2005 (900 million). By contrast, broadband uptake rose by 26% in the past year. Total infringing music files are down 20% on the 1.1 billion peak in April 2003.

    Posted by keefner at 07:41 AM

    IFPI Digital Music Report - Executive Summary

    Looking at the impact of music on a new wave of digital commerce. It includes a call to action to key partners to help address the key challenges confronting the digital music industry at the start of 2006.

    IFPI Digital Music Report - Executive Summary


    Introduction by John Kennedy, Chairman & CEO of IFPI looking at the impact of music on a new wave of digital commerce. It includes a call to action to key partners to help address the key challenges confronting the digital music industry at the start of 2006.


    2005 was a landmark year for digital music. Digital sales in 2005 accounted for approximately 6% of global music sales based on the first half of the year.

    The legitimate digital music business has caught the imagination of consumers, sales have increased steadily and new service launches have accelerated to give shape to an exciting new market for recorded music.

    This sections highlights the key milestones in shaping the future of the digital market and looks at developments worldwide

    Key highlights:

    * Digital is the fastest-growing delivery channel for music
    * Single track downloads in 2005 more than doubled
    * Online song catalogues doubled
    * Digital music expanded rapidly across the world
    * Apple iTunes extended its service to 21 countries worldwide
    * Portable video was launched
    * The mobile phone became a portable music device
    * The world's first publicly available legal peer-to-peer (P2P) service iMesh launched in beta phase
    * James Blunt topped Europe's first digital songs download chart in 2005


    From a-la-carte and subscription to video and mobile, digital distribution formats have evolved and diversified in 2005, bringing music to consumers in more ways than ever before. This is set to continue in the coming year as business models continue to evolve.


    * Distribution channels diversify
    * Video boosts digital music services
    * The record company investment
    * The marketing opportunity
    * Digital-only labels emerge
    * The new digital intermediaries


    Over the past decade mobile penetration has risen exponentially and, more recently, mobile handsets have evolved from a basic voice-based device to whole entertainment hubs, creating a new channel for music distribution. Mobile music is fast becoming an important revenue stream for record companies, already accounting for almost half of digital music revenues.


    * Mobile music spreads globally
    * From ringtones to 'real music'
    * Music drives 3G
    * The handset market
    * The future of mobile music


    A key focus for music industry today is to help make music available for the consumer in an array of innovative and flexible ways - just so long as it is properly licensed secure and paid for. As new technologies develop year on year, record companies have been working with entrepreneurs, technology providers and online services to help develop new opportunities, while making sure that right holders retain their right to determine the distribution of their creative works. 2005 has seen three exciting new developments progress: legitimate peer-to-peer (P2P), digital radio and podcasting.


    * Legitimate P2P
    * Digital radio
    * Podcasting

    Consumer demand is the key to the successful evolution of the digital music market. This section looks at new IFPI research into consumer awareness and uptake of digital services in the past year across Europe. Key to the research findings is the fact that legal downloading is now on a par with illegal file-sharing in two of the largest digital markets, but attracting file-sharers to legal sites is a long-term challenge.


    * New IFPI research spotlights the consumer
    * Digital music versus the CD
    * The power of portability


    In early 2006 a number of significant obstacles hamper the progress of the digital music market. These include the still very large problem of internet piracy and the need for more effective cooperation from Internet Service Providers (ISPs) in containing copyright infringement; the continuing lack of interoperability between formats and devices; and the emerging threat from unlicensed digital stream ripping.


    * Internet piracy: the biggest obstacle
    * Digital stream ripping: the next big challenge
    * The call to ISPs


    For the recording industry, the business environment in which legitimate digital music has had to compete with mass-scale unauthorised free music is improving rapidly. The message sent by the courts has been clear. Operators of unauthorised P2P networks and websites searching for 'piracy havens' can be held liable for music piracy.


    * Courts rule against illegal P2P
    * Shutting down 'piracy havens'


    A thriving digital music business means containing piracy. In 2005 the music industry widened its campaign of deterrence against illegal file-sharing, nearly tripling the number of legal actions to a total of some 20,000 cases in 17 countries. Targeted education campaigns also played a critical role in raising awareness and changing consumer perceptions. This section asks whether the industry's efforts are yielding results by looking at the latest file-sharing figures in the context of the rise in broadband penetration.


    * Deterrence: legal actions against individual file-sharers
    * Education
    * Is the fight against piracy working?
    * Changing attitudes


    Digital Rights Management is an essential tool, helping to increase consumer choice while protecting the works of music creators from unauthorised distribution and unfair use. They are digital enablers, not merely locks and keys. The biggest challenge with DRM technologies is to make them operate smoothly enough so that they are largely invisible to consumers - and this remains a very significant problem in the current digital music market. Meanwhile the incompatibility of DRM systems has created a situation where digital services and devices do not inter-operate, hindering the future development of the digital music business.


    * The challenge for DRM
    * Interoperability: a key priority


    What online and digital music offers the consumer at a glance.

    Posted by keefner at 07:40 AM

    December 20, 2005

    U.S. McDonald's guests no longer able to burn music on in-store kiosks

    OAK BROOK, Ill. (Dec. 8) - McDonald's Corp. has halted a test of in-store kiosks where customers can burn music onto CDs, print out photos from digital cameras, or download ring tones. A spokeswoman declined to say why the test was discontinued, asserting in an e-mail that "customer feedback has been very positive." The devices continue to be tested by McDonald's in Germany, she said.

    McDonald's, which operates or franchises 30,000 restaurants worldwide, commenced the domestic test in May at a unit here that was touted as the chain's new flagship.

    From Restaurant News

    Posted by keefner at 07:12 AM

    September 08, 2005

    iTunes Phone and iTunes Nano Introduced

    Apple has finally unveiled its iTunes-enabled phone. "You've probably heard about this," quipped Steve Jobs at an invitation-only unveiling in San Francisco. The device, manufactured by Motorola and named ROKR, will be carried by Cingular Wireless in the US.

    Additionally, various other mobile operators will carry the device outside of America, including British carriers O2, Orange, Virgin Mobile, and BT Mobile. "The Motorola ROKR represents the ultimate convergence of mobile communications and music," said Ed Zander, chairman and CEO of Motorola. "Fusing iTunes with your always-with-you mobile phone, we're revolutionizing the way the world experiences mobile self-expression and entertainment."

    The device will allow consumers to port up to 100 tracks from their PCs. The phone will come with stereo speakers, headphones, and dedicated music keys, and will automatically pause the music during a call. Rollouts are expected later this month in the UK, France, Canada, Italy, and Hong Kong. Releases are then expected in the fourth quarter in Australia, Singapore, Philippines, Argentina, Brazil, Mexico, and other markets. A long list of superstars will kick off an advertising campaign this week, including Madonna, whose entire catalog is now available on iTunes.

    While most of the attention remains focused on the recently-unveiled iPod phone, Apple has also introduced another addition to its iPod line. The nano, a tiny player that is thinner than a #2 pencil, will now take the prize as the smallest iPod available. But even though it is about half the size of many competing players, the device delivers an impressive 4GB storage capacity. The price tag on the device will be $249, and a 2GB version will also be available for $199. iPod nano is a full-featured iPod in an impossibly small size, and its going to change the rules for the entire portable music market, said Steve Jobs. The nano weighs about 1.5 ounces.

    The nano is sleek, light, and absolutely tiny. The device comes in either white or black, offering yet another twist on the famous player design. That will help to entice more buyers, especially ahead of the holidays. Now, Apple is hoping to widen its considerable lead in the space, offering little breathing room for competitors like Samsung, Creative, and Sony. Meanwhile, the iPod lineup appears to be getting a bit crowded, with the nano flanked by both the screenless shuffle and the mini. That could cause some internal cannibalization for Apple, with the nano delivering a comparable storage capacity to the mini in a smaller size.

    Posted by keefner at 02:47 PM

    August 22, 2005

    FYE Offers Digital Music Service, In-Store Kiosks

    Music retail giant Trans World Entertainment has recently launched a subscription and download store for its FYE chain.

    The company will offer a catalog of 1.2 million tracks, and deliver downloads for 99-cents each. On the subscription end, a tethered service is available for $8.99 a month, while a portable subscription option is offered for a $14.99 monthly fee.

    The company will also be experimenting with in-store download kiosks, allowing customers to sample tracks and download them on the spot. The kiosk rollout is slated to begin next month.

    Posted by keefner at 03:05 PM

    August 12, 2005

    Music and Entertainment Week in Review

    The most interesting digital music news items for the week.

    The biggest news this week came from Japan, with the iTunes Music Store crossing one million downloads after just four days. The intensified a stalemate with Sony, which refuses to license its tracks to Apple.

    Meanwhile, the US Patent and Trademark Office (USPTO) issued a non-final rejection to Apple on a submission detailing the iPod user interface. The USPTO pointed to an similar patent submitted earlier by a current Microsoft researcher.

    Following a substantial payola settlement involving Sony BMG and New York attorney general Eliot Spitzer, the FCC has now opened its own investigation into the matter.

    Clear Channel continued to advance its plans to spin off both its outdoor and live business units, eventually creating three, separately-traded business groups.

    Online media monitoring firm BigChampagne finalized a data-sharing deal with AOL Music. And at Music 2.0 in the Bay Area, Sony BMG Executive Thomas Hesse pointed to new digital music concepts like release windowing and varied pricing, while also placing a greater emphasis on new formats like ringtones.

    In the financial world, Loudeye posted strong revenues while also suffering deeper quarterly losses. And Creative also suffered a disappointing quarter, with heavy pricing pressures and a write-down in inventories causing net losses, despite increased unit sales.

    Posted by keefner at 05:19 PM

    August 03, 2005

    Music Label Market Share Numbers

    Global recording industry trade group IFPI has released its latest annual report, with Universal Music showing a dominant market share. According to the report, Universal grabbed a 25.5 percent share of the market last year, a percentage that has increased in 2005.

    Meanwhile, Sony BMG grabbed a 21.5 percent share, followed by EMI at 13.4 percent and Warner at 11.3 percent. Meanwhile, the independent sector continued to show remarkable strength with a 28.4 percent piece of the global pie. The figures are contained in the IFPI's 12th annual Recording Industry in Numbers report.

    Other trends were notable. The group recently started tracking revenue from performance royalties, a rapidly growing sector. Royalties topped $493 million in 2004, a 4.5 percent increase over 2003 and a 19 percent jump over figures from five years ago. While those totals include revenues from restaurants, hotels, and traditional television and radio outlets, new technologies like webcasting are also increasing total earnings.

    Elsewhere, the IFPI continued to trumpet a recent increase in global paid downloads, which reached 180 million units for the first half of this year. And overall, CD buyers appear to be getting older, with 55 percent of discs purchased by those over the age of 30, a steady increase over figures from 5 years ago.

    Source: DigitalMusicNews

    Posted by keefner at 02:33 PM

    August 01, 2005

    Burning CDs at Concerts

    This is ground zero of one of the newest markets for rock and pop music: instant concert CDs, mixed on the fly by the engineer, copied, and then distributed just 15 minutes after a show as an instant souvenir that has more substance than a T-shirt or commemorative program.

    Source - toledoblade.com -

    The ultimate concert souvenir
    Before the last notes have faded, instant CDs are made and sold
    Many in the audience at the Allman Brothers Band concert earlier this month at Toledo's Stranahan Theater ordered CDs of the concert and picked them up after the show.


    Backstage at the Allman Brothers Bands concert a few weeks ago at the Stranahan Theater, there was the usual hubbub and focused preparations a half hour before show time.

    Gregg Allman, clad in sweat pants and a T-shirt, walked in a back door with a woman carrying his stage clothes. Guitarist Warren Haynes, smaller and less husky than he appears on stage or in pictures, strode through quickly, brow furrowed with a sense of purpose etched across his face as he ducked into a side room. Roadies scurried around in a business-like hustle to make sure everything was ready to go.

    And in a control room just off stage left, a nervous engineer sat behind a sound board, fretting over the fact that just a few dozen feet away several hundred people among the 3,000 or so at the show had paid $25 on faith that he would do his job properly with brand new digital equipment.

    This is ground zero of one of the newest markets for rock and pop music: instant concert CDs, mixed on the fly by the engineer, copied, and then distributed just 15 minutes after a show as an instant souvenir that has more substance than a T-shirt or commemorative program.

    With technology owned by entertainment giant Clear Channel Communications, the process is popping up in concert venues across the country as acts as diverse as Jewel, Hall and Oates, the Charlie Daniels Band, Black Crowes, and the Allmans feature it at shows this summer.

    Its a piece of merchandise that is unique to that show, said Stephen Hall, project manager with Instant Live, the Clear Channel-owned firm set up at the Allmans concert. What we are doing is saying, You were at this show, and now you can listen to it on this CD.

    For Scott Smelcer of Monroe, the CD was a chance to fill in the first hour of the Stranahan show, which he missed, and hear a better quality performance than the actual concert. While the band played with their typical combination of bluesy, jam-band fire, the mix in the hall was too loud, making Allmans vocals indecipherable.

    The concert was kind of muffled and drowned out, but the CD and recording itself was unbelievable, said Smelcer, who popped the disc in his car stereo before he left the parking lot.

    Jeremy McCoy of Perrysburg also listened to his copy of the three-disc set immediately after the 2-hour show, and was more critical of the CDs sound.

    The quality of the recording isnt real crisp, but it sounds OK, he said. You can tell the different instruments more distinctly, but youve really got to turn it up if you want some volume.

    Still, hes literally dissected the overall sound and performance, comparing it to his memory of the actual show and what he hears on the discs later. Ive listened to them in their entirety three times and I always find something different in them. Im glad Ive got them, he said.

    Trend setters

    While theres nothing new about live albums seminal works like James Browns Live at the Apollo or The Whos Live at Leeds are considered classics very few concert-goers ever get to hear the show they attended. Bootleg recordings made without the artists consent have been around forever, generally recorded by audience members with a sound quality that can be mediocre at best.

    Other variations on the live recording have popped up over the years. Pearl Jam recorded its entire 2000 tour, releasing the discs months after the show. And jam bands like the Grateful Dead have always encouraged fans known as tapers to record their concerts.

    Crew members burn CDs of the group's performance and place finished copies into cases for sale to concert-goers.

    Hall said Instant Lives approach is an extension of those concepts while giving the bands an alternative stream of money that amounts to about $10 per sale. Multiply that times the 250 CDs sold at the Allmans show and you have $2,500 in the bands pocket in addition to ticket sales.

    In this day and age with downloads and free music on the Internet, artists get less and less control of the quality of the product out there, Hall said.

    His perspective was echoed by Ray Waddell, senior editor/touring with Billboard magazine, who noted that Instant Live and another firm, DiscLive, are producing high quality products that legitimately boost bands bottom lines.

    Its another form of merchandise, another revenue stream for the artist and something for a fan to take home with him other than just a memory, said Waddell, who tracks rock and pop tours for the influential music magazine.

    The bands that contract with Instant Live control the process, Hall said, and if they want to allow tapers at their shows something many of the jam bands encourage then the company leaves them alone. The band is our client and we only go as far as they want us to. We never reach our arms over them, he said.

    How it works

    The recording process is deceptively simple. The Instant Live team travels in separate vehicles with the band, bringing along an engineer, sales manager, and someone to duplicate the CDs, and hiring local people to help do the legwork at the venue.

    A high-tech mixing board is set up and the sound from the show is fed directly to the engineer, who mixes it literally as the show is taking place. After about an hour he burns a CD that is then hustled out to a team that duplicates it.

    In the bowels of the Stranahan, that job fell to Joshua Boine, an Instant Live duplicating production manager who stood before a series of CD burners that could record 105 discs at a time. He supervised a couple of locals who fed the discs into the burners, which would spit them out in a few minutes to be loaded in no-frills packaging.

    The timing is set up so that the first couple of hours are done as the concert is taking place. As soon as the last notes of the show fade and the band walks off, the final disc is burned in about 15 minutes and everything is ready to be sold.

    Clear Channel bought the patent to the process two years ago, and some people in the music industry have expressed fear that the firm would wipe out any competition.

    The manager of the band String Cheese Incident, Mike Luba, fought with Clear Channel in 2003 when promoters prevented the band from using its own CD-burning equipment, according to Rolling Stone.

    Its one more step toward massive control and consolidation of Clear Channels corporate agenda, Luba told the magazine.

    Hall insisted that Instant Live works directly with the bands, and said if a group is playing a Clear Channel venue and wants to use other technology it can, as long as it doesnt violate the companys patent.

    He also said the firm, which makes the discs from the show it records available for sale on its Web site (www.instantlive.com), wont stop bands like The Who or Pearl Jam from making available live discs just days after a show.

    Started in February, 2003, Instant Live hasnt been around long, and Hall said the company is retooling to reach more venues and sign more artists, which means concert-goers could see the kiosks hustling the CDs at a lot more shows in the future.

    Its been around for a few years but its still a relatively new concept, he said. People are still opening their eyes to it.

    Posted by keefner at 02:25 PM

    July 26, 2005

    Music Video Catching Up To MP3s

    Universal Music Group has inked another video licensing deal, this time with the reincarnated MP3.com. The re-treaded music destination, now part of CNet Networks, Inc., will soon deliver hundreds of Universal videos on-demand and free of charge.

    As part of the deal, MP3.com also scored an exclusive remix video from 50 Cent. Meanwhile, MP3.com sister site GameSpot will feature an
    exclusive interview with the rapper, who will discuss his new game, 50 Cent: Bulletproof. That content is already being heavily promoted throughout the CNet destination, which reports a reach of 25.5 million.

    For MP3.com, the new videos offer a nice content addition, with 50 Cent sure to deliver a spike. For Universal Music, the move is part of a growing string of deals with internet video outlets, and follows larger negotiations involving AOL, Yahoo, and MSN. While those outlets could once rely on free video content, a surge in broadband penetration and multimedia interest have caused majors to now charge for their videos. That is a major shift from previous thinking, with top executives uninterested in replicating their promotional-only MTV relationship online. Now, smaller destinations are coming to the table, with UMG recently finalizing a deal with online video outlet Singingfool.com.

    Source: Digital Music News

    Posted by keefner at 02:45 PM

    July 15, 2005

    Smallest iPod Yet Shown on NY Times?

    ipod.jpegTGIF News:
    Video satire of fictional new iPod Flea product release (smallest iPod yet) on NY Times. The "extra accessories" bag with power source is a nice touch.

    See video here

    Posted by keefner at 03:38 PM

    July 14, 2005

    Apple Reports Results - iPod Shines

    The music business and Apple seem to agree given their latest financial results. Earnings over last year increased 425% (not bad...) and Sales surged 75%. The iPod device proved to be the highlight.

    Apple said it shipped 6.16 million iPods during the quarter ended June 25, a 616% increase from a year ago. Sales of the device totaled $1.1 billion -- up more than fourfold -- and thus accounted for almost a third of the company's total revenue. "The iPod numbers came through yet again,"

    Posted by keefner at 09:49 PM

    July 06, 2005

    Interview with Music Kiosk Pioneer

    Interview with Shervin Rashti of Touch n Surf on the Burn A Song self-service music download burning kiosk. Major distribution agreement hinted at in next few weeks.

    Source: KioskCom.com Website

    Burning a Revolution in Music

    By Rick Redding

    You say you want a revolution? Thats what Shervin Rashti believes his Burn A Song kiosk is bringing to the music business. Thats why he and his associates at Los Angeles-based Touch N Surf set out on a path two years ago to build a kiosk for burning CDs, and eventually distributing all sorts of media.

    The Burn A Song kiosk finished second at the 2005 KioskCom.com Awards in the category of Best New Deployment, Small Deployment. Rashti, who co-founded Touch N Surf with his father Jacob, believes his patience in dealing with the requirements of record label executives is about to be rewarded.

    He said Burn A Song wont qualify as a small deployment long, as he expects to have 100 of the kiosks in place this year, and more than 1,000 in locations such as electronic retailers, grocery stores, universities, malls and convenience stores by the end of 2006.

    In a July 5 interview, Rashti said he expects to have a major distribution announcement later this month.

    Without doubt, Rashti said the biggest hurdle has been getting agreements from the four major record labels to license musical content. Burn A Song is the first to obtain such an agreement, and he expects to have all of the labels on boards very soon.

    It has taken 14 months, he said of his quest to obtain agreements from the four major record labels. Its taken a lot of meetings and stringent requirements. Theyre big on security, and they have to OK your whole business model.

    Rashti says that in the near future customers will be able to find and download music from the four major labels Universal Music Group, SONY/BMG Music Entertainment, EMI Group and Warner Music Group on Burn A Song kiosks. Theyll be able to use the kiosks to compile their own CDs. But more importantly, customers will be able to find and purchase out-of-stock recordings through the kiosk.

    We saw this vision two years ago, Rashti said. We saw the need and the pain involved in the distribution of music. Retailers cant offer the shelf space, and consumers cant get the solution.

    Weve put a major store into a 2 by 2 box. Thats revolutionary, he said.

    An industry-leading publication, Billboard, discussed the kiosks role in helping music stores reduce physical inventory. A May 21 story about CD-burning kiosks included this quote from record industry executive Gene Fein. A lot of labels are eliminating low-turning albums from their catalog, and retailers are taking them out of their inventory anyway. We don't think this is going to replace traditional manufacturing, it will complement it.

    The Burn A Song kiosk is manufactured by Kiosk Information Systems, which has several clients pushing to be included in an increasingly crowded market.

    Theyre the first group to secure major label content, said Tom Weaver, vice president of sales and marketing for the Colorado-based firm. This application is still in its infant stages. The biggest issue is content. Indy labels are available, but the question is would anybody buy it?

    In fact, Business Week reported on June 20 that a CD burning station, Hear Media, with a catalog of 150,000 songs available, has been a disappointment for Starbucks. Tested in 45 stores in Austin, Texas and Seattle, the early results show customers aren't buying CDs. Still, the chain told Business Week it would roll out the machines eventually to 30,000 stores.

    Weaver said very few similar CD burning deployments have reached the marketplace, though there are many competitors. KIS, in fact, believes digital media downloads, including CD burning, will become a major channel/sector for the kiosk industry.

    And while the Burn A Song kiosk is poised to stir a music revolution, Rashti says its only the beginning in terms of product that can be offered on the kiosk. Ring tones, photos, even movies, are part of his vision of the future.

    Other things are definitely coming, Rashti said.

    Posted by keefner at 03:39 PM

    June 16, 2005

    Strong Lattes, Sour Notes at Starbucks Music Download Stations

    Doubts come to surface again on whether or not the Starbucks equation is working and/or will work for music download stations and kiosks.

    BW 50: Strong Lattes, Sour Notes at Starbucks
    Starbucks' adventures in media bars aren't playing out as planned

    For Starbucks Corp. (SBUX ), the success of upstart folk rock band Antigone Rising couldn't be more delicious. The girl group's debut album, From the Ground Up, was promoted by Starbucks and for now is only on sale at the coffee shops. It's doing well: 35,000 CDs in its first three weeks. The New York City band has been deluged with requests to appear on late-night TV and music cable shows.

    But Antigone Rising is one of the few sweet notes in the company's effort to blend coffee with music. Its new Hear Music media bars, which let customers burn CDs at Starbucks shops from a digital library of more than 150,000 songs, have been as disappointing as a tepid latte. And its broader goal of, as Starbucks Entertainment CEO Ken Lombard puts it, "transforming the way music is discovered and delivered" seems like marketing froth so far. This is Starbucks' most ambitious attempt yet to become known for something more than java, and a stumble could ding one of the world's best-known brand names.

    That said, for all of its talk, Starbucks isn't necessarily looking to make big money in the music business. CIBC World Markets' (BCM ) restaurant analyst John Glass estimates that Starbucks' annual revenues from the music bars could add up to $120 million at most, or just 3% of the company's $4.5 billion in U.S. retail sales. Glass figures Starbucks breaks even if customers create 1,600 CDs annually at each store. That would add between 4 cents and 7 cents to earnings per share. Even the success last year of Starbucks' multiplatinum Ray Charles album, Genius Loves Company, earned the company more buzz than anything else. Same goes for the Starbucks music channel it launched on XM (XMSR ) satellite radio last year.

    Starbucks is investing cautiously enough that any impact would be minimal should this prove to be another ill-fated attempt to sell something else, anything else, with the Starbucks name on it. Indeed the company is in a position to take some risks: It enjoys a 10.6% operating margin, and its shares are up 34% since the beginning of the year.

    So what's really at stake here? Chairman Howard Schultz's deep conviction that Starbucks can be different from other retail chains: that it can offer people a place to do the things we spend much of our time on these days, such as connecting to the Internet and downloading music.

    Despite evidence that the CD-burning service isn't doing well at the 45 test shops in Seattle and Austin, Tex., set up last fall, Starbucks is officially upbeat. It plans to roll out more media bars this year and expects eventually to have them in up to two-thirds of its 4,500 U.S. stores. "Our excitement is as high, if not higher, than when we initially launched our strategy," says Lombard.

    The reality isn't so exciting. Hear Music insiders say the response at the stores in Austin -- a college and live-music town -- has been disappointing. Even in Starbucks' home city of Seattle, few customers were listening to the music during recent visits to four stores with media bars. During several hours at each of the four spots, only one CD was burned.

    The Austin experiment could be a sign that Starbucks is misreading its customers. The city is full of tech-savvy music downloaders who carry iPods, not portable CD players. Digital music these days means MP3 file mixing and sharing, and that's not in the business model yet, says digital music analyst Josh Bernoff of Forrester Research Inc. (FORR )"Starbucks is not going to be a significant contributor to the music economy."

    Besides the unproven premise that customers want to download music at a coffee shop, Starbucks' fees are high. It costs $2 to use the media bar, $8.99 for the first seven songs, and then 99 cents per song. Apple Computer Inc.'s (AAPL ) iTunes Music Store charges just 99 cents a song, and Wal-Mart Stores Inc. (WMT ), just 88 cents.

    rest of story

    Posted by keefner at 04:26 PM

    May 26, 2005

    McDonalds Blaze Net in Chicago with Music Kiosks

    A chicago writer makes the trip to the local test McDonalds and writes up the latest kiosk techonology test by McDonalds. This is the US test with the previous one done in Germany rumors have it.

    The best guess as far as effectiveness is that the music download kiosks result in close to 15% revenue increase for the restaurant in normal terms. That's a significant revenue increase.

    Read more on MTV

    Posted by keefner at 08:01 PM

    May 24, 2005

    Followup to Ed Christman Billboard article

    Last week we posted nice article by Ed Christman on music kiosk business. Within the billboard article were two sidebars which did not show up in the electronic logs.

    By Ed Christman of Billboard
    Burning Question: Full Albums or Compilations?

    A key debate is shaping up over whether the machines should be used for creating song compilationsas many label executives believeor for manufacturing out-of-stock albums.

    Do you burn a deep catalog album and make a lot of money, or do you do the customized compilation as most expect.

    The kiosk model can't be dependent on "five to 10 customers a day making their own compilations," MICS president Gene Fein says. "That is not a business."

    Supply chain issues enter into the equation and the article goes on to present two different point of views, both of which are valid.

    Copy Protection: Not An Issue Yet

    Copy protection at the CD level (and with GE media) is still not an issue at the kiosk level but copy protection to a mobile device is definitely on the radar (and mandatory).

    One of the problems is that the labels would like to use Janus DRM from Microsoft however most of the portable devices do not support it. That's a dilemma.

    Plus Microsoft still requires a personal computer to unlock the mobile device (less than optimum).

    We get to wait...

    Posted by keefner at 02:18 AM

    Acquisitions in Music

    InternetRetailer.com - Daily News for Friday, May 20, 2005 Muze was bought today by Enterprise Partners Venture Capital. Muze has one of the largest repositories of music metadata of anyone. Enterprise plans to aggresively expand Muze's market in retail websites, stores and kiosks. Terms not disclosed.

    Posted by keefner at 02:12 AM

    May 16, 2005

    Reuters Feature on CD Burning Kiosks

    Feature on how red tape and the music labels are making it hard for CD burning kiosks to succeed. The labels all have their different requirements. The growing trend for independent music and more relaxed requirements from smaller labels is not covered. Good story.

    Red tape could kill stores' CD-burning kiosks
    Sun May 15, 2005 07:53 PM ET

    By Ed Christman

    NEW YORK (Billboard) - The concept seems great: Place CD-burning kiosks that can manufacture out-of-stock albums in retail stores and offer customized compilations, too.

    But after numerous false starts, retailers, hardware suppliers and the major labels say a quagmire of issues still threatens to overwhelm the initiative.

    Even with the momentum of Starbucks leading the way with Hewlett-Packard kiosks, and despite numerous other hardware suppliers flocking to stake a claim in the market, retailers say that in-store CD manufacturing still has one big problem: an unprofitable business model.

    Key to the equation are significant hardware costs and stringent content-usage requirements from the majors.

    Installing a CD-burning kiosk in a store can run $18,000-$35,000, hardware suppliers and retailers say. The actual cost depends on which hardware supplier is chosen and how many viewing screens or tablets are placed with each machine.

    The machines also require software systems to manage in-store CD burning and provide accounting. These systems add thousands of dollars in costs.

    Still, at least a dozen hardware suppliers have licensed music for kiosks or are in talks to do so, and more are popping up every day.

    While all parties agree costs could decline if CD-burning kiosks are mass produced, other expenses still have to be dealt with to achieve a profitable model.

    As it turns out, each major label is licensing music for kiosks with its own set of strings attached.

    For example, Universal Music Group wants kiosks to use only special blank CDs sold by General Electric that, depending on who you ask, cost two to five times as much as normal blank CDs.

    And EMI Music wants the cover art printed on paper to be installed as the front sleeve of the jewelbox. Another major is said to have limitations on when and how much music can be made available for in-store burning.

    "Each content company has its own set of rules, which when explained makes sense. But when you put them all together, it's a mess" -- and an expensive one, Mike Dreese says. The CEO of Brighton, Mass.-based Newbury Comics is a member of the CD-burning task force of the National Assn. of Recording Merchandisers.

    A Feb. 24 meeting in New Orleans that brought together merchants, hardware suppliers and labels to discuss CD-burning kiosks was an eye-opener for all, as each camp aired its issues.

    Following that meeting, NARM's task force created a 52-item punch list that could facilitate the CD-burning initiative. It was delivered to the majors April 1 for review. NARM spokeswoman Susan L'Ecuyer declines to comment on the list, which she describes as "preliminary."

    Nevertheless, task force member Ish Cuebas, director of merchandising operations at Trans World Entertainment, says, "I see signs that retail can make this a business, but we need cooperation from the hardware, software and content people."

    Without some compromises, "why waste all this time and money to find out if this is a business?" Dreese asks. He suggests, "Give us one year with no barriers to find out if it's a business. Then let's talk about the rules."

    So far, the 6,400-unit Starbucks chain is testing HP kiosks in dozens of stores in Austin, Los Angeles, San Francisco and its company base, Seattle.

    Also, Mix & Burn, a unit of New Hope, Minn.-based Navarre, is running tests in about a dozen stores, company executive Bob French reports.

    Test sites include two Trans World Entertainment stores; two Best Buy stores; one Borders Books & Music store; one Newbury Comics store; one Electric Fetus outlet; one store in the Musicland Group; one in Bound to Be Read, an independent bookstore in Minneapolis; one in a Nordstrom department store; and two at the U.S. naval base in Norfolk, Va., under the auspices of Eurpac.

    John Marmaduke, chairman/CEO/president of Amarillo, Texas-based Hastings Entertainment, is all for testing CD-burning kiosks. But, he says, "we want somebody to prove there is a business model that works. We want to be a fast second but don't want to be a pioneer. I am real happy to let someone else plow that furrow."

    Meanwhile, Wal-Mart is taking a different route, at least initially. It will allow customers to use their home computers to create their own compilations. Sources suggest that Anderson Merchandisers' Liquid Digital Media will make those compilations.

    The Redwood, Calif.-based company was one of the first to enter into the CD-burning kiosk business back in 1999, along with RedDotNet. But that effort failed because the majors were reluctant to license their music.

    Some other hardware suppliers -- including MICS (based in Cambridge, Mass.); Digital Kiosk Technologies (Indianapolis); Burn a Song (Los Angeles); VMS (London); Mediaport (Salt Lake City); Starbox (Orlando, Fla.); and Touchstand, a unit of Denver-based Synergy Media Group -- say they are either on the verge of placing kiosks in test stores, signing licensing deals with the majors or lining up financing.

    While the field is crowded, it is clear that not all the hardware companies are ready to field kiosks with a full array of hoped-for capabilities, merchants say.

    One kiosk company's system cannot handle variable pricing. Another company's unit so far can only make compilations, but not full albums. Still other companies that can manufacture albums are not ready to handle album cover artwork.

    Still to be answered by all hardware suppliers is whether their kiosks will have industrial strength to withstand the wear and tear of the marketplace.

    "Some seem ready to go and have their licenses in order, and others are struggling to get either the license and/or technology right, while still others are not even there," Dreese says. "But how much of it will be rubber that can meet a road somewhere is unclear."

    As for the majors, it "remains to be seen how much creativity the rights holders will allow us to experiment (with) so that we can see what the consumer wants," Dreese says. "I am afraid that the labels are going to choke the golden goose before they know what kind of egg they have."

    rest of story

    Posted by keefner at 03:19 AM

    May 11, 2005

    Yahoo Music Goes Live

    Yahoo today launched an early version of a new music service (rumors about which were circulating in March) in an effort to take on Apple's dominant iTunes and capture a good chunk of the online music market, writes CNET. The song-sharing and the community aspect of Yahoo's new subscription plan are key - and could change the market dynamics of the online music business, according to analysts.

    Story Link $4.99/month
    Yahoo Music Site Link

    Posted by keefner at 04:01 PM

    May 06, 2005

    DVD Content Indexing

    dvd.jpg In their attempts to make the content of digital video and television searchable, search engines are increasingly racing to form partnerships with content providers and to bolster their indexes of video content.

    Yahoo Inc. joined the partnership race on Thursday as it made its video search engine generally available. The company announced a series of partnership with networks and movie studios such as Buena Vista Pictures, CBS News, MTV and Discovery Communications to feed video information to its index.
    Read more of article

    Posted by keefner at 06:16 PM

    EMI signs with Snocap

    Shawn Fannings new company just signed EMI as one of its labels. He already has Universal and Sony BMG.
    Snocap, headed by Napster founder Shawn Fanning, identifies songs by their digital "fingerprints" and determines how copyright holders want them to be used. For example, a music label could authorize an up-and-coming single to be freely distributed, or to play three times before requiring payment. authorized music download link

    Posted by keefner at 06:01 PM

    May 03, 2005

    Universal Music Revenues

    Universal Music has revealed that it made $52mn from downloads sales in the first quarter of 2005.

    The world's biggest record label, with 25 per cent of the global market, saw downloads contribute four per cent of its total revenue. Jean-Bernard Lvy, the new CEO of Universal's owner, Vivendi, anticipates this rising to 20 per cent 'in a few years'.

    The company also expects to increase Web-based revenues by pioneering a video royalties deal with Yahoo!, MSN and AOL. Previously they were allowed to stream videos for free, as the labels considered them as advertisements for albums. However, the websites are now generating their own revenue from the streams and Universal will get its cut.


    Posted by keefner at 05:08 PM

    April 28, 2005

    Wal-Mart Custom Burning CDs

    Wal-Mart had the misfortune of scheduling the launch of its new service on the same day as the release of Rhapsody 3.0. Wal-Marts new custom CDs were relegated to the sidelines, which is perhaps where they will stay. Wal-Mart has never gotten much coverage of its online music site, despite undercutting iTMS by 11 cents per track (every song is 88 cents).

    Wal-Mart Offers Custom CDs

    Posted Apr 28, 2005, 6:46 AM ET by Brad Hill

    Wal-Mart had the misfortune of scheduling the launch of its new service on the same day as the release of Rhapsody 3.0. Wal-Marts new custom CDs were relegated to the sidelines, which is perhaps where they will stay. Wal-Mart has never gotten much coverage of its online music site, despite undercutting iTMS by 11 cents per track (every song is 88 cents). Part of the problem is the middling catalog of 400,000 tracks, but the bigger issues probably are Wal-Mart image and customer demographics. With the download store faltering, Wal-Mart has introduced custom CD burningyou select the tracks; they do all the work. As with the download store, the interface is Web-based (IE is necessary to reorder the list of tracks on a custom CD) and quite expertly designed. Prices are $4.62 for the first three songs, then 88 cents per additional track, and $1.97 for shipping. A 12-track custom CD costs $14.51 to your doornot a great cost-saving over a store-bought CD, especially at Wal-Mart, but pre4sumably each track is a keeper.

    This scheme is hardly an innovation; other custom-CD stores have been attempted and abandoned. Perhaps the marketplace is divided into extremes: playlist consumers who download, and traditional consumers who dont care to program their music beyond buying prepackaged CDs.

    Walmart.com - Custom CD

    Posted by keefner at 02:18 PM

    April 17, 2005

    Virgin Customers Burning Music CDs From Websites

    Virgin Megastore customers will be checking out Internet music along with the rest of their CDs this fall.

    Virgin Entertainment Group launched a new kiosk service Thursday that will allow in-store customers to burn Internet music onto CDs for purchase.

    Customers can download selected tracks from eight popular Internet music sites, and for US$10 walk out with a CD containing 10 tracks of their choosing.

    Virgin is launching the new system at the opening of its Columbus, Ohio Megastore 16 July. The plan calls for installing the system in the rest of Virgin's Megastores this fall.

    Customers will pick from about 100 tracks found on eight different Internet music sites that have entered an agreement with network and kiosk service, RedDotNet.

    read more

    Posted by keefner at 02:53 AM

    April 14, 2005

    Download that Oldtime Religion

    (Portland, OR April 13, 2005) During a press conference on April 12, the worlds largest provider of Christian music licensing launched a web service dedicated exclusively to family-friendly music downloads.

    Providing a web outlet for an ever-growing genre that includes gospel, worship music, Christian rock and rap, www.songtouch.com will launch at the Gospel Music Awards in Nashville, Tennessee. read more

    Posted by keefner at 02:27 PM

    April 10, 2005

    Scocap and Music Distribution

    Nice article on Shawn Fanning (Napster founder) and Scocap and how they are trying to change the way music is distributed, and priced.

    Newsday.com: Web tunes: The next step

    Shawn Fanning is out to save the music industry. Again.

    Sure, record company officials will say the 24-year-old Napster founder sent their business into a tailspin, one they haven't fully pulled out of yet. But they really should thank Napster and the other music download services that created a whole new revenue stream for them, one that requires minimum investment, while also shaking them out of a complacency that would have led to their eventual ruin.

    With his new company, Snocap Inc., Fanning hopes to catalog every piece of music, giving each song an acoustic fingerprint, so that record companies and other copyright holders will be able to track and sell its songs more easily. Companies that sign up with Snocap (Sony BMG and Universal Music Group already are onboard, as are several major indie labels, including TVT, Artemis and Nettwerk) can set prices and usage rules for their music centrally, instead of negotiating individual deals with each online retailer.

    Under the Snocap business model, if Sony BMG wants to make a new Dave Matthews Band single available for free for a week to drum up interest in the band's new album, it can do it easily. If it wants to lower the price of the entire Dave Matthews catalog for a few weeks to help entice some new purchases, it can do that, too. That means loads of new sales without pressing and shipping any new products. Unfortunately, all those new sales won't be enough for the music industry to drop its ever growing number of lawsuits, including the MGM v. Grokster case being heard by the U.S. Supreme Court.

    "There is a digital marketplace now," Fanning said, speaking at the South by Southwest Music Conference last month. "Innovation has been stifled by the litigation."

    In its latest example of behind-the-curve bumbling, the music industry continues to duke it out with peer-to-peer Internet download services such as Grokster and Kazaa in the Supreme Court over whether those companies are responsible for the actions of their customers. However, the court's decision, expected later in the spring, already may be technologically obsolete.

    According to a recent survey by the Pew Internet & American Life Project, about 18 million Americans, or 13 percent of Internet users, say they download either music or video files without using traditional peer-to-peer networks or paid online services. They swap music files via e-mail or instant message and download songs from blogs and other Web sites.

    Despite its multibillion-dollar revenues, the music industry continues to be too slow to understand the shift toward Internet distribution of music and too arrogant to try to meet its customers' needs. Instead of trying to broker some sort of workable solution that would take advantage of this new method of distribution, the industry continues to adopt one ridiculous strategy after another - from releasing computer viruses and fake files on peer-to-peer services to trying to scare consumers away to taking music fans to court for copyright infringement.

