Archive for: music store
Hewlett Packard, one of the biggest desktop manufacturers, has announced its plans to operate a music download and streaming supscription service called MusicStation, operated in conjunction with a company called Omnifone and installed by default on all of their new PC’s, desktops and laptops alike. This service looks set to enter the market and compete directly with services like Emusic and Spotify, charging a monthly subscription, variable by territory, but coming in at around $14.50 USD. The service will allow subscribers to stream and listen to as many songs as they like, and keep 10 DRM free downloads forever, even after they cancel their subscription.
The User Interface will have to be good to justify the premuim over Spotify’s sub price, although the ability to keep downloads is an incentive. The service seems a sort of halfway house between the bigger success stories of the nascent digital music market, iTunes, Emusic, Spotify… Even though it’s not a particularly innovative product, HP have a similar advantage in that they can build hardware that interfaces smoothly with their software, and get their product in the hands of anyone who buys their machines, just as Apple do with their desktops. That said, Microsoft’s Zune failed to make the impact they’d hoped, despite the fact that it had some nice functional advantages over the iPod and their software runs on the vast majority of PC’s worldwide. Given the facility with which software can be obtained, I think HP’s project will live or die by the quality of its interface, and keeping up with Spotify on that front will be a hard task.
Warner Music Group has had mixed experiences with investing in music startups; losing out heavily on their purchase of Imeem and Lala, and their bad experiences look like preventing them from investing in any other online startups. Their spokesman Stephen Bryan, during a panel at Midem, pointed out the difficulty of trying to run a company subsidiary with opposite interests to its owner. Imeem and Lala were attracting customers with as much music as possible for as little investment (whether that be in terms of ad views or dollars paid), while WMG was concerned to make as much money for each stream or download of every song in their catalogue. A reluctance to find themselves in this ’stuck in the middle’ position again and the money they burnt means that they profess reluctance to own any more services.
Bryan did state that they’re very happy with their relationship with Spotify, which is going from strength to strength in terms of both users and advertising revenue. The less likely WMG is to invest in new services, the better Spotify will be pleased, as Warner will be more likely to channel all their efforts into promoting their content with their part owned partner.
The Orchard’s majority stock owners, Dimensional Associates, are considering a bid from music streaming service eMusic’s owners, JDS Capital. JDS have been angling for a majority in The Orchard for a while, and this is the third time they’ve come to the table with a new bid, this time of $2, up from their original price of $1.68.
The period between the announcement of the initial bid and this last news has seen the Orchard’s stock prices climb out of the trough they were in last October (a $1.05 low point). The advantages to the tie in of a music distributor and a music streaming service are obvious, as eMusic would gain unlimited access to The Orchard’s catalogue, and take advantage of the entire chain of profit between musician and consumer, using their own services to promote artists they think will sell.
Emusic has just announced that they’ve licensed not only Warner Music’s catalogue, but that of every one of their associated sub-labels. From their blog:
So — quite a few new arrivals today, eh US members?
Over 10,000 albums, to be precise, a dizzying avalanche of stuff from the Warner Music Group. No matter your taste in music, there’s sure to be something here that appeals to you.
The increased catalogue will hopefully mean more subscribers, which in turn will mean more pairs of ears that can access all the music that RouteNote distributes to them… A small trickle down perhaps, but positive news none the less.
A lot of poorly substantiated figures are being thrown around regarding what online music piracy costs the industry. Illegal digital downloads of copyrighted material like music, movies and games has been one of the hottest political topics of the last year, with everyone from Peter Mandelson to Lily Allen weighing in on the subject, but no-one can come up with a definitive figure on how much of the market value the music industry has lost over the last ten years is attributable to pirates stealing music rather than buying it from music download stores like iTunes and Emusic. The BPI’s contention that “Jupiter estimate that losses to online music piracy amounted to £180m in 2008, and predict they will rise to £200m in 2009″ is seemingly based on the idea that one illegal download equals one lost sale, but that’s not really true; bacause someone is prepared to pinch something to listen to it, doesn’t mean they are necessarily prepared to pay full price for a copy. This is certainly the opinion of BT consumer boss John Petton, who called the BPI’s claims “melodramatic”, and estimated that the cost of enforcing the measures that the UK government proposes to deal with online piracy will cost around £365m ($583.4m) a year [!].
Scoffing ensued from rights agencies after this announcement from BT, but now government ministers have revealed that the costs will be more like £500 million annually. According to the Times – “Impact assessments published alongside the Bill predict that the measures will generate £1.7 billion in extra sales for the film and music industries over the next ten years, as well as £350 million for the Government in extra VAT.” These figures are presumably based on the assumption that everything that is stolen would otherwise be bought, which is pretty optimistic… What is certain if the current bill is enacted, is that the majority of law-abiding consumers will end up paying a vast amount to police the actions of the few – if the wild estimates we report are true, more money than is lost by the music industry to pirates annually by a factor of two. Hardly an equitable proposition.
