Digital Media

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.

MySpace on Wednesday acquired social-networking site Imeem for an undisclosed sum, but sources with knowledge of the deal say is worth about $8 million.

The News Corp.-owned MySpace has agreed to pay $1 million in cash, but the total figure also includes money for accounts receivable and employee earn outs. Regardless, the price is a big loss for investors who poured upwards of $30 million into the pioneer ad-supported music service.

(Credit: Imeem)

An Imeem spokesman declined to comment.

Imeem will continue to operate as a standalone site, at least initially, according to the sources. One source said that Imeem's brand will unlikely live on as they expect Imeem's assets will be folded into MySpace Music.

At least half of Imeem's staff will likely lose their jobs, according to the sources.

One interesting note is that Imeem was once backed by all four major music labels, but one of the record companies dissolved its position in Imeem weeks ago, the sources said.

Imeem is the fourth ad-supported site either to go bust or sell for peanuts. The sector is starting to look like a graveyard; Ruckus and SpiralFrog shut their doors earlier this year, and iLike was acquired--also by MySpace--for a song.

Backers launched these risky ventures hoping that if the services could attract large enough audiences, ad-money would follow. It hasn't worked that way.

The ad-supported services couldn't generate ad rates high enough to cover the licensing fees the record companies charged--even as in Imeem's case, the labels reduced their fees. Sure, a soft ad market and ailing economy didn't help, but the information that's surfaced about these sites is that they struggled to convince advertisers that streaming music was a good vehicle for delivering ads. It's not.

Internet users don't want ads and don't look at them when listening to songs. That's the dilemma.

Against this backdrop, all eyes should now be on MySpace Music. The question it must answer is how does acquiring Imeem and iLike help turn the lackluster and underachieving site around?

When MySpace Music launched in September 2008, big promises were made. The site was supposed to sell concert tickets and merchandise and branch out overseas. The site hasn't come close to living up to the hype.

While it's difficult to see what Imeem assets might give MySpace an advantage, It might not be a bad idea to tap into the experience of Dalton Caldwell, Imeem's CEO and his top lieutenants.

Sure, they couldn't make Imeem's iffy model work but they know where all the mines are buried. My music industry sources said the labels were always impressed with Caldwell and guys like Ali Aydar, Imeem's chief operator officer as well as Matt Graves, the company's vice president of communications.

They won kudos for helping to keep keep Imeem going when a a cash crunch threatened the company last spring.

In the wake of acquiring smaller digital music services iLike--and now, it looks like, Imeem--MySpace continues to attempt to align itself as the foremost player in the digital music industry. On Wednesday, the News Corp. division rolled out a music charts page to track the most popular music getting listened to on the social site.

It's fairly self-explanatory. There's a prominent "movers" section featuring artists that have seen an uptick in activity recently, and music can be filtered by genre, country, and label category (indie, unsigned, or major). Then there are links to "friend" an artist, buy songs, and watch music videos on MySpace's recently launched music video portal.

(Credit: MySpace)

The design, regrettably, isn't very user-friendly and requires quite a bit of scrolling. And in a world of finely tuned "music discovery" and personalized recommendations, charts can seem a little bit static. A blog post from MySpace Music head Courtney Holt assures that it's "just the beginning of a product and platform evolution that reinforces the key messaging, vision and direction of the new MySpace Music."

MySpace launched its music service last year as a joint venture with major and independent record labels, and has received a mixed response as the industry continues to grapple with the fact that no non-iTunes digital music service has proven to be a huge moneymaker yet.

Multiple sources are reporting that MySpace is in talks to acquire Imeem, the social-networking music service that has struggled with financial problems for some time.

(Credit: Imeem)

Peter Kafka at All Things Digital is reporting that negotiations are in the late stages and that MySpace is making the deal to acquire some of Imeem's talent and technology. News of the talks was first reported by TechCrunch.

Here's my contribution to the news: two sources with knowledge of Imeem say CEO Dalton Caldwell was in New York recently looking for new investors. Imeem was again running short of cash after coming perilously close to a financial crisis last spring. After Imeem received new funding from some of the music labels, sources told CNET that the money would last only through the end of 2009.

An Imeem representative was unavailable for comment, and a MySpace representative declined to comment.

Nobody has reported the asking price but don't expect it to be very much. One of my sources said that Imeem had been looking for a buyer for a while. Nothing had come of it. But Imeem, which made a name for itself by being among the first to offer ad-supported streaming music and being free to users, is likely to be thrilled by this kind of exit.

A sale is another sign that the ad-supported sector is amid a shakeout.

The truth is the sector is in shambles. Ruckus and SpiralFrog shut down earlier this year. Qtrax, a proposed legal peer-to-peer service hasn't even formally launched yet and has struggled with financial problems.