    Only after another technology company - Apple Computer, with its iPod player and iTunes download service - showed the music industry how to make money online did the industry start to understand the possibilities. Music companies still aren't prepared to act, though. So once again, they will rely on a new bunch of technology companies - from new peer-to-peer services to ringtone makers to copyright negotiators - to help them remake their business again.

    That's where Fanning comes in. This time he has early cooperation from some major labels, a sign that they may have learned from their mistakes. At least for now - Snocap hasn't launched yet.

    "It still feels like the first step on a very long road," Fanning said, adding that there is still lots of money in converting peer-to-peer users into paying customers.

    "It took 14 months for iTunes to sell 100 million songs," he said. "We were doing 100 million downloads a day on Napster."

    Contact Glenn Gamboa at 631-843-3434 or [email protected]

    Posted by keefner at 10:55 PM

    April 06, 2005

    Napster Subscription Numbers

    Napster Releases Growth Numbers

    Napster shares jumped when the company released its subscriber numbers for the recently ended quarter. The subscription side of the hybrid service attracted 143,000 new members, bringing its total to 410,000. Despite the strong growth, the company is expected to post a loss of about 63 cents per share.

    read more

    Posted by keefner at 07:51 PM

    February 16, 2005

    Copy Protection Bypass

    Portable Napster turning into a free-for-all

    Users Bypass Copy Protection on Portable Napster

    Tue Feb 15, 2:20 PM ET

    Add to My Yahoo! Technology - Reuters

    By Sue Zeidler

    LOS ANGELES (Reuters) - Users have found a way to skirt copy protection on Napster (news - web sites) Inc.'s (Nasdaq:NAPS - news) portable music subscription service just days after its high-profile launch, potentially letting them make CDs with hundreds of thousands of songs for free.

    Such users are already providing instructions to other would-be song burners through technology Web sites like BoingBoing. (http://www.boingboing.net)

    Napster is currently offering a free trial of its new Napster To Go service, which will enable users for a monthly $15 fee to download as much music as they want and transfer it to a portable device. They can also pay 99 cents for each track they want to burn to a CD.

    That "rental" model for digital entertainment, backed by giant software concern Microsoft Corp. (Nasdaq:MSFT - news) and others, is getting its most serious mass-market tryout yet with Napster to Go.

    But, according to various Web sites, thwarting the intellectual property protections of the service is as easy as a free software patch.

    Engadget.com said by installing the digital music program Winamp and then adding a secondary program to Winamp called Output Stacker, users could convert the digitally protected files from one format to another that can then be burned, unencumbered, onto CDs.

    "We're not going to advise you to do anything untoward, but apparently if you install Winamp along with the Output Stacker plug-in you can convert those protected WMA files to WAV files and then burn them to CD without paying a penny. Or at least an extra penny," Engadget.com said in an item on its site.

    A spokeswoman for Napster said that such endeavors were nothing new and the company was not too concerned.

    "The DRM (digital rights management) is intact. Basically, people are just recording off a sound card. This is nothing new and people could do this with any legitimate service if they want to use a sound card," she said.

    "This kind of attack has been around for a long time and it's just because of our higher profile that it has sparked such interest," she said.

    She said the company had no record of who was doing the illicit recording.

    "The bottom line is that people are always going to find a way to get around the system, although we give people a way to enjoy music while respecting artists' rights," she said.


    The "new" Napster has positioned itself as the chief competitor to Apple Computer Inc.'s (Nasdaq:AAPL - news) iTunes service, which dominates the digital download market.

    The original Napster was a free-for-all that let millions of users download and share songs for free -- before the music industry forced it into bankruptcy with successful legal challenges.

    American Technology Research analyst PJ McNealy said that no matter how protected a music file is, you can capture the output and save it on the hard drive.

    "Now, portable subscriptions are a bigger bullseye or goal for people," he said.

    Napster unveiled the portable subscription earlier this month, backed by a $30 million ad campaign attacking rival Apple's iTunes service and its ubiquitous iPod digital music player.

    Until recently, music subscription services have been somewhat restricted in their ability to transfer songs they provide to portable players, while Apple has sold millions of portable iPods by allowing users to buy songs from iTunes and store them on iPods.

    But Napster uses a new digital rights management software from Microsoft called Janus to enable the portable transfers.

    Posted by Craig at 02:39 AM

    January 20, 2005

    New DRM Group Formed

    Five Firms Seek DRM Interoperability

    A quintet of technology companies on Wednesday formed a rights-management wrapper that is designed to facilitate interaction between DRM schemes.

    Intertrust Technologies, Matsushita Electric Industrial (Panasonic), Royal Philips Electronics, Samsung Electronics, and Sony Corporation announced the formation of the Marlin Joint Development Association that will provide standard specifications for content management and protection for the consumer electronics industry. The Marlin JDA specifications will allow CE companies to build DRM clients for consumer devices that support popular content distribution modes in the Internet, broadcast, and mobile vertical market segments, the group said. ADVERTISEMENT

    The idea is to provide interoperability between DRM standards, rather than the "walled garden" approach that isolates specific groups of content files, like Apple's iTunes, from being easily accessed by other devices.

    The standard will work with the previous "Coral" initiative, which seeks to provide a developer framework for enabling DRM interoperability.

    The Marlin JDA will also offer a Licensing and Compliance Program and a Community Source Program to permit adopters to obtain sample code modules andlicenses for the specifications on a reasonable and non-discriminatory basis, the group said. The Marlin JDA plans to release version 1.0 along with the associated Community Source and Licensing and Compliance program in summer 2005.

    Posted by Craig at 03:15 PM

    January 19, 2005

    Music Download Numbers

    New international figures show fans downloaded more than 200m tracks last year, a tenfold leap on 2003 when the figure stood at 20m.

    Download revolution rolls on
    Alexa Baracaia, Evening Standard,
    19 January 2005

    THE astronomical rise of the music download industry is revealed today. New international figures show fans downloaded more than 200m tracks last year, a tenfold leap on 2003 when the figure stood at 20m.

    The digital music sales industry is now estimated to be worth 177m across Europe - and the figure is expected to double this year. The industry is so fast-moving that experts predict legal downloads, where consumers pay sites for music downloaded and a percentage goes to the record company, will account for 25% of music company revenue by 2008. The current total is 1.5%.

    These are the findings of a major study led by the International Federation of Phonographic Industries (IFPI).

    The US leads the charge, with digital sales of single tracks rising from 19m in 2003 to 143m last year. Britain is at the forefront of the revolution in Europe, with 5.7m downloaded tracks last year, compared with virtually none in 2003.

    U2 helped drive sales in Britain: their latest single Vertigo was last year's most downloaded track, followed by Gwen Stefani's What You Waiting For? The traditional singles chart for last year is a radically different list, topped by Band Aid 20. This is partly because, despite the boom in download tracks available, there are still many that cannot be accessed through most online sites. Dario Betti of computer consultancy Ovum said: "The online chart would be very different from the traditional top 10 because [download] customers are older and richer than the traditional singles buyer.'

    {1}Other findings include:

    o A repertoire of a million songs is available for download worldwide.

    o The number of legal music sites such as iTunes and Napster have quadrupled to more than 230.

    o Up to 25m portable players were sold last year, of which 10m were Apple iPods.

    There are also signs that the battle to banish internet piracy is being won, with illegal downloads dropping by 30m to 870m.

    IFPI chairman John Kennedy said: 'The biggest challenge for the digital music business has always been to make music easier to buy than to steal. At the start of 2005, that ambition is turning into a reality.'

    Posted by Craig at 11:02 PM

    January 03, 2005

    Music Restructing

    Sony Restructures Music Division

    From MacCentral today

    Sony's Connect Co. to hone focus on digital media
    By Elizabeth Heichler, IDG News Service

    Sony Corp. has set up a cross-company working group dubbed Connect Company to focus on the digital media market, the U.S. office of the Japanese electronics giant confirmed Thursday.

    The effort will be headed by co-presidents, the team of Koichiro Tsujino, a Sony electronics engineer, and Phil Wiser, chief technology officer for Sony Corp. of America, the Wall Street Journal reported and a Sony spokeswoman confirmed. It will function as a "virtual" company overlaying various groups in the corporation, she said.

    Some observers believe that Sony, with its diverse and sometimes redundant products, needs to coordinate its efforts better or risk missing the next generation of mass-market media technology. The inventor of the Walkman has seen Apple Computer Inc.'s iPod mini become the top-selling digital audio player in Japan in recent months, while its own effort to tie together a digital music strategy consisting of players, an online music service and PC software, has suffered setbacks.

    Improving how SonicStage music-management software works with the San Jose-based Connect Inc. music store is a priority for Connect Company, and to that end it will merge the SonicStage group in Japan with a San Jose software group, the Journal reported.

    In a press release announcing Wiser's promotion to CTO, Sony said he would oversee the team responsible for the development of the companys digital services businesses and infrastructure, including Connect Inc. Wiser is also charged with setting the U.S. unit's course in digital rights management and interoperability for digital services and devices, according to the company.

    Posted by Craig at 04:49 PM

    December 15, 2004

    Music Download and Gift Certificates

    MyCokeMusic launches gift certificates

    4/12/2004 by Leigh Phillips

    MyCokeMusic, Coca-Colas UK-only legal music download service, yesterday launched pre-pay gift certificates for its music outfit.

    The download site, powered by white-label music download service provider OD2, a division of digital media solutions firm Loudeye, is offering gift vouchers in denominations of 5 (7.22), 10 (14.44), 20 (28.89) and 40 (57.77), that can be used to buy songs from MyCokeMusics 400,000-track catalogue.


    Posted by Craig at 04:01 PM

    December 03, 2004

    iPod Competitors

    Taking a Bite of Apple's Action (Rio)

    As digital entertainment goes, the undisputed star in recent years has been Apple Computer's (appl.pk.PK) line of iPod handheld music players. And you wouldn't know it from all the attention the little device is getting, but dozens of outfits making rival MP3 players are trying to undo Apple's lead.

    Competitors such as privately held Rio Audio of Santa Clara, Calif., which is very close to Apple headquarters, figure iPod won't be all things to all people. It hopes to nibble away some of Apple's dominance. Like other small players in the business, Rio has a partnership with Microsoft (NasdaqNM:MSFT - News) to use its Windows Media Audio software.

    Nonetheless, Rio faces an uphill struggle. It's a distant second to iPod and has a fraction of Apple's resources. "Our way to execute is to design the right product at the right value and then use any kind of buzz we can take advantage of," says Hugh Cooney, Rio's president. In the nine months ending this September, Apple's iPod accounted for 54.7% of total digital-music-player units sold, vs. just 8.9% for Rio. Says Stephen Baker, analyst at market research outfit NPD Group: "It's tough to maintain that (low) level of market share over the long term."

    Rio's vice-president for marketing, Dan Torres, recently spoke with BusinessWeek Online reporter Amy Tsao about his company's plans to catch the competition. Following are edited excerpts of their conversation:

    Q: How are the holidays panning out so far?

    A: It's turning out quite well. We brought some of our newer products to the market a little later than we wanted to, so retailers have had less time with them than we expected. However, they're more than meeting our expectations in reorders. We're seeing a very upbeat holiday. We're not prepared to offer dollar figures. But I would say we're on plan.

    Q: How are you competing with Apple's iPod?

    A: When we look at the entire space, Apple makes only a hard-disk player. We have a new hard-disk offering in the Carbon 5 gigabyte. It's a little hard for us to figure out what share we're taking from them, but we're competing with them directly. And we've seen Carbon doing quite well, but it's still way early. We need to ride this season out and see. So far, we think we're doing quite well, and we'll be taking share away from iPod mini.

    Q: What about Dell (NasdaqNM:DELL - News) and Microsoft?

    A: Dell is about cost. They really are a follower. They drive down costs of certain things. It's more about (whether they will) continue to drive pricing down, but they don't really change the landscape.

    Microsoft is interesting. With its Windows Media Player, it will have a significant role in changing behaviors.

    Q: What will happen to the market if Apple comes out with a flash-memory-based player?

    A: I think there will be a combination of things. It will be interesting to see how they change their position in coming into that market. Will they go after sports, which is one of our targets? It will be an interesting addition to the market. Apple will call attention to the importance of flash. Just a year ago they had said flash is passe. (See BW Online, 11/11/04, "The Word on the Next iPod: Flash".)

    Q: Is consolidation coming among makers of digital music players?

    A: No. I think what we're seeing is even more diversity. We haven't seen anyone fall out of the market. I think we see people starting to differentiate on a variety of characteristics, whether it's about branding, youthful market, or price. Companies are looking at music and audio to enhance their product offering, like Dell (did), or coming to music because there's a competency (within their company) and a natural attraction to audio.

    We don't see consolidation happening yet. We'll still see more innovation in the space.

    Q: Who do you see as your main audience?

    A: We break it down into three key segments. One is the music enthusiast, who's younger and motivated by (having) more audio choices. A second segment wants to fit music into their lifestyle. They want audio, but it's not important. They're more about the experience of getting music into the player easily. It's about ease of use for them. (For the) third segment, music is a motivational companion. That's the sports and fitness user.

    Q: Which of these markets holds the most untapped potential?

    A: We believe the most opportunistic market is the ease-of-use users. We think our Carbon is the type of compact device, at 5 gigs, that fits that need. It's for someone who wants 1,200 or so songs. They want enough music to listen to without repeating. This is a very broad market.

    Q: But the buzz around your products isn't even close to iPod's. How can you change that?

    A: For not having the profile of Apple, we do well in getting people's attention. People have been looking at our product as something that finally challenges iPod. It looks different. These devices are very small, very precious. When you get them in your hand, customers really take to them.

    We also have things that really matter to customers, like compact size and 20 hours of battery life, which is really important in the hard-disk market. You can plug a Rio into a Windows machine, and it mounts up automatically without any extra software.

    Q: What kind of growth do you expect from Rio players?

    A: Ultimately, mobile entertainment is the space we deliver on. Right now we're focused on being best-in-class for mobile audio. We'll grow with the market -- by about 40% in the flash space over the next two to three years. We're seeing unexpected demand in mini hard disks.

    And the dynamics will eventually change from just being audio. People will start looking to having other features and media on more compact and smaller storage sizes.


    Posted by Craig at 02:40 PM

    Music Peer to Peer

    Napster Creator Unveils Online Music Technology

    By Sue Zeidler

    LOS ANGELES (Reuters) - Shawn Fanning, once reviled by record labels as the creator of renegade song-swap service Napster (news - web sites), on Thursday launched a new service designed to turn the threat of still popular peer-to-peer services into an opportunity for music companies and artists.

    The original Napster was eventually shut down in 2001 by copyright litigation and then sold to Roxio Inc, which re-launched it as a paid online service.

    But despite the proliferation of commercial services like the new Napster, RealNetworks Inc's Rhapsody and even Apple Computer Inc's iTunes, Fanning said unauthorized file-sharing was as rampant as ever.

    In launching the new platform, Snocap, Fanning and co-founders Jordan Mendelson and Ron Conway, said the company, also named Snocap, reached a deal for Vivendi Universal SA's Universal Music Group to license its catalog.

    After registering music and copyright information in Snocap's database, labels and artists can manage online distribution through Snocap's copyright management system, which lets them set rules for each track on a global basis.

    Fanning said Snocap, which received $10 million in funding, will expand the digital music market by giving authorized services the broad selection that makes peer-to-peer services popular.

    By using audio fingerprinting technology to identify and track music, Snocap will give consumers authorized options on par with file-sharing services. By removing the threat of litigation, consumers will also be get better quality service and avoid things like the risk of litigation from the industry or downloading a computer virus, spoofed downloads or unwanted advertising, Fanning said.

    Snocap, which provides back-end services, said said it was talking with various peer-to-peer services, online retailers and music labels.

    Sharman Networks, the distributor of Kazaa, declined comment, while Michael Weiss (news - web sites), chief executive officer of Streamcast, distributor of Morpheus, said he was concerned the technology was not easily adaptable to Morpheus, a decentralized peer-to-peer software.

    "My fear is that Snocap is coming up with solutions that are four years old. As far as we're concerned, we want to push the technology envelope," said Weiss.

    A spokeswoman for Snocap said Weiss' fears were unfounded and that the application would without a doubt work on either a centralized or decentralized peer-to-peer architecture.

    Fanning said Snocap was working with MashBoxx, a new peer-to-peer service expected to launch early next year. Industry sources said Sony BMG Music Entertainment was looking into using Snocap to populate MashBoxx.

    After years of blaming peer-to-peer services for billions of dollars in lost sales, all the labels are now looking at various ways to legitimize these services.

    EMI Group Plc (news - web sites) confirmed it had held talks with Snocap, while Warner Music Group was not immediately available. Sony BMG Music Entertainment declined comment.

    In another example of the industry's new willingness to embrace peer-to-peer technology, Wurld Media Inc. last month licensed content from Universal, Sony BMG Music and Warner Music for a new service to be called Peer Impact.

    Posted by Craig at 02:38 PM

    November 24, 2004

    Music Label Goes Ringtone

    Universal Music Group to Provide Master Ringtones to Verizon Wireless Customers

    BEDMINSTER, N.J., Nov. 24 /PRNewswire/ -- Verizon Wireless, the nation's
    leading wireless service provider, announced today it has entered into an
    agreement with Universal Music Group, the world's leading music company, to
    bring music from many of today's chart-topping artists to Verizon Wireless
    customers. The alliance includes the sale of real-music ringtones from
    Universal Music Group Artists and opportunities for the two companies to
    develop joint marketing programs.
    "With more and more of our customers personalizing their wireless service
    with ringtones, it's important for us to offer their favorite songs from the
    most popular artists," said Paul Palmieri, executive director of business
    development for Verizon Wireless. "The diversity of Universal Music Group's
    artists especially in the Pop and Hip-Hop genres -- from Ashlee Simpson to
    Nelly and Ja Rule -- allow us to expand on our ringtone line-up with the
    artists our customers are demanding."
    "This agreement creates another opportunity for consumers to enjoy the
    great music made by our artists," said David Ring, vice president of business
    development and business affairs for Universal Music Group eLabs. "We're
    thrilled to partner with Verizon Wireless and give its customers access to the
    hottest and best-loved music being made today for their ringtones."
    Verizon Wireless products and services are available in more than 1,200
    Verizon Wireless Communications Stores, at participating Best Buy, Circuit
    City and RadioShack locations and on the Web at

    About Verizon Wireless
    Verizon Wireless owns and operates the nation's most reliable wireless
    network, serving 42.1 million voice and data customers. Headquartered in
    Bedminster, NJ, Verizon Wireless is a joint venture of Verizon Communications
    (NYSE:VZ) and Vodafone (NYSE and LSE: VOD). Find more information on the Web
    at http://www.verizonwireless.com. To receive broadcast-quality video footage
    of Verizon Wireless operations, log onto

    About Universal Music Group
    Universal Music Group is the world's largest music company with wholly
    owned record operations or licensees in 71 countries. Its businesses also
    include Universal Music Publishing Group, one of the industry's largest global
    music publishing operations.
    Universal Music Group consists of record labels Decca Record Company,
    Deutsche Grammophon, DreamWorks Records, Interscope Geffen A&M Records, Island
    Def Jam Music Group, Lost Highway Records, MCA Nashville, Mercury Nashville,
    Mercury Records, Philips, Polydor, Universal Music Latino, Universal Motown
    Records Group, and Verve Music Group as well as a multitude of record labels
    owned or distributed by its record company subsidiaries around the world. The
    Universal Music Group owns the most extensive catalog of music in the
    industry, which is marketed through two distinct divisions, Universal Music
    Enterprises (in the U.S.) and Universal Strategic Marketing (outside the
    U.S.). Universal Music Group also includes eLabs, a new media and technologies
    Universal Music Group is a unit of Vivendi Universal, a global media and
    communications company.

    SOURCE Verizon Wireless
    Web Site: http://www.verizonwireless.com

    Universal Music Group to Provide Master Ringtones to Verizon Wireless Customers

    Posted by Craig at 07:05 PM

    November 19, 2004

    IBN, DRM, and UDV in UK

    Digital music download coin-op to offer 'all formats, all DRMs'


    By Tony Smith
    Published Friday 19th November 2004 12:51 GMT

    Analysis Inspired Broadcast Networks (IBN) CEO Norman Crowley has pledged to support all DRM-protected music formats, including Apple's FairPlay, when his company rolls out its fleet of pound-a-download digital music vending machines.

    However, he admitted that it may take some time before the company is able to sell songs to passing punters. While licensing negotiations are underway, IBN has yet to sign up a single music label to its Urban Digital Vending (UDV) service.

    Formally launched in London this week, IBN's UDV roll-out will see coin-operated vending machines sited shortly in the capital's King's Cross and Waterloo railway stations. Crowley told The Register a further eight machines may appear in the city before Christmas ahead of a more aggressive 2005 roll-out that is set see up to 20,000 music delivery boxes installed throughout the country.

    IBN's parent company is Leisure Link, one of the UK's biggest gaming machine and jukebox providers, so there's little doubt that it can deliver a significant number of vending machines to suitable locations during the roll-out phase. According to Crowley, IBN has already won the backing of hospitality company Welcome Break and fashion retailer NewLook, and hopes to sign Coffee Rupublic shortly. Woolworth's Group subsidiary MVC is already using compatible machines as in-store listening posts. IBN also has Coca-Cola's support, and the drinks manufacturer will be co-branding a number of the vending machines, which will also serve up said beverage. Lastminute.com's upcoming ticket sales machines will likewise be able to offer downloads.

    Initially, however, many of these machines will not sell songs. While IBN has licensed over 2m songs for playback through it's The Music digital jukeboxes - which are rapidly replacing Leisure Link's CD-based players - its public performance licences don't cover digital downloads.

    Crowley said IBN is in talks not only with the major labels but key independents too, all with the aim of delivering that 2m-track database to download customers. Right now, even iTunes doesn't offer that many songs in the US, let alone the UK, and it's ahead of all the other digital music providers in the market today.

    To be fair, Crowley's taking a longer view, out to a year or so down the line when the vending machines are in place and initial label signings have already allowed IBN to begin offering downloads. In 12 months' time, it's possible that the UDV network will be able to offer significantly more songs than iTunes or Napster do today. But by that time, so will they.

    IBN's negotiations are likely to be made more tricky not only because Crowley is adamant that the service supports iPods - given the Apple player's market share, he'd be daft not to want to include it - but the anonymous nature of cash-purchased downloads. With no explicit link to a form if ID - typically a credit card, and at the very least an account with the music provider - getting the DRM right will be harder to achieve, and the music industry will need to be persuaded that IBN can get it right before signing on the dotted line.

    Apple's refusal to date to license FairPlay isn't going to help, but Crowley's keenness on supporting all such systems, means he's going to have to take Sony's MagicGate and Windows Media DRM too. It also means supporting Apple's preferred format, AAC, plus Sony's ATRAC and its derivatives, and Windows Media Audio. Putting in place content delivery licences to cover all these bases will be no mean feat.

    Asked what technlogical innovation he'd most like to see coming to the digital music industry over the next 12 months, and Crowley puts a universal DRM system at the top of his list.
    Phones matter more than MP3 players

    Help may come not from the usual digital music suspects but by way of the mobile phone vendors. No handsets yet support DRM in the UK, though it's starting to happen in the US, courtesy of Microsoft's Windows Media Player 10 for Windows Mobile 2003 smart phones. However, other handset makers are expected to roll-out DRM enabled player software during 2005. Given the mobile phone market's general preference for standards - MPEG 4 for video, for example - it's likely to lead the way with better cross-vendor format and DRM support.

    That plays into IBN's hand not only by reducing the range of technologies it will need to support, but also because of Crowley's belief that it's mobile phone users who will be more attracted to UDV systems than iPod or Zen Micro owners.

    The drive to buy on impulse that Crowley is hoping to tap into, particularly purchasing with cash, is likely to appeal to punters who see music as being more disposable, less a part of a collection, and that's generally not how you'd profile the owner of an expensive, high-capacity digital music device.

    More and more phones have memory card support, and as 512MB and 1GB cards come down in price, plenty of folk will, in a year's time, have handsets capable of storing a decent number of tracks, says Crowley. Quite a few will have Bluetooth, too, and while IBN's vending machines sport slots for all the key memory card formats - not to mention USB and Firewire - many will allow tracks to be transferred across and ad hoc Bluetooth link. And thanks to IBN offshoot The Cloud's move to equip Leisure Link systems with Wi-Fi access, in order to build its hotspot business, users will also eventually be able to download tracks using 802.11 wireless technology, Crowley says.

    And Wi-Fi, he adds, offers the potential for fast, 3G-beating download speeds. When the full network of 20,000 vending machines is up and rumning, it can even challenge the near-broadband mobile phone system for availability, he believes.

    But technology is of little value if you don't have the content, and that's what UDV's future hinges upon. Crowley called upon broadband connectivity partner BT Retail and its CEO, Pierre Danon, to give UDV his thumbs-up. The strength of partners like BT, Coca-Cola and Woolworths will, he hopes, help persuade not only the music industry but the DRM owners that they need to work with IBN. Launching the service before the download content is in place is a risky opening gambit, but probably one that needs to be made, Crowley feels, to get the licensing negotiation game going.

    Will it win the licenses it needs? That depends on the changing landscape of the digital music market over the next year or so, as Apple's lead in music players and online music sales is challeged by more sophisticated Windows Media-based devices, and how aggressively it pursues the mobile phone market. Given the growth seen in legal downloads, it's hard to see content providers being unwilling to come to an agreement with IBN, particuarly while it's a content seller's market.

    Posted by Craig at 03:54 PM

    November 16, 2004

    Music Download and File Swapping

    In another sign of the music industry's grudging embrace of file-swapping technology, Universal Music Group has agreed to license its 150,000-song catalog to Snocap, a San Francisco company started by Napster founder Shawn Fanning.

    Posted on Tue, Nov. 16, 2004

    File-swap firm gets license to sell music


    By Dawn C. Chmielewski

    Mercury News

    In another sign of the music industry's grudging embrace of file-swapping technology, Universal Music Group has agreed to license its 150,000-song catalog to Snocap, a San Francisco company started by Napster founder Shawn Fanning.

    Snocap, which has been operating in stealth mode for more than a year, will provide the technology to let listeners buy music legally distributed over Internet file-sharing networks.

    The Snocap service is expected to make its debut in early December, sources confirm. And Mashboxx, a new file-swapping service to be powered by Snocap, is expected to make its debut in January, according to industry sources. News of the deal was first reported by the Wall Street Journal on Monday.

    A Snocap spokeswoman declined to comment on the arrangement with Universal.

    The licensing agreement is another sign of the music industry's evolving position toward file-swapping. To date, Hollywood has failed in its attempt to use the courts and technological countermeasures to quash illegal downloading of copyrighted songs on Kazaa and other file-sharing networks.

    And so last month, Sony Music BMG, the world's largest music company, acknowledged it was in licensing discussions with the industry's most caustic critic, Wayne Rosso, former president of file-sharing service Grokster.

    Rosso is behind the new Mashboxx file-sharing service to be powered by Snocap.

    Snocap embodies Fanning's quest to legitimize Internet file-swapping, pioneered by Napster in 1999. Snocap's technology gives file-sharing networks the tools to know exactly what files people are looking for and what they're offering to share.

    It can identify each song by its acoustic properties or ``fingerprint'' and then wrap each tune in a set of licensing rules, determined in advance by the artist or label. Such rules, for example, could allow a person to listen to the song for free or let them listen to it for a set number of days before they are required to purchase it.

    The Universal deal gives Snocap a license to sell its catalog of 150,000 songs through file-swapping networks. But Universal won't allow its music to be distributed on services that don't use some sort of filtering to remove bootleg songs. That would apparently preclude Snocap's deployment on existing Internet file-swapping services such as eDonkey, Kazaa, Morpheus or Limewire.

    EDonkey President Sam Yagan said he is reluctant to use a service such as Snocap because of the potential privacy implications of software that monitors every file traversing a network.

    He said he also is worried he would expose his service to legal challenge if he agreed to start filtering content. That's because the recording industry could argue that file-swapping services can control the illegal exchange of music on their networks.

    ``The labels are saying they want to experiment, which is great,'' he added. ``But the one experiment they refuse to do is to try selling paid-for content next to free content.''


    Posted by Craig at 08:20 PM

    Music Download Swiss

    Soft drink giant Coca-Cola has launched a Coca-Cola-branded music store in Switzerland, in collaboration with white-label digital music service provider ODS from Loudeye.

    Coke launches Swiss online music shop

    16/11/2004 by Victor Frimpong

    Soft drink giant Coca-Cola has launched a Coca-Cola-branded music store in Switzerland, in collaboration with white-label digital music service provider ODS from Loudeye.

    The MyCokeMusic service will allow consumers to search, stream and download digital songs from a catalogue of around 400,000 tracks. As well as international music, the service will feature local Swiss music and artists.

    The company hopes to use this service to consolidate its market position and strengthen its brand, especially among youth.

    This is not the first time Coca-Cola has launched an online music service: in January, 2004, the company launched an online music store in the UK, which was also powered by OD2.

    story link

    Posted by Craig at 04:44 PM

    November 15, 2004

    Music Downloading and Mark Cuban

    Mark Cuban (Dallas Mavericks) Lays Out the Record Labels in his blog..

    When will the music industry do it right ?

    Can the music industry cry wolf any longer?

    This is the only industry in the world that can see thousands of its retailers close, reduce the number of products it sells via cutbacks in artist rosters and albums released, cut back marketing and promotional dollars and then blame a reduction in sales on someone or something other than themselves.

    That big bad boogieman of piracy is blowing down everyones house. The poor music industry. Except of course that there is nothing more than anecdotal proof that Peer to Peer networks hurt music sales, and to counter those, there are studies and anecdotal evidence that the sampling opportunity that P2P networks create actually help sales.

    Of course, the other digital entertainment mediums have seen booming sales over the same period. Games. DVDs. VHS. Even books on tape have grown. Im not saying anything new here, nor I am saying anything I havent said before. Which leads to my points:

    1. The amount of money the RIAA is spending, along with other lobbying efforts in the industry, could go to artists, and probably be better spent on marketing the industry and getting consumers excited, rather building a wall around your industry that only slows it down.

    2. Its a crime that our politicians have fallen prey to your please protect us please. Our country is in enough debt. We dont need to spend more to put legal walls around your industry. How long before we have tort reform for the music industry?

    3. There are solutions that are simple. Learn a lesson from the cable and phone industry. Go to where people already are paying for digital access to your product, and for a little bit more money, give them a more product, legally and easily.

    Why in the world havent you gone to AOL, Cable and DSL providers and offered your catalogs by genre for 10 or 20c per month, per subscriber? Universal, take a lesson from your NBC/Universal pals. Create a rock channel, an 80s rock channel, a hip hop channel, an oldies channel, etc, etc. Put your catalogs for each genre channel on a server that you control. Go to AOL, et al. Offer their users access to DRM protected music that gives them the same rights as ITunes or the MSN store or whatever makes you feel good at night rights. Price each channel cheap enough that all the broadband or dialup ISPs can package them in marketable solutions with the other labels. Its a no brainer sale. AOL et al, send out emailers and promotions.. Want the latest rock hits from artists like xxxxxx ? AOL brings you legal peer to peer. Download all you want, check us every day because we add more music every day.

    Its the Rock Download Channel from AOL and its only 1 buck per month on your AOL bill. Click here, and you can start now (billing is for a minimum of 12 months) Of course there is also the oldies channel, the hip hop channel. The old school hip hop channel, the R&B channel. However many ways you can dice and slice your music, thats a buck a month. Per channel. Per Sub.

    Consumers will do it because its easy, safe and cheap. We are used to being sold 1 more channel, or 1 more tier or call waiting for an extra 99 cents per month. We will commit to five channels per month at a buck each for a year before we would ever commit to spending $60 on CDs at a sitting.

    We like to buy things a dollar at a time. If you wanted to be greedy. You could even offer a $99 dollar setup charge that allows the users to dump the complete channel on their music device or hard drive right when they sign up. ISPs, AOL, Cable companies and Telcos will jump up and down to sell these value ads. They will advertise them. They market them. They will probably offer you lots of money to do exclusives with them. They all need and want new digital services to drive their digital tiers and Hi Speed Data.

    Comcast is making a huge bet on Subscription Video on Demand. Why would they be any less excited about Subscription Music on Demand? Universities could get a discounted version that they offer at cost. $50 bucks per head, per semester and you are a legit downloader. Its included in your options at the beginning of the semester. Then of course the kids are going to want it when they get home.

    Im sure this isnt a new idea. I know its been talked about, because I have brought it up in meetings again and again. So the question is, why hasnt it been done? Its so much more profitable than anything that could ever happen with per song downloads. 200mm singles sold gets you 200mm in gross revenue. One song at a time. 5mm people buying five channels at five bucks per month gets you 300mm dollars in predictable annual gross revenues.

    But thats far from what the market will be. Im guessing, but it could easily be 40 million people averaging five dollars per month. Thats real money. In an industry that sells 800mm or so albums in a year and makes what, 1 to 3 bucks net, per CD, thats nothing to sneeze at.

    I know, you are afraid it will cut into your CD sales. It wont cut into your CD sales, or should I say, it wont help your CD sales any more or less than existing peer to peer networks. This is a great time for the labels to decide to make some money. Consumers want a cost effective, easy to use way to buy music. Broadband and dialup providers want new revenue options and to stop dealing with subpoenas from the RIAA.

    The only ones against the move? Probably the RIAA and our politcians. The RIAA would have nothing to do but give out gold and platinum records and the politicians would lose a gravy train of money.
    Link to Mark Cuban blog

    Posted by Craig at 09:13 PM

    UK - Music goes public

    UK group preps public digital music 'ATMs'

    By Tony Smith
    Published Monday 15th November 2004 14:13 GMT

    Updated The UK will this week see the launch of music download vending machines that allow punters to purchase songs for cash as easily as buying soft drinks or snacks.

    Inspired Broadcast Networks (IBN) will leverage its network of 7800 music jukeboxes and games machines, located in pubs and other venues throughout the country, to offer downloads to mobile phones and digital music players.

    Initially limited to a trial run, the service will be made available in a number of public venues, such as railway stations. IBN and its partners said they expect to invest 50m over the next two years replacing existing vending machines and entertainment devices with digital download-enabled equipment.

    IBN will formally launch the service on Wednesday, and is keeping details of the service - prices and catalogue range, for example - to itself for now. However, it is believed the machines will offer access to a massive 2m tracks, though how much of those are available for download rather than playback is not yet clear.

    Which format(s) the system will support isn't known either. Publicity photos show an iPod connected to a terminal. Since Apple hasn't - so far as we know - licensed its FairPlay DRM technology, or Real Networks its Harmony DRM conversion system, that implies MP3 downloads, but we can't see the music industry being happy with that. Windows Media seems the most likely format, which would cut iPod owners out of the picture.

    Songs can be downloaded via USB or Firewire, and to memory cards.

    The company is partnering with British physical media distribution group Entertainment UK, retailer Woolworths Group and EMI Music. Woolworths recently launched its own online music store, and undoubtedly sees in-store downloads via terminals of the kind IBN is producing as a way of maintaining shop sales should demand for physical media slide. It also provides it with a way of taking digital music to PC-less customers.

    For similar reasons, online travel agent Lastminute.com is also partnering with IBN on the digital music vending machines, which can also punch out concert and travel tickets.

    UK telco BT is part of the consortium too. Last month, the company admitted it was exploring ways to provide digital music through its own public terminals, such as payphones.

    IBN is part of the Leisure Link group, which supplies public gaming, music and ATM systems to some 25,000 leisure and retail venues. It's also the parent company of UK wireless ISP The Cloud, which runs Wi-Fi hotspots off the back of suitably equipped broadband-enabled jukeboxes, one-armed bandits, pokies and the like.

    The Register

    Posted by Craig at 02:49 PM

    November 08, 2004

    Tesco and Music Download

    Tesco gets into music download game

    UK supermarket chain Tesco has launched its own music download service via its website.

    The online store opens today, using Microsoft technology, and will sell tracks for 1.13 (79p) and albums for at 11.44 (7.99). The supermarket has collected a catalogue of some 500,000 songs prior to launch.

    Tesco believes that its store's selling point will be the quality of its downloads, which are digitised at a higher standard than most existing music download services. The company believes this will also attract a wider audience for the product.

    "Music buying is changing," said Tesco.com chief executive Laura Wade Gery. "We know that for the first time dads are spending more on music each week than their teenage sons, and they're more likely to be attracted to music players and downloads because of quality of sound."

    Posted by Craig at 04:08 PM

    November 01, 2004

    The Jukebox CellPhone

    Dial M for Music -- After the success of the iPod, the mobile industry wants to make your cell phone a roving jukebox (TIME)

    Monday, Nov. 01, 2004

    Mobile-phone makers scored a surprising hit four years ago when they introduced handsets equipped with tiny digital cameras. Today, nearly one-third of the cell phones sold worldwide do double duty as cameras, and that could reach two-thirds by 2009, according to the Boston-based research firm Strategy Analytics. So what will the mobile-phone industry do for an encore?

    If you listen carefully, you can hear the answer reverberating from those distinctive white "ear-bud" headphones attached to Apple Computer's iPod digital-music player. After the booming success of the iPod and Apple's iTunes Internet music store, the mobile-phone industry is keen to join the party by converting phones into mobile jukeboxes capable of storing hundreds or thousands of songs. Meanwhile, cellular-network operators are launching their own download services, hoping that by generating revenue from digital-music sales they can recoup some of the billions of dollars they've invested in high-speed, third-generation (3G) networks. "This is the prelude to people effectively using their phone as an iPod device," says Ralph Simon, Americas chairman of Mobile Entertainment Forum, an industry association. "All of the smart money is aware this is the way this whole thing is going."

    In the past year, several European cell-phone carriers have started music services. And this month, Japan's KDDI plans to offer 10,000 wirelessly downloadable tunes for $2 to $3 a track. "This really is a step forward because you get CD-quality files for the first time" via a cellular network, says Kirk Boodry, an analyst with Dresdner Kleinwort Wasserstein in Tokyo. "The potential for this service seems very strong."

    Indeed, there's ample evidence that music could become a lucrative new market for companies like KDDI. Sales of ring tones reached $4.1 billion worldwide last year, according to Strategy Analytics, proving that consumers are predisposed to wireless downloading, even if the product is little more than synthetic song snippets. Technical barriers are disappearing, too: as more carriers upgrade to 3G systems, sluggish data-transfer rates are becoming a thing of the past (songs can be transferred in as few as 30 seconds via 3G networks). The capacity of phones to store music remains a problem, but that's being solved, too. This month Samsung Electronics plans to launch the first phone with a miniature hard drive, la the iPod. Called the SPH-V5400, the phone has 1.5 gigabytes of memorythat's less than half the 4 GB on the iPod Mini but still enough for 300 songs. The price is estimated to be a wallet-straining $800. Other handset manufacturerslike Nokia, the world's largestare considering making phones with hard drives.

    Of course, it's not certain the industry can repeat its camera-phone coup. For mobile music-download services to take off, business models have to be developed and pricing for songs settled. Many consumers may prefer to transfer tunes already stored in their home computers to their phones, instead of paying high wireless fees to download music. Devices sporting hard drives may be too complex and expensive for the masses. Most important, record companies must embrace the ideaand so far labels seem concerned that wireless downloading will spread music piracy. For example, earlier this year South Korean record labels and three cellular providersKTF, LG Telecom and SK Telecomattempted to reach an agreement over copyright protection for mobile music services, but the effort has been bogged down by infighting.

    Still, hybrid phone-music players are expected to gain widespread acceptance. According to Strategy Analytics, within five years, more than half of all mobile phones sold will be able to play digital music. "I wouldn't quite say music on mobile phones is shaping up to be a killer application, but I would say it's a manslaughter app," says Neil Mawston, an analyst for Strategy Analytics. Need further validation? Motorola, the world's second-largest cell-phone maker, recently announced it will include Apple's iTunes software on its next series of phones.

    With reporting by Coco

    Posted by Craig at 08:28 PM

    October 14, 2004

    CD Burn

    Starbucks Expanding Custom CD Service to 45 Stores

    Thu 14 October, 2004 15:15

    By Nichola Groom

    LOS ANGELES (Reuters) - Starbucks Corp. SBUX.O on Wednesday said customers will be able to make custom music CDs at 45 of its U.S. coffee shops by later this month, the first step in a plan to expand the service nationwide.

