OD2 Launch Pay Per Play Jukebox Sonic Selector

OD2 think that streaming music to PCs, rather than downloading tracks, is the way forward: “Most of the music our users listen to on their PCs will be streamed,” Charles Grimsdale, chief executive of the company said.

Consequently, OD2 have launched their Sonic Selector service – allowing customers in France, Germany, Italy and the UK to stream any track from the company’s 350,000 track catalogue. As the streams are Windows Media encoded, you’ll need you’ll need Version 9 of Microsoft’s player.

OD2 already offered a similar feature on their download sites such as the shudder-inducing MyCokeMusic, where users can stream some tracks for one of their credits, as opposed to buying the track for 99 credits. Napster also offer a streaming service, but only with their UK£9.99 (€15) subscription.

OD2 evidently hope that a pay-as-you-go system will entice more users to buy music in a market where increased competition every day means that punters are less willing to lock themselves into a particular vendor with a subscription: “The pay-as-you-go system also allows the users to spend as little or as much as they wish each month, without the burden of a fixed rate subscription” commented Grimsdale.

Sonic Selector is in fact a proprietary plug in for Windows Media Player, created by OD2, but is a little more interesting that just a streaming gadget. Every day, the Sonic Selector team pick through new releases, chart hits and exclusives to offer their recommended picks, with featured artists in key genres. If you really like a track, then you can buy it and keep it.

Sonic Selector marks another small shift to consumers not owning music, instead paying for each play – it’ll be interesting to see how iTunes reacts to this at launch.

Sonic Selector

UK Digital Radio Market Set to Double by 2005

The Digital Radio Development Bureau (DRDB) has claimed that the UK’s £45 million (€67.75 million) market is going to double by the end of the year.

There are currently 547,000 digital radios in use in the UK, and this is hoped to expand to 1 million by 2005.

Why the sudden jump? One theory is that personal stereos and portable music systems equipped with digital radios are about to hit the market, rapidly increasing the installed base. As the cost of integrating a digital tuner into consumer electronics declines, many more audio devices that featured analogue only tuners will get digital ones by default.

The DRDB is a trade body funded and supported by the BB and commercial radio operators, with a remit to ensure the swift adoption of digital radio in the UK, so you can imagine that they’re pleased at this proposed sudden spike in uptake.

The Digital Radio Development Bureau

Napster and NTL’s Broadband Partnership

Napster UK and NTL have completed a deal to bundle the new music store with NTL’s Broadband Plus package. This will bring Napster a potential one million more customers, and will also include a 30 free trial subscription to the store.

NTL’s Broadband Plus package starts at UK£3.99 (€6), or UK£9.95 (€15) including a Napster subscription.

“This is a significant deal for Napster because we are partnering with the biggest provider of broadband services in the UK, and ntl’s own research has shown that over 75% of broadband customers download music each month,” said Brad Duea, president of Napster.

Napster’s catalogue now stands at over 750,000 tracks, making it the largest music store in the market at the moment.

Napster UK

RIAA Is Lobbying For DAB Radio Copy Protection

The Recording Industry Association of America is lobbying for digital rights management features to be incorporated in digital radio, and Mitch Bainwol, CEO, intends to make the issue the focus of the forthcoming Congressional Hearing on Digital Copyrights on 16th June.

“We’re in favour of HD radio,” Bainwol said, referring to Digital Radio, “It offers great benefits for consumers and everyone involved, but we’re not blind to several concerns. Someone could cherry-pick songs off a broadcast and fill up a personal library and then post it on Kazaa.”

Therefore, to prevent this evil, the RIAA are keen to have a copy protection scheme in place to prevent digital copies of digital radio broadcasts. The Consumer Association are not pleased, however.

Many are concerned that the RIAA are trying to removing another freedom from the consumer. Besides, no DRM scheme will currently stop people from making high quality analogue copies of music and then re-digitising them. The RIAA, in it’s fervour to prevent perfect digital copies of music seem to have forgotten one thing: digital radio is compressed, it’s not possible to create a “perfect” copy. On top of this the act recompressing to make an MP3 or Windows Media file, transcoding, generally makes audio and video quality even worse. A digital radio copy will never have the same quality as a CD recording.

