Digital Media

I had a fascinating conversation with MediaNet CEO Alan McGlade on Friday morning. Unless you're deeply involved in online music, you probably don't know MediaNet, but it's the back end powering a lot of music services you might have used, including MOG's subscription service that launched earlier this week, as well as Microsoft's excellent Zune Pass subscription service and iLike's online music marketplace. (MySpace acquired iLike in August, and in November, links to iLike's service began appearing directly in music-related search results on Google.)

Fox Interactive used MediaNet's technology to embed this list of Aerosmith songs in a story about the band. Readers could then listen to a sample or buy the song.

(Credit: MediaNet)

They've also got more history in online music than just about anyone. The company started off as MusicNet, with part-ownership by three of the then-Big Five major labels: BMG, EMI, and Warner. They powered RealNetworks' music initiatives before RealNetworks bought Rhapsody. They powered Yahoo Music. They powered MTV's online music store.

These early stores went nowhere. Content owners insisted on digital rights management (DRM) restrictions, which meant that content from these stores had restricted use rights and couldn't be played on every device--including, in most cases, Apple's iconic iPod. Setting up a store using MediaNet's platform often took 18 months and significant technical expertise. In the meantime, Apple focused on a dedicated online store for its own devices, and completely dominated the market for music downloads.

But the landscape has changed. Labels don't want to be beholden to Apple. They no longer insist on DRM for single-song downloads, and have realized that the more outlets there are for their digital music, the more customers they'll reach, and the more sales they'll have. (Amazing it took this long to figure out.) MediaNet is, in my opinion, incredibly well positioned to take advantage of this sea change.

In October, the company released a set of technologies called MN Open that make it almost trivially simple for companies to add a wide variety of music consumption options to their Web sites. Sure, companies can still use MediaNet to build an end-to-end service like MOG.

But say you're Fox Interactive and want to make a story about Aerosmith more engaging. Using a MediaNet component, Fox created a link for the first mention of the word Aerosmith that took users to a page with more information about the band, and links to play and buy some of their popular songs. Fox also posted Aerosmith songs in a box directly on the story page.

MediaNet handled all the heavy lifting: licensing the music, streaming the samples, and fulfilling the transaction. Fox kept its brand and design throughout the process, and users didn't have to leave the site to buy the song. Best of all for Fox, it didn't have to make any up-front payment to use MediaNet's technology. Instead, MediaNet takes the customary cut of any song purchased through the site (about 30 percent, if it's anything like Apple). The model's the same for sites that offer free ad-supported streams or subscriptions--MediaNet takes a portion of each transaction, then handles payment to the content owners.

Now imagine this kind of integration on sites for radio stations, record labels, or your favorite bands. Imagine your ISP or cell phone carrier offering you a music subscription service bundled with your Internet service or smartphone. In this world, users won't have to go to iTunes or Amazon MP3, or subscribe to Rhapsody (or MOG for that matter). Music will be available for consumption everywhere. And content owners will get paid regardless of where users buy it.

According to McGlade, it's already happening--he said MediaNet is adding about one new distributor per day, and has already got about 50 customers using the MN Open platform. One site, GetPlaylists.com, was able to add playable song samples and downloads-for-sale in only two days with MN Open, according to McGlade.

Thanks to this upsurge, the company--which is owned by a private equity firm and no longer has any direct ownership affiliation with the major labels--has recently crossed over into profitability. A rare situation indeed in today's online music landscape.

It's a great vision, and something that Microsoft, the original platform company, could have done. But Microsoft spent years pushing the Windows Media Platform, which made heavy use of Microsoft codecs and file wrappers (instead of MP3s, which were becoming the industry standard). Microsoft also spent a lot of effort trying to enable the labels' DRM demands--for example, by building a platform to enable subscription-based downloads to be transferred to portable devices. Then, just as the labels were getting ready to abandon DRM, Microsoft basically gave up pushing Windows Media as a general-purpose platform for distributors and device makers, and instead started trying to mimic Apple's end-to-end software+service+device with the Zune strategy.

Talk about an opportunity lost! Instead of struggling along with something like 2 percent of the digital media player market, Microsoft could have ended up powering the music technology on thousands of Web sites.