    The company will install three to six terminals for choosing music and burning CDs in each of 15 stores in Seattle and 30 in Austin, Texas, said Ken Lombard, president of Starbucks' entertainment division.

    "This is by no means a test," Lombard said in an interview. "This is the initial phase of a national rollout."

    Using a variety of computer gear and support provided by Hewlett-Packard Co. HPQ.N , Starbucks customers will be able to record seven songs for $8.99 while they wait for their favorite foamy coffee drinks. Additional songs will cost 99 cents each.

    Neither Starbucks nor Hewlett-Packard would disclose financial terms or how much they were spending on the program.

    Wednesday's announcement is the latest in a series of moves Starbucks has made to expand its music offerings. Earlier this year, the chain opened its first music cafe at a former Hear Music store in Santa Monica, California.

    Starbucks will expand the music service to other locations in mid-2005, but would not say where or to how many stores.

    Earlier this year, the Seattle chain said it aspired to expand the service to 2,500 stores in two years, but a spokeswoman said on Wednesday that that figure was no longer necessarily accurate.

    The company will expand the service in a disciplined way, Starbucks Chairman Howard Shultz said in an interview.

    "This is how Starbucks traditionally rolls out new products," Schultz said. "Whether it's WiFi, or the Starbucks Card, or even Frappuccino, we've had a long history of doing this on a region-by-region basis."

    In addition to selling music in its cafes, Starbucks earlier this year struck a deal with XM Satellite Radio Holdings Inc. XMSR.O under which XM will provide the "Starbucks Hear Music" channel to its more than 2 million subscribers.

    The chain also collaborated with jazz recording label Concord Records to produce the late Ray Charles' last album, sales of which have soared since its Aug. 31 release.

    The chain has several other proprietary CDs featuring other recording artists in the works, Schultz said, but declined to name the musicians or give a timeline for their release.

    Reuters | Latest Financial News / Full News Coverage

    Posted by Craig at 03:57 PM

    October 01, 2004

    Music download

    Sony digital chief Cartwright leaves to form own start-up

    Staff, Brand Republic 08:00 30-09-2004
    LONDON - The head of Sony Music's new-media division, Neil Cartwright, is leaving the company after seven years to set up his own business.

    Cartwright, head of e-media at Sony, has been at the music giant since 1997 where he has overseen the development of its digital strategy, from internet sites through to digital music downloads.

    His new company Million Media will concentrate on the supply of digital content, mostly entertainment focused, to mobile phone networks, interactive kiosks and Wi-Fi networks.

    Million Media already has three clients on its books, Cartwright said, including Third Space Media, the mobile strategic agency, and SNM Group.

    Cartwright originally started off at Sony building websites for the group in its communications department, and moved up swiftly to head up a whole department dedicated to maximise the opportunities offered to Sony via all digital media platforms, not just the internet.

    Brand Republic

    Posted by Craig at 09:39 PM

    September 29, 2004

    Virgin Music Download

    Virgin gets in the music download game

    29/09/2004 by Leigh Phillips

    Print | Email Colleague | Add Comment | Comments (0)

    Virgin Digital, the digital entertainment platform of the UK-based Virgin Group has launched the Virgin Digital music download service in the US, with a catalogue of 1m tracks and compatible with around fifty portable devices.

    The service spans a digital music store, music-club subscription service, streaming radio, digital music and portable device management tools, and music-discovery options.

    Tracks are available for 0.80 ($0.99) each, with licences for playing, burning to CDs and downloading to portable devices.

    The Music Club offers a subscription-based service for 6.49 ($7.99) per month and enables users to have unlimited access to some 100,000 albums on-demand. Radio Free Virgin is integrated into the Virgin Digital service as well.

    The product is compatible with any portable music device running Microsoft's 'Plays for Sure' software.

    While plans are currently in place to extend Virgin Digital outside the US, no dates have been announced.

    Digital Media Europe: News - Virgin gets in the music download game

    Posted by Craig at 05:36 PM

    September 24, 2004

    Music Download Margins

    Record labels taking massive chunk of music download revenues

    Record labels still on top despite online revolution
    By Andrew Orlowski and Charles Arthur
    21 September 2004

    Record companies are taking such a large cut from tracks sold online that many of the burgeoning online music stores will go out of business, experts warned yesterday.

    Figures obtained by The Independent show that the labels take home the lion's share of the cost of a digital download - making more money per track than they do with CDs in shops.

    Online stores such as Apple's iTunes were seen as a revolution in music sales, with customers turning their backs on CDs to shop online. Many also believed that the stores would drive down the cost of online tracks.

    But figures from the US show that Apple Computer, the dominant legal download business in Europe and the US, retains just 4 cents from each 99-cent (55p) track sale while "mechanical copyright" holders - generally the record labels, who own copyright in the song's recording - take 62 cents or more. Music publishers take the rest - about 8 cents.

    With the sites, the copyright owners have doubled their share of royalties, even though the marginal cost of manufacturing has fallen to almost zero.

    The revelation will embarrass industry executives, who meet this week in Manchester for their annual In The City music conference.

    The figures also cast doubt on the viability of the dozens of companies storming into the market - recent arrivals include the high street store Woolworths, and Stelios Haji-Ioannou, founder of easyJet.

    Apple has the advantage that only tracks sold from its iTunes Music Store play on its profitable iPod digital music player, of which the company has sold 1.6 million this year. Songs from other commercial download sites cannot be played on the iPod. Apple declined to comment on the figures. It has said its prices depend on each country.

    Legal download sites thus herald a quiet coup for the record companies, which had seemed threatened by the explosion in illicit file-sharing and falling CD sales. Online stores have also been criticised for offering less than physical CDs: the sound is lower quality, and the digital tracks contain encoded restrictions on copying to other PCs or handheld music players, and on "burning" the music to CDs for personal use.

    But despite the lack of profits, more and more companies are joining the UK online music business, which has leapt from about 100,000 downloads per month at the start of the year to 500,000 in August. About half are from Apple.

    Tom Dunmore, editor of the new online music magazine Rip & Burn, forecast that at current licensing prices, many more legal download sites will launch in the next 12 months - and then quietly disappear within five years.

    Phil Evans, a spokesman for the Consumers Association, said the data suggested record labels would have to change - or strangle the nascent market. He said: "Unless the record labels look at new [distribution] models, they're bringing about their own demise."Michael Robertson, the founder of MP3.com, is blunter. He says commercial downloading is so unprofitable it is "a race where the winner gets shot in the head".

    Posted by Craig at 11:27 PM

    September 23, 2004

    digital audio players

    Sales of portable digital audio players like Apple Computer Inc.'s trendy iPod are booming and are expected to generate $58 billion in revenue worldwide by 2008, according to a research report released Tuesday.

    Sales of portable digital audio players like Apple Computer Inc.'s trendy iPod are booming and are expected to generate $58 billion in revenue worldwide by 2008, according to a research report released Tuesday.

    The report, from research firm IDC of Framingham, Mass., is another indication of how portable MP3 players -- introduced in late 1998 -- have evolved from a niche technology gadget into a mainstream consumer device, said Susan Kevorkian, an IDC senior analyst.

    Apple Computer has captured more than 50 percent of the digital player market with its iPods. These use small internal hard drives to store thousands of songs. But the Cupertino computer-maker may have to adjust its focus because prices for digital audio players that use flash-memory cards are falling, Kevorkian said.

    "Although Apple will continue to have a leading position in the portable jukebox market, they may eventually offer a flash-based iPod branded player as well,'' she said.

    The report said revenue from digital audio players is expected to reach $7 billion by the end of 2004, up from $4.4 billion in 2003. The category also includes portable CD players that are designed to play CDs with songs recorded in the compressed MP3 audio format.

    By the end of June, Apple Computer had sold more than 3.7 million iPod and iPod Mini players since they were introduced in 2001.

    Apple has been most successful in North America, where it has tied marketing of the iPod to its online iTunes Music Store.

    However, Kevorkian said, smaller-capacity flash-based MP3 players remain more popular overseas, particularly in regions of Asia where "they are used more as a fashion accessory.'' More 22 million flash players are expected to be sold worldwide by the end of 2004, compared with a projected 8 million hard- drive players.

    Kevorkian also said declining wholesale costs of flash-memory cards should bring average sales prices of flash-based MP3 players down from $117 in 2003 to $98 in 2008. Meanwhile, average prices of hard-drive players should decline from $304 last year to $171 in 2008.

    More than 20 million combination CD-MP3 players will be sold this year, but that number is expected to rise only modestly in the next few years.

    However, Kevorkian said, regular CD players won't disappear quickly because the CD remains the core distribution medium for the recording industry, "and we don't expect that to change overnight.''


    Posted by Craig at 07:52 PM

    digital audio players

    Sales of portable digital audio players like Apple Computer Inc.'s trendy iPod are booming and are expected to generate $58 billion in revenue worldwide by 2008, according to a research report released Tuesday.

    Sales of portable digital audio players like Apple Computer Inc.'s trendy iPod are booming and are expected to generate $58 billion in revenue worldwide by 2008, according to a research report released Tuesday.

    The report, from research firm IDC of Framingham, Mass., is another indication of how portable MP3 players -- introduced in late 1998 -- have evolved from a niche technology gadget into a mainstream consumer device, said Susan Kevorkian, an IDC senior analyst.

    Apple Computer has captured more than 50 percent of the digital player market with its iPods. These use small internal hard drives to store thousands of songs. But the Cupertino computer-maker may have to adjust its focus because prices for digital audio players that use flash-memory cards are falling, Kevorkian said.

    "Although Apple will continue to have a leading position in the portable jukebox market, they may eventually offer a flash-based iPod branded player as well,'' she said.

    The report said revenue from digital audio players is expected to reach $7 billion by the end of 2004, up from $4.4 billion in 2003. The category also includes portable CD players that are designed to play CDs with songs recorded in the compressed MP3 audio format.

    By the end of June, Apple Computer had sold more than 3.7 million iPod and iPod Mini players since they were introduced in 2001.

    Apple has been most successful in North America, where it has tied marketing of the iPod to its online iTunes Music Store.

    However, Kevorkian said, smaller-capacity flash-based MP3 players remain more popular overseas, particularly in regions of Asia where "they are used more as a fashion accessory.'' More 22 million flash players are expected to be sold worldwide by the end of 2004, compared with a projected 8 million hard- drive players.

    Kevorkian also said declining wholesale costs of flash-memory cards should bring average sales prices of flash-based MP3 players down from $117 in 2003 to $98 in 2008. Meanwhile, average prices of hard-drive players should decline from $304 last year to $171 in 2008.

    More than 20 million combination CD-MP3 players will be sold this year, but that number is expected to rise only modestly in the next few years.

    However, Kevorkian said, regular CD players won't disappear quickly because the CD remains the core distribution medium for the recording industry, "and we don't expect that to change overnight.''


    Posted by Craig at 07:52 PM


    Sony shifts strategy to support MP3 music files

    Posted on Wed, Sep. 22, 2004

    Associated Press

    SAN JOSE, Calif. - In a major strategic reversal, Sony Corp. said Wednesday it plans to add support for MP3 music files to some of its portable music players.

    The shift to support the widely used MP3 music format would end Sony's long-standing insistence on its proprietary format called Atrac and better position the electronics giant against rivals such as Apple Computer Inc., whose portable players support both MP3s and other file formats.

    Though some of its CD Walkmans could play MP3s, Sony had fallen behind in recent years as it stuck to its proprietary format in its newer class of audio players, forcing users to go through an extra step to convert their digital song files - often already in the MP3 format - to its Atrac format first.

    Now, Sony plans to release some new flash-based players with both MP3 and Atrac playback as early as this year in Europe, said Gretchen Griswold, a spokeswoman for Sony Electronics Inc. The company is also working to create software upgrades so owners of current models could play their songs in the MP3 format.

    Similar plans are underway for the United States market but Griswold did not know when audio players with MP3 support would be introduced in the U.S.

    AP Wire | 09/22/2004 | Sony shifts strategy to support MP3 music files

    Posted by Craig at 07:48 PM

    September 20, 2004

    Yahoo Music

    Yahoo Launching Music Download Service This Year

    After its $160 million aquisition of MusicMatch, Yahoo is expected to be releasing its own music download service at the end of the year. According to ZDNet, Yahoo has been in the development phase of its music download service since last year, working with MusicNet. However, the MusicMatch acquisition gives Yahoo a finished product to tweak, perhaps making it the final piece to the Yahoo music puzzle.

    Yahoo may, however, be introducing a double music downlaod service of the Yahoo Music Player AND a revamped MusicMatch, keeping MusicMatch members happy and introducing a brand new product to Yahoo loyalists. ZDNet reports The Web giant is likely to run the two services side by side for some time before ultimately drawing on Musicmatchs technology and moving Musicmatchs subscribers into the Yahoo fold, sources said.

    Yahoo is not entering this paid download field without rivals however. They will have Apple iTunes, Microsofts MSN Music Store, RealNetworks (which has a limited Google distribution partnership) and Yahoo partner Napster to worry about. However, Yahoo is now again entering an incredibly popular and high dollar market. Digital music sales are expected to grow rapidly in the near future, particularly with the increasing availability of broadband access. Music subscription sales are expected to grow from $113 million this year to $890 million in 2009, while digital downloads are anticipated to reach $803 million in 2009, compared to $158 million for 2004

    With the MusicMatch aquisition Yahoo brought on an entire hoopla of music features to their network. MusicMatchs assetts include Musicmatch Jukebox software, which allows consumers to play, burn, download, discover, and organize an entire music collection; the online Musicmatch Radio network, which offers free and premium streaming access to more than 900,000 songs and more than 200 pre-programmed stations; and the Musicmatch Music Store a la carte song download service, which offers access to more than 700,000 tracks. Most recently, the company introduced the Musicmatch On Demand streaming music subscription service, providing unlimited access to more than 700,000 songs from any computer as well as legal music sharing through its innovative Send to a Friend feature.

    Search Engine News Journal Yahoo Launching Music Download Service This Year

    Posted by Craig at 10:38 PM

    Music Download

    Music-download sites give life to rival players

    By Macworld staff

    The proliferation of new music-download services will lead device-makers to unveil a new generation of smaller, sleeker and cheaper MP3 players this autumn, perhaps knocking Apple from its dominant position in the digital-music industry.

    According to a Reuters report, Apple's consumer electronics rivals are hoping that the proliferation of companies trying to sell digital music on the Web in a format incompatible with the iPod will cause sales of their music devices to increase.

    Rio VP of marketing Dan Torres predicts that music service providers will be a "key driver" of device sales. He said: "The market is definitely heating up."

    Choices for a growing market

    Many of the new iPod alternatives are not trying to compete with Apple's iPod. They hope to cater to consumers who are looking for less expensive, lower-storage-capacity flash-media players or entry-level hard-drive players that hold more than 1,000 songs more the market of the iPod mini.

    One label executive told Reuters: "Not everyone needs a 40GB player and that's where companies are seeing opportunity."

    And with flash memory prices dropping, flash players are likely to become a significant portion of the digital music player business, suggests the report.

    Sony Electronics product manager Kelly Davis said: "Flash is going to be here for a while, because it's more affordable. People are trying to get more capacity for their dollar."

    Cheaper options are even leading some consumers to buy more than one player. According to Rio's Torres: "Cheaper flash prices are leading some consumers to purchase a flash player for the gym and active situations and a hard-drive player for power use."

    Macworld UK - Music-download sites give life to rival players

    Posted by Craig at 10:37 PM

    September 17, 2004

    CD Downloads

    9 out of 10 cats prefer CDs to downloads

    By Andrew Orlowski
    Published Friday 17th September 2004 11:52 GMT
    Not only is the CD format alive and well, but it's emerging from the "online" revolution looking healthier than ever. 92 per cent of DRM-store downloaders surveyed by Entertainment Media Research prefer the plastic platters to their MP3 downloads, Revolution magazine reports.

    It supports the theory that online downloads are complementing, rather than replacing traditional CD sales; with shoppers using the online stores to sample music before getting "the real thing". 80 per cent of "legal" downloaders surveyed said they will buy as many or more CDs buy as many or more CDs in the future.

    CDs have better sound quality than music downloads, and in most countries have no restrictions on how the user listens to the music.

    Although Napster and Apple claim downloads in the millions, it's a drop in the ocean compared to CD sales and peer to peer networks. And even the most optimistic growth forecasts see online stories making only modest inroads: at best around eight per cent of the market in five years' time. That's if the today's online stores survive. With the DRM stores only keeping four cents of the 99 cents you pay for a song, only businesses that view it as a loss leader for another product, such as Apple with its lucrative iPod business, are likely to survive. Little wonder that MP3.com founder Michael Robertson called it a "goldrush for lemmings".


    Posted by Craig at 11:02 PM

    September 15, 2004

    Music Downloads

    Music download spawns new business

    Making waves in music download

    DENVER - Unlike most download music sites, Denver-based DiscLogic seeks to empower the artist.

    DiscLogic is a music download provider for artists, record labels, music distributors and other entertainment companies. The company provides musicians with the means to sell their music directly to their fans. The company will be at Telluride Blues and Brews festival this weekend digitally recording live sets.

    "We maintain a central online store that allows music fans to preview music before buying the download," said Doug Rayburn. "We also develop branded online download stores for our music partners that can be integrated into their own Web site."

    Music fans can log on to www.disclogic.com, browse its catalog of over 1,000 albums and download tracks using DiscLogic's cutom-built download utility.

    "They can choose from one of four high quality music formats and are free to burn the music to a CD or copy the music to a portable music player like an iPod in addition to listening to it on their computer," said Charlie Winski.

    DiscLogic features over 800 different artists through contracts with record labels, distributors and the artists themselves. Featured artists include moe., Umphrey's McGee, The Disco Biscuits, Soulive and Mike Gordon. The company has also recorded at the New Orleans Jazz Festival, High Sierra Music Festival and will be recording Jam Cruise, a jam band celebration at sea on a Carnival Cruise line ship.

    "It's not just about the artists, which is something I will rarely say. We feature record labels, large and small, and festivals all across the country. So we are as much a community for all those that are a part of the music environment at large as we are about the artists themselves," said Paul Edwards.

    While working together at DataPlay in Boulder, DiscLogic founding members Rayburn, Winski and Todd May visualized a company that would serve as a download portal for all live music. They began building the infrastructure of the company in May of 2002, using their love of music and technology as a guide. Rayburn and Winski's strengths reside in technology, and May has been professionally playing the drums for over 15 years. Edwards came on board last summer and has helped DiscLogic sign numerous deals through his music contacts, formed after running two clubs in North Carolina.

    "We would like to become a well-known and well-respected company within the music industry. We want all fans of live music to regularly come to our site to find the latest and greatest live music available on the Internet," Rayburn said.

    Music downloads are gaining popularity fast, but CD sales are not going to stop entirely anytime soon, Rayburn said. There will always be music lovers who want a packaged product. DiscLogic is currently working on a partnership that will offer its live music catalog to customers as downloads or CDs that are shipped to them or purchased at a retail store.

    For more information on DiscLogic, log on to www.disclogic.com.

    Vail Daily News for Vail and Beaver Creek Colorado - Arts and Entertainment

    Posted by Craig at 10:09 PM

    August 30, 2004

    Music Metrics ROI

    RealNetworks Promotion Sells 1 Million Songs in 1 week (49 cents a tune)

    RealNetworks Promotion Sells 1 Million Songs

    By Robin Arnfield
    NewsFactor Network
    August 27, 2004 10:11AM

    "This strategy will cost it money -- RealNetworks could lose $2 million from below-cost sales -- but will give its service a huge boost," says Forrester Research analyst Rebecca Jennings. "Real's Harmony technology also hits Apple where it is weakest -- in its lack of compatibility."


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    RealNetworks has sold one million songs from its RealPlayer online store in the week since it launched its 49-cent-per-track promotion, the Seattle, Washington-based company announced. In addition, RealNetworks cut the price of most albums to US$4.99.
    The promotion is part of a concerted push to transform RealNetworks from its origins in the mid-1990s as a developer of streaming media software into a provider of paid Internet content.

    "Selling 1 million songs from our Internet jukebox in one week is the highest level of sales we have ever experienced," RealNetworks spokesperson Matt Graves told NewsFactor. "RealNetworks is now the number-two [company] in a la carte music-download sales. We are also the number-one provider of online music-subscription services, as our Rhapsody platform now has 550,000 subscribers."

    No Profits Yet

    The move into the download market has offset declines in RealNetworks' software business, but there is no profit to show for it yet. Revenues from consumer services increased 50 percent in the first half of 2004 and accounted for four-fifths of the company's sales.

    RealNetworks has posted five quarters of losses and, last week, increased its loss forecast for the third quarter after cutting prices on its music downloads. It said that the effect of the campaign would be to increase third-quarter net losses by 1 cent per share. The company revised its forecast of net losses from a range of 3 cents to 4 cents a share to a range of 3 cents to 5 cents a share.

    Revenues from RealNetworks' consumer services rose 50 percent to $99 million in the first half of 2004, while its business-software sales fell 14 percent to $26 million.

    Targeting Apple

    Last week's announcement of price cuts formed part of RealNetworks' biggest-ever ad campaign for digital music, with print, radio and Internet spots being used to target customers of Apple's iPod music player.

    At the end of July, RealNetworks announced a beta version of its new Harmony software, which allows songs sold by Real to be played on an iPod. Until this point, the only music store that could provide paid-for songs for the iPod was Apple's iTunes. Apple sells songs online for 99 cents each.

    Harmony was launched last week as part of RealNetworks' latest player, RealPlayer 10.5 with Harmony Technology. The new player enables consumers to play songs downloaded from the RealPlayer Music Store on more than 100 portable music devices, including the iPod and iPod mini.

    Freedom of Choice

    RealNetworks has called its latest promotion the "freedom of choice" campaign, to stress that consumers do have options as to where they play the music they download. "Consumers didn't realize that they were being locked into a particular brand of portable player, such as the iPod, forcing them to buy music that only worked on that device," Graves told NewsFactor.

    "Our freedom of choice campaign has certainly got a lot of people talking about consumer choice in online downloading," Graves said.

    Huge Boost

    "RealNetworks' 49-cent downloads were launched to provide a significant challenge to Apple's dominance, and on the basis of the initial selling figures, appear to be doing so," Forrester Research analyst Rebecca Jennings told NewsFactor.

    "This strategy will cost it money -- RealNetworks could lose $2 million from below-cost sales -- but will give its service a huge boost. Real's Harmony technology also hits Apple where it is weakest -- in its lack of compatibility. Consumers want flexibility, and their adoption of Harmony will push the likes of Apple, Sony and Microsoft into improving the interoperability of their hardware and software," Jennings predicted.

    "Real will get a short-term advantage while this happens -- although, once it has happened, it is likely to lose ground again," Jennings continued. "What will be achieved is that consumers will realize that Apple's iTunes proprietary technology locks them into Apple -- and will start questioning whether to buy iPods while this remains the case."

    Student Deals

    Separately, Real announced that it had signed deals to offer its Rhapsody Internet jukebox service to over 80,000 students at the University of California, Berkeley, and the University of Minnesota, starting this fall.

    The discounted music program for college students is part of a one-year test program that Real expects to expand to other campuses next year. It offers a Rhapsody subscription to 30,000 Berkeley undergraduates for free through October 31st and at a deep discount after that date, RealNetworks said.

    In Minnesota, over 50,000 students at four state university campuses can buy the service at reduced monthly rates or at even deeper discounts for 3- or 12-month subscriptions. Normally, the service costs $10 a month.

    "By offering students legal alternatives to music piracy, we're investing in the future of the online-music industry," says Richard Wolpert, chief strategy officer, RealNetworks, in a statement.

    CIO Today: NewsFactor Network - - RealNetworks Promotion Sells 1 Million Songs

    Posted by Craig at 11:24 PM

    MSN in Music Biz

    Microsoft will jump into the music-downloading market this week, with the rollout of a new MSN online-music service that will compete with Apple's iTunes and RealNetworks' Rhapsody.

    Microsoft To Enter Music-Download Market

    By Robin Arnfield
    Enterprise Windows I.T.
    August 30, 2004 12:18PM

    Microsoft will jump into the music-downloading market this week, with the rollout of a new MSN online-music service that will compete with Apple's iTunes and RealNetworks' Rhapsody. MSN Music will launch at the same time as the beta release of Microsoft's new Windows Media Player 10.


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    Microsoft is expected to enter the music-downloading market later this week, in a move that will put the software company in direct competition with Apple's iTunes platform.
    As a storefront on the MSN online service, Microsoft's music service will offer songs for downloading to PCs and portable music players.

    Beta Version

    The launch of Microsoft's Internet music store, MSN Music, will take place on Thursday, September 2nd, at the same time as the beta release of its new Windows Media Player 10, according to press reports.

    MSN Music will also be in beta mode, and will be given additional features at a later date. The downloading service will offer 99-cent downloads, but at this time will not offer monthly subscriptions.

    Strategic Plan

    The timing of MSN Music's launch to coincide with the announcement of Windows Media Player 10 indicates that for Microsoft, the goal is wider than competing with iTunes, which has been the dominant player in the Internet music market since its debut in April 2003. According to Forrester Research, iTunes has around 70 percent of the U.S. music-downloading market.

    Windows Media allows consumers to play films, music and other digital content on a variety of devices running the Windows operating system. With Windows Media and MSN Music, Microsoft hopes to expand its efforts to make Windows the foundation for its move beyond the desktop and into consumers' living rooms.

    Protecting Investment

    "Yes, Microsoft does want its software to be the centerpiece of the digital-entertainment hub in the home," Yankee Group analyst Michael Goodman told NewsFactor.

    "But its strategy is wider than that. By entering the music-downloading market, Microsoft is protecting its investment in its WMA music format and its Janus digital-rights-management technology. There was a risk that companies would have stopped using WMA had Microsoft not demonstrated that it was serious about Internet music."

    Antitrust Issues

    Antitrust regulators in Europe and the U.S. will be taking a close interest in Microsoft's launch of its online-music store to see whether it is using its domination of the operating-system market and the near-ubiquity of its Media Player software on consumers' desktops to gain advantage in the online-music market.

    In the U.S., Microsoft has already been ordered to remove an obscure link, buried deep inside Windows, that opened an Internet Explorer browser loaded with a Microsoft-branded CD store.

    European regulators have been very critical of Microsoft's use of the Media Player to get ahead in the online-media market and will no doubt scrutinize any undue promotion of the MSN Music store.

    In March, the European Commission cited Microsoft for offering Windows on the condition that the operating system come bundled with the Windows Media Player, alleging that this effectively stifled competition.

    Microsoft is challenging the Commission's ruling in the Windows Media Player case. In September, it will go before the Court of First Instance. The software company intends to ask the European Court to suspend the Commission's remedies, which include requiring Microsoft to offer a version of Windows without Media Player.

    CIO Today: NewsFactor Network - E-Business - Microsoft To Enter Music-Download Market

    Posted by Craig at 11:20 PM

    August 17, 2004

    Music Download

    Real slashes music download prices

    7/08/2004 by Leigh Phillips

    Print | Email Colleague | Send Feedback | Read Feedback

    Online media software firm Real Networks has announced today it has slashed in half the price of songs from its digital music store in an attempt to undercut key rival Apple's iTunes music service.

    Real has temporarily cut the price of a single track to 0.40 (49 cents), down from 0.80 (99 cents) - the same as iTunes. Albums will now cost 4.04 ($4.99) as well.

    The firm also launched the latest edition of its Real Player media player today, and announced its largest-ever ad campaign for its digital music service, with ads newspapers, magazines, and on radio and the internet.

    Real's online music shop has yet to launch in Europe.

    Digital Media Europe: News - Real slashes music download prices

    Posted by Craig at 11:58 PM

    August 16, 2004

    Music Projections

    Digital music sales to increase sixfold to $1.7 billion by 2009

    No wonder theres so much competition for digital music downloads: Sales will more than double to $270 million this year from last year, then grow sixfold to $1.7 billion by 2009, Jupiter Research reports.

    Although digital music will return the U.S. music industry to growth after four years of steep declines in sales, it will not replace CDs or return music sales to their peak of 1999, Jupiter says. It adds that revenue from digital music subscription services will grow faster than revenue from separate downloads, which will mostly serve as a means for sampling music titles before purchasing a CD, Jupiter says.

    "The so-called celestial jukebox is in sight," says David Card, vice president and senior analyst. "But for now, it will appeal to music aficionados. The U.S. music industry must manage digital music as one of a series of incremental revenue streams, one that is in the same scale as licensing (e.g., ring tones, games and advertising)."

    Jupiter adds that shipments of MP3 players will grow more than 50% this year to more than 5 million, and continue to grow nearly 50% per year for the next several years.

    The digital music market is playing out in robust sales at several providers. Apple Computer Inc.s iTunes, for instance, reports that it has sold 100 million digital songs since launching about 15 months ago. And Roxio Corp., which is selling off its software operations to concentrate on digital music and changing its name to Napster, its digital music brand, sold 300,000 songs in its first week of operation last November.

    InternetRetailer.com - Daily News for Thursday, August 12, 2004

    Posted by Craig at 02:55 PM

    August 05, 2004

    Patents and Music

    Apples Settles with E-Data. Microsoft did earlier this year. E-Data goes after 14 more.

    ZDnet 08/04/04: Separately, Apple has brought an end to a legal dispute over the iTunes Music Mtore, E-Data announced on Wednesday. The iPod maker has agreed to license patents from E-Data, which says its owns intellectual-property rights to the process of selling music online. Microsoft has also settled with E-Data.

    Related story 1/20/2004

    Microsoft settles music download suit
    By John Borland
    CNET News.com
    January 20, 2004, 4:48 PM PT

    New York company E-Data said on Tuesday that it has settled a patent infringement suit filed against Microsoft and others, based on music download services in Europe.

    Last October, the small company sued a European division of Microsoft, along with the HMV Group, Internet service provider Tiscali and digital music company On Demand Distribution (OD2), charging them with violation of a patent that covers the downloading of information onto a tangible object such as a CD. Music download services operated by the four companies allowed consumers to burn downloaded music to a CD.

    The settlement terms include past and future rights to use the patent anywhere in the world, E-Data said in a statement. Financial terms were not disclosed.

    "We are quite pleased with this settlement, as it further reinforces the scope and validity of (our) patent in Europe," said E-Data Chairman Bert Brodsky in a statement. "While the OD2 service is still in the nascent stagethe agreement sends an important message to other companies infringing upon our intellectual property."

    The patent is one of several that cast some financial uncertainty over the young digital media business. Other companies, including Acacia Research and SightSound Technologies, have said that they own broad rights to such processes as streaming digitally archived media such as music or video, or even selling access to audio and video over a telephone line .

    E-Data is characterizing the suit's settlement as an explicit shot across the bow of other download services--Brodsky specifically cites Apple Computer's iTunes--that are planning to enter the European market.

    "We are currently in talks with a number of prominent companies in Europe infringing upon our intellectual property, and may seek injunctions against these companies if necessary," Brodsky said.

    Related Story 8/4/2004

    E-Data Commences Litigation Against 14 Companies in the United States; New Litigation Follows Successful Settlement with Apple Computer in Europe

    PORT WASHINGTON, N.Y.--(BUSINESS WIRE)--Aug. 4, 2004--E-Data Corporation (OTCBB:EDTA) announced today that it has commenced litigation, and is seeking damages from the following companies: Cinemark USA, Inc.; Regal Entertainment Group (NYSE:RGC); the Thomson Corporation (NYSE:TOC); International Data Group, Inc.; Amazon.com, Inc. (Nasdaq:AMZN); Movietickets.com, Inc.; Ticketmaster, L.L.C., Marcus Theaters Corporation, Fandango, Inc., Franklin Electronic Publishers, Inc. (Amex:FEP), The New York Times Company (NYSE:NYT); Hallmark Cards, Inc.; American Greetings Corporation (NYSE:AM); and NewsBank, Inc., in the United States District Court, Eastern District of Texas (Docket: 4 04 CU 256), for having infringed upon its patent (U.S. patent No. 4,528,643) also known as "the Freeny patent," prior to its expiration within the United States in January 2003. The Freeny patent covers the downloading and recording of information from a computer onto a tangible object.

    This action follows the company's recent settlement with Apple Computer, Inc. (Nasdaq:AAPL). Additionally, the company has pending litigation against Getty Images (NYSE:GYI) and Corbis in the United States and Europe. The United States litigation has been commenced in the U.S. District Court, Western District of Texas (Docket: A 04 CA 230LY). In Europe, the company has filed litigation in the United Kingdom (Docket: Pat04007 and Pat04008) for infringing upon its European patent (EP 0 195 098 B-1).

    Bert Brodsky, chairman of E-Data Corporation stated, "These 14 companies have violated our patents. We have a very strong track record enforcing our intellectual property rights, as evidenced by our favorable decision with the U.S. Court of Appeals, and our recent settlement with Apple Computer. In addition, we have obtained settlements from Microsoft, Tiscali, HMV, and On Demand Distribution, further reinforcing the strength of our patents. We are represented by two of the leading intellectual property law firms--Simon, Galasso & Frantz in the United States, and Howrey Simon Arnold & White, MNP, in Europe. Given our strong representation and recent success, we will aggressively enforce our rights."

    Within the U.S., the company has already secured more than 30 domestic licenses and has received a favorable decision by the Court of Appeals for the Federal Circuit on November 6, 2000 - supporting the scope of the company's patents. E-Data has alerted additional companies to their need for a license under the Freeny patent, and is analyzing the activities of others. The company will not hesitate to start additional legal actions if necessary.

    Posted by Craig at 11:30 PM

    July 08, 2004

    CD Burn Music Station

    CD kiosks let fans do it their way -- and legally

    CD kiosks let fans do it their way -- and legally
    Adrienne Baker, Star Tribune
    July 7, 2004 MIXANDBURN0707

    A St. Paul company is jumping into the maelstrom over downloading music with its own way to get customers to pay: stations where they can mix and burn their own custom CDs.

    Mix & Burn Inc. has developed a laptop-size, touch-screen kiosk called a "Music Tablet" where consumers can download from a catalog of more than 200,000 songs spread among 200 music genres. The kiosks, which are sold to retailers, will appear in two area stores in coming weeks.

    At $10 for the first seven songs and $1 per song after that, it's not as cheap as free, but it is legal. And the service addresses a fundamental problem with how the music industry sells its product: People don't like paying $15 for a 10-song album when they want only two of the tracks.

    An album can be created at a Mix & Burn station in about four minutes.
    Mix & Burn's Music Tablets
    Mix & Burn's Music Tablets
    Heather Charles
    Star Tribune

    The company hopes to expand the concept to digital movies, games and software.

    CEO Stephen Russell said he came up with the idea for the Music Tablet after talking to his son about Napster, then an illegal service, and other peer-to-peer networks several years ago. "I thought, 'This is too large an industry to not find a legal way for digital content to be delivered,' " Russell said.

    Mix & Burn is hardly the first to try to capitalize on legal music downloads. Apple Computer's iTunes Music Store, for example, sold 70 million songs, at 99 cents each, in its first year. Richfield-based Best Buy Stores Inc. has contracted with two services, Rhapsody and Napster, for downloads and music streaming.

    Many of those legal services require users to pay monthly subscription fees on top of download charges, however. Legal downloading also is out of reach for people who don't own a computer or who lack a high-speed Internet connection.

    Mix & Burn's Music Tablets will be located in retail outlets, meaning there's no equipment for consumers to buy. And because Mix & Burn has agreements with five major music publishers, songs are available for download as soon as albums are released in the stores.

    Still, the question remains whether consumers will be willing to travel to a store in order to pay to download music, as opposed to doing so -- legally or illegally -- from the privacy of their homes.

    Matt Wineger, a 20-year-old University of Minnesota student, doubts the product's ability to compete with free music and the convenience of home. "You don't want to be downloading 'It's Raining Men' in a public place," he joked.

    But John Flaherty, a 19-year-old University of Minnesota student and Napster user who refers to himself as a "professional pirate," said: "It would be awesome to use it and absolutely convenient. I don't know if it'd be marketable, but it is certainly worth a shot."

    For the music industry, any business that persuades customers to pay is a welcome one.

    The Recording Industry Association of America describes Internet theft as "rampant." An industry survey released three years ago claimed that 23 percent of music consumers were choosing to download or copy music for free rather than buy it.

    About 44 million Americans have downloaded music, said Matt Kleinschmit, director of Ipsos-Insight, an international market research organization. "The rise of digital music has redefined the music industry options for consumers. No longer is there only one way to obtain music," he said.

    Though legal kiosk-based music delivery has been discussed since the late 1990s, the concept was slow to be adopted, partly because music companies were skittish about all download services, including legal ones.

    Mix & Burn is one of the first companies to develop a kiosk that could be used by all kinds of retailers, and the timing could be right, Kleinschmit said. "We are entering into an era now where consumers are more in tune with terms like 'download,' 'burning' and 'ripping,' " he said. "Now is a perfect time to experiment with these types of systems."

    The success of iTunes has persuaded the music industry to grant licenses to other legal download services. In March, Starbucks added kiosk-style listening and burning stations to its menu at some stores, selling albums for $6.99 for five tracks and $1 for each additional song.

    Navarre Corp., a New Hope-based publisher and distributor of music and software, recently bought 45 percent of Mix & Burn. "Mix & Burn is a new and unique way for the consumer to access and purchase music through a retail market," Navarre CEO Eric Paulson said. "Our relationships with major record labels and independent labels helped them get licenses," he added.

    Mix & Burn's July installment of Music Tablets at the Bound to be Read bookstore in St. Paul will be an opportunity for Minnesotans to sample digital music in stores.

    Music Tablets will be available at the Electric Fetus in Minneapolis and at the St. Olaf College bookstore in Northfield beginning this fall.

    "We are hoping to get as many teens in here as possible that won't buy anything and just sit and look," joked Lance Festerman, general manager of Bound to be Read.

    Music Tablets give the bookstore an opportunity to sell music without having to stock physical inventory, Festerman said. "It's very much a new angle. It's taking an old model from the music industry, turning it around and updating it," he said. "I think it will draw people of all ages. If you can navigate the Web, you can use the product."

    As the search for ways to support the music business and combat theft continues, other companies are considering CD burning at retail locations.

    Best Buy is closely watching the performance of CD-burning stations. The company has no immediate plans to offer the service, but "it is something that we are looking very seriously at," said Scott Young, vice president of digital entertainment.

    Large picture

    Adrienne Baker is at [email protected]

    CD kiosks let fans do it their way -- and legally

    Posted by Craig at 03:00 PM

    June 30, 2004

    Starbucks and Music Burn

    Thinking Outside The Cup in-depth article on Starbucks..http://www.fastcompany.com/magazine/84/starbucks_1.html

    Posted by Craig at 06:14 PM

    June 28, 2004

    Mobile Phones & Music

    T-Mobile Rings Up Music to Sell Download Phones

    Mon Jun 28,10:05 AM ET

    LONDON (Reuters) - More of Europe's music fans will be able to use their mobile phone like a digital music player as Germany's T-Mobile (news - web sites) (TMOG.UL) (DTEGn.DE) attempts to cash in on the song download craze

    The mobile phone giant will announce the roll out later on Monday of five new handsets equipped with "Ear Phones" technology, which enables customers to download three CD-quality tracks to their phone.

    It is the latest bid by a mobile phone group to drive traffic across networks and tempt customers into pricier handsets. Rivals Vodafone (news - web sites) Group Plc (VOD.L) and mm02 Plc (OOM.L) have launched similar deals, so far with little market impact.

    Piracy-battered music companies, meanwhile, are trying to provide tech-savvy customers with yet another legitimate sales channel and reverse slumping music sales.

    The T-Mobile handsets will be available as of Monday in its markets of Britain, Germany, the Netherlands, Austria and the Czech Republic.

    Song downloads will be limited to a catalog of 500 "mobile mixes," or condensed versions lasting 90- to 120-seconds. They will cost roughly 1.50 pounds or 1.50 euros, well above the average 99 pence Internet (news - web sites) retailers charge for downloads, which can then be transferred to a digital music player.

    T-Mobile reckons the relatively cheap handset upgrade will stoke early demand. Ear-phone handsets will have a launch price of between 29.99 pounds and 59.95 pounds for contract customers, compared with at least 200 pounds for a state-of-the-art digital music player such as Apple Computer Inc.'s (Nasdaq:AAPL - news) iPod.

    But the market for mobile phone music players is very much unproven. Handset song capacity is limited and technology standards still need to be perfected before the potential music catalog can rival online download stores such as Apple iTunes.

