Music – Page 29 – Digital-Lifestyles

Paid-for music downloads up 10x in 2004: IFPI Report

The IFPI, has reported very positive sales figures for the 2004 and have even higher hopes for 2005.

The IFPI was previously known as the International Federation of the Phonographic Industry, but it looks like they’re probably trying to phase the full name out – it’s far from easy to find it explained on their site. They’re the equivalent to the non-US RIAA (Recording Industry Association of America), to which it is affiliated.

Building on their IFPI Online Music Report of last year, they have found some pretty positive figures.

Online sites that are able to sell music have quadrupled from 50 in the previous year to 230. The tracks that are available to purchase through these sites have doubled to 1 million, and paid-for downloads are up nearly tenfold to 200 million. For the full run down of stats, it’s best to check the IFPA site.

It’s with the benefit of hindsight that John Kennedy, IFPI Chairman and CEO now says “The biggest challenge for the digital music business has always been to make music easier to buy than to steal.” From our recollection, this was certainly a minority view within the music business previously. Their previous approach had been to try and stop the unpaid-for file sharing, while not being particularly co-operative with companies wanting to sell their music. As we all know, it was the release of Apple iTunes music store that changed their view.

We’re encouraged to hear they’re now grabbing digital distribution with both hands. “The record industry’s priority now is to licence music – to as many services, for as many consumers, on as many formats and devices for use in as many places and countries as it can,” Kennedy said in a statement.

Giving further details of the guidelines for signing up distribution services he said, “The straightforward conditions are that the business must be legitimate, the music must be correctly licensed, and record companies and other rights holders must get properly paid.” All good, except there is still some discussion within the industry on what “get properly paid” entails in digital distribution, with many feeling that electronic distribution should bring lower prices than current rates.

The IFPI say they see the “digital music market taking off in 2005”. If 2004 saw paid-for downloads up more than tenfold to over 200 million, they must be jumping with joy in anticipation of the figures for 2005.

IFPI Digital Music Report 2005

Apple iTunes Selling 1.25m Tracks per Day

During his MacWorld keynote, Steve Jobs took time to tell the Apple faithful about the success of iTunes.

Back in mid-December, we were rather dismissive when we heard that iTunes had sold 200m tracks, so when we heard Jobs saying that the figure had now reached 230m songs, it didn’t set our world alight.

What we did find interesting was the current rate at which tracks are being sold per day. From their combined online stores in the 15 countries they have running (covering 70% of global music market), they are currently selling at the rate of 1.25m per day.

Jobs was quick to point out that ‘at this rate’ the annualised sale of tracks would be 0.5 billion tracks.

While this tracks/day rate initially sounds enormous, it has to be put against the explosion in the sales of iPod over the last quarter of 2004.

In the run up to xmas a very impressive 4.5m iPods were sold (a 500% growth over the same quarter last year) and dropped in to people’s xmas stockings, bringing the total sold to 10m. Clearly these arrive empty and have to be filled with music, some of which may be already owned, but experience tells that the common action is for people to take this as an opportunity to buy more music.

The number of tracks downloaded will have been helped by the 1m prepaid card that Apple has sold since US Thanksgiving (25 Nov).

These combined factors may account for the big hike in tracks/day and could point towards this being a seasonal blip. Sustaining it will require a continued enthusiastic appetite for new music from the current owners or legions of new iPod owners continuing to arrive.

Apple iTunes

iPod shuffle. Apple’s Flash Music Player

The success of Apple’s iPod range is well known. They have to date sold over 10 million units and have total domination of the hard disk-based portable music players. The only market they weren’t in was the solid state memory, or Flash memory players. To address with the hope of being the winner there too, Jobs announced the Apple iPod shuffle.

Shown in iPod white it’s 3.3 inches x 0.98 x 0.33 (8.4 cm x 2.5 x 0.84) and weighs only 0.78 ounces (22.11g). In summary it’s very small, about the size of a pack of chewing gum.

The controls are very simple, numbering just five – play/pause; volume up and down; next and previous track. Unexpectedly it has no display, so there is no visual way to know which track is playing. Apple being Apple, worked this idea to their advantage, suggesting that receiving your music in a random, unexpected order was fun. We’ll see if the market agrees.

