According to a report in Forbes, phone giant Nokia has delayed the U.S. launch of its Comes With Music service until 2010.
Nokia first announced Comes With Music back in December 2007, then revealed more details almost a year later as the service launched in the U.K. Under the plan, cell phone buyers pay some extra money up front and, in exchange, get the right to download as many songs as they want from Nokia's music store for one year. Those downloads don't expire when the user's cell phone contract ends, but they are copy-protected, limiting usage to the phone and one computer that's registered with the service. Still, it seemed like a reasonable deal if Nokia could convince cellular carriers to subsidize some of the cost, and early reviews from the U.K. were mostly positive. I even suggested that Microsoft follow Nokia's lead whenever it launches its next-generation consumer-focused smartphones.
I thought the launch of the Nokia 5800 Xpress Music phone in the U.S. would be accompanied by the launch of the service in the U.S. as well, but it wasn't. So what's the problem? My guess is that Nokia's facing the same licensing economics that are limiting free download service Spotify to the European market only. Nokia may also be waiting for a more fundamental transition: the company has said that it's considering removing digital rights management limits from future iterations of the service, allowing the downloads to be played and shared between an unlimited number of devices. (In fact, the Comes With Music DRM scheme was bypassed almost immediately, proving for the umpteenth time that the concept is flawed.) It's only a matter of time: three years ago, nobody envisioned the content owners abandoning DRM on single-song downloads. Now, there's not a per-song download service that still uses it.
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The idea of a digital music kiosk, where customers can walk up, press a few buttons on a screen, and download music to some sort of portable storage medium (disc, phone, flash card), has been around for a few years now. Starbucks ended a two-year experiment with in-store CD burners back in 2006, and U.K. music retailer HMV began offering free downloads to USB drives from in-store kiosks in 2007.
Even if the trend hasn't exactly taken off, companies continue to try them out. Earlier this week, Seattle-based start-up MOD Systems entered the fray, announcing that it had signed deals with all four major labels, allowing it to package more than 5 million DRM-free songs for digital distribution via in-store kiosks.
There's a bit of irony in the announcement, as MOD co-founder Anthony Bay used to lead Microsoft's Windows Media Division, whose business model relied heavily on DRM (digital rights management). Microsoft hoped to convince content owners that it had a robust DRM system so they'd use Windows Media technologies to encode and host their content. But that was almost 10 years ago, and now that the recording industry has come around to the idea of selling DRM-free tracks on iTunes, Amazon, and countless other online stores, there's no reason to restrict retail kiosks from doing the same.
So is there any future for digital music kiosks? It's hard to imagine shopping at a digital-only record store when it's so much easier to buy MP3s over the Web on my home computer--which is where I store them anyway--or over the air from a phone or wireless-connected player. But kiosks might find a place in multipurpose retailers and big-box stores, where they'd take up a lot less space than the CD racks currently in place, or in other places with lots of foot traffic--hotel lobbies, malls, university campuses, and so on. I can even imagine a jukebox that not only lets you play songs, but also lets you download them to a flash drive--great for those late-night impulse buys.
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In January, Apple announced that all songs in the iTunes Store would be free from DRM. As part of the announcement, the company said that previous DRM-encumbered purchases would be upgradeable to DRM-free versions, with a higher bitrate as well. This isn't just a point of principle with me--I have a Zune player that automatically adds all the songs in my iTunes library, including AAC files, but which cannot see or play DRM-protected songs.
Today, while doing some shopping for songs I love but don't own (or have only on--gasp--cassette, which I can't digitize because of the way my stereo's set up), I finally got around to upgrading my previous DRM-encumbered purchases. iTunes found three of them, and let me upgrade to DRM-free versions for 30 cents a track. So far so good. Then, I went to buy "Bela Lugosi's Dead" by Bauhaus. iTunes told me I already had it in DRM-encumbered form, and asked me if I'd like to convert to iTunes Plus. Say what? I thought I did that already. But when I actually tried to convert it, iTunes said my conversion process was finished. I looked further, and found there were about 20 songs that iTunes wouldn't let me upgrade. Why not?
