YouTube Music: It's Bigger Than Pandora, Spotify, Rhapsody, & Grooveshark Combined...
It may not be the cleanest experience, but it is the biggest experience - by a gigantic and overpowering margin. In fact, nearly 40 percent of YouTube's trillion-plus annual views come from music videos according to the latest research estimates. And according to our calculations, that makes YouTube Music bigger than Spotify, Rhapsody, Grooveshark (and Rdio, MOG, Deezer, and eMusic) combined.
Here's a comparison using five of the biggest players in this space. It uses figures from the companies themselves, various research groups, and our own back-of-the-envelope assumptions. Below the graph you'll find our detailed methodologies and assumptions.
And, please geek out on our methodologies and assumptions.
(1) YouTube Music Videos
Based on top-level, 2011 view data of 1 trillion views, as reported by YouTube. Accustream iMedia Research estimates that 38.4 percent of that traffic is music videos (others peg it closer to 40 percent).
(2) Pandora
The company reported 8.2 billion hours of radio streaming during its fiscal 2011. Assuming 12, 5-minute songs in that span, the total number of 98 million is reached (the estimate ignores in-stream ad interruptions, but inflates the average song length).
(3) Spotify
Using the company's 10 million active userbase figure (WW, includes premium), and assuming a daily play of 10 songs.
(4) Rhapsody
Using the company's reported 1 million subscriber total, assuming a higher per-daily play of 20 million from paying subs.
(5) Grooveshark
The Office of Technology Licensing at the University of Florida pegged the figure at 150 million per month in 2010 (we've seen this estimate elsewhere). We inflated to 200 million given very noticeable growth since 2010 as measured by Alexa (though in fairness, Compete shows declines).
Could Spotify's new Facebook Timeline change music education?
Facebook changed how we communicate with friends and family. Google challenged how we search for information. The Kindle altered the course of the book industry, and iTunes redefined music consumption.
Enter Spotify: The digital music service and its database of millions of songs and compositions is out to chronicle history and offer another avenue learn about music, from as early as organum works of the Christian church at the beginning of the second century.
That's quite impressive for the five-year-old Swedish company that has three million paying clients and 10 million active end users. For the time being, the service will continue to be free with ads — commercial-free for $5 to $10 monthly.
The tuneful social network has capitalized the use of Facebook's new Timeline format, which became the base standard for all brand pages, bringing them up to speed with individual accounts as introduced in December.
The layout feels like a chronological archive — a personal diary — of events past and present. For Spotify, it's musical storytelling on crack.
The layout feels like a chronological archive — a personal diary — of events past and present. For Spotify, it's musical storytelling on crack.
Some preliminary studies say that the new design doesn't improve engagement.
But Spotify's innovative use has huge potential — if administered properly — both for revenue generation and for music education.
A listen is a mouse click away.
Check out the year 1,403 and find an entry for the birth of French composer Solage. The link opens Gothic Voices' The Unknown Lover: Songs by Solage and Machaut. In 1800, Beethoven's Symphony No. 1 was premiered in Vienna.
An 1899 post announces the birth of Duke Ellington and gospel legend Thomas Dorsey. The 1950s tells of the first Grammy Awards, Miles Davis' Kind of Blue and David Brubeck's Time Out. In 1962 The Beatles released "Love Me Do" and in 1999 Eminem debut album, The Slim Shady, came out.
No sooner than Spotify announced that it would track "memorable posts," fans poured in with comments suggesting additions like the riots at the premiere of Stravinsky's Rite of Spring in 1913, the birth of Ella Fitzgerald in 1917 and the death of Jimi Hendrix in 1970.
And with that, Spotify's morphs its Facebook wall into an interactive and easily accessible database effective for 21st-century learning, essentially.
In a recent Facebook post, it writes:
Of course, all this is just the beginning. We'll be adding more and more huge historical landmarks in the coming weeks as well as keeping you up to date with the freshest and most important music moments of today.
It's too early to tell how this resource will unfold. Questions of inclusivity, accuracy and accountability will surely surface. Who's responsible for verifying information?
The Cloud Is Running Out of Room: Here's How AT&T Limits Affect Spotify, Pandora and Others
One option for music fans who want to stay clear of AT&T download limits is to keep downloading MP3s from iTunes, BitTorrent, Amazon, MP3 blogs, sneakernet, and other sources that offer downloads, rather than subscribing to a streaming service. Another is to rely on the ability of some streaming services to store music for offline playback after syncing it via WiFi.
Assuming you don't want to keep living the download life in a streaming world, here's how much music AT&T's new wireless data limits allow you to listen to each day, assuming you use your phone for nothing else, at a few different bit rates. Remember, the higher the bit rate, the better the music sounds:
Regular plan for 3G and 4G smartphones
- 32 Kbps (Pandora's most efficient rate): about 7 hours per day
- 128 Kbps (standard digital music bit rate): about 1.8 hours per day
- 320 Kbps (MOG and Spotify's maximum bit rate): about 45 minutes per day
LTE plan
- 32 Kbps: about 12 hours per day
- 128 Kbps: about 3 hours per day
- 320 Kbps: about 1.2 hours per day
This might sound like a lot of music, especially using the hyper-efficient 32 Kbps bit rate music. However, keep in mind that every time you read your email, check Facebook, download apps, use the web, watch a video, and so on, your monthly supply of available wireless data decreases. The above numbers assume that you use your phone solely for streaming music.
Once a user hits the limit, AT&T sends them a text message alerting them to the fact that their account will be throttled for the remainder of the month. Some users have reported that web pages can take as long as two minutes to load using a throttled account.
Update: As the Future of Music Coalition points out, AT&T also wants media and app companies to pay for the bandwidth used by their subscribers.
Guest post by Eliot Van Buskirk of Evolver.fm.
It's true, what they say: Our digital lives are moving to the cloud. Whenever we fire up Facebook instead of a local email client, we're taking part in the shift from locally-run software to the networked app world.
However, some fairly major parts of those digital lives — our music, movies, and other activities — haven't truly moved to the cloud, at least when it comes to all of those smartphones and tablets we've been buying, and they likely won't for the foreseeable future.
The reason:
We are running out of wireless bandwidth.
The supply of wireless data in the United States — the stuff that lets us use the internet on our smartphones and tablets — is fast disappearing, as reported by CNN Money, which found the crisis pressing enough to warrant a week of dedicated coverage.
[Above graphic: CNN Money's chart, which relies on data from the FCC, shows our wireless spectrum surplus becoming a deficit next year.]
Consumers - and music fans in particular - are already feeling the squeeze. As a recent example, AT&T reneged last month on its promise to provide unlimited data to customers who ordered and paid for it. Not only does AT&T not sell unlimited data plans anymore, but it won't even honor the ones it already sold, despite pledging to grandfather those users in (if they agree never to tether their computers to their phones and abide by other annoying restrictions). If you were counting on AT&T to let you stream all the music you wanted, well, you no longer can.
As a result, the streaming world that has taken over media consumption on our PCs (think Spotify and Netflix) doesn't translate cleanly to the mobile devices that are replacing computers in other parts of our lives. By our calculation, Verizon's $50/month limited data plan, which comes with 5GB of fast LTE wireless bandwidth each month, would only let you listen to about an hour of MOG's music (which Verizon streams at 320 Kbps) per day — and that's if you don't use your phone for anything else.
