iLounge

Target has sent a letter to movie studios expressing concern that Apple and other companies will get a better deal from the studios for digital movies than the retailer gets on wholesale DVDs. The sharply worded letter from Target President Gregg Steinhafel said the retailer didn’t object to competition but wanted “a level playing field,” and also said that if Target didn’t receive fair pricing from the studios it would reconsider its investment in the DVD business. Target accounts for about 15% of DVD sales in the U.S. The letter follows similar complaints to studios from Wal-Mart and comes just weeks after Apple added full-length movies from Disney to the iTunes Store for as little as $12.99 each.

MP3.com founder Michael Robertson believes the Zune media player will be a large failure for Microsoft. “At first glance the features seem compelling but my prediction is it will be the biggest flop of 2007 with less than 50,000 units sold worldwide,” he says. Robertson cites Zune’s disappointing wireless features and the device’s incompatibilities with “Plays For Sure” purchased songs. “Microsoft will likely spend nearly $100 million in marketing the Zune. The press will give them tens of millions of dollars in free marketing,” Robertson continues. “In spite of this publicity the Zune will be an expensive failure for Microsoft because consumers aren’t stupid. As the saying goes: Zune me once, shame on you. Zune me twice, shame on me.”

Microsoft has finally announced pricing and a release date for its much-hyped Zune media player. The company said it will charge $249.99 for the device—essentially the same as Apple’s 30GB iPod, which retails for $249. Microsoft will launch both the Zune and its companion digital music service on November 14th. The Zune music service will charge 99 cents for individual songs and $14.99 per month for a subscription service. Scott Erickson, senior director of product management for Zune, admitted that the Zune player will not make money for Microsoft immediately. “In total we won’t be making a profit this year, but we will of course work toward becoming a profitable business in the future,” he said.

Beleaguered subscription music company Napster said it is considering selling the company. “There’s been interest by third parties to acquire the company,” said Napster CEO Chris Gorog, adding that other proposals have included strategic partnerships or joint ventures. “That activity has heated up as we’ve gotten traction with a lot of our new products… There’s been a lot of speculation” about which companies or industries would be interested in Napster, Gorog said. “Any company that is executing at a high level in digital media will likely have at least a conceptual interest in looking at Napster.” Napster was originally an illegal music sharing site before being shut down in 2001. It was purchased by Roxio and relaunched in 2003. Napster said as of June 30, it had 512,000 paid subscribers, down from 606,000 in the prior quarter.

After persistent compatibility problems with Microsoft’s “Plays for Sure” format, RealNetworks has teamed up with SanDisk to offer a portable music player that works seamlessly with the company’s Rhapsody service. The Sansa Rhapsody will be based on SanDisk’s e200 player, which comes in 2GB to 8GB sizes and retails for $140 to $250. The player has a layer of RealNetworks’ own software, including copy-protection technology, to ensure compatibility.

Microsoft officially announced its Zune media player and new online music service today. As previously reported, the Zune player will feature a 30GB hard drive, Wi-Fi wireless technology, a built-in FM tuner and a 3-inch screen. Microsoft said the Zune will come in three colors—black, brown and white. The company declined, however, to disclose pricing and an exact release date, only saying the Zune player would be available “this holiday season.”

In addition to the player, Microsoft also announced the Zune Marketplace, a new online music service “where you can choose to purchase tracks individually or to buy a Zune Pass subscription to download as many songs as you want for a flat fee.” The Zune Marketplace appears to be part of the Zune media manager software for organizing music, videos and photos and transferring them to the device.

After years of covering music on CDs, records and tapes, insurers are now beginning to accept claims for digital music downloaded to iPods and other gadgets. “Nationwide has been the trail-blazer, including music and other entertainment downloads as standard in its home contents cover,” reports The Independent. “The building society argues—and a lot of iPod users would agree—that these virtual music collections count as family valuables, just like CDs and old LPs. Other insurers are considering a similar addition to their home contents cover… Nationwide’s cover is for any download—ringtones, games, films or music—wherever it is held, be that a phone, PC, laptop or music player. The important point is that the owner will have to prove they have paid for the download.”