Another aside: while MusicNet offers a lot of flexibility for distributors--downloads, samples, free streams, or subscriptions are all supported--McGlade is most bullish on subscriptions as the digital business model of the future. He admits that old fogeys accustomed to CDs and vinyl will have a hard time giving up the concept of ownership, but suggests that today's teenagers don't care--they want music on demand from any device, any time, in any location, and don't need to have the files physically present. McGlade thinks that subscriptions will have the best chance of taking off if they're bundled with some other product, like ISP service.

Scoff all you want about subscriptions, but the concept keeps coming up: music industry expert Donald Passman also believes they're the best chance for the music industry to thrive in the future. Even Apple finally seems to be bending to the idea of streaming music with its acquisition of Lala, although Lala isn't a straight subscription service, but more of an online music locker with some free streams, plus fee-based individual streams.

Is this man unbeatable in the digital-music sector?

(Credit: Ina Fried/CNET News.com)

Update 6:21 p.m. PST: The New York Times and Wall Street Journal are reporting that Apple and Lala have struck a deal.

Apple acquired Lala on Friday, unlikely offering much for the streaming-music service.

Sources with knowledge of the discussion told me Apple is interested in bringing some of Lala's engineers onboard. According to the sources, Apple is impressed by Lala's technology. The 4-year-old Lala scans users' hard drives and creates a duplicate music library that they can access from Web-enabled devices. The company also sells songs for a dime each.

I posted a story on Friday about the acquisition talks. Apple declined to comment on "rumor and speculation" and a Lala spokesman did not respond to an interview request.

Over at The New York Times, Brad Stone posted a report citing sources who also said Apple had a special interest in obtaining Lala's engineering talent. But the Times also added this:

"The talks (between Apple and Lala) originated when Lala executives concluded their prospects for turning a profit in the short term were dim," Stone wrote. "(Lala) initiated discussions about a potential investment with Eddy Cue, Apple's vice president in charge of iTunes."

That Lala was struggling to turn a profit is consistent with the kind of bleak news that has come out of digital music the past year. Many of the newer and experimental business models, such as ad-supported music, have flopped. The only reasonable question now is how much longer will this shakeout continue?

We saw Ruckus falter and close in January. We saw SpiralFrog flameout spectacularly in March. In August, MySpace picked up iLike, and sources said that MySpace acquired Imeem last month, but the news has not been announced.

What seemed to be different about Lala is that the company had received positive reviews from the music labels for a long time. Executives at some of the biggest recording companies have told me in the past that they respected Lala's management and its focus on the bottom line. This spring, label execs said they saw some encouraging signs after Lala had revamped the service for seemingly the umpteenth time. It initially made a name for itself by trying to enable users to swap CDs over the Internet. It never went anywhere.

Then came the announcement in October that Google would offer Lala's music to users searching for information on music acts. That could mean a boon said some of the pundits. Apparently, by that time, Lala's fate was sealed.

So, we're kind of right back where we started. The only proven winners in digital music are Apple and download sales.

Michael Robertson, the serial entrepreneur and MP3.com founder, told me earlier this year that it doesn't matter if Imeem, Lala, and their competitors went away because there is always a new crop of players longing to jump into the music industry.

"It's sexy," Robertson said.

In that case, who's up next? Let's see your ideas and technology. Better bring a lot of nerve.

Update 1:32 p.m. PST to include some of the reasons sources say Apple is interested in Lala.

Apple is close to acquiring digital-music service Lala, according to two sources with knowledge of the discussions.

Talks are very advanced, the sources said Friday. One said that the sides have already agreed on terms and have only to sign a final agreement. (Update 6:21 p.m. PST: The New York Times and Wall Street Journal are reporting that Apple and Lala have struck a deal.)

Steve Dowling, Apple's spokesman, said the company doesn't comment on rumors and speculation. A representative from Lala was not immediately available for comment.

Lala is a streaming-music site that sells songs for 10 cents apiece and enables users to store their music libraries on the company's servers. But it has gone through multiple iterations and was once known as a CD-swapping service before reinventing itself as a streaming site.

Exactly what Apple intends to do with Lala remains unclear. Right now, Apple is the largest music store online or offline and has made more money than any other music service by selling downloads. CEO Steve Jobs could start a streaming service, but my sources told me Friday that Apple managers are very interested in working with Lala's engineers, who have come up with "a payment and fulfillment system that could save Apple millions of dollars a year."

