Comes With Music... But No One Cares

from the thank-you-drm dept

Nokia got a lot of attention when it launched its "Comes With Music" concept -- where you buy a phone that comes with "free" all-you-can-eat music downloads for one year. Of course, the music comes wrapped in annoying DRM, though the music will keep playing (thankfully), after the year is up. Still, it seems like people aren't buying for the most part. A recent report shows only 107,000 users worldwide. This must be a blow to the major record labels who always seem to insist that "free music" drives pretty much every other business model. For example, BPI continues to insist that ISPs are basing their own business model on people sharing "free music." And you have record labels who are pissed off because they think that video games Rock Band and Guitar Hero aren't paying enough for all the benefit they get from the music. And, of course, there are all those collection societies claiming that every business that plays any kind of music needs to pay more, because it must be all that music that brings in the business. Well, it looks like Nokia is proving them all wrong. The music, by itself, doesn't seem to attract all that much business at all. Perhaps everyone should be asking for a refund.

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Why Did Apple Approve Spotify?

from the not-that-tough-to-figure-out dept

AdAge has a long article trying to puzzle out why Apple potentially "sacrificed iTunes" in approving Spotify's streaming music app. Oddly, while the article touches on a few of the reasons, I don't think it clearly highlights what seems like the most obvious reasons:

1. As we noted when the app was approved, Apple appears to be somewhat gunshy, following the FCC inquiry into why it "blocked" Google Voice on the iPhone (and, yes, Apple still insists it didn't actually block the app, but Google says otherwise). Given the scrutiny, Apple probably realized that it was in for some serious political trouble if it blocked an app like Spotify, which would have received a lot of press attention. Oddly, the AdAge article doesn't mention this at all.
2. Apple has always viewed iTunes as something of a loss leader to help it sell more iPods and iPhones. If someone else can help sell more of the devices, then more power to them. Though, the fear, of course, is that something like Spotify works on other devices too.
3. But this brings up the final reason: I would bet that the folks at Apple are pretty damn sure that they can outlast and out-innovate Spotify. Spotify hasn't shown much ability to make money, and while it has become a press darling as a music app, I wouldn't be surprised to find out that Apple's quietly been working on its own version of a Spotify-like offering built directly into iTunes. And, given Apple's standard operating procedure, if that's the case, there's a good chance that the Spotify-like iTunes will be even better than Spotify itself.

So, I don't think it's that confusing why Apple approved Spotify (and Rhapsody). I'd argue that the first reason was the biggest driver. Without the FCC investigation, it wouldn't have shocked me if Apple had denied the app if only to buy itself time. But, I would expect that sooner or later, Apple will come out with its own streaming version of iTunes with very strong integration into the iPhone, and suddenly Spotify won't look quite as interesting.

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Recording Industry, Japanese Gov't Work To Break Your Mobile Phone If You Listen To Unauthorized Music

from the how-nice-of-them dept

You would think that the entertainment industry might look back at its rather long history of failed attempts to stop technological innovation from interfering with their business models and realize the sheer futility of trying to stop people from doing what they want to do, and could have learned that embracing what technology allows is a better path. But... that never seems to happen. Apparently the recording industry is now so worried that unauthorized file sharing on mobile phones is the next big threat, that rather than working on ways to use that to their advantage, they've teamed up with the Japanese gov't (note: not Japanese consumer electronics makers) to develop a system to break mobile phones if users are caught listening to unauthorized music.

Think of it like an automated "three strikes" plan for your phone:

Details are scarce, but apparently the system would consist of a central database which contains information about music which is authorized to be downloaded. This system would be responsible for verifying that cellphone users weren't downloading illicit music. Those that do would be sent warning messages.

But of course, simple warnings aren't enough for the music industry. The report claims that the music capabilities of cellphones could be disabled for persistent infringers.

Once again, the entertainment industry would prefer to break any new innovation rather than learn to adapt.

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New Mobile Music Service Works Via Voice Calls

from the well,-that's-different... dept

There are a bunch of different mobile music services out there (and more popping up every day). Some involve getting downloads to your phone, and others involve streaming (and, of course, there are things like ringtones and ringbacktones for specific functions). But Music Ally points us to a new service launched with Orange UK (and Universal Music) that will let users dial a voice call to hear some music. Basically, you call into an IVR system, and get a variety of options on what playlist you want to listen to. There's some functionality where you can set up your own playlist on a computer, and then access it via the IVR. Of course, the service is quite limited, especially in that it only has Universal Music music right now. The article describes the service as "free" but also targeting "pay as you go" customers, which makes me wonder if people are paying for those voice "minutes" that they'd use (which could add up). Perhaps I'm missing something? I also would think the very limited selection is an issue. Still, it's fascinating to see someone try such an experiment to get around some of the other barriers -- especially for folks with lower-end phones that don't have all the bells and whistles and app stores of higher end phones.