    T-Mobile, though, is promising a downloadable catalog of 250,000 full-length tracks by Christmas. It has already enlisted the help of some of the world's biggest music companies including Universal Music (EAUG.PA), Sony Music (6758.T) and Warner Music.

    "We believe that music and the mobile space will continue to converge as a lifestyle focal point, and we intend to ensure that our artists realize the full benefit of that convergence," said Jim McDermott, senior vice president of new technologies at Sony Music International.

    Posted by Craig at 07:04 PM

    June 22, 2004

    Music Download

    Loudeye's OD2 Buy Creates Music-Download Giant

    By Robin Arnfield
    CIO Today
    June 22, 2004 3:02PM

    U.S. digital media company Loudeye has purchased On Demand Distribution (OD2), the leading European music download company, for $38.6 million. The acquisition creates an international music-download powerhouse

    As competition heats up in the European legal music-downloading market, online-music service OD2 has been acquired by Loudeye, a U.S.-based digital-media company, for US$38.6 million.
    The two companies said that an initial guaranteed payment in cash and shares of $20.7 million (11.4 million pounds) would be paid for Bristol, UK-based OD2. Loudeye also agreed to pay about $17.5 million over the course of the next two years.

    "By combining with OD2, the leading digital-music service provider in Europe, we become the largest business-to-business digital media provider in the world with the largest licensed digital music catalog in the industry," Jeff Cavins, Loudeye's president and chief executive officer, told NewsFactor.

    OD2's long-held position as Europe's main legal music-downloading services provider has come under attack in recent weeks as Apple Computer's iTunes and Roxio's Napster both entering the market. Sony is due to launch a European downloading service shortly.

    Thinking Ahead

    Digital-music sales in Europe will experience significant growth rates over the next three years, reaching approximately $1.6 billion by 2007, Forrester Research forecasts.

    Earlier this year, OD2 hired U.S. investment bank Broadview International to help it explore various funding options, including a potential sale. Rather than compete head on with such well-known brands as iTunes and Napster, the newly combined company will become a back-end supplier to the big players, providing digitized music services to dozens of retail partners in Europe and North America.

    OD2 already supplies music downloads for 35 European music Web sites operated by such firms as MSN, MTV, Tiscali and Coca-Cola, while Loudeye provides anti-piracy measures for major music labels.

    The company claims to be the only company with digital-music distribution rights for all major European countries from all five leading recorded-music companies, as well as Europe's largest independent recorded-music companies.

    Through its various distribution partners, OD2 has built a database of more than 750,000 registered customers. Last week, OD2 launched a digital-music "jukebox" offering consumers the opportunity to listen to songs for 1 UK penny and to make downloads for 75 UK pence (US$1.35) per track.

    Going Global

    Loudeye is looking beyond Europe as well. "We are definitely targeting the Asia-Pacific region as a result of our deal with OD2," said Cavins.

    "Three months ago, I told our shareholders in an earnings report that we wanted to expand Loudeye globally. By buying OD2, we are able to expand into Australia, where OD2 supplies digital music content for NineMSN. OD2 is already a leader in Europe and we are strong in North America, but we want to be global," Cavins explained.

    "OD2 in Europe is the main provider of Internet downloading services," Rebecca Jennings, an entertainment industry analyst at Forrester Research in London, told NewsFactor. "It has two thirds of the market for legitimate music downloading.

    Asia-Pacific Market

    "So, buying OD2 means a huge push into Europe for Loudeye. But the most significant aspect of the deal is the intention to enter new markets, such as the Asia-Pacific region, where there are big opportunities but not as much competition as in the U.S.," Jennings noted. "But I suspect that OD2 will need to negotiate with the record labels to obtain Asia-Pacific online rights to their catalogue," she added.

    "To allow us to enter the Asian market, we need to negotiate licenses for Japan and China, the main markets in Asia," Cavins confirmed. "If the demand is there from consumers, the major labels will be very keen to sell music in Asia over the Web."

    However, Cavins said that the company would not need to renegotiate digital music rights in Australia because of OD2's deal with NineMSN. The Australian Web site, which is a joint venture between MSN and Australian media firm Publishing and Broadcasting, launched its digital music service in April 2004.

    White-Labeling Opportunity

    A growing trend in the music-download business is for consumer-goods companies to offer online music stores as a way of selling their products, which range from digital-music players to Coke. Founded in 2000 by ex-Genesis singer and World Music pioneer Peter Gabriel, OD2 spotted a business opportunity to act as the back-end services provider for these Web sites, rather than selling music direct to the public under its own brand name.

    Now, with the number of music-download retailers reaching 100 around the world, OD's original strategy -- to act as a white-labeling service provider rather than to create its own retail downloading brand -- makes even more sense. As competition accelerates, there undoubtedly will be casualties among the startups, and the capital required to stay in the market will grow.

    Cavins added that OD2's current catalog of 350,000 tracks will be expanded to 1.3 million within the next few months, drawing on Loudeye's archive of 4.6 million songs.

    The combined firm will continue to carry the OD2 brand in Europe and will have its headquarters in Seattle, Washington. According to press reports, it plans to move into mobile-phone download services and expand beyond audio into video services.

    NewsFactor Network - Tech Trends - Loudeye's OD2 Buy Creates Music-Download Giant

    Posted by Craig at 09:59 PM

    June 14, 2004

    Prepaid in C-Stores

    7-Eleven to distribute prepaid Musicmatch cards

    7-Eleven to distribute Musicmatch cards
    Musicmatch Inc., a provider of personalized music software and services, reports the immediate availability of Musicmatch Music Download Cards at thousands of participating 7-Eleven Inc. c-stores nationwide. The distribution is being enabled by a partnership with Vesta Corporation.

    The Musicmatch cards are priced at $9.90 for 10 songs. Once purchased, the cards can be easily redeemed through the Musicmatch Downloads service, which currently offers more than 550,000 tracks as well as other features.

    "Musicmatch and Vesta have provided us with an easy and effective way to bring digital music to the masses in a prepaid format," says Kevin Elliott, vp of merchandising for 7-Eleven Inc., "which is especially attractive to a new generation of young consumers looking to buy music without the need for credit cards."

    Intelecard News Online |ICN Wire

    Posted by Craig at 03:42 PM

    Music Service

    Echo Music Group Goes Way of the 8-Track, Says Report (lasted 16 months)

    Echo Music Group Goes Way of the 8-Track, Says Report

    LOS ANGELES (June 14, 2004) - Echo, the consortium of brick-and-mortar music retailers formed in 2003 to compete with online, digital entertainment services, has lost the backing of its seven members, according to a report from CNET News.com.

    Best Buy Co., Hastings Entertainment, Tower Records, Trans World Entertainment Corporation, Virgin Entertainment Group, Wherehouse Music and Borders Group have pulled funding for Echo, in large part because online competitors so far have not overtaken nearly as much of the bottom line as traditional stores once feared, the report states. Other factors behind the decision included growing development costs and an influx of competitors offering bargain-rate services.

    The reality is that compared to all the retailers bottom lines, even Apples music sales are insignificant, Alex Bernstein, a co-founder and investor in Echo, stated in the report.

    Executive Technology

    Posted by Craig at 03:39 PM

    June 08, 2004

    Music Service

    Toshiba goes with Napster

    Tuesday June 8, 6:00 am ET

    IRVINE, Calif. and LOS ANGELES, June 8 /PRNewswire/ -- Toshiba Digital Products Division (DPD) and Napster, a division of Roxio (Nasdaq: ROXI - News), today announced that they will work together to provide Toshiba's customers with easier access to the most recognized brand in online music. Toshiba's Satellite notebook computers will feature a pre-loaded Napster client with direct access via the Napster "kittyhead" desktop icon so customers can download music from the digital music service with the largest catalog and most features. Toshiba selected the Napster subscription service because it keeps users mobile by allowing them to download an unlimited amount of music to their notebook, which can be played while on or offline. As a special benefit to all new Toshiba notebook buyers, Napster has extended a one month free trial to its subscription service.

    "Professionals, students and families alike are becoming more and more mobile, and Napster's software allows them to take their music anywhere they need to go without having to be connected to the Internet," said Taro Hiyama, vice president of marketing, Toshiba DPD, a division of Toshiba America Information Systems, Inc. "Whether it's including the latest productivity features for the office, or the hottest entertainment capabilities for play, Toshiba is committed to providing our notebook customers with products that make their lives easier."

    "With Napster's innovative subscription service, music fans can download an unlimited amount of music to their hard drive for only $9.95 a month. We designed this service with notebook computers users and broadband or dial-up customers in mind since this is a great way to listen to music even when not connected to the Internet -- on a plane, in a bus ... anywhere," said Larry Linietsky, Napster's SVP, worldwide business development. "As more people use their notebook computers for enjoying their music collections on the go, Napster is pleased to offer its software, service and a special trial to Toshiba's top selling line of portable computers to make the experience easy and fun."

    The first series of Toshiba notebooks with the Napster software pre-loaded and extended free trial begin shipping today. Once consumers click on the kittyhead desktop icon, subscribers can listen to over 750,000 full-length tracks on demand, and download any track they choose onto their notebook's hard drive for offline listening and convenience on the go.

    Subscribers can also access over 50 interactive radio stations, community features like browsing other members' collections, sending tracks to friends and sharing playlists, Billboard chart information, an original magazine, Fuzz, and music videos. Consumers who choose not to subscribe can download the application and sign up for Napster Light, where they can buy songs for 99 cents each and albums for as little as $9.95 each. All Napster members can organize their entire music collection in Napster by using the ripping software to take tracks from CDs they already own to play on Napster, import MP3s into their Napster Library, or transfer tracks they've bought to any of over 70 portable music devices.

    About Toshiba America Information Systems, Inc. (TAIS)

    Headquartered in Irvine, Calif., TAIS is comprised of three divisions: Digital Products Division, Digital Solutions Division and the Storage Device Division. Together, the three divisions provide mobile products and solutions, communications, storage and imaging products and services. Products include industry leading portable computers, PDAs, projectors, DVD/CD recordable products and hard disk drives for computers, telephony products, digital imaging systems, wireless solutions and services. TAIS provides sales, marketing and services for its wide range of information products in the United States and Latin America. TAIS is an independent operating company owned by Toshiba America, Inc., a subsidiary of Toshiba Corporation, which is a world leader in high technology and integrated manufacturing of electrical and electronic components, products and systems. Toshiba has global sales of over $52 billion and more than 300 subsidiaries and affiliates worldwide. For more information, visit the company's website at www.toshiba.com.

    About Napster

    Napster is the world's most recognized brand in online music. Napster subscribers can listen to full-length tracks on-demand, collect tracks to their hard drive, listen to Napster Radio and access Napster's community features. Napster Light, a "lighter" version of the service, allows members to freely search and browse 30-second clips within Napster's music catalog and purchase tracks and albums to burn to CD and transfer to over 70 digital music players. Napster has content agreements with the five major record labels as well as hundreds of independents, creating the largest catalog of online music which spans all genres and artists from Eminem to Miles Davis. Napster is a division of Roxio, Inc., (Nasdaq: ROXI - News), the Digital Media Company, provider of the best-selling digital media software in the world. Napster is headquartered in Los Angeles with additional offices in London, New York, Richmond Hill, ON and San Diego.

    (C)2004 Toshiba America Information Systems, Inc. (TAIS). Satellite is a registered trademark of TAIS. All other product, service and company names are trademarks, registered trademarks or service marks of their respective owners. Information in media advisories including without limitation product prices, specifications, content of services, and contact information, is current on the date of the press announcement, but is subject to change without notice.
    Copyright (C) 2004 Roxio, Inc. All rights reserved. Roxio, the Roxio tagline and Napster are registered trademarks of Roxio, Inc. or its subsidiaries in the United States and/or other countries. All other trademarks used are owned by their respective owners.

    Napster Contact:
    Dana M. Harris
    [email protected]

    Nancy Sullivan, John Conroy
    Rogers & Cowan
    310-201-8899 or 201-8878
    [email protected]
    [email protected]

    Toshiba Contact:
    Roslyn Whitehurst
    Benjamin | A Weber Shandwick Company
    [email protected]

    Source: Napster; Toshiba America Information Systems, Inc.

    Toshiba Selects Napster to Provide Music Download Service on Select Notebooks

    Posted by Craig at 09:33 PM

    June 03, 2004

    Music Download

    Music Download Firms Don't Get It [Motley Fool Take]

    By Mark Mahorney
    June 3, 2004

    I had my first go at paying to download music the other day and it left much to be desired. I didn't even look at Roxio (Nasdaq: ROXI) because after I wrote about its earnings, I was warned that its software was intrusive. Then, I eliminated RealNetworks' (Nasdaq: RNWK) Rhapsody and Time Warner's (NYSE: TWX) AOL because they both required that customers buy a subscription for the privilege of paying them again to download songs. Now I don't know about you, but it just seems wrong to have to pay someone to shop with them unless they have something I need and can't get anywhere else, like a mega-sized jug of cheese balls. (And who doesn't love that?)

    Both Sony's (NYSE: SNE) Connect and Apple's (Nasdaq: AAPL) iTunes required that I download software, but with Sony, as far as I could tell, I had to download the software before I could even see what music it had to offer.

    With the choices narrowed down to iTunes, Buy.com, and Wal-Mart (NYSE: WMT), I started my song search and found the search capabilities overly simple. I searched for Aerosmith's "Angel" (for my wife; if it were for me, it would have been something obscure and grungy from Toys in the Attic). Aerosmith has been around longer than I have, so there are many pages of songs to sift through. And searching on the song Angel comes up with about a thousand matches.

    Then I found that none of the services had all the songs that I wanted. That's not their fault necessarily, as it's an artist and label issue. But, to get most of the songs on my list, I was going to have to use more than one service.

    In the end, I went with Wal-Mart to save a buck, and I got what I paid for. Per the service, I had to read the help files in Microsoft's (Nasdaq: MSFT) Media Player to burn songs to a CD. It took three discs to burn the 19 songs. I then used another software to copy the songs from the three discs onto a single disc, which all fit fine. The service cost me three discs and a lot of time. I don't think I'll be downloading music again anytime soon.

    Now my computer literacy is well above average -- not to brag -- but it says to me in a Peter Lynch sort of way that these services aren't ready for the average user yet. And therefore, much of the potential market is being left untapped and revenue is being limited. However, that also means there's potential for whichever company can step up and simplify the process.

    The most likely right now is Apple because it's the current leading brand and its software is supposed to make burning simple, but if Amazon.com (Nasdaq: AMZN) were to enter the market, I suspect it would quickly become a leader, at least in simplicity and search capability, just as it is with books.

    Fool.com: Music Download Firms Don't Get It [Motley Fool Take] June 3, 2004

    Posted by Craig at 09:29 PM

    June 02, 2004

    Music and McDonalds

    Sony and McDonald's link up for music download deal

    Staff, Brand Republic 08:00 02-06-2004
    NEW YORK - Sony and McDonald's are targeting teenagers as part of a new promotional deal that will see the two offer music downloads to people from Sony's Connect digital music service.

    Sony Connect is hoping that the deal will attract teenage music fans to its download service, which is currently available in the US only, while McDonald's hopes that it will position the store as a venue for those interested in digital music.

    According to reports, McDonald's will invest $30m (16.3m) in advertising the partnership. In return, it will get discounts to license some songs from Sony Connect, which could be given for free to some customers.

    McDonald's said in a statement on Tuesday that it was announcing a new strategic music alliance in Hollywood at an event that will feature appearances from Justin Timberlake, who appeared in the brand's "I'm lovin' it" advertising, and Ashanti.

    The music download industry is becoming highly competitive, especially in the US where music fans have access to online stores such as Napster and iTunes, as well as major retailers such as Wal-Mart getting in on the act.

    Sony Connect, which launched in May and charges $9.99 for a monthly subscription, already has a deal with United Airlines' loyalty scheme Mileage Plus. The deal lets members spend miles on music and earn songs by using the Mileage Plus-branded Visa card.

    In the UK, McDonald's has been building its relationships with internet companies, with deals including a BT wi-fi deal and the installation of EasyEverything internet terminals in some of its restaurants.

    Brand Republic

    Posted by Craig at 09:20 PM

    May 25, 2004

    DVD rentals

    Robotic DVD Machines at Chicagoland Jewel-Oscos

    Published on 6/3/2003

    GETAMOVIE's touch-screen robotic machine, which costs $50,000.
    Photo courtesy of GETAMOVIE

    SCHAUMBURG, Ill. � Four Jewel-Osco grocery stores across Chicagoland now have a new perk: the ability to circumvent video stores without human intervention.

    Schaumburg, Ill.-based GETAMOVIE, formerly coined CineQuest when ePrairie profiled the prototypical company late last year, has placed its $50,000 proprietary robotic vending machines at west suburban grocery stores as an allure to convenience shoppers who don�t want to make a separate trip to the video store.

    "We want to minimize people having to go from store to store to get everything they need," said Mike DeLazzer, president and co-founder of GETAMOVIE. "GETAMOVIE saves time and fulfills the need for instant gratification. Almost any new-release movie you can think of that's in stock you can rent right this second."

    Originally equipped with traditional screens and steel buttons, the company�s latest machines are powered by touch screens. GETAMOVIE rental machines are similar to ATMs in that they are designed to provide a fast and automated way to rent DVD movies and games. Each machine allows movie and video game lovers to search and select favorite movies and games by title, director, actor and category.

    The machines are connected to the Internet via DSL so consumers can browse machine inventories (roughly 250 titles) and reserve them at Getamovie.com before heading to a store. DeLazzer says his is the first DVD rental system that allows consumers to ensure real-time movie and game availability at retail locations in advance.

    Though DeLazzer and co-founder Franz Kuehnrich toyed with the notion of one-day DVDs for 99 cents some months ago, DeLazzer says there�s no need to undercut rivals so dramatically. Rather, he says, GETAMOVIE prevents the accrual of massive late fees, which in the past has rung up $800 million in profits annually for Blockbuster Video.

    �Hey, things happen. You�re not always able to return a movie exactly on time and you shouldn�t be penalized that much. I don�t know any other service in the world that would make you pay the same fee if you�re only a couple hours late,� DeLazzer said. �This is entertainment. We want people to have a good time and come back with smiles on their faces. The last thing we want to do is kill the smile due to some arcane late-fee policy.�

    GETAMOVIE co-founder Mike DeLazzer (left) beside co-founder Franz Kuehnrich.
    Photo courtesy of GETAMOVIE

    GETAMOVIE game and DVD rentals start at $3 for 24 hours. A second day costs 50 cents more. Each day thereafter costs an additional 99 cents. Some 90 percent of the discs are movies. Consumers can pay by credit card or credit card-linked membership cards, which come charged with $5 and can be recharged at any time.

    Returns are due back to the machines from which they were rented. DeLazzer says his machines are equipped for leeway so you�re not necessarily penalized if you�re an hour late. He says the machines typically give you four or so hours before charging you an additional day.

    Each machine hold 1,500 titles. Because space is always an issue at a grocery store, DeLazzer says his company is working on a new model that would hold the same amount of discs while taking up half the physical space. DeLazzer declined to name the New York company that is producing the machines to GETAMOVIE�s specifications.

    As far as the earlier notion of burning DVDs anew at the machines, DeLazzer says today's technology still isn�t at the point of on-the-spot burning practicality. Consumers won�t want to wait through a 30-minute ordeal, he says. He adds that disposable DVDs would come sooner than burnable machines whereby you could play them a couple times, they�d self destruct and you�d never have to worry about returns.

    While the allure to consumers is one-stop shopping, the charm for Jewel-Osco and other grocery stores is unmanned profit. As many grocery chains move in the direction of outsourcing their video and game rentals, GETAMOVIE plans to benefit from Jewel�s loyal and voracious customer base in return for a profit-sharing relationship with Jewel.

    GETAMOVIE machines are currently installed in Jewel-Oscos at 1755 W. Ogden Ave. in Naperville, 2855 W. 95th St. in Naperville, 1200 W. Boughton Rd. in Bolingbrook and 50 E. Ogden Ave. in Westmont. Further Chicagoland expansion is planned for later this summer with the goal of building a national network over the next 12 months through franchising, according to DeLazzer.

    In the first four days of business, DeLazzer says the company has signed up 300 customers at the four Chicagoland Jewel-Osco stores. He says healthy interest could bring GETAMOVIE machines to all 165 Chicagoland Jewel-Osco stores in three months.

    Formerly an eight-person company, GETAMOVIE now has four full-time employees and is funded by DeLazzer, Kuehnrich and Chicagoland angels and organizations. Though DeLazzer declined to specify the names of his external funding sources, he says GETAMOVIE is currently working on a second round.

    Posted by Craig at 02:17 PM

    May 24, 2004

    Video Download

    Sony to add video to Connect download service

    Martyn Williams, IDG News Service

    24/05/2004 07:19:27

    Sony plans to add video content to its Connect music download service later this year, accoridng to the head of the company's entertainment operations.

    "Sony Connect, our music download service, has just been launched at beta-testing level and video downloading will follow later this year," vice-chairman and chief operating officer of Sony, Howard Stringer, said.

    A company spokesperson downplayed the remarks and said that while Sony was considering a video download service it has made no decision on timing or the type of video content that may be offered.

    Sony launched its Connect music download service in the US on May 5 and plans to launch the service in June in the UK, France and Germany. It's a direct competitor to services such as Napster and Apple's iTunes Music Store, which launched a year earlier on April 28, 2003.

    Users of Connect can legally download songs and listen to them on a PC or compatible hardware device. Connect charges $US0.99 per song or from $US9.99 for an entire album. The songs are encoded in Sony's ATRAC3 format and protected against unauthorided copying with the company's MagicGate system.

    Sony has some experience in video download due to its involvement in Movielink.

    Launched in November 2002, the service is a joint venture of Metro-Goldwyn-Mayer (MGM), Paramount Pictures, Sony Pictures Entertainment, Universal and Warner Bros. and offers users the ability to download movies and watch them at home at any time during a 24-hour period for a flat fee.

    Through its Sony Pictures unit, Sony has access to a large amount of television, music video and movie content. Sony-produced television shows include Seinfeld, Days of our Lives, The Young and the Restless, Jeopardy and Wheel of Fortune while its movies arm has been responsible for recent hits including Spiderman, Charlie's Angels and Men In Black.

    This library could grow substantially depending on the outcome of current talks with MGM over a takeover of the company by Sony. Exclusive talks were currently talking place between the two companies regarding a possible acquisition, Stringer said.

    ARNnet | Sony to add video to Connect download service

    Posted by Craig at 08:51 PM

    Music Download

    Canada: Future Shop set to launch music-download service

    May 18, 2004. 01:00 AM

    Future Shop set to launch music-download service
    Retailer tackles free competition

    Margins on sales `slim,' firm says


    Electronics retailer Future Shop plans to announce today that it's getting into the music-download business to complement in-store CD sales.

    Best Buy Canada Ltd., parent of Future Shop, will officially launch its online service, dubbed Bonfire, on June 12, making it the first and largest Canadian retailer and online retailer to sell digital tunes through the Web.

    "Entertainment is very important for us as a category," Rick Lotman, senior vice-president of merchandising and marketing at Best Buy Canada, said. "We've been selling MP3 players and laptops for a while, and we're excited about being able to marry the hardware with the content."

    Like similar sites from Bell Canada and Telus Corp., Future Shop's Bonfire site will be based on the same technology that runs Puretracks.com, the first licensed music-download site in Canada.

    Bell opened its Sympatico Music Store last week, just nine days after Roxio Inc. of Santa Clara, Calif., announced its reborn Napster 2.0 service is coming to Canada this summer. More U.S. download services, such as MusicMatch Inc.'s MusicMatch Download and Apple Computer Inc.'s iTunes, are expected to follow.

    Revenues from music downloads in Canada are tiny relative to traditional CD sales. But recording industry executives see online music sales as a way of providing an affordable and convenient alternative for consumers who otherwise would download free files from music-swapping sites, such as Kazaa and Morpheus.

    "Trying to fight free is a challenge for anybody," said David Basskin, president of the Canadian Musical Reproduction Rights Agency Ltd., a licensing agency for publishers and songwriters. "We've believed since day one that the best answer to people who steal is having a commercial, legit, licensed alternative."

    Basskin said Future Shop's entry into the music-download market is positive news because it creates more awareness of such services. Puretracks.com has the marketing muscle of Bell, Telus and now Future Shop to spread the word and educate customers.

    "The bottom line," said Basskin, "is people need lots of choice."

    As more choice comes to market, legislators are moving forward on efforts to crack down on music swapping, which a federal court ruled earlier this year is not piracy because it doesn't constitute distribution or authorization to copy under Canadian copyright rules.

    Last week, a government committee report urged Ottawa to update federal copyright law to comply with its obligations under two World Intellectual Property Organization treaties. Those treaties make it illegal to make music digitally available for others to download freely.

    Future Shop's Bonfire service, like others, will sell most songs for 99 cents or full albums for $9.99 and customers will have access to Puretracks.com's music archives. Analysts expect that increased competition will eventually lead to lower download prices.

    Lotman said there are "slim" margins on music sales, meaning the service is unlikely to make money in the near term. "Over time that's going to change," he said. "It's very early. These are pioneering days in the download space."

    TheStar.com - Future Shop set to launch music-download service

    Posted by Craig at 04:47 PM

    May 03, 2004

    DRM and Janus


    Posted on Mon, May. 03, 2004

    Freeing the music from the computer


    By Dawn C. Chmielewski

    Mercury News

    Online music-subscription services like MusicNet or Rhapsody offer a seemingly appealing proposition: all the music you could ever listen to for a flat monthly fee. But there has always been a hitch. The songs remain locked to your computer, unless you pay more to buy them outright.

    A widely anticipated announcement from Microsoft today potentially removes that obstacle when the company unveils a new version of its Windows Media digital-rights-management software. Code-named Janus, the software will allow consumers to move rented music, movies or games onto portable devices or distribute them across home networks.

    ``What we're seeing happen in the second part of this year is really a migration of content off the PC and into people's lives, into handhelds, into TVs, into set-top boxes throughout the house. And this allows for that,'' said Bruce Eisen, executive vice president of CinemaNow, an online movie-rental business in Los Angeles.

    The new software has an internal clock that keeps track of the return date on a particular song or movie. Every time the portable music player or a Pocket PC connects to the Internet, or to an Internet-connected PC, the software checks the return date to see if the file has expired.

    That internal clock is key to subscription services. Record companies have refused to offer portability without such safeguards. Their fear: Consumers would join a service for a month, transfer all their favorite songs to a portable player in one giant download binge, then cancel their subscriptions.

    The new version of Windows Media software would prevent such abuse -- while allowing for portability. The first devices should be available in the fall.

    ``It gives the consumer another really compelling choice to immerse themselves in music,'' said Peter Csathy, president and chief operating officer of Musicmatch, a music download and subscription radio service based in San Diego.

    Janus holds similar potential for online movie-rental businesses such as CinemaNow and MovieLink, which allow consumers to temporarily download a movie to their PC, but not watch it on the living-room television.

    Microsoft envisions a new group of consumer devices, from DVD players to digital televisions, that could reach across a home network to find the movie on the PC and display it on the TV.

    ``So that when the consumer says, `I want to watch this movie,' it works,'' said Microsoft spokesman Jason Reindorp.

    Long-time consumer-electronics analyst Richard Doherty said Microsoft worked for five years, and ``spent more money than anybody but Microsoft would spend,'' to address the piracy concerns of major studios and music companies.

    Mercury News | 05/03/2004 | Freeing the music from the computer

    Posted by Craig at 07:16 PM

    DRM Software

    New anti-piracy technology from Microsoft

    New anti-piracy technology from Microsoft
    Jennifer L. Schenker IHT
    Monday, May 03, 2004

    In a move designed to extend the range of devices on which consumers can legally play and transfer music, movies and other content downloaded from the Internet, Microsoft was expected to announce Monday a new version of its digital rights management technology to combat piracy.

    Microsoft said the new version of its Windows Media digital rights management, or DRM, technology would enable consumers to play downloaded music and video on many PCs, portable audio devices and media players, mobile phones and Pocket PCs as well as networked devices connected within the home like digital audio receivers.

    "The technology will enable all kinds of new and different scenarios," Erin Cullen, Microsoft's lead product manager for Windows digital media division, said in an interview.

    Cullen said a long list of companies had agreed to support the new version of its DRM technology, including America Online, Disney, Napster and On Demand Distribution, a European music downloading service. But many big-name entertainment companies are missing from Microsoft's list, evidence, analysts say, that the jury is still out on which technology will be used by a majority of content providers to control copying or to charge consumers for each recorded work downloaded.

    In order to pay royalties to copyright holders, DRM technology needs to be embedded in all the hardware on which music, video and other forms of content play. Because of its strength in PC operating systems, Microsoft's entry into the sector and the enhancements are expected to help DRM to become more prevalent. The lingering problem, analysts say, is that there are a number of competing DRM technologies and no single DRM solution is poised to become an industry-wide standard.

    Gartner, a technology consultancy, predicts that DRM technologies embedded in hardware like MP3 players will not become widespread before 2009, meaning consumers could be faced with a confusing situation for some time to come. "While it is possible to use these technologies separately, it is not possible to integrate them today," said Ray Wagner, Gartner's research director for information security strategies.

    Music downloaded via Apple Computer's iTunes Music Store cannot be played on a device powered by Microsoft's Windows Media Player. Music from competing services can be downloaded and played on a computer but only through separate media players.

    Competing DRM camps include Microsoft, Apple, RealNetworks, Macrovision, and a joint venture formed by Sony and Philips. RealNetworks recently approached Apple about licensing its FairPlay digital rights management controls that prevent songs purchased through iTunes from being illegally copied, but Apple reportedly rebuffed the offer.

    Analysts said the attempt to build such an alliance was a response to the fact that the two other main competing camps are bulking up.

    A system designed to work across all devices is expected to be introduced this year by Philips, Sony and InterTrust Technologies, a Santa Clara, California-based maker of software used to control digital distribution rights.

    Microsoft, which last year formed a DRM alliance with Time Warner, in April announced that the two companies would jointly acquire nearly all of ContentGuard, a digital rights software company, from Xerox, which will retain only a small stake. ContentGuard is a competitor to InterTrust, which is owned by Philips and Sony.

    InterTrust sued Microsoft three years ago, charging patent infringement. The lawsuit was settled on April 2 when Microsoft said that it would pay InterTrust $440 million and get a license to use its patent portfolio.

    International Herald Tribune

    New anti-piracy technology from Microsoft: printer friendly version

    Posted by Craig at 07:14 PM

    April 30, 2004

    USB Drives and Music

    New device allows recording at concerts
    Fans can go home with legal copies of live shows

    New device allows recording at concerts
    Fans can go home with legal copies of live shows

    Chad Rachman / AP
    An eMusicLive USB pen drive and live music kiosk are shown in New York on April 27. Users can now load a live recording of a show onto a cigarette-lighter-sized hard-drive that can hang off a keychain.
    By Lukas I. Alpert
    The Associated Press
    Updated: 6:45 p.m. ET April 29, 2004NEW YORK - Oh, how far we've come from the 78, the 45, even the CD. Now, minutes after your favorite band sounds its last note on stage, you can load a live recording of the concert onto a cigarette-lighter-sized hard drive hanging off your keychain.


    Take it home, toss the digital files onto your computer and then e-mail it to all your friends with the message, "Dude! These guys are awesome!"

    On May 21, new digital kiosks offering the tiny drives will be installed at Maxwell's, a small indie-rock club in Hoboken, N.J. At $10 a pop for the recording, and $20 for the reusable, keychain drive, let the downloading begin.

    "This is a tool that allows fans to take home and share some of the best independent music from small live venues around the country," said Daniel Stein, CEO of Dimensional Associates, a private equity firm that owns eMusic Live, which created the machines, as well as eMusic, a music file-sharing Web site, and The Orchard, a marketing firm for independent labels.

    For Scott Ambrose Reilly, president of eMusic Live, the idea is to let fans have a legal copy of a live show, which gives smaller artists and their labels creative control over the quality of the recording and a commercial stake in its distribution.

    Sharing encouraged
    The understanding is also that it is not a one-time recording. Fans can share the files with their friends, providing free word-of-mouth publicity for smaller bands.

    For eMusic Live, the devices are just the next step for a service that it and other competitors already provide: burning CDs of live performances right after a show ends.

    "What we were seeing is that a large number of people were taking their CDs home and ripping them to MP3s, so we thought it would benefit music fans to eliminate that middle step," Reilly said.

    The technology is quite simple: The music fan goes up to the touch-screen kiosk after the show and buys the keychain drive with a credit card from a dispenser alongside the screen. Once that's done, the miniature drive is inserted into a slot in the kiosk, and the recording stored as MP3 files is loaded onto the device's 128-megabyte hard drive. That is enough space for 110 minutes of music.

    A receipt for the transaction is sent to the concertgoer's e-mail address.

    "Newer, legal, next step"
    "I can remember when I started the debate it was whether the 45 or 33 would be more successful," said Richard Gottehrer, author of hits like "My Boyfriend's Back," and "I Want Candy," and chairman of The Orchard. "Now the Napsters of the world are yesterday's news and this is the newer, legal, next step."

    Whether the technology will take off remains to be seen. But its creators are optimistic and hope to roll the machines into venues around the country soon.

    "Admittedly this won't be for everyone," Reilly said. "But since the direction of music is increasingly going digital, I don't see why this wouldn't find its niche."

    At a demo for the device at a sound studio in Manhattan on Tuesday, a New York-based band, Elysian Fields, performed three songs, which were quickly loaded onto the "pen drives" afterward.

    Later, at home, the device was inserted into the USB port of a laptop computer and voila! singer Jennifer Charles' smoky, lilting lyrics and Oren Bloedow's reverbed-out, brooding guitar lines filled the living room.

    Charles called the new technology "a beautiful thing."

    "I'm very excited to be a part of this incredible and sexy technology," she said between songs. "It makes us feel very James Bond. You can have your little pens _ wow, beam me up Scotty."

    MSNBC - New device allows recording at concerts

    Posted by Craig at 02:11 PM

    April 29, 2004

    Prepaid Music Cards

    Musicmatch Introduces Prepaid Music Cards; Vesta Corp. and AT&T PrePaid Web Cents Enable Musicmatch To Reach Millions of Music Fans Through Retail Distribution Channels

    INDIAN WELLS, Calif.--(BUSINESS WIRE)--April 28, 2004--Musicmatch Inc., a leader in personalized music software and services, announced today at RetailVision that it will introduce Musicmatch Music Download Cards at retail outlets nationwide starting this June.

    Musicmatch is working with Vesta, and using AT&T Prepaid Web Cents(R) service, to facilitate the distribution, activation and redemption of the Musicmatch Music Download Cards through AT&T's extensive retail relationships. Three different music download cards will be available, including those featuring 10 music tracks for $9.90, 15 music tracks for $14.85 and 20 music tracks for $19.80. Once the card is purchased, tracks can be redeemed from Musicmatch Downloads, one of the most popular digital music stores today.

    "By offering Musicmatch Music Download Cards at retail, we're empowering customers, including those who do not own credit cards, to buy music easily, conveniently and everywhere," said Mike Matey, Musicmatch vice president of consumer marketing. "We are very excited to work with Vesta and the AT&T PrePaid Web Cents Service on our new prepaid music card program, as the relationship further expands Musicmatch's reach through the retail channel and ensures a great customer experience through proven technologies."

    Musicmatch Music Download Cards will be activated immediately as they are purchased and scanned at the register. Once cards are activated, cardholders simply enter in their codes and choose from a catalog of more than 550,000 tracks to download music of their choice at Musicmatch Downloads (www.musicmatch.com). The AT&T PrePaid Web Cents distribution and sales team adds point of sale activation capability to Musicmatch Music Download Cards through its diverse network of retailers, and Vesta Corp. manages the transactions.

    "Retail distribution will help Musicmatch expand their customer base tremendously," said Rocky Scales, vice president of sales and marketing at Vesta Corp. "Prepaid cards not only make great gifts, but also allow consumers without credit cards, such as teenagers, to purchase and legally download music online."

    Musicmatch Downloads

    Musicmatch Downloads offers the easiest way to find, buy and enjoy music that matches each individual's unique taste. Through full integration with Musicmatch Jukebox, Musicmatch Downloads brings together an entire music collection -- including newly purchased downloads -- in one place for simple enjoyment and powerful music management. Musicmatch Downloads lets consumers instantly buy tracks for 99 cents each and $9.99 for most albums.

    About Vesta

    Vesta is the leader in stored value solutions. Uniquely suited to stimulate customer loyalty in the telecom, financial services and retail industries, Vesta's solutions are designed to support credit card-not-present (CNP) transactions requiring real-time customer authentication and account recharge. For over seven years, the company's proprietary transaction management solutions have maximized revenue and provided secure, convenient stored value account services for customers of American Airlines, AT&T, AT&T Wireless, Cingular, MasterCard, NextEstate, Sprint, Verizon and others. Vesta has been ranked as one of America's fastest growing private technology companies by Inc, Fast Company, and Deloitte & Touche, and was recognized by the Computerworld Honors program for technological advancements. For more information on Vesta Corp. visit www.trustvesta.com or email [email protected]

    About AT&T

    For more than 125 years, AT&T (NYSE:T) has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.

    About Musicmatch

    Musicmatch Inc. is a leader in personalized music software and services, helping people find, manage, enjoy and buy music that best matches their unique tastes. The company invented the digital jukebox concept in 1997 and since then has registered more than 50 million users of its best-selling Musicmatch Jukebox. The Musicmatch Radio network, launched in 2000, features the world's most popular Internet radio station, Artist MATCH(TM) Radio. The Musicmatch Downloads service, offering more than 550,000 songs, is the easiest way to find, buy and enjoy music. For additional information, visit www.musicmatch.com.

    Musicmatch(R) is a registered trademark of Musicmatch Inc.

    Artist MATCH(TM) is a trademark of Musicmatch Inc.

    Musicmatch Introduces Prepaid Music Cards; Vesta Corp. and AT&T PrePaid Web Cents Enable Musicmatch To Reach Millions of Music Fans Through Retail Distribution Channels

    Posted by Craig at 07:22 PM

    iTunes ushers in a year of change

    iTunes ushers in a year of change
    By John Borland and Ina Fried
    CNET News.com
    April 26, 2004, 4:00 AM PT
    URL: http://zdnet.com.com/2100-1104-5199227.html

    John Gillilan has hundreds of Pepsi caps lined up in rows in his University of Southern California freshman dorm room, each one representing a song downloaded from Apple's iTunes Music Store.


    What's new:
    Apple Computer's iTunes Music store was launched one year ago, and Apple is now the leading distributor of online music by far.

    Bottom line:
    Apple's launch has spawned numerous imitators and changed the way the recording industry views electronic distribution. Rather than being distrustful, as they were during Napster's heyday, the record labels now consider legal downloads a way to fight piracy and to tap a large and rapidly growing market.

    More stories on this topic

    A Macintosh user and avid music fan, he started buying music from the store when it launched a year ago. This year Gillilan realized he could apply much of his $2,500 college dorm food allowance to purchasing bottles of Pepsi and taking advantage of Pepsi's iTunes song-giveaway promotion, he said.

    The 18-year-old Gillilan might be a little more single-minded than most iTunes fans, but as a music major and recording engineer he sees the success of online digital distribution--today best evidenced by iTunes' sales--as a harbinger of his own future.

    "Obviously the record industry has been reluctant, but it's crazy how much has actually happened (this year)," he said. "My career at this point realistically is going to depend on how successful this business model is."

    Gillilan isn't alone in looking at iTunes as an industry bellwether. Launched a year ago Wednesday with a blaze of publicity, the service effectively kick-started a languishing digital music business.

    Over the next year, Sony, Microsoft and Virgin all are aiming at the market. Yahoo is expected to throw its hat into the ring, and AOL may open its own store, instead of pointing its subscribers to iTunes as it currently does.

    Even the major record labels are excited--a dramatic reversal for an industry that had previously seen Internet downloads as a threat to their business, rather than an opportunity for growth.

    For the two years leading up to Apple's launch, attention had been focused on Napster, Kazaa and other file-swapping services that were allowing billions of songs a month to be downloaded for free. The major record labels, stung by falling revenue, focused much of their attention on filing lawsuits, drawing charges that their main interest was to smother development of the digital music business.

    "iTunes has been incredibly valuable," said Larry Kenswil, president of Universal Music's eLabs division. "It has changed the debate, changed the buzz, changed people talking about record companies putting up a wall" against digital music.