4Flix.Net has announced its Free*Pass monthly subscription plan, which allows unrestricted access to the site’s collection of iPod-ready videos for $9.99 a month. The service allows members to download any of 4Flix.Net’s DRM-free feature-length movies, classic TV shows, and independent films. Strangely, in 4Flix.Net’s press release for the new service, sent to iLounge, the company lists “Apple’s 6th Generation 16x9 widescreen Video iPod” as a supported device. Apple has obviously yet to introduce such a device and is unlikely to provide product details to a company such as 4Flix.Net in advance of such an announcement.

Update: As noted in the comments below, 4Flix.Net has updated its press release on its website, which now lists “Apple’s 5th Generation video-capable iPod” as a supported device.

As expected, Amazon.com today launched its Amazon Unbox video store. The web-based service offers TV shows and movies from more than 30 studios and networks.

TV shows cost $1.99 per episode, and most movies range from $7.99 to $14.99. Movies can also be “rented” for $3.99. The “DVD-quality” movies and shows must be watched on a PC using Amazon’s software. Downloads also come with a second file that can only be viewed on one of a handful of Windows Media-compatible video players from Creative, Toshiba, Archos and iRiver. Movies cannot be burned to DVDs for playback in a DVD player. The average TV show weighs in at 600MB in file size and is expected to take 30 minutes to 2 hours to download, while a 2-hour movie is around 2.4GB in size and takes from 2-7 hours to download.

Apple is widely expected to launch its own online movie service at a special event in San Francisco on Tuesday. Recent reports claim that Apple has yet to sign the majority of Hollywood studios due to wrangling over movie prices. 

SanDisk has announced that several companies will be making accessories for its line of Sansa digital media players under a new “Made for Sansa” licensing program—an obvious imitation of Apple’s “Made for iPod” program. Among SanDisk’s first seven accessory partners are six well-known iPod accessory makers: Altec Lansing, DLO (Digital Lifestyle Outfitters), Griffin Technology, HandStands, Macally Peripherals, and Speck Products. 

Popular social networking website MySpace has announced plans to launch a major digital music service. The News Corp.-owned site, which currently has 106 million users, said it will offer music from nearly 3 million unsigned, independent bands before the end of the year. “The goal is to be one of the biggest digital music stores out there,” said MySpace co-founder Chris DeWolfe. “Everyone we’ve spoken to definitely wants an alternative to iTunes and the iPod. MySpace could be that alternative.” The indie songs will be sold in unprotected MP3 format, compatible with the iPod. Bands will decide how much to charge per song after including MySpace’s distribution fee. DeWolfe said MySpace will be “enhancing and customizing” its online music service to eventually offer copyright-protected songs from major record companies.

Microsoft’s Zune digital media player appears to be “another classic case of overpromising and underdelivering” by the software giant, according to American Technology Research analyst Shaw Wu. “While we have great respect for Microsoft, we are frankly underwhelmed by the much-hyped Zune device,” Wu said in a research note today. “Microsoft had hinted of an all-new design from the ground up, but from our analysis, it appears that the Zune is essentially a repackaged Toshiba Gigabeat that has seen limited success. Moreover, the software is similar to the Windows Mobile OS licensed to its hardware ‘partners’. At this point, we believe this could end up being another classic case of overpromising and underdelivering by Microsoft.”

Vivendi’s Universal Music Group, the world’s largest music company, has partnered with SpiralFrog, a new online music start-up that plans to allow customers to download songs for free. The advertising-supported, web-based service will initially offer Universal’s complete roster and will include digital rights management technology on the tracks. The SpiralFrog service, which is expected to launch in the U.S. and Canada in December, is apparently targeting the pirated music circles rather than the iTunes Music Store. In the company’s press release announcing the service, Robin Kent, SpiralFrog’s CEO said: “Offering young consumers an easy-to-use alternative to pirated music sites will be compelling. SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site.”

According to an FCC filing published this week, Microsoft’s Zune digital media player will be manufactured by Toshiba. The filing revealed that the tested player included a 30GB 1.8-inch Toshiba hard drive, 3.0-inch low temperature polysilicone TFT LCD display, FM tuner with RDBS, headphone jack and USB 2.0 connectivity. The Zune tested by the FCC also featured a rechargeable Li-Ion battery, mechanical switches for all control surfaces and a Wireless LAN module. The FCC filing included several photos of the Zune and its components. See iLounge’s previous reports (1, 2, 3, 4) for further Zune details.