What should be remembered is that this explosion of piracy has been driven by consumer demand, and the convenience offered by online piracy. Rather than focusing on punishing the minority responsible for the piracy, it would seem more appropriate for the music industry and rights bodies to direct their efforts towards making the convenience and level of ’service’ provided by file sharing legally and financially viable. If we are being expected to pay £25 extra a year each for our net connection, more than double what the music industry says it’s losing to pirates, then surely it would be better to provide extra services to the average consumer for that money, than to spend it on persecuting people who probably wouldn’t be pirating in the first place if what they were after was more readily available online.
Myspace’s efforts to update their site’s music functionality by integrating technology purchased with their buyout of Imeem are plodding slowly ahead. There’s been no evidence of an update on site, but this email went out to Imeem users:
The MySpace Music team is working around the clock to duplicate your imeem playlists and make them available to you on myspacemusic.com as soon as possible. In the coming weeks, we will be emailing you with instructions on how to claim your playlists on MySpace Music, using your MySpace login. If you don’t have a MySpace account you can sign up for one here.
If you have questions about MySpace, please visit http://faq.myspace.com/app/home.
Thanks for your patience. We will be in touch soon.
- MySpace Music Team
How a net business with hundreds of millions of dollars of annual revenue can allow so much time to slip by in a market where they’re losing ground every day is hard to fathom – small as Imeem’s fire-sale purchase price may have been compared to Myspace’s turnover, their tech contribution was substantial, and constitutes a big opportunity for Myspace to catch back up to it’s competitors. One can only assume that Imeem were playing harball and not releasing anything before the lawyers had all shaken hands and inked the contracts, and are not particularly motivated by the Murdoch lash. I can see that having your company fail under you and being bought out by Darth Rupert might be disheartening.
Our music retail partner Emusic has been running a countdown of their favorite albums on their blog. They’re most of the way through now, releasing ten per day, with 3 days left to go. It’s obviously a very personal list, obviously, but it might introduce you to a few things you’ve missed over the last 10 years!
We posted yesterday about EMI’s bleak balance sheet: today they’re in the news with a new Hulu page for Norah Jones, presumably the first of many of their artists that will be featuring on the site. I think this adoption of new channels can only be a good thing for the industry. It might feel like EMI are the first to be making these deals with new service providers because they’re under financial pressure, but from this support and collaboration between big record labels and innovative new channels the next mainstream will be born, and those industry players that adopt early will have a headstart on their competitors in terms of implementation and consumer base. EMI’s cooperation will hopefully encourage the others in the big 4 to follow suit – the ground is being laid as we speak: Spotify is preparing their platform for a US launch, youtube’s collab with the majors ‘Vevo’ will launch within a month, and the big guys are warming to the idea of online streaming services, as this Hulu/EMI deal shows. I’m betting that the record labels will swallow the bitter pill of lower per track fees, the big online channels will fight it out with the rights industries over standard rates, and the dust will settle with most people using ad-supported on demand streaming services, with a smallish percentage of us opting to buy the premium ad free offerings like the one our digital distribution partner Spotify offers.
An interesting article here, because we’ve been saying this for a while: the Guardian basically patting Spotify on the back for having an instrumental part in the decline of illegal filesharing. A great reason to let us do your online distribution for you, as we’re working with Spotify.
While the government and the music industry posture about illegal filesharing, smaller, smarter companies are simply out-competing it.
Stand by for the death of illegal music downloads. It is already gathering pace, being one of the fastest growing – or contracting – activities on the web. It is not happening because of the music industry’s rough justice (such as suing customers); nor because of Lord Mandelson’s variant of “three strikes and you’re out” for people caught downloading illegally – though doubtless they will claim credit.
You can read the rest of this very insightful article at the Guardian. 
Another new survey conducted in the EU argues that music sharers buy less music over the course of a year than those who are classified as online or physical only buyers.
http://www.ifpi.org/content/library/Jupiter_Research_study_on_online_piracy.pdf
Oddly iPod owners aren’t classified as digital music buyers, and it’s not clear how these categories have been delineated or how people have been divided into them, or whether they are mutually exclusive. I wish that when research like this is commissioned it was released in its entirety, to allow us to make our own decisions about it, rather than accepting the opinions of those who publish it based on limited information release. Wishful thinking, perhaps, but it might help us get to the truth if it happened.
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