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Op-Ed: Jon Webster, CEO Music Managers Forum

IN SUPPORT OF A UK I-POD TAX

Music Manager Forum CEO Jon Webster responds to my commentary last week critical of a proposed UK tax on manufacturers whose devices  enable  format shifting - tracks copied from one device to another including for personal use.

I am one of the members of the UK Music Business Group that proposed licensing device manufacturers who benefit from format shifting.

The music industry contains as well as the major record companies, other labels big and small, self releasing artists, songwriters (with and without publishers), artists, paid session musicians, music producers, studio technicians, collecting societies etc etc.

We, as constituent parts of the music industry, seldom agree but when we do as on licensing and the payment for format shifting it should carry some weight. We effectively are representing everyone in the value chain. And that is our point.

A 20 Million Song iPod Is Coming

Can you imagine carrying virtually every song ever recorded around in your pocket? It's possible thanks to a new compression technology being developed at the University of Rochester that digitally reproduces music in a file nearly 1,000 times smaller than a regular MP3.

"This is essentially a human-scale system of reproducing music," says Mark Bocko, professor of electrical and computer engineering and co-creator of the technology. "Humans can manipulate their tongue, breath, and fingers only so fast, so in theory we shouldn't really have to measure the music many thousands of times a second like we do on a CD. As a result, I think we may have found the absolute least amount of data needed to reproduce a piece of music."

An 80G iPod can currently hold about 20,000 songs. Multiply that by 1000 and the player could hold 20 million songs.  Finding that many tracks may actually be the hard part. The World's Largest Record Collection only boasts 6 million songs and Amazon offers a mere 4,683,676 tracks for sale.

But bring on that ISP flat tax on music. I'm feeling up for the challenge.

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Sony, KIDDI Link Could Challenge Apple

Sony and Japan's second largest mobile carrier KDDI said Tuesday they will enable digital music to be shared between Sony portable and home music players and mobile phones on KDDI's network.

It's the kind of partnership that, if copied by others, could create a major tear in Apple's armor

Starbucks Gives Away 50 Million Tracks For iTunes WiFi Launch

Starbucks is going to give away 50 million tracks as it helps launch the new iTunes wireless service with Apple. From Oct. 2 to Nov. 7 customers in all 10,000 U.S. Starbucks outlets will be handed 1.5 million "Song of the Day" cards each day for redemption on iTunes.  The first song featured is Bob Dylan's "Joker Man."

Starbucks own Hear Music label artists Paul McCartney and Joni Mitchell will among the 37 artists featured along with Dave Mathews, Joss Stone, John Mayer, Annie Lennox and Band of Horses.

Starbucks will also start selling iTunes digital release cards for full albums plus bonus material. KT Tunstall's "Drastic Fantastic" and the soundtrack to the film "Into the Wild" featuring music by  Pearl Jam's Eddie Vedder will be part of the card debut retailing for $14.99 and $11.99 respectively. Starbucks will also sell limited-edition re-loadable purchase or gift cards that include two free downloads when registered online.

Beginning with 600 stores in NY and Seattle on Oct 2 and then expanding nationally, a Starbucks icon will light up on any iPhone or iTouch when in range of a Starbucks WiFi signal. People with the Apple devices or any laptop with iTunes software can use the WiFi signal free to browse iTunes.

ANALYSIS - The partnership allows Starbucks to further imbed music into its brand experience with limited cost and precious self space.  In return Apple gets a ubiquitous and trusted retail partner as it works to extend its own dominance in the music marketplace.

But could Starbucks and iTunes actually accelerate sluggish download growth?  "We're going to see huge improvement in terms of the amount of tracks downloaded", Ken Lombard  the president of  Starbucks Entertainment told AP.

That may seem a bold prediction, but the majority of downloads already happen over the air in Japan and some other markets. Starbucks and iTunes  could in fact be on the front edge of a wireless download wave that once again transforms the new music business.