The last time we asked, Pandora's Tim Westergren told Evolver.fm he's not too worried about limited data plans because Pandora streams to mobiles at a hyper-efficient 32 Kbps (using aacplus). But even Pandora would benefit from offline playback in the subway and on airplanes, and has other reasons to consider offline playback, including improved sound quality.
In Spotify's iPhone app, you can choose to view only those playlists that have been cached for offline playback, which is a nice way of dealing with this increasingly important issue.
In addition, even if Westergren's right that Pandora is efficient enough that it doesn't need to worry about its users' data consumption, it needs mobile listeners who can be advertised to at higher rates due to the fact that they sometimes walk past an advertiser's physical location. And if mobile users are concerned about data usage, even without cause, they might think twice about listening to Pandora all day on their phones. The perception of a limit can be as effective as an actual limit.
[Graphic right: In Spotify's iPhone app, you can choose to view only those playlists that have been cached for offline playback, which is a nice way of dealing with this increasingly important issue.]
As the bandwidth crunch continues, we expect to see bargain plans proliferate alongside with new ways of throttling accounts when they play too much music or watch too much video. Are music fans really going to want to listen to another hour of music if it means they might lose the ability to read web pages or use Facebook by the end of the month? Maybe, but they won't use the cloud to do it.
This is particularly troubling because so much music listening happens in the car, where every digital music executive we've asked agrees that the smartphone will continue to function as the modem for at least the foreseeable future.
A solution to this problem exists, and some music apps already embrace it: offline playback. For example, Spotify's app can store up to 3,333 songs on your smartphone's or tablet's memory, so that you can play them without tapping in to your wireless data plan or staying near WiFi. Likewise, Slacker lets users cache entire streaming radio stations offline, so they can listen to programmed music without a connection.
This sort of caching requires a separate license from copyright holders. We have not been able to determine how much more that license costs, but it's likely to be an increasingly valuable feature as heavy media users seek to store pieces of the cloud on their devices.
However, one precedent suggests app developers shouldn't have to pay copyright holders anything extra for caching songs and videos on portable devices. ISPs don't have to pay for so-called "ephemeral copies" of media on their servers (stored there to ease transmission), so long as those copies are destroyed after being sent on to users. The same concept could apply to ephemeral copies stored on users' devices, which would make it easier for developers to add this increasingly important feature.
Regardless of how that plays out, offline playback is already here. Even if it might sound a little wonky and geeky — like something only system administrators would care about — offline playback could become a must-have feature for any music or video service that runs on portables. In other words: Don't leave home without it.
It hit two million paying subscribers in September of last year and 2.5 million in November, and now Spotify has hit another big milestone. According to the
Financial Times, it now has three million subscribers paying for one of its premium services, which reportedly represents more than 20 percent of its active user base. As the
FT notes, that percentage is up from 15 percent in March of last year, and Spotify says that its "active" users don't include folks who signed up for a a free trial of its premium service but didn't continue to use the free service. Interestingly, the company also revealed that over half of its paying
subscribers are under 30, which Spotify's Ken Parks says is a "remarkable number of people who are generally hard to monetize."
Guest post is Scott Perry of New Music Tipsheet and entertainment industry marketing and consulting firm Sperry Media.
Don't care what anybody says, artist has a right to withhold their music from streaming services in order to make a couple extra dollars from physical & downloads. It ain't greedy, it's business -- if you can sell out Madison Square Garden in 10 minutes (Black Keys, pictured left), if you can sell out 3 nights at the Hollywood Bowl (Coldplay), if you are on the verge of sweeping the Grammys (Adele), the world can afford to pay full price for your art.
But then again, the #5 album on the charts last week sold under 30,000 units (Coldplay, btw), so how long do you withhold an album before opening it to streaming? Maybe this won't matter in 2 years, when revenue grows as streaming services have 30% market penetration (Apple 15%, Spotify 10%, the rest 5% combined), but for now, acts need to make as much money as possible from each channel without one area cannibalizing the other.
An Escalated Window Schedule
We're not too far off from an escalated window schedule, just like the movie industry -- leak first single to blogs 8 weeks in advance, drop video 6 weeks in advance, preview album stream a week in advance on NPR, offer album as physical or download for first four weeks, then make it available to streaming services after maximizing album sales to fans (likely by week 4 -- or earlier if one service is willing to pay for the exclusive).
So yes, there will be windows, albeit small windows -- acts like Civil Wars and Bon Iver will need to do this in order to protect their revenue. These are the kinds of acts that can sell 50,000 units to their core fans in the first couple of weeks ($500k gross), but will need streaming services to keep growing their base in order to build their potential live audience base, especially since mainstream radio ain't exactly burning the airwaves with their tunes. This model will let them record an album for $50k, put up $50k for hard marketing and tour costs, and still make a few bucks after paying out their management and promo teams ($100k) -- and that's before ticket, merch, and licensing revs kick in.
Cloud based streaming of music will be a key digital trend this year, according to a report by eMarketer. Rapid adoption of smartphones, tablets and other connected devices has shifted consumer expectations. Now, consumers expect consumption to be seamless across all of their connected platforms. This creates both a challenge and an opportunity for content providers and advertisers as they move to meet those expectations.
Music is a key example of content that consumers will seek to access mobilely and across multiple devices. Platforms and technologies that give listeners instant access to their music collection on their assortment of devices are perfectly suited to this challenge.
Streaming music, or cloud based music as eMarketer refers to it, will get its long term test in 2012.
While a large part of the challenge to these online services is to keep listeners happy as they tune in on their collection of devices, that’s precisely the opportunity for streaming music as well. Music collections used to live at home, and then moved onto an ipod, but were purchased, collected and synced by the listener as a physical library. Cloud based music changes all of that, enabling listening to streaming services to replace the purchase of music. Services that allow that – from Pandora to Spotify to Amazon’s and Apple’s cloud services – are increasingly preferred by consumers.
Of course, the challenge in this major shift from purchasing music to streaming it from a service is the revenue, and the question remains whether the services can make money through subscriptions and advertising to cover licensing obligations and survive.
All of these challenges take place within a digital experience that continues to evolve – mobile commerce, targeted ads, privacy and social media are lending to an increasingly sophisticated online marketplace.
This guest post is by Eliot Van Buskirk of music app blog and database Evolver.fm.
On one level, Spotify’s transformation into a music platform was a simple technical matter of exposing an application programming interface (API) to app developers and publications and allowing them to treat Spotify like a web browser for their HTML5 apps, linking each song to Spotify’s catalog. Big whup, as we used to say.
Want to listen to Pitchfork’s favorite albums in Spotify (
Pitchfork), sort its 15-million-song catalog by mood (MoodAgent), scroll lyrics in real-time as they play (TuneWiki), or listen along with your friends (Soundrop)? Spotify now has you covered — just install the preview version, look for the new Apps Finder in the left pane, and you’re off to the races.
As GigaOm points out, at least one developer fears users might “forget about [his app]” within the Spotify platform.
However, every developer we spoke with at the event was enthusiastic about adding their app to Spotify, even though Spotify apps are desktop-only (for now) — and even though, due to the intricacies of dividing the loot with labels, publishers, and Spotify itself, developers can’t charge for or include ads in these apps (for now).
Even Spotify’s director of product development, Charlie Hellman, thinks these app developers will eventually be able to charge for their apps.