In addition, Apple wants Lala's founder Bill Nguyen to come over as part of the acquisition, another source said.

Nguyen is a well-known and respected Silicon Valley entrepreneur who has tried for years to find a music service that is both popular with users (meaning cheap and easy to use) while also generating profits.

According to music sources, the affable Nguyen is also considered my label insiders as one of the more popular figures from the tech sector. Nguyen has typically focused on generating profits as much as whiz-bang technology, which is not always the case with many of his competitors, the sources said.

That said, Lala is not believed to be profitable.

If the deal goes through, it would be the third acquisition of a digital-music site in recent months. MySpace acquired iLike in August and sources said last month that MySpace purchased Imeem.

If Apple is planning some kind of streaming service, the public has shown an appetite for streams that are free of charge and ad-supported.

Many music fans have also clamored for a better way to store music. Right now, most music libraries can be found on an owner's computer hard drive, which can malfunction and potentially destroy thousands of songs. Lala enables users to store songs on the company's servers and access them from Web-enabled devices.

Now that Black Friday and Cyber Monday are just a memory, the holiday season is in full swing. For those of us who like to be organized when we hit the stores, creating a shopping list is really the best way to go.

Unfortunately, though, there aren't many services that do a great job at creating those shopping lists. Too often, they provide very simple functionality. Realizing that, I've compiled a handful of services that do perform well for anyone looking to get organized this holiday-shopping season. In this list, you'll find a few sites and a few iPhone apps to check out.

Let's get started.

Get your shopping on

Amazon Shopping List Not to be confused with the company's Wishlist, Amazon's shopping list helps you keep track of all the products you want to buy.

Overall, Amazon's Shopping List is useful. It's not the best service in this roundup, but it if you're looking for simple, one-click experience, Amazon's tool provides it. That said, I should note that you can't simply add any product on Amazon to the list. Unfortunately, I could only find items that could be added in the grocery, beauty, gourmet food, and health and personal care pages. Even then, not all the products listed in those categories were capable of being added to the shopping list. It was a little disappointing. But if you're a heavy Amazon customer who shops in those categories, try it out. If not, there are some better services out there.

My Amazon shopping list needs more products!

(Credit: Screenshot by Don Reisinger/CNET)

Boxedup Boxedup is one of my favorite services in this roundup. It makes it quick and easy to find products anywhere from the Web and add those to a shopping list.

When you start using Boxedup, you'll need to download a Boxedup button that's added to your browser (I was using Firefox, which it works well with). From there, simply go out to any online retail site and click on the Boxedup button when you want to add the item to your shopping list. Upon doing so, it's added to your Boxedup list for later viewing. You can also add items to your profile right from the Boxedup page, but to be quite honest, that's not how the service was designed and that functionality is a little suspect. Regardless, having the option to add content to your list from just about anywhere on the Web is fantastic. Boxedup works quite well. Check it out.

Boxedup helps you add content from just about anywhere.

(Credit: Screenshot by Don Reisinger/CNET)

Although a judge recently ruled in favor of Apple in its copyright infringement case against Psystar, the two companies have reached a new settlement, according to Computerworld and other reports.

Details are sketchy at this point, and there's no confirmation from Apple, but Psystar claimed in a motion filed Monday that a partial settlement has been reached.

"Psystar has agreed on certain amounts to be awarded as statutory damages on Apple's copyright claims in exchange for Apple's agreement not to execute on these awards until all appeals in this matter have been concluded," noted Psystar's motion filed in federal court in San Francisco. "Moreover, Apple has agreed to voluntarily dismiss all its trademark, trade-dress, and state-law claims. This partial settlement eliminates the need for a trial and reduces the issues before this Court to the scope of any permanent injunction on Apple's copyright claims."

Psystar also seems to be looking for a loophole against any injunctions. Apple had asked the court to prevent Psystar from selling clones not just with Leopard, but also Snow Leopard, which was released after the lawsuit began. But in its filing, Psystar argued that it should be allowed to sell its Rebel EFI utility, which lets customers install Snow Leopard on clones sold by the company, thus moving the legal burden away from Psystar.

Psystar's motion also indicated that another motion with further details would be filed Tuesday with Judge William Alsup.