Psych! Fooled ya!
I had to do some digging but found the answer in this MacWorld article: these were all free songs I'd received through promotions, mainly when I bought concert tickets through Ticketmaster and for the Monterey Jazz Festival. It's not like these songs were never paid for--presumably the promotional partners paid some fee to Apple, thinking that these free downloads would create positive associations in their own customers' minds. (Ticketmaster can always use more good P.R.) But now I'm stuck--either I pay full price for a new download or accept that they'll never leave my iPod.
I wouldn't have minded so much if Apple hadn't tempted me by offering me the chance to upgrade, only to dash my hopes when I actually tried to complete the process. That's an annoying bug, but the policy itself is the real offender.
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Universal Music first floated the idea of Total Music in 2007 as a way to give customers an alternative to free MP3s available on file-trading networks and anonymous Internet sites.
At that time, the business model called for hardware manufacturers to pay some extra amount--perhaps $5 per month--and optionally pass this cost along to consumers. In return, consumers would get the right to download as much music as they wanted, for free, during a certain time period.
Nokia eventually launched a similar plan, Comes With Music, but Total Music (which became a joint venture between Universal and Sony Music) ran into some antitrust questions and eventually shifted its focus to ad-supported streaming and paid downloads.
Now it's dead, along with Ruckus, a college-specific music download service that Total Music quietly purchased last summer.
Blame the economy if you want, but the real reason for the failure of these services--and every other record industry effort to capitalize on the Internet for distribution--is revealed in two places in this blog post by Total Music's vice president of product management, Jason Herskowitz.
First, he built a mashup service called Friendp3, which takes his friends' Last.fm feeds, searches the Internet for the same song posted somewhere as a free MP3 file, and creates a playable playlist of those songs. On demand. Like the excellent Songerize service--which lets you enter a song name and hear it on demand--it uses the Seeqpod playable search engine on the back end. Very cool.
But the technology's not the point. Did you see what just happened there? There is free music on the Internet! Available with no advertising and no restrictions. That means that any new music service, industry-sponsored or otherwise, is not only competing with iTunes, or Pandora, or Last.fm, or MySpace, or the latest ad-supported-service-of-the-week. It's competing with millions of MP3s uploaded by users and easily findable, thanks to the rapid advances in Internet search technology.
Hold that thought for a second as we come to the end of his blog post:
But wouldn't it be cool if there was a way to do this on a platform that plays nice with everyone? And compensates those that deserve compensation? And somehow can magically cover the costs associated with all of the above (hint: this is the kicker)?
Yes! Yes, it would be cool! I would like a free pony and no more dental appointments as well. And a mint-condition low-mileage black 1997 Mercedes E Series. With tinted windows.
Not to be too flip, but this sentence gets right to the nut of the problem with industry-sponsored online services. Their primary concern is getting paid and making sure that everybody else in the traditional value chain gets paid. That's a laudable and perfectly understandable goal. But that's how they miss the point, again and again and again. In order to create a service in which everybody gets paid, somebody's going to have to be paying.
The only way you will get customers to pay more than zero when there's so much zero-cost unrestricted content out there is by offering them a compelling benefit they can't get anywhere else. This is why iTunes is successful--it offers customers the easiest way to find and buy new music to load on their iPod.
What did Ruckus offer? DRM-encrusted downloads that couldn't be transferred to a Zune, much less an iPod. What did Total Music offer? We don't know because it never launched, but I'm willing to bet it didn't have a clear and compelling customer benefit.
I don't know what the magic formula is. Forget advertising--the ads are so ignorable, and CPMs so low on these kinds of services, that they'll never cover the cost of the content, and users will absolutely reject more intrusive advertising like an audio ad every 10 songs. (Remember: you're competing with free.) So you have to get users to pay.
