Apple Start a Garage Band

One of the highlights of iLife ’04, GarageBand is Apple’s new music application. It follows a similar paradigm to other loop-based music programs: samples are dragged to a timeline and arranged to form tunes. However, GarageBand goes beyond that – each professional quality sample’s key and tempo is automatically adjusted to fit, and you can plug in a MIDI keyboard (or use the one on screen) to control the range of software instruments provided. More loops, samples and instruments are available in a “Jam Pack” expansion pack.

We think the program deserves a mention because GarageBand performs a very useful function – not only can you export your creations into iTunes to listen to and share, but you can also use them as the soundtrack to your iDVD projects, giving far more professional results.

GarageBand homepage at Apple

UK Broadband Goes Up a Notch or 20

We have long been envious of broadband users in Japan who have access to the Yahoo’s 45Mps broadband service, but some who live in Central or West London could have the chance of getting to near to half those speeds when Bulldog DSL launch their 20Mbps service in the fourth quarter of 2004. The cost of the service is rumoured to cost around £300 per month.

This announcement comes hard on the heals of Bulldog talking about a 4Mps service for home users priced at £72.99 per month (inclusive of VAT). Richard Greco the Bulldog CEO was reported as saying he expects other areas of the UK could also be reached as the network coverage is expanded.

Prior to this announcement, the faster broadband service in the UK was from EasyNet, who currently provide a 6Mps service for £199 per month.

Speed to 5Mps are significant as they allow the transfer of broadcast quality video, held in MPEG2 video to be displayed TV resolution.

We hope this kind of announcement will embarrass BT into upping the speed of their offering, particularly as most DSL customers in the UK run at a barely acceptable 512Kbps. Frankly we are not hold out much hope.

Bulldog

ADSLGuide on Bulldog

EMI Deal Helps Peer to Peer Go Legit

With 60,000 recordings from 182 record labels, Wippit is a new attempt at a legal, profitable P2P network. Their business model is based on subscription – currently priced at US$49, the one year pass allows you unlimited downloads of all material on the service. The client guarantees no spyware or RIAA lawsuits, which is refreshing. Amongst the material available on the network are tracks from Underworld, the Stereophonics and FC Kahuna. They also have the Cheeky Girls.

The EMI deal includes artists like Radiohead and Pink Floyd, but excludes The Beatles, whose music is not available for download currently.

Fans of Shazam can forward Shazam SMSs of ID’d tracks to the Wippit Wireless number, and have the track forwarded to them for downloading later, if Wippit have the track.

Wippit are based in London, and led by Paul Myers, formerly of X-Stream.

The client is currently Windows only, but they’re considering Linux and Macintosh ports if there is enough demand.

About Wippit

MovieLink Offer Re-rental

MovieLink, the on-demand film service that delivers films via broadband Internet connections, is experimenting with different pricing models. They have launched an offer that permits their viewers to re-watch films that they have downloaded, paid for and watched. They call it MultiPlay.

If a viewer has the urge to watch a film again within 30 days of the original rental, they can pay a normally reduced price to have another 24 hours access to it and have the advantage that the film does not have to be downloaded again. Not all films that MovieLink carry are included, presumably because of licensing restrictions, and the cost of re-renting varies but start at 99c.

MovieLink

Midem Report: Focus on the Mobile Music Forum

By Paul Hosford, partner, New Media Law

In another crammed auditorium full of music industry and mobile phone industry delegates, keynote speaker, Takeshi Natsuno, MD of i-mode strategy at Japan’s NTT DoCoMo in revealed that its straightforward, entertainment-based service had attracted 40 million users to its subscription based model, because it is an utterly consumer focused offering. He urged his European and North American counterparts to leave behind current industry specific perspectives and to develop viable marketplaces for mobile content, where the key to overall success would be equal roles for all types of hardware manufacturers, content providers, and service providers.

