iLounge

“Color me paranoid, but when Apple first announced its upcoming iTunes cross-promotion with Pepsi, my first thought was that Apple was putting itself at risk by signing on with the soft drink industry’s number two player. I figured that it was just a matter of time before Napster, Dell, Microsoft, or some other player in the music download space would announce a similar deal with comfortably-number-one Coca-Cola. Sure, it would have just been yet another case of Apple dreaming up a new way of doing things only to have an unimaginative competitor steal it, but it would really have sucked for iTunes if it had worked out that way.

So when Coke announced yesterday that it would be launching its own music download service without help from anyone, I have a feeling that Steve Jobs was dancing in the streets. Even better, Coke is only launching the service in Great Britain. In other words, Coke just wants to have something out there to compete for attention when Pepsi starts giving away iTunes tracks during the Super Bowl. You knew that Coke would enter the picture at some point, but this is beautiful: they’ve taken themselves out of the picture completely…”

“Persistence is paying off in the battle between the record industry and music sharers, as Ipsos-Insight determined that there has been a growing willingness among Americans to pay for their tunes.

The firm’s research revealed that the number of paying music downloaders doubled in the first half of 2003 – coinciding with the Recording Industry Association of America’s (RIAA) announcement that they intended to begin prosecuting file-sharers and the release of Apple’s iTunes music store.”

“Music industry executives are contemplating shifts in the 99-cent song price that has become a default standard

As the early buzz over new music services such as Apple Computers iTunes fades, record labels and technology companies are struggling to turn the services into profitable businesses.”

“The demand for MP3 players in the United States is poised to grow at a steady rate of 50 percent a year through 2006, signaling better times for the digital music market, claims Jupiter Research.

Shipments of MP3 players should hit 3.5 million in 2003, almost double 2002 figures, Jupiter said in a report issued Tuesday. It also said that there will be more than 26 million MP3 players in use by 2006. Starting in 2004, the demand for players with hard drives will surpass that of players with flash memory.”

“In the last decade a new record business has been forming online. It has been coalescing by trial and error, largely error. And its evolution is in no way complete as it moves toward a finish line at the rate of one step forward for every nine-tenths of a step back.

In the last month the music-downloading landscape online has shifted once more with these five major events, not all of them good:”

“Illegal file-sharing might be getting a smackdown from the recording industry, but downloading music from the Internet has never been more stylish.

Web sites like iTunes, BuyMusic, Musicmatch and the new Napster make it possible to download your favorite songs for $1 each. Some of them even have subscription services that charge a monthly fee for unlimited use, or you can download an album starting at $10.

Now it’s legal and cool.”

“How many online music download services can the market bear?

That’s going to be a key question as the music download market warms up to a white-hot temperature in 2004. The rush is underway among several companies to build music download services and replicate the success of others already leading the way.”

“Despite bad press for turning on its customers, the recording industry said Wednesday that it would sue 41 more people, alleging they illegally downloaded music from the Internet. [...]

Nielsen/NetRatings says the average number of users on Kazaa, the top music and movie trading program, has dropped 53% since June — when the RIAA first warned of lawsuits.”

“Digital music download services are exploding, with the number of US consumers downloading tracks doubling in the first half of 2003.

Ownership of MP3 players such as Apple’s market leading iPod is also climbing: 19 per cent of US music downloaders own such devices - up from 12 per cent in December 2002.

A quarterly digital music behaviour report from research firmIpsos-Insight shows that in late June 2003, “roughly” one out of six (16 per cent) of US music downloaders aged 12 and older had paid to download music online. The company says this is the equivalent of 10 million people.”

“Record labels have long been accused of stealing musicians’ copyrights as soon as the ink is dry on the contract. Now, one small independent label in Great Britain is doing the opposite: It’s giving the rights to the artists—and anyone else who wants to use the music, too.

Loca Records wants to foster experimentation and freedom in music by building a stable of free music which can be shared, remixed and manipulated by anyone. Songs are not locked by digital rights management technology.”

“Informa Media, the music consultancy, on Tuesday predicted that recorded music sales would fall by almost 9 per cent this year to $28.2bn, with a further decline to $27.4bn in 2004.

Music sales have been in freefall for three years, hit by online file sharing and widespread CD copying by organised criminal gangs and pirate factories across Asia and eastern Europe.”

“Despite their legal blitzkrieg to stop online song-swapping, many music labels are benefiting from—and paying for—intelligence on the latest trends in Internet trading. [...]

One company, Beverly Hills-based BigChampagne, began mining such data from popular peer-to-peer networks in 2000 and has built a thriving business selling it to recording labels. [...]

BigChampagne has certainly done well by file-swapping. It formed in July 2000, just as the Internet boom was beginning to bust, and now counts Maverick, DreamWorks, Warner Bros., Disney and Atlantic Records among its clients. All the major labels have worked with BigChampagne ‘in one capacity or another,’ Garland said.”

“Sen. Dianne Feinstein of California moved Thursday to protect increasingly beleaguered movie and music producers and artists by proposing a new federal crackdown on pirates, especially those who use the Internet to distribute their goods. [...]

The Feinstein-Cornyn proposal would make illegal recording a federal felony, with a maximum punishment of five years in prison, an unspecified fine, or both. The maximum prison time increases to 10 years for a second offense.”

“Rising sales of digital tracks through such services as iTunes Music Store and Napster are raising questions about how such transactions should be measured on the Billboard charts. [...]

‘The consumer’s rapid and enthusiastic acceptance of iTunes and other download services gives great meaning to that data,” says Geoff Mayfield, Billboard director of charts. “We will need to factor those transactions into The Billboard Hot 100 . . . .’”

“The recent fights of the music industry remind me a lot about the early days of the personal computer industry. While I was still a kid then, it seems the software industry went through a similar experience in terms of trying to figure out how to deal with piracy. In this entry, I examine what I consider to be the four stages of dealing with piracy of digital assets.

I believe that any industry that is seeing a move of their intellectual assets to a digital medium will go through four basic stages: ignorance, panic, protection and litigation, quiet acceptance. This was the case with software in the 80s and 90s, is currently the case with music, and will soon be the case with movies. I suspect that other industries like the professional photography market are facing similar issues currently or have in the past.”