MySpace purchased iLike in August for a price that was reported to be barely enough for investors to break even.

For a breakdown of the challenges that ad-supported music services face, read "How turf wars and miscues crippled SpiralFrog" and "Plenty of proof that ads don't support Web music."

Update at 9:05 a.m. PST: MySpace representative's statement added.

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)

NEW YORK--Manhattan is the center of book publishing, all four music labels have headquarters here, and it's home to the country's largest general newspaper.

(Credit: New York magazine)

But even in the Big Apple, many people appear unwilling to pay for media.

New York magazine conducted an apparently unscientific poll of 100 pedestrians in Manhattan's SoHo district and it revealed some startling and humorous results.

Few of those polled are willing to pay for The New York Times. Asked whether they subscribe to the paper, 79 said no. Asked how much they would be willing to pay to read the paper online, 63 said "nothing." To the question of how charging a fee to read the paper online would affect The Times, 65 answered that it would make it less successful.

The good news for the music industry was that 34 of the respondents say they pay for all their music. The bad news is that 61 acknowledged obtaining at least some of their music illegally.

As for downloading TV shows illegally via BitTorrent files, seven of those polled said "all the time." Five said never." 38 said only if they miss a show on TV. 12 asked "What the hell is a torrent?"

When it came to books, the respondents were much more willing to pay and don't appear to be Kindle fans. Check it out.

(Credit: The Beatles)

No, the digitally remastered Beatles catalog hasn't come to Apple's iTunes. But it has come to an apple-shaped USB device.

Retailing for $279.99, the collection will be released December 8 in North America, three months after the September 9 release of the remastered set of the band's albums (as well as The Beatles: Rock Band video game). The apple shape is in reference to Apple Corps, the Beatles music publisher--which in the past, you may recall, sued tech giant Apple in a trademark dispute.

(Credit: The Official Beatles Shop)

When the release of the remastered Beatles catalog and Rock Band game were announced for September 9, 2009 (the band has a song called "Revolution 9"), speculation arose that a concurrently scheduled Apple Inc. announcement might bring the catalog, still unavailable for digital download on the Web, to iTunes. That didn't happen. But with the release of the USB collection, the albums are available in non-CD digital form for the first time.

In addition to MP3 and FLAC versions of 14 stereo titles, according to a release, the 16GB device contains "all of the remastered CDs' visual elements, including 13 mini-documentary films about the studio albums, replicated original UK album art, rare photos and expanded liner notes."

Correction 10:45 a.m. PST: This story initially misstated the release date. It is December 8 in North America. Also, the type of lawsuit Apple Corps filed against Apple Inc. has been corrected. It was a trademark dispute.

I have a love song to write. I don't know yet whether it will be a tragic ballad or an exuberant ode to the triumph of happiness. But it's a love song for sure: I have fallen for Spotify, the latest buzzworthy "free music" service. After months of trying to find a great way to find and listen to music online, I believe I have met my match.

No, Spotify technically isn't available in the U.S. just yet, though the U.K.-based company hopes to bring the software stateside by the end of the year. My acceptance of an invite code sent by a generous friend therefore may or may not have been in gross violation of some international laws or statutes or regulations. But that's OK. Spotify, we can have an illicit romance for now.

You see, I needed this in my life. I had been thinking about "music discovery" of late. Last week, at the tail end of a trip in which I had been covering Google's splashy Los Angeles debut of its music search service in partnership with MySpace and Lala, I was sitting in the lobby of the Standard Hotel in West Hollywood, a shameless hipster magnet designed in the manner of tacky Southwest-desert motels and which features a constant soundtrack of semi-edgy music picks from '90s-era Britpop to lo-fi and LCD Soundsystem remixes. As a parade of attractive, Sunset Strip rocker types drifted to the check-in desk, I was sitting next to a cactus, intermittently holding up my iPhone to a speaker, using audio-recognition app Shazam to find out exactly what was playing.

Considering the cooler-than-thou crowd, I probably looked awfully silly. But Shazam has been my preferred method of music discovery because I just haven't found anything else I really like. Queuing up a Pandora station makes for great party music, but I've never been enthralled by its recommendations for me. Music blog aggregator Hype Machine has very well-done charts to track the songs that are getting blogged and tweeted about the most, but they can be a little bit predictable once you've already listened to the latest mashup of Kanye West and MGMT. I use Last.fm, owned by CNET News parent company CBS, to tabulate listening-history charts, but have never found myself hooked by its recommendations or radio stations. (Sorry, bosses.)

Social music and discovery services are a mess, frankly. Some of them have terrible user interfaces, and others are slowly becoming the victim of poorly conceived business models (many of which relied too heavily on advertising strategies that have yet to bear fruit) and ill-fated licensing agreements with the major labels. Still others, in striving to get a leg up on competitors, veered into editorial curation--exclusive album-listening debuts, promotions and tie-ins, and the like. That can make for a whole lot of clutter.

