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Universal gathering allies to take on iTunes

Universal Music Group chief Doug Morris is gathering support from other labels, including Sony BMG and Warner Music Group, in hopes to build a subscription-based iTunes competitor, reports BusinessWeek. The service, which is among several under consideration, would be called Total Music, and would tie a $5-per-month subscription fee to the price of compatible players. Unlike current subscription plans, this business model would allow consumers to pay just once for the player, and have unlimited music for the life of the device. It is estimated that this plan would add about $90 to the price of any Total Music device. “If the object is to wrest control of the market from Steve Jobs,” says Gartner analyst Mike McGuire, “this is a credible way to try it.”

Radiohead releases latest album without label, others to follow

English rock band Radiohead has released its latest album, In Rainbows, on its own through its website, echewing iTunes and other label-driven digital music services. While the band is selling a “discbox” set that includes the album on physical media as well as other extras, the digital download version, which comes as 10 DRM-free 160kbps MP3s, is available for as much or as little as the customer would like to spend, save for the £0.45 transaction fee. This label-free release comes at a time when another well-known artist, Nine Inch Nails, announced on its website that it is a “totally free agent, free of any recording contract with any label.”

While Radiohead has never made their music available on iTunes, citing the fact that they prefer not to sell individual tracks and wanting whole album sales instead, Nine Inch Nails offers a large portion of its catalog on the service. Both artists, however, have had prior disputes with their labels, and Trent Reznor of Nine Inch Nails made clear his band’s distaste with the major labels as he said on his website, “It gives me great pleasure to be able to finally have a direct relationship with the audience as i see fit and appropriate.”

As both these major artists are announcing their split from the labels, reports are surfacing that other bands are anxious to follow suit. The Telegraph is reporting that Jamiroquai and Oasis, neither of which is signed to a recording contract, are considering following Radiohead’s lead and releasing work for free, or in a “pay what you want” manner. “They’ll all be thinking about it now,” said Stuart Clarke at Music Week. “Any big name that is out of contract such as Jamiroquai and Oasis will now see it as an option.”

Microsoft introduces new Zune lineup

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Microsoft has unveiled its latest revisions to the Zune digital media player, including a revamped hard drive-based model as well as a new flash-based Zune, which will compete with the iPod nano. The new hard drive-based Zune will offer 80GB of storage, Wi-Fi wireless sync, and a 3.2-inch screen; it will sell for $250, matching the price of the 80GB iPod classic. The new flash-based Zune will be offered in 4GB and 8GB capacities, will feature a 1.8-inch screen, the same Wi-Fi functionality as the larger model, and will sell for $150 and $200 respectively, matching the price points of the 4GB and 8GB iPod nano (with video). The new players also sport touch-sensitive navigation via the new “Zune Pad”, a rounded rectangle-shaped control apparatus that takes the place of the original Zune’s round navigation pad. No battery life statistics have yet been disclosed by Microsoft. All three new Zune models are slated for a November release.

Amazon launches public beta of DRM-free music download store

Amazon has launched a public beta of Amazon MP3, its new digital music download store offering DRM-free 256kbps MP3 files. According to Amazon, the service boasts “Earth’s biggest selection of a la carte DRM-free MP3 music downloads.” The service currently offers over two million songs from more than 180,000 artists. Individual tracks are available for $.89 or $.99, with full albums available from $5.99 to $9.99. In addition, the company is offering its Amazon MP3 Downloader, a helper application that seamlessly adds users’ MP3s to their iTunes or Windows Media Player libraries.

MTV, RealNetworks partner to challenge iTunes [updated]

Viacom’s MTV Networks is ready to announce that it is merging its online digital music offerings into a new venture with RealNetworks in an effort to better compete with iTunes, according to a Wall Street Journal report. The new joint venture will reportedly use Verizon Wireless for mobile distribution of content, a move that provides the service additional leverage against Apple and iTunes, following the launch of the AT&T-only iPhone. The report also claims that the venture will be headed by Michael Bloom, who currently heads Urge for MTV Networks. The new venture effectively signals the end of the Urge service, which was announced in partnership with Microsoft last year.