Connecting to either a Mac or PC via its USB 2.0 port, it also takes its charge onto its 12 hours battery this way. This is a great feature that players like the Jens MP-130 had used, which we found a real boon.

While we’re on the Jens MP-130, it had a really excellent microphone build into it which enabled quality recording of interviews and the like. It’s noticeable that the iPod shuffle doesn’t have a mic onboard or even a jack for an input. This is for playback only.

It comes in two models; 0.5 GB and 1GB – pretty beefy for a Flash player. Prices are $99 (~€75, ~£53) and $149 (~€113, ~£79) in the US, £69 (~€98, ~$130) and £99 (~€141, ~$187) in the UK and is “shipping from the factory” yesterday.

The integration with iTunes is strong and features AutoFill. This gives various methods of selecting music tracks to go onto the iPod shuffle, filling it to capacity.

The experience that we’ve had in the Digital Lifestyles office with USB music players is that the ones that have a clip-on lid end up having problems with the lid dropping off. The iPod Shuffle is using a removable lid as the attachment to the lanyard which then hangs around the neck.

The reaction throughout most of Jobs’s presentation was pretty ecstatic as is the norm, with them cheering and whooping on cue. Strangely during the presentation of the iPod shuffle, it was pretty restrained, even quiet. The only audible excitement was during the announcement of the price of the base model.

We’re sure Apple will be hoping the public has a more enthusiastic reaction to it. We’ll be getting our hands on it this Friday, so we will update you after that.

Apple iPod shuffle

SmartDeck from Griffin gives iPod control

Griffin SmartDeck iPod Griffin Technology has announced what they call SmartDeck Intelligent Cassette Technology.

At first glance it appears to be a “seen it” product, a bit of audio cassette-shaped plastic that you pop into your cassette player to let you play the music you’ve got on your digital music player.

Take another look beacuse this device is smarter than that. Rather than having to fumble for the control on your iPod while you should be concentrating on things like … driving. This little beauty lets you use the buttons on your cassette deck to control your iPod. The fast forward and rewind buttons take you to the next or previous playlist track; the Stop and pause buttons do as would be expected; and hitting Eject or selecting car stereo’s radio also put the iPod on pause.

How does it do it? The cassette adaptor has sensors on it (note the teeth inside the holes in the middle of it) and passes this information down a single white cable to the four-pin top accessory port on the top of the iPod. Clever isn’t it?

Griffin are also claiming it automatically sets optimal volume on the iPod for best audio quality and the devices innards are the highest-quality to give crystal clear quality sound.

It should be available in the second quarter of 2005, priced at $24.99 (~€19, ~£13.50). If you can’t wait until then to see it, it’s going to be on show on Booth #1917 at current MacWorld show.

Griffin SmartDeck

Apple iTunes passes 200m tracks – And?

OK … Apple has had over 200m tracks paid for and downloaded on Apple iTMS. Yes, it’s been a success, but now it’s getting a bit like the passing of time. You don’t often hear, Hold the front page, it’s December … we must tell the world.

Do you know what? The download was part of “The Complete U2”. How very fortunate for the recent US/Apple iPod deal. Did they have a little piece of code running on the server that selected what that 200mth track would be?

Oh and the other thing. Apple aren’t announcing when this occurred … just the fact that it has happened.

We’re nearly sure that the timing of this announcement has nothing to do with Christmas being next week, but Apple also very helpfully point out that the iTunes gift vouchers make ideal xmas presents.

So what’s the next landmark? We’re running sweepstakes on whether it’ll be the quarter billion, 300m, or half billion. Our recommendation? Don’t bother until it gets to 1 billion.

Napster More Recognisable Than iTunes, Survey

In a recent US survey by Ipsos-Insight, Napster has come out as the most recognised pay-for music download service. When presented with a list of services, Napster scored 79% recognition over iTunes, which hit 46%. More details are in the press release, but RealPlayer Music Store and MusicMatch weren’t that far behind around the 40% level.