What are they willing to pay for? A bigger back catalog? Some sort of online storage locker for downloads, which would then let you play them from any Internet-connected device? The ability to share songs with a friend in a seamless electronic way--the equivalent of playing the record you just bought for them, only, you know, with computers and Internets and stuff?
The sad thing is that many of these things have been tried, and industry players have done everything in their power to stymie them with lawsuits (the original MP3.com, file-sharing networks), copyright fees (the battle over online radio), and unreasonable DRM restrictions (take the original Zune's "three plays, three days" restriction on device-to-device sharing, which killed what could have been an interesting feature). But perhaps it's not too late to try again.
CNET News' Greg Sandoval is already covering the story, so I won't belabor it, but kudos to Apple and the three holdout record labels--Sony, Universal, and Warner--for reaching an agreement that will result in more than 8 million songs being available on iTunes with no digital rights management (DRM) restrictions. (EMI has made DRM-free songs available on iTunes since last spring, but only 10 percent of the music sold in the U.S. comes from EMI.) As Greg reports, Apple will also let users with existing DRM-encrusted downloads upgrade to a DRM-free version at a higher bitrate--256kbps--for an extra 30 cents.
For only 60 cents, I can upgrade both of my iTunes Store music purchases to DRM-free versions.
To remind everybody why this is important: this now means that most of the songs you buy on iTunes will be playable on devices and software produced by other companies. Yes, the files are still going to be in Apple's preferred AAC format rather than the more widely supported MP3, but a lot of recent digital music products from other companies do support AAC, including Microsoft's Zune (software and device) and the next version of the Windows Media Player, as well as Sony's most recent Walkman digital media players. SanDisk's popular Fuze and Clip, however, don't support AAC--a failing the company will hopefully fix with a software update.
This truly means that DRM for single-song downloads is dead. iTunes is the No. 1 distributor of digital music by a huge margin, and in fact is the No. 1 music retailer in the U.S., ahead of all brick-and-mortar outlets. DRM will live on in subscription-based services--the record companies aren't going to let you download unlimited music for one month's $15 subscription, then cancel and keep all that music--but otherwise fuggedaboudit.
My only gripe: the news comes six days too late to make my No. 1 prediction for 2008 true. Apple is also making music downloads for the iPhone available over 3G cellular networks in addition to Wi-Fi--another prediction that I made for last year.
Predictions columns are always risky because it's easy to look back a year later and see how wrong you were. For the most part, I was on the right track, but too bold--as a wise prognosticator once said, we tend to overestimate the amount of change that will happen in one year, and underestimate the amount of change that will happen in ten.
Here's a rundown of where I was wrong--and right.
DRM will die. I'll give myself half a point here for predicting that all four labels would agree to sell DRM-free tracks on Amazon (Sony capitulated only 11 days into 2008), and for the fact that Microsoft added 10 permanent DRM-free downloads per month to its Zune Pass subscription offering. But I was completely wrong about iTunes--the vast majority of songs on the service still come with DRM, and iTunes Plus is still alive and well. More to the point, Amazon and other DRM-free services haven't made a dent in iTunes' dominance.
3G iPhone and iTunes. Wrong. I can't really take credit for predicting a 3G iPhone, since the CEO of AT&T had already let that slip, and Apple surprised me by refusing to open the wireless iTunes store to downloads over 3G.
No Zune phone. Right. Microsoft hasn't even announced a Zune client for Windows Mobile or other types of phones, although I expect an announcement of some sort next week at CES.
GarageBand will win a Grammy. Wrong. I still expect a recording made with GarageBand or another low-cost digital audio workstation to win a Grammy someday, but it didn't happen in 2008.