Update: In an official announcement, Real and MTV revealed that they are uniting Real’s Rhapsody service and MTV’s URGE service in a single offering from a new company, Rhapsody America, that will be the exclusive digital music service for Real and for MTV Networks in the United States. Through the new company both Real and MTV have formed a long-term exclusive relationship with Verizon Wireless. As part of that relationship, Rhapsody will be fully integrated with Verizon’s VCAST Music service. As of today, users of MTV’s URGE service can use their existing usernames and passwords to log in to Rhapsody and get access to both services.

Universal to sell DRM-free tracks, excludes iTunes

Universal Music Group has announced plans to begin selling DRM-free tracks from select artists such as Sting, 50 Cent and Stevie Wonder, for a limited time. The tracks, which are to be available as unrestricted MP3s, will be sold on the artists’ websites and through several online retailers, such as RealNetworks, Wal-Mart, Amazon.com, and Google. The DRM-free tracks will not be available, however, through iTunes. Some believe that this is a move by Universal to undermine Apple’s overwhelming lead in this market; Universal claims that it is using the iTunes Store as a control group for measuring the impact of DRM-free sales on pricing, piracy and sales. “There’s no doubt these guys are poking a stick at Apple,” said Michael Gartenberg, analyst for Jupiter Research.

Universal Music Chairman and CEO Doug Morris said the test is one of several the company is conducting this year and “will provide valuable insights into the implications of selling our music in an open format.” “Universal Music Group is committed to exploring new ways to expand the availability of our artists’ music online, while offering consumers the most choice in how and where they purchase and enjoy our music,” Morris said. The tracks will be available from Aug. 21 to Jan. 31.

Canadian Copyright Board approves iPod levy

The Copyright Board of Canada has released its decision on the application of a private copying levy to iPods and removable memory storage cards, including the popular SD format. Backing the levy is the Canadian Private Copyright Collective (CPCC), while the Canadian Storage Media Alliance and Retail Council of Canada are both against it, arguing that the Federal Court has struck struck down a previous levy on digital audio recorders as being outside the Copyright Act. Despite this earlier ruling, the Copyright Board has sided with the CPCC, and in fact stated that the levy might possibly expand to cover items such as cell phones and computers as well.

“CSMA expressed misgivings about the possibility that cellular phones and computers might end up being leviable,” the decision states. “We see no inherent problem with this scenario. A thing that is ordinarily used by individual consumers to make private copies should not be excluded from the private copying regime for the sole reason that it has other uses.  Indeed, all media that are currently subject to the levy can be used for purposes other than private copying.” The entire 41-page decision is available online (PDF Link).

Amazon to launch DRM-free music service

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Amazon has announced that it will launch a DRM-free digital music store later this year. The store will offer “millions of songs,” from more than 12,000 record labels, all in DRM-free MP3 format. The store will include EMI Music’s catalog. “Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device,” Jeff Bezos, Amazon.com founder and CEO, said. “We’re excited to have EMI joining us in this effort and look forward to offering our customers MP3s from amazing artists like Coldplay, Norah Jones and Joss Stone.” EMI CEO Eric Nicoli added, “They [Amazon.com] have been an important retail partner of ours, and we are delighted they will be offering consumers EMI’s new premium DRM-free downloads in their new digital music store.” Further details such as launch date and pricing were not available.

Ticketmaster to give away music with ticket purchases

Ticketmaster has announced that it will give customers complimentary digital music with every concert ticket purchased online. With every concert ticket purchased at Ticketmaster.com, the company is providing a 10-song digital music sampler, which showcases “a variety of emerging and established artists.” In addition, with the purchase of every ticket to any summer concert scheduled to take place between Memorial Day (May 28) and Labor Day (Sept 3), Ticketmaster customers will receive a free download of their choice from the iTunes Store.