Then along came my Spotify invite, and everything changed. The service makes no attempts on the surface to be an "influencer" in and of itself, instead just offering access to full-length streams of just about any song. That's daunting at first. When you first load up Spotify, you're greeted with basic top-music charts that are notably uninspiring (Black Eyed Peas? Kings of Leon?) and searches don't bring you anything other than, well, what you searched for. Social-networking features like Facebook and Twitter sharing are sparse and well-hidden. If you don't know where to look, it can be a little bit dull.

Instead, the "discovery" process is left up to third parties. Create a playlist on Spotify, and you can assign it an HTML address so that when people click on it (assuming they have Spotify accounts) the playlist will open right up. A popular U.K. music blog called Drowned in Sound has a feature called "Spotifridays," where a selection of popular music from that week is packaged into a Spotify playlist, eliminating the need to click around through various Web browsers and streaming-music embeds. A friend sent me a link to Drowned in Sound's playlist of top songs of the first half of 2009. I was set for the next 7.6 hours.

Then, this happened: My Amazon MP3 bill started escalating as my "shopping cart" filled up with songs from bands I'd never heard of before, like the Veils, Let's Wrestle, and the Big Pink. The no-brainer Spotify platform, and how easy it is for anyone to use it to create playlists and share them in a way that doesn't involve a single wacky embeddable widget, was making me buy music.

But Spotify's long-term prospects are still hazy. Its dual business models, monthly subscriptions (for ad-free accounts and access to its iPhone app) and advertising for free accounts, have historically failed to hold up in the face of the micropayments-based iTunes. CEO Daniel Ek has even acknowledged that profits aren't flooding in yet and accused the labels of inflating licensing fees. The specter of SpiralFrog, another hyped free-music service that went down in flames earlier this year, is still in recent memory.

It's also unclear as to how the Spotify service, currently available in Sweden, Norway, the U.K., Finland, France, and Spain, will fare in the U.S. when it arrives here. Google's new music search feature, which is right now restricted to the States, may give a big advantage to competitors MySpace Music and Lala as search traffic is directed there. There's also the potential money drain: Government regulations over licensing fees last year. Digital music, you could say, is an industry with a lot of emotional baggage.

Generally, when there are glaring roadblocks in a new relationship, it's a red flag that you shouldn't get too attached. But this is one where I'm willing to fight to keep it alive. I hear there's a chance I'll be shut out of Spotify entirely in a few weeks unless I tweak my IP address somehow to fool the service into thinking I'm in one of its approved countries. Or unless I cough up the money for a premium subscription.

And I'd consider that. Money can't buy me love, but it could buy me Spotify. And right now they're sort of one and the same.

I had a quick conversation with Lala co-founder Bill Nguyen this afternoon, and he filled me in on some of the company's plans to expand its presence in Google's new music search feature. Today, when you search for an artist's name, Google uses mathematical algorithms to determine which songs to display--no editor is involved. But eventually, artists will be able to use Lala's platform to ensure that specific content, such as a new song, shows up in the music search results at Google.

An example of Google's embedded Lala player, which appears on a search for "Joy Division."

Artists and labels will also be able to work with Lala to sell products other than MP3 downloads through Google's search results. For example, Lala is working on a deal with Rhino Records where users will be able to buy vinyl Joy Division records directly from Lala. Eventually, the offer will appear within Google search results on queries like "Joy Division" as well.

For Rhino, this kind of deal is a no-brainer: they're suddenly getting free placement for a relatively high-priced physical product in Google's search results. But it's also beneficial to users: if they buy through Lala, not only will they get the records, but they'll also get all the digital tracks on the LP immediately added to their Lala locker, which lets them listen to those tracks from any PC with an Internet connection. (I've been using Lala's excellent locker service for about a year. Basically, it uploads your entire music collection to the Web, then lets you add additional songs for only $0.10 apiece.) And if users like the deal, then they're more likely to use Google for future music searches. Wins all around.

And that gets me to the most exciting Lala announcement of all: The company has submitted its iPhone app to Apple and hopes to have it approved some time in November. The app will allow users to stream any song in their online Lala locker to their iPhone, over both 3G and Wi-Fi connections. Conceptually, it's similar to iPhone apps from Spotify (in Europe) and Rhapsody, but without the subscription fee; any song you've uploaded to your music locker will be available on your iPhone. And of course, you'll still be able to buy streaming-only versions of new songs for $0.10 a piece. (Lala might charge something like $5 for the app itself, but the company hasn't decided.) I'm getting an early look some time in the next few days. I'll try it and report back on how it works.