RealNetworks Inc. is teaming up with SanDisk Corp. to release a portable music player that more closely links with RealNetworks' Rhapsody online music service, in the latest attempt to take on Apple's iPod and iTunes stronghold.
Analysts see the deal, to be announced Monday, as a way for SanDisk and RealNetworks to join forces against a new common foe: Microsoft Corp., which recently announced plans to release its own Zune portable music player and service.
Redmond-based Microsoft has been providing the technology that allowed services such as Rhapsody to transfer songs to portable music players without compromising the digital rights of that content. But many say they think Microsoft's plans to release the Zune service and a player made by Toshiba Corp. could make the software giant a significant competitor.
"This is kind of a way for both Rhapsody and SanDisk to say, 'Well, if you're gong to compete with (us), guess what, we're gong to compete with you,'" said analyst Phil Leigh with Inside Digital Media.
Katy Gentes, a product manager for Microsoft's Zune effort, said Friday that the company remains committed to the Windows Media platform it provides to partners and will continue to invest in it.
Under the deal, RealNetworks and SanDisk plan to release the Sansa Rhapsody, a portable music player based on SanDisk's e200. The companies said they expected the gadget to be available in time for the holidays, but they would not say exactly how much it will cost.
The player will come pre-loaded with hundreds of songs from musicians such as the Dixie Chicks and Jessica Simpson, as part of a free trial of RealNetworks' Rhapsody To Go subscription service. Anyone who buys or already has the music service will then be able to use the gadget to listen to nearly all of the songs available through the core Rhapsody service.
The Rhapsody Unlimited online service charges users a flat fee of $9.99 to essentially rent an unlimited number of songs as long as they subscribe to the service. Users who purchased the Rhapsody To Go service, at $14.99 per month, had previously been able to transfer their Rhapsody songs from their computers onto a portable music player. But the process required using Microsoft's technology for managing digital rights, a process RealNetworks said was clunky and had glitches.
"The fact that one company was making the player, one company was making the software and a third company was making the service meant it was not seamless," said Dan Sheeran, senior vice president of music for Seattle-based RealNetworks.
The Sansa Rhapsody will use RealNetworks' own technology for managing digital rights, which RealNetworks says will work more smoothly and allow the company to offer more bells and whistles. The gadget's release also will coincide with an update of the Rhapsody service.
Eric Bone, SanDisk's director of product marketing for audio/video products, said the goal of the partnership was to help smooth out the bumps that came up for users trying to grapple with the Rhapsody service and Microsoft technology. But he said the device would still include Microsoft's digital rights technology, so people could still use it to run other music services besides Rhapsody.
Sheeran said the company hoped to release more products with Milpitas, Calif.-based SanDisk, and he also wouldn't rule out working with other device manufacturers.
Analyst Michael Gartenberg with Jupiter Research said he thinks Microsoft's move to offer its Zune player and service has left some device makers and music services looking for new partnerships. But he said RealNetworks still has an uphill battle in persuading lots of users to go with this offering.
For one thing, people who use Apple Computer Inc.'s popular iPod and iTunes music service are used to owning their music, whereas Rhapsody works as a rental service. While Rhapsody has been around for a while, Gartenberg said most consumers still aren't familiar with it, and especially with using it on a portable player.
"The notion of renting music is a very strange concept to consumers, and no one has ever really explained it to them," Gartenberg said. "So one of the things that Real's going to need to do is evangelize."
RealNetworks Chief Executive Rob Glaser said in an interview Friday he believes the access to unlimited songs on a portable device will be a major selling point to people who want to take music on the go.
"It extends the value to a whole set of users who previously said, 'Well, I like the idea of a jukebox in the sky but I don't live with my PC," he said.
Leigh said both companies might be able to do a bit better by working together, but he still doubts the partnership stands a chance of making a dent in Apple's market dominance.