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Will Apple Allow Spotify On The iPhone?

from the one-to-watch dept

Having used Spotify a bit, I can definitely see how some people think it could potentially replace iTunes completely. It basically acts like an iTunes that has access to millions of songs at no additional cost (and, yes, it's all licensed and legal). The songs are streamed, but you almost never notice it. It really does feel just like iTunes, while also having "Pandora-like" features for creating specialized stations or sharing others' playlists. Unfortunately, it's only available in the UK for now, though the rumor is it will be available in the US before the end of the year. However, where things could get really impressive is with Spotify's mobile app. For a few months, there's been a YouTube video of Spotify Mobile on Android:

The demo highlights the fact that you can sync any playlist for "offline" play, solving the biggest question about weak mobile signals on the go, or how you use it on a plane or somewhere without wireless access. With offline syncing, it's basically everything that an iPod can do -- with access to 6 million songs without having to pay for each individual song. But, of course, Android is still a limited platform. The big fish these days is the iPhone App Store, and Spotify has now submitted an iPhone app for approval, which raises all sorts of questions. With Apple's history of rather arbitrary rejections -- including ones for things Apple has deemed "competitive" -- will it block Spotify as a rather direct competitor to iTunes? That would be very unfortunate, and again demonstrate the risk of a closed platform.

That said, the initial reviews of the iPhone app seem quite strong. Eliot Van Buskirk at Wired loves the syncing feature, and warns that "you'd have to pry it out of my cold, dead iPhone before I'll delete it from my phone." Meanwhile Music Ally points out that Spotify has uploaded a video of the iPhone app as well: It really does look pretty slick. So now the ball's in Apple's court. I have no idea if Spotify can survive as a business (and I suspect that the royalty rates the music industry wants will make that difficult), but it is great to see more innovation in the space. Now we get to see how Apple feels about that sort of innovation.

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Less Well Known Artists Make Use Of Mobile Platforms To Interact With Fans

from the an-artist's-an-artist,-no-matter-how-small dept

When talking about the success of musicians adopting business models around the economics we discuss here, people often complain that it "only works for big artists" or "only works for the little guys," so much so that someone dubbed the exceptionalism as "Masnick's Law." I admit that it was easy to feel this way when Trent Reznor launched the Nine Inch Nails iPhone app. How many less well known artists would benefit from (or be able to develop) their own mobile app? Well, a company called Gigdoggy recently launched a mobile "Fanteraction" platform that lets bands easily create mobile websites for their gigs. In a blog post chronicling a show in which the platform was used and promoted, the first artist to play didn't really push it, but the second artist, Greg (one of the creators), made a point of explaining it to people. Basically, by queueing up each song on the site, an artist is able to provide lyrics and additional information that the audience can access via a mobile device while enjoying the performance. It's web-based, so it's accessible from different platforms without the need for downloads (or the risk of getting banned by Apple). Greg was able to get some people interested and following along. One audience member even prompted him when he forgot the lyrics to a verse! The platform is in its early stages, but it'll be interesting to see how it develops and what people do with it. At the very least, it's a good illustration that you don't need to be playing in stadiums to find a use for this sort of thing.

Blaise Alleyne is an expert at the Insight Community. To get insight and analysis from Blaise Alleyne and other experts on challenges your company faces, click here.

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Band Puts All Its Music (Plus More) Into A $3 iPhone App

from the more-experiments dept

The pop band The Presidents of the United States of America have released a special iPhone app that contains all of the music from all of their albums, as well as additional rare and unreleased music and images. The whole thing costs $3 -- which certainly blows the old $1/song model out of the water. It's worth noting that one of the band members is now VP of the software company that made the app... and the band actually owns all the rights to its own music -- so that made all of this much easier. Also, it's a bit unclear how the app works exactly, but it certainly looks like the music is locked (hello, DRM!) inside the app. That's annoying.