“I think the potential for people to build a business on the Spotify platform will happen over time,” he told us. “This is day one, really, of us transitioning from being an app to being a platform.”
With that in mind, here are some key snippets from Evolver.fm’s interviews with developers at Spotify’s “music platform” announcement yesterday:
MoodAgent founder and CEO Peter Berg Stephenson
“[Over the long term] a lot of app developers will see the monetization opportunities [within Spotify], because they won’t happen in the short term within the client, for the simple reason that [Spotify has] all these dependencies on the labels, who actually take the biggest cut of anything that happens on screen.”
“I know that a mobile version of this is in the making. And, of course, there are a number of ways we can monetize — either by driving new users to Spotify [Premium], and get a rev[enue] share from that, but much more interestingly, with a large volume of users, we know the mood that people are in at a specific time and a specific place, and we can use that information to drive partners to… services matching the mood to their product… or brand values… You can imagine Coca-Cola being interested in knowing that it’s a happy user [to whom] we’re showing this ad for their product.”
Fuse vice president of marketing Joe Marchese
“We’re a television company, so there are some interesting roads to go down inside of the Spotify app, because it’s HTML5. And because we’re a television company, we’re one of the few that can have on-air stuff kicking to our Spotify application. So, you’re watching our weekly top 20 countdown and on television, in the bottom, people can be in influencing it in Spotify… every two weeks, we’re going to be looking at rolling out new features, or as much time as Spotify will put up with us.”
“I know it’s easy to get carried away on the launch day, but it’s huge. Spotify is one of the pre-eminent music players in the world right now. Things are starting to funnel through them. People have access to music [there] but they don’t necessarily have the curation, so with a 24-hour linear television station, we curate all day long… This, for us, is: If the entire music community is here, and we can provide a filter or lens through which to view it, that’s huge for our linear television.”
Songkick founder Ian Hogarth
“I think it’s a really big deal. We’ve been brainstorming with Spotify for ages about how this could happen. We’ve been talking about it at Hack Days and trying to come up with the right way of doing it… Spotify users have been asking for it and our users have written in saying ‘integrate with Spotify,’ so it’s something we know there’s a lot of pent-up demand for.”
“What’s so exciting to me is the level of seamlessness. In a single click, Songkick will scan all the music in your Spotify playlist and build you a personalized calendar of every single concert [from those bands] in your city… [Or] say you’re going to Singapore on holiday [great, because we at Evolver.fm are always going on holiday to Singapore]. You can bring up the city listings, and say ‘I’m free on Wednesday night.’ There would be a list of bands, and half of them you’d never have heard of. You can now, with the click of a button, listen to that band right there within the listings. It’s kind of like the Village Voice with a play button on it… I think it’s going to have a great impact on artists’ livelihoods and fans’ lives.”
We Are Hunted CEO, founder, and “tech guy”
“Our site’s been growing tremendously in the last six months, we think we’ve got a great product, and we can be one of the best music discovery services in the world if more people knew about is. That’s what this is about for us.”
“Spotify has only spoken about the desktop. I assume it’s going to go to mobile at some point, and it’s all HTML5, so it’s easily portable to that.”
“We met the guys from Spotify before who came from Skype, and they were talking to us about the parallels they saw in the fun brand, the peer-to-peer architecture, the growth he saw at Skype, and the Swedish origin — [they're] seeing it happen all over again, and he’s expecting they’ll blow up. We put a bet on Spotify. We’ve been approached by all these guys to do charts and stuff, and then two years ago, their creative director, who’s now at Facebook, reached out to us and said “I love Hunted, I love the idea of it, can you guys be in there?’… we had 18,000 followers [in Spotify even before this app]. We just had a bet at one point that discovery is going to be a big differentiator between these guys, MOG, and Rdio, and we want to be there… It took a year longer than we thought. They had to wait a year to come into the US, but now [that] they’re here, it all made sense to us.”
TuneWiki CEO Larry Goldberg
“There are going to be a lot more people who haven’t heard of TuneWiki before who are going to find out about what we offer, and how passionate we are about lyrics. We’re thrilled to be able to allow Spotify users to have the lyric-viewing experience. The other thing is, as you know, our lyrics, database, and syncs are crowdsourced… so to have people who use Spotify become part of the TuneWiki community as well, to add syncs and lyrics into the overall database will be fantastic for us.”
“We’ve been providing lyrics to people who have stored [music] libraries for some time, and as the business evolves, it’s clear that people are also going to use on-demand services… partnering with one of the leaders in that area helps us move the bar forward… You have to start somewhere.”
Hop into the wayback machine and join me at Google I/O 2010. It was day 2 of the conference and Vic Gundotra was playing the ghost of Android future and showing us the Android world that was yet to come. Vic described Google Music as we have it today, uploading your music collection to the cloud and streaming it from anywhere on your device. First however he showed us one feature that continues to elude Google today and that is simply purchasing a song via the Android Market.
Rumors of Google starting a music service of their own date back basically to the launch of the T-Mobile G1 when many speculated that their partnership with Amazon and its MP3 store was just a bandaid to get Google by until they could get a competing option up and running. Three years later and still nothing. Apparently it was a more herculean task than anyone would have expected.
Well if the New York Times sources are correct, the wait may finally be drawing to a close. The Times is reporting that Google has ramped up talks with the labels in the hopes of launching their store “in the next several weeks.” Now these are the same talks that broke down earlier this year and caused Google to launch Music without the ability to purchase songs or to have Music recognize the songs in your collection and simply make them available to you rather than forcing you to upload your entire library.
In July some unused resources found in the Android Market revealed that Google had been very much ready to incorporate these features.
So what’s changed? Perhaps Google is feeling the pressure with iTunes Match so close to launch and is more willing to deal this time around. Of course it’s also possible that the music industry doesn’t want to cede their fate to Apple completely.
How critical do you think a legitimate music service is for Android?
Speaking of Google Music, if you still need an invitation just make sure you ask in your comment and I’ll give invites to 5 of you that have commented by noon tomorrow.
by Hisham Dahud
In a new research study concluded by eMusic, and administered by Insight Research Group, 92% of music fans are concluded to prefer they own their music rather than stream it – citing unlimited playback and file security as key determining factors.
However, steaming music was found to be an important gateway to music purchases. The study found that 71% of consumers use streaming to discover and listen to new music in order to gauge whether it’ll be worth purchasing. However, only 13% of the general population chooses to pay for music steaming services, while 20% of more dedicated music consumers pay to stream music.
Combining Ownership With Access
Combining ownership with access, roughly 40% of all music fans say they would store digital music files that they already own in a cloud-digital locker so they can listen to them anywhere.
This quantitative survey for eMusic occurred during August – September 2011. Respondents were online music buyers nationwide, including eMusic members. Sample size consisted of 1000 male and female respondents between 18-64 years old.
Cloud-based music services can heave a sigh of relief. MP3tunes, the cloud locker service founded by Michael Robertson, scored a partial victory in the copyright litigation brought by EMI. In his August 22nd decision, Judge William H. Pauley III agreed with MP3tunes that the safe harbor provision of the Digital Millennium Copyright Act (DMCA) protected it against many of EMI’s infringement claims. The decision represents a significant victory for other cloud-based music services – such as Google, Amazon and Dropbox – who should have renewed confidence in operating their cloud services without a license. Though the decision sets a beneficial precedent for cloud-based music services generally, it is a mixed result for MP3tunes as the court also found both the company and Robertson liable for copyright infringement on some of EMI’s claims.