NextSentry wants workplace ban on iPod

NextSentry, a desktop security firm, is recommending that businesses prohibit the use of iPods and other pocketable storage devices due to what it calls “Pocket Fraud.” It believes that unscrupulous employees are using their access to customer data and intellectual property in concert with the portability of pocketable storage devices to steal the valuable data from their employers.

“Many employees enjoy listening to their iPods at work, but companies can’t afford this luxury at the expense of leaking valuable customer data or intellectual property into the hands of criminals or competitors,” said Jim Hereford, CEO of NextSentry. “If you don’t have proper policy enforcement capabilities in place to monitor the desktop and all removable media, even the CEO who loves their iPod could be stealing millions of dollars worth of data right underneath the chief security officer’s nose.”

EMI offers first ‘premium’ DRM-free album in MP3

EMI has announced that its first “premium” DRM-free album, the self-titled The Good, The Bad, and the Queen, is now available in 320 kbps MP3 format from the band’s store, which is powered by UK-based digital media delivery company 7digital. The Good, The Bad, and the Queen is headed by Damon Albarn, who is also frontman of Blur, and Gorillaz, and was present at the EMI/Apple announcement on Monday. EMI has offered DRM-free tracks in the past, but not at the higher bitrate used for this release. EMI’s DRM-free offerings won’t be available on the iTunes Store until May, where they will be offered in 256 kbps AAC format, offering roughly the same quality as this 320 kbps MP3 format release.

eMusic launches new subscription plans

imageeMusic has announced that it is expanding its music offerings with three new subscription plans. eMusic subscription plans differ from most online subscriptions in that the subscriber doesn’t rent the music — users are charged a certain amount each month for a set number of downloads, which the user then owns. The new subscriptions are named “Connoisseur Plans” for the high number of downloads per month that each plan offers.

The Basic Connoisseur Plan offers 100 downloads per month for a $24.99 fee, the Plus Connoisseur Plan offers 200 downloads for $49.99 per month, and the Premium Connoisseur Plan offers 300 tracks for a monthly fee of $74.99. All three new Connoisseur Plans offer an average download cost of $.25 per track, assuming that all the download credits are used. eMusic is the world’s second-largest digital music service after iTunes, and offers its entire catalog in DRM-free MP3 format.

iPod film festival finalists available for download

The Flux 2007 iPod Film Festival is now online, with all finalist short films available for free download. The festival awards prizes to filmmakers in three categories—Student Film, Indie Film and The Kitchen Sink—and winners will be determined by viewer ratings, along with a festival jury, which this year includes Apple co-founder Steve Wozniak. In addition to voting, visitors can also participate in a new community section, leaving their own reviews of the films, messages for the filmmakers, and blogs by the filmmakers. The short films will be available for download until judging ends on June 28th.

Digital ‘Fair Use’ bill draws RIAA wrath

A new bill before Congress would poke holes in the 1998 Digital Millennium Copyright Act to make it easier for consumers to enjoy digital content. The Freedom and Innovation Revitalizing US Entrepreneurship (FAIR USE) Act, co-introduced earlier this week by a Democrat and Republican in the House of Representatives would reportedly allow “customers to circumvent digital copy restrictions in six limited areas when copyright owners’ business models are not threatened.” An example of this is allowing “libraries to circumvent digital locks or secure copies of works that have been damaged, lost or stolen.” The RIAA has come out opposing the bill, while the Consumer Electronics Association, among others, supports it.

BitTorrent launches legit online movie, TV store

BitTorrent, maker of the popular peer-to-peer file distribution technology known for pirated content, has launched an online video store to sell movies and television shows licensed from Hollywood studios. The BitTorrent Entertainment Network offers films from Warner Bros., Paramount Pictures, 20th Century Fox, Metro-Goldwyn-Mayer and Lionsgate and episodes of TV shows such as “24” and “Punk’d.” TV episodes are $1.99 to download to own. BitTorrent will rent movies for a 24-hour viewing period for $3.99 for new titles and $2.99 for older films. BitTorrent’s videos are protected by Windows Media DRM and will only play back using Windows Media Player.