Wednesday, September 20, 2006
Why the iPod is losing its cool
Apple has added ever more extras to its digital music-player in a bid
to stem falling sales. But fears are rising that the device is now too
common to be cutting edge
The Mermaid, Puddle Dock, is not the first place you might go in search
of the cool and cutting edge. That will not stop an expectant crowd
gathering at the conference centre in London's Blackfriars this week
for a live satellite broadcast from San Francisco that could make or
break one of the consumer icons of the Western world.
The iPod, the digital music player beloved of everyone from Coldplay's
Chris Martin to President George Bush, is in danger of losing its
sheen. Sales are declining at an unprecedented rate. Industry experts
talk of a 'backlash' and of the iPod 'wilting away before our eyes'.
Most disastrously, Apple's signature pocket device with white earphones
may simply have become too common to be cool.
On Tuesday the eyes of iPod-lovers the world over will be on Steve
Jobs, the co-founder and chief executive of Apple, when he seeks to
allay fears that it could follow Sony's tape-playing Walkman into the
recycling bin of history.
to stem falling sales. But fears are rising that the device is now too
common to be cutting edge
The Mermaid, Puddle Dock, is not the first place you might go in search
of the cool and cutting edge. That will not stop an expectant crowd
gathering at the conference centre in London's Blackfriars this week
for a live satellite broadcast from San Francisco that could make or
break one of the consumer icons of the Western world.
The iPod, the digital music player beloved of everyone from Coldplay's
Chris Martin to President George Bush, is in danger of losing its
sheen. Sales are declining at an unprecedented rate. Industry experts
talk of a 'backlash' and of the iPod 'wilting away before our eyes'.
Most disastrously, Apple's signature pocket device with white earphones
may simply have become too common to be cool.
On Tuesday the eyes of iPod-lovers the world over will be on Steve
Jobs, the co-founder and chief executive of Apple, when he seeks to
allay fears that it could follow Sony's tape-playing Walkman into the
recycling bin of history.
Guardian Unlimited | The Guardian | Most iPod users don't pay for music, says research
Only one in five European iPod owners regularly buys songs online, new research shows, a signal that the music industry will need to rely more heavily on other ways to recover revenue lost to piracy and illegal downloading.
Europe's digital music market is expected to double to 385 million euros ($487.1 million) in 2006 from a year ago, Jupiter Research said on Monday, but iPod owners on average buy only 20 tracks a year from Apple Computer's market-leading iTunes music store.
About 83 percent of iPod owners throughout Europe do not regularly buy digital music, the study found, although they are more apt to do so than owners of other portable media devices.
"The model isn't broken, there's just lots of room for improvement," Jupiter analyst Mark Mulligan said. "Digital music is really underperforming its potential."
The study found that 30 percent of iPod owners illegally swap songs using file-sharing networks and another 23 percent listen to Web-based audio files for free legally.
Ipod owners also were found in the survey of about 4,000 consumers across Europe to be much more likely to buy CDs online than they were to buy downloads.
Apple's iTunes is compatible only with its iPod player, about 60 million of which have been sold worldwide. About 200 million songs had been sold on iTunes stores in Europe through August since they launched about two years ago, Jupiter said.
Apple officials could not immediately be reached for comment.
A handful of services, including eMusic and Wippitt, sell songs in the MP3 format that work on all music devices, including iPods.
Emusic launched in all 25 European Union member nations last week.
The music industry is licensing songs to dozens of new models that are being tested online and over mobile phones, including the forthcoming advertising-supported download service SpiralFrog and advertising-supported peer-to-peer service Qtrax.
"Ad-supported is definitely appealing to the under-25s," Mulligan said. "It the key way of engaging the younger consumers."
Europe's digital music market is expected to double to 385 million euros ($487.1 million) in 2006 from a year ago, Jupiter Research said on Monday, but iPod owners on average buy only 20 tracks a year from Apple Computer's market-leading iTunes music store.
About 83 percent of iPod owners throughout Europe do not regularly buy digital music, the study found, although they are more apt to do so than owners of other portable media devices.
"The model isn't broken, there's just lots of room for improvement," Jupiter analyst Mark Mulligan said. "Digital music is really underperforming its potential."
The study found that 30 percent of iPod owners illegally swap songs using file-sharing networks and another 23 percent listen to Web-based audio files for free legally.