MP3tunes allows its users to store music files in personal online storage lockers and then to play those stored files from Internet-connected devices. MP3tunes also operates a second website, Sideload.com, that permits users to search for free song files on third-party websites and then “sideload” those songs, which would be saved to users’ lockers. EMI, along with fourteen record labels and music publishers, filed this lawsuit in November 2007, claiming a laundry list of violations of copyright and unfair competition laws.
Yesterday’s decision turned largely on whether MP3tunes is eligible for the DMCA’s “safe harbor” protection, which shields qualifying online service providers from copyright infringement for content uploaded (or “sideloaded”) by their users. To qualify, online services must follow the rules set forth in the DMCA, including expeditiously responding to takedown notices from copyright holders. The court found that MP3tunes – for the most part – complied with all of the DMCA rules and, therefore, was largely immunized from liability.
However, MP3tunes and Robertson did not completely avoid liability. Shortly before filing this lawsuit, EMI sent MP3tunes three takedown notices that identified specific song titles and URLs to be removed. Although MP3tunes disabled the links to those songs, thereby preventing more users from downloading them, it did not actually delete the songs from the lockers of its users who sideloaded the songs from those links. (MP3tunes claimed that it would be subject to lawsuits by its users if it removed property from users’ lockers.) The court held that MP3tunes did not do enough when it failed to remove the sideloaded songs from users’ lockers.
As for Robertson, the court ruled that Robertson was “directly liable for the songs he personally sideloaded from unauthorized sites.” This finding is somewhat confusing based on the court’s earlier statements that “there is no evidence that MP3tunes executives or employees had firsthand knowledge that websites linked on Sideload.com were unauthorized.”
There are several key-takeaways from this important decision. First, this decision provides significant legal cover for cloud-based music locker services to continue providing their storage and play-back services without obtaining a license. (When Amazon and Google launched their respective cloud services earlier this year, the record labels were “upset” and clamored that licenses were necessary.) While the decision does not specifically address the legality of MP3tunes’ music locker business model or other similar cloud-based services, it is clear that MP3tunes would have completely escaped copyright liability if it had removed the specific songs listed in EMI’s takedown notices from its users’ lockers.
Second, the ruling re-affirms the DMCA as a powerful shield against copyright holders, who claimed that the DMCA did not apply to MP3tunes. As the court observed, “the DMCA does not place the burden of investigation on the Internet service provider.”
Third, the decision appears to let MP3tunes off-the-hook for its storage process, which eliminated duplications of the exact same music files so that only one copy of a particular file would be stored on its servers and then streamed to its users. Google and Amazon took a different approach when they launched their respective services as both companies require every user to upload every song, regardless of whether other users had uploaded identical files, thereby resulting in an enormous consumption of bandwidth and storage space.
Finally, the ruling indicated that playing back songs stored in a user’s digital locker was not a “public performance” requiring a license, contrary to EMI’s contentions. This holding was a natural extension of an earlier decision – commonly referred to as the Cablevision case, which determined that a public performance license was not required for the play-back of television shows that were stored on a remote DVR at the direction of Cablevision’s subscribers.
The EMI v. MP3tunes case, however, is not over. While the decision disposes of some claims, several issues (such as damages) still will need to be tried – unless there is a settlement. The range of damages is $750 is $30,000 per work infringed, and can increase to $150,000 per infringed work if there is a finding of “willful” infringement. Because there are at least 350 works at issue, the damages could exceed $50 million dollars, though that result is highly unlikely. And, barring a settlement, one can certainly expect an appeal of this decision. But, in the meantime, the decision provides some important clarity and leverage for cloud-based storage services that may have been considering the daunting process of negotiating with labels (and other copyright holders) for the right to store and play-back their users’ lawfully-obtained digital files.
Century Media: Why We're Pulling Out Of Spotify Immediately...
The following is a statement from label group Century Media, which announced Tuesday that it was pulling all content from Spotify to "protect the interests of its artists." Century includes InsideOutMusic, Superballmusic and People Like You.
_______________________
"While everyone at the label group believes in the ever-changing possibilities of new technology and new ways of bringing music to the fans, Century Media is also of the opinion that Spotify in
its present shape and form isn't the way forward. The income streams to the artists are affected massively and therefore that accelerates the downward spiral, which eventually will lead to artists not being able to record music the way it should be recorded. Ultimately, in some cases, it will completely kill a lot of smaller bands that are already struggling to make ends meet.
"At the same time, Century Media also believes that Spotify is a great tool to discover new music and is in the process of reintroducing their bands to Spotify by way of putting up samplers of the artists. This way, fans can still discover the great music released by the label.
"Physical sales are dropping drastically in all countries where Spotify is active. Artists are depending on their income from selling music and it is our job to support them to do so. Since the artists need to sell their music to continue their creativity, Spotify is a problem for them. This is about survival, nothing less, and it is time that fans and consumers realize that for artists it is essential to sell music to keep their heads above water.
"Obviously, it is ultimately up to the music fan and consumer how they access their music, whether it is buying, streaming or stealing. There needs to be awareness, though, that how you will consume your music has direct consequences for the artists, who we are all trying to support."
The launch of Google Music and Amazon's Cloud Music Locker without licenses (and in Google's case without a download store) represents a real setback for the recorded music industry. I'm not one who believes that Google and Amazon should need licenses to create the kind of online hard drives that they did. But the result are cumbersome, only compatible with select operating systems and lacking many of the features that excite music fans while encouraging discovery and purchase.
Sadly, many fans will try one of these new lockers, be disappointed and decide that music in the cloud is not for them. Given all the options that cloud music makes possible, that's a major setback in ongoing efforts to encourage consumers to believe again that music is worth paying for, whether as streams or downloads.
Just as importantly, Google and Amazon are playing into Apple's hand. By waiting to cut deals with the labels and likely by accepting some restrictions, Apple can launch a cloud music competitor with features that encourages users to stay within their closed eco-system of devices, applications and stores. - Bruce Hougthon
Apple is nearing launch of a cloud music service according to sources. Unlike Amazon's recent cloud launch, which in not licensed and acts as an online hard drive, Apple is getting licenses from labels and will return revenue. MediaMemo is reporting that Apple has already completed licenses with two of the four majors. COMMENTARY:
Licenses mean that Apple can offer a more full featured music experience than Amazon does currently. Details are slim, but it is likely that iTunes will allow customers to store their songs on a remote server and access them from any internet connected device.
COMMENTARY
Whatever the details, the result is that Apple will beat Google to the music cloud. But who is first, matters less than who gets it right. Thus far, no one - Apple, Google, Amazon or anyone else - appears to be offering much that might cause consumers to change their current behaviors.
That leaves Apple as music's dominate force and the major labels still complaining about it.
Amazon's New Music Service Could Be A Boon For Apple
Amazon’s launch of a web-based music storage service last week has been heralded as a major victory in the online retailer’s battle with Apple over the digital music market.
Yet, despite being the first to debut a digital music locker of this sort, some experts predict Amazon’s media streaming service will actually give Apple the upper hand and provide it a more advantageous position from which to launch a rival offering.