    But as the so far unchallenged market leader, Apple has established several other market realities against which various rivals chafe. The company's iTunes service is so tightly integrated with its hardware business that songs bought through the store can only be easily played on Apple's iPod, not other MP3 players. The close integration also means Apple can afford what it openly concedes are miniscule profit margins on the store itself, seeing it as a way to drive iPod sales.

    Although Apple has taken a largely proprietary approach to iTunes, it made one major concession by making its software compatible with Microsoft's Windows operating system, effectively untying the iPod from the Mac in hopes of tapping into the much larger market for Windows PC users. The company has also struck a deal under which Hewlett-Packard will sell PCs with iTunes preloaded and also sell HP-branded iPods.

    Apple launches iTunes Music Store and new iPods

    The most public overtures when it comes to opening the iPod have come from RealNetworks Chief Executive Officer Rob Glaser, who--not long after comparing Apple's closed technology doors to a Soviet grocery store--found his own private appeal to Apple CEO Steve Jobs rejected.

    Jobs says he sees little reason to open up to rivals, given Apple's commanding lead.

    "To be honest, it's just not worth it," Jobs said at last week's Apple shareholder meeting. "It doesn't make any business sense."

    However, record company executives are quietly advocating industry cooperation, contending digital balkanization will be bad for business over the long haul.

    "Interoperability is critical," said EMI Music Senior Vice President Ted Cohen. "We need to get to that point, and people need to work together to do it."

    Just getting started
    Despite Apple's success, the digital music business is only beginning to get off the ground, and it's hard to predict what might happen next. The iTunes launch was seen by many in the record industry as an experiment with loosening previous restrictions on digital files. Now that the first stages of the experiment have proven successful, labels may be amenable to further experimentation.

    Some of that variability will come in prices. Apple's 99 cent price for single songs and $9.99 price tag for albums has been widely copied. But already that's beginning to change, with some record executives saying they're eager to test tiered price models.

    A little of this is already evident on iTunes. Singles have remained steady at 99 cents, but a few albums have begun creeping upward. Aerosmith's newest was priced at $11.99 last week, while rock-guitar virtuoso Joe Satriani's new release was $14.99, for example.

    Apple declined to comment for this story, but other services said they had already seen labels raise prices on some individual songs as well as albums. None has passed on those per-song price increases yet, citing a continued need to present consumers with the simplest offer possible, however.

    Label and Web company executives said the price increases reflect an experimentation with tiered pricing that mimics the way retail album prices fluctuate according to title, and over time. Under this model, pre-release singles or very popular artists might cost $1.50 or more per song, average tracks might stay at 99 cents, and back catalog and other promotional songs or albums could drop even lower, for example.

    "It is a good thing to have that experimentation, both up and down," said Sean Ryan, RealNetworks vice president for music services. "Just because everyone went out at 99 cents doesn't mean that's always the right price."

    Labels are sensitive to charges that they want to charge more online than for CD sales, however.

    "We've built in a lot of flexibility," said EMI Group spokeswoman Jeanne Meyer. "There are tiered prices (for wholesale digital tracks), but they're all lower than in the physical world."

    With that experimentation in pricing may come some fluctuation in usage rules. Currently iTunes customers can use their purchased music on up to three computers and burn the same songs in the same order up to 10 times. However, those rules may be tweaked as the record companies renegotiate their contracts with Apple.

    Other companies, if not Apple itself, are likely to begin experimenting more with subscription services as well. Jobs has dismissed these as virtually irrelevant, saying that people want to "own, not rent" their music.

    For the most part, these have remained niche products, although RealNetworks has said it now has a total of more than 495,000 subscribers to either its unlimited Rhapsody product or a cheaper online radio service. But for companies that do not have an iPod-like hardware device to depend on for profits, this monthly stream of revenue looks far more appealing, and will likely drive more experimentation next year.

    Microsoft is also hoping to make such services more attractive through technology, code-named Janus, that would allow subscription music to be transferred to portable devices--a key drawback to the current crop of subscription services.

    Though Apple has been the undisputed leader in the market--and has done better than some would have thought a year ago--online downloads still represent a small part of how people get their music. File-swapping services continue to be popular, and CD sales have started to show some signs of life. Apple itself had predicted it would distribute 100 million songs by the time the one-year anniversary rolled around, a goal the company seems likely to miss.

    To date, rivals like Napster and Musicmatch have fallen far short of Apple's sales. According to the NPD Group, Walmart.com's cut-rate pricing has come closest, drawing about half the number of customers seen by iTunes in March.

    Analysts say that although many of the new entrants to the market could pose strong competition, Apple will continue to benefit from the fact it has sold so many iPods--devices that work only with Apple's service. Last quarter Apple sold 800,000 of the portable music players, with rivals such as Dell and Samsung selling only a fraction of that total.

    "Apple set the bar incredibly high," said Mike McGuire, an analyst with GartnerG2, a division of the Gartner research group.

    But some rivals said they expect Apple's dominance will be temporary.

    "Apple is probably still riding the wave of their initial launch," said Jason Reindorp, a group manager in Microsoft's Windows digital media unit. "They have spent an inordinate amount of money to generate awareness around their closed ecosystem. (But) as people get more sophisticated in this area they are going to be getting more frustrated with a closed ecosystem. I think the market will kind of self-correct as things get more mainstream."

    iTunes ushers in a year of change - News - ZDNet

    Posted by Craig at 03:49 PM

    April 21, 2004

    College Music Services

    Napster still raises concerns

    By Bryan Farrell
    Collegian Staff Writer
    The courtship is complete. The wedding date is set. As of August 28, 2004, Napster will no longer be the pilot program for Penn State's landmark expedition into online music, but rather an equal partner with benefits extending to all students at University Park.

    "I would consider it a success," said Sam Haldeman, assistant to the associate vice provost for information technology services. According to his estimates, 10,000 students signed up to use the service, which is 80 percent of the students on campus.

    But in the five months since Penn State began its self-proclaimed "groundbreaking agreement," many of the same questions remain, including how much Penn State is paying Napster and why it is incompatible with Macintosh platforms.

    While students may be feeling left in the dark, the university has bigger questions to tackle, such as whether it can successfully provide students with a legal alternative to music piracy.On the one hand, students like Andy Blessing (sophomore-electrical engineering) think the program has been a major asset.

    "It offers a lot of music we listen to," Blessing said.

    But on the other hand, he has no plans to buy the service after he graduates, which is the last thing Napster wants to hear.

    "These are people who after they graduate will turn into our future customer base," said Dana Harris, director of corporate communications for Napster, of students.

    Despite the precarious situation that exists between Napster and its involuntary student customers, other universitie are gaining interest.

    The University of Rochester was the first private school to sign a deal with Napster, and the only school other than Penn State thus far. But according to Penn State officials and University of Rochester Provost Charles Phelps, universities are calling every day to find out how they can get involved with online music services.

    "We want to cut down on illegal file sharing and find out if offering a legal alternative solves the problem," said Phelps, who serves on the same Joint Committee of the Higher Education and Entertainment Communities. Penn State President Graham Spanier and Recording Industry Association of America (RIAA) President Cary Sherman also serve on the committee.

    But while both universities remain optimistic, especially when pointing toward the number of students who have signed up for the service, Blessing put things in perspective.

    "It's a better solution," the sophomore said. "But not the best. There is no way to get around not purchasing music and keeping it for yourself."

    University perspective

    Phelps likened the dilemma of music piracy to that of underage drinking. To prevent students from engaging in the illegal activity, Rochester offered alternative social events. And much like underage drinking, music piracy hurts the university.

    "Large chunks of bandwidth get sucked up by file sharing," Phelps said. But Napster hosts songs locally, limiting strain on university networks while allowing students to download music legally.

    As for the reason the University of Rochester chose Napster, Phelps said it was the service with the most advanced catalog and the best pricing system. The university pays on a month-to-month basis, using "general university funds for compensation."

    Napster will remain in a pilot study at Rochester for another year.

    "We were proud and very enthusiastic [that other schools are following our lead]," said Haldeman, the university official responsible for choosing Napster at Penn State. "It shows that higher education is recognizing its role."

    But as more subpoenas reach the administrative offices of universities, that role may not be as noble educator but legal informant. Out of 532 lawsuits in the latest round of copyright infringement suits filed by the RIAA, 89 targeted students. To find students suspected of illegal downloading, the RIAA must get names from university files.

    Both Haldeman and Phelps said their universities would comply with any legal subpoenas asking for the names of students, whom companies can identify by their IP addresses.

    Haldeman said his heart goes out to the nine students at New York University who were issued lawsuits because they did not realize the consequences of illegal downloading, but he said it is something students must recognize.

    "I wouldn't be surprised if they had to settle for less than $50,000," Haldeman said.

    Problems still exist

    Despite reports of layoffs within the Napster company and the cancellation of a deal that would have put the Napster icon on every Hewlett-Packard computer, the company maintains its business is doing fine.

    "We never announced any layoffs," said Harris, a public relations spokesperson for Napster. "We did it to get rid of redundant positions. When Roxio bought Napster, a lot of the same positions existed."

    Both Penn State and Rochester are optimistic that Napster will stay in business.

    "I hope they do [stay in business]," Phelps said. "We have a contract."

    But Haldeman said Penn State is prepared to move on to another service should Napster falter.

    "We will always keep the option open if strong competition offered us a better service," he said. "Napster still seems like the best. But if there is better competition our attention will be drawn to it."

    One service, Apple's iTunes, is compatible with both Windows and Macintosh operating systems.

    "We have said publicly that we want to talk to Apple," Harris said. But Apple has yet responded to the public statements.

    Despite multiple phone calls, a representative from iTunes could not be reached for comment. Phelps suggested students "go talk to Steve Jobs," CEO of Apple, because the Macintosh platform does not accommodate Microsoft Digital Rights Management, a security feature used by copyright holders to protect their media.

    "I suggested to others in the industry that they adopt open single standard encryption methods," Haldeman said. "But they don't recognize the discomfort it is causing students."

    The biggest complaint against Napster, however, is the lack of major artists' albums, like The Beatles and Led Zeppelin. And both universities have set up sites where students can submit the names of songs or artists they want to see on Napster, which says it adds thousands of new songs each week.

    Both iTunes and Napster claim to have over 500,000 songs available for download from all five major music companies, but only iTunes mentions offering songs from more than 300 independent labels.

    "The university should and does tell Napster to add more independent bands," Haldeman said. "We need to try harder to find independent labels and improve upon getting away from major labels."

    Phelps said Rochester has been able to add local artists to Napster and suggested that Penn State do the same.

    "I would love to create an opportunity for students and bands to spread their music," Haldeman said. "I sent e-mails to some bands about starting a college station on Napster featuring Penn State bands, but I don't yet have a desire from any band. Students should make that desire evident to me."

    Haldeman said it would be a lengthy process to make local bands' songs available for download on Napster. Napster has more than 50 of its own radio stations. The creation of a college station would be easier to set up, Haldeman said, if he received enough interest.

    "It's a chance for bands on a college level to have millions listen to their music," he said. "I don't know why it hasn't happened yet."

    Skepticism remains

    Brian Morrison (junior-film and video) began posting fliers around campus last semester titled "Do You Know About Bad Napster?" Several weeks ago, a friend told him that MTV News did a piece about Penn State and Napster, and for a brief couple of seconds, showed his flier to millions of people worldwide.

    The gist of Morrison's anti-Napster campaign was to show that Napster is feeding an already rich music industry and disguising itself as a medium for free entertainment. Although he isn't willing to admit defeat, Morrison said the odds are stacked against him.

    When Napster held information sessions in the HUB-Robeson Center, Morrison distributed copies of his flier in front of the company's table.

    "They know I am not a force to be reckoned with. They know that the $20 I spent to distribute the fliers almost broke the bank. You can't fight city hall," he said. "But if this had been seen as any kind of issue, there might have been a reaction."

    Morrison said most students are passive, and he doesn't blame them. He does, however, think the universities involved with Napster have acted in a more reproachable manner.

    "I wanted to see the universities backing the students," he said. "I wanted them to make a statement that the music industry stopped being an efficient business. And show that it needs to find new ways to compete instead of going back to a system [that only worked before the Internet]."

    Morrison said he advises students to avoid using Napster simply because it is there.

    "It is like helping Napster publicize itself," he said. "It's like casting a vote."

    While students like Blessing remain ambivalent and students like Morrison cast stones at the university, both say that the program has only mitigated the problem of music piracy.

    "File sharing is like a hydra," Morrison said. "You cut off one head, and two appear."

    Napster still raises concerns

    Posted by Craig at 04:08 PM

    April 20, 2004

    Napster & Music

    Napster is frustrated in EU

    Napster's music licensing frustration
    By Tony Smith
    Published Tuesday 20th April 2004 13:29 GMT

    Different content licensing regimes in different European countries is hampering Napster's attempts to set up over here, the company's parent confirmed today.

    Describing the European licensing process as "very challenging" and "a bit frustrating", Roxio CEO Chris Gorog said Napster still intends to launch "before the end of summer".

    Speaking to Reuters, Gorog admitted that Napster has yet to license all the content it wants to offer when it launches in the UK. And he has no idea when the service will be extend to the rest of Europe. Licensing negotiations are still in what Gorog described as at a "preliminary stage".

    Gorog's comments come just days after Apple Europe chief Pascal Cagni grumbled about similar hurdles his company is facing in its attempt to launch its iTunes Music Store in Europe.

    Yesterday, the European Commission offered a series of proposals intended to encourage the emergence of a unified pan-European licensing structure. Such a framework would maker it easier for Napster, Apple and other content distributors to license content. Licensing organisations would be dealt with on a one-off basis rather than from a country-by-country standpoint.

    Napster's music licensing frustration | The Register

    Posted by Craig at 11:33 PM

    DRM News

    IBM enters the DRM fray in music

    IBM raises stakes in digital media circle

    SEATTLE — IBM on Monday became the latest tech supplier to offer Hollywood and the record industry yet another avenue to fully engage the digital world.

    Big Blue unveiled its version of digital rights management, or DRM, the technology created to stave off digital pirates and give content publishers a tight grip on how digital music and movie files can be used.

    IBM's move introduces fresh competition for Microsoft, Apple Computer, RealNetworks and Sony. Each is pursuing separate DRM strategies. The result: mostly confusion and frustration on the part of consumers.

    "With different and incompatible DRM schemes, the picture is getting more, not less, fragmented," says Matt Rosoff, industry analyst at research firm Directions on Microsoft.

    In its attempt to leapfrog the pack, IBM could force content publishers and device makers to pick sides. Industry experts anticipate a shakeout reminiscent of the showdown between the Beta and VHS videocassette formats two decades ago.

    But solving digital rights promises to get messier before reaching equilibrium. That's because content publishers and tech suppliers seem bent on imposing onerous restrictions on consumers, who've gotten used to the freedom and flexibility of the Internet, says Fred von Lohmann, staff attorney for the Electronic Frontier Foundation, a consumer advocacy group.

    Some copyright experts predict that consumers will be reluctant to give up the MP3 music format and others like it that use no DRM technology. And they are likely to shun paid services deemed overly restrictive.

    "Make no mistake, DRM is wholly to enable more restrictions on stuff you've already paid for," says von Lohmann. " It treats every consumer as a potential pirate."

    New ways to sell

    Nonetheless, IBM over the next two years aims to win wide support for something called "extensible Content Protection," or xCP. It unveiled xCP on Monday at the National Association of Broadcasters convention in Las Vegas.

    The idea is to embed xCP as widely as possible in digital music and movie files, as well as most kinds of playback devices.

    Once widely distributed, IBM says xCP will open up lucrative ways to sell digital content.

    Want to download a normal-resolution copy of the latest blockbuster movie to burn onto a DVD for the minivan but also install a high-definition copy on the TiVo for the plasma TV? No problem.

    Want to download a hit song that plays on portable devices made by different companies and doesn't expire at the end of the month? Easy. IBM's technology is designed to repel pirates, exact fees and distribute shared revenue.

    "This is very flexible, powerful technology that can liberate digital content," says Steve Canepa, IBM's vice president for media and entertainment.

    Yet Microsoft has been attempting much the same thing with its Windows Media-based DRM technology since the late 1990s. Progress has been slow but steady.

    Windows Media Player, the program needed to play Windows-formatted music and videos, resides on about 500 million PCs worldwide. Windows Media music files can be played on more than 60 types of portable devices. And Microsoft has struck broad alliances to pursue digital media initiatives with Disney and Warner Bros.

    "We believe our holistic approach is a smart one that's going to be a win-win for content providers and consumers," says Jason Reindorp, group manager for Windows Media division.

    Fair use, fair price

    Hollywood executives have long drooled about the billions they could make distributing music and movies across the Web.

    But unlike e-tailer Amazon, auction site eBay or search engine Google, they've been slow to figure out the dynamics of the Internet.

    DRM's biggest success — Apple's popular iTunes music store — charges 99 cents for one song download. But an iTunes patron cannot play a legitimately purchased song on more than three specified PCs, or on a portable device other than an Apple iPod.

    But an iTunes patron cannot play a legitimately purchased song on more than three specified PCs, or on a portable device other than an Apple iPod.

    While iTunes and iPods have pumped up Apple's revenue and profit, and spawned imitators, free file-sharing sites using the MP3 protocol remain by far the most popular way to download digital music files.

    "It comes down to the rights of consumers vs. the rights of business," says RedMonk analyst Stephen O'Grady. "What people want is fair use of content purchased at a reasonable price."

    Changing digital rights equation
    More homes than ever use broadband Internet hookups, capable of downloading music and movies for a fee ...
    U.S. home
    broadband users, in millions
    ... but file-sharing sites still get wide use, though Apple's iTunes paid music downloading service has come on strong. Individual users, in millions:

    Source: Nielsen/NetRatings

    USATODAY.com - IBM raises stakes in digital media circle

    Posted by Craig at 08:57 PM

    April 17, 2004

    RealNetworks in Real Bind

    Real reaches out to Apple with not good results. Is Microsoft next? That might impact the billion dollar lawsuit that Real has against MS?

    RealNetworks Reaches Out for Ally Amid Competition
    Fri Apr 16,10:04 AM ET

    By Reed Stevenson

    SEATTLE (Reuters) - RealNetworks Inc. (NasdaqNM:RNWK - news) is facing increasingly stiff competition in online music, analysts said on Thursday, as rivals seek deals with larger players and longtime adversary Microsoft Corp. (NasdaqNM:MSFT - news) gears up to launch an online music store later this year.

    The Seattle-based company, best known as the provider of the Real audio-video format and player, also confirmed that it had reached out to Apple Computer Inc. (NasdaqNM:AAPL - news) by proposing an alliance that would allow its media format to work on Apple's popular iPod portable music player.

    "Apple should open up the iPod," said Greg Chiemingo, vice president of communications at RealNetworks, "The industry is still growing, and the key for long term growth for everyone is that whenever a consumer purchases a legal song from a site, they should be able to play that on any device."

    Chiemingo said that RealNetworks chief executive Rob Glaser had written to Apple chairman Steve Jobs (news - web sites) last week to suggest an alliance, confirming details first reported in the New York Times on Thursday.

    RealNetworks, which 10 years ago began as a provider of software for playing music on personal computers, later used the Internet to stream audio and video and now also provides subscription services for online content.

    "The key business for them is the subscription service," said A. Sasa Zorovic, analyst at Oppenheimer and Co. Inc.

    "An alliance would be an important thing for RealNetworks and a positive development for them," said Zorovic, "providers will be spending considerably more money for customer acquisition and they need to ally themselves with somebody with deeper pockets."

    An alliance with Apple, depending on its structure, would not only help promote RealNetworks' format over Microsoft's but also provide a key tie-in for RealNetworks' Rhapsody subscription service, which it acquired a year ago.

    RealNetworks said on Thursday that it added 100,000 new subscribers for its main online music services in the first three months of 2004 to reach 450,000 paid subscribers.

    At the same time, however, Musicmatch Inc., the biggest competitor to Rhapsody, an online music streaming subscription service operated by RealNetworks, said that it struck a deal with Intel Corp. (NasdaqNM:INTC - news) to get its software distributed with hardware sold by the world's largest maker of microchips.

    "It's a big win for us," said Musicmatch president Peter Csathy, adding that he is expecting up to 20 million Intel motherboard to be shipped with Musicmatch software per year.

    "We unseated Real to be able to win this account, so I think it shows that the Musicmatch solution is really seen as the optimal digital music solution."

    RealNetworks, however, said that the number of songs streamed on Rhapsody had posted double-digit growth for ten straight months until February which, along with the other growth data "reinforce RealNetworks status as the industry leader in offering subscription-based online music services to consumers."

    RealNetworks, Apple and their competitors are scrambling to reinforce their businesses as Microsoft, the world's largest software maker and Sony Corp (news - web sites). (6758.T), the world's largest consumer electronics company, set their sights on the online music market.

    Microsoft has indicated that it will launch an online music platform later this year that will include offering from other companies along with its own. Sony said it will launch a service offering some 500,000 songs that will at first only work with its portable devices. (Additional reporting by Daniel Sorid in New York)

    Posted by Craig at 01:02 PM

    April 12, 2004

    Music DRM

    Microsoft Settles InterTrust Patent Suit

    NEW YORK (Reuters) - Microsoft Corp. (NasdaqNM:MSFT - news) will pay InterTrust Technologies Corp. $440 million to settle a lawsuit over anti-piracy technology for digital music and movies, the companies said on Monday, lifting a legal cloud hanging over Microsoft's media strategy.

    The deal gives Microsoft a license to InterTrust patents and resolves all outstanding legal action between the companies. InterTrust is owned by an investment group that includes Sony Corp (news - web sites). (6758.T) and Philips Electronics (PHG.AS)

    Microsoft said the settlement will speed the development of anti-piracy services -- known in the software industry as digital rights management, or DRM -- that protect music and movie studios from theft by online file sharers.

    "This is an important agreement in that it reduces uncertainty for the industry," said Will Poole, a Microsoft senior vice president, in a statement posted on the company's Web site.

    Microsoft shares rose 22 cents to $25.70 in morning trade on Nasdaq.

    For Microsoft, the agreement comes just 10 days after a much larger settlement with Sun Microsystems Inc. (NasdaqNM:SUNW - news). In that deal, Microsoft agreed to pay $2 billion to Sun as the companies lined up against threats from the popular Linux (news - web sites) operating system.

    Santa Clara, California-based InterTrust, a pioneer of software used to control digital distribution rights for media ranging from software to music, sued Microsoft three years ago.

    "Today's announcement validates InterTrust's intellectual property portfolio as seminal to advancing DRM and trusted computing in the marketplace," said Talal Shamoon, chief executive officer of InterTrust.

    Microsoft deputy general counsel Marshall Phelps said the deal "reaffirms Microsoft's commitment to the importance of intellectual property rights."

    Posted by Craig at 06:09 PM

    April 08, 2004

    Music Downloads

    It gets more expensive?

    Downloading music gets more expensive

    The Associated Press
    4/7/04 9:09 AM

    The Wall Street Journal

    To see the future of online music prices, look no further than "Fly or Die," the new album by rock-meets-hip-hop trio N.E.R.D.

    For months, digital-music services have been touting albums for $9.99 to entice more people to buy online. But Apple Computer Inc.'s iTunes Music Store has been charging $16.99 for "Fly or Die," while Roxio Inc.'s Napster service sells the 12-song collection for $13.99. Both prices are higher than the $13.49 that Amazon.com charges for the CD itself. The same pricing shifts are showing up on albums by a growing slate of artists, from Shakira to Bob Dylan.

    Unburdened by manufacturing and distribution costs, online music was supposed to usher in a new era of inexpensive, easy-to-access music for consumers. In many cases, buying music online is still cheaper than shopping for CDs at retail outlets. But just a year after iTunes debuted with its 99-cent songs and mostly $9.99 albums, that affordable and straightforward pricing structure is already under pressure.

    All five of the major music companies are discussing ways to boost the price of single-song downloads on hot releases -- to anywhere from $1.25 to as much as $2.49. It isn't clear how or when such a price hike would take place, and it could still be months away. Sales of such singles -- prices have remained at 99 cents -- still account for the majority of online music sales.

    The industry is also mulling other ways to charge more for online singles. One option under consideration is bundling hit songs with less-desirable tracks. Another possibility is charging more for a single track if it is available online before the broader release of the entire album from which it is taken. There is also talk of lowering the price on some individual tracks from older albums.

    Several record-company executives acknowledged that pricing changes are being discussed at all five major companies.

    The new pricing developments come as digital-music sales are growing steadily. Some 25 million digital tracks were sold in the first three months of this year, versus 19.2 million for all of the second half of last year, according to Nielsen SoundScan.

    That growth is why some in the industry are uncomfortable with the talk of price increases. Most music-company executives believe that the download market is still in a critical early-growth stage, which could be disrupted by raising prices. "For us right now the issue is not, 'Do we make another $300,000 by raising the price five cents?"' says a music company executive. "It's making sure the market grows."

    Revenues in the music industry have been dragging in recent years, in part because of the rise of illegal downloading services. Raising digital-music prices could spur additional illicit downloading. Weaning people off those illegal services by giving them an alternative that they consider viable is critical to the industry's future profitability.

    N.E.R.D's "Fly or Die" is far from the only album that now costs significantly more to download from iTunes than to buy on CD. And many high-profile albums from two of the big five music companies, Sony Corp.'s Sony Music Entertainment and EMI Group PLC, are now priced on iTunes and its competitors well above the $9.99 norm. Sony artist Pete Yorn's "Musicforthemorningafter," for example, costs $13.99 on iTunes and $10.88 on average in retail stores, according to the NPD Group. Albums by EMI artists from Kylie Minogue to Blur also cost more in digital than physical form. (EMI also distributes N.E.R.D.)

    The reason this disparity is so pronounced at EMI and Sony is that both companies routinely set wholesale prices for online albums higher than their competitors, according to people familiar with the matter.

    A much smaller number of titles from the other major music labels also cost more than $9.99 on iTunes. A handful of albums from Bertelsmann AG's BMG, Warner Music Group, and Vivendi Universal SA's Universal Music Group also cost more online than they do as CDs. But these tend to be double discs such as OutKast's "Speakerboxxx/The Love Below," which incur higher costs in certain kinds of royalties when sold online than as traditional CDs.

    "There's a lot of experimentation in the industry," says Peter Csathy, president and chief operating officer of Musicmatch Inc., which sells digital music.

    The music companies are reluctant to talk openly about their wholesale-pricing strategies, but they are quick to blame the retailers for higher prices. A spokeswoman for EMI, for instance, stresses that the retailers, not record companies, ultimately set the prices consumers pay.

    However, the digital-music services say they base their retail prices directly on the wholesale prices the music companies charge. "Our pricing comes when the fees come in from the labels," said Musicmatch's Mr. Csathy.

    ITunes, the market leader among downloading services, and its competitors offer music at two distinct price points: Single tracks cost 99 cents. A full-album has generally cost $9.99, regardless of how many songs are on it.

    Napster was until recently the lone holdout among the major online services on full album prices, charging $9.95 for numerous titles that cost between $12.87 and $16.99 on iTunes. But two weeks ago, it relented and created a higher tier of album prices, set at $13.99.

    Separately, Walmart.com, the online arm of Wal-Mart Stores Inc., recently rolled out a slightly cheaper 88-cents-per-track price. Many observers, however, argue that any advantage conferred by the 11-cent difference will be offset by a user interface that early reviews have called less friendly than those of other services. Executives at competing services also contend that research shows that consumers don't care much about price differences within the band of about 75 cents and 99 cents.

    The issue of online music prices raises philosophical debates for music executives. Some executives, for example, believe they should be charging a premium for the online versions of older tracks because consumers may be willing to pay more for harder-to-find material.


    Fly or Die, N.E.R.D.

    iTunes $16.99

    Amazon.com $13.49

    Self Portrait, Bob Dylan

    iTunes $13.99

    Amazon.com $10.99

    Feels Like Home, Norah Jones

    Napster $13.99

    Retail(1) $12.58

    (1)Average price determined by the NPD Group

    Sources: NPD Group; WSJ research


    Pricing Your Music

    Some titles are cheaper on CD than when purchased in digital form. A sampling of artists and prices:

    ARTIST/TITLE: Anastacia, Freak of Nature


    ITUNES: $13.99

    NAPSTER: $13.99

    MUSIC-MATCH: $11.99

    RETAIL STORES(a): $11.98

    AMAZON.COM: $14.99

    ARTIST/TITLE: Beyonce, Dangerously in Love


    ITUNES: 9.99

    NAPSTER: 15.84(b)

    MUSIC-MATCH: 9.99

    RETAIL STORES(a): 13.87

    AMAZON.COM: 13.49

    ARTIST/TITLE: Chingy, Jackpot


    ITUNES: 13.99

    NAPSTER: 13.99

    MUSIC-MATCH: 11.99

    RETAIL STORES(a): 12.78

    AMAZON.COM: 13.99

    ARTIST/TITLE: Fountains of Wayne, Welcome Interstate Managers


    ITUNES: 13.99

    NAPSTER: 9.95

    MUSIC-MATCH: 11.99

    RETAIL STORES(a): 13.88

    AMAZON.COM: 13.49

    ARTIST/TITLE: Jewel, 0304

    PUBLISHER: Warner Music

    ITUNES: 11.99

    NAPSTER: 12.88(b)

    MUSIC-MATCH: 9.99

    RETAIL STORES(a): 13.25

    AMAZON.COM: 13.99

    ARTIST/TITLE: Korn, Korn


    ITUNES: 11.99

    NAPSTER: 9.95

    MUSIC-MATCH: 9.99

    RETAIL STORES(a): 13.85

    AMAZON.COM: 13.98

    ARTIST/TITLE: Liz Phair, Liz Phair


    ITUNES: 13.86

    NAPSTER: 13.99

    MUSIC-MATCH: 11.99

    RETAIL STORES(a): 12.46

    AMAZON.COM: 13.49

    ARTIST/TITLE: Norah Jones, Come Away With Me


    ITUNES: 13.86

    NAPSTER: 13.99

    MUSIC-MATCH: 12.49

    RETAIL STORES(a): 13.74

    AMAZON.COM: 13.49

    ARTIST/TITLE: Norah Jones, Feels Like Home


    ITUNES: 12.87

    NAPSTER: 13.99

    MUSIC-MATCH: 11.99

    RETAIL STORES(a): 12.58

    AMAZON.COM: 13.49

    ARTIST/TITLE: OutKast, Speakerboxxx/The Love Below


    ITUNES: 19.98

    NAPSTER: 19.90

    MUSIC-MATCH: 16.49

    RETAIL STORES(a): 15.79

    AMAZON.COM: 16.99

    ARTIST/TITLE: Pearl Jam, Riot Act


    ITUNES: 13.99

    NAPSTER: 13.99

    MUSIC-MATCH: 10.99

    RETAIL STORES(a): 14.09

    AMAZON.COM: 14.99

    ARTIST/TITLE: Pete Yorn, Musicforthemorningafter


    ITUNES: 13.99

    NAPSTER: 13.99

    MUSIC-MATCH: 10.99

    RETAIL STORES(a): 10.88

    AMAZON.COM: 13.99

    (a)Average prices determined by the NPD Group

    (b)Available on a track-by-track basis only

    Sources: NPD Group; WSJ research

    NJ.com - NewsFlash

    Posted by Craig at 07:45 PM

    Wi-Fi Music Kiosks

    SonicWALL, Inc. (Nasdaq: SNWL), a leading provider of integrated security, productivity and mobility solutions, announced today the company has been chosen by Synergy Media Group to supply up to 1,000 award-winning SonicWALL SOHO TZW wireless Internet security appliances over the next year for the rollout of Synergy's new TouchStand Media Kiosk

    The SonicWALL SOHO TZWs provide wireless access and security for the
    transmission of all information from the kiosk to the retailer's network, as
    well as secure data communications back to Synergy Media Group headquarters.
    The SOHO TZW provides TouchStand the ability to offer secure wireless guest
    access in appropriate locations, enabling store patrons with mobile computers
    to log onto the Internet. Synergy Media Group is also testing a new handheld
    device that will enable retail customers to scan CD bar codes and stream the
    music to the TouchStand kiosk for playback. To date, 50 SonicWALL TZWs have
    been deployed.
    TouchStand Media Kiosks offer retailers an easy-to-use sales and marketing
    system for driving in-store music sales, building relationships with
    consumers, gaining valuable data on consumer music purchasing behavior and
    differentiating themselves in the physical music retail business. TouchStand
    Media Kiosks provide digital music clips from more than 3.2 million songs,
    retailer-defined top-seller lists, in-depth content searches, consumer data
    mining, email and mailing list management, labor free point of sale, and
    automatic content updating in one integrated, custom branded package.
    Synergy Media Group is implementing SonicWALL's Global Management System
    (GMS) to give their network administrators the ability to remotely set-up,
    configure and provision the wireless appliances. SonicWALL GMS is a
    browser-based software management system for SonicWALL Internet security
    appliances. SonicWALL GMS can manage and monitor thousands of SonicWALL
    appliances from a central location.
    "We needed a wireless solution that was highly reliable and secure, that
    allowed us to log all data transactions to prove and audit media deliveries,
    and that could be managed remotely. With kiosks deployed across the country,
    it would have been cost prohibitive to send an IT professional into the field
    every time we wanted to make a change to the service," said Michael Fitts,
    President/CEO of Synergy Media Group. "As our network of kiosks grows, we
    anticipate our relationship with SonicWALL to grow as well and we look forward
    to exploring all the possibilities a secure wireless solution has to offer.""
    "We are pleased to have been selected as the wireless security vendor of
    choice for the new TouchStand media kiosks," said Douglas Brockett, vice
    president of worldwide marketing for SonicWALL. "SonicWALL has a strong
    presence in the retail point-of-sale market, and this relationship
    demonstrates the creative ways SonicWALL products can be used to offer an
    enhanced customer experience."

    About Synergy Media Group (SMG)
    Synergy Media Group has been providing the media and entertainment
    industry with innovative approaches to promotion, marketing, distribution and
    retail technology since 1991. SMG's team of professionals brings extensive
    experience in all areas of the music industry, including retail, distribution,
    major and independent label management, radio promotion, press and publicity,
    marketing, Internet services, database management and cutting-edge technology
    product development.
    To learn more about TouchStand, visit http://www.TouchStand.com or call toll free
    877-277-6205. To learn more about Synergy Media Group, visit

    About SonicWALL, Inc.
    SonicWALL, Inc. is a leading provider of integrated network security,
    mobility, and productivity solutions for the SMB, enterprise, e-commerce,
    education, healthcare, retail/point-of-sale, and government markets. Core
    technologies include firewall, VPN, wireless, intrusion detection and
    prevention, SSL, anti-virus, and content filtering, along with award-winning
    security management solutions. Together, these products and technologies
    provide the most comprehensive distributed enforcement architecture available.
    SonicWALL, Inc. is headquartered in Sunnyvale, CA. SonicWALL trades on the
    NASDAQ exchange under the symbol SNWL. For more information, contact SonicWALL
    at +1-408-745-9600 or visit the company web site at
    http://www.sonicwall.com/ .

    Certain statements in this press release are "forward-looking statements"
    within the meaning of the Private Securities Litigation Reform Act of 1995.
    The forward-looking statements include but are not limited to statements
    regarding expected product purchases over the next year, the performance
    capabilities of the SOHO TZW and our Global Management System, the ability of
    our products to improve our customers' productivity, our ability to provide
    wireless network solutions to additional retail customers, and the adoption of
    wireless technology. These forward-looking statements are based on the
    opinions and estimates of management at the time the statements are made and
    are subject to certain risks and uncertainties that could cause actual results
    to differ materially from those anticipated in the forward-looking statements.
    In addition, please see the "Risk Factors" described in our Securities and
    Exchange Commission filings, including our Annual Report on Form 10-K for the
    year ended December 31, 2003, for a more detailed description of the risks
    facing our business. All forward-looking statements included in this release
    are based upon information available to SonicWALL as of the date of the
    release, and we assume no obligation to update any such forward-looking

    NOTE: SonicWALL is a registered trademark of SonicWALL, Inc. Other
    product and company names mentioned herein may be trademarks and/or registered
    trademarks of their respective companies.

    KNO - KioskNews.Org: Wifi security on those music kiosks

    Posted by Craig at 04:20 PM

    April 05, 2004

    Loudeye Powers First Web-Enabled and Wireless In-Store Media Kiosk

    Synergy Media Group's TouchStand(TM) Media Kiosk Demonstrates the Scalability and Flexibility of Loudeye's Digital Media Solutions in Delivering Millions of Digital Music Clips Wirelessly Around the Count

    SEATTLE, April 5 /PRNewswire-FirstCall/ -- Loudeye Corp. (Nasdaq: LOUD - News), the worldwide leader in business-to-business digital media solutions, today announced it has partnered with Synergy Media Group to provide digital music distribution services for Synergy's TouchStand Media Kiosk, the industry's only web-enabled, in-store media kiosk to provide digital music content, retailer-defined top seller lists, in-depth content searches, consumer data mining and point-of-sale, among other functions, for brick-and-mortar music retailers.

    Under the agreement, Loudeye is providing digital music clips from more than 3.2 million songs delivered wirelessly to TouchStand Media Kiosks, which were introduced today in a related announcement by Synergy Media Group. For the project, Loudeye created a custom music archive that is expected to grow to more than 4 million tracks later this year. The digital audio content enables TouchStand users to easily preview tracks of their choice in a brick-and-mortar environment, either by searching the TouchStand database or scanning the UPC code from a physical CD across a barcode reader on the TouchStand kiosk.

    TouchStand Media Kiosks offer retailers an easy-to-use sales and marketing system for driving in-store music sales, building relationships with consumers, gaining valuable data on consumer music purchasing behavior and differentiating themselves in the physical music retail business. TouchStand Media Kiosks provide digital music clips from more than 3.2 million songs, retailer defined top seller lists, in-depth content searches, consumer data mining, email and mailing list management, labor free point of sale, and automatic content updating in one integrated, custom branded package.

    "The TouchStand Media Kiosk offers music retailers a comprehensive solution and powerful marketing tool to help drive customer retention, competitive advantage and increase music sales," said Michael Fitts, CEO of Synergy Media Group and co-creator of TouchStand. "Loudeye proved to be a valuable partner in providing digital audio content to enable a key feature of the kiosks, while offering the potential of unlocking future functions including digital downloads. By working with Loudeye, we were able to rapidly go to market with this product, ensure it is constantly updated with new release material and meet the key feature demands from our retail partners."

    "As brick-and-mortar retailers look to enhance their in-store customer experiences by blending the traditional packaged product and digital worlds, products like TouchStand will be at the forefront of driving this important evolution," said Jeff Cavins, Loudeye's president and chief executive officer. "Our solutions were designed with the knowledge that digital media would rapidly spread to new devices, applications and experiences, requiring flexible distribution systems that can support these emerging business models. TouchStand represents an innovative product with the potential for future enhancements to drive further value to music retailers and consumers."

    About Loudeye Corp.

    Loudeye is the worldwide leader in business-to-business digital media solutions and the outsourcing provider of choice for companies looking to maximize the return on their digital media investment. Loudeye combines innovative products and services with the world's largest music archive and the industry's leading digital media infrastructure enabling partners to rapidly and cost effectively launch complete, customized digital media stores and services. For more information, visit www.loudeye.com.

    About Synergy Media Group (SMG)

    Synergy Media Group has been providing the media and entertainment industry with innovative approaches to promotion, marketing, distribution and retail technology since 1991. SMG's team of professionals brings extensive experience in all areas of the music industry including retail; distribution; major and independent label management; radio promotion; press & publicity; marketing; internet services; database management; and cutting edge technology product development.

    To learn more about Synergy Media Group visit www.SynergyMediaGroup.net or contact us toll free 888-355-9387.

    Posted by Craig at 06:13 PM

    April 02, 2004

    iPod Killer and DRM

    Microsoft is expected to unveil copy-protection software this summer that will for the first time give portable digital music players access to tunes rented via all-you-can-eat subscription services--a development that some industry executives believe will shake up the online music business.


    What's new:
    This summer may see the beginnings of a shake-up in the online-music industry--sources say new Microsoft copy-protection technology will finally arrive, bringing the all-you-can-eat subscription model to portable players.

    Bottom line:
    If fans of iPod-like devices can be convinced to drop the idea of owning song files, they could shift to paying a subscription fee for ongoing access to hundreds of thousands of tunes--something that would cost them hundreds of thousands of dollars under the current dollar-per-download paradigm.

    Sources say the technology--code-named Janus and originally expected more than a year ago--was recently released in a test version to developers and that a final release is now expected as soon as July.