Music execs see DRM-free tracks boosting download sales

According to a Jupiter Research survey, almost two-thirds of European music industry executives believe removing digital rights management (DRM) from downloadable music would compel more consumers to buy music online. The study was carried out between December and January, before Apple CEO Steve Jobs’ call for DRM-free music. “The study revealed that about 54% of those executives questioned thought that current DRM systems were too restrictive,” reports BBC News. “Also, 62% believed that dropping DRM and releasing music files that can be enjoyed on any MP3 player would boost the take-up of digital music generally.”

Report: EMI considering DRM-free music

Following Apple CEO Steve Jobs’ open letter on digital rights management (DRM) this week, EMI has reportedly been holding talks with online music resellers about the possibility of selling a large portion of its catalog in unprotected MP3 format. An industry source told Reuters that EMI was seeking large advance payments from online retailers in exchange for the right to sell its music without DRM. “Lack of operability between a proliferating range of devices and hardware and the digital platforms for delivering music is more and more becoming an issue for music consumers and EMI has been engaging with our various partners to find a solution,” an EMI spokeswoman said.

Reaction to Apple CEO Steve Jobs’ call for end of DRM

“We agree wholeheartedly with Jobs, since EFF has been making exactly the same points for several years now. As a first step in putting his music store where his mouth is, we urge him to take immediate steps to remove the DRM on the independent label content in the iTunes Store. Why wait for the major record labels?”—Derek Slater, Electronic Frontier Foundation

“[Jobs’ argument to drop DRM] is without logic and merit. We will not abandon DRM.”—Edgar Bronfman Jr., Warner Music CEO

“I don’t expect the record labels to move very quickly in this direction. It would be very hard for the music industry to walk away from all the lawsuits they have filed against individual consumers, some against 15-year-olds, and say digital rights management is not a big deal.”— James McQuivey, Forrester Research

“It’s a bold move on his part. If anything can play on anything, it’s a clear win for the consumer electronics device world, but a potential disaster for the content companies.”—Ted Cohen, managing partner of TAG Strategic and former senior VP for digital distribution for EMI Music

“[Jobs’ letter was] irresponsible, or at the very least naïve. It’s like he’s on top of the mountain making pronouncements, while we’re here on the ground working with the industry to make it happen.”— Jason Reindorp, marketing director for Zune at Microsoft

“We welcome Apple taking this problem seriously, and addressing it at such a high level. It is clear that the record industry has some of the responsibility, but that does not relieve Apple of responsibility. Our concern is, of course, that Apple and iTunes Music Store should be addressing the issue of record companies and DRM themselves if it needs to be addressed. It’s iTunes Music Store that’s providing a service to the consumers and therefore has the responsibility.”—Torgeir Waterhouse, senior adviser to the Norwegian Consumer Council

“The essay ultimately comes across as more of a finger-pointing exercise than anything else, concluding by telling European governments to turn their attention to (European) record companies instead of Apple. The company’s proposal of two equally unpleasant alternatives—Apple DRM or no DRM—makes some rhetorical sense, but obviously doesn’t encompass all of the potential solutions out there, and as neither Apple option will satisfy sabre-rattlers, it won’t stop those trying to force FairPlay licensing upon the company.”—Jeremy Horwitz, iLounge

“Most technologists have always believed this and apparently now Steve Jobs is saying it publicly. He is begging the music industry to give up on all the DRM initiatives while subtly predicting they may spell its doom. He is dead right.”—John C. Dvorak, Marketwatch

“There is a less than 25% chance that the music industry will license music to online stores without any DRM. Record labels have worked hard to protect their product from theft by negotiating DRM requirements, so despite Jobs’ request, DRM free online music services are not likely to be the norm any time soon.”—Gene Munster, Piper Jaffray

“Is it a challenge to the major record labels? An answer to the increasingly hostile European governments (Norway, France, Germany) that are pressuring Apple to “open up” the iTunes Store? A message to the press to clarify Apple’s stance on DRM? A big f***-you to Microsoft? It is all of these things.”—John Gruber, Daring Fireball