We think that Napster has a huge debt of gratitude to pay to the RIAA and the US recording industry for their original barrage of anti-Napster press. What is surprising is iTunes wasn’t higher, we suspect there’s some confusion in the mind of the consumer with so much noise being made about iPod, iTunes becomes eclipsed.

Apple workers at 1 Infinite Loop can breathe a sign of relief about the quality of their offering. When asked which was the “best” fee-based service, 31% of the respondents rated iTunes the tops, leaving Napster trailing at 23%.

IPSOS research

P2P OK with Most Musicians, Survey

A survey by the Pew Internet & American Life Project has revealed that two thirds of musicians that they surveyed felt that peer-to-peer (P2P) file-sharing poses a minor threat or no threat at all to them.
The author of the report, Mary Madden said, “What we hear from a wide spectrum of artists is that, despite the real challenges of protecting work online, the Internet has opened new ways for them to exercise their imaginations and sell their creations. To many, this feels like a new Digital Renaissance rather than the end of the world.”
The findings of this survey are in stark contrast to the published findings of the US recording industry that claim that file-sharing hurts artists.
We’ve found a drastic difference between the public stance of the record companies and their private actions. In our discussions with operators of file-sharing networks we’ve been surprised to hear that one of their largest paying clients have been record companies, who have become near-obsessed with using the networks to watch the speed to spread of new tracks giving them valuable feedback to the viability of bands.

Pew Internet & American Life Project survey

BT And Blueprint Jointly Develop Innovative Music Distribution Service

In yet another move in the legitimate digital music market, BT and Blueprint have jointly developed a new service based on Blueprint’s Open Royalty Gateway (ORG) and Song Centre software that allows copyright holders to take more control of their material.

The new service for hosting, managing and distributing music and related content online, promises to accelerate the growth of the market by addressing key problems hampering the development of online music businesses, such as time to market, copyright protection, capital expenditure in IT and networking technologies, control of rights and the margin structure of the present models.

BT brings to the table IT, networking and data storage knowledge, while Blueprint offers experience in media management software and music industry relationships. Blueprint will provide the software framework and industry interface, with BT utilising its digital content hosting platform and international network to deliver a global reach.

The solution enables rights holders – artists, writers, publishers and record companies – to host their songs, videos, ringtones and other digital media files while having a direct commercial relationships with retailers. Content can be delivered directly to any number of media-enabled devices, including PCs, digital audio players and mobile phones. Of course, online-only distribution also dramatically reduces the time it takes to get digital files to market, but the system has to be successful in managing rights and digital licences, reporting royalties and sales to rights holders, and offering a wide variety of digital media to consumers using variable pricing structures.

An interesting feature of ORG is that it allows rights holders to actively manage their content, including setting business rules for pricing and location, electronic contract creation, sales tracking and royalty reporting. In addition to handling ‘major label’ music content, ORG allows independent labels and artists, many of whom control their own rights, to encode, package and upload their content to the service and then manage contracts. Blueprint will also work with retailers, letting them mix and match content to create their own offers and campaigns through a service called Song Centre.

On the other hand, the service could, however, let artists or smaller labels bypass the majors and sell their music directly to retailers or consumers. Referral and reward programmes, using viral recommendation, also means that consumers can earn back the cost of the music they purchase, by rewarding them with a commission each time one of their friends buys recommended content.
The service has already been used by EMI for Robbie Williams’ recent No.1 hit single ‘Radio’ with Australia and New Zealand’s leading music retailers, Sanity and Sounds. Audio, video, visual and mobile content was bundled together for sale, and linked into a competition utilising Blueprint’s referral and reward technology to drive additional opportunities to win prizes. The service is now powering the global Robbie Williams ‘Greatest Hits’ digital download store.

Blueprint
BT

Thomson: ContentGuard and Verisign deals

Paris-based Thomson have been busy. They’ve done two deals that will have an impact.They have become a strategic investor in ContentGuard, a closely-held developer of Digital Rights Management (DRM) intellectual property. With this investment, Thomson enters into a partnership with current investors Microsoft and Time Warner Inc.

Digital Rights Management describes a wide range of technologies that have been developed to allow movies, music and other digital content to be accessed by consumers over the Internet while protecting that content from unauthorised copying and counterfeiting – a technology championed by Microsoft and its Windows Media Player software.