    Janus would add a hacker-resistant clock to portable music players for files encoded in Microsoft's proprietary Windows Media Audio format. That in turn would help let subscription services such as Napster put rented tracks on portable devices--something that's not currently allowed. Fans of portable players could then pay as little as $10 a month for ongoing access to hundreds of thousands of songs, instead of buying song downloads one at a time for about a dollar apiece.

    Few online music subscription plans have enjoyed great success to date, but some music company executives said they believe Janus will make renting music more attractive to consumers and eventually give a la carte download services such as Apple Computer's iTunes Music Store a run for their money.

    Device makers, too, see the software as a way to take on Apple and its industry-leading iPod player, which for now offers no support for rented music. Anticipating the Janus release, MP3 player makers including Samsung have already begun advertising support for the technology in a handful of high-end products.

    "To us, Janus finally provides the platform on which we can build a new type of experience for the consumer," said Zack Zalon, president of Virgin Digital, the British conglomerate's new online-music division. "We believe this is it. This is what consumers are going to want. We want to be big participant in changing consumers' attitude towards what music really is."

    Microsoft executives associated with the project declined to confirm details of the technology's release. "As we've said before, enabling access to unlimited downloads on consumer devices will open up all new scenarios for the distribution and enjoyment of digital content," Jason Reindorp, the group manager for Microsoft's digital media division, said in an e-mail statement.

    Online-music insiders have debated for years about whether future services will ultimately resemble a traditional CD store--requiring consumers to purchase each single song--or a new model in which subscribers pay a monthly fee for unlimited access to all available music, without the right to keep the music after they stop subscribing.

    Apple Chief Executive Officer Steve Jobs has been the most prominent proponent of the pay-per-download model, saying that consumers want to own, not rent, their music. Apple's iTunes supports solely downloads, one of the few services to focus exclusively on a single model, and has captured a dominant part of the market to date, selling more than 50 million tracks in its first 11 months.

    Others argue that consumers used to the anarchic world of Kazaa and other file-swapping networks have grown accustomed to having thousands of music files at their fingertips. Only services that offer that kind of breadth of content--without requiring customers to pay thousands of dollars--will wean digital music aficionados away from file swapping, argue subscription advocates.

    Analysts said they expect subscription services to trail downloads in popularity, given the alien quality of the rental concept.

    David Card, a digital media analyst with Jupiter Research, said he doesn't expect Janus to drive dramatic growth in online music subscriptions, adding that it could take years for music rentals to challenge CD and download sales, if they ever do.

    "I think this is good, but it's not as if this is a silver bullet," he said. "It is important in adding another feature to the ultimate goal of creating the 'celestial jukebox,' but it's probably not going to jump-start the market."

    What's in it for Microsoft?
    The Janus release comes as Microsoft is prepping its own commercial music service, which is expected to launch on its MSN Internet service this year and may include a subscription component along with the ability to purchase downloads.

    Although Microsoft plans to get into the retail music market, its primary ambition is to be a technology provider and ultimately make its software the de facto industry standard for encoding and playing back digital media files--goals toward which the company could take a big step if subscription services based on Janus catch on.

    Microsoft has worked hard to establish its Windows Media file formats in the industry and has won converts among record labels and music services. But it has struggled to win over consumers, having made relatively little headway against the dominant MP3 file format even as it has drawn antitrust scrutiny over its digital media plans.

    Last month, European regulators hit Microsoft with a $617 million fine in relation to its digital media practices and ordered the company to offer PC makers a version of its Windows operating system with its media player stripped out. The software giant is also battling a civil antitrust suit involving its digital media business in the United States, where rival RealNetworks is seeking up to $1 billion in damages.

    Part of the trouble with subscription services to date is that subscribers typically haven't been able to transfer the millions of files available to them to their portable music players. Record labels have largely required that subscription content "time out," or be made unplayable if a subscriber stops paying, and MP3 players haven't had the capability to support that feature.

    That's where Janus comes in. The technology would add a "secure clock" to Microsoft's Windows Digital Rights Management technology, which would let an MP3 player tell whether a particular file was past its expiration date.

    Microsoft has been working on that problem--a technically tricky one--for quite some time, and industry sources have said the company originally planned to announce it at the 2003 Consumer Electronics Show in Las Vegas.

    Considerable time has elapsed since then, but sources say Microsoft developers finally appear to be reaching the finish line. Beta, or test, versions of the software have gone out to some developers within the past month, industry sources say. The software is expected to be released by late summer or early fall, with some citing a date as soon as July.

    A few MP3 player manufacturers, including Gateway and Samsung, have begun quietly advertising Janus support in the specifications for their new high-end products. A representative for Diamond Rio maker Creative said that company was in negotiations with Microsoft, and would support Janus when released.

    A Gateway representative said that company had been mistaken in listing current Janus support in the iPod-like player now available on Gateway's Web site, since Microsoft has not yet provided final specifications. But the company would support the technology when it was released, the representative said.

    Online music companies are clearly eager for the prospect to make their subscription offerings more attractive to a generation of consumers who are snapping up iPod-like MP3 players, which can hold thousands of songs at a time.

    "We are very excited about it, and will support it," said one executive at a music service, who asked not to be named. "We believe it's real and think it will be implemented."

    Music service executives said they were still in negotiations with record labels over how to treat the new technology. Allowing people to bring thousands of songs at a time to portable players may wind up costing more than the $10 a month that most subscription services charge today, the executives said.

    Nevertheless, some music services are eager to drive more consumers to subscription plans, since per-song download stores have tiny or even nonexistent profit margins.

    "There are a couple of companies that are dependent on (subscriptions) for a steady revenue stream that doesn't have a one penny margin," said Liz Brooks, senior vice president of business development for Buy.com's BuyMusic site, which does not offer a subscription plan. "This could be very important."

    Jupiter's Card notes that consumers have repeatedly said in surveys that owning music is important, however. It will take considerable time before a large part of the market grows used to the idea of subscribing to music the same way people subscribe today to TV services, they say.

    "I think we're really at the stage for the next few years where (subscription) music services are for music aficionados, not for the mass audience," he said. "There are not enough of them that this is going to be a $10 billion business anytime soon."

    Microsoft's iPod killer? | CNET News.com

    Posted by Craig at 08:41 PM

    Starbucks and Music

    Gimme a decaf vanilla latte - and a CD to go ...

    NEW YORK In the battle to get people to buy more music, marketers are going after a new target: your appetite. Now that digital music is widely popular - and can be downloaded legally - companies like Pepsi, Coca-Cola, McDonald's, and Starbucks are associating eating and drinking with getting hold of your favorite music.
    Offerings for consumers that are already available or in the works range from free song downloads (awarded after buying a bottle of soda or a cheeseburger) to the ability to walk into a Starbucks and choose from thousands of songs to make a CD.

    The Seattle-based coffee company's foray into digital music is perhaps the most dramatic, including a store dedicated to copying - or burning - CDs, which opened in March in Santa Monica, Calif. Those who stop in don't need to be tech-savvy or even own a computer to take advantage of the service, which will spread later in the spring to 10 regular Starbucks stores in Seattle. The company aims to introduce people to new music in an environment that's more appealing than a chain store.

    Making interacting with digital music easier - through the Starbucks project and free song giveaways - may help online music reach a broader audience, one that wouldn't normally think of downloading. At the very least, consumers, marketers, record labels, and musicians are benefiting from the deals.

    "It's kind of a win, win, win [situation]," says David Card, an analyst at Jupiter Research, a technology tracking firm.

    After a cautious start, record companies are making more of their product available in electronic form. Some analysts say digital music likely won't save the sagging record industry - with downloads and subscription services amounting to about $1.6 billion of the roughly $12 billion industry by 2008, according to Mr. Card. But with the variety of portable players and download services now available, the number of potential partnerships with big brands is still high.

    Coca-Cola shopped a partnership with its Sprite brand to a number of online services before settling on Musicmatch. Details of the promotion, which begins this summer, have yet to be announced, but will include free song downloads and even bigger prizes from Musicmatch.com.

    "We have for some time been looking for an opportunity to become even more involved with digital music," says Scott Williamson, a Coca-Cola Co. spokesman. "The launch of for-fee, legal service really made it very desirable for us."

    Other partnerships are in the works, including one reportedly between McDonald's and Sony, which would give away songs from Sony's new Connect music site, set to launch shortly. Neither company would comment on the deal.

    How consumers respond to such deals is unclear. The partnership between Pepsi and iTunes, the download site from Apple, gave away free songs to people who bought Pepsi drinks with special winning codes in the bottle caps. One hundred million songs were up for grabs - winners simply had to take the codes to the iTunes site to obtain their free downloads.

    Lots of Pepsi and Sierra Mist fans saved themselves the usual download charge of 99 cents, but the companies have differing takes on the promotion's success. Apple CEO Steve Jobs recently told The Wall Street Journal that redemptions weren't as high as hoped. Pepsi is pleased with the response, says spokeswoman Nicole Bradley. "We have had millions of redemptions and expect more throughout the month of April," she says.

    All of the deals highlight one of the criticisms industry-watchers have with the current digital downloading process: With so many online services and related devices, you can't easily play music from one service on the device of another.

    Starbucks is getting around that by offering its customers the ability to burn songs and albums. The company opened Hear Music Coffeehouse, its first store dedicated to such listening, last month. While sipping lattes, customers can browse thousands of songs and make their own CDs - paying $6.99 for five songs and $1 for each additional song. Later this spring, the CD-burning service will expand to 10 Starbucks stores in Seattle. "We're the first to secure the rights to do this in the US," says Don MacKinnon, vice president of Starbucks Music and Entertainment.

    Soon the company expects it will have as many as 140,000 songs, or the equivalent of 15,000 to 20,000 albums, available in genres ranging from pop to classical. Knowledgeable staff and in-store features will also offer guidance about new music, something people don't get when buying from a giant retailer, says Mr. MacKinnon.

    "We're trying to get people to have the discovery of music be a part of their life again," he says. "But you kind of have to find a part of their routine that you can tie it to."

    'Gimme a decaf vanilla latte - and a CD to go' | csmonitor.com

    Posted by Craig at 06:21 PM

    April 01, 2004

    Wal-Mart and Music

    Why Walmart.com's digital-music efforts won't bring about the great digital-music shakeout.

    SAN FRANCISCO (CNN/Money) - Last week was a big week for Wal-Mart. First, the retailing titan topped the latest Fortune 500 list, and second, the company launched a digital-music download service.

    Apple (AAPL: Research, Estimates), the leader in digital music, didn't seem fazed by the new arrival.

    "It's hard to imagine any other company catching up with iTunes," says an Apple spokesperson. But insiders raised concerns for some of the smaller players, because Wal-Mart (WMT: Research, Estimates) announced it would sell its songs for 88 cents per track -- 11 cents below the going rate.

    "Great, just what we need," one industry observer wrote to a digital-music mailing list.
    Caution ahead

    For Wal-Mart investors, however, the company's digital-music download effort just doesn't make much sense.

    Don't get me wrong -- I firmly believe that there are already too many players in online music and a shakeout is imminent. I just don't think Wal-Mart will be the reason the herd begins to thin.

    Apparently I'm not the only one. Wal-Mart's entrance into digital-music downloads "is kind of comical," says Gene Munster, a senior research analyst at Piper Jaffray. "The typical Wal-Mart user isn't tech-savvy."

    Cynthia Lin, a Wal-Mart spokeswoman, counters that two-thirds of Wal-Mart's users are online and two-thirds of those people connect via broadband.

    "It's a viable and profitable business model, one with huge growth potential. That's why we're moving forward with it," she says.

    That's a nice thought, but unfortunately for Wal-Mart, the company's modus operandi won't work in the digital-music world -- at least not yet.

    Typically, Wal-Mart can charge less because it pays less. Its suppliers sacrifice margin because they can make up for losses with high sales volume.

    With digital-music downloads, however (aside from those made on Apple's site), the volume needed to support Wal-Mart's pricing strategy simply isn't there. What's more, according to a study conducted last year by Piper Jaffray, consumers won't respond to price differentiation among music download services until the price point gets to 50 cents.

    "For the people who are going to purchase music online, the 79-, 88-, 99-cent price point doesn't make much difference," Munster says.

    The "me-too" syndrome

    Finally, Walmart.com's most recent me-too forays into the digital arena haven't proven successful.

    Much fuss was made (including in this column) when Walmart.com entered the Netflix market, undercutting Netflix by more than $3 per month. Now, a year and a half later, Netflix still commands more than 95 percent of the market (by its own count).

    "I frankly can't figure it out," says Josh Bernoff, an analyst with Forrester Research, of Walmart.com's decision to enter the digital-music space.

    "Even if somehow the company captured 10 percent of the market this year -- which would be an enormous feat -- it would still only be a $30 million business. The company will sell over $1 billion in CDs this year in its stores. Why is it doing this? It doesn't make sense."

    So the entrance of the country's biggest company into digital music isn't the most pressing problem facing investors in companies such as Roxio (Napster) and RealNetworks (Rhapsody).

    Instead, they need to figure out where their portfolio companies will stand when the great digital-music shakeout occurs. When will that happen? I think it will start in the second half of this year, when Microsoft unveils its digital-music system. More on that in a future column.

    Tech Biz: Wal-Mart takes on iTunes -- but who's listening? - Mar. 30, 2004

    Posted by Craig at 05:48 PM

    Circuit City Acquisitions

    Circuit City to Acquire InterTAN, MusicNow

    RICHMOND, Va. (April 1, 2004) - Circuit City Stores announced two strategic acquisitions yesterday. The retailer has agreed to buy Canadian consumer electronics chain InterTAN for a price tag of $284 million, as well as digital service provider MusicNow.

    The deal with interTAN will give Circuit City a Canadian physical presence The tender offer is slated for completion by the second quarter, and Circuit City plans to introduce InterTANs private-label products into its Superstores by Fall 2004.

    "InterTAN will bring to Circuit City a management team with extensive sourcing experience in private-label merchandise and creative in-store merchandising capabilities," said W. Alan McCollough, chairman, president, and CEO here at Circuit City. "We believe that this transaction will enable us to quickly expand the offering in our Circuit City Superstores and further our efforts to provide complete consumer electronics solutions to our customers. In addition, we are excited to enter the Canadian market through a company that has a proven track record.

    The transaction with Chicago-based MusicNow is expected to close in April 2004. Were thrilled to be gaining the knowledge and expertise in the digital media space," said Fiona Dias, president of Circuit City Direct. "Circuit City will integrate MusicNow's platform into Circuit City's Web site at circuitcity.com as well as our nearly 600 Superstores across the country.

    Posted by Craig at 02:27 PM

    March 31, 2004

    Music Catalog

    Tracking Down Tracks: Search Engines Evolve

    Tracking Down Tracks: Search Engines Evolve
    By Kinley Levack - April 2004 Issue, Posted Mar 31, 2004

    How do you discover new music and artists? Probably through friends, the radio, or by wandering the aisles of a Virgin Megastore. Time consuming? Yes. Effective? Rarely. Two companies have recently entered the scene with the intent to turn your musical affinities into recommendations for other titles, albums, and artists, and, not only could it revolutionize the way consumers find music, but it has implications in a host of other consumer arenas.

    Recommendation engines run by companies like Savage Beast and Siren Systems have developed highly advanced methods to determine what kind of music is similar to whatever your musical taste du jour may be that are far more intuitive and intelligent than a traditional text-based search. They analyze hundreds of attributes of songs in order to best categorize each selection, including beats per minute, instruments used, gender of vocalists, and content of lyrics, then use that data to tailor a list of songs or albums that a user already knows and enjoys.

    Savage Beast's president Tim Westergren explains that they look at approximately 400 different traits, which they refer to as "genes." (A tenor sax solo within a song, for example, can have seven or eight genes of its own to help describe the piece.) These genes are stored in the Music Genome Project, a proprietary database that currently holds data on over 350,000 songs. Siren Systems uses their SongScore algorithm to compare 700 data points in songs before compiling its personalized list for users via the consumer-facing Soundflavor Web site, which is significantly smaller at this stage of the game with about 5,000 songs.

    Both Savage Beast and Soundflavor use a combination of human analysts and automation to catalog songswhich generally takes about 15 minutes per song to completeand both are adamant about the importance of using trained professionals to catalog music. "Our intention is not to be the arbiters of what's good or bad," says Westergren, so they train analysts, who are also musicians, for approximately 40 hours and often run duplicate analysis on songs to ensure that they have been appropriately and objectively handled. Soundflavor chose a more automated route in an effort to ensure that there was nothing subjective in the categorizing and analyzing of content. "We spent two years in R&D creating a metadata model that is objective," says Pete Budlong, cofounder and president of Siren Systems. "I call it metadata on steroidsso people do not decide if a song is happy' or sad.'" Analysts for Soundflavor use a text-based guide for each song and are both trained on the tool and tested before they are allowed to use it independently.

    Because the Soundflavor Web site was preceded by a relationship with KROCK radio, the site had an initial focus on alternative rock, but it is following a genre map for the future. They are also allowing artists to submit music for free for as long as the site is in beta, and Budlong predicts they will charge a nominal fee thereafterlikely in the area of $20 per song. As for Savage Beast, "Our focus right now is to get all of the stuff on the charts," says Westergren, and the database grows from there. The company also accepts unsolicited submissions from artists.

    According to Westergren, Savage Beast's approach is, "sort of a musicological study of not just what gives a song its style, but how it might correlate with other's preferences." They offer their database to retailers via the Web or in-store kiosks that are fully customizable to each retailer. Best Buy, a Savage Beast marquee customer, operates approximately 60 Web-enabled touchscreen kiosks that essentially act as a smarter version of the traditional listening station. Customers insert a CD into the kiosk and the recommendation engine offers similar albums. All songs can be previewed and Westergren anticipates that in the near future the touch screen will also offer options allowing customers to create their own CDs.

    Soundflavor's approach is extremely different. Budlong views the future of music discovery as, "more active and less passive, with the consumer in the driver's seat." Hence the next iteration of the company's site, expected for release this spring, will retain more information about what users like and do not like, so each visit will result in a more and more tailored experience. All results lists are also relevancy ranked, la Google, so users do not have to scroll through pages of unwanted or irrelevant material. To use Soundflavor, anyone on the Internet can visit the site and play with predesigned playlists or explore based on favorite songs, albums, genres, or artists. Available playlists, or Soundflavors, are based on activities and moods, such as "Remedy for a Bad Day," "For the Working Man," "Pumpin' Iron," or "Instrumental Only."

    Westergren views recommendation engines as, "the logical next generation of search" and he believes that, "any product area where you can describe the product with a consistent set of details and rich analysis is a candidate for this," citing other possible categories like film, food, and books. Budlong expresses similar expectations for the use of recommendation engines, particularly in the entertainment space, and he predicts that, "in the long run, a metadata model combined with collaborative capabilities is the one that will win out."

    Posted by Craig at 05:12 PM

    Apple Seeks Patent

    Apple seeks patent on "method of making large sums of money with multimedia player":

    Writing in Mac Observer, John Kheit suggests that Apple's
    patent application for the iPod GUI, should it be
    approved, may make it a market leader. "Considering that one of the major
    distinguishing features of the iPod is that it is simply way easier to use
    and navigate, having a patent on the interface presents a big obstacle to
    knock-off artists," Kheit

    writes. "Dell and other
    would-be pretenders to the MP3 throne will actually
    have to come up with their own UI or license it from Apple. This makes HP's
    decision just to outright license the iPod a lot more understandable. ...
    Should this patent application be allowed by the USPTO, it may turn out to
    be a big ace-in-the-hole for Apple. Had Apple secured patents on its desktop
    user interface, many years ago, the entire landscape of the computer
    industry would likely be very different today.

    Posted by Craig at 04:47 PM

    March 29, 2004

    Shakeout in Music Download Already...

    Some start-ups seek buyers, anticipating entry of established firms eager for a stake in selling songs

    By Nick Wingfield
    The Wall Street Journal
    Originally published March 29, 2004

    NEW YORK -- With too many players jostling for too few chairs in the online-music game, a long-predicted shakeout appears to be under way.

    Not long ago, online music captured the imaginations of entrepreneurs and investors, and start-ups were popping up all over the Web. But for all the excitement generated by Apple Computer Inc.'s iTunes Music Store and others, the online-music market is still a young business where the direct profits from selling songs remain elusive -- not yet big enough for the crowd of newcomers that soon became a glut.

    Pressure on start-ups will further intensify this year as big companies including Microsoft Corp., Sony Corp. and Yahoo Inc. enter the market.

    Facing the music, the online-tunes start-ups are beginning to shelve planned offerings or shop themselves to more-established companies.

    In recent weeks, closely held MusicNow Inc. in Chicago has approached large retailers, technology companies and other online music sites with the intent of selling itself or raising capital, say several executives at companies approached by MusicNow.

    Those executives say they declined the chance to do a deal with MusicNow, although it's possible MusicNow may have reached a pact with another party. Greg Rudin, a spokesman for MusicNow, declined to comment.

    Like a growing number of companies in the market, MusicNow -- formerly known as FullAudio Corp. -- was trying different approaches to delivering music licensed from recording companies to users, including selling copies of songs for 99 cents each and charging a $9.95 monthly subscription fee for access to an unlimited library of music, albeit with restrictions on how consumers listened to the music.

    The company's services never gained much of a following: MusicNow signed up only about 18,000 members to its subscription service, according to outside executives familiar with its numbers.

    More start-ups going to market

    OnDemandDistribution PLC, a distributor of music co-founded by the musician Peter Gabriel and based in the United Kingdom, is also casting about for potential investors or acquirers; it has hired investment bank Broadview, a unit of Jefferies & Co., to help it with that goal, according to executives approached about a possible deal.

    OD2, as the company is also known, is considered one of the stronger Internet music companies in Europe, with agreements to operate European music-retailing sites for high-profile partners like Coca-Cola Co. and Microsoft's MSN. OD2 will face increasingly tough competition starting later this year, though, when U.S. players like Roxio Inc.'s Napster and Apple's iTunes have said they plan to enter the European market.

    Tiff Pike, OD2's finance director, confirmed in an e-mail that the company has hired Broadview. But he didn't respond directly to questions about whether the investment bankers were helping it find a suitor. "They are providing us with advice on conditions in the market generally and specifically on growth opportunities," Pike said in the e-mail.

    Other start-ups are backing off from the market indefinitely. A little over a year ago, major retailers Best Buy Co., Trans World Entertainment Corp. and others formed a consortium called Echo Inc. that planned to license music from recording companies and distribute the songs through each of the retailers' own Web sites.

    Los Angeles-based Echo never launched its service and its plans are now on hold as it tries to figure out how to distinguish itself from other music sites.

    "We didn't want to go out with a me-too, too-late service," said Dan Hart, Echo's chief executive. "We looked at other players in the space and the results they were having and thought we needed a somewhat different strategy to be more competitive."

    Very little profit

    Indeed, there are more than a dozen companies with existing or planned online music ventures hawking virtually the same selection of songs licensed from major recording companies and independent labels.

    The profits from such song-download services are questionable. These companies pay from about 65 cents to 79 cents a song to music companies, analysts and industry executives say. Credit-card processing fees, bandwidth charges and costs related to customer service often chew up whatever profit is left over from the 99 cents most consumers pay for a song.

    Apple CEO Steve Jobs has said that Apple makes its money in the music business from selling iPods, the sleek portable music players that are the only hand-held gadgets that work with its iTunes Music Store. Apple says it has sold more than 50 million songs since it introduced the iTunes Music Store about a year ago, making it the market leader by far. The company, based in Cupertino, Calif., has sold more than two million iPods.

    Apple's competitors have said Jobs is understating the profits in music sales for Apple's own benefit. Music sites like Napster and RealNetworks Inc.'s Rhapsody say profit margins are higher for subscription music services, which both companies offer, than in the business of selling 99-cent downloads. Apple doesn't offer a subscription service.

    Sales vs. downloads

    Whatever the approach to selling music, though, sales from commercial music sites are still small compared with the number of downloads from free, renegade alternatives like Sharman Networks Ltd.'s Kazaa, which have a much broader selection of music, most of it pirated.

    Still, the transformation of music retailing into an online business is eventually expected to be so thorough that large companies, including Microsoft, Sony and Yahoo, are preparing to start their own music-downloading sites.

    But the growth of online music into a major business clearly will take time.

    Last week, Roxio said it expects its Napster service to post about $5.5 million in revenue for the calendar first quarter, up 53 percent from $3.6 million in revenue in the fourth quarter. What Roxio didn't remind investors is that the company had launched Napster in late October. Had Napster been in business the full fourth quarter, Roxio had previously said it was on track to report $5 million in revenue then -- meaning it had a mere 10 percent in sequential growth.

    Roxio's shares now trade for less than half of their value prior to its reintroduction of Napster.

    "We're still just scraping the surface of the online music market," a spokesman for Roxio said.

    baltimoresun.com - Shakeout winnows online music companies

    Posted by Craig at 04:46 PM

    March 24, 2004

    Wal-Mart and Music

    Wal-Mart bets discount digital downloads will draw online customers
    At just 88 cents per song, Wal-Mart hopes its new online music store will compete on price against Apple's iTunes and Roxio's Napster services. But the real goal of the site is to drive consumers to Wal-Mart's Web site, analysts said, where the company has launched other online services including a DVD rental service and prescription contact lens fulfillment.

    Wal-Mart Launches Online Music Store

    Tue Mar 23, 4:26 PM ET

    Add Business - Reuters to My Yahoo!

    CHICAGO (Reuters) - Wal-Mart Stores Inc. (NYSE:WMT - news) on Tuesday officially launched its online music store with an expanded roster of artists, and kept the price at the same 88 cents per song that it offered during a three-month test.

    The store, which sells digital downloads for 11 percent less than major competitors, expanded its catalog of artists by 50 percent, including exclusive songs from Jessica Simpson, 3 Doors Down, Shania Twain and others, the Bentonville, Arkansas-based retailer said.

    Wal-Mart began testing the site, which allows customers to download songs from the Internet, in December.

    While the new store will have the brand name of the most powerful retailer behind it, it will face off against a number of companies that are better known in the online music space, such as Apple Computer Inc.'s (NasdaqNM:AAPL - news) iTunes music store and Roxio Inc.'s (NasdaqNM:ROXI - news) Napster (news - web sites).

    Apple, which said last week it has sold more than 50 million songs through downloads on its nearly year-old service, declined to comment on the pricing but said it has confidence in its iTunes service.

    "We think it's going to be increasingly difficult to imagine others catching up with iTunes," an Apple spokeswoman said.

    Both iTunes, the most popular online music service, and Napster charge 99 cents per song, although Napster and several other services also offer subscription options that allow users to pay a monthly fee for downloads.

    Wal-Mart is the dominant force in U.S. retailing, but it was relatively late to the dot-com world and has been adding online services in hopes of boosting its Web presence. It recently started offering contact lens prescription and DVD rental services.

    Wal-Mart spokeswoman Cynthia Lin declined to comment on whether the service was profitable, or on how many songs had been downloaded, but said demand "far exceeded" company forecasts. She said the music download service means Wal-Mart can offer far more titles than it can in its stores, where shelf space is limited.

    Analysts have said that the goal for Wal-Mart is to bring more people to its Web site. Even if the music service sold 100 million songs, that would add up to just $88 million -- a paltry sum for a company that recorded nearly $260 billion in revenue last year.

    Wal-Mart said that for the next two months it would be the exclusive supplier of songs from artists carried by the Curb Records label, whose roster includes country music stars Tim McGraw and LeAnn Rimes.

    Like most online services, the Wal-Mart service is aimed at users of Microsoft Windows operating system, which accounts for the vast majority of personal computers. Apple's iTunes, by comparison, is compatible with both Windows and its own operating system.

    Shares of Wal-Mart closed up 11 cents, or 0.19 percent, at $58.21 on the New York Stock Exchange (news - web sites) on Tuesday. Apple shares closed off 2.20 percent at $25.59 and Roxio closed down 5.75 percent at $4.75, both on the Nasdaq.

    Yahoo! News - Wal-Mart Launches Online Music Store

    Posted by Craig at 04:57 PM

    March 22, 2004

    Music and QSR Retail

    McDonald's, Sony Said to Be in Music Pact

    The fast-food chain would help market the launch of a new service to download tunes, sources say.

    Times Headlines

    Study Details Port Pollution Threat

    Web Connection Ready for Takeoff

    Jobless Coffer Shrinks as Payouts Grow

    McDonald's, Sony Said to Be in Music Pact

    Internet 'Phishing' Scams on the Rise

    more >


    By Jeff Leeds, Times Staff Writer

    Hungry for a taste of the online music business, Sony Corp. is aiming to line up McDonald's Corp. to market the Japanese conglomerate's new download service, according to people familiar with the deal.

    The two companies have been hammering out the details of a pact in which McDonald's would provide fast-food diners with free songs from Sony's online music store, Sony Connect, these people said. The deal is expected to be announced this week.

    Representatives from Sony and McDonald's declined to comment.

    The sources said McDonald's was expected to commit about $30 million to advertise the program in the U.S. and beef up the launch of Sony Connect, which will charge 99 cents per song when it starts up this spring.

    In exchange, sources said, McDonald's will be able to buy some tunes from Sony Connect at unspecified discounts. The fast-food giant plans to give customers free songs when they buy certain menu items; customers will receive codes they can redeem online for downloads.

    The pact would underscore a central strategy of would-be players in the online music world: find major advertisers with the marketing clout to sell alternatives to the illegal downloading of music on unauthorized file-sharing networks such as Kazaa and LimeWire.

    Sony has already announced a deal with UAL Corp.'s United Airlines in which travelers, once the Connect service starts, will be able to trade in frequent flier miles for free songs. And Apple Computer Inc. has teamed with PepsiCo Inc. to award buyers of soft drinks downloads from the iTunes Music Store if they find special codes under bottle caps.

    Pepsi pledged to give away up to 100 million songs in the bottle-cap contest. But Apple Chief Executive Steve Jobs said recently that the redemptions had fallen short of expectations.

    One person familiar with the McDonald's deal said the fast-food company would probably give away more than 100 million Sony Connect songs in the U.S.

    McDonald's had been in talks to launch a similar marketing effort with Apple, but switched plans after a last-minute pitch from Sony, sources said.

    The McDonald's deal comes as Sony is racing to build a presence on the online landscape and drive sales of its own line of portable music devices. Sony, which introduced music lovers to portability with the Walkman, has lagged behind such rivals as Apple, which dominates the field with its iTunes service and has seized market share with the iPod music player.

    Now, Sony not only has to catch up to Apple, but it also has to confront other online players, including Microsoft Corp., which is developing its own Internet music store.

    For McDonald's, the aim is to build a hipper image among young consumers.

    McDonald's, which has hired pop singer Justin Timberlake to appear in its commercials, has been laying large bets on the marketing power of music.

    The McDonald's-Sony alliance is expected to focus on Sony's music service, but the sources said it might be extended to market Sony video games and other products.

    McDonald's, Sony Said to Be in Music Pact

    Posted by Craig at 05:35 PM

    March 19, 2004

    Music Download

    Sony music download service to launch in June

    Posted: 17/03/2004 at 15:28 GMT
    The Register Mobile: Find out what the fuss is about. Take the two week trial today.

    Sony today confirmed that it will launch its European digital music download service, Sony Connect, in June.

    Connect will be made available to music buyers in the UK, France and Germany, who will have the pick of over 300,000 songs. The catalogue includes bands signed to independent labels as well as Sony's own roster of artists. Sony already has physical distribution deals with a number of small labels, so it's likely these arrangements will be matched in the digital domain by Connect.

    "We will offer a unique catalogue proposition for each country which includes not only international but also a wealth of local artists," said Robert Ashcroft, senior VP at Sony Network Services Europe, which is running Connect.

    Each song will be offered in Sony's ATRAC 3 format, the compressed digital music technology that's the basis of the company's MiniDisc products. While tracks will be initially downloaded to a PC, they can only be transferred to "secure Sony portable audio products". Indeed, Sony is using the service to tout its Hi-MD high-capacity MiniDisc players.

    Prices will start at 79 pence in the UK and 99 cents in Europe, Sony said. Tracks are copy-protected using Sony's own Open Magic Gate (OpenMG) DRM system, and users will need to download songs through the company's SonicStage jukebox and CD burning app. A new version, 2.0, will be required to use Connect. At this stage, it's not clear how many times songs will be allowed to be burned, copied to Sony MD players or shared with other, local PCs. Sony bundles SonicStage with its Vaio PCs. We somehow doubt it will offer a Mac version.

    Sony Connect is expected to launch in the US in due course. The arrival of the European store will be keenly awaited by a number of digital music companies and market watchers who believe Sony will not allow other players to offer its catalogue of songs until it has launched its service.

    Many observer says the European Commission will examin the launch of Sony Connect in its investigation of the music company's proposed merger with Bertelsmann Music Group (BMG).

    The Register

    Posted by Craig at 07:07 PM

    music download mobile phones

    T-Mobile unveils mobile music download

    19/03/2004 by Leigh Phillips

    Mobile operator T-Mobile has unveiled its Mobile Jukebox - a service that will allow customers to download snippets of music in a Mobile Mix format.
    The format will offer a starting catalogue of around 200 songs, each of which are edited down to 90 to 120 seconds - with full tracks becoming available for download once there is a greater selection of 3G handsets available in stores later this year.

    While no specific date for launch has been set yet, the operator is aiming to have the service is available to subscribers to T-Mobiles 2.5G by April and subscribers to its 3G network upon launch of commercial services.

    The operator is to launch the service in the UK, Austria and Germany first of all, on the Sony Ericsson P900 and Nokia 6230, 660 and 7600 handsets.

    Users will be able to store up to 64 songs, at a cost of 3.70 each. Downloads on the 2.5G networks will take around two minutes, and 45 seconds over 3G.

    Songs will only be playable on the handset that downloaded them, as the system uses the the OMA digital rights management 1.0 standard.

    Source(s): NetImperative

    DMeurope.com: News - T-Mobile unveils mobile music download

    Posted by Craig at 07:05 PM

    music download

    Expect A Shakeout as Big Merchants Crowd Online-Music Market

    By Clint Swett, The Sacramento Bee, Calif.

    Jan. 18--Last spring, when Apple Computer introduced its iTunes Music Store, the company had the nascent field of legal music downloading mostly to itself.

    By mid-2004 there likely will be nearly a dozen companies jockeying for the same customers.

    Recorded music is "a $30 billion business worldwide, and $30 billion is a lot of money," said Phil Leigh, an analyst with Tampa-based Inside Digital Media, in explaining the rush to set up online music stores.

    And it hasn't hurt that Apple proved there is a market by selling more than 30 million songs since it kicked off its online service last April.

    An online store is essentially a Web site at which consumers can browse through hundreds of thousands of song titles and then download individual selections to their computers, typically for 99 cents each. The digital tunes can be played on the computer, transferred to portable music players and burned onto CDs.

    In recent weeks, Wal-Mart and RealNetworks have launched their music downloading services while Sony earlier this month unveiled similar plans. They join a revitalized Napster, as well as Rhapsody, MusicMatch, EMusic and BuyMusic.

    Yahoo!, Amazon and MTV are also considering music download services. And lurking in the background is industry behemoth Microsoft, which has acknowledged plans to launch a service later this year but has provided few other details.

    PC companies are getting into the game, too. Dell, for instance, has aligned itself with the MusicMatch download service. And in a surprise announcement last week, HP said it would sell Apple's popular iPod music players on its Web site and brand them with HP's name beginning this summer. In addition, it said it would load all its consumer PCs with iTunes software, effectively steering consumers to Apple's music site.

    A variety of factors are contributing to the rush toward online music distribution. Prodded by flagging sales and a surge in illegal downloading, the music industry has become much less restrictive in licensing its tunes to legal download services.

    High-speed Internet connections have also become much more common, making downloading faster and more convenient.

    Consumers, particularly younger music buyers, are now more comfortable with the notion of buying things from music to books to cars over the Internet.

    "I think we're witnessing a real gold rush, and there are a lot of streambeds where companies can stake a claim," Leigh said.

    But like the Gold Rush of 1849, there will be plenty of big losers as well as winners.

    At least for now, the online music business runs on terrifyingly thin profit margins, with the download sites making only a few cents on the songs they sell for 99 cents each, analysts say.

    That won't go far in offsetting the expense of setting up the online music stores, said Leigh, at least in the short term.

    He sees the music situation as similar to Amazon.com's years of bleeding red ink while it established itself as the dominant online book seller.

    Experts say it's unclear how many online music sites the public will support.

    "The market will let us know how many will work," said Mike McGuire, who follows the online music business for Gartner G2. "But will there be a shake-out? You bet there will."

    There's little to differentiate most of the online sites, at least in the titles they have to offer. Most of the major music labels offer the same licensing deals to all the online services, which generally boast about 400,000 to 500,000 titles.

    A clean interface, good search capabilities and software that can make recommendations based on your previous music purchases all are essential, analysts said.

    But the real money will likely be made from selling other products associated with music downloads. Apple, for instance, shipped 733,000 iPods in its most recent quarter, generating $256 million in revenue.

    The deal with Hewlett-Packard could further increase iPod sales and accompanying profit margins as increased manufacturing volume contributes to lower costs, said Gartner's McGuire.

    For its part, Sony, whose Walkman pioneered portable music players, said it will tightly integrate its devices with its download service, which has been dubbed Connect.

    Some of its newest players will allow users to electronically mark songs or artists that they like, said Jay Samit, general manager of Connect. When the unit is plugged into the computer it will send that information to the Connect site, which will then make further recommendations based on your current tastes, he said.

    Samit said Sony also has struck a deal with United Airlines to allow customers to redeem their airline miles for music.

    However, he squelched speculation that Connect will have special access to Sony's extensive music library. "It will be a level playing field," Samit said.

    Napster, the godfather of music downloading, has a deal with Target in which its software and prepaid download cards will be sold in the giant retailer's stores in an effort to broaden the market beyond traditional computer users.

    Even though it's too early to tell who the download winners will be, having a legal alternative may help stem the tide of illegally swapping copyrighted music.

    According to a recent telephone survey by the Pew Internet and American Life Project, the number of illegal music downloaders in the United States fell from 35 million last spring to about 18 million in late November and early December.

    But other measurements say illegal file sharing is still going strong. BigChampagne, a Southern California company that monitors network traffic, said activity at some of the biggest file sharing sites was greater this past December than a year earlier.

    Eric Garland, founder and chief executive of BigChampagne, points out that Apple, which has an estimated 70 percent of the legal market, hopes to sell 100 million songs in its first year. But illegal file sharers swap 10 times that number of tunes every month.

    Still, Mitch Bainwol, chief executive officer of the Recording Industry Association of America, said progress is being made.

    He points to consumer education, aggressive legal action and the availability of legal alternatives as factors that could help thwart music piracy.

    "We're living through an important juncture in music history," he said. "Six months ago, people didn't know they could download music legally. Now the whole terms of the debate have changed."

    Posted by Craig at 07:02 PM

    music downloads

    Rio and BuyMusic.com Partner to Offer Free Music Downloads to Customers

    Free Music Download Selection Includes Unprecedented Catalog to Choose From

    SANTA CLARA, Calif. and ALISO VIEJO, Calif., Mar 10, 2004 /PRNewswire via COMTEX/ -- Rio Audio, a leading provider of Digital Music Players, and BuyMusic.com(TM), one of the world's largest legal music download stores for PC users, today announced a partnership for free music downloads. Customers who purchase a Rio Karma, Rio Nitrus, Rio Cali, Rio Chiba or a Rio Fuse Digital Music Player will be offered up to ten free downloads from BuyMusic.com. With more than 400,000 songs to choose from, customers will have the best of both worlds -- an extraordinary Digital Music Player and an abundance of their favorite songs to download. Look for a Rio Digital Music Player with the BuyMusic.com promotional code to hit the store shelves in mid-April.

    "The partnership between Rio and BuyMusic.com offers consumers the ability to try out one of the leading legal music services on the market," said Gil Miller, Director of Business Development for Rio. "We are offering the consumer a great value -- buy one of the coolest Digital Music Players on the market and receive up to 10 of your favorite songs, for free."

    Rio is one of the top selling Digital Music Player brands in both the emerging mini-hard disk player market and the flash player market. Recent reports show that the Rio Nitrus 1.5GB is the best-selling 1-inch HDD Digital Music Player. Additionally Rio has regained the top spot in the overall flash Digital Music Player market.