Not only does Apple already claim 69 percent of the digital download market, but it has proven time and time again with gadgets like the iPod and iPhone that by following fast -- but well -- it can release a product after its competitors and still dominate the market. Online music streaming may prove to be no exception.
Amazon’s new web-based music storage service, Amazon Cloud Drive, allows consumers to store their music collection on Amazon’s servers and stream songs on any web browser or Android phone using Amazon Cloud Player. The new product is an enticing one for consumers: convenient, reasonably priced (the first 5GB are free), and reliable.
But the same features that may lure users to hand their songs—and cash—over to Amazon will receive intense scrutiny by rivals such as Google and Apple as they refine their own music streaming services, which are rumored to be in the works. Amazon has tipped its hand and competitors will adjust their next move to ensure their own offerings are at least as enticing as Amazon’s.
“There is a second mover advantage for Apple,” said Mark Little, principal analyst at Ovum, a research firm. “The fact that Amazon launched first obviously gives Apple and Google another bite at the cherry in terms of tweaking their offerings. That could be very advantageous to them.”
“Apple is a very canny company that doesn’t necessarily originate ideas, but its core strength is in the implementation,” said Little. “This what is what Apple is about: it may one day be a first mover, but in most cases it’s a second mover where it has implemented things across a platform and ecosystem in a much, much better way than others do it.”
Earlier this month, ABI Research predicted that cloud music to boom in the next five years, reaching a subscriber of 161 million by 2016. They believed that smartphone penetration, a lowering in price, and an emerging Asia-Pacific market would give services like Spotify and Rhapsody a boost. Now, Juniper Research is saying similar things; they suspect that subscribers will reach 178 million by 2015, due to an increased 3G Access, i.e. smartphone penetration in China and India, also known as the emerging Asia-Pacific market.
According to the study's author Daniel Ashdown, "markets where a combination of a large population, rising mobile subscriber penetration, and developing economies that represent a golden opportunity for mobile music services." By 2015, Ashdown believes that mobile music will become a $5.5 billion industry.
As Hypebot has said before, increased mobile access and a lowering of price does not guarantee a boom, and even if it does occur, its sustainability depends on elements – like the balance of effortlessness and investment and increased awareness of cloud-based services – that haven't even been figured out yet.
There's no signs that the record industry can handle a boom of this magnitude either, because it could topple their iceberg and erode profitability before they're ready to watch CDs and digital downloads decline. Musicans also lose, if not prepared. The fact is that convenience devalues culture and access impedes ownership. Spotify and Rhapsody are only great for artists and the industry if done correctly, yet consumers will have music streams their way regardless.
Most Consumers Still Unaware, Disinterested In Streaming Services...
Let's step away from the industry bubble for a second, shall we? Because a recently-released report by Nielsen shows that most consumers are either unaware or disinterested in audio streaming services, whether paid or free. In fact, amongst all age groups and across both genders, a minority expressed both awareness and interest (and that doesn't count actual usage or subscription commitments).
In fact, outside of twenty-somethings, more than 30 percent of consumers were unaware that these services even existed. And, this was a global canvass, so the list spans everything from Rhapsody, Spotify, we7, Deezer, and Grooveshark.
Actually, that can be viewed as fertile ground, and a juicy awareness challenge. But more worrying is that in every age group under 50, more consumers expressed an awareness of these services - but also a complete disinterest in jumping on board. That result frequently poked past 40 percent.
And another view:
Cloud Music Expected To Boom In Next Five Years
from hypebot by Kyle Bylin
Subscription music services like Rhapsody and Spotify are expected to grow significantly by 2016 due to the increased ubiquity of smartphones and a possible lowering in price.
According to a study released by ABI Research, the number of subscribers to streaming music applications is expected to top 5.9 million by the end of this year, and by 2016, that figure is expected to grow to more than 161 million subscribers.
The problem with such lofty projections, however, is that they fail to recognize the many, many other hurdles that remain in the path of subscription services.
Market Leaders Matter
Ubiquity of smartphones doesn't guarantee raised awareness of subscription services as we've learned from the success of the iPhone. While it surely provided services with a boost in consumer interest and new subscribers, the iPhone didn't help establish a market leader. Currently, a majority of the population has little to no knowledge that subscription music even exists.
That, and due to the recent news that an "Apple Tax" may be issued for in-app signups, it matters precisely what smartphone provider becomes the dominate brand. If Apple becomes a market leader and does decide to hold strong on its 15% tax on subscribers it helped services obtain, that may hinder, not accelerate the boom in subscriptions, because it will force prices to rise, not fall. Second, even if Apple doesn't remain firm on the App Store levy, there's absolutely zero indication that the major labels will be willing to let the bounty they collect from subscription services fall. If anything, once a market leader is established, major labels will continue to pressure higher royalty rates and erode its bottom-line.
Previously, Guitar Hero became a market leader in music gaming and rather than embrace them, labels demanded that the publisher paid higher and higher royalty rates because they believed their music, not gameplay, is what made it valuable.
And well, Guitar Hero is dead now, in part, due to this schizophrenic relationship.
Price Hike, Not Fall
The record industry is transferring from a business of selling CDs to one of digital downloads. Meanwhile, consumers are shifting from downloads to streaming. As the more lucrative income, i.e. downloads, declines, pressure will be placed on streaming revenues to rise. As a way to preserve what portion of the download business they can, the labels will not allow subscription services to be a better value proposition. This is why Apple and Google are selling downloads and not subscriptions, as the labels don't want them to accelerate the download decline.
Thus, when ABI Research predicts that prices will fall by 2016, due to major label intervention, it's likely that they're wrong. Apple may force a price hike and the labels may too, and if not a price hike, similar to the way movie studios treat Netflix, labels may begin withholding content to drive sales of digital downloads.
If enough new music isn't present on subscription services, consumers won't be interested. Added to this is the fact that services have yet to find a balance of effortless and investment, be everywhere consumers want, create meaningful choices and curated music for listeners, and encourage an active over passive relationship to music. The truth of the matter is that while Spotify may change the world and Slacker may thrive, there's still plenty of problems left for Rhapsody, Rdio, MOG, and Napster to navigate before such a boom by 2016 will ever occur.
Microsoft’s “Ventura” Focuses On “Discovery” – Just Like Every Other Digital Media Service
Microsoft, which has never figured out how break into the digital media business, is trying again. Part of its new effort, ZD Net’s Mary Jo Foley reports, is code-named “Ventura.”
Foley has found a Microsoft job posting that mentions the project, and notes its reference to “services and experiences revolving around music\video discovery and consumption”.
That nugget is enough for some observers to conclude that Microsoft is going after Pandora, the Web radio service, because Pandora’s service also fits that description.
Here’s the thing, though: Basically all Web media services now focus on “discovery and consumption” — that is, helping people find stuff they didn’t know they were looking for, and helping them buy/play it.
The one big exception is Apple’s iTunes store, which is primarily a place to go buy things you know you want. The fact that iTunes dominates the digital media market (particularly in music) is one of the reasons other services have focused on “discovery and consumption” — it’s a way to differentiate yourself against the market leader.
And for all we know, Ventura could feature an iTunes-style store, too. But based on Foley’s reporting, it’s likely to feature more than that, as well — just like every media service on the Web.
2011 will be the year that defines the trajectory of digital music. The developments that everyone has been waiting for are on their way.
