Warner Music Group, the third largest music label, will license music to Nokia's Comes With Music service, a Warner Music spokeswoman confirmed Monday.
Nokia now only lacks EMI's participation in the service, which offers unlimited free access to music for a full year.
During that time, users will be able to transfer their Comes With Music library to a PC as well as to a new Nokia handheld, but they won't be able to transfer it to iPods or other non-compatible devices.
At the end of the year, Nokia users won't lose their music. It will live on their computer or Nokia device for as long as they own them. To acquire new music after the year is over, Nokia phone owners can either purchase downloads from the Nokia Music store or join the company's subscription service.
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The Comes With Music service won't be ready until later this year.
In contrast, Verizon's V Cast service announced Monday that it has begun selling downloads from all four major labels. Not only that, but the music sold is free of copy protection software and will play on iPods and other digital music players.
To this point, selling DRM-free music hasn't proven to be much help for Apple competitors but it's probably better than a service that ties consumers to one device, regardless of how much free music they are given.
Verizon Wireless has upped the ante in its efforts to take on Apple's iTunes store in the digital music market by offering DRM-free music for all purchased music plus a new subscription service. But will it be enough to make a dent in Apple's dominance?
On Monday, Verizon Wireless will announce the revamped V Cast music store, which will be loaded with digital music that is free of the pesky digital rights management encryption on all songs that are purchased through the store. Verizon is joining Amazon as the only other digital music distributor that will be selling DRM-free music from all four of the major record labels, including, Sony BMG, Universal Music Group, Warner Music Group, and The EMI Group.
The company is also offering its first ever music subscription service courtesy of its relationship with Real Networks' Rhapsody America service. Verizon announced it was partnering with Rhapsody last year. And through this partnership, the company has redesigned its music store and the V Cast user interface.
The new service clearly puts Verizon Wireless in a new category when it comes to digital music. Verizon cell phone subscribers as well as nonsubscribers can download the DRM-free music onto a PC and sync it to any MP3-enabled device for $0.99 a song. Songs can be purchased over Verizon's cell phone network onto a Verizon phone for $1.99 a pop. And the new V Cast service also allows Rhapsody subscribers to sync their phones to the subscription service, much the same way AT&T subscribers can access the Napster subscription service.
But even though it has potential to become a major player, it's still unlikely that the cell phone company's moves will have much impact on market leader Apple. Instead, experts believe that Verizon is much more likely to help grow an already underperforming market.
"The issue isn't whether Verizon can take down iTunes," said Russ Crupnick, a senior analyst at the NPD Group. "But rather, can it help grow the market? And I think the answer to that is yes. Verizon is very well-positioned for that."
The music industry is in dire straits. Sales of CDs have been plummeting over recent years, and the industry hasn't been able to make up for the losses through digital distribution. Apple is by far the leader in digital downloads, hitting the 5 billionth song download mark from its iTunes music store just a couple of weeks ago. According to Crupnick, over three-fourths of the full music tracks downloaded come from the iTunes store. Amazon is a distant second, with other players such as Wal-Mart trailing even further behind.
So far, freeing music downloads from DRM protection hasn't done much to move the needle. Amazon and Wal-Mart have been offering DRM-free music for almost a year, and they still lag behind Apple. The reason for this could simply be that Apple is so far ahead in terms of market share that few people have reason to see DRM protection as a problem.
"When you have 80 percent market share on Apple devices," Crupnick said, "there isn't much demand from people to get unprotected music. They don't seem to encounter any issues with it."
Ed Ruth, director of digital music for Verizon, said that the company is simply trying to offer customers choices.
"Of course we recognize that Apple has done a great job," he said. "They have helped tell the digital music story quite well, and they've tilted the ecosystem in one direction. But in some ways they have trapped people into one experience. And that's the problem we're trying to solve."
Meanwhile, Verizon could also have an uphill struggle in getting people to use the Rhapsody subscription service, which costs about $15 a month for unlimited access to millions of songs. In the online world, only a small niche of music aficionados use services like Rhapsody and Napster. And so far, the model hasn't proven to be much more successful in the mobile world. AT&T has been offering the Napster music service, and even though the company hasn't published figures on how many customers are using the service, analysts say it hasn't been a runaway success.