Thomson has agreed to purchase an aggregate 33 per cent voting stake in ContentGuard from Microsoft, Time Warner and Xerox, subject to customary closing conditions and regulatory approvals. The announcement follows Time Warner’s April 2004 purchase of most of Xerox’s stake in ContentGuard.

The three companies (Microsoft, Time Warner and Thomson) are using the announcement to promote the development of inter-operable DRM systems, accelerate the deployment of consumer devices that support Digital Rights Management, and encourage content owners to launch new distribution channels.

The move is also interesting because Thomson is a long-standing technology and services provider to content owners and network operators, thus bringing a unique perspective that should complement the interests of ContentGuard and its co-investors. Thomson also has a lot of experience in IP licensing, which should further help to support ContentGuard’s licensing activities and accelerate and broaden the acceptance of DRM and ContentGuard’s intellectual property.

“The development of Web services and new content distribution systems requires a complete ecosystem of participants. Thomson’s investment alongside Time Warner and Microsoft shows that media, software, devices and services companies are committed to developing the infrastructure for Web services to flourish”, said Bill Gates, chairman and chief software architect, Microsoft. “This partnership will help propel the licensing of DRM intellectual property. With the participation of Thomson, a recognised leader in IP licensing, we add a European headquartered partner that will make this important technology more accessible in other parts of the ecosystem, particularly services and devices.”

“Today’s announcement marks yet another important step in our work on DRM, and expands our collaboration with key partners on this strategic initiative,” said Ron Grant, senior vice president at Time Warner. “We look forward to working with Thomson, Microsoft and others on offering consumers exciting new digital media products and services while simultaneously protecting content.”

In another move, Thomson and VeriSign have joined forces to create an authentication and authorisation service for movies, music and games delivered over digital networks. The new service, which will likely debut next summer, will be used to process secure transactions and for other back-office functions. It is geared at the subscriber digital entertainment market over broadband networks, which is a fast growing industry.

VeriSign’s Internet transaction authentication and network infrastructure technologies will be used, while Thomson will capitalise on its experience in content security, management and distribution. Both companies also plan to develop proprietary technologies to authenticate and authorise digital content and to build an interface for home networking devices such as video recorders, mobile devices and computers. These features could help protect movies and other content from piracy.

Thomson
ContentGuard
VeriSign

Universal Music Group Creates Digital-Only Music Label

Another month, another digital music announcement. This time, however, a record label is actually thinking long term. Universal Music Group (UMG) are embracing online technology as part of its business model, rather than wasting its time, money and efforts suing a handful of consumers for downloading copyrighted material.

Universal, which like other record companies, has heavily relied on profits from sales of CDs, will this week promote eight relatively unknown acts on a digital-only label (UMe Digital) through online services including Apple Computer’s iTunes, RealNetworks’ Rhapsody and Microsoft’s MSN Music. Online promotion is an alternative marketing option that’s nowhere near as expensive as traditional forms, but has the potential to be highly effective.

It’s great news that Universal is taking these innovative steps, as it finally shows that music labels will have to adapt to online sales and marketing in order to survive, especially as sales of CDs have fallen over the last four years, record stores are moving from high streets, and more shelf space is being given to DVDs and video games.

The move is also great news for bands because they can get relatively large exposure without having to spend a fortune on recording, making a video and then going on the road to ‘develop’. However, bands do not receive an advance or even the cost of producing an album. Having said that, they do retain full ownership of their master recordings and licence them to Universal for a limited time.

Universal is paying the musicians around 25 per cent royalty on the retail price of the downloads, and if online sales of an artist’s music reach a certain point, say around 5000 copies of a particular song, the company has an option to pick up distribution of the CD to record stores.

It’s now only a matter of time before digital-only independent labels start promoting bands online by creating a low-risk way to market them without producing a physical album or underwriting a tour or music videos. For consumers, gone are the days of paying £15 for a CD – a digital world means more choice and better value.

Warner Music Group is developing a unit similar to Universal’s, initially to sign artists and finance recordings for online sales, with the potential for later CD releases.

Universal Music Group
Warner Music Group