The technology behind digital radio broadcasting in the US comes from iBiquity, who are obviously willing to build in a copy protection scheme if it brings them more revenue, but even they can’t see the point … at the moment: “If there’s a consensus among the groups, we’re willing to go along,” said Jeff Jury, COO of the Baltimore-based company, “But given the state of the technology, it’s premature to worry about this.”

By imposing a DRM system on digital radio, the RIAA can remove the consumer’s ability to time shift or archive radio programmes. Also, it some feel that it marks a shift towards preventing consumers owning music, instead they will have to rent it, paying time and again to hear tracks.

Michael Petricone, technology vice president at the Consumer Electronics Association commented: “Our position on this is that there has been no demonstration that there’s a problem. It’s not clear what the RIAA is talking about. Do they want a broadcast flag or some limit on recording material? We regard a consumer’s ability to record off the radio as a pretty fundamental right. They’ve sold a half-million digital radios in Great Britain over the past five years, and this problem hasn’t come up. It’s premature to ask the FCC for restrictions on devices for a problem that might not exist.”

RIAA

Steve Jobs: The 99c Track Is Staying, iTunes 4.6 Released

Steve Jobs has confirmed Apple’s commitment to a single US$0.99 (€0.82) price point for tracks bought from their iTunes music store. Apple have been vehement in stating their commitment to 99c, and have reiterated it several times over the past month, despite some iTunes album prices climbing.

Labels have been gradually increasing wholesale prices, but Apple have not passed these cost onto their single-buying customers … yet.

At the recent D: All Things Digital conference in San Diego, Jobs stated: “We don’t think the consumer wants to pay more than 99 cents.” He’s not wrong.

Apple have also released version 4.6 of the iTunes application, adding support for AirTunes and AirPort Express, so that users can stream music wirelessly around the home. The new version is also features a number of other “minor enhancements – we’re downloading a copy now and if there are any surprises in it, we’ll let you know.

Download iTunes

IFPI: Illegal Music Files Down 25%

The International Federation of the Phonographic Industry has reported a few pieces of good news for the industry.

Firstly, the IFPI are claiming that the number of illegal, copyright infringing music files on the internet is down 800 million files – down from a peak of 1.1 billion files this time last year. Now, you know as well as I do that there is now way of measuring the numbers of anything on the internet, especially music files – but we’re pleased that they believe that the problem is getting better, not worse.

Any drop in infringing files can no doubt be attributed to the 100 or so legal music services that have popped up in the last couple of years. It’s as we’ve said all along: people don’t want an illegal copy of a track when they can have a properly encoded, licensed file from an official source.

Secondly, they are pleased to report that seven out of ten Europeans know that file sharing is illegal. To help raise awareness, the music industry sent 23 million instant message warnings to people using P2P services in 9 countries.

Interestingly, 45% of those surveyed in Italy said that “they expected to stop over the next three months” — implying that they were either waiting for music services to start up, or they were finding it difficult to kick the habit.

Registered users at music services in Europe now stands at 830,000 people – up from 380,000 at the end of September.

Prosecutions are still taking place amid all the improvements – 24 more cases were rolled out, and the IFPI says that several hundred more cases are planned for the coming months.

IFPI

Josaka: Why Are Record Labels Ignoring Fans?

Kevin Harrington in the studio, courtesy Keith CorcoranMusic and user-created content go hand in hand – a love of music inspires many people’s first web pages. Kevin Harrington, former trouble maker at Sony and once a marketing director at the BBC, has taken the the idea several steps further – dissatisfied with the lack of involvement from big record labels, he set out to create the sort of web portal that would link local bands with their biggest resource – their fans.

The result was Josaka (you’ll have to visit the site to find out what that means), one of the most popular local music resources in the UK, with an impact felt across the world, not just in leafy Berkshire.