Ipod owners also were found in the survey of about 4,000 consumers across Europe to be much more likely to buy CDs online than they were to buy downloads.
Apple's iTunes is compatible only with its iPod player, about 60 million of which have been sold worldwide. About 200 million songs had been sold on iTunes stores in Europe through August since they launched about two years ago, Jupiter said.
Apple officials could not immediately be reached for comment.
A handful of services, including eMusic and Wippitt, sell songs in the MP3 format that work on all music devices, including iPods.
Emusic launched in all 25 European Union member nations last week.
The music industry is licensing songs to dozens of new models that are being tested online and over mobile phones, including the forthcoming advertising-supported download service SpiralFrog and advertising-supported peer-to-peer service Qtrax.
"Ad-supported is definitely appealing to the under-25s," Mulligan said. "It the key way of engaging the younger consumers."
The downside of Europe's download market
Only one in five European iPod owners regularly buys songs online, new research shows, a signal that the music industry will need to rely more heavily on other ways to recover revenue lost to piracy and illegal downloading.
Europe's digital music market is expected to double to 385 million euros ($487.1 million) in 2006 from a year ago, Jupiter Research said on Monday, but iPod owners on average buy only 20 tracks a year from Apple Computer's market-leading iTunes music store.
About 83 percent of iPod owners throughout Europe do not regularly buy digital music, the study found, although they are more apt to do so than owners of other portable media devices.
"The model isn't broken, there's just lots of room for improvement," Jupiter analyst Mark Mulligan said. "Digital music is really underperforming its potential."
The study found that 30 percent of iPod owners illegally swap songs using file-sharing networks and another 23 percent listen to Web-based audio files for free legally.
Ipod owners also were found in the survey of about 4,000 consumers across Europe to be much more likely to buy CDs online than they were to buy downloads.
Apple's iTunes is compatible only with its iPod player, about 60 million of which have been sold worldwide. About 200 million songs had been sold on iTunes stores in Europe through August since they launched about two years ago, Jupiter said.
Apple officials could not immediately be reached for comment.
A handful of services, including eMusic and Wippitt, sell songs in the MP3 format that work on all music devices, including iPods.
Emusic launched in all 25 European Union member nations last week.
The music industry is licensing songs to dozens of new models that are being tested online and over mobile phones, including the forthcoming advertising-supported download service SpiralFrog and advertising-supported peer-to-peer service Qtrax.
"Ad-supported is definitely appealing to the under-25s," Mulligan said. "It the key way of engaging the younger consumers."
The downside of Europe's download market
Only one in five European iPod owners regularly buys songs
online, new research shows, a signal that the music industry will need
to rely more heavily on other ways to recover revenue lost to piracy
and illegal downloading.
online, new research shows, a signal that the music industry will need
to rely more heavily on other ways to recover revenue lost to piracy
and illegal downloading.
Europe's digital music market is expected to double to 385 million
euros ($487.1 million) in 2006 from a year ago, Jupiter Research said
on Monday, but iPod owners on average buy only 20 tracks a year from
Apple Computer's market-leading iTunes music store.
About 83 percent of iPod owners throughout Europe do not regularly buy
digital music, the study found, although they are more apt to do so
than owners of other portable media devices.
"The model isn't broken, there's just lots of room for improvement,"
Jupiter analyst Mark Mulligan said. "Digital music is really
underperforming its potential."
The study found that 30 percent of iPod owners illegally swap songs
using file-sharing networks and another 23 percent listen to Web-based
audio files for free legally.
Ipod owners also were found in the survey of about 4,000 consumers
across Europe to be much more likely to buy CDs online than they were
to buy downloads.
Apple's iTunes is compatible only with its iPod player,
about 60 million of which have been sold worldwide. About 200 million
songs had been sold on iTunes stores in Europe through August since
they launched about two years ago, Jupiter said.
Apple officials could not immediately be reached for comment.
A handful of services, including eMusic and Wippitt, sell songs in the
MP3 format that work on all music devices, including iPods.
Emusic launched in all 25 European Union member nations last week.