But some analysts think that a service that does a good job of integrating Verizon's V Cast with Rhapsody could help attract new users to the subscription model.
"If they can make the experience of Rhapsody on a handset complimentary to what they are already doing with V Cast, I think it will make Verizon a stronger player by attracting new music subscribers," said Susan Kevorkian, an analyst at IDC.
While Verizon may never be able to beat Apple in the online music game, there's reason to believe that the company could beat out its fellow cell phone carriers and other music downloading services for market share. And in such a nascent market, Verizon still has an opportunity to make a significant amount of money from its music store and help move the carrier away from simply being a phone company.
Verizon claims that record labels have told it that in terms of revenue, it is already second to Apple when it comes to the money that is made from full track downloads. And in a recent survey of Internet users conducted by NPD Group, Crupnick said that over half of the respondents had heard of the V Cast music service. This was higher than awareness for music services from other cell phone companies such as Sprint Nextel or AT&T. But it was also higher than some well-established music brands, such as Microsoft's Zune music store, Rhapsody, and Napster. Still, only about 7 percent of the respondents said they had ever used the V Cast music service to download songs.
But Crupnick believes this consumer awareness could someday translate into growth for Verizon's V Cast service. Verizon also has other attributes that some of these other music distribution channels don't have. In addition to selling full track songs, Verizon is also able to help the record labels monetize the same songs in multiple ways by selling ringtones, ring-back tones, and wall papers of the artists. The company has even begun working to help produce some albums using a mobile recording studio.
What's more, Verizon has access to a wide variety of music playing devices, something that Amazon and Wal-Mart don't readily offer themselves. And it already has an established billing relationship with most of the customers that will likely use its site to download music. All of this bodes well for Verizon. But is it enough to really challenge Apple's dominance?
The answer is probably no. But it could be enough to make it a strong alternative. At the end of the day, Verizon's Ruth said that it's all about forming good relationships with the music industry and providing a great service to customers.
"Our approach is to be as good a partner to the music industry as we can be, " he said. "And we always keep the customer experience and expectations in mind when designing and delivering the service. I think we've done that so far and as a result have earned the trust of our customers."
Some people might be embarrassed if their friends found an old copy of Mr. Big's "To be with you" or Paula Abdul's "Cold hearted (snake)" stashed away in their CD collection. But not EMI. They own those songs, and they want the world to know it.
The music giant is suing social-networking site Hi5, video advertising start-up VideoEgg, and 10 unnamed defendants for allegedly infringing on the copyrights of those and hundreds of other pop throwbacks.
The lawsuit alleges that Hi5 users have uploaded and disseminated hundreds of music videos the company owns rights to. VideoEgg is on the hook because it's a former partner of Hi5, and those allegedly infringing videos were uploaded to its servers. (On May 31, VideoEgg stopped hosting videos uploaded by the public and refocused efforts on its ad network, prompting rumors that the company was on its way out.) The lawsuit doesn't say much of anything about who the 10 John Does are.
The companies had attempted to work out some kind of deal for more than a year, a source told TechCrunch, but those efforts eventually failed.
The Pioneer Inno
(Credit: Pioneer)EMI Group is the latest major music label to reach a settlement with XM Satellite Radio over the Pioneer Inno device, the companies announced Tuesday.
EMI, one of several music labels that filed a copyright infringement lawsuit against XM in May 2006, is withdrawing from the complaint. Terms of the settlement were not disclosed.
The initial lawsuit stems from XM's Pioneer Inno, which has the capability to record and store music delivered over satellite radio. EMI, along with other major music labels, had contended that the device could violate their copyrights.
With the settlement, EMI is joining Universal Music Group and Warner Music Group, which in December also reached a settlement with XM. Last February, Sony BMG and XM also settled.
I'll jump on the iPhone bandwagon, now that the price has dropped, and there's faster data transfer.
I can't wait to get rid of my Verizon Wireless service, which has deteriorated horribly in the last two months (nice timing, guys!), and my contract expires a convenient four days before the iPhone 3G goes on sale.
The 12-Bar Blues feature of the Band app for the iPhone will keep you on the I-IV-V.
