“With too many players jostling for too few chairs in the online-music game, a long-predicted shakeout appears to be under way,” Nick Wingfield reports for The Wall Street Journal.
Wingfield reports that servies such as MusicNow, OD2, and others are actively searching to sell their online servcies or raise capital. And “Los Angeles-based Echo never launched its service and its plans are now on hold as it tries to figure out how to distinguish itself from other music sites.”
As for number two, Napster, less than 1/10th the size of Apple’s market-dominating iTunes Music Store, Wingfield reports, “Roxio said it expects its Napster service to post about $5.5 million in revenue for the calendar first quarter, up 53 percent from $3.6 million in revenue in the fourth quarter. What Roxio didn’t remind investors is that the company had launched Napster in late October. Had Napster been in business the full fourth quarter, Roxio had previously said it was on track to report $5 million in revenue then — meaning it had a mere 10 percent in sequential growth. Roxio’s shares now trade for less than half of their value prior to its reintroduction of Napster.”
Full article here.
One thing that the impending demise of BuyMusic.com (YAY!!!) shows is that being Windows only / WMA compatible and locking out iPod users by no means whatsoever insures success. It also shows that underestimating the Mac market is stupid. iTMS is so successful, in very large part, because of the Mac community. Don’t forget that iTMS was the #1 paid music download service even before there was a Windows version.
HP made a very wise decision indeed: if you can’t beat ’em, join ’em!
“Whatever the approach to selling music, though, sales from commercial music sites are still small compared with the number of downloads from free, renegade alternatives like Sharman Networks Ltd.’s Kazaa, which have a much broader selection of music, most of it pirated.”
Isn’t it ALL pirated….?
“”We didn’t want to go out with a me-too, too-late service,” said Dan Hart, Echo’s chief executive.”
Well, it is… or it will be
-yawn- nothing new really
gzero
what would be the alternative to WMA for this services?
MP3 or just open AAC without DRM?
I’ve heard the argument before, but I’m not getting it (no sarcasm)
what are the options?
It’s just a matter of time before Paul Thurridiott starts farting from the neck that it’s lies, all lies! Mark my words, you heard it here first.
SsnMx:
Anything that’s iPod compatible, which WMA is not. Of course, if Apple licensed FairPlay AAC, that would probably help the other services, and result in some lost sales for the iTMS, but perhaps even more sales of the iPod, so it’s really a win/win situation for Apple if they licensed FairPlay.
BTW, at the CeBIT convention in Hannover, Germany a number of companies were showing AAC compatible cell phones, including market leader Nokia. Imagine if you could sync iTunes with your cell phone…
On the ballyhoo’ed idea that Apple does not offer a subscription option for iTunes, tell me if this would make sense….
Apple should offer a “subscription” service to its .Mac members, letting them listen and stream as much music as they want. This would offer a jealousy factor bar-none, cause Windows users would be pissed (and go buy a Mac) This would give more value to .Mac, enlisting more annual subscriptions. You would still need to buy the music in order to put it on your iPod.
I would buy into this subscription model waaaaaaay before i tap into any of the existing ones because look at all the stuff you get with it, and when you add that up in annual costs, that’s cheaper than any of the other services, even if they bump the price to $129 for an iTunes Enhanced .Mac account.
What do you guys think?
Interesting idea that might work eaxit but I am not sure if Apple will go for it. They have stated again and again that “renting” music was what was wrong with the previous business models. It would be hard for them to about face on that.
I might go for a streaming version for a while but actually I don’t listen to tunes that much on my computer and mostly do so on my ipod. I think other people DO listen on their computer more and so for people like that this would be of more intererest to them. You also have to remember tho that Apple is making the money on the iPod sales and not on the tunes so much (at least right now).
Part of the problem with a subscription service, from an artists rights perspective, is you can take a program like AudioHijack and simply copy the music in WAV format. I think part of the reason Apple got the rights they did is because they took a number of steps to protect the rights of the artists (or at least make it more challenging).
Jack A,
All Steve has to do is say, this is the way streaming/subscription should be done. The right way, the apple way. I am sure they would come up with a way to protect the artist’s rights. How else are the other services able to offer subscriptions with the same catalog?
“All Steve has to do is say, this is the way streaming/subscription should be done. The right way, the apple way”
I’m sure at this point Steve could get anything he wanted. I might be willing to pay a bit more for my .Mac account but I’d have no interest in a subcription. I’m already considering spending $10/mo for XM radio in my new Audi (after paying $1,000 extra for the radio).
geeeeeeeez!, iSteve, have enough toys? which model (audi) do you have?
Subscriptions won’t work and Apple does not need to offer them. I think the dot.com bust proves this. Everybody imagined that they could get us to pay for content, etc…. never happen.
I agree with Citizen X – subscriptions won’t work.
eaxit – one cannot have too many toys! Way off topic: I currently have an A4 Avant 1.8T but I’m debating between a new A4 or waiting for the A3 when it comes to the US. If any of you in Europe have any pro/con views on the A3 please send me a private email. Thanks.
ooops. Helps to check the show email box…
CitizenX,
I am not saying to sell subscriptions for subscriptions sake, I was saying add value to it via .Mac, we already pay for it, why not add to it. If the PC world is paying for it, then if it is worth it to them and they know that they can still listen to all that music, then switch and get an enhanced .Mac account.
Actually, I think I would be more inclined to buy more music if I listened to more of it. Right now, I buy cause I heard it on the radio on the way home or saw the video and decided to buy it. By this model i get to listen to a very small section of the music industry catalog. If I had the whole catalog at my disposal, hell yeah I would buy more cause I am exposed to more than just teeny bopper top-40 shit I hear everyday.