    "Rio Digital Music Players are the ultimate choice for consumers looking to get in to the digital music craze and Rio is a great choice for BuyMusic to partner with," said Keith Allen, Senior Vice President. "As a leader in the PC digital music industry, we want our customers to experience the best in music choice and portability. This free music promotion with Rio offers just what we were hoping for."

    About Rio

    Rio Audio, a D&M Holdings Inc. company, pioneered portable digital audio technology in 1998, with the launch of the Rio 300. Since then, Rio has become the world's number one brand of portable MP3 players by developing a host of award-winning portables that let music lovers take their music with them wherever they go. For more information regarding Rio, or to purchase a Rio digital audio player, please visit www.rioaudio.com.

    About BuyMusic.com(TM)

    BuyMusic.com is one of the world's largest legal music download stores for the country's 150 million PC users, offering more songs at a lower price than any other legal music website. The Aliso Viejo, California-based BuyMusic.com, a wholly owned subsidiary of Buy.com, is available to anyone with a PC and Windows Media Player (a free download at BuyMusic.com). For more information, please visit www.buymusic.com or call 1-800-BUYMUSIC.

    Media Contacts:

    Colleen Henley
    Porter Novelli for Rio Audio
    [email protected]

    Larisa Hall
    [email protected]

    SOURCE Rio Audio

    Colleen Henley of Porter Novelli, +1-408-988-2100, or
    [email protected], for Rio Audio; or Larisa Hall of
    BuyMusic.com, +1-949-389-2137, or [email protected]


    Posted by Craig at 06:57 PM

    Music Download

    The Orchard Becomes First Independent Distributor to Hit One Million Paid Downloads and Streams

    World's Leading Supplier of Independent Music Experiencing Growth of 100% Per Month

    NEW YORK, Mar 17, 2004 /PRNewswire via COMTEX/ -- The Orchard, the world's leading supplier of independent music, today announced its unmatched achievement of one million combined paid downloads and streams. The company is experiencing explosive growth, increasing its sales by 100% per month. "Doubling our sales month over month signals an inflection point in the online music business," says Daniel C. Stein, CEO of Dimensional Associates, Inc., the private equity firm that owns the Orchard.

    The Orchard has become the world's largest distributor of non-major label music, with a catalog of 130,000 tracks from 2,500 labels representing music from more than 48 countries. It is the only company to have successfully secured licensing deals with all of the leading digital music services in the US and Europe, including iTunes, Rhapsody/Real Networks, Napster/Pressplay, Music Net/AOL, Music Match and BuyMusic. Currently, the Orchard's full catalog is available and for sale through all of these Digital Music Services, with new titles quickly becoming available as they enter The Orchard's distribution system. More than 80% of the albums in this vast catalog generate revenue through the digital services, bearing out the premise that the digital revolution benefits independent artists and labels and allows for effective distribution outside traditional channels. In the first month alone of 2004, The Orchard generated digital revenue equal to the prior 12 months combined.

    "Having achieved an unmatched one million combined paid downloads and streams proves that independent artists and labels can get their music distributed to a world audience, and that music fans are hungry for access to this cutting-edge content," said Greg Scholl, CEO of The Orchard. "The Orchard will continue to lead the way for independent artists and labels and, working with our retail partners, we will ensure that artists have a paying audience, and music fans have access to the best music in the world -- which, as everyone knows, is not exclusively Top-40 radio."

    The influential New York-based alt-rock label French Kiss recently joined The Orchard for digital distribution, and four weeks later, their entire catalog was available on iTunes and the other major digital music services. "The Orchard has solved the logistical riddle of digital distribution for us," said Label Manager, Aaron Roman. "I can't tell you how simple it is to have all the various sites accounted for on one statement, not to mention the fact that they have been able to get our product on to sites like iTunes that we would not have the leverage to do so on our own. Basically, as a small record company, we wouldn't be able to get this much done on our own."

    Other artists who have benefited greatly from The Orchard's service offering include The Raveonettes, Elysian Fields, The Features, The Hong Kong, Ozark Mountain Daredevils, Jon Auer (Posies, Big Star) and The Hold Steady.

    About The Orchard

    The Orchard (www.theorchard.com), based in New York and London, is the largest distributor of non-major label music in the world. The Orchard currently represents more than 130,000 tracks spanning a multitude of musical genres, including Blues and R&B, Country, Classical, Children's, Christian, Electronic, Folk, Hip Hop/Rap, Jazz, Latin, Metal, New Age, Pop, Punk, Rock, Seasonal and World Music. The songs were supplied to The Orchard by over 2,500 record labels and thousands of artists from 48 countries.

    About Dimensional Associates, Inc.

    Dimensional Associates, Inc., is the Rye, New York-based private equity arm of JDS Capital Management, Inc. Its portfolio companies include eMusic, The Orchard and Digital Club Network (now eMusicLive).

    Adele Plumail / Andy Morris
    Andy Morris & Co.
    212-561-7454 / 212-561-7465
    [email protected]
    [email protected]

    SOURCE Orchard

    Adele Plumail, +1-212-561-7454, [email protected], or Andy
    Morris, +1-212-561-7465, [email protected], both of Andy Morris & Co. for The


    Posted by Craig at 06:55 PM

    music downloads

    At online stores, tills are alive with sound of music downloads

    March 17, 2004 06:08

    At online stores, tills are alive with sound of music downloads
    Chicago Tribune

    By James Coates

    I'm from the crowd that thinks hip-hop describes a wrestling move and that Ice T is a beverage that one can get for a 50 Cent piece. I do, of course, know who Britney Spears is. Nobody is that old.

    So what follows is an admittedly incomplete look at just two players in the amazing new music download industry. Apple's iTunes Music store (www.apple.com/itunes) and Buy.com's BuyMusic (www.buymusic.com) are far more than places where kids can get their pop music without having to walk through an actual mall to a record store. They are amazing digital treasure houses of classical and pop performances for the rest of us.

    I prefer Apple, followed by BuyMusic, but whichever provider you select, cultural miracles reside behind the Top 40 tunes that have dominated legitimate downloaded music since the Recording Industry of America grudgingly allowed Apple to lead the way with 99-cent downloads.

    Competing download stores not covered here include Music Match.com, Wal-Mart.com and the new, legal Napster.com.

    These stores typically offer 500,000-plus titles, which include a lot but far from all recordings ever made. Classical and historical collections are huge but still limited _ some but not all of Bing Crosby, a little Liszt and just the bare bones for Beethoven.

    Some background on how we got here:

    By the mid-1990s, PCs and Macs started including CD drives and software that would "rip" tunes from music CDs into data files called MP3s. This led to a global pirate network of younger folks starting Internet file-sharing Web sites like Napster and Morpheus.

    It blossomed into a global storehouse of downloadable music that cost absolutely nothing. After a couple of years, the courts ruled this was outrageous piracy and the music studios started slapping lawsuits on offenders.

    In that climate, Apple stunned the marketplace when CEO-for-life Steve Jobs cut deals with top studios to allow downloads on Macs for a steep but endurable 99 cents per tune.

    Jobs won over the folks whom Madonna was calling The Suits because the Mac audience is a gnat to Microsoft's gigantic rhinoceros beetle. (We'll get to the Beatles in a second).

    The Recording Industry Association of America knew it would be politically safe to pull the plug if the iTunes store proved to be just another source of files for the peer-to-peer pirates to swap.

    Instead, Apple's music store became the hottest thing in the recording industry since the drum machine. The store netted millions from Day One, even when only Macs could use it. Sales of iPod portable music players have become so huge that one must wonder whether Apple is going to morph into a record store.

    There were, of course, holdouts.

    Bob Dylan said Jobs was blowing in the wind, and the Beatles said it would be a hard day's night before gems like the White Album would be downloaded by any of the lonely people, Eleanor Rigby, too.

    Meanwhile, at Apple's Cupertino, Calif., headquarters, programmers worked furiously to transpose the hands-down superb iTunes music software for Macintosh OS 10 into a nearly identical program for Windows XP and 2000.

    It was a mighty day when iTunes for Windows was added to Apple's company store for free download. Now just about every PC user with a reasonably modern machine and a Web link can revel in the cultural ecstasies brought by instant access to 500,000 pieces of music, each offered for 99 cents.

    As I sampled iTunes and Buy.com's Internet music store, this column took much longer to research than really necessary. Working in my home office, jumping from tune to tune in 30-second snippets proved addicting.

    You can sit there, as I did, and recall pleasant musical memories. One minute it was Barbra Streisand asking "Have I Stayed Too Long At the Fair," and the next it was an unidentified pianist with the London Symphony playing the Chopin Polonaise in A-flat minor.

    Let's leave the sunny side of the street and briefly deal with the complex rules for use. The file formats involved can appear dark as a dungeon at a casual glance.

    Regarding portable digital players, the iTunes store's music only works with Apple's iPods for Mac or Windows users. The iPods are great but costly and even hard to get right now.

    For Windows, iTunes uses the new MP4 format. That also can be converted to Apple's own encrypted AAC files for play on a Mac. A downloaded song can only be used on three computers.

    Similar rules apply at BuyMusic, which uses the Windows-encrypted WMA format and plays on Microsoft's Windows Music Player 9 and portables from Rio, RCA, Creative Labs and others.

    The good news is that both operations let users burn their purchased tunes onto CDs in the standard CDA format. These can be burned back into MP3 files if you're a gearhead like some computer columnists I know who could use a shave.

    And yes, boys and girls, you can then post them on Kazaa.

    But why ruin a good thing?


    Posted by Craig at 06:51 PM

    Requiem for the Record Store

    Downloaders and Discounters Are Driving Out Music Retailers

    By David Segal
    Washington Post Staff Writer
    Saturday, February 7, 2004; Page A01

    With a total stock of more than 85,000 albums, Manifest Discs & Tapes was a music lover's mecca in the North and South Carolina towns where it operated. And despite an industry-wide downturn in CD sales in recent years, all five Manifest stores were turning a decent profit right up until the end of 2003.

    So there was shock all around when chain owner Carl Singmaster announced in late December that Manifest would close all locations and lay off all 100 of its employees. There were still plenty of consumers eager to browse the bins, Singmaster explained, but his company's prospects looked bleak and were getting bleaker.

    "I felt like I needed to take this opportunity to exit," Singmaster said in a telephone interview. "Indies in the smaller markets face a very risky environment."

    It's not just the indies, and it's not just the smaller markets. On Thursday the parent company of Tower Records, which has four stores in the Washington area and a few dozen more in major cities nationwide, was on the verge of filing for Chapter 11 bankruptcy, according to news reports, having failed to find a suitable buyer. In September, the bankrupt Wherehouse Entertainment chain was acquired by a company that promptly said it would close 35 under-performing stores. Mall chains such as Sam Goody are hurting, too.

    As pop's superstars strut down the red carpet in Los Angeles tomorrow night for the Grammy Awards, there's something close to panic in the retail trenches of the music business. The record store is in serious trouble. Sales have been hammered by Internet piracy as well as competition from big-box retailers, such as Best Buy and Wal-Mart, which are two of the nation's leading music vendors. Online CD stores, such as Amazon.com, are gaining momentum, too -- 3 percent of the market in the most recent survey by the Recording Industry Association of America, up from zero eight years ago.

    Now a new threat looms. The market for legally downloadable music is tiny today, but the success of Apple's iTunes online music store and the rush of rival services to the marketplace is expected to gobble up an ever-larger share of the pop music pie. A recent study by Forrester Research, which examines technology trends, predicts that in five years fully one-third of all music will be delivered through modems, and the CD itself will be passe, if not obsolete, in the years after. This isn't necessarily bad news for the record labels, but it could be lethal for brick-and-mortar stores.

    "I tell retailers they need to get out of the plastic business," said Josh Bernoff, the Forrester analyst who wrote the report, titled "From Discs to Downloads." "Two-thirds of the people who currently download say that when it comes to music, it isn't important to them to hold a physical object. They're done with the CD. They just care about the songs."

    If that's true, the album is doomed and the industry is headed back to its roots in the '40s and '50s, when the single was the most popular format. It's already moving that way. Last week, the punk trio Green Day released a cover of the rock classic "I Fought the Law" through a promotion advertised on the Super Bowl and available exclusively on iTunes. That's a peek at the future: Hear the song one minute, own it the next.

    That's a transaction that doesn't require a record store, of course. As a precedent, consider the airline ticket. Thanks to online travel sites and the advent of ticketless travel, millions of flyers no longer think of tickets as physical objects that must be printed and brought to the airport. And that's been brutal for travel agencies: in the past three years, 30 percent of them have closed, according to Airlines Reporting Corp., which keeps tabs on the industry.

    Plenty of stores like Manifest have surrendered, while others believe the end is inevitable, if not yet near.

    "The fat lady is warming up, but she's not exactly singing," says Mike Dreese, who runs Newbury Comics, a music chain in Massachusetts. "We're five to seven years from a complete meltdown. The only question is whether our death is in seven years or eight. Everybody's lights are out in 10."

    This isn't the first time the death knell has been sounded for a segment of the real-world retail market. Bookstores were supposedly doomed by Amazon a few years ago, and by e-books after that, and yet there are still plenty of Borders stores and Barnes & Nobles -- in part because they started selling CDs -- and even independent bookshops around. People like getting out of their homes, touching the merchandise and mingling more than a lot of tech-enamored Web experts predicted.

    Furthermore, most record retailers, Dreese included, aren't going quietly. Many are going loudly, by inviting bands for in-store performances that draw customers. Others are diversifying into other product categories, stocking comic books, posters and clothing lines. Others are getting into DVDs of every kind, including music, television shows and movies.

    "The music store of the future will have to be an arcade," says Roy Trakin, editor of Hits magazine, a music industry tip sheet. "A place where you can try out things, grab legal downloads, see performances."

    Retailers are also scrambling for a seat at the digital download table. A consortium of the biggest players -- including Virgin, Tower and FYE -- will launch their own downloadable music stores through a technology company they jointly invested in, called Echo. The idea is that Echo will allow the stores to split the cost of building a downloadable sales infrastructure, then handle transactions and downloads on separately branded Web sites.

    "Our members do $5 billion worth of business now," says Echo's president, Dan Hart. "The question is, how do you leverage those assets?"

    Virgin is now taking its first tentative steps into the downloadable market. Over the Christmas holiday, the company revamped its San Francisco store by adding something it calls Mega Play, a system that allows customers to listen to any album in the store. By June, says company CEO Glen Ward, the system will offer song-at-a-time downloads for portable MP3 players, and eventually there will be frequent-buyer cards that allow repeat customers to build up credits for free downloads.

    "There will remain a place for the physical product," Ward predicts. "A good retailer can help people figure out what is new and what is recommended. But we'll offer the chance to buy anywhere people want to buy -- from the home, the office or in a store."

    The trouble is that record stores are up against companies that can consistently beat them on price. Best Buy and Wal-Mart often sell new CDs a dollar or two below wholesale prices, using the lure of the new Sheryl Crow album, for instance, to bring customers to the stores and sell them something else, like a high-margin computer or a washing machine. Likewise, at 99 cents per song, Apple is actually losing money on each track it sells. It earns the money back, and then some, by selling iPods, which start at $249.

    It's hard to beat rivals who consider music a loss leader, especially given recent trends. CD sales were down more than 8 percent, year over year, in 2002 and dropped another 2 percent in 2003. The most encouraging sign of relief arrived last month, when Nielsen SoundScan reported that sales figures for January were up 10 percent over the same month last year. The uptick might reflect a rebound in the economy, store owners say, or it could be the fruits of the Recording Industry Association of America's high-profile lawsuits against online pirates, which might have scared many people straight. Or it might be an aberration.

    Regardless, many in the business blame not just the fans of file-swapping services such as Kazaa for their current woes -- they blame the labels, too.

    The rise and fall of Manifest tells the story. Singmaster opened his first store 19 years ago, and since then has often been confounded by the labels' addiction to the album format. It requires fans to pay around $15.99 for, say, a 12-song disc that might have only a couple of tunes they'd like to hear. The single, once the mainstay of the record business, was getting scant attention from the labels. Eventually, as the public demand for a la carte, downloadable music became clearer, owners like Singmaster had a hard time getting in on the action.

    "We said, 'Just give us access to anything that is available online,' " Singmaster says. "We'll give you 69 cents a song, just like Apple does. Just let us burn a physical CD, and we'll sell it."

    Manifest finally signed a deal for a $3,000 computer system called a Starbox, which allowed customers to burn songs onto a CD, but, under the terms of a licensing agreement, prohibited staff from burning discs or creating compilations on their own. It was as though Manifest employees were teaching every customer how to make a doughnut but couldn't bake any themselves.

    "Can you imagine if there was tremendous consumer demand for an 18-ounce Pepsi and we told Pepsi about this demand?" Singmaster says. "How long do you think it'd be before Pepsi started selling an 18-ounce Pepsi to anyone, anywhere? The record industry has created all these barriers, and those barriers have alienated consumers."

    The downloadable music system is erecting new barriers, he says. He couldn't offer all the tracks his customers were requesting: four songs that John Mayer released exclusively through iTunes, four Johnny Cash tunes released through the same service. Then there are the deals that labels are cutting with big-box retailers, such as a Rolling Stones DVD released last year that was sold only through Best Buy. That so infuriated some store owners that they pulled all Stones albums from their inventory.

    Manifest's sales sank 30 percent in the past three years, causing Singmaster to close two of the seven stores he then owned. Business at one of those, in Clemson, S.C., dried up almost overnight when the university there installed broadband Internet connections in dorms, Singmaster says.

    "You can tell me all that online business went to Amazon, but I'd like to see the receipts," he says.

    The five stores remaining were getting weaker but still turning a profit when, in December, Singmaster's leases were up for renewal. He decided to jump before he was pushed. He eventually found buyers for all but one of the stores, thanks in part to local newspaper coverage of the closing. Once he closes those deals, he'll be looking for a new line of work.

    "I have no idea what I'll do next," he says. "I really don't have another plan."

    washingtonpost.com: Requiem for the Record Store

    Posted by Craig at 05:15 PM

    March 16, 2004

    MyCokeMusic music download site pop-ular

    Sugary, vile-tasting international soda pop behemoth Coca-Colas recently launched music download site has turned into something of a success after all.

    The company says that as of yesterday, there had been over 700,000 visitors to MyCokeMusic.com - aimed at UK customers - since its late January launch, with around 10,000 single and album downloads being sold every week.

    The achievement is in marked contrast to the near flop at launch, when visitors to the site could not actually visit the download page due to a bug in the sites system. In the first week, the site received 185,000 hits.

    Visitors to the site can buy music singles for between 80p and 90p, depending on the credit package they sign up for, with albums priced at between 6.40 and 7.99.

    Since the launch, the company has been promoting the service on cans and bottles of the dark, fizzy drink. Critics of the service complain that the sole available download format is Microsofts WMA, and not MP3 or Apples AAC, and that there is little interactivity functionality.

    Some users have also complained that the site has trouble running in any other browser than Internet Explorer.

    OD2, the digital music manageme

    DMeurope.com: News - MyCokeMusic music download site pop-ular

    Posted by Craig at 11:08 PM

    SMS music download billing not just for kids

    Peter Gabriels legal music download outfit, OD2, has announced today it is set to launch an SMS billing system for paying for music downloads.

    Later this week, it sounds like UK digital music retailer Wippit - which announced today it had a digital distribution deal with music giant BMG - will be launching its own SMS billing scheme as well.

    Now, OD2 is apparently aiming the scheme at young people as many of them do not have credit cards. However, find me a yoof who doesnt have a mobile. Thus paying for music downloads via SMS - with the charge appearing on the bill at the end of the month - has tremendous potential. One possible hiccough, though, is the high percentage of pre-paid mobiles in the UK - where the scheme is first being launched - especially amongst the young. However, the ease of payment, as opposed to the hassle of fishing out a credit card every time you want to make a 0.99 payment - not to mention issues of security - could make the process attractive beyond the youth market the scheme is aimed at. Look at the (unfortunate) popularity of ringtones.

    But what will really drive the market for legal downloads is the convergence of the mobile networks and large-memory, intuitive, user-friendly digital music players like Apples iPod. Nokia already has a couple of handsets on the market along these lines, but without the iPods easy-to-use interface and nowhere near its memory.

    Nokias N-Gage is a dog - as an exec from games developer Electronic Arts called the handset two weeks ago - mostly because, outside of geeky teens - nobody wants to embarrass themselves by playing video games on the bus, especially when they have a full-featured game consol at home.

    Music is different. Like the camera phone, you stick a serious music playing capability on mobile phones and people will use it everywhere - and no one is embarrassed by a pair of headphones.

    As academic Dr Michael Bull told the BBC last week, portable music players are "multi-faceted transformative devices", a "tool whereby users manage space, time and the boundaries around the self." It sounds high-falootin but its true that ultimately we use portable music players to alter our mood, to relocate ourselves mentally, to cocoon ourselves from an increasingly media-saturated environment. This is especially so with the iPod - which is now outselling Apples iMacs - but weve known this since we started rocking out to Falcos Der Komissar on our yellow Sony Walkmans in the eighties (or was that just me?).

    So where is the iPod Mobile?

    Original article:
    OD2 launches music download SMS billing - kinda

    DMeurope.com: News - SMS music download billing not just for kids

    Posted by Craig at 11:06 PM

    Six Retailers Move Into Digital Music

    In an effort to combat plummeting CD sales, six of the largest music retailers have formed a joint venture, dubbed Echo...

    Edited By Jonathan Cohen. January 27, 2003, 10:55 AM ET

    Six Retailers Move Into Digital Music

    In an effort to combat plummeting CD sales, six of the largest music retailers have formed a joint venture, dubbed Echo, to ensure their survival in a world where consumers are spending less and less of their entertainment dollars on physical music products.

    Echo brings together Best Buy, Tower Records, Virgin Entertainment Group, Wherehouse Music, Hastings Entertainment Inc. and Trans World Entertainment Corp., which operates FYE, Strawberries, and Coconuts, as equal partners. The consortium will offer consumers a range of in-store and online content and special deals, using what could be characterized as a supercharged loyalty card program. The service will compete directly with major-label ventures MusicNet and Pressplay.

    Echo CEO Dan Hart said the initiative will marry the retailers' point-of-purchase expertise with the power of technology. "I believe in the huge market potential of legal digital music, but most of what's gone on has not gained consumer traction," Hart said.

    Echo is scheduled to go live before year's end. All six partners will distribute many thousands of free "starter" CDs that consumers can use to become members. Once consumers install the software, Echo will collect information on what music members play in their computers or networked devices. It will also track such data as what each member browses, plays online or downloads.

    In exchange, members will get free downloads, bundled promotional packages, E-mails with artist and tour information and whatever else the retailers come up with, all targeted to a member's individual interests. Hart predicts that the retailers will be particularly interested in specials for which members need to swipe a membership card through an in-store reader.

    No specifics have been designed, however. Hart said the retailers' consortium is "approaching labels based on their existing relationships" but that no consumer offering is in place yet. Among the ideas Hart expects to see are retailers selling portable players that come with download credits, giving away CDs with content that consumers pay to unlock and in-store kiosks that have content available only to Echo members.

    Echo also plans to provide a simple way for nontechnically minded consumers to become engaged in digital music because the CD and the online presence can offer step-by-step tutorials and other assistance.

    Hart said Echo can remedy three key points not being addressed by existing digital music products, legal or otherwise. "They're not reaching customers who have never downloaded music, they're not reaching customers who download just because they can't get it anywhere else, and they're still working on getting the licensing and pricing right," he said.

    Music sales are plummeting, and the retailers are sharing in that pain, Hart said. Wherehouse recently filed for bankruptcy protection a second time, and Tower Records is examining its pricing structure and number of outlets. "But customers are still spending money in the direction of music," Hart said, noting that clothing and other lifestyle products with artist logos are selling well. He thinks Echo can channel this inclination into increasing sales of the actual music.

    -- Chris Marlowe, The Hollywood Reporter


    Posted by Craig at 10:54 PM

    Starbucks and Music

    Starbucks tries out musical blend

    By Dean Takahashi


    Now you can have Jessica Simpson with your grande decaf non-fat no-foam latte.

    Teaming up with Hewlett-Packard, Starbucks is opening a coffee house in Santa Monica today that doubles as a music store where customers can create their own custom CDs.

    Starbucks calls the new-concept cafe the Hear Music Coffee House, after the company's chain of four music stores. Palo Alto-based HP will provide the technology to create the in-store CDs, including 68 tablet-style portable computers that customers will use to select the music they want burned.

    The hybrid music store-coffee house will feature "listening bars" where patrons can sip coffee and listen to music on head phones. The stores also will feature stages for live performances.

    If the concept works, Starbucks will build more Hear Music stores and add CD-burning capability to more of its own Starbucks coffee houses. Already, Starbucks has plans to equip 10 Starbucks coffee houses in Seattle with the CD-burning kiosks.

    "Part of the reason for doing this is there is a lot of excitement about going digital," said Don MacKinnon, vice president of music and entertainment at Seattle-based Starbucks. "You can make your own compilation of songs from hundreds of thousands of choices."

    Customers can browse music and videos stored on the tablet PCs, which are touch-screen laptops. They then can order the songs they would like to put on a CD. Within three minutes, the store's computer will create the CD and the customer can take it home. The cost is $11.99 for a 10-song CD, and $12.95 for a complete album. The computer will allow someone to choose their own graphics for the CD and put their name and a label on the disk as well.

    So far the Santa Monica store offers a selection of 20,000 songs. By the time more Starbucks houses are brought aboard, MacKinnon estimates 150,000 songs will be available. Through Hear Music, Starbucks has licensing deals in place with four of the five major record labels: Sony, Warner Music, Universal and BMI. Those agreements allow consumers to pick songs from different artists and mix them on the same CD. Starbucks remains in negotiations with the fifth big label, BMG.

    MacKinnon said the new concept might encourage people to stay in stores longer and buy more coffee. But he said the music business alone represents a good opportunity for Starbucks.

    The technology will be limited in some ways to make sure that experience is friendly for general consumers, said Felice Swatt, HP's director of strategic initiatives.

    MacKinnon said the tablet computers won't be Internet-equipped, but the store will offer wireless online access for customers' own laptops.

    Customers also won't be able to create CDs using the popular MP3 format. MacKinnon said the Hear Music CDs will be like standard store-bought CDs, with no special copyright restrictions.

    Over time, Starbucks plans to expand the music experience at its stores, MacKinnon said. "There are a lot of places this can go," he said.

    Contra Costa Times | 03/16/2004 | Starbucks tries out musical blend

    Posted by Craig at 04:11 PM

    March 11, 2004

    Music Download

    Mediaport offers one-stop shopping and distribution to local musicians-for free.

    Scene & Heard - March 11, 2004
    Distro Inferno
    Mediaport offers one-stop shopping and distribution to local musicians-for free.
    by Randy Harward

    As the debates over online file-sharing, iTunes, etc., vs. brick-and-mortar stores, and indie vs. major labels continue, local upstart company Mediaport appears to have solved everything.

    Mediaports big idea is a kiosk, roughly two-thirds the size of the standard arcade game. It acts as a vending machine; customers use a touch-screen to browse through many participating independent artists. Headphones allow the customer to hear samples from each; anything they like, they can buy instantly. Insert cash, and Mediaport burns the CD on the spot.

    It alleviates some key concerns for the independent artist. Cost is eliminatedMediaport is entirely free to artists. Distributionthe ability for an artist to get their music into stores, onto Websites, and in listeners headsis simplified, allowing consumers call the shots.

    Previously, the usual methods have been to sign to an indie or major label (built-in distro), self-release/promote/distribute (essentially no distro) or upload to such music sites as Insound.com, iTunes or the now-defunct MP3.com. All of the options carry risks and cost moneyand the end result is often a pile of debt. On top of that, without a label, there is no interference in the creative process and the artist retains control of the masters.

    Mediaport is all about independent music, says Jon Butler, Mediaports executive vice president of strategy and business development. Major labels censor artists, tell them what to play, control distribution and limit the independent artists ability to play. We have the ability to give independent musicians nationwide distribution so they can have the freedom to play music the way they want to.

    The kiosks currently hold up to 100 CD-Rs; a bin on the side of the kiosk holds jewel cases. The operation is exactly like getting a candy bar out of a vending machine, or a strip of photos from a booth. In two to three minutes, the kiosk spits out a CD with the artist name, album title and songs printed on the label side. The customer then grabs a jewel case, inserts the CD and carts it home (eventually, cover art will be available at Mediaport.com).

    The CDs are burned from data (.wav files taken directly from the master recordings) on Mediaports server and cost $5 for EPs and $10-$15 for full-length albums (almost all of the participating artists have chosen to sell theirs for $10). The artists profits range from 50 cents per CD for EPs to $1 to $7 for full-length CDs (the amount depends on price and sales). Mediaport recoups costs from the remainder and, of course, takes some profit. But the artists take, says Butler, is two to three times more than [Mediaports].

    Butler conceived Mediaport about two years agoor, as he says, put it to paper. About six months later, he snagged Helen Seltzer, former president/CEO of the telecommunications company I-Link (and before that, Messageclick) as well as former executive VP of Bell Atlantic, as a consultant. She was sufficiently impressed with the business model and ethos, and agreed to become chairman and CEO soon after.

    Mediaport plans to place the kiosks in record stores, clubs, and college campuses offering music from nearly 70 local bands (including Trace Wiren, Thunderfist, Magstatic, Tim Wray, Purdymouth, The Dirty Birds and Alchemy), many of whom have their entire catalogs available through Mediaport. Theyve also enlisted bands from Seattle, Boston and Dallas and have representatives in New York, Los Angeles and Las Vegas courting bands for a planned national campaign.

    But for now, Mediaport focuses on Salt Lake City and its bumper crop of talent. They launch the kiosks officially March 11 at Sound with Mediaport artists SuperSoFar, Cosm and Gigi Love performing. Tickets are $15, but Butler says theyre making it very easy to get in free. For instance, you can get two tickets if you bring this pagego ahead, rip it out.

    MEDIAPORT LAUNCH, Sound, 579 W. 200 South, Thursday, March 11, 9 p.m.

    Salt Lake City Weekly - Distro Inferno

    Posted by Craig at 02:21 PM

    March 10, 2004

    Virgin and Music

    Online Music Field To Get Another Player

    March 8, 2004 (12:09 p.m. EST)
    TechWeb News

    The crowded online music field will get a little more packed this summer, with the entry of Virgin Group Ltd. The firm, a new creation of Richard Branson, is scheduled to unveil a full-featured service that will provide online music on a monthly, single-song, or album basis.

    Branson is counting on his Virgin Megastores to provide kiosks for the downloading of music. According to press reports, MusicNet will provide the service for Virgin. One observer noted that the Virgin mobile-phone operation might figure into the mix. The market is already crowded with several competing online music suppliers, led by Apple Computer's iTunes.

    Techweb > News > Online Music Field
    To Get Another Player

    Posted by Craig at 05:58 PM

    Virgin and Microsoft

    Virgin hops into bed with Microsoft

    Virgin hops into bed with Microsoft: The online music industry is today making room for its latest competitor, Virgin Digital. Developed in collaboration with MusicNet, Virgin Music Club, will offer two services: The first will allow consumers to purchase music on a per-song or per-album basis. The second will allow them to purchase a subscription to listen to all the streamed music they like. The service's format of choice will be Microsoft's digital music format, WMA, and Virgin hopes that will give it an advantage over Apple's iTunes service, which supports an iPod-dependent version of the AAC media format. "We believe Microsoft will eventually define the standard," Zack Zalon, president of Virgin Digital, told the New York Post. "Apple is an innovator, but, because it has a closed standard, it will fall off." Zalon's claim is a brash, albeit transparent one, even leaving aside his suggestion that AAC is a closed format (it's not; it's an open source format that requires no licensing fee and is supported by outfits like Creative Labs, Samsung, Philips, iRiver and Nokia), and WMA is not (it is; in fact, WMA is likely the most "closed" media format available today. It's completely proprietary, and manufacturers must pay a licensing fee to Microsoft to use it). Apple's got a hell of footprint in the digital music market, one whose breadth is only increasing. Apple's iTunes music store has sold millions of songs to date, and the company's iPod mini digital music player has proven a smashing success, despite the predictions of certain industry observers who perhaps gave too little credit to its fashion appeal. In point of fact, the mini virtually sold out after less than two weeks in stores. So, for now at least, consumers seem little bothered by Apple's iPod-dependent music format. Perhaps that will change in the future. But my guess is it won't and Zalon will be eating his words sooner, rather than later.


    Good Morning Silicon Valley

    Posted by Craig at 05:56 PM

    March 04, 2004

    Music Download

    Carry a Concert Home in Your Pocket


    Published: March 4, 2004

    AXWELL'S in Hoboken is better known as a showcase for new rock acts than for new technology. But that could change later this month when the club becomes a testing ground for digital kiosks that will enable clubgoers to download a recording of the show to a small U.S.B. drive almost immediately after a performance.


    The experiment is the brainchild of eMusic Live (formerly the Digital Club Network and a sister company of the online music service eMusic) and represents the latest initiative to offer concertgoers instant digital recordings of shows they have just seen. After the kiosks are introduced at Maxwell's and the South by Southwest Music and Media Conference in Austin, Tex., eMusic Live plans to install others this year throughout a network of 23 clubs nationwide from which it has been Webcasting live shows since 1999.

    "We'll just be opportunistic about how this evolves," said Greg Scholl, a managing director at the private equity firm Dimensional Associates, which acquired eMusic from VU Net USA in November. Besides eMusic and eMusic Live, the firm's holdings also include the Orchard, an independent music distributor that supplies both online music sellers and physical record stores.

    As Dimensional seeks to integrate the online offerings of eMusic and its live music affiliate, Mr. Scholl views the kiosks as a way to help draw new subscribers to eMusic, which specializes in independent and alternative music. EMusic fans were irked last fall when the service's new owner capped the previously unlimited number of downloads at 40 for $10 per month or 65 for $15. It now offers up to 90 downloads for $20 per month.

    EMusic is not alone in trying to woo concertgoers with the instant delivery of concert recordings. Last year Clear Channel Communications introduced its Instant Live program, in which the concert giant uses dozens of CD burners at venues to pump out mastered CD's minutes after shows end. Last year bands including Phish and Pearl Jam began offering MP3 downloads of concerts through their Web sites within 48 hours of performances to satisfy demand from avid fans. EMusic Live itself started selling instant live CD's at certain clubs last year, including Maxwell's.

    But with its digital kiosk plan, the company is taking the next step in instant audio gratification. A prototype of the wall-mounted kiosk, created with help from the interactive media design studio Funny Garbage in Manhattan, features a touch screen that gives users a few options for getting shows. For $10, nonmembers of eMusic can download a concert in about 30 seconds by entering an e-mail address (to generate a receipt, the company says), swiping a credit card and then inserting a U.S.B. drive with a 128-megabyte capacity, either their own or one they can buy from a dispenser attached to the kiosk at an anticipated price of $20.

    Eventually, eMusic subscribers using a U.S.B. drive would be able to enter their account information and have the individual songs that make up the concert deducted from their monthly plan. Subscribers could also use the kiosk to log on and order the concert for download the next day from the eMusic site. Nonsubscribers could simply enter their e-mail address to begin a free 50-song eMusic trial and a free download of the show the next day. Kiosk users will someday be able to download concerts directly to an iPod or other portable music player.

    While still working out some kinks with its homemade machine, the company expects it to be in place at the South by Southwest conference on March 18 and at Maxwell's a week later. EMusic Live's president, Scott Ambrose Reilly, said club owners throughout its network had expressed enthusiasm for the project.

    Maxwell's co-owner, Todd Abramson, expects that the kiosks will appeal to the serious music fans who frequent the club. "I would think people would treat this as a new toy and be excited about the technology," he said.

    Carry a Concert Home in Your Pocket

    Posted by Craig at 04:51 PM

    March 03, 2004

    Music and Retail

    Diving Into the Digital Music Revolution; With More People Using Legal Digital Music Sites, Best Buy Survey Shows Many Are Looking for the Right Service and Player for Their Lifestyle

    MINNEAPOLIS, Mar 2, 2004 (BUSINESS WIRE) -- Today's music lovers have more options than ever before for enjoying their music. Technology is opening up new possibilities, taking music beyond the radio or CD player and integrating it into consumers' lifestyles seamlessly.

    Despite the growing popularity of digital music, a recent Best Buy Digital Music survey shows that many consumers still have concerns about giving it a try. According to the survey, the top obstacles that prevent people from downloading music include worrying about lawsuits (30 percent) and not knowing where to start with the process (27 percent). And, with more than half of people (57 percent) feeling confused or clueless about options available for accessing digital music, they crave information about services and players that cuts through the clutter and helps them enjoy all that digital music has to offer.

    The key question for anyone thinking about trying out digital music is, "How do I want to listen to my music?" One nice thing about digital music is that it can cater to very specific lifestyles and listening habits. If you like to listen in the car, at the office, or while working out, you can find a service and player to meet your needs.

    Jammin' to Tunes at Home

    According to the Best Buy survey, more than half of respondents (54 percent) like to listen to music at home on a computer with speakers. Today's computers, when combined with an appropriate digital music service, a high-speed or broadband Internet connection, and quality speakers, can give music lovers a rich and enjoyable listening experience. Many people are turning their computers into hubs of entertainment, and are even connecting their computers with their home theater and stereo systems.

    The best service for this type of listener could be a subscription-based service like Rhapsody from RealNetworks. Rhapsody provides unlimited access through a computer to hundreds of thousands of songs for a monthly subscription fee ($9.95 per month for Rhapsody). Users also can burn music to CDs for 79 cents per track and take their music with them. The service's streaming features also make it easy to explore new music, create playlists, and program hours of music without ever having to change discs. With 91 percent of survey respondents saying they primarily download songs to listen to them on a computer or burn to a CD, this type of service offers a great solution.

    Rockin' While On the Go

    The Best Buy survey also shows that one-third of people (32 percent) like to take digital music with them while commuting to work, exercising or traveling. For these users, an MP3 player is the best answer, and there are many types of players to meet different needs.

    Flash players - which traditionally are lighter, smaller and less expensive than hard-drive players - hold anywhere from two to eight hours of music (128 MB to 512 MB in size) and are perfect for listening to music while jogging, working out at the gym, or just carrying with you for whenever you need "pick me up" tunes. Some flash players, like the MPIO FY200, can plug directly into a computer's USB port, letting it double as a portable storage device to transfer pictures, songs or even Word documents from computer to computer.

    When it comes to portable MP3 players, many people think "bigger is better," in terms of memory at least. Given the choice, nearly three-quarters of those surveyed (72 percent) would like to own a larger, hard-drive player with more than 5 GB of memory. Hard-drive MP3 players allow users to download their complete music collections onto one player and carry anywhere from 65 to 650 hours of music (4 GB to 40 GB). One of the most popular hard-drive players is the Apple(R) iPod(TM). Available in iPod(TM) and iPod(TM) Mini models, these players not only have a slick and stylish design, but they also can fit in your pocket and let you listen to hours of music without ever hearing the same song twice.

    Find the Service that is Right for YOU

    When selecting a digital music service, the survey indicates people want song selection (67 percent) and reasonable prices (57 percent). Overall ease-of-use is another important factor; nearly half of those surveyed (46 percent) admitted that they would be more comfortable with a digital music service if they could "try it before they buy it," and another 41 percent wanted step-by-step, easy-to-use instructions when exploring a site.

    There are a number of legal, user-friendly digital music services available, so the most important step is to find a service that meets your needs and works with your MP3 player. For example, the Samsung Napster Digital Audio Player (YP-910GS), which has a 20 GB hard drive and is capable of storing approximately 5,000 MP3 files, is fully integrated to work with the Napster 2.0 music service. The iPod(TM) is designed to work with the iTunes music store.

    MusicNow's digital music service is an ideal choice for users seeking broad compatibility with a variety of portable audio players. MusicNow works seamlessly with more than 40 different players from a variety of manufacturers, including iRiver, Rio, Creative Labs and MPIO. MusicNow, as well as Napster 2.0 and iTunes music store, allows users to download songs for 99 cents per song with no subscription fee. Retailers such as Best Buy make it easy for people to compare a variety of options so they can find the right service to match their player and their specific needs.

    "When it comes to digital music services and players, it's not a one-size-fits-all world," said Scott Young, vice president of digital entertainment for Best Buy. "We make it easy for people to get the most out of what digital music has to offer by letting them learn about a variety of services on our in-store kiosks and on our Web site, www.BestBuy.com. We also are training our sales associates to match the correct service and player with a customer's needs."

    "Digital Music is on the rise," said Jim Barry, national media spokesperson for the Consumer Electronics Association (CEA). "There are scores of portable players to choose from, along with a growing roster of legal music services. It's getting easier for consumers to enjoy digital music every day - anywhere and any way they choose."