Mashups will go mainstream. Half a point. I read more about mashups this year than any year since 2005: music critics expended a lot of digital ink on GirlTalk's latest album, Feed the Animals, which consists entirely of samples. But the rest of the world didn't care much--the pay-what-you-want download didn't exactly light up the Web like Radiohead's In Rainbows did, and the CD (released Nov. 11) didn't crack Billboard's top 200 albums of the year.
Year Zero will become the precedent Wrong. Nobody else went to such lengths in 2008 as Trent Reznor did in 2007 to promote Nine Inch Nails' Year Zero. Lack of creativity? Or just too much work? A few artists, including The Fireman (Paul McCartney and Youth) and David Byrne and Brian Eno, experimented with online-first releases and packages at multiple price points, two other trends that Nine Inch Nails was early to embrace. But as far as full interactivity goes, Trent stands alone.
The world's best record store will go online. Totally wrong. Amoeba is still firmly planted in the bricks-and-mortar world--California, specifically. Chalk this one up to wishful thinking.
The loudness wars will end. This is a bit subjective--you'd need a detailed sonic analysis of releases during 2008 to prove it--but I don't hear quite as much over-compression as I did a couple years ago on mainstream radio. That said, Metallica's Death Magnetic was slammed for continuing this unfortunate trend--some listeners thought the music sounded better on Guitar Hero than on CD!--so I'll have to say I was wrong.
The concert business will follow the recorded music business down. I was wrong in the specifics--revenues were actually up from 2007--but only because average ticket prices were higher. Attendance was down 2%, a smaller drop than the 20% last year.
Led Zeppelin will play again, but not tour. More wishful thinking--Robert Plant wasn't interested.
Two out of ten--ouch--although I was heading in the right direction on a few others, just moving too fast.
Will I do better in 2009? I'll lay out my predictions for the coming year tomorrow.
Correction: AC/DC's 1981 album For Those About to Rock We Salute You peaked at #1 on the U.S. charts, which means Wal-Mart's press release is wrong.
American retail giant Wal-Mart relaunched its online MP3 store Tuesday, and it's a worthy competitor to Amazon in the DRM-free MP3 sweepstakes. (To remind you: unlike many songs from Apple's iTunes, or Microsoft's Zune Marketplace, or Nokia's music store, every song sold on Amazon and Wal-Mart can be played an unlimited number of times on just about any portable device and in any software application out there.)
The new Wal-Mart store includes top hits at only 74 a cents per song, with standard pricing at 94 cents (a nickel cheaper than most), plus a free download of the week (hopefully it won't always be kids' music), plus one free MP3 download for every full physical album that you buy either in the store or on the Web site starting in November.
Highlights of Wal-Mart's relaunched MP3 store include exclusives, a free song of the week, and selected downloads for only $0.74
(Credit: Screenshot)But no AC/DC. If you're of a certain age and musical predeliction, you probably already know that AC/DC's new album, Black Ice, is available only at Wal-Mart--but not as a download. You might have checked out the new single, "Rock and Roll Train," for its first minute or two. But you probably would never have guessed that Black Ice has just become AC/DC's second album to top the U.S. charts, showing that big old rock bands don't need none of that digital computer stuff anyhow. At least they have a sense of humor about it.
I was a big fan of Logitech's Squeezebox Duet, which I saw demonstrated at the 2008 Consumer Electronics Show, and today Logitech announced a follow-up that looks even better: a boombox for your digital music collection. And unlike the Duet, which had to be plugged into a stereo, the Boom has speakers.
A nice device for anybody with a large music collection trapped on a PC with crummy speakers.