How’s this for a business plan:
You are going to launch a store serving a very specific market for sales. Your plan:
1) Excludes the only consumer base that covers the market (Mac & PC).
2) Excludes support for the most popular format in that Market (AAC w/ FairPlay DRM).
3) Excludes the enabling hardware that has the best user demographics (iPod).
Maybe it’s a good thing Steve Jobs doesn’t have an MBA…
If these bozos bothered to do a little research into the legal download music market, they would realize that Mac users as a whole are far more likely to PAY for LEGAL downloads than their “I want everything for FREE”, Windows using counterparts.
As was said above, the iTUNES store was #1 even before Windows users were given access.
An all Windows/No iPOD/No Mac business model is sure to fail every time. All we are seeing is that reality taking hold.
why don’t all the other “music stores” PAY apple to support their own DRM of choice on the iPod, instead of whining that Apple should open up and license AAC/FairPlay to them????
there’s at least 1 “music store” out there that uses AAC with an other DRM afaik…. and MP3 with DRM is also possible it seems.
no need for M$ and WMP.
‘nuf said
Too true RV.
How many of your Windows friends have warez out the wazoo, and not only want you to learn how – but fix their computers for FREE.
It’s funny that the folks that are likely to PAY for the products – from peripheral makers, music download sites, etc. – are categorically removed from their business plan.
It might be 89% versus 5%, but many of these guys make as much money (profit) from us as from the 89ers.
If OD2 is in trouble, that’s the basis for most (all?) of the European stores, like mycokemusic, who in theory might have had an early foothold before Apple.
Prince opens online music store at [url=http://www.npgmusicclub.com]http://www.npgmusicclub.com[/url] Unfortunately, Prince choose WMA for the store. Apple needs to license FairPlay DRM to these types of sites.
As usual, Prince has a wildly inflated view of his popularity. Who the hell would want to buy anything from him?
He should stick to showing up late for concerts, playing a short set and then rushing off to a nightclub.
Does the iPod understand Fairplay? Or is the Fairplay stripped when Fairplay DRM’d AAC files get copied to the iPod? If it does get stripped, why doesn’t Real’s music store which uses AAC work with the iPod? Is it because they don’t have a Mac version of their player that will strip the DRM from the music?
Anyway, Apple should definitely license Fairplay to other stores. There is absolutely no reason why they are holding this back if they actually own Fairplay. The licensing is the key, not the iPod. In five years, music players will cost less than $50 and the iPod may not even exist. What will exist is the DRM unfortunately. Its up to Apple to decide who’s DRM will be the standard.
eaxit
If you ask me about the failure of subscription services and the dot.com bust, I would have to say choice. Too much choice.
Say I do pay for iTunes streaming audio. 10 bucks a month. Now I just got that video iPod. Another 15 bucks to Time/Warner a month to rent videos for it. Now, my newspaper, radio station, tv station, library, bookstore (insert any idea for making money off the internet here) wants to sell me stuff. Not only are we talking about paying numerous vendors, how is all this disparate stuff supposed to be managed on numerous devices, of which there are many different choices, formats, and rights management. Besides there is the choice to not sign on to this at all. My music listening habits are my iTunes playlist, playable throughout the house, thanks to Apple. I purchase what music I wan’t from ITMS. I think that is a more common model for most people rather than acquiring content through subscriptions and purchase to play on all of these wonderful devices we can buy. (iPod excepted because it does what it was designed to do, play music and be as easy to use as possible) ITMS works because like all things Apple, it just works. You pays your money, you get your tunes. Whether you put it on an iPod is a different matter
I guess in my mind we will always be stuck looking for the killer app, the killer product that does it all, made by people with different interest interest and motivations, telling us it is all good because we have choice.
When I buy and iPod and an iVideo or whatever it will be more as an amusement than anything else personally. I think Apple is brilliant for recognizing the personal in all these equations. You may be a member of a group of iPod owners, but its your iPod, your music and your Mac. Not something you are setting up and automatic withdrawal for. I don’t think there is a mass market for subscription services.
” Actually, I think I would be more inclined to buy more music if I listened to more of it. Right now, I buy cause I heard it on the radio on the way home or saw the video and decided to buy it. By this model i get to listen to a very small section of the music industry catalog. If I had the whole catalog at my disposal, hell yeah I would buy more cause I am exposed to more than just teeny bopper top-40 shit I hear everyday.”
would you really buy MORE music or perhaps buy different music in pretty much the same quantity?
CitizenX,
Given th proverbial deep pockets, I believe I would be able to buy more music given the fact that I could listen to a variety instead of what the top 40 station decides that I need to listen to. With that model, I may only buy one or two songs a week, if at all.
Now, if I get to listen to what I WANT, flip thru as many genres as I want, (most of which don’t get radio “fairplay”), i think I could do some serious damage to my finances, because I know this is going to be the only place that I hear this or that song, cause it is not played on the radio, but I want to take it with me on a CD of iPod.
Yes I would buy more,…, right now, what prevents me from doing so is, like any other comsumer, I am lazy, and don’t want to have to click on a gazillion 30 sec. previews to hear all the music that I want. I just want to walk in the house, have Salling’s Clicker sense my presense via the bluetooth phone, turn on iHub (I wish), flip through a couple of genres, and sample whatever selection of music i feel like that day. Then when I am leaving, and decide that I want to take it with me, just buy it.
To comment on your subscription take, I said Apple should just roll the entire catalog to all .Mac members, that way you only have to pay one annual fee, instead of being bilked monthly, that gets annoying. Not to mention, Apple would save huge ammounts of money charging your credit card once instead of 12x a year. Multiply that buy a few million users and the whole venture becomes a money pit.