I talked to Kevin to find out his thinking on music’s relationship with the internet, owning the relationship with the music fan, and of course, getting the labels to “shut up whinging and pay attention to the fans.”


What inspired you to start building a site with this amount of content?

My first interest in creating a website was pretty much around the whole subject of “Why the hell does it cost £150,000 to have a corporate website created that has virtually nothing on it?” So, I set out to discover how complex or how simple it really was.

The site started off back in 1999, and it set out to support live music in Berkshire. Starting off creating a site from nowhere then, it was very much “Let’s do this and see what happens.”

It lists just about everything that I can think of that is going to help people find gigs or musicians. The consequence of having a huge amount of content on the site and having it pretty Google-friendly is that people all over the world are finding it, and there have been great successes: there’ve been local bands who’ve had their music played on American radio stations, just because of information that’s been published on Josaka.

Have you tried going through some of the websites from big labels to find information? The success of Josaka is hardly a surprise. There’s no competition locally, and there’s nothing going on nation-wide that competes with it.

Why live music? Were you drawn into this because it was something that record labels had completely ignored?

I have a love of live music, and at the time [of the launch of the website] I was actively involved in doing sound for a band, my wife’s a singer – live music is a very important thing. And I play the guitar badly.

What thinking did you bring to the website that was different from that you’d seen around the internet at the time? What influenced you?

There wasn’t a huge amount around at the time that could be classed as competition for Josaka, and this whole discussion of what is competition for a site is an interesting thing. At the time my thinking was very much “Why are we talking about this as a medium, why aren’t we talking about what the content is all about?” If you just start thinking about the content, that’s ultimately what influenced how the site developed.

The fact it’s on the internet does determine certain ways of delivering content, but the core thinking has to be “Who is the audience? Who is the consumer of this? Who’s going to benefit? Who’s going to read the pages on the site?” It has to be a very consumer orientated thought-process that gets you round to deciding how the site should be.

If I was the publisher of a magazine, I’d be much more concerned about the content rather than the format.

Why do you think the internet and music go together so well? It’s not just a delivery mechanism is it?

The reason the internet and music are so right for each other is that everything can be now, everyone can share, everyone has an equal voice if they’ve got something sensible to say, and the cost of getting the message around is remarkably economical.

What surprises me is that the people who complain about the costs of overheads to their business, like big record labels, don’t use the internet better. They should be the ones that are leading the way, they should be the ones that are setting up ground-breaking websites that aren’t just about saying “Aren’t we bloody wonderful?” They should be standing right in the middle ground and saying “Hey, we’re the heart of the music community!”, and they should allow themselves to be criticized on their own websites. They should use the format for distributing samples themselves, and take control of things. In it’s own little way, Josaka does that, but if I was a record label, if I was a Sony, I’d do it for the whole country. Just think of the impact that would have if it was done on a genuinely approachable, honest, open and fair way.

The whole issue of being able to share files and download MP3s, whilst important is not the core reason why there are websites about music. There are countless websites that you can’t download music from. I think the reason why the whole area of music and the internet sit well together is music becomes successful when it’s accessible and there’s a community feel about it. What the internet allows is a very strong feeling of community to develop quite quickly, which other delivery formats like a magazine don’t tend to do.

A comparison to that would be the NME [infamous UK music newspaper, the New Musical Express] – there’s very little sense of community with a thing like the NME. With a website, you can very quickly get that feeling of ownership from readers of the site by allowing them to have their views published in discussion forums and so on.

Now that we have websites about music, and bands’ own websites, particularly small bands – what social effect do you see this having on consumers? How will self-created content affect consumers’ habits?

There are obvious positives and negatives. On the negative side, the fact is that it is so easy for people who have no marketing, press or media experience to be able to publish their views – in seconds people can go and create themselves blogs or websites and if they get the tone of it wrong it can put people off going to see bands or going to see events.

I have recent experience of people saying that to me, from running quite a lively discussion forum on Josaka. I’ve had people who have read the discussion forum and decided not to go to an event because it sounded too cliquey. A lot of people go and publish things without enough consideration for how it’s going to be read.