“Apple’s offer to license Fairplay to other technology companies is a welcome breakthrough and would be a real victory for fans, artists and labels. There have been many services seeking a license to the Apple DRM. This would enable the interoperability that we have been urging for a very long time.”—RIAA (misunderstanding Jobs’ letter)

“It should not take Apple’s iTunes team more than 2-3 days to implement a solution for not wrapping content with FairPlay when the content owner does not mandate DRM. This could be done in a completely transparent way and would not be confusing to the users. Actions speak louder than words, Steve.”—Jon Lech Johansen (AKA DVD Jon)

“We’re not going to broadly license our content for unprotected digital distribution.”—Anonymous music company executive

“Last time I checked, Apple also sold TV shows, music videos, and films on iTunes Music Store, and they are all protected by FairPlay DRM. Why didn’t Jobs make the same courageous stand against DRM on video? Unfortunately, the answer isn’t very pretty: Apple doesn’t have anywhere near the same clout in the movie and TV business that it has in music, and has only signed film deals with two of the major studios as a result. Taking a stand against DRM for movies would anger the same people he is trying to make deals with.”—Andrew Shebanow, Shebanation

“We’ve been talking about the need for open formats for a very long time.”—Dan Sheeran, senior vice president for digital music at RealNetworks

“I’ve always assumed that DRM was a condition set by the record labels, not by Apple, and that Apple conceded only as a way to get the labels to sell their music through iTunes. Interoperability will drive iPod sales, and also music sales. This is what we at the Canadian Music Creators Coaltions (CMCC) have been pushing, and I’m glad to see Apple make a push for a DRM-free world.”—Steven Page, Barenaked Ladies

“In the near-term, this letter is going to have minimal impact. I fundamentally agree with much of what Jobs said. The record labels drive DRM adoption. DRM is not going away because the record labels aren’t going to let it go away. They are too paranoid about piracy.”—Michael Goodman, Yankee Group

Apple’s Steve Jobs pens ‘Thoughts on Music’; Calls for DRM-free world

In a rare move, Apple CEO Steve Jobs as written an open letter on Apple’s digital rights management (DRM) system used on the iPod and iTunes. In the letter, Jobs explains why Apple has implemented its FairPlay DRM technology, and explores three alternatives for the future—continue the current DRM scheme, license FairPlay or abolish DRM entirely. Jobs’ letter is in response to mounting pressure from European countries which say Apple is forcing limits on consumers. Jobs says that persuading the major record companies to allow iTunes and other stores to sell music DRM-free is the right move. He says Apple would embrace selling this open music “in a heartbeat.” A portion of the letter is below, but clicking through to read the entire letter is highly recommended.

Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store. Every iPod ever made will play this DRM-free music. [...]

So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none. If anything, the technical expertise and overhead required to create, operate and update a DRM system has limited the number of participants selling DRM protected music. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in innovative new stores and players. This can only be seen as a positive by the music companies.

Much of the concern over DRM systems has arisen in European countries.  Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free.  For Europeans, two and a half of the big four music companies are located right in their backyard.  The largest, Universal, is 100% owned by Vivendi, a French company.  EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company.  Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace.  Apple will embrace this wholeheartedly.

Wal-Mart launches online movie store with all major studios

Using its clout as the world’s biggest seller of DVDs, Wal-Mart has launched an online movie download store with films from all six major Hollywood studios. The Wal-Mart Video Downloads store currently sells about 3,000 movies and TV shows from Walt Disney, Warner Brothers, Paramount, Sony, 20th Century Fox, Universal, Comedy Central, CW, FX, Logo, MTV and Nickelodeon. The Windows Media-based store only works with Microsoft Windows and videos are not compatible with the iPod. Download prices will be $12.88 to $19.88 on the day of the DVD release. Older movies will start at $7.50, while TV shows will sell for $1.96 an episode. Apple’s iTunes Store, which only offers movies from Walt Disney and Paramount, charges $12.99 for movies when pre-ordered and during the first week of sale, and $14.99 afterward.

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