In the past few months, launch dates for Spotify, Apple in the Cloud, Slacker On-Demand, and Sony's Music Unlimited have been confirmed. As well, the major court decision in the EMI vs. MP3tunes is two to six months away. If MP3tunes wins, companies like Google Music and Apple will not have to pay extra royalties when users pull songs from the cloud. Not to mention, of course, that MP3tunes will be able to continue the development of their Sideload service.
Everything is up for grabs. Anyone can become the market leader now.
Here's an overview of launch dates and why they're exciting:
1) Spotify.
Launch date: "In the coming months." [MediaMemo.]
Why it's exciting: Spotify has the potential to change the world and dramatically shift consumption habits in music. It could help combat music piracy in a big way and become one of the most widely known cloud-based music services. It could make subscriptions more mainstream. Did I mention that Spotify could make the URL the universal music format and drive the sharing of music within Facebook too? Despite its failure to launch here, Spotify is a big deal and for good reason.
2) Apple Cloud.
Launch date: "Available as early as June." [WallStreetJournal.]
Why it's exciting: It's Apple. MobileMe, their online storage service, is getting revamped; it could become a "focal point for a new online music service that Apple has been developing for more than a year," writes the Wall Street Journal.
"Social networking would be another key component," one of their sources said.
Apple does everything in a big way. They have the muscle to push music into the cloud and once this happens, they may introduce their subscription service. If this happens, awareness will be raised and subscriptions may go mainstream.
3) Slacker On-Demand.
Launch date: "It should be launched around SXSW." [Mashable]
Why it's exciting: Slacker is entering the market a with a very strong strategy.
With a free radio offering at the front of their service, users will be able to slowly acquire songs and build their collections. By offering multiple tiers of service – free radio, paid radio, and on-demand – Slacker gives users with room to grow.
Unlike other cloud-based music services, the company will not turn new users away once their free trial ends. Slacker is the outlier to watch out for in 2011.
4) Sony Cloud.
Launch date: "This quarter." [Bloomberg]
Why it's exciting: Sony's Music Unlimited is backed by all four major labels and will have a 30-day trial period – longer than anyone in the market. Sony also has a huge cache technology including the PSP, PlayStation, TVs, computers, and eReaders. This gives Sony a large, existing user base to market the service to right out the gate. Major label backed services have been a recipe for mediocrity and failure in the past, but this time around, Sony could leverage their clout and make Music Unlimited a compelling offer. Only time will tell if it's a blockbuster.
5) Google Music.
Launch date: "Months rather than weeks." [Cnet]
Why it's exciting: It's Google. First and foremost, Google Music will place much needed, legitimate search results in an engine that's known to drive piracy. Even though it's 2011, zero and I mean ZERO results to buy music show up in Google for many artists. This is a HUGE step for digital music and it doesn't stop there.
Google Music is rumored to feature cloud-based lockers and may even have a subscription element. Plus, while Apple has the iPhone, Google has the Android.
Google has flopped a few products before, but this service may be remarkable.
6) MP3tunes.
Case Settlement: "2-6 months away." [Hypebot]
Why it's exciting: In short, if MP3tunes wins their case against EMI, it could mean an explosion of cloud-based music locker services. Theoretically, services like MOG, Rdio, and Rhapsody could offer their own lockers for users without worry of major label lawsuits. It all depends on what the final ruling says. At this point, the major labels are fighting tooth and nail to ensure users won't be able to upload pirated collections into the cloud and access them anywhere. Stay tuned.
Indie trade group Merlin has signed a deal with Rdio to stream the music of its members which include such key indie labels as Rough Trade, Epitaph, Naxos, Beggars, Merge and Domino. The deal fills a major hole in the Rdio offering. At the same time, a leaked email to Merlin members states that while talks have finally begun with the proposed Google Music service, Merlin execs remain concerned that indie artists and labels may not get a fair deal.
"Merlin has had significant concerns that independents have been excluded form these discussions and that historically, services which follow this development path typically tend to in our view to discriminate against independents (e.g. MySpace Music and You Tube) both in terms of the commercial terms they are eventually offered and also in the structuring of the major record company agreements," Merlin CEO Charles Caldas said in the email.
"We now hope to achieve a Merlin agreement with Google on behalf of our members, which both addresses those concerns and reflects fully and properly the value of our members' repertoire via a Merlin license."
Record Labels Withhold Key to Google’s Digital Music Locker
Google’s long-anticipated music service will not be released in time for the holiday shopping season, if a new report citing an executive at Google is accurate.
Delays can be attributed to the reservations of record label executives, who are said to be balking at the idea of a digital locker for storing and streaming music in part because they fear users would use the locker to store and stream pirated tracks.
“What’s been holding things up is that the labels will do downloads, but they need to know more about the locker service, and Google really wants to keep the two together,” the executive said to the New York Post.
According to previous reports, the “Google Music” service was expected to launch by Christmas and have two key components: a digital download store and a cloud-based subscription locker service costing $25 per year. The digital locker feature would allow users to store their music — purchased from Google or added from their own collection — for streaming across multiple devices.
Defining Google’s streaming rights around this locker system seems to be the major sticking point. This is a relatively common hardship for all cloud-based music services. Even Spotify, the super trendy U.K. freemium music streaming service, may not be faring so well — it was recently reported that the startup lost $26.7 million in 2009.
Still, all may not be lost. The source holds out a sliver of hope for a pre-Christmas launch and suggests a late first quarter 2011 release is more likely. Unfortunately for Google, the delay would mean a missed opportunity to capitalize on holiday music sales.
Americans Now Stream As Much Music As They Download
For the first time, music fans in the United States are streaming approximately as much music as they’re downloading, according to numbers shared with Evolver.fm by the NPD Group market analysis firm.
Apparently, the purchasing of downloaded music from iTunes or Amazon — or even the free downloading of songs from peer-to-peer file sharing networks — cannot compete with the allure of clicking a link and having the song play instantly.
In the United States, music downloads and streams were nearly even in terms of popularity in August, according to NPD Group’s latest numbers, and are likely now in a dead heat. Downloads to Mac and Windows computers increased from 29 percent in March to 30 percent in August, said NPD Group spokesman Lee Graham, while 29 percent of Americans streamed music in August, up from 25 percent in March. (In such studies, a one point difference is within the margin of error.)
These stats paint a clear picture.
Not only is music streaming growing faster than music downloading in the United States, but if the trend continues it will become the dominant computer music listening behavior in this country in a matter of months — and that’s before you take into account smartphone and television streaming.
The tipping point from downloading to streaming took place in France earlier this week, and these numbers indicate that we’re next.
They also back up the contention that music streaming services hurt not only music download stores but file sharing networks — a position often espoused by the long-awaited Spotify music service, which claims that its free streaming feature attracts P2P downloaders to its licensed music services, for which they will pay once they get hooked.
Music fans: The writing is on the wall. It might not be too long before you start to view the precious downloads you’ve gathered over the years as a waste of disk space.
Not only is music streaming growing faster than music downloading in the United States, but if the trend continues it will become the dominant computer music listening behavior in this country in a matter of months — and that’s before you take into account smartphone and television streaming.
The tipping point from downloading to streaming took place in France earlier this week, and these numbers indicate that we’re next.
They also back up the contention that music streaming services hurt not only music download stores but file sharing networks — a position often espoused by the long-awaited Spotify music service, which claims that its free streaming feature attracts P2P downloaders to its licensed music services, for which they will pay once they get hooked.