The responsibility of publishing content on the internet is a considerable one, but there are no great rules for it. My analogy is if I went and stuck a huge transmitter on the roof of my house and started broadcasting radio or television, there’d be a whole lot of rules I’d have to comply with, and that’d be after I got my license, if was lucky enough to get one. I’d have to take it all very seriously, and there would be a lot more consideration about the content, but on the internet it’s remarkably free – and long may it be so. The downside is that people can pitch stuff in the wrong way for their target audience and consumers. On the positive side, there’s this wonderful, raw unedited immediacy to it, and it means that bands who in the past could never get feedback from audiences are now receiving it – good and bad – and they’re able to respond back, and dialogues start happening. That’s an enormously positive thing.

Now so many bands have web pages, how can they stand out? How do they still get exposure with the internet so crowded?

Ignoring the number of band websites for the moment, the real problem is that a band’s site is generally speaking a dull affair – which is why many bands have gone down the “let’s have loads of Flash everywhere” route. How many things can a band say during the course of month that’s going to get people returning to their site? I think that’s been the issue since bands first started having sites – if it’s just one band’s content, it’s not going to be that exciting, it’s not going to be refreshed, there’s not going to be that much news on there. There are exceptions of course. Sites like Josaka have benefited the Berkshire music scene as everyone is linked from the bands page, and all the key headline news gets published It becomes the place to go to find out the latest news about bands who are quite often 15, 16 years olds, pro, semi-pro – it doesn’t matter what size or scale they are, they all get a sensible airing if they go to the effort of making an event.

What’s the most exciting part of Josaka for you?

Free entry to gigs?

And?

One of the most pleasing things is that it’s been going for more than five years, uncontested and running successfully. It’s been doing that because it’s not run on a commercial basis – it doesn’t need income to survive. My standards for it mean that it has to get better and provide better content, and it has to grow – it has to constantly evolve and improve.

There are many sites locally that have tried to do similar things but they’ve always started off by saying “We’ll get some offices, they’ll cost UK£10,000 a year, we’ll have a finance director, we’ll get our income from banners.” You know the maths as well as I do – how many banner ads are you going to have to sell off a site to pay your rent?

For me, the most exciting thing is saying “This is a vehicle to promote live music”– at its core it has to be the content that lets it survive – not its saleability for banner ads. Editorial and content-wise it has to be successful first. If at one point in the future it became a commercial site, that would have to be in a way that didn’t dilute, interrupt or interfere with the content.

How much consultation with the public do you do to find out what people want? Do you talk to people at gigs? Questionnaires?

Most of the major changes on Josaka over the years have been driven out of asking the visitors to the site: I’ve done questionnaires and invitations to people to come up with ideas.

Because it’s such a passion, because it’s so successful, it consumes a lot of time – it’s my principle activity outside of money earning things. I’m going to another gig tonight, I produced a radio programme yesterday for Reading college.

What do you think are the key things you’ve learned?

I guess in the earlier stages I spent too much time quietly developing it and pushing it towards people and some of my character traits of being a control freak were probably too much to the fore. I’ve learned that the discussion with the audience and getting them involved, getting them to contribute, has been the major breakthrough for the site. When it finally twigged that it couldn’t be a sort of stand back “here’s the music business, come and get it” kind of thing, that was a turning point for me.

What thinking and ideas do you most admire in the industry?

We’re still a long way off downloads becoming that significant in the market place, and the current whinging from the music industry about how downloads are increasing and single sales are decreasing…

Down 32% this year, I believe…

… allegedly. If you’re in a band, the record label always tells you that you lose money on singles, you make money on albums. The singles are there to promote albums. There is an argument that says that the record labels should shut up whinging and be pleased that single sales are going down.

Album sales are going up…

If I sit down in front of my TV, there’s probably about fifteen channels of music on there that are playing new singles weeks before they’re launched, and they give me an idea of what an album might sound like. Let’s stop talking about downloads, let’s talk about how the music industry should promote their artists and bands so that these profitable things called albums sell. I think people are getting much bigger samples of music from cable and satellite than from downloads.