Apple's lawsuit against Psystar began in July 2008 after Psystar started selling Mac clones with OS X installed on them. Apple has argued that its end user license lets people install its operating system on Apple computers only.

On November 13, Alsup ruled in favor of Apple, finding that Psystar's use of OS X on its clones was not "fair use" as the company contended and further finding that Psystar violated the Digital Millennium Copyright Act (DMCA) by "circumventing Apple's protection barrier."

Since then, Apple has been keen to shut down Psystar's Mac clone business permanently, calling for an injunction against the company and potentially millions of dollars in damages, substantially more money than the clone maker has.

Alsup's findings and Apple's fervor in going after Psystar raise the question of why Apple would agree to any kind of settlement at this point. A hearing was set for December 14, with a full trial scheduled to start in January. But if the latest news from Psystar is true, then the company may be able to avoid further courtroom drama.

Neither Psystar nor Apple has responded to requests for comment. We'll provide further details of this latest development as court documents become available.

In its attempt to redress the imbalance created by the latest Verizon ads, AT&T has hurriedly cobbled together not just one Luke Wilson ad, but several.

Curiously, one ad features precisely the same strategy as that of the latest iPhone advertising: reminding those who might still be on the fence, on the phone, or even on the lam that you can't simultaneously enjoy voice and Web surfing on the Verizon 3G network--and hence on the Motorola Droid.

So here we have Luke Wilson, still looking a little peaky and dressed in a difficult brown. Behind Luke, we have a man trying to use two phones (by implication, Verizon phones) to perform a task the iPhone will manage alone.

Some might find it entertaining that as his friend attempts to download something on one of his Verizon phones, he complains that it's all going rather slowly. Others might find this both true and funny.

AT&T hasn't merely paid Wilson a little more than 3G to make this comparison. Someone, somewhere, has, perhaps even wisely, said, "We need a map to counter Verizon's map."

So the writers hit upon the idea of a two-part extravaganza (this already aired during Tuesday's "Dancing with the Stars" finale), in which Wilson produces postcards from all the different American towns that really do--no, really--have AT&T 3G coverage.

Wilson says his job is to set the record straight, with respect to Verizon's vicious besmirching of the AT&T network. He tries his best. He tells us that AT&T covers 97 percent of all Americans--yes, 300 million people.

The AT&T map also seems far more filled-in and far more colorful than it appears in Verizon spots, though one suspects that local word of mouth might be rather stronger, in this instance, than national advertising. If you live in Spokane, Wash., for example, and you know someone there who has spotty 3G service on a particular network, that is far more powerful an influencer than any number of Wilson's postcards or Verizon's barbs.

It's enlightening, however, to discover that Wilson once dated someone in Tulsa, Okla., and it didn't work out. Did she catch him simultaneously calling and Web surfing? Perhaps we will never know.

Sony is planning a new online store a la Apple's iTunes, but with a few twists.

Announced at a strategy meeting in Tokyo on Thursday, the new service will hawk music, movies, books, and other downloadable content geared for its various electronics, including TVs, mobile phones, music players, and computers.

The service, which Sony aims to launch next year, will link the company's devices and digital content that it produces--setting it apart from other online stores.

"That's the kind of combination that I think is not seen anywhere else," Kazuo Hirai, Sony executive vice president for networked products and services, said in an interview with the Associated Press. "That I think is where our core competence lies, and that's a differentiator for Sony."

Hirai also spoke about the new service with BusinessWeek, saying that it won't just sell products but also tap into social networking by letting people upload their own photos or videos and connect with each other.

"It's not just access content, stream it, and enjoy," Hirai told BusinessWeek. "What are your friends watching right now? There's a screen that says all the programming that's available. It highlights all the things that your friends are watching, for example. It's a community experience."

Called the Sony Online Service for now, it will model itself after the company's successful PlayStation Network, a free service that has captured 33 million registered users who download movies, access social networks, and grab games for the PS3 and portable PSP console. Hirai said that gamers will be able to access the new online service directly through their PlayStation Network accounts.

Of course, Sony has been down this road before in 2005 with its late Sony Connect music service. The aborted iTunes clone was done in by internal politics and a failure to connect with consumers, forcing the company to shut it down in 2007.