Music fans: The writing is on the wall. It might not be too long before you start to view the precious downloads you’ve gathered over the years as a waste of disk space.
from Audio4cast by Jennifer Lane
One of the biggest things that Pandora has going for it is its Founder Tim Westergren, who is a smart, hip, passionate spokesperson for the leading Internet radio platform in the US. Westergren is almost as widely recognized as Pandora – he’s definitely a media darling who spends lots and lots of time speaking to the media, listeners, and musicians – making sure everyone loves his creation.
In the last few weeks Westergren has been busy – I caught videos of him interviewed at Ad Week in NYC and at the Future of Music Forum in DC. He says Pandora is driving the transition from broadcast to Internet radio. Yesterday I wrote about a new study by Vision Critical which compares Internet radio audience growth in the US, UK and Canada and comes to a similar conclusion.
Westergren says Pandora is also focused on building a great ad business for Internet radio, something that I agree with as well. Pandora has been out in front with the creation of ad opportunities, they are doing a lot of work at the agency level, and they’re on the tip of every advertiser’s tongue when Internet radio is mentioned.
Pandora recently crossed over the 65 million mark in terms of registered users, an 8% increase since July, which is absolutely phenomenal growth. But it’s a drop in the bucket to Westergren, who points out that all of Internet radio is just 3% of radio listening right now while 90% is to broadcast radio. That, says Westergren, is where Pandora’s growth will come from.
The market really opened up for Pandora when Apple introduced the iPhone and apps, which solved consumer adoption issues for them. Now Pandora is on all the major mobile devices. Next comes consumer electronics – tvs, blu-rays, tabletop – anything that has internet connectivity and audio output is fair game and Pandora wants in. Given their popularity I doubt they have to do much convincing.
So while broadcasters are working hard to get FM tuners on mobile phones, Pandora’s already done that and moved on to every single connected device. Yeah, he’s smart. And frank about his intentions. But is his competition paying attention?
And Incorporates Time Into Music Recommendations.
Music recommendation is fairly straightforward, at a time, when our consumption habits clearly aren’t. The general, algorithmic approach takes the stance that users who played a song in accordance with another in high volume will likely enjoy a song that other users have voted as being most-relevant in the progression of the playlist.
Others take song structure and cadence into consideration, while several services attempt to tap the social and human elements of the process, seeking to make their suggestions a little less soulless. The result is similar, yet gradually diverse evolutions of taste in music. However, we all know that the music that we like isn’t that simple and numbers-orientated.
Adding another facet to music recommendations, the online radio service Last.fm has launched a new data visualization called Listening Clock, which takes into account the quantity and different types of music that you listen to throughout your day. The theory is that certain listeners consume a distinctive variety of music, at different times of the day. Thus, these temporal listening patterns can be used to create a better music recommendation algorithm, one that takes the time of day into consideration. The ultimate goal being to not just suggest the right song, but to be able to queue it up at precisely the right time too.
To make sense of the graphic, the red indicates weekday listening and the green is weekends. The arms on the clock represent the average duration of time that you listen and their length coordinates with how focused your listening is around that time. This is one of many moves among social music discovery services that aim to map songs to how humans actually experience them; it will be interesting to see what’s to come. What other elements, beyond time, do you think should incorporated into music recommendation?
iPod Sales Dwindle, But Apple Isn't Worried
from hypebot by Kyle Bylin
While no one is calling for the death of the iPod just yet; it has been reported that "the latest sales figures for the quarter to June showed 9 million sold—the lowest quarterly number since 2006." Once deemed the silver-bullet savior for a record industry in terminal decline—that re-engendered enthusiasm for music across all generations and demographics—it's downward trajectory is mirroring that of the very business it was supposed to rescue.
It is worth noting though that this time around, while Steve Jobs could surprise all of us, as he has in the past, that now that the iPhone and iPad have exploded into the market and opened up ever more profitable industries for Apple that music may no longer be in their main focus. Though we all hope and speculate their entry into the cloud-based or subscription music market, the thing is that there is simply more money to be made in other cultural industries at the moment, like TV and books. The general fear is that if the stand-alone music player starts to die off, people's interest in purchasing songs from digital stores may go with it, leaving those who wished digital sales to one day displace physical bewildered. Industry research analyst Mark Mulligan told that the Guardian that at a time when we should be seeing is "hockey-stick growth in digital sales" what we're seeing instead resembles a growth curve closer to that of a "niche technology." Imaginably, this is slightly disconcerting because there is a high likelihood that as the social phenomenon that is the iPod cools off and sales continue to slow, so too will the digital music sales that the device drove.
And, in a world dominated by applications, the idea of just buying a single file may lose its value proposition in the minds of fans, because in no way does it "play to the strengths" of the technology, Mulligan notes further. Charles Arthur, technology editor at the Guardian, argues that "it's unlikely that even Steve Jobs will be able to produce anything" that will revive the iPod's demise. Meaning that, a little more than five years after the record and music industries thought they had found salvation in the proliferation of the digital technology; they will be left searching again for a "for a new stepping stone to growth—if, that is, one exists."
It might, however, be a long time before Doug Morris gets to dance on the grave of the 'repository for stolen music' just yet. Maybe, in the course of my life, it might happen, but, as some industry insiders may joke, hopefully not his.
Are Label Attitudes Changing Or Is Apple Just Poking The Beast?
Apple and iTunes inched closer to offer music in the cloud recently with the release of an updated app for the iPhone, iPad Touch and iPad.
Buried in the release notes of the Apple's upgraded iDisk app is new option that lets devices stream music in a manner that appears to ignore record label demands that streaming music services requires a license. Click on the "More" button and the new option "Play audio from your iDisk while using another app" appears.
As serial entrepreneur and MP3Tune's CEO Michael Roberston points out, "This is not 'iTunes in the cloud, but it is definitely moving the Cupertino company in that direction". Lacking are key features like an automated way to get all your iTunes music to your iDisk account, for example.
Will The Labels React?
"One company sure to be miffed at this new capability is Universal Music Group," says Robertson. "They have told net companies who have inquired about offering personal cloud music services that backing up and downloading music files is OK with limitations, but streaming music files requires entering into a license and paying a per stream fee. Apple's service allows unlimited sharing (no user-name or password required) and now background streaming - all without a license from the record labels."
Label negations with a number of streaming music companies have been going on for months. Does Apple know something that the rest of us don't about a shift in label attitudes toward streaming? Or are they just testing to see how far they can go before the labels react?
Google to Offer Free as Part of New Music Site
We know Google is building a music service, finally entering the fray where countless other companies have tried to achieve the improbable: making money by distributing music online.
We also know that any on-demand aspect of Google Music will require some form of payment, because Google’s music attorney said record labels won’t license ad-supported on-demand music services anymore — an analysis we’ve heard before.
Now, it appears likely that in addition to a paid on-demand music service, Google Music will include a free music streaming service along the lines of Pandora, to be supported by a peppering of Google’s audio ads.
A MediaPost source claims Google is preparing audio advertisements in lengths of 10, 15 and 30 seconds to accompany music streamed to Android devices – as well as, we suspect, to a Google Chrome web app, so that anyone with a web browser and an internet connection will be able to utilize the service.