Downloads of singles and samples are probably a very positive thing for the industry.

The start point has to be labels appearing to engage the subject sensibly, and most of their forays into working with downloads seem to be led by the finance director. A bit of understanding of how the consumer wants to do things is the way forward.

Make music available to buy – the only reason P2P sites exist is because it’s often the only place to get some music. People are prepared to pay money. Record labels trying variable levels of pricing could actually end up setting the right price quite quickly.

As legal music services open up, people do use them. They often only turn to download sites when a particular piece of music isn’t available to buy.

A lot of people genuinely don’t realise the laws they’re breaking – that doesn’t make them innocent but shows how poor communication has been by the entire industry. Most people do respect the issue of copyright – what they don’t accept are the excessive levels of profit that appear to be made by record labels.

If record labels want to genuinely defend, and explain, and get CD consumers to agree that £17 is a fair price for a CD I’d like to see them put the case.

The industry needs to start thinking about the consumer. They’re worried – quite rightly because they’re looking after shareholders – about what appears on the balance sheet and the various costs of doing but let’s start worrying about what the audience wants.

I know a lot of people who would prefer to download music from an official band site. Why? Because they’re going there to sample a track before they decide to buy an album and they want to find out a bit more about the band. Pure download sites, whilst they’re very functional, actually from an industry point of view would be better if there was relevant and informative content surrounding it.

Then as an industry we could be saying “We might not be making a lot of money on the download of samples, but we know at the same time we are able to get the message across about a band or about an act, we’re able to get the imagery across, we’re able to get across gig dates, we’re able to sell merchandise, we’re able to talk about tour dates and we’re able to get people to subscribe to discussion forums.”

If I was running a band, one of my concerns would be about owning the relationship with the audience, owning the relationship with the person who is listening to the track. I want to be able to communicate with them – and that’s what the internet’s about, two way communication, it’s not just about someone downloading a track. That contact with either an existing or potential fan is enormously valuable. We know music fans are fairly promiscuous types of people, so use let’s a bit of intelligence, let’s use the medium to grab hold of them and retain them.

Napster has launched several new sites this year. When we discovered that the UK was twice as expensive at the US and Canadian versions, we were told by Napster that it was because UK industry charged higher wholesale prices than elsewhere. Why does the record industry in the UK seem twice as greedy as elsewhere?

To be blunt, they’re completely out of touch with the consumer. They cruise into work and answer a few emails before they go out for lunch. How many gigs do they go to? How many people in bands do they talk to? How many people in audiences do they see? Do they really have had any respect for the people that are fans?

I know there are exceptions to that, but as an industry it’s unapproachable. Even the big bands have suffered from the problem of becoming unapproachable. A lot of the bands that are linked from Josaka will use the sense of community that’s been engendered by the site to get to know people, to communicate both ways, to build up a base so that they can tell people about new material they’ve got. It becomes a friendly, fun thing to do. Music is not just about listening to music, it’s about who you listen to music with, where you listen to and and the group of people that you associate with. It’s a lot more than just having an MP3 or CD.

This brings us back to creating community sites, doesn’t it?

I know that Josaka has taken a ton of effort and has more than 1,400 pages on it so I recently did a cost structure on what it would cost to put together from scratch and produce that level of content, and it came out in excess of £100,000.

What really surprises me is that, with the relative ease of being able to put together an informative and useful website, why so few people have managed to do it in other areas. If every county had one, and they linked together, you’d have a really powerful tool to then go to record labels and say “Hey, if you want to get your message across, get the tone right for this audience and we can start talking to people through this vehicle.” And what happens? Big record labels ignore community sites.

Interestingly, there are quite a lot of small indie labels that probably employ up to ten people that send sampler CDs, press releases because they know where it’s at, they know where the audiences are.

So it’s greed and apathy from within, then? You don’t think it’s because people are getting less interested in music, because they’ve got lots of other things to spend money on like DVDs and games?

