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.

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.

There are many ways of showing respect to those you don't actually respect.

So it's touching to see that Apple has not only produced a few "Get A Mac" ads to darken the hearts of those about to upgrade to Windows 7, but has also donned its Wellington boots, gone down on its knees, and offered a dig in the grubby world of search.

I am grateful to The Next Web, who discovered that Cupertino has been throwing a few grenades into Google searches such as "Download Windows 7" and "Windows 7 download."

(Credit: The Next Web)

While one naturally expects to see ads for Microsoft stores adorning these searches, Apple has slipped in ads that suggest the best way to upgrade to Windows 7 is to actually purchase something from the Apple family.

Some might find it amusing simply that Apple is using such a tactic. But perhaps others will be a little disappointed that the wording for the ad is so straight. No jibes. No subtle suggestions that Windows 7 is merely a Manchurian macrame version of Vista. Not even a hint that Windows 7 will make you more miserable than eggnog ice tea.

How sad.

Apple's iPhone and Android-based smartphones have both seen solid growth throughout the world this year, says a report released Wednesday by AdMob.

The iPhone's worldwide market share jumped from 33 percent to 40 percent over February to August, according to AdMob's "August Mobile Metrics Report," which tracked smartphone usage for that six-month period. AdMob, which serves ads for mobile Web sites and apps, bases its numbers on data from ad requests, impressions, and clicks.

Phones running Google's Android OS picked up a 7 percent market share by August versus only 2 percent in February, thanks to rapid gains in North America and Western Europe, said AdMob. Since its debut this summer, T-Mobile's Android-powered MyTouch has been a top seller in both of those regions.

(Credit: AdMob)

With the launch of the Pre, Palm's WebOS has also taken off, grabbing a 4 percent slice of the smartphone market in August.

Top smartphones across the world

(Credit: AdMob)

On the downside, older smartphone systems have witnessed a drop in market share, according to AdMob.

The global share for Nokia's Symbian OS fell from 43 percent in February to 34 percent in August. However, Nokia smartphones remain hot sellers, accounting for 12 of the top 20 smartphones tracked by AdMob. Nokia's N97 and 5800 XpressMusic units were the fourth and fifth most popular smartphones in the U.K. for August.

Research In Motion's slice of the market dropped slightly from 10 percent in February to 8 percent in August. Still, RIM's Blackberry devices accounted for three of the top 20 smartphones around the world. The Palm OS, running on older units such as the Centro, declined in share from 3 percent in February to 1 percent in August.

Finally, Microsoft's Windows Mobile also lost share, falling from 7 percent in February to 4 percent in August, according to the report.

AdMob sells and tracks ads on mobile Web pages and applications to more than 7,000 publishers. The company compiled the data for this report based on its analysis of more than 10 billion monthly ad requests from over 160 different countries.

(Credit: Screenshot by Dong Ngo/CNET)

Windows 7 isn't officially out until October, but if you want to start an online backup service and make sure you can still use it once upgraded to the new operating system, Proxure has something to offer.

The company announced Tuesday the availability of version 3.15 of its KeepVault backup solution. The new version provides support for Windows 7 (both 64-bit and 32-bit) as well as Windows Vista and Windows XP.

The company also announced a special version of KeepVault that works with Windows Home Server, a special OS from Microsoft designed specifically for network storage devices such as the HP MediaSmart LX195.

The KeepVault backup solution offers an online storage account and an easy-to-use interface to provide continuous, real-time, off-site backup for Windows computers. Apart from online storage, the software can also perform local backup to internal and external hard drives.

Proxure offers online backup services that start at $4 per month for 40GB, which is a rather good deal. In addition, the KeepVault software can be installed on an unlimited number of computers at any location and supports an unlimited amount of users. Many other backup software programs only allow for a limited amount of computers or users. Proxure online backup also allows for failure notification via Twitter, e-mail, or SMS in case a backup job doesn't finish properly.

The KeepVault backup solution is available now and you can try it risk-free 15-day trial version here.

Blu-ray players are becoming a hot item in the living room, but they have yet to attract much attention in the office, according to a new report from iSuppli.

The market research firm found that 3.6 percent of PCs shipped in 2009 will feature Blu-ray players. By 2013, the company expects 16.3 percent of PCs to sport a high-def drive. During that period, DVDs will still reign supreme.

