Digital Noise: Music and Tech

If free ad-supported music services aren't going to make it financially, what about paid subscription services? Rhapsody and RealNetworks continue to soldier along, but RealNetworks is apparently looking for investors to take some portion of the Rhapsody business off its hands, and we haven't heard much about Napster since Best Buy, which acquired it a little over a year ago, slashed subscription prices in May in a bid to build membership.

A new subscription music service is coming next week.

Soon, there will be another competitor in the market: MOG. The company has offered a kind of music blog site with a social-networking spin for a couple years now. On Monday the company announced it will launch MOG All Access, a new subscription service, on December 2. At $5 a month, the price will match Napster's, only without the minimum 3-month commitment that Napster requires.

MOG has been teasing the service with videos for a couple of months now, and the latest demonstration video looks pretty appealing. Fast search will show results as you type, and you'll be able to create and save playlists, which will then appear in other users' search results (for instance, if you create an all-shoegaze playlist, it should show up when I type "Boo Radleys Curve Slowdive"). There's also a social-networking aspect: you'll be able to create profile pages which will display information such as the last song you played, and add other users as "trusted sources" to get their recommendations--very similar to Microsoft's Zune Social.

There's also a radio feature that trumps every other online radio service I've seen. You can enter an artist, such as the Dead Kennedys, and it'll begin playing songs only by that artist; unlike most other online radio services, you'll be able to see the queue and move to any song in it. If you crave more variety, you can have the service add related artists to the mix in a fashion similar to Pandora or Zune Smart DJ.

All this sounds like a valiant effort to move the subscription market forward, but lack of a portable story is a big drawback. Rhapsody To Go is available on the iPod; Microsoft gives you its own alternative for the Zune. Still, I've signed up for the beta and will be testing it out as soon as I can.

The more time I spend with my Zune HD, the more I like it. Sound quality aside--and I know opinions differ dramatically here, but I'm stuck with my ears and my preferences--there are a bunch of features that make Apple's products seem like they've fallen behind the curve. Here are five things in particular that I miss when I use my iPhone or one of my iPods:

Zune Pass Apple has long maintained that people want to own rather than rent their music. I counter that a subscription-based music service, combined with a state-of-the-art player, is one of those features that you have to try before you realize how fantastic it is. It reminds me of the first time I beta-tested the Xbox Live gaming service back in 2002--I didn't understand how addictive online console gaming could be until I spent eight hours playing Moto GP without even looking at the clock.

Here are a couple of real-world examples from yesterday. First, a friend came over for brunch and we began talking about Gram Parsons, one of those towering influences whose music is sorely lacking in my collection. In the past, we might have talked for a minute, maybe gone online to hunt down some ancient YouTube videos, and then forgotten about it. But with the Zune Pass, we were able to walk over to the Zune HD (which I have plugged into a first-generation AV dock and connected to a Bose Wave player in my living room), connect to the Marketplace through my home Wi-Fi network, and sample a bunch of Gram Parsons songs while we ate.

A Zune Pass makes the Smart DJ function into a great music-discovery tool.

Later, I ripped the nervously funky Can LP "Ege Bamyasi" to my hard drive. Curious to discover some similar music, I used the Zune software's Smart DJ function, then listened as it drew music from the Marketplace that I don't know very well, like Kraftwerk, Brian Eno, Gong, and my favorite discovery, Faust. Trying the same thing with iTunes' Genius function suggested plenty of new music from the iTunes Store but to hear it, I'd have to buy each song as a download. (Note: you can't create a Smart DJ playlist on the Zune HD device itself, although I expect that feature to be added later. Instead, you have to use the Zune software, then save it as a playlist.)

These are the kinds of music-discovery features that make the Zune Pass a great deal at $14.99 a month. And on top of that, each month you get 10 MP3 downloads to keep.

Quickplay This feature lets you "pin" favorite songs, albums, playlists, or other types of content to the front menu of the Zune HD. It also has a "New" section that automatically displays the six items you've most recently added to your collection, a "History" section that displays the last six things you've played, and a spot to access any currently playing song that you've paused. I miss this instant gratification, particularly quick access to recently added music, on the iPod.

Background art Remember how cool it seemed when you could first look at album covers as you played songs on your MP3 player? The Zune HD makes this seem hopelessly obsolete--instead, it scrolls through album art and pictures of the artist as each song plays. No purchase is required--it works even with the LPs I ripped. It's similar to how the Zune software (and iTunes) can populate your music collection with album art from a database in the cloud, only more sophisticated. (You can see this feature in action starting around 2:00 into this video demo.)