I see absolutely no evidence that people are becoming less interested in music, I see plenty of evidence that they’re getting pissed off with the pap that they’re being given by record labels. Time and time again, regurgitations of something that was once great, now in a really bad form by bands that frankly shouldn’t be bands.

There’s a healthy desire for recorded music, night clubs, live music, outdoor gigs, festivals. If people want to get involved in a market that is highly lucrative the music industry is the one to be in. Run efficiently, there’s a whole load of money to be made – but you can only ever make money in business if you’re doing what the customer wants.

I think you’re wrong to say that music labels are suffering from greed and apathy. I believe they think they’re being really dedicated, I believe they think they’re doing a good job.

The bottom line is, I think they’re out of touch with who the consumer is, do they really understand what the consumer thinks and believes or are they just going by the surveys they read in the Sun?

Headline news is an easy thing to respond to – it’s easy to react against “Single sales are 32% down!”, but what genuinely lies beneath that? I said earlier, I think that single sales being down is a good thing. Why should I spend £4 on a single? When I want the content of a single it’s because I want to understand what a band sounds like. By the time I’ve spent £4 I might as well buy the CD, but I probably won’t – I’ll probably just be a bit pissed off about it, so I’ll wait until I hear it on the radio. Or, hey, I might go and download it.

A lot of people on Berkshire Live might say “I’ve come across this band” and post a link to a track and all of a sudden you’ve got people talking about a band that hadn’t been talked about before. It’s exciting stuff, it’s dynamic, it’s real, it’s immediate. For the big record labels, immediacy is not something that’s in their vocabulary.

Josaka

European iTunes: 15th June?

Apple has let major publications know that it intends to make a big announcement on 15th June, but isn’t giving away exactly what it is. The giveaway is that the press conference is billed “The biggest story in music is about to get even bigger”, and the invite carries the iPod dancing people motif. We think it’s going to be European iTunes – but will no doubt be disappointed when it turns out to be the UK launch of iTunes Mini.

Some websites are already quoting 15th June as an established fact – it’s just wild speculation at the moment, Apple aren’t telling anyone.

Which countries will get iTunes? How much will it cost? How many songs? Perhaps all will be revealed in the next few days.

iTunes

Mobile Peer to Peer File Sharing with PDAs

Simedia, a small software publisher in Bucharest, has ported a clone of Apple’s Rendezvous application to PocketPC and teamed it with a web server. The result? A mobile P2P file sharing program.

The application discovers other devices on the same WiFi network and allows people to share files and documents. And of course, music.

Simedia themselves give various uses for the application, including using it to “share your music collection with passers-by or listen to their collections whilst sharing a ride on the bus”. Features like these will no doubt have music execs jumping out of windows, whilst RIAA lawyers will be lighting cigars with $100 bills.

The software will be available from 16 June in two versions: a free version, and a paid version with corporate functionality.

Simedia already have a history for off-beat PDA products – they are well known for their SounderCover application which plays background noises (trains, the dentist, a errr, circus parade) over phone calls for those wishing to deceive spouses and employers that they somewhere different to their real location.

Simedia

NPD Group: US CD Price Cuts Are Accelerating

NPD Group’s MusicWatch PriceLab latest information shows that US price cuts to CDs are accelerating. CDs in Q1 2004 were 4% cheaper than in Q1 2003. By Q3 2003, the prices had only fallen 1%, by Q4 2003 they’d fallen 2.5%.

This means that the average price of a CD in the US has fallen to US$13.29 (€10.90) from US$13.79 (€11.31) in 2003. Titles older than 18 months are cheaper still, averaging at US$12.99 (€10.65).

“There are several reasons for the accelerating decline,” according to Russ Crupnick, president of NPD Music. “First and foremost the recording industry has had to deal with a changing market over the past few years, which was fuelled in part by file-sharing. But the retail landscape has also changed, and consumers are increasingly exposed to everyday low prices or terrific discount offers. Everyone also recognizes the increasing competition for entertainment dollars, as DVDs and video games are growing at double digit rates. These situational factors are causing the industry to reduce rethink pricing.”

NPD Group