HMV Group Plc, the U.K. operator of HMV music stores, said it is joining forces with Microsoft Corp. to open an online music store that will challenge Apple Computer Inc.’s iTunes downloading service and iPod music players. Maidenhead, England-based HMV will invest 10 million pounds ($19.2 million) in the digital downloading service, which will start in the second half of 2005, Paul Barker, head of corporate communications, said.
MacDailyNews Take: 19.2 million? Dollars?! That’s it? Apple’s annual toilet paper budget is higher.
“HMV is to develop a digital downloading service with software giant Microsoft, tapping into demand for online music. The applications, which the music store chain hopes to launch in the second half of next year, include a customised ‘jukebox’ where customers can find, download and buy music online at home and through terminals in HMV stores,” Reuters reports.
“Shares in HMV leapt 3.7 percent to 255 pence, valuing the company at around 1.3 billion pounds. HMV customers will be able to listen to the digital downloads on over 75 portable players currently in the market, like the Philip’s MP3 player, the firm said,” Reuters reports. “However, the software is not compatible with Apple’s iPod, and when the service is launched next year, HMV stores will stop selling iPods, a spokeswoman for HMV said.”
Full article here.
“‘IPods are not compatible with Windows Media at the moment,’ an HMV spokeswoman said. ‘However, while Apple has been incredibly successful, products based around Windows are going to push up their market share. It is going to be important that the service is compatible with Microsoft.’ The initiative will be developed by a joint team ‘combining the industry knowledge of HMV with the software development product expertise and consulting skills of Microsoft,’ Alistair Baker the managing director of Microsoft UK, said. Alan Giles, the HMV chief executive, said this morning that the company was ‘delighted’ to be working with Microsoft. ‘We have a unique opportunity to leverage the HMV brand…to establish a strong position in the newly emerging market for paid-for downloads,'” Mike Verdin reports for The Times Online.
MacDailyNews Take: The “consulting skills of Microsoft.” Oh, so that’s what MS does well, consulting. MS consulted HMV right into a format that won’t play on the player with over 90% of the market. The player that’s sold somewhere between 3-6 million unit, depending who you ask, in the past 90 days. Or 3-6 million more non-HMV customers. Sheesh, we almost feel badly for HMV. Almost.
Perhaps there is logic to this move: HMV must not want the hassles of selling music online and digital music players in their stores.
As if HMV werent hurt enough already by the rise of online muisc sales, they then shoot themselvs in the foot by not selling or suporting the iPod. Doh!
What or who is HMV? A perfect brand for Microsoft.
HMV = His Master’s Voice.
‘Nuff said.
HMV sounds like a virus or syndrome.
HMV = His Microsoft’s Voice ?
Actually $19.2 million sounds like an awfully large sum of money just to slap an HMV logo on the MSN Music page.
HMV is an overpriced excuse for a music store. Outrageous prices for stuff. This is not a smart move. His Masters Voice should be changed to His Microsoft Voice, and it’s not very clear.
yawn, I do not care. As well as the other millions iPodders around.
How does HMV think is going to be able to sell music online to people NOT having their player supported. Could all these people be that idiot or simply the CEOs are getting fat cheques from Microsoft? That is the only consultant power leverage that I could see from M$ to convince HMV to not support the most common player in the market, the iPod, in their music store.
So they are targeting the 20% to 10% not iPod user base and believe they are going to make money? Like selling 100k tunes per week/month?
NEXT!
If HMV want to lose out on the retailer’s share of iPod sales, let them go ahead. I have yet to see a WM based device that comes close to an iPod. At this rate, decent MS based music players will come out just in time for the market to disappear to the mobile phone manufacturers.
Hasn’t any of these guys ever watch the A-Team? No matter how many bad guys pile together (Real, HMV, Sony etc.) under one real evil guy (MS) and try to take over, the small band of heros (Apple) will still wipe the floor with them using really creative ideas (iTunes-iPod).
I love it when a plan comes together!
Maybe some young gal will wrrite a post that lets us know just which financial investment instrument we use to make money in a case like this, where we’re pretty sure a company’s stock value is going to fall.
About HMV here…
http://www2.hmv.co.uk/hmvweb/navigate.do?pPageID=1083
“His Master’s Voice” is very same as the old RCA logo of a dog in front of a Victrola, with audio quality so good, the dog is unable to distinguish the recoding of his master’s voice with that of the master himself.
Originally, the “His Master’s Voice” trademark was owned by EMI in the UK (& Empire?) but by RCA Victor in the USA. Presumably the artist sold the rights separately.
I find it amusing they are going to wait until the launch to stop selling iPods. Why not stop now if they are so concerned about formats?
“Maybe some young gal will wrrite a post that lets us know just which financial investment instrument we use to make money in a case like this, where we’re pretty sure a company’s stock value is going to fall.”
I’m not a gal, but here goes.
Go “short” on the stock. You borrow the stock to sell now (from your broker), under the assumption the value will fall. When it does. you buy the stock back, at the lower price, and give the shares back to the broker. You pocket the difference.
If the stock goes up, you’re screwed.
Nice blast from the past Buffy.
all these other retailers are jumping in with MS because they have no choice.