    About Best Buy Stores

    Best Buy Stores, owned and operated by Minneapolis-based Best Buy Co., Inc., is the nation's leading specialty retailer of technology and entertainment products and services. Best Buy was founded in St. Paul, Minn. in 1966. Best Buy Stores reach an estimated 300 million consumers per year through more than 600 retail stores in 48 states and online at BestBuy.com. For more information about Best Buy, visit the virtual pressroom at http://communications.bestbuy.com/pressroom/.

    About the Survey

    Best Buy commissioned the study to determine what consumers look for in digital music services and players. The results are based on an internet survey of a randomly selected national sample of 1000 people ages 18 to 64, conducted February 2004 by Click IQ on behalf of Best Buy. For results based on this sample, one can say with 95 percent confidence that the maximum error attributable to sampling and other random effects is plus or minus 3.0 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

    Editor's note: The amount of music held per player depends on compression rate; figures based on a 128kps WMA compression, or approximately one minute per megabyte.

    SOURCE: Best Buy

    Best Buy, Minneapolis
    Brian Lucas, 612-291-6128
    [email protected]
    Erin MacMillan, 612-291-6129
    [email protected]

    Posted by Craig at 08:42 PM

    February 20, 2004

    Music Download

    Yahoo rethinks music downloads

    Yahoo rethinks music downloads
    Jim Hu and John Borland
    CNET News.com
    February 09, 2004, 08:50 GMT

    Tell us your opinion
    The Internet firm is investigating ways of developing a music-download service

    Yahoo, rethinking earlier plans, is quietly exploring ways to develop a music-download service as archrivals Microsoft and America Online place bigger bets on digital song sales.

    According to knowledgeable sources, Yahoo bought music-software developer Mediacode in December to help create a digital jukebox and media player -- the key components in many music download services. The Mediacode team includes two founding members of Nullsoft, which created the popular Winamp music player and is now owned by AOL.

    In addition, Yahoo also has begun kicking the tires of online music services as it rethinks its strategy, which hinges on streaming media, not downloads. For example, Yahoo has held discussions with Musicmatch, one of the largest Internet music services, in what could be a prelude to acquisition talks, according to sources familiar with the meetings.

    Sources characterised the discussions as preliminary and said Yahoo has not yet made any offer. They added that Yahoo meets with companies often to discuss possible deals and has received inquiries in recent months from a handful of Web music services, including BuyMusic.com and Napster owner Roxio.

    Yahoo declined to comment on any of these talks. "We do not seek to comment or speculate on market rumours," Yahoo spokeswoman Charlene English said.

    Napster and BuyMusic also declined to comment. Musicmatch spokeswoman Jennifer Roberts would only say, "We talk to lots of companies, but we're just focused on running our business."

    Jumping into music downloads would be a switch from Yahoo's past music strategy, which has focused on streaming audio and video through Launch, a subsidiary that it bought for $12m (6.5m) in 2001. Yahoo also distributes Roxio's Napster music service, which lets customers buy music downloads and sign up for subscriptions.

    Singing for their supper?
    Launch depends on advertising to support a free version of its service, as well as subscription fees for a premium version. Yahoo does not report financial results for Launch, but sources familiar with the figures said the site is about break even.

    Yahoo executives, including music division head and Launch co-founder Dave Goldberg, previously have disparaged music downloads as a money-losing business. Music-store companies have conceded that margins are slim to nonexistent, with sales consumed by licensing fees for record companies, delivery costs and credit card fees.

    Few analysts expect music downloads to make money anytime soon. Apple Computer, whose iTunes Music Store dominates the market, makes its money on the sale of companion iPod music players and concedes the service is not yet profitable.

    Still, many large companies, including Microsoft and Coca-Cola, now have plans to offer music downloads. America Online has also joined the game, taking a shortcut by bundling Apple's iTunes store with its online service. Even RealNetworks, which has bet on subscriptions through its Rhapsody product, recently launched a retail song store.

    All of these companies argue they can't afford to stand still in a rapidly changing market where consumer demand is still being formed. If demand takes off, they are confident the services will become profitable. In the meantime, they can rely on music downloads as a "loss leader" to help sell related products, such as concert tickets, posters, T-shirts and even soft drinks.

    Yahoo's management also is starting to see the value of a more comprehensive strategy, if only to defend against its own users defecting to rival offerings, sources said. "Theoretically, if you don't have it, they will go elsewhere," said a source familiar with Yahoo's plans.

    For months, music insiders have been expecting Yahoo to up the ante in its music bet, a move they say would change the dynamics of the industry. As one the most highly trafficked sites on the Web, Yahoo is better positioned than most to sell music services. In addition, Yahoo could sell music through partnerships with high-speed Internet access providers such as SBC Communications.

    "Yahoo seems to be a real obvious major player in the space," said Jeff Cavins, chief executive of Loudeye, which builds music stores for other companies. "Digital music for Yahoo is a natural way to create incremental revenue and profit."

    Yahoo has made several stabs in that direction. Last year the company explored ways for Gracenote, a music database provider, to build software that would let Yahoo customers buy and play back digital songs, sources said. But the partnership never bore fruit, so Yahoo turned to Mediacode.

    Mediacode, led by former Nullsoft engineers Ian Rogers and Rob Lord, has created software that lets people access their media libraries from multiple PCs. For example, songs stored on a PC at home can be played at work.

    Finding the right match
    Although Yahoo acquired Mediacode's engineers to build its own player, the company could hedge its bets by acquiring existing technology.

    Musicmatch has attracted more than 160,000 paying subscribers, and it already has secured licences to hundreds of thousands of tracks owned by the major record labels.

    Musicmatch traditionally has guarded its independence, and said it doesn't require a partnership to grow. Still, it has suffered some recent setbacks.

    In October, Apple dropped Musicmatch as its software provider for Windows iPod owners, opting to create its own application instead. Since then, Hewlett-Packard also dropped Musicmatch and decided to bundle iTunes with its computers.

    Musicmatch said HP provided a much smaller customer base than Dell, its main distributor. It also has partnered with Coca-Cola in the United Kingdom.

    "We've demonstrated our ability to be successful as an independent," Chris Allen, Musicmatch's senior vice president of marketing and strategic planning, said in an interview last week. "Our intent is to march forward along those same lines."

    ZDNet UK - News - Yahoo rethinks music downloads

    Posted by Craig at 10:53 PM

    February 04, 2004

    Prepaid Music

    AT&T PrePaid Web Cents Technology Drives RealRhapsody Music at 7-Eleven Stores

    Tuesday February 3, 10:04 am ET
    7-Eleven, the nation's largest convenience store chain, will offer specialty-content card featuring online music from RealNetworks' RealRhapsody service

    MORRISTOWN, N.J., Feb. 3 /PRNewswire/ -- AT&T today announced that 7-Eleven stores will carry a new specialty-content card using AT&T PrePaid Web Cents technology, providing access to RealRhapsody, the award-winning Internet jukebox service from RealNetworks.

    "With 7-Eleven joining the AT&T PrePaid Web Cents Service family, we have another winning combination of two premier companies reaching out to a growing base of consumers interested in purchasing online music," said Mark Evans, vice president of marketing and sales for AT&T Prepaid Service. "As a global leader in convenience retailing, 7-Eleven, with its 5,300 nationwide stores, can demonstrate its ability to provide consumers with access to RealRhapsody's online music without them having to use a credit card."

    The RealRhapsody card, available at participating 7-Eleven stores for $14.95, will provide consumers with one month of access to RealRhapsody's enormous music library and the ability to build a personal collection of tunes by being able to burn 15 songs.

    RealRhapsody ( www.real.com/rhapsody ) is the number one Internet jukebox service, offering unlimited access to a vast library of more than 35,000 albums for a monthly fee. RealRhapsody enables consumers to listen to more than 500,000 songs on-demand and purchase more than 425,000 songs. In addition to burning full albums or custom-mixing CDs, RealRhapsody lets consumers build their own Internet radio stations, listen to professionally programmed stations and browse extensive music information and editorial recommendations.

    "Working with AT&T and 7-Eleven makes it convenient for on-the-go consumers to pick up RealRhapsody at thousands of locations across the country," said Sean Ryan, vice president of music services, RealNetworks. "The RealRhapsody card processed via AT&T PrePaid Web Cents technology allows consumers to sample thousands of songs and burn a CD with 15 of their favorites, all at a substantial discount."

    Kevin Cooper, 7-Eleven, Inc.'s category manager for prepaid services, stated, "Our collaboration with AT&T to offer RealRhapsody's music to 7-Eleven stores across the country demonstrates our commitment to fulfilling our customers' needs and desire for alternative means of paying for online music content."

    Other exciting specialty-content cards supported by AT&T PrePaid Web Cents technology and available at over 20,000 nationwide retailers include:

    -- Disney's Blast ( www.disneyblast.com ) from Disney Online
    -- Disney's Toontown Online ( www.toontown.com ) from Disney Online
    -- GameBlast ( www.prepaid.gameblast.com ) from Shockwave.com
    -- MobileCraze Cards ( www.mobilecraze.com ) from Cellus USA
    -- Vindigo 2.0 Subscription Cards ( www.vindigo.com ) from Vindigo
    -- Fantasy Sports Season Pass Cards ( www.cbs.sportsline.com ) from CBS

    Introduced in April 2003, AT&T PrePaid Web Cents Service is a secure payment alternative for consumer purchases of online content. AT&T's full-service program enables content providers to offer consumers a way to prepay for online content by purchasing specialty cards in traditional retail outlets, such as 7-Eleven stores. Each line of specialty cards carries a specific content provider's brand and is used exclusively to purchase that provider's online content on its site.

    AT&T manages the retail supply chain: production, warehousing, inventory, fulfillment and point-of-sale activation of the content providers' specialty cards, as well as day-to-day management of vendor relationships and retail operations. In addition, AT&T can handle all transaction-processing functions: PIN database management, payment authentication, customer e-care and settlements with retailers.

    More information on AT&T PrePaid Web Cents Service ( www.webcents.att.com ), as well as AT&T PrePaid Phone Cards and AT&T PrePaid Internet Service, is available at www.att.com/prepaidcard .

    About AT&T

    For more than 125 years, AT&T (NYSE "T") has been known for unparalleled quality and reliability in communications. Backed by the research and development capabilities of AT&T Labs, the company is a global leader in local, long distance, Internet and transaction-based voice and data services.

    AT&T PrePaid Web Cents Backgrounder

    The News Event

    On February 3, AT&T is announcing an agreement with 7-Eleven to market AT&T Web Cards that allow customers to download music from RealRhapsody, the Internet jukebox service from RealNetworks. The cards will be available in 5,300 7-Eleven stores.

    What Are PrePaid Web Cents Cards?

    The cards are a secure payment alternative for consumer purchases of online digital content. AT&T's service enables digital content providers to offer consumers a way to prepay for online digital content by purchasing specialty cards in traditional retail outlets.

    AT&T manages the retail supply chain: production, warehousing, inventory, fulfillment and point-of-sale activation of the content providers' specialty cards, as well as day-to-day management of vendor relationships and retail operations. AT&T also can handle all transaction processing functions: PIN database management, payment authentication, customer e-care and settlements with retailers.

    Prepaid specialty cards supported by AT&T PrePaid Web Cents technology are sold at traditional retail outlets. They carry a specific content provider's brand and are used to purchase that provider's online content.

    Consumers simply purchase a card from displays at a participating retailer. The retailer activates the card at the point of sale, and it's ready for use. To use the card, the consumer logs on to the content provider's Web site directly or through the AT&T PrePaid Web Cents site ( www.webcents.att.com ). The consumer is prompted to enter the serial number and PIN printed on the back of the card to begin purchasing digital content. AT&T processes the payment using AT&T PrePaid Web Cents technology.

    The specialty cards can be used to purchase a variety of online content such as interactive games, ring tones, graphics, maps, guidebooks, digital music, streaming audio and video, software, research services, and more. Each card is issued by the content provider and is exclusively for use on its site.

    What's The Trend?

    More and more consumers are willing to purchase compelling online content (e.g., music, games, software, dating services, etc.) As a result, more online content companies are pursuing pay-for-content business models -- in essence, "monetizing" their content. Also, the expansion on broadband high-speed access will create more opportunities for content applications.

    The Market

    Although no research is available on the prepaid digital-content card market, there is data from Jupiter Research on the digital market itself -- all fair game for prepaid Internet cards.

    -- Including sales of physical goods, digital goods and services, and
    ticketing, US online entertainment (e.g., music, film, games and
    sports) will grow from a $6.9 billion market in 2002 to a
    $15.7 billion market in 2007.
    -- In 2002, the online digital content industry was a $1.4B category-and
    it's expected to grow to $5.8 billion by 2006.
    -- Online music will continue to be the largest online entertainment
    segment, followed by films and games.
    -- Digital subscriptions and downloads will grow from $800 million in
    2003 to nearly $3.5 billion in 2007.

    AT&T in the Market
    -- Prepaid voice and internet cards generate 10 percent of AT&T
    Consumer's revenue -- about $1 billion.
    -- We don't break out revenue between voice and Internet prepaid cards.
    -- No other telecommunications company of which we're aware offer such
    specialty cards.

    More Specifics on How The Cards Are Used

    Content providers can choose to make cards available in monetary or unit denominations or in weekly, monthly or annual subscriptions. Monetary or unit denomination cards have specific values, which are applied against the purchase of the content provider's digital content. With subscription-based cards, the consumer can access the online content or make multiple downloads for the length of the subscription. Content providers can choose to have the total value of the card deducted at first use or have AT&T manage the cards' multiple transactions or additional use during a subscription period.

    Examples of how consumers use the cards:

    Disney's Blast ( www.disneyblast.com ) from Disney Online is a subscription-based, advertising-free online service that offers more than 100 games and activities in a secure, parent-trusted environment. The subscription card was announced in April 2003 and is available now for the first time at Wal-Mart.

    Disney's Toontown ( www.toontown.com ), the first massively multiplayer 3D online game for kids and families. The online subscription card will be packaged with a CD-ROM of the game assets.

    MobileCraze Cards, from Cellus USA, can be used to purchase an array of online content for a mobile phone, including ring tones, jokes, voicemail greetings, and picture messages. Introduced in April 2003, the cards are available at Wal-Mart and other participating retail outlets.

    Fantasy Sports Season Pass cards from SportsLine.com can be used to purchase a full season in any of, or any combination of, CBS SportsLine.com's individual basic fantasy games: football, baseball, basketball or hockey. These new specialty cards were announced recently and are available at Wal- Mart and other participating retail outlets.

    GameBlast subscription cards from Shockwave.com can be used for 24 x 7 access to an exclusive online collection of more than 40 action, sports and puzzle games. Introduced in April 2003, the cards are available at Wal-Mart and other participating retail outlets.

    Who Uses The Cards?
    -- Consumers without credit cards or those reluctant to use credit cards
    -- Online customers who don't want to commit to long-term subscriptions
    -- Parents who want to provide children the ability to enjoy online
    entertainment but limit it from a cost perspective
    -- Tech-savvy teens who participate in online games, download (legally)
    music and other online content.

    (Logo: http://www.newscom.com/cgi-bin/prnh/19991018/ATT )

    Source: AT&T

    AT&T PrePaid Web Cents Technology Drives RealRhapsody Music at 7-Eleven Stores

    Posted by Craig at 09:31 PM

    January 30, 2004

    Pepsi and iTunes

    Catch the upcoming Pepsi and iTunes Super Bowl commercial in advance.
    Quicktime player required:

    Posted by Craig at 08:33 PM

    Music Download

    Following Pepsi's Lead, Coke Tunes In to Net Music Scene

    Coca-Cola Co., which famously offered to teach the world to sing in perfect harmony, now wants to teach the world to download in perfect legality.

    Coke said Wednesday that it was planning a joint promotion with San Diego-based MusicMatch Inc., becoming the fifth beverage company seeking to fizz up its brands with a partnership that taps the popularity of online music.

    PepsiCo Inc. will be the first out of the gate, offering as many as 100 million songs from Apple Computer Inc.'s iTunes Music Store in a promotion that kicks off with a flashy commercial during Sunday's Super Bowl. Later this year, Miller Brewing Co., Heineken USA Inc. and South Beach Beverage Co. plan campaigns with Roxio Corp.'s Napster, RealNetworks Inc.'s Rhapsody and BuyMusic.com Inc., respectively.

    The online music scene caught fire four years ago, and advertisers have been salivating ever since over the prospect of reaching millions of young consumers there. But the most popular destinations for downloaders file-sharing networks like Kazaa and Morpheus that have become havens for music pirates have been too hot for blue-chip advertisers to touch.

    "The customers of Kazaa are used to not paying for their stuff," said Michael McGuire, an analyst with technology market researcher GartnerG2. "I'm not sure the soft drink companies are willing to endorse that" kind of thinking.

    So far, the number of music fans quenching their thirst for tunes through legitimate online vendors like MusicMatch has been a tiny fraction of the millions using file-sharing networks. Only recently have industry-authorized outlets like Apple Computer Inc.'s iTunes Music Store started to draw audiences large enough to attract the interest of Coke and other top-tier advertisers.

    That's why Rob Enderle, who runs a technology market research firm in San Jose, thinks the time is right for deals like Coke's partnership with MusicMatch.

    "Wherever the kids are, they want to be," Enderle said. "Young adults are some of the most well-funded consumers in the world and people struggle to get access to those dollars. The kids are partying, and they want to be the thing the kids are partying with."

    Coke, which last week put its name on a downloadable music store in England, revealed little about its plans with MusicMatch. Geoff Cottrill, who directs the music marketing group for Coca-Cola North America, said the promotion would feature Sprite lemon-lime soda and was expected to let customers download individual songs free and give them some access to MusicMatch's online jukebox service, which normally costs $4.95 a month.

    The flurry of beverage promotions may not be over. Among the firms waiting for a potable partner is one of the pioneers in online music, and it couldn't have a better name: Liquid.com.

    Following Pepsi's Lead, Coke Tunes In to Net Music Scene

    Posted by Craig at 03:39 PM

    January 21, 2004

    Music and Retail

    Wal-Mart Selects Liquid Digital Media As Partner For
    Music Downloads Store

    REDWOOD CITY, CA, Dec. 18, 2003 - Liquid Digital Media, a leading provider of custom digital media services, in conjunction with Wal-Mart, the world's largest retailer, today announced the test release of a Music Downloads service at www.walmart.com. There are plans for an official launch in 2004.

    Wal-Mart's Music Downloads service is the first service developed under the Liquid Digital Media name. The store continues Liquid's record of developing advanced digital music products and services, and features the best rights and pricing available for a Windows PC-based service.

    "Our unique position in the market enables us to quickly deliver tailored solutions for our partners with their customers in mind," said Ole Obermann, Liquid Digital Media vice president and general manager. "The Wal-Mart Music Downloads service is an excellent example of this. It's our first step in working together, and we look forward to continuing to develop advanced digital media distribution systems for Walmart.com and other partners based on the needs and wants of their customers."

    "We're excited to offer this convenient service with the value and selection our customers expect from Wal-Mart." said Kevin Swint, Walmart.com's senior category manager of entertainment. "Liquid Digital Media was the obvious choice for a partner -- capable of providing a service built to order for us, backed with years of experience, and delivered in an aggressive time frame."

    Liquid Digital Media is a leading provider of custom digital music solutions, encompassing design, technology, and commerce. Current distribution partners include Wal-Mart, Amazon.com, and Clear Channel. Created in January 2003, Liquid Digital Media is a division of Anderson Media, a large music distributor, and was formed from the assets of Liquid Audio, the service that pioneered the increasingly popular sale of legitimate ala carte music downloads. Liquid Digital Media is staffed with experts in the digital music industry, including former employees of Liquid Audio, Rioport, and Listen.com.

    # # #

    Liquid, Liquid Digital Media, Liquid Music Network and the Liquid Digital Media logo are trademarks of Geneva Media LLC.

    For more information, press only:

    Ole Obermann
    Liquid Digital Media
    (650) 549-2000
    email: [email protected]

    Posted by Craig at 09:57 PM

    December 22, 2003

    Music Download

    Apples iTunes Music Store still isn't profitable and if Wal-Mart has anything to say about it, it never will be. On Thursday America's ... ahem ... favorite retailer launched its own digital music storefront online. Developed by Liquid Digital Media, the store offers 200,000 songs at 88 cents a pop -- undercutting iTunes downloads by more than a dime. Such aggressive price cuts are the standard practice that has driven innumerable mom and pop stores out of business and even elbowed aside major retail chains like Tower Records.
    Wal-Mart Link

    Posted by Craig at 02:39 PM

    December 18, 2003

    Wal-mart Testing Music Download

    CHICAGO (Reuters) - Wal-Mart Stores Inc. (NYSE:WMT - news) said on Thursday it would begin testing digital music downloads on its Web site, joining a list of companies hoping to profit from the growing demand for such services.

    Wal-Mart, the world's biggest company, said customers could download songs for 88 cents per track. Wal-Mart said it would gather customer feedback over the next few months and make any modifications before officially launching the service in 2004.

    Posted by Craig at 10:00 PM

    December 11, 2003

    Music Exhibit Kiosks

    Bob Dylan Retrospective Debuts at EMP November 2004

    Experience Music Project: Bob Dylan Retrospective Debuts at EMP November 2004; First-Ever Exhibit to Explore the Beginnings of a Pop Music Legend
    Jump to first matched term

    SEATTLE, Dec 11, 2003 (BUSINESS WIRE) -- November 2004, Experience Music Project (EMP) will debut, Bob Dylan's American Journey, 1956-1966, an extensive, first-ever exhibit dedicated to exploring a critical and transformational ten-year period in this American music legend's career. Few performers have reached the status of Bob Dylan -- a multi-generational force, his name evokes images and memories of the folk revival, social protest, and the development of rock music as an art form. Bob Dylan's American Journey, 1956-1966, curated by EMP's Ann Powers, captures a singular artist as he made history in the throes of social change taking place around the country. The exhibit will include extensive material from the Bob Dylan Archives, EMP's own collection, as well artifacts from private collectors from around the world. The exhibit kicks off a period of renewed examination of this crucial period in Dylan's career that will culminate with a broadcast documentary on Dylan to be directed by Martin Scorsese, and will air in early 2005.

    "This is the first time a nationally recognized cultural institution has taken on the telling of Bob Dylan's story," said Matt Ellis of the Dylan Archives. "We are very pleased that Experience Music Project, one of the most innovative music museums in the world, has taken on this important project."

    "It's an honor for Experience Music Project to create a major exhibition that's focused on one of the most significant artists of the 20th century and to have the opportunity to work closely with the Dylan Archives to develop it," said Robert Santelli, EMP's Director of Museum Programs. "It's practically impossible to think of popular or roots music in the past forty years without the name Bob Dylan prominently coming to mind. Dylan's sweeping influence on both American music and culture makes him the ideal artist to explore in a major music exhibition."

    Dylan's lyrics and music encompasses a wide palette of influences ranging from Delta and Chicago Blues; Beat poetry; the Bible; Shakespeare; Southern work songs and Scots ballads. His work serves as a key link in the chain connecting these sources to the many contemporary singer-songwriters for whom Dylan is a main influence. Bob Dylan's American Journey, 1956-1966 follows him from the industrial town of Hibbing, Minnesota, where he was born Robert Zimmerman, through his debut in the Greenwich Village folk revival, into his massive fame as the man who "electrified" contemporary songwriting, and ends with the making of three of rock's greatest works: Bringing It All Back Home, Highway 61 Revisited, and Blonde on Blonde.

    The exhibit will showcase handwritten letters and lyrics and musical instruments as well as capture Dylan's interest in Americana -- playing off classic imagery that he has mined in his music: the railroad, the highway, and the carnival. Rock and folk's greatest visual chroniclers, including D.A. Pennebaker, Daniel Kramer, and John Cohen, will be prominently featured throughout the show.

    Bob Dylan's American Journey, 1956-1966 will also feature an audio tour and interactive kiosks, as well as extensive education materials available to teachers and scholars across the country.

    For ticket and EMP information, visit emplive.com, or phone 206-770-2700.

    About Experience Music Project

    Dedicated to exploring creativity and innovation in American popular music, Experience Music Project is a 21st Century museum that strives to capture and reflect the essence of rock 'n' roll, its roots in jazz, soul, gospel, country and the blues, as well as rock music's influence on hip-hop, punk and other recent genres. Patrons can make their own music, see and learn about rare artifacts and memorabilia from EMP's collection of more than 80,000 items, explore various musical milestones within unique interpretive exhibits, feel the power of the creative force by listening to musicians tell their own stories, and discover the power and joy of music in all its forms. Founded by investor and philanthropist Paul G. Allen, under the direction of co-founder Jody Patton and designed by architect Frank O. Gehry, the 140,000-square-foot, multi-colored and "swoopy" museum rises up in the heart of Seattle at Seattle Center and provides visitors a musical experience unparalleled anywhere in the world. A 501(c)(3) nonprofit organization, EMP is online at www.emplive.com.

    SOURCE: Experience Music Project

    Experience Music Project, Seattle
    Press Only:
    Paige Prill, 206-262-3218
    [email protected]

    Posted by Craig at 09:40 PM

    Music Download Delivery

    Coke Enters the Music Business

    LONDON -- Coca-Cola is launching an Internet music download service in Britain next month, the first consumer brand to jump into Europe's crowded Internet music market, the company said on Monday.

    The soft drinks maker said that in January it will begin selling music downloads from a catalog of 250,000 songs supplied from each of the five major music labels.

    The artists range from Eminem to Elvis, delivered through a partnership with OD2, a British music-download company. The companies did not announce the pricing plan for downloads.

    The European market for legal music downloads, though small at the moment, has attracted intense interest from major media companies and retailers ranging from Virgin Megastores to Time Warner's AOL unit. Still, the industry-sanctioned sites are running well behind the free file-sharing services run by Kazaa and iMesh.

    Coke, which has huge brand appeal and a massive marketing budget, is expected to bring some much-needed publicity to the subscription download services.

    Coke's main rival, PepsiCo, will join forces with Apple Computer iTunes download service in a 100-million-song "under-the-cap" giveaway beginning in February. The Apple service is not available in Europe.

    Posted by Craig at 12:34 AM

    November 25, 2003

    Branson Leads Rebirth of Music Retail in San Francisco

    Sir Richard Branson who will unveil the most progressive music entertainment store, at the Virgin Megastore, San Francisco. There will be a celebration on December 3, from 4-8pm; and Sir Richard Branson, CEO of Virgin companies, will be on hand to introduce and discuss the enhanced offer that will be available to Virgin Megastore customers.

    Branson Spreads the Gospel About His Plans to Breathe New Life Into Music Retail at San Francisco Virgin Megastore

    SAN FRANCISCO, Nov 24, 2003 /PRNewswire via COMTEX/ -- Virgin Entertainment Group, North America, the world's premiere music and entertainment retailer, is pleased to announce the arrival of Sir Richard Branson who will unveil the most progressive music entertainment store, at the Virgin Megastore, San Francisco. There will be a celebration on December 3, from 4-8pm; and Sir Richard Branson, CEO of Virgin companies, will be on hand to introduce and discuss the enhanced offer that will be available to Virgin Megastore customers.

    While many other music retailers have closed their doors and are battling to stay alive, Virgin has shown its complete commitment to the future of music and entertainment retailing by investing in the development of a new cutting edge retail concept. After conducting significant customer research in the Bay area, the San Francisco Virgin Megastore, originally opened in 1995, has recently completed a total rebirth. Virgin has tailored a unique experience by combining a fresh mixture of cutting edge products with innovative consumer-facing technologies in a truly stimulating environment.

    "We are renowned at Virgin Megastores for providing the best selection of music and entertainment products. However, this time we've really raised the bar and have elevated our offer to include an expanded range of products and services that appeal to our core customers' lifestyles," Sir Richard Branson, Founder and CEO, Virgin Entertainment Group Inc., said. "We are confident that this is the direction we need to go for Virgin Megastores in the future."

    "While we believe we must have a fantastic multi-channel offering to compete in today's environment, this demonstrates our commitment to our core business, which is our stores," states Glen Ward, CEO, Virgin Entertainment Group, North America. "We have asked our customers what they want, and by enhancing our stores and making them a more exciting place to shop we've given them what they asked for and more."

    The revitalized Megastores will offer a significantly expanded product range to appeal to the lifestyles of the music and DVD buyer. Already known for its selection of CDs and DVDs, Virgin will be offering the best of today's electronics, fashion, accessories, sex merchandise and even associations with car and motorcycle brands.

    Long known for its selection of imported music, Virgin has expanded upon this and now offers imported pop culture fashion, foods, DVDs and gadgets. Band merchandise, vintage music t-shirts, collectable concert prints, and artist-endorsed fashion brands have also been introduced to appeal to the fan and collector. The DVD selection has been expanded to represent the broadest array of movies on the West Coast, and is now joined by a handpicked selection of movie merchandise. Virgin's well regarded World Music, Jazz and Classical selection are now complimented by Mind, Spirit and Body products, and a zone dedicated to gay lifestyle has been introduced. For the fashion consumer, an expanded selection of music related fashion brands is featured throughout the store, along with fitting rooms on all three floors. Cutting edge consumer electronics including Virgin Pulse, Samsung and Philips products are located at key positions throughout the store. Virgin has also introduced a service for customers to recycle used music, games and DVDs in return for store credit. And there's even an adult section that will include adult DVDs and games.

    The Megastore will also feature the largest concert stage in a North American retail environment. This will serve as a live music platform as well as a location to showcase lifestyle products of interest to Virgin's customers such as new technologies, motorbikes, cars and musical equipment.

    As another enhancement to the overall shopping experience, Virgin has invested in new technology, which will bring more interaction into the in-store environment. At the heart of the Virgin Megastore experience is the opportunity to listen before you buy. After pioneering the industry-leading Virgin MegaPlay kiosks, which enable the customer to access over 2 million music clips, for the first time at any North American music retailer, customers can also plug flash media cards directly into the MegaPlay kiosks and download 30 of Virgin's favorite songs, free of charge.

    Virgin will also unveil the industry's first portable hand held listening device. By partnering with MusiKube, Virgin has provided customers with the ability to listen to whatever they want, wherever they want within the store.

    Bay area residents can now be the first in the nation to own the latest titles, as they will be able to purchase Tuesday releases in the early morning hours from Virgin's CD and DVD vending station which will face San Francisco's Market Street, and will allow customers to purchase the latest releases 24 hours a day.

    Reporters are invited to "The Virgin Megastore Revival Meeting" on Wednesday, December 3rd starting at 4PM, which includes a VIP tour of the revitalized Virgin Megastore, San Francisco (2 Stockton Street) and a special service led by Sir Richard Branson. Reporters can discuss the new business plans, as one-on-one press interviews with Sir Richard Branson and Glen Ward can be made by appointment.


    Virgin Entertainment Group is the world's leading multi-channel music and entertainment retailer, providing customers with a range of superior entertainment experiences through a family of integrated Virgin-branded businesses. The "category killer" Virgin Megastores and Virgin Megastore Online at www.virginmega.com are integral parts of a strategy to provide entertainment customers with what they want, how they want it, and when they want it. For more information, or to check out the location of the nearest Virgin retail, go to www.virginmegamagazine.com .

    SOURCE Virgin Entertainment Group

    Krysty Walker of SJ Communications, +1-818-881-3889,
    [email protected] , for Virgin Entertainment Group

    Posted by Craig at 12:04 AM

    November 10, 2003

    Digital Music Store

    MusicNow Works With Top Digital Device Manufacturers and Best Buy for Launch Of New Digital Music Store

    New Online Store Works Easily with More Than 40 Portable Digital Music Players To Make Digital Music Simple for Millions of Customers

    CHICAGO and MINNEAPOLIS, Nov 10, 2003 /PRNewswire via COMTEX/ -- MusicNow Inc., developer of a legal online music store and service, and Best Buy (NYSE: BBY), North America's leading specialty retailer of consumer electronics and entertainment products, today announced the launch of the MusicNow Download Store, which will be available only through Best Buy for the month of November. The new store lets music lovers download songs directly to more than 40 portable digital music players, giving them more options to enjoy their music than any other digital music site.

    The MusicNow Download Store for Best Buy allows consumers to download music more easily to their favorite digital music players from industry leaders such as Creative, Rio, iRiver, Phillips/Nike, and Digitalway. Unlike other digital music offerings, the MusicNow Download Store for Best Buy enables users to transfer songs directly to more than 40 portable devices without having to convert their music or download extra plug-ins. This impressive compatibility is possible through MusicNow's special integration with the Windows Media Player 9 Series. In addition, the compression efficiencies of the Windows Media Audio 9 format provides music content in half the size of MP3 files without sacrificing quality, making it possible to store more music on portable devices.

    "Best Buy is committed to offering our customers leading services that make buying entertainment digitally a great experience. With the launch of the MusicNow Download Store in the Windows format, we believe consumers now have a great choice to purchase digital music that will work on many devices," said Scott Young, vice president of digital entertainment for Best Buy. "We want music to be available to people how and when they want it, and that means letting them take their music with them on the road, in the car, or wherever they want to enjoy it. The combination of Best Buy's retail expertise and MusicNow's integration with more than 40 portable audio players offers an exciting digital entertainment experience for music fans."

    The MusicNow Download Store for Best Buy features more than 400,000 tracks from all the major labels. It is available now at www.bestbuy.com/digitalmusic and also can be viewed through special kiosks at Best Buy retail stores. MusicNow customized its service for Best Buy and the two companies are working closely with portable device manufacturers to continue improving the way consumers experience digital music -- at home, at work and on the go. The ability to work seamlessly with so many different music devices is one feature that differentiates the MusicNow Download Store for Best Buy from the rest of the digital music field.

    MusicNow gives consumers a single, comprehensive destination to enjoy digital music through a wide array of listening options. Shopping at the MusicNow Download Store for Best Buy enables consumers to purchase music a la carte, giving them the freedom to buy digital tracks and albums without a subscription. In addition, Best Buy customers also have the option of becoming MusicNow members, enabling them to accumulate larger digital music collections at a lower cost and giving them access to MusicNow' unique entertainment features. Following are the simple options:

    -- MusicNow Download Store for Best Buy: Shoppers can purchase
    individual tracks for $0.99 or full albums for $9.95 with no
    subscription fee

    -- All MusicNow: $9.95/month for premium channels of exclusive music
    programming showcasing the work of a particular artist or genre;
    unlimited tracks on demand that are available for play online and
    offline for the duration of the subscription; $0.99 per song and
    $9.95 per album for permanent downloads that can be burned to CD and
    transferred to portable devices
    -- MusicNow Premium Channels: $4.95/month for premium channels

    The MusicNow service is designed more like a music magazine than a music database. With MusicNow memberships, music enthusiasts receive access to 40 channels of original music programming including the co-branded channels Elvis 2nd to None, The Soul of Quincy Jones and the Blue Note Channel. MusicNow members enjoy premium, commercial-free radio stations distinctive to each channel. TrackPaks -- MusicNow's exclusive compilation series -- offer a unique way to discover the channel's new recordings alongside old favorites. Channel home pages spotlight new hits and other special tracks and albums, which subscribers can listen to on-demand or purchase for transfer to their favorite portable device. MusicNow will continue to add additional channels to the service featuring the biggest names in music.

    As part of the nationwide launch of the service, Best Buy and MusicNow are conducting a promotion with portable audio devices and blank media such as CD's: when music lovers purchase these items and sign up for a month of the All MusicNow service, they receive their first 10 song downloads at no additional cost. Participants in this promotion include: Creative, Rio, iRiver, Digitalway, Phillips/Nike, Samsung, Fujifilm, Imation, Memorex, and TDK.

    Also, to promote digital music as a holiday gift giving idea, Best Buy will sell holiday gift cards that are redeemable at The MusicNow Download Store for Best Buy beginning in mid-November. These cards will be displayed in three locations within Best Buy stores -- with the portable audio players, in the music section, and with the gift cards.

    "With the launch of the Download Store that works with more than 40 devices and our launch with Best Buy, MusicNow offers consumers the best way to purchase and use digital music," said Scott Kauffman, president and chief executive officer of MusicNow. "Our Windows-based service and unprecedented ease of use with multiple portable devices will further accelerate the mainstream consumer adoption of digital music services."

    Manufacturer Comments


    "Seamless integration between PCs and NOMAD portable audio players gives music-passionate customers a new level of freedom and flexibility. Customers can download music from the MusicNow Download Store directly to a Creative NOMAD portable audio player in just one easy step, giving users more time to enjoy new music on their NOMAD anywhere they want to go."

    Lisa O'Malley, senior brand manager for portable audio products at Creative


    "Rio's approach has always been to support non-proprietary music services that will benefit the digital music consumer. We're excited to be supporting Best Buy and the MusicNow Download Store. It's a validation that this is a good market for consumers, and the store will provide them with another choice to find the music they're searching for."

    Jeff Hastings, president of Rio


    "Customers require online music services to deliver a superior online music experience. The MusicNow Download Store for Best Buy mirrors what customers want from a music service. iRiver is committed to providing products for online music services, and it's refreshing when music services, such as MusicNow, heed customer demands."

    Jonathan Sasse, president of iRiver America


    "By integrating the MusicNow Download Store into our digital music players, Best Buy customers will love how easy it is to download music right onto an MPIO Digital Music Player. Our already easy to use players combined with the convenience of the MusicNow Download Store, open the door for everyone to leave a Best Buy store and start downloading and enjoying digital music immediately."

    Marcelino Kim, vice president marketing and sales for Digitalway Inc.


    "As a premier supplier of portable music players and recording media, TDK has always recognized the need to encourage legal music sharing among listeners. We are proud to support the launch of the MusicNow Download Store for Best Buy, and its efforts to make access to digital music easy, economical and enjoyable."

    Bruce Youmans, TDK vice president of marketing


    "Giving customers easy-to-use and convenient access to the music they love is a priority of ours. The MusicNow Download Store helps our customers get access to and manage music so they can take their favorite tunes with them wherever they go."

    Erin Burns, channel marketing manager - retail, Samsung Electronics


    "Memorex is convinced that working with Best Buy and MusicNow will benefit the consumers in obtaining their favorite music in a quick and convenient manner. As the market leader in blank CD and DVD media, Memorex is committed to providing high quality digital media that will enable consumers to enjoy their legally downloaded music on any CD or DVD player."

    Allen H. Gharapetian, vice president of marketing and product development for Memorex


    "Fujifilm is pleased to join Best Buy in bringing consumers new and different ways to enjoy their favorite music. We believe that today's music enthusiast will embrace the flexibility, choice, and convenience that the MusicNow Download Store offers."

    Bill Drysdale, director of sales, Fuji Photo Film USA Inc.

    About MusicNow

    MusicNow Inc., formerly FullAudio, develops a legal online music store and service with more than 40 channels of original music programming and content from all five major labels -- BMG, EMI, Sony Music Entertainment, Universal Music Group and the Warner Music Group -- as well as the independent labels Koch and Sanctuary. Customers have the option to either purchase tracks and albums a la carte or subscribe to MusicNow's subscription service, which provides unlimited access to the music in MusicNow's library for a monthly subscription fee. MusicNow is primarily marketed through distribution partners, which currently include Best Buy, Charter Communications, Clear Channel Communications, EarthLink and Microsoft. Founded in April 1999, MusicNow manages the software and systems that cover every aspect of music content aggregation and delivery including content acquisition and management, media storage, secure delivery and digital rights management to ensure that all rights holders are fairly compensated for their work. The company is headquartered in Chicago, with offices in Palo Alto, CA. For more information or to subscribe to MusicNow, please visit www.musicnow.com .

    About Best Buy Co., Inc.

    Minneapolis-based Best Buy Co., Inc. is North America's leading specialty retailer of consumer electronics, personal computers, entertainment software and appliances. The Company's subsidiaries operate retail stores and/or Web sites under the names: Best Buy (BestBuy.com), Future Shop (FutureShop.ca), Geek Squad (GeekSquad.com), and Magnolia Audio Video (MagnoliaAV.com). The Company's subsidiaries reach consumers through more than 700 retail stores in the United States and Canada.

    SOURCE MusicNow Inc.

    Greg Rudin of MusicNow, +1-312-663-9363 x161,
    [email protected] , Erin Poole of Ruder-Finn for MusicNow, +1-312-329-3977,
    [email protected] , or Brian Lucas of Best Buy, +1-612-291-6131,
    [email protected]

    Posted by Craig at 02:27 PM