"BDs won't be replacing DVDs as the primary optical drive in PC systems through at least the year 2013," Michael Yang, senior analyst for storage and mobile memory at iSuppli said in a statement. "They eventually will find success, but during the next five years, that success will be limited in the PC segment."

iSuppli believes that Blu-ray's lack of adoption in the PC market is centered on two main factors: a relatively small number of available movies and the cost of adding a Blu-ray drive to PCs. iSuppli said its findings suggest consumers will be more likely to add Blu-ray drives to their PCs once the cost of those drives decreases.

Although the results weren't ideal for the Blu-ray Disc Association, iSuppli said that they're not uncommon. According to the company, new media formats in PCs have enjoyed success only when the cost has decreased to a suitable level. That success also depends on whether or not consumers feel the technology's value proposition is high enough.

iSuppli cited the 3.5-inch floppy's 15-year lifespan as proof that consumers will use media as long as they perceive value. Currently, those same consumers believe there is more value derived from DVD drives.

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.

CDs are so 20th century.

(Credit: MOD Systems)

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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Netflix's streaming service will appear on Windows Media Center within the next couple of days.

(Credit: Microsoft)

Microsoft has struck a deal to bring Netflix's streaming movie service to Windows Media Center, the companies said Tuesday.

Netflix's more than 12,000 "Watch it now" movies and TV episodes are only available to users of Windows Vista Home Premium or Ultimate. XP users won't be able to access the service.

Owners of Windows Media Center will also be able to search the entire Netflix library, manage their DVD queues, and "filter searches by titles that are available to watch instantly," Microsoft said in a statement.

Microsoft continues to try to boost the amount of content available on Windows Media. In March, the company launched a new sports channel, including replays of the past NCAA basketball tournament.

"We're building on our broader vision to alleviate the need to jump from Web site to Web site to find TV shows, movies, sports and news," Microsoft said in a statement. " "With Windows Media Center, (users) can now find it in one place."

For Netflix, the partnership offers the Web's No.1 video rental service the chance to reach scores of of Vista users. Netflix's deal with Microsoft's Xbox videogame console proved to be a boon for the company.

Netflix has steadily been crossing the once wide chasm between the PC and the television by striking partnership deals with a wide assortment of set-top box makers, including Roku, and LG.

To access Netflix's service, Windows Media Center owners must first subscribe to the rental service. Then, to stream movies, they can start Windows Media Center on their computers by selecting the new Netflix tile under TV+Movies heading.

Update 4:15 p.m. PDT: Two clarifications. First, Remote Media Streaming is not limited to music--you can also stream video and pictures. I focused on music because that's the main topic of this blog. Second, you are required to associate a Windows Live ID (which used to be called Passport) with each computer whose library you want to share, and each computer you want to be able to access that library. I assume Microsoft took this step to avoid complaints or possible litigation from content owners.

In the announcement of the impending release of Windows 7 RC (basically the final beta), Microsoft on Wednesday confirmed a rumor that I first saw reported by Zack Whitaker of ZDNet last month: a new feature called Remote Media Streaming will let you access the music library on your home PC from another computer over the Web.

(Credit: Renai LeMay/ZDNet Australia)

It's like Slingbox, only instead of accessing the cable box or DVR sitting in your home, you're accessing the music files stored on your home PC.

It could get really interesting, if combined with Windows Live ID--simply associate a Live ID with your home machine, and you could get immediate automatic access to your music library whenever you log on with that ID on another machine (though you might need the Windows Media Player 12 on that accessing machine).

This is the first exciting new digital-media feature I've seen in Windows 7, but it seems to be at cross-purposes with other Microsoft efforts. For instance, one selling point of Windows Home Server is the ability to access files remotely, and while I suppose that some families might use that feature to access their financial records or homework, it seems like digital media would be the most interesting use. Offering that feature in Windows 7 takes some of the steam out of Home Server.

Then there's the whole Zune factor--for the last two years, the Media Player has languished untouched while the Zune PC software has been updated several times. Now, just when I had finally abandoned the Media Player, it looks like I'll have a reason to re-employ it.

From Microsoft's perspective, does it really make sense to have two product teams working on different digital-media clients for the PC? I don't think so, and eventually, Microsoft may have to pick a winner. I thought that Zune had the inside track, but now I'm not so sure.

Images: A peek at Windows 7 release candidate