His advice to the music content owners was to translate pricing models into the world of the packaged IT product – lower price higher volume, but to consider that the mobile operators need business models that address their industry’s concerns as well. Service providers should stay user-centric ensuring that even the most unsophisticated user is comfortable with, and enjoys using the product, for it to be properly commercially viable. DoCoMo’s model is to only take 9% commission on sales for themselves – preferring that “the revenue must go to the content providers”. In fact Natsuno said when other people within his organisation had suggested that they took a higher percentage, “I fired them”. This is a refreshingly different approach to current income sharing with many mobile service providers, particularly in the UK, where the operator takes as much as 40% of some services. His expectation is that their 40 million paying subscribers in Japan and 1.5 million active subscribers outside Japan will grow to a target of 100 million by 2010.

“Making Money from Mobile Music, Today” panel
In the panel session “Making Money from Mobile Music Today”, these different industry perspectives were apparent in the lively discussion of how ringtones and their increasingly musical offspring, “Hi-Fi tones”, had proved to be massive money spinners for the mobile operators. HiFi tones are near perfect reproductions of music. Representatives from T-Mobile International (Germany), Comverse (Israel), Musiwave (France), EMI Music Publishing (UK), Sony Music (UK), and Faith West (US) debated the future growth of “real” mobile music content with the development in mobile technology and the increase in personalisable ring-tones of various kinds beyond the mono and polyphonic tones that most of us are used to hearing. From the music industry’s side, as the quality of ringtones reproduction increases, record companies and publishers will overcome their initial reluctance to put their music on what they say has, up to now, been a platform with inadequate reproduction quality (they say they have been protecting their artists from low quality renditions of the music). The operators and service providers view is that it is clear that business models that take into account airtime and subscription considerations may or may not work for the rights owners. The record labels and publishers whilst obviously keen to collect revenues for themselves and artists from this potentially massive distribution opportunity will have to continue to develop open licensing policies across many territories. And if the operators follow Takeshi Natsuno’s advice, they will lower resale rates from the 10 to 40 % currently talked about.

Conclusion
As in the online environment, the on-demand mobile music world that will come to consumers in the near future will require the multiple rights relationships that exist within the music industry to be simplified and standardised – this in itself is a large task. As ever, what is all too apparent is that there are many expecting their slice of the pie – at an extreme the list could be as long as record company/label, music publisher, possibility the artist (depending on their contract), content aggregator, mobile service provider and payment system provider. One of the challenges facing the mobile music industry is whether the pie will be as big enough for everyone to get their slice.


         

Viacom May Bid for EchoStar

A strange twist of business fate may lead to Viacom becoming a suitor for EchoStar reports mergers and acquisitions specialist publication, MergerMarket.

The reason for the surprise is that Viacom and EchoStar are currently locked in legal action. EchoStar Satellite is claiming that Viacom is illegally trying to force EchoStar to buy Viacom-owned MTV and other cable channels at unfair prices in exchange for the right to carry 18 CBS-owned stations in 15 big-city markets. One effect of the dispute might be that 1.6m EchoStar subscribers will not get to see the Super Bowl this coming Sunday.

Researching the pieces, Rick Appin at MergerMarket took a sounding from the markets and found that they felt it was inevitable that EchoStar would be taken over due to large debts and a lack of programming.

Unnamed sources close to the situation said Viacom would only interested in acquiring cable programming, television and radio stations, broadcast properties and outdoors advertising. They saw the benefits of the merger being savings on distribution and fees. Once merged it would also bring Viacom the strength it feels it needs to compete against Rupert Murdoch. News Corp recently to a 34% stake in US satellite company, DirecTV.

There is also speculation that SBC Communications could be eyeing EchoStar, but the timing might right, with SBC having posted lower quarterly earnings on Monday.