Wireless sync This feature has been part of the Zune experience since 2007, and once you get used to it, you'll hate dragging your iPod to your computer every time you want to load new music. Microsoft seems to have improved the sync experience in the Zune HD and Zune 4.0 software--all you have to do is leave the Zune HD's wireless connection on, and it will periodically sync automatically with your PC, even if you don't have the Zune app open.

See what my friends are playing Zune's social-networking functions haven't been very useful because of the relatively small number of people who own a Zune. I'm hoping this changes with the Zune HD. Already, the Gram Parsons fan says he's going to buy one. Once we connect to one another, I'll be able to see his playlists as he runs through Gram Parsons, the Flying Burrito Brothers, and all their musical neighbors. With a Zune Pass, I'll even be able to play any song that he's played, immediately, on my device, as long as it's available in the Marketplace. Again, this is an absolutely amazing tool for music discovery.

Apple's still riding high with the iPod, particularly the Touch, but the Zune HD is clearly moving ahead in terms of innovation. Now if Microsoft can open the Marketplace to third-party apps and fix the browser, Apple might have reason to worry.

When I tried Spotify, the free on-demand music-streaming service currently available only in Europe, I was impressed by its iTunes-like user interface and how fast the songs loaded. So when I saw Monday's news that Spotify has submitted an iPhone app to Apple for consideration, I got excited.

(Credit: Spotify)

Then I read more closely: to use the mobile version of Spotify, you'll need a premium subscription. The service isn't available in the United States yet, but a premium subscription in the United Kingdom costs 10 pounds a month, which translates to about $16.50 at today's exchange rate.

That's in line with prices for other portable subscription music services, such as the Zune Pass or Rhapsody to Go. Those services aren't available for the iPod or iPhone, but Spotify's not doing anything groundbreaking here; it appears to be trying to fill a gap that Apple has left open by refusing to introduce its own subscription service.

The video demonstration also makes it look like users have to side-load playlists from their computer before accessing them on the device. I want what you get with the Zune Pass--the ability to stream songs on demand from any location with a Wi-Fi connection.

Corrected at 3:45 p.m.: This story mischaracterized a demonstration video for the application. It does show the ability to search Spotify for any song wirelessly. I got confused because it started with the caveat "playlists you've already created." It wasn't clear whether the search results were coming from those playlists, but they're not. My bad.

The group overseeing MSN Music in the United Kingdom seems to be operating off in its own little bubble, totally out of step with Microsoft's broader music and digital entertainment strategy.

Mixview, one of the many cool features in the Zune software. MSN Music? Can't touch it.

(Credit: CNET Networks)

First, they launched MSN Unsigned, a half-hearted attempt to let unsigned bands promote their music on MSN. (It's devolved since then: the button on the MSN Unsigned page to "send us your music" launches your e-mail application with a barely configured note--just a subject header. Apparently you're supposed to attach something, but darned if I can find any instructions on the site.) Then they announced an overpriced, DRM-encumbered mobile music service on the same day that Microsoft announced its first layoffs ever.

Now comes the news, first broken by U.K. paper The Telegraph, that MSN is planning to launch a free streaming music service in the U.K.

Fine idea. Free music-streaming services are spreading like kudzu, a recent Morgan Stanley report by a 15-year-old intern suggests that kids expect streaming music to be free, and Microsoft has a strong advertising platform to earn money from the site.

But there's just one problem: Microsoft already has an all-you-can-eat music service--that it expects customers to pay for. It's called the Zune Pass. Yes, Microsoft's Zune sales have been abysmal, but the PC client software has evolved into a super-slick media player, and the forthcoming Zune HD is actually cool enough to give Microsoft a fighting chance in this market.

So if Microsoft's going to launch a free streaming music service, why not tie it into the Zune Marketplace and software? A free streaming-only service integrated into the Zune Web site and/or Zune software could help upsell customers to the paid version of the Zune Pass (which would allow users to download and transfer the songs to their Zune devices). More important, who's driving Microsoft's digital entertainment strategy, the Entertainment and Devices group (Zune, Xbox) or MSN? Having two groups working at cross-purposes isn't very efficient.

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Coolfer has an interesting post this morning, responding to Peter Kafka's suggestion that it's getting too hard to buy music because fewer retailers are stocking CDs. I think Kafka's confusing cause and effect--if retailers were still making lots of money on Britney and Rihanna, CDs would be sold front and center. But regardless of the chicken-and-egg question, Coolfer makes the very good point that most music purchasers don't seek out music and aren't willing to sift through the racks at their local record stores, but rather pick up a CD as an impulse buy on their way to the beer aisle. So what happens to those purchasers once CDs are relegated to a small corner in the back of Wal-Mart or Borders?

I look forward to an Amoeba trip like a kid looks forward to Christmas. But most towns don't have an Amoeba, and most casual music fans wouldn't stop by anyway.