(Credit: Logitech)Once again, CNET's John Falcone has beaten me to the punch with a full review, but even without his validation, at first glance this looks like a great product for users with large collections of digital music trapped on their computers. Beginning in September, $300 will get you a boombox that can connect to your computer over a Wi-Fi network, and plays a huge variety of files--not just garden-variety MP3s, WMAs, and AACs, but also relative rarities beloved by digital audiophiles like Ogg, FLAC, and Apple Lossless. The necessary software works not only with PC and Mac but various flavors of Linux (including a Debian/Ubuntu installation package). It also lets you connect to various Internet radio services, such as Pandora, Rhapsody, and LastFM. The only possible drawback: it can't play DRM-protected files. Which means if a large portion of your digital music collection was purchased from iTunes (or a WMA competitor) before the last year when these services began offering more DRM-free files, you won't be able to play it on the Boom.
An aside: the product line is called Squeezebox, which I assumed was a reference to the 1975 Who song. But Logitech's product shots show the Boom playing "Tempted," the 1981 single by Squeeze. So which is it--Who fans or Squeeze fans?
A couple weeks ago, game developer Cliff Harris asked a simple question on his blog: why do you pirate my games? Then, he broke the responses down into several categories. Subtracting out the folks who view all intellectual property as theft or who admitted they're too broke or cheap to buy games--two groups which will never be convinced to pay--he found that most respondents thought his games are too expensive and not good enough, and that the demos were too short for them to feel confident they were going to get a reasonable value for the buck. Adding DRM to games also alienated a small but very vocal portion of the gaming community.
Did you buy this album? If so, how many times did you listen past the first song?
His response: better games, longer demos, no DRM, and (if the economics make sense) possibly lowering prices.
Reading this, I couldn't help but think of the music business. Imagine the kid who heard a one-hit-wonder's single on the radio, then shelled out $18 for the full CD, only to find that the rest of the tracks are disappointing filler. Add DRM, which makes downloads unplayable on certain devices and under certain circumstances, and no wonder piracy is rampant.
While the industry's taken a long time to get around to a response, it seems to be following a similar path as Harris: lowering prices (in the form of single-song downloads and big discounts on CDs through Amazon.com and other outlets), increasing the content available in free "demos" (MP3 downloads and streams), and eliminating DRM. As far as music quality goes, that's a subjective debate, but at least there's a larger selection than there was 10 years ago.
Update: there is a lightweight browser plug-in that lets you play song samples without having to download and install the full Rhapsody client. When I tried the MP3 download service yesterday, I was unable to play the 25 free songs in that browser window--it only let me play 30-second samples. Today, using the same username and password, it started my 25-song count. So my major complaint with the service has been solved. Kudos to Rhapsody.
Amazon was first out of the gate with a comprehensive MP3 download store last September, and they've steadily upgraded the site since then. I'm particularly happy they changed the search interface that mixed in MP3 downloads with physical CDs and other products. Now, when you search for an artist's name on Amazon MP3, the default search setting is for MP3 downloads. As it should be.
Yesterday, I couldn't play my 25 free samples within this lightweight browser plug-in. Today, I can, eliminating my only major complaint with the service.
(Credit: Screenshot)Even so, MP3s are just another product to Amazon, which is why I welcome the entry of RealNetworks' Rhapsody into the market. Rhapsody is my favorite of the subscription services I've tried, and I know several big music listeners who are devoted fans. The company understands how to curate and package music.
Rhapsody MP3 launched today, and it's very straightforward: songs cost $0.99, albums $9.99, everything's in DRM-free MP3 format, and you don't need the Rhapsody player or any other specialized software application to buy songs. (Like Amazon, Rhapsody offers the option of downloading a small application that automatically adds songs to iTunes. Unlike Amazon's equivalent, this download manager can also add songs to the Rhapsody Player and the Real Player, which apparently is still used by somebody somewhere. But it doesn't support the Windows Media Player, while Amazon's does.)
Rhapsody's store also has one huge advantage over Amazon's: you can sign up for the free level of the Rhapsody subscription service and stream 25 songs per month in their entirety. No more guessing whether you like a song based on a 30-second sample.
As my fellow CNET Network blogger Rick Broida already noted, if you're one of the first 100,000 to create an account--which means giving them a credit card number--before July 4, you get a free album.
