hypebot

Music Sites Choosing Amazon Over iTunes

Revenue Hunt & Major Label Demands Drive Partnerships 

Yesterday Emmis announced a pact with iTunes for downloads from its radio station web sites. The deal is part of a growing trend as music and social networking sites search for ways to monetize traffic beyond advertising.

But iTunes is increasingly a second choice as Amazon appears poised to finalize a variety of partnerships. Universal mp3 compatibility is a factor, but so is the web retail giant's  extensive credit card database. Ease of use and trust dominate when purchasing online.

The major labels are also motivating some download store partnerships. If they are going to license a fledgling music discovery service or social network, the majors want to be certain that discovery can lead to purchase.

Napster and Rhapsody are barely a factor in these talks.  Their slow crawl towards DRM-free appear to have left them out of this race altogether

Is DRM Dead? Some Don't Think So.

Even as many celebrate the death of DRM, some industry leaders seem to believe DRM is poised for a comeback.  From this week's Digital NARM:

"I made a list of the 22 ways to sell music, and 20 of them still require DRM. Any form of subscription service or limited play-per-view or advertising offer still requires DRM...I think there will be a movement towards subscription services and they will eventually mean the return of DRM."- David Hughes, Head of RIAA Technology Unit (via cNet)

"Until piracy is stopped, debating new business music models is like arguing who gets what deck chair on the Titanic." - Rick Carnes, Songwriters Guild. When presented with the analogy of bottled water competing with free: "The reason people buy bottled water is because they are scared of the tap water."

These experts want to make people so afraid of free music that they'll pay for it; then lock it up so tight they can't do anything with it.  In the digital age, however, consumers want what they want when they want it.  Until the music industry starts giving consumers that freedom; fans will always find a way to fight back.

WMG Set To Broaden DRM-Free Offering

EXCLUSIVE: As Digital NARM opens in San Francisco today, sources are pointing towards Warner Music Group broadening its DRM-free mp3 offering beyond Amazon. Variable pricing appears to have been a major reason for the hold-up including demands by WMG, Sony BMG and Universal for higher prices for new and hit product.

With WMG dropping demands that most download stores would not agree to, plus mp3's from EMI and the indies, a tipping point should be near that forces Sony BMG (who are rumored to be close to following WMG's lead) and Universal (whose offering is unpredictably selective) to follow.

WMG To Test Variable Pricing

WMG will soon begin experimenting with variable download pricing.  Few details have been shared, but the trial will be powered by Digonex and technology already in use by Nettwerk, Naxos and PassAlong.

Using Digonex’s patented DigitalOnlineExchange, a dynamic commerce engine that suggests changes to prices based upon behavioral principles, consumers can actively help set prices for select digital albums from WMG’s artists as part of the program.  DOE will work with digital retailers to continuously identify the ‘sweet spot’ where prices follow perceived market value and generate the maximum economic return while providing fair prices for consumers.

Grand Theft Auto Tags Amazon For In Game Downloads

Starting today, players of Grand Theft Auto IV can look up songs they hear in the game with the touch of a controller, then access and download personalized playlists of those songs from Amazon MP3.

Amazon has also added a dedicated storefront promoting music from Grand Theft Auto IV. The store is organized by radio stations within the game, and will feature the new 16-song album “The Music of Grand Theft Auto IV”.

Here’s how "discover and download" works: While playing Grand Theft Auto IV, players can listen to 200+ songs across 16 in-game stations. A new GTA IV feature called ZIT lets customers ‘tag’...

iTunes Turns 6 - Much To Celebrate, But Danger Ahead

iTunes celebrates its 6th birthday today.  With an estimated 70% of the worldwide music download market, Steve Jobs & Co. have much to be proud of. A new InStat survey predicts that 25% of the overall worldwide music market for iTunes by 2012. But to maintain its dominant position, iTunes has much work to do and some tricky competitive waters to navigate.

Six month after Amazon began offering DRM free downloads from all four major labels and thousands of indies, the majority of music sold on iTunes still carries Apple's proprietary DRM that tethers downloads to Apple created products. The labels may or may not be to blame, but its hard to imagine that Jobs could not move the DRM-free forward if he chose to.

As DRM free music spreads to more stores and new services, iTunes will find that it has more than just Amazon to compete with. MySpace Music, Nokia's Comes With Music, imeem, WE7, SpiralFrog, Rhapsody and Napster, niche players and services not yet imagined each have the potential to whittle away at Itune's market share.

Then there's the slow rate of digital music adoption. 85% or more of music is still sold via physical formats. Some consumers are unwilling to give up their home stereos and their autos don't have compatible docks. So, for many, the CD still feels like a more portable product.  RIAA lawsuits, label embedded copy-protection and Apple's insistence on its own proprietary DRM have all led to consumer confusion and among younger buyers deep cynicism.

Congratulations iTunes, on your 6th Birthday. But look over your shoulder; there are a bunch of kids chasing you.

POLL: WHAT DO YOU THINK ITUNES' MARKET SHARE WILL BE BY 2012?  VOTE HERE.

POLL: Predict iTunes' 2012 Market Share

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eMusic Adds Classical Labels

SAYS FREE SAMPLERS DRIVE SALES

eMusic announced a number of larger ndependent classical label signings including UK-based Chandos Records, Telarc, and Harmonia Mundi. Other classical labels recently added include Naïve, Vox, Lyrita, Hungaraton, Supraphon, and CSO Resound, the Chicago Symphony’s in-house recording label. These additions will be available on the website both in the US and worldwide.

eMusic says that more than half of its subscribers who downloaded one of two recent free classical music samplers went on to purchase additional classical music. Of those, nearly one third had never downloaded a classical track before.

Microsoft Reminds Us Why DRM Sucks

I'll let the evil corporate giant do the talking:

"As of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers. You will need to obtain a license key for each of your songs downloaded from MSN Music on any new computer, and you must do so before August 31, 2008. If you attempt to transfer your songs to additional computers after August 31, 2008, those songs will not successfully play."

In simple terms, if you get a new computer next year; all the tunes you bought from MSN Music won't play in it. "We will no longer be able to support..." sounds like "screw the consumer" to me.

MySpace Shares Some Equity Plans. Bands Beware...

Co-founder Chris DeWolfe shared some details of MySpace's move into music in a Wired interview, but failed to reveal exactly how revenues will be shared with indie labels and offered only bad news for unaffiliated musicians.

When asked if MySpace's equity sharing would extend to distributors like The Orchard and IODA, DeWolfe said, "We're open to extending our equity deals to the right partners, but at a certain point, you can't extend equity to everyone." Does that mean there will be a tiered system with only larger aggregators receiving equity? And is MySpace offering distributors equity like the majors or a just share of ad revenue?

Unaffiliated indies and acts are completely left out. "We don't really have the mechanism right now to develop an affiliate program or a payout structure for millions and millions of bands," said DeWolfe. If MySpace doesn't have a mechanism; its because they don't want one. Thousands of affiliate and revenue sharing programs exist across the net. 

Listening Post's Eliot Van Buskirk suggests, "If you're an indie artist on MySpace, it's time to start shopping around for an aggregator...It's the only way you're going to re-level the playing field and get the same treatment MySpace accords the major labels."  But will a share of equity offset the fees charged by the aggregator?  And are they really getting a deal that equals the majors?

And by the way... Hey, MySpace! How much are you charging for downloads and exactly how much of that are you keeping?