Clearly the pursuit of EchoStar would not be a one horse race. One analyst felt others might enter the bidding fray, saying “What is likely to happen is the ignition of a bidding war with the likes of SBC, Viacom and even Disney making a play for it”

Merger Market

TiVo Consumes StrangeBerry

TiVo has announced that it has acquired a company called StrangeBerry. The stock-for-stock deal actually took place on 12 January but the details have only just emerged due to a recent SEC-filing by TiVo. No real details have been released by TiVo as to why they have bought it, but in the filing TiVo describe it as

a small Palo Alto based technology company specializing in using home network and broadband technologies to create new entertainment experiences on television

Very little is known about StrangeBerry and the products they have been working on since its inception in April 2002. What is know is there are only a handful (five) of signed deals with companies like Coke & Fox to place promotional videos on TiVo’s and given TiVo has over one million paid up users, handling this would require a highly scalable solution. StrangeBerry could bring these skills.

Time will tell – but it sounds interesting.

TiVO SEC filing

TiVo announcment about StrangeBerry

MidemNet 2004 report

By Paul Hosford, partner, New Media Law

The fifth MidemNet 2004 opened the week long international music industry’s conference in Cannes. In heavily attended sessions this year, it appears, at least on the surface, that the industry is at last grasping on-demand digital distribution of music – the legal variety that is.

MidemNet is the music industry’s international forum that attracts players from every corner of the business to get together and discuss the issues confronting an industry severely impacted by the illegal distribution of millions of copies of its product.

Ted Cohen, EMI Music’ s senior VP of digital development and distribution, opened with the positive pro-industry message – commercial downloads represent the ultimate way forward for music consumers. He feels that it will come of age in 2004, and when legal battles are overcome and the consumer is empowered by commercialised P2P delivery, the industry’s bad reputation will begin to improve.

Keynote interviewee Eddy Cue of Apple’s Internet services announced what everyone suspected, the iTunes Music Store would launch in Europe at some point. iTunes throws into relief these challenges for the music business. Launched in April 2003 as a proprietary platform download service, the Music Store leverages Apple’s existing back-end infrastructure to offer a flat fee of 99 cents per track, and now offering 0.5 million tracks, made available by the Major record labels under recent licensing, but only available to US consumers. The delay in the European launch has been put down to resolving licensing across countries.

Setting out to develop “a better Kazaa” by 5 January 2004, iTunes has sold more than 30 million tracks in all kinds of genres, predominantly to an over-21 demographic. This has moved the Majors on from a proposition that only 2 and a half years ago was not on their list of potential licensing opportunities.

Whilst we all know and covet that beautifully packaged piece of must-have hardware that is the iPod, the reality is that Apples share of the 99 cents may not, in isolation, be sufficient to rev-up their share price. What is clear is that sales of iPod are going through the roof.

There has been a lot of discussion here about iTunes downloads not being platform-independent and that ultimately this may become a sticking point for the device-rich consumer who wants the flexibility to listen to their paid-for music on any device they own. In the meantime, iTunes sales still represent small numbers when compared to the world of illegal P2P sharing.

The European iTunes delay has highlighted a major problem. What will remain firmly as the principal challenge for any pan-European initiative is an industry with differing product release dates, differing licensing and rights collection mechanisms across the European territories – and differing price models. The message is clear – the industry must push through change in these licensing and publishing practices across the major markets.

In the panel sessions representatives of OD2, EMI Music, RealNetworks, French ISP Wanadoo and mmO2, debated the very real technical problems of delivering to consumers a single product where the industry’s marketplace and accounting mechanisms are territorially divergent and a very long way from uniformity. Whilst EMI’s goal is obviously, to sell more music by making it available in multiple formats on any platform, corralling all the various rights holders that share in recorded music remains the Major Labels most immediate challenge.

For the content aggregators, the ISP’s mobile networks and digital music intermediaries, the problems are different, but equally complex. They must deal with multiple payment mechanisms, differing pricing regimes and a complex value chain that makes it very challenging to deliver cost effective alternatives to paying consumers demanding of quality content. What will be critical to delivering a successful consumer experience is cross-platform transferability of the downloaded track that is paid for once.

In the meantime, the disc media formats are very much alive and kicking representing over 90 percent of music bought today. Your correspondent for one is looking forward to experiencing SACD recordings – real surround sound.