Sony To Shut Down Connect Music Service

Given that the service has been a  dud since launch, it should come as no surprise that Sony is shutting down its digital download service Connect.  Use of their own proprietary DRM kept buyers away; so now Sony is adopting Windows media for its new Walkman players.

Buried 17 paragraphs deep in a press release announcing new Walkman players was this:

With these new Walkman players, Sony has widened its digital music environment to support Windows Media technology. This gives customers greater flexibility in their music software approach. As a result, Sony will be phasing out the CONNECT Music Services based on Sony's ATRAC audio format in North America and Europe. Specific timing will vary by region depending on market demand, but will not be before March 2008.  The CONNECT e-book service for the Reader will not be affected.

DRM Free Won't Save The Industry But It Empowers Those Who Can

COMMENTARY: Pundits like Jupiter's David Card and blogger Bob Lefsetz want to be sure that we knowthat Universal and others dropping DRM (see story) won't save the recorded music industry. They're right of course, but they miss the point.

 Two things will save the "record biz" and going DRM free empowers them both.

First, the industry must restore consumer confidence. There is nothing more frustrating and confusing than having the music people purchase be locked up and incompatible. Blame the original Napster. Blame Apple. Blame the labels.  Consumers don't care. If we want them to pay for music then it damnwell better be accessible whenever, wherever and on whatever device they choose. DRM free makes that possible.

The second key to any industry turnaround is experimentation.  DRM free makes the creation of new products and services that enrich the consumer music experience possible.  And designers and manufactures know that what they produce will not be locked out of the iTunes eco-system or kept from any other device or service that has not even been imagined yet.

Bold moves by Universal, EMI Rhapsody, Amazon and others may or may not in themselves save the new music industry, but they enable those who can.

Zune Ramps Up Marketing With Live Nation Promotion

Microsoft is intensifying its Zune marketing efforts with a significant presence at 28 Live Nation concert venues this summer at Zune Spots that encourage consumers to try the players. These "Zune Spots" are converted freight containers that have been "redesigned to bring the brand to life".

A Zune Zoom Away competition sends fans to Live Nation concerts and consumers can download Zune Zone vouchers. The first 50 people to bring the voucher to a Zune Spot will receive VIP treatment at the Zune Zone, a special area at select concerts with private wait staff and Zune lawn chairs.

The Zune Ignition program has also added Ryan Adams and Great Northern to its select roster of artists getting exposure across a wide swath of Microsoft properties.

press release

Napster Warns iPhone Incompatibility Will Hurt Sales But Still Isn't Selling The Compatible Tracks Available

Napster is warning investors that the incompatibility of the tracks it sells with the new iPhone could hurt sales. (InfoWeek)

It seems a weak excuse given that Napster's real problem is incompatibility with 10 million iPods.

Since Napster's woes would be cure as more labels drop DRM; why isn't the download service selling the million plus compatible mp3's that are available from EMI and all of the indies?

Does Steve Jobs Secretly Prefer DRM?

Steve Jobs achieved hero status a few months ago for calling on record labels to remove copy restrictions from downloads. It is a stance that is hugely popular with the media, in the tech community and with consumers. If actions speak louder than words then Jobs and the company that he leads are sending a very different message.

After some delay, iTunes has added DRM free tracks from EMI, but if Steve Jobs truly cared about consumer choice and freedom:

• Why is iTunes tagging the purchaser's name and email address onto every download?
• Why is Jobs effectively forcing consumers to choose what kind of tracks they want to purchase in advance instead of offering more expensive DRM free tracks alongside cheaper tracks with DRM?
• Why isn't Jobs following Amazon's lead and using his considerable clout to encourage labels to remove copy protection?
• Why aren't millions of tracks from indie labels offered DRM free elsewhere for sale on iTunes? We know he's been saying differently of late, but the fact is that iTunes has yet to even set a  timetable for removing copy-protection from more tracks.

Or Does Jobs secretly prefer DRM?  Is the real truth that he has nothing to gain and much to loose if record labels remove copy protection?  After all, untethered downloads purchased from other store are playable on the iPod opening the previously closed iTunes/IPod ecosystem.