AOL today announced that it has signed partnerships with several Hollywood studios to offer full-length movie downloads for $9.99 to $19.99. AOL made deals with 20th Century Fox, Sony Pictures Home Entertainment, Universal Pictures, and Warner Bros. Home Entertainment Group. Once downloaded, the movies can be viewed offline on Windows-based PCs and “compatible portable devices.” AOL did not specify a file format, but it is all but certain that the company will use Microsoft’s Windows Media format. AOL becomes the fourth major digital movie store, after Movielink, CinemaNow and Guba. Apple has been long-rumored to launch a large online movie store this year.

Several iLoungers note that Dell’s last remaining digital music player, the DJ Ditty, has quietly disappeared from the company’s online store. The DJ Ditty, a flash memory-based player that competed with the iPod shuffle, was the last player offered by Dell after the company discontinued its hard drive-based line of DJ players in February. Dell’s DJ Life website currently links to error pages for ordering, and the company’s online store now only sells media players from Sandisk, Samsung, Creative, Archos, and iRiver. Members of Dell’s message boards also note that the Ditty is no longer to be found in the company’s monthly catalog and that the player was briefly available at a discounted price earlier this month.

SanDisk has introduced an 8GB version of its flagship media player and reduced prices on its entire Sansa line up in a bid to lure customers away from the iPod. SanDisk, which is a distant second to Apple in the digital music player market, today announced its $250 Sansa e280 player, which offers 8GB of flash storage (expandable to 10GB with microSD slot), audio, photo and video capabilities, FM tuner and recorder, a user-replaceable battery, and a 1.8” TFT display. SanDisk also cut prices on its existing line of Sansa e200 players. The e250 (2GB) now sells for $140, the e260 (4GB) is now priced at $180, and the e270 (6GB) now sells for $220. According to the NPD Group, SanDisk accounted for 9.7% of U.S. MP3 player sales in the second quarter, up from 3.1% last year.

Fox plans this Fall to sell full-length movies and TV shows online that will only be compatible with Microsoft Windows Media Player. At launch in October, movies will include “X-Men: The Last Stand,” “Garfield: A Tail of Two Kitties,” “The Omen” and “Thank You for Smoking.” TV offerings such as Fox’s “24” and “Prison Break” and FX’s “It’s Always Sunny in Philadelphia” will also be offered, with new episodes being made available within 24 hours of broadcast. Movies will sell for about $20 and TV shows for $1.99 an episode. Fox will use a platform called Direct2Drive, currently used to sell video games, for controlling the download and playback of the content. The movies and TV shows will be limited to playback on two Windows computers, each supporting one portable device.

The DVD Copy Control Association, a film industry group created by Hollywood studios, plans to lift some restrictions to allow consumers to legally burn downloaded movies onto blank DVDs. “The impending technical and policy changes involve the copy group’s proprietary technology known as the Content Scramble System, or CSS,” reports the AP. “The association licenses the encryption technology to makers of DVD players and other electronics companies and applies it widely to movies on DVDs to restrict illegal copying. The association said it will soon expand licensing to movies that are digitally distributed on demand or a la carte—and not just for movies that are mass produced on DVDs. The group also is working with disc makers to produce CSS-compatible blank DVDs.” The removal of the DVD hurdles is seen as a sign that Apple and other online merchants will soon start selling full-length movies.

Warner Music Group is planning to release music albums on DVD discs that will include extras such as videos, ring tones, photos and pre-ripped digital music files. The Wall Street Journal reports [paid sub. req.]: “People familiar with the situation say Warner is close to a deal with Apple that would make the digital tracks essentially identical to those the computer company sells through its iTunes Music Store—something that has proved elusive for others in the music industry, since Apple has been unwilling to license its proprietary copy-protection software to outsiders. People briefed on the talks said a likely solution would involve Apple creating the digital tracks and Warner putting them on DVDs.” Warner plans to introduce the discs with “a handful of titles” in October, with a “full-blown launch” planned for early next year.