(Credit: Amoeba Records)

The most likely replacement scenario, I think, will be over-the-air digital downloads: users will hear a song on the radio or in some public space and make an impulse buy from their mobile phone or other portable device. But the technology to make this process as easy as picking up a CD is still in the very early, geeks-only stages.

With an iPhone, you can make a purchase only if you've got a Wi-Fi connection, not over your service provider's cellular network. (The same holds true for the iPod Touch, since it's not a phone at all.) And identification requires a third-party app like Shazam (which just added another 2 million songs to its already impressive database). Apple could make impulse buys a lot easier if it bought Shazam, incorporated its functionality into the iTunes Wi-Fi app, and created a cellular version of the iTunes store--perhaps giving users the ability to download a very small but highly compressed version of the song over 3G, then giving them the right to "upgrade" to a better-quality file later.

The Buy From FM feature on Microsoft's Zune player is another good idea, but it only works when you're listening to the Zune's FM radio--there's no identification of audio from outside sources--and of course the Zune isn't a phone (yet), and can't connect to Wi-Fi hotspots that require a browser-based log-in. Microsoft's also making a big push for its Zune Pass, which lets you stream any song in the Zune Marketplace on demand, but like subscription services from Rhapsody, this won't appeal to impulse buyers--by definition, those folks aren't going to pay $15 a month (or whatever) for the right to listen to music.

Internet radio with click-to-buy functionality is another strong contender--think of Pandora on the iPhone. But once again, there's a disconnect between hearing, identifying, and buying (which requires a Wi-Fi connection).

Don't get me wrong--the CD still has a lot of life left in it, and specialty music stores and online retailers will continue to sell them by the tens of millions. But as smartphones become more common, somebody (probably Apple) is going to close the loop in a way that makes impulse buys of digital downloads just as easy as grabbing a CD from the rack next to the cash register. Whoever does stands to become the Tower Records--or should I say Wal-Mart music section--of the next decade.

One more detail about the latest Zune update: the Zune Pass, which costs $14.99 a month, is now going to allow users up to 10 permanent downloads per month. That's in addition to the unlimited downloads that expire if you stop paying your subscription. Think of it like an insurance policy for Zune Pass: if your Zune breaks and you decide to switch to another brand of MP3 player, you'll still get to keep some of the songs you downloaded.

Soon, you'll be able to get 10 permanent downloads a month with a Zune Pass, in addition to unlimited music as long as you keep paying $14.99 a month.

(Credit: Microsoft)

I believe that Microsoft is the first company to offer free permanent downloads alongside unlimited temporary downloads. Subscription service eMusic does sell permanent downloads, but limits you to a certain number per month. Nokia's Comes With Music might offer more bang for your downloading buck, as it allows you to keep all of the songs you've downloaded during a one-year period. But those songs are DRM-protected, limited to your phone and one PC, and can't be burned to CD. In contrast, Zune's music catalog is about 85 percent MP3s. (Microsoft also announced that it's added songs from Universal Music and Sony BMG to its MP3 catalog, along with Warner, EMI, and a lot of indies.) This means a lot of the Zune permanent downloads will be completely unrestricted.

Is all this going to be enough to wrest some market share from the iPod, or even help Microsoft overtake number-two SanDisk in the MP3 player space? Probably not this year. But given that the Zune devices are just the first shot in a long-term plan to become a major digital audio and video distributor, I'm not betting against Microsoft. Look how long the company was willing to spend money on the Xbox business before it became a real player in console gaming.

Repeat after me: it's just a rumor. Record company sources deny it. But if the anonymous tipster who e-mailed Mac Daily News is telling the truth, and Apple is indeed going to offer an all-you-can-download iTunes subscription service for for $129.99 a year (or $179.99 a year with Mobile Me), other subscription services will have a hard time surviving.

Let's review for a moment, shall we?

eMusic.
Cost? The cheapest plan $143.88 per year, but only for 30 downloads per month. No unlimited plan available.
Works with the iPod? Yes, because the downloads are non-DRM-protected MP3s.
Chance of survival? Only with price cuts and a more generous subscription plan.

Zune Pass.
Cost? $179.88 per year.
Works with iPod? No.
Chance of survival? Yes, but only because Microsoft seems committed to losing money on the Zune for as long as it takes to make a dent in Apple's market share, and will probably follow with a price cut.

Rhapsody to Go.
Cost? $179.88 per year.
Works with iPod? No.
Chance of survival? Slim. Subscription-music fans tend to like Rhapsody, but once there's an alternative that costs less and works with the most popular MP3 player in the world, I imagine a lot of those fans will reconsider.

Napster to Go.
Cost? $179.40 per year.
Works with iPod? No.
Chance of survival? Given all the other problems Napster's already facing, an iTunes subscription service could be the last straw.