There have been a few other bands that have experimented with similar "album in an app" type models before, and it's certainly an experiment worth watching. However, by itself, I'm not sure how scalable the model really is. If other bands do this using different apps, then you have to run each one separately and you lose out on the benefit of a central control system for all your music. And, if it really does involve DRM, then bands may just jump on this and alienate fans yet again. Still, if a "standard" and open way of doing this was established, such that bands could have their own apps easily interoperate, and the music wasn't locked down, you could see some interesting models emerge. For example, imagine getting an app that actually kept you updated on a band? Every time they release a new song or add new artwork, it automatically is added to your collection across different devices. That would be a useful application. Unfortunately, this particular app only seems to be a tiny step in that direction (and due to DRM, perhaps a step in the wrong direction).

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SanDisk Makes Music Even Less Convenient

from the this-is-progress? dept

SanDisk is getting a bunch of press for releasing what it's positioning as a new "format" for music. But it's not a new format at all. SanDisk is simply sticking mp3s onto a microSD card, reasoning that lots of folks now carry phones with microSD slots in them. That's true (I've got one of those phones), but that hardly makes this a compelling offering. First of all, microSD cards are tiny. They're not the sort of thing that people want to pop in and out of their phones like a CD or a floppy disk. If you do that, you'll probably end up losing the microSD. So, most folks I know simply put a single microSD card in their phones and just use it as expanded storage. Besides, these days, most folks know that removable storage is annoyingly inconvenient compared to just using a blank disc and moving around the music you already have. I don't want to have to remember to put a specific microSD card into my phone if I want to hear a band -- especially when it's ridiculously easy for me to just transfer music from my computer to my phone instead. SanDisk claims that this will work because people don't know how to download music -- but they might be surprised if they actually went and spoke to people, rather than making up stuff in an effort to sell more microSD cards.

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Betting On Mobile Phones Won't Save The Recording Industry

from the grasping-at-straws dept

The recording industry hasn't had much of a strategy for dealing with the changing marketplace over the past decade (and, no, I don't consider lashing out and suing music fans as a "strategy"), so far be it for them to start now. That's why it's amusing to see articles about how the recording industry honchos are now betting on a new generation of mobile phones to save them. Funny how that works. This is the same group of executives who will claim that the phones themselves have no value without the music -- and yet here they are hoping and praying that the devices will save their industry.

But the real problem is that this isn't a strategy. It's wishful thinking. It doesn't involve any actual insight into what's happening in the market. It doesn't involve any proactive movement towards accepting new business models and changing the way business is done. It's merely the old way of thinking, trying to figure out what the "next" platform will be on which to sell music. It went from vinyl to cassette tape (we'll skip 8-track) to CD to computer... and now they want it to go to mobile. But they're missing the fact that the more popular mobile devices get, the sooner it is that we'll see file sharing apps for mobile devices pop up. Rather than waiting and praying that some new platform will be the savior, isn't it time that the industry started taking lessons from the past 10 years, and worked towards adapting to the age of digital content?

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Ringtone Sales Falling As People Realize They Don't Need To Pay Twice

from the took-'em-this-long? dept

I have to admit that about the only surprising thing in the news last week from BMI that ringtone sales are likely to drop this year is the fact that it took this long. Since 2004 we've been wondering when people would get around to realizing that just because a ringtone is on a phone, it doesn't change the basic economics (which are even worse, as the industry kept trying to push the price of ringtones higher to "save" the industry). With users finally realizing that they can transfer songs they have elsewhere onto their phones as ringtones, the desire to pay huge fees just to prop up the recording industry just isn't going to work any more. No wonder the industry is now jumping on the music tax plan.

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The 'Ringle,' Or What Passes For Innovation In The Recording Industry

from the something-else-you-won't-want dept

It's no secret that the record labels face a chronic inability to innovate in their business models, choosing instead to continually repackage content and seek ways to force people to buy stuff they don't want in order to get the things they do want. It's this sort of thinking which has brought about the "ringle": a combination of a single and ringtone, and apparently Sony BMG and Universal Music's latest strategy masterstroke. Buyers would get a CD with the full-length track, a B-side or two, and a ringtone for $6-7 -- which doesn't really compare favorably to a 99-cent download and a few bucks for a ringtone (or a download and free homemade ringtone). Is there any real benefit for the consumer here? It's hard to see any, but that's not really surprising. It seems more like an attempt by the record labels to try and deter people from buying single-track downloads, since they don't like the low price and the way they've blown up the album sales model -- which itself is another variation of the "buy stuff you don't want to get the stuff you do" model. It's unlikely that many consumers will fall for it, especially since the CD single is pretty much a dead format. It's probably also worth pointing out that just like the labels try to recycle content, they recycle their innovative ideas as well, since it would appear that Universal tried pretty much the exact same thing in 2004, just calling it the Pocket CD instead of the ringle.

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