(Credit: Moo-Cow Music)But exciting as it might have been for iPhone holdouts like me, today's keynotes at Apple's Worldwide Developers Conference didn't have much music-related news. Steve Jobs did promise that the audio on the new iPhones would sound better than the current version, and Apple is finally getting rid of the weird recessed earphone jack that caused a lot of angst because it was hard to use with older peripherals. But that was about it--no big iTunes updates, for example.
One demonstration did catch my ear: Moo-Cow Music's Band, which was originally developed by a single programmer, Mark Terry, as a sort of fun hack. It is now being rewritten for the iPhone development platform and offered with Apple's blessing through the iTunes App Store. It allows you to tap out and program simple drum beats, add bass, piano, guitar, and vinyl-scratching noises, then mix them all together in a simple song.
I immediately thought of all those band rehearsals in which nondrummers attempt to describe a beat they have in mind to the drummer, and end up spitting and clicking like the sound effects guy in the Police Academy movies. Now they can whip out their iPhones and play exactly what they have in mind. Drummers love that!
UPDATE:To include CBS statement.
Warner Music Group has pulled its entire catalog from Last.fm, a company spokeswoman confirmed Friday.
Warner Music would not comment on the reason for leaving Last.fm, but the label's departure is certainly a setback for the social-networking site. Warner was the first of the major labels to do a deal with Last.fm.
Last.fm offers an on-demand streaming service that's free to members but has been seriously hamstrung by limits placed on song playback. The site allows users to listen three times to a song. At rival Imeem, users can listen to free streaming music as many times as they want.
Silicon Alley Insider reports that Warner Music licensed its music to Last.fm on a month-to-month basis and hasn't renewed it.
"We are currently negotiating a new agreement with Warner Music Group," CBS, which acquired Last.fm a year ago, said in a statement. The network added that it was "working hard to build the most comprehensive music service on the Web."
Note:CBS has agreed to acquire CNET Networks, parent company of News.com.
Earlier this week, I noted that book publishers and authors had, so far, been largely protected from the mass copying that has helped to undermine the music recording industry's profits. The reason is simple. You can't copy dead-tree books for minimal effort and cost the way you can CDs or MP3s. But, with e-books finally seemingly establishing a bona fide foothold with Amazon's Kindle, that's going to start changing.
New York Times Op-Ed columnist Paul Krugman notes this trend in "Bits, Bands and Books" together with a corollary that Esther Dyson predicted in 1994:
”that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product--software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to--distribute intellectual property free in order to sell services and relationships.”
This, of course, is what a lot of folks--whether as a way to justify music piracy or otherwise--have been saying for years about the business model for music. It's (supposedly) OK if you can't sell a lot of CDs (or iTunes downloads) any longer. Krugman notes that, according to a recent Rolling Stone article: "Downloads are steadily undermining record sales--but today's rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through 'publishing, touring, merchandising and licensing'."
I'm a bit skeptical that selling tchotchkes, tickets, and "extras" in one form or another is really a practical substitute for selling the music itself in the general case. But let's leave that go for the time being. It's been endlessly debated and isn't going to be resolved here. What seems to me even more problematic is the suggestion that there has to be viable alternative models for creative content that becomes de facto free in the general case. For example, Krugman goes on to write:
Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.
And here, I'm deeply, deeply skeptical. At least with music, there are a variety of revenue-generating activities that are a natural outgrowth of the primary creative product. Most musicians do live performances in any case. The only question is how much money they can make by doing so.
But writers? Sure, some well-known authors make engaging speakers. Geoffrey Moore (author of Crossing the Chasm and Dealing with Darwin) is one I've heard fairly recently. J.K. Rowling just spoke at Harvard's commencement. But just because someone is a writer--even a best-selling one--doesn't make them a good speaker. Indeed, some of the best writers are reclusive and would shudder at the thought of having to make a living by public speaking.
Yes, business models are changing. And all of us will have to adapt in various ways. But let's not kid ourselves that advertising, live performances, or magic money trees are going to automagically pay the bills for creative content that we want to consume but don't want to pay for.
(Credit:
Qtrax.com)
Qtrax, the free music site with the questionable history of signing labels, has cut a licensing agreement with EMI Music, the company announced Tuesday.