But with a new, more cohesive management team put in place by CEO and president Howard Stringer, Sony is hoping to avoid the in-fighting that helped kill Connect.

Sony needs a shot in the arm at this point. Though the company pioneered the portable music concept 30 years ago with its Walkman, it has struggled to compete in the Digital Age. Continuing a string of quarterly losses, Sony took a $292 million net loss in its recent second quarter. Despite cost cuts and layoffs, the company is projecting a total loss of $1.3 billion for the full fiscal year.

Apple quietly launched a new preview service this week that makes it easier for users to view its iTunes music library from the browser.

Dubbed iTunes Preview, the new feature allows visitors to view iTunes content from their browser without being forced to launch iTunes. Previously, when a Web user received an iTunes link, they needed to open iTunes to view its content.

As part of the launch, Apple has updated links in iTunes to redirect to iTunes Preview. When a user copies a link in the software and pastes it into the browser, they will be brought to the song's individual listing on Apple's Web site. The feature is especially handy for those who don't use iTunes, since they can now view an individual song without being forced to download the software.

Aside from individual music listings, iTunes Preview also allows users to sift through artists and albums based on genre. Each individual listing displays all the songs in an album, the album art associated with it, its cost, and other content typically found in the iTunes store. The page also includes a link to the iTunes store in case the viewer wants to buy it. That said, there aren't any song previews in iTunes Preview; users will still need to go to iTunes to hear them.

iTunes Preview in action.

(Credit: Screenshot by Don Reisinger/CNET)

For now, iTunes Preview features music. There's no telling if Apple will add more content over time. If you want to check it out, copy an iTunes link from within the software and paste it into your browser.

(Via AppleInsider)

Corporations can be heinous places. All day, people wander around, playing politics like so many Lindsay Lohans in "Mean Girls."

So today, one wonders just what machinations are being endured by Simon Aldous, the Microsoft Partner Group manager who was Wednesday quoted by PCR as suggesting that Windows 7 was rather inspired by the simplicity of the Mac OS. Indeed, Aldous declared that Microsoft's new operating system was designed to "create a Mac look."

In what appears to be a somewhat hurriedly written post on the Windows Team blog titled, "How we really designed the look and feel of Windows 7," Microsoft showed that perhaps some of its underwear is currently a little twisted.

The post read: "An inaccurate quote has been floating around the Internet today about the design origins of Windows 7 and whether its look and feel was 'borrowed' from Mac OS X."

This would suggest that Aldous was, in fact, misquoted.

However, the post, written by Brandon LeBlanc, continued, "Unfortunately, this came from a Microsoft employee who was not involved in any aspect of designing Windows 7. I hate to say this about one of our own, but his comments were inaccurate and uninformed."

"I'm Steve Jobs, and Windows 7 was my idea?"

(Credit: Stephen Shankland/CNET)

Some would therefore now conclude that he was quoted accurately, but he didn't quite get his facts right. This is entirely possible, though one might wonder why he would have made comments with a ring of such endearing honesty.

However, perhaps the most interesting aspect of this Windows Team post is a comment left by someone with the handle "i-dont-do-tat".

This commenter wrote: "I know Simon Aldous, having worked in the same U.K. subsidiary as him for a few years. He's a good guy who, for me, is telling it like it is. He's paying testament to the common view that a Mac is cool and a great template to copy."

As many in the world of business will tell you, copying happens all the time. The competition is scrutinized religiously, and the best articles of faith are taken and sometimes even improved. This happens in every product category.

The "i-dont-do-tat" poster concluded that perhaps honesty might not be such a bad thing: "Denying this to your customers just makes you look stupid because the very look and feel of Windows 7 is desperately trying to look like a Mac OS--just admit it."

Oh, of course one mightn't expect honesty in the mass-market arena. It is a very dangerous place in which to say anything at all. Equally, though, in a tech world interview, perhaps a little nod toward the opposition is not such a bad thing. It might even lull it into a little complacent smugness.

One can only hope that Simon Aldous had a good breakfast Thursday and that he hasn't endured any untoward communications. Unless it's a job offer from Apple, of course, which he should accept only if the company gives him a better deal and appears to come from nicer people.

That's how the corporate world works, you see. Like high school, it's all temporary, so you have to make the most of it while you can.