First Impressions Of The New Apple TV, iTunes ‘Ping’ Social Network
Some first takes on Apple’s latest would-be game-changers, Apple TV and iTunes’ new “social network for music,” Ping:
• Apple TV’s 99-cent streams of TV shows represent an incremental digital revenue opportunity for ABC, Fox, and any other network willing to sign up with the company — but the streaming rental model is not (yet?) a disruptive threat to an industry that still relies on advertiser dollars and retransmission fees, according to the Wrap.
• Wired pooh-poohs Apple TV from a tech-savvy consumer’s perspective, offering five specific shortcomings: a dearth of content at launch; no app-style interface; no HD broadcast tuner; no 1080p support; and generally, not a compelling enough offer to wean video file-sharers off BitTorrent. But Wired sees promise in Ping to spark more impulse-buys of songs and lift the digital music business.
• The Daily Beast cites analyst enthusiasm for Apple TV’s $99 price point, and the positioning of the product not as a cable box replacement, but as a peripheral that succeeds the DVD player. As for the intended audience, the site echoes CrunchGear’s observation that the device “isn’t for pirates, it’s for parents.”
• All Things Digital explores Ping’s lack of Facebook integration, despite early reports of such features. Apple CEO Steve Jobs tells the site’s Kara Swisher that Facebook ultimately wanted “onerous terms that we could not agree to.” iTunes may in any event have 150 million active users