The music industry is licensing songs to dozens of new models
that are being tested online and over mobile phones, including the
forthcoming advertising-supported download service SpiralFrog and
advertising-supported peer-to-peer service Qtrax.
"Ad-supported is definitely appealing to the under-25s," Mulligan said. "It the key way of engaging the younger consumers."
Most iPod users don't pay for music, says research
Despite the phenomenal success of Apple in building a market charging
for music downloads, research has shown that more than 80% of iPod
owners do not pay for digital music.
for music downloads, research has shown that more than 80% of iPod
owners do not pay for digital music.
Just 17% of European iPod owners purchase music on at least a monthly basis, according to a report by JupiterResearch.
However, 30% of iPod owners download music illegally for free and 23% do the same with video.
The figures include paid-for music, as well as tracks downloaded free from legal and illegal sitesNew Song Release
Universal backs free music download service
Music fans for years have been telling record labels what they want to pay for downloaded songs: Nothing.
Now the labels are starting to agree that free might work for them,
too. Universal Music Group's announcement Tuesday that it is licensing
its digital catalog to a Web site offering free, legal downloads marks
a significant shift in an industry long criticized for fighting, rather
than harnessing, the Internet's potential.
The Web site, backed
by New York company SpiralFrog, hopes to make money selling
advertisements that play while songs download. In addition to
Universal's artists, which include U2 and Kanye West, SpiralFrog is
seeking to license the catalogs of Sony BMG Music Entertainment, Warner
Music Group and EMI Group.
"This is really promising that the
labels are going to finally stop kvetching and start thinking
intelligently about where their money's going to come from in the 21st
century," said Aram Sinnreich, managing partner of Radar Research.
"SpiralFrog is one small step for the record labels, one great leap for
music kind."
The deal between SpiralFrog and Universal Music,
the world's largest record seller, reflects how the entertainment
industry is scrambling to find new ways to make money as the Internet
rewrites the rules of distribution and marketing.
"If someone
wants to buy a million CDs from us and then give them away on a street
corner, that's fine with us as long as we get paid," said Larry
Kenswil, a top digital-media executive at Universal Music.
The
record company will receive an upfront payment from SpiralFrog and a
portion of the company's advertising revenue. "Anything that encourages
people to get music from legitimate sources is a good thing."
But SpiralFrog's success is far from guaranteed.
Record labels have spent much of the seven years since the debut of
Napster trying to convince music fans not to download free songs from
online file-sharing networks. They've fought the networks in court and
sued thousands of individual users for copyright infringement.
And, at least for the foreseeable future, online ad revenues are
unlikely to replace the US$33 billion spent worldwide last year on
recorded music. Even with the success of outlets such as Apple Computer
Inc.'s iTunes Music Store, labels still make most of their money
selling compact discs -- although those sales have been declining for
years.
"There's a real risk that, over time, consumers will
eventually lose their willingness to pay for music at all," said
entertainment analyst Mike McGuire of research firm Gartner. "You have
to drive a lot of ads to a lot of eyeballs to make as much money as
iTunes earns by selling songs for 99 cents each."
Finally,
there's the question that cuts to the core of SpiralFrog's business
model: Will fans sit through a 90-second ad to get free music?
Despite the conventional wisdom that young people don't want to be
bombarded with marketing messages online, advertisements are some of
the most popular video clips bouncing around the Internet. Teen-agers
routinely sign up to receive promotions and e-mails from their favorite
brands.
"The currency we're using is time," said SpiralFrog
chairman Joe Mohen. "Young people are already downloading free songs
illegally on peer-to-peer networks. We believe that advertisers will
pay to show those consumers ads, and that those payments will rival
what music companies get from iTunes or other online retailers."
SpiralFrog's site is expected to debut later this year. When it does,
users will be able to save downloaded tunes to a hard drive or a
portable music player. They won't be allowed to burn songs to a CD.
Users also will have to visit the SpiralFrog Web site once a month to
watch more ads. Otherwise, digital locks on the music will make it
inaccessible.
Subscribe to:
Posts (Atom)