"EMI's music will be available free to registered Qtrax users for unlimited streaming or downloading to a PC," the companies said in a statement. "(Users) can also load downloaded tracks on up to three portable devices and play them while their membership remains active."
Here's the rub: users must sync their portable device every two months so the number of plays can be counted so that artists are accurately compensated. New York-based Qtrax offers links to online retailers for users who decide on buying the songs.
Qtrax is an ad-supported music and legal P2P site that is best known for an embarrassing episode last January when all four of the major recording companies denied Qtrax's assertion that it had cut deals with them. Since then, the company has been chugging along.
Last month, Qtrax signed a licensing agreement with Universal Music Group, the largest of the four biggest music labels.
Once Qtrax signs the two remaining majors, Warner Music Group and Sony BMG, and has the licenses it needs, executives have said it will offer more than 25 million songs. The company has already signed agreements with the publishing units of the four top labels.
What's right about the service is that it's free. What's wrong is that users can't burn music to disc. However, signing more major labels is a step in the right direction for the company.
Former MTV exec Angel Gambino announced Friday she has left Bebo.
(Credit: angelgambino.blogspot.com)Angel Gambino, the Bebo executive in charge of attracting record labels and musicians to the site, has resigned and she appears to be part of an executive exodus at the company following its $850 million acquisition by AOL.
Gambino, Bebo's global vice president of music and content, follows Bebo's founders Michael and Xochi Birch out the door. A source close to the situation said that at least two other Bebo managers are considering a departure.
Some critics of AOL's deal have worried that Bebo's teen audience may be turned off if the site becomes too buttoned-down as it goes corporate. The news comes as AOL scrambles to defend its purchase price. Earlier this week at the D conference, Time Warner's CEO Jeff Bewkes acknowledged that AOL "may have overpaid."
In an interview with CNET News.com, Gambino acknowledged that her Bebo stock had fully vested when the all-cash deal closed last week and the extra money will allow her to spend time with her young son.
She said that she jumped to Bebo a year ago from MTV to be part of a start-up and wants to be part of another. Another reason why Gambino said she is leaving is that developing Bebo's music offering was not AOL's highest priority.
"The priorities right now are integrating ICQ and AIM," Gambino said. "They are focusing on communication tools and integrating them into the platform. Music is on the agenda but it's not tops on the agenda."
While MySpace, YouTube, and Imeem have built up their music offerings, Bebo has stood on the sidelines. Imeem has licensed music from all the major recording companies and now offers a free streaming music service. YouTube has deals to offer rock videos and to allow users to insert music into their videos.
MySpace has partnered with the top four recording companies to offer streaming music, sell downloads, offer ad-supported music, as well as sell concert tickets.
"Bebo has been nowhere with music," said one music-industry insider. "They have a very music-hungry community, but they have not done anything with it. They went to the labels a year ago and said they had plans to formalize their approach to music. But nothing has happened."
Gambino said that was due to one thing: money.
"We weren't willing to pay the money that the labels expected for the licensing deals," Gambino said. "We didn't have the cash or the resources of a MySpace. We also didn't think having loads of back catalog would be that beneficial."
Instead, Bebo has gone with a more grassroots approach, catering to unsigned artists who were interested in showcasing their music on the site.
"We tried to be creative in offering new models," Gambino said. "We created some new models."
AOL and Bebo representatives could not be reached for comment.
Sony's CEO Howard Stringer is bringing new meaning to the term "anger management."
Howard Stringer
He wants Sony managers to get mad, according to a report in The Wall Street Journal.
Anger-passion, combined with energy, innovation, imagination, and bold steps, is the ticket to get Sony back on track as it sets out its next three-year growth plan, Stringer is cited as having told the company's staff of more than 1,000 managers during a closed-door annual management meeting in Japan.
"I'm asking you to get mad," Stringer said, according to the Journal report.
The electronics giant is facing greater pricing competition on the TV front, while Apple is giving it a run for its money on the innovation front.
To fight back, Sony has unveiled such products as an ultrathin TV screen that resembles a flat-screen computer monitor and a plethora of devices in February at its electronics open house in Las Vegas.