This information came to light through somewhat of a game of telephone, but passes the smell test. David Szetela, the founder of Clix Marketing Clix Marketing, told MediaPost that an employee of Google’s DoubleClick advertising division divulged details about Google’s plans for advertising within its music service including the length of the clips and that Google will stream music to Android phones.
In addition, he said, Google Music’s ad-supported music stations could be available through YouTube as well. YouTube is already the best free on-demand music service in the world (if you close your eyes to make it a music service, rather than a video service), because its video ads generate enough money to satisfy copyright holders. Adding music stations to YouTube would make it even more alluring to music fans, including the kind who don’t like to pay for music.
“Google, in some sense, is like the Conde Nast of the online world,” added Szetela (Disclosure: Conde Nast is the publisher of Wired.com). “All they need to do is roll out a new publication. People will buy the publication, but Google can also sell advertising in it.”
In addition, adding a Pandora-like component to Google Music would give it a competitive advantage over Apple, which focuses on selling single-song downloads, while gathering its radio stations from outside sources.
According to the New York Post, Google has already made progress in its licensing negotiations with record labels, and plans to launch Google Music in November or December.
For almost two years, Spotify has been trying to launch in the US, having hoped to go live back in 2009. Sources now report that their licensing negotiations with the major record labels have been restarted entirely. Thus far, CEO Daniel Ek has failed to sway them to go along with his vision for the U.S version of the service.
In the last month, attempts have been made to approach the labels with a clean state, but it’s difficult to determine what type of service, if any, would be possible to launch before the end of the year. “Earlier this month, Ek reiterated his claim that the service is on track for launching before the end of the year,” Billboard's Antony Bruno writes, “but also hinted that he'd delay it into next year if that's what was required to ensure Spotify launched under the model he envisions.”
At this point, its impossible to know when Spotify will reach the U.S., but, by the time it does, either the service will be gutted of its uniqueness or hobbled to the point where the user experience will not be worth bearing. This occurrance could be sad, sad news, in the place of what has seemed to be the very kind of forward thinking needed to revitalize the record industry and forge a brighter path forward.
One of our reliable Apple sources has just filled us in on some of the company’s iTunes plans, and they’re exciting. We have been told iTunes will be getting a huge cloud capability that many people have been asking for (and logically thought would happen sooner or later). These new capabilities are broken down into three groups:
- Streaming music and movies from Apple’s servers to your computers, devices, etc.
- Streaming music and movies from your home computers to your other computers, remote devices, etc.
- Wireless iTunes syncing with devices
For the first point, we have been told that this will work pretty much like you’d expect it to… pretty much any Apple device with wireless capability will have te ability to stream purchased content directly from Apple’s servers, thus eliminating the need for a lot of local storage. With the second point, Apple will reportedly let you be the content distributor to your own computers and devices, as any purchased content that’s locally on your computer will be able to be streamed using your internet connection out to your devices. Lastly, yes, wireless syncing of iTunes for devices.
For wireless syncing, we are told it will work pretty seamlessly. Any apps you buy for instance on your iPhone will immediately sync to your computer, changes to your calendar, or notes, or contacts will also automatically update on your computer as well. What good would all these new features be without some new devices? Apple’s traditional fall event (or maybe even before it) should bring at least “two new devices with camera/camcorder capabilities.” Well, there you have it!
In what could prove to be a welcomed move for music labels, Google Inc. is planning to release a music download service that’s tied to its search engine later this year. The Wall Street Journal is also reporting that Google will introduction of an online subscription music service sometime in 2011. Many in the industry hope is that with Google’s marketplace entry, Apple’s dominate position will be slightly shaken.
Initially, it’s expected that Google’s music service will permit fans searching for music in their engine to be linked directly to a Google store where they could then buy and download tracks. It is believed that the store would enable Google to position themselves in as a cloud-based subscription service, allowing users to stream music directly from the internet to their mobile phones.
Michael Robertson Predicts No Cloud Based iTunes In 2010
It's no secret that Google is getting progressively more involved with music. TechCrunch recently even found a Google Music url and logo. Now CNET is reporting that, according to multiple industry sources, Google could launch a music service with downloads and streaming as early as this fall.
Google's purchase of Simplify Media, which enabled users to stream songs from their computer to other web enabled devices helped set the stage. Then, Google approached several major label executives during the Consumer Electronics Show early this year. They told the labels that a Google Music store would include digital downloads and streaming music tied to Google's search results. It's an obvious value proposition: you found it here; so why not listen and buy it here?
The Race Is On: Google vs. iTunes vs...
Of course, Google is not the only company interested in music in the cloud.
Apple's purchase and subsequent shuttering of Lala.com and a consistent stream of leaks from the labels, all point to some kind of i
Tunes music in the cloud service. Whether it will only be about streaming music bought at iTunes, making entire music collections available anywhere as
MP3tunes already does, or include streamed music like
Spoitify,
Rdio and
MOG is just a guessing game.
Whether Google or Apple launches first could matter. But according to MP3.com and MP3tunes founder Michael Robertson, who helped create the sector, "building a cloud music service - especially one with an API so it can connect to lots of devices - is a challenging undertaking".
"Apple won't launch any cloud music service in 2010."
In fact delivering music from the cloud is such a complex undertaking that Robertson does not believe that Steve Jobs can accomplish it anytime this year. "Apple won't launch any cloud music service in 2010," declares Robertson. "Nobody knows more about storing personal music collections online and it's not a trivial task by any stretch. It's even harder when you have a massive installed base like Apple does.." As for Lala or any acquisition helping to jump start Apple's efforts, "It takes a huge amount of time to integrate outside companies into an existing platform," according to Robertson. - Bruce Houghton
The Apple rumor mill is gearing up yet again, with the blogosphere increasingly atwittter (pun intended) over the possibility that Steve Jobs will announce an iTunes in the cloud music service on June 7th at its Worldwide Developers Conference in San Francisco.
NME, The Electric Pig, Wired and many others have all weighed in despite scant evidence that a cloud music announcement is forthcoming. It is true that Apple likes to announce things at their gatherings. It's also true that lala.com was turned off on May 31st. Lastly, there has to be some reason that Apple bought lala in the first place, right?
I do know that Apple has been talking to the major labels about a service that would, at the very least, allow you to play tracks that you bought on iTunes from the cloud on any connected device. But, with the same "reality and the consumer be damned" attitude that has contributed to their decline, the major labels are claiming music from the cloud is an "additional use" and demanding more money before fans can play the music they've already paid for.
Sadly, I'm betting that June 7th is not the day that we'll see iTunes In The Cloud surface. I hope I'm wrong, and I believe that it will come. But the last time I checked, the heads of the major labels still had their heads (at least up to their ears) buried in the sand.
- Bruce Houghton
Music Panel Podcast: The Cloud vs. The Paradise of Infinite Storage
As seen in the title of this SXSW Music panel The Cloud vs. The Paradise of Infinite Storage, two distinct methodologies have emerged for accessing digital music. Will one or the other become a dominant force? What are the implications for artists, rights holders and those who license music?
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For an extended description of the panel, we previously posted speaker Sandy Pearlman's original pitch that you can read here. Sandy was joined on the panel by Bryan Calhoun of SoundExchange, Eric Garland of BigChampagne, Peter Biddle of Intel, and Wayne Marshall of MIT. The session was moderated by Mike McGuire of Gartner.