They can continue to sell players (iPods) and make a few bucks or try to push iRiver, Rio, Samsung players and make more per unit…PLUS with their own music stores they have a chance to make a few more dollars from each user. Also it fractures some of the powerbase of Apple. if apple continues to grow iTunes at the current rate, there will be no HMV in the long run.
all the music labels LOVE what apple has done, but what happens in 5 years if they really do control 90% of the music sales. None of the labels will have control of distribution. None of the record stores will be happy that they’ve lost sales and locked out of the future “growth” in sales (online distribution).
in Apple’s guidence filings, they do note that future iTunes sales are dependent on labels continuing and renewing their contracts with Apple at similar rates. There is no guarantee that they will in the future. Although if you hit critical mass where iTunes really is HUGE, how can you pull the plug? But in all honesty PULLING the plug on Apple would be in the record label’s best interest in 5 years cause apple will CONTROL online downloads.
with HMV selling Apple ipods, they get a few bucks with the iPod and that’s it…although isn’t Apple giving iTunes reciprical income for sales now? Probably make more through that than their own store…LOL
Try this interesting experiment:
1. Go to http://www.playsforsure.com
2. Locate the Quick search field on the left
3. Enter the word ‘iPod’ and click on Go.
4. Guess which Music player you are presented with? (Hint: It’s not an Ipod)
As a lover and collector of clasical music HMV, responsible for some of the greatest recordings ever made, has always had my admiration and respect ……
UNTIL NOW !
The dog was fooled by the gramophone and now HMV has been fooled by the dog (i.e.Microsoft)
My experience of online music is with two stores.
iTMS : scarily simple. Easy previews. One click. I’ve only used it to get the free downloads as I think it’s too expensive otherwise, unless there was an exclusive track there that I couldn’t get on an album. Will probably work out cheaper for singles for my kids, rather than albums or compilations albums with crap on that they’re not interested in.
Note: I thinkn it’s too expensive, but that’s a personal decision not to use the store. If it suits othee people’s needs, then that’s fine by me.
Wippit: I used this last night. They have an exclusive track that I want, and it’s an MP3 rather than WMA, so that’s fine by me. It’s also only available as a download from Wippit as far as I know. It was 79p, but there’s a minimum �1 per sale. Bad start. So I figure it’s better to buy another track and spend a little more. Do alittle digging and discover that they have a lot of music I would quite like in MP3 format. Not music I’m desparate for, but music I’d like if it was cheap enough.
Wippit do a �50 annual subscription. Many songs are available as a free download for that �50, including all of those that I looked at. I figured I’d need to download 100 songs in the year to make it worthwhile, and immediately saw about 50 that I’d like without doing much searching. The songs don’t die when the subscription does, so I’d get to keep them forever.
So I paid up. They claim to be Mac and Linux friendly now.
The site isn’t very good. Not a patch on iTMS. No previous (or at least no obvious previews). Each song added one by one to a basket. The basket has to be ‘paid’ for at the checkout, and then they’re available do download individually.
Now it was slightly painful, but not too bad for some cheap music. About the cost of 4 CDs. The problem though, was that the tracks simply didn’t download. Click the download button and an empty popup window appears saying, after about 2 seconds, “Download complete”. No new files on my Mac.
I’ve left a mail with their helpdesk, but it’s a 48 hr response time.
So for now, for me, even though I choose not to use it, iTMS is still a long way ahead of the competition.
What makes them think they will do any better than Napster. Apple has a great product that is easy to use, and has a great place to get music from.
iTunes news zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz.
hs,
thanks that was fun. What a sad site (sight) that URL is!
[I]”‘IPods are not compatible with Windows Media at the moment,’ an HMV spokeswoman said. ‘However, while Apple has been incredibly successful, [B]products based around Windows are going to push up their market share. It is going to be important that the service is compatible with Microsoft.[/B]'[/I]
Now whilst the first part of this statement is undoubtedly correct, the second section (in bold) just goes to show the quality of HMV’s thinking.
I’m relatively certain that iTunes runs on Windows, and is the [B]ONLY[/B] cross-platform online music store on the planet. I’m also certain that iPod in its various forms is also compatible with The World’s Sorriest Excuse for an Operating System �.
So when Alan Giles (obviously a shining example of one of my country’s education system) says that it is important that the service is compatible with Microshaft, presumably he means the business aims of the company as oppsed to the products.
If the man had a brain cell, it would die of loneliness�
Why go to HMV to buy from a kiosk when you can do it from home?
Speaking of iTMS, my only qualms with it are that the encoding should be better (I suspect this is something they had to negotiate with the label) and that some small labels have yet to make it on. One store to consider is you like music from labels like Warp, K7, Ninja Tune, Output, etc, is Bleep.com, Warp Record’s music store. The interface is not as smooth to use as iTMS and the prices of $1.35 a track, but you have access to all of their music (a lot of which can be difficult or impossible to find on CD), the encode the mp3’s with LAME using the -alt-preset standard VBR setting (ave 205 kbps), you can preview whatever 30 sec portion of the song you choose (based on a waveform), and NO DRM!! It’s a niche store, but if you like such music, it’s worth a look.
Well, just to be fair though, what choice do they have? Apple is not going to license out fairplay to them so if they want to be involved in the market, pretty much the only available option to them is M$. Outside of Apple this would also be the safest choice (I kinda doubt they would pin they hopes to Real’s coattails).
I hope that Apple can continue to dominate this market (pretty much unilaterally) and become the long term standard. However, if they see appreciable market share being taken from them, they should consider openly licensing out Fairplay to all comers and sewing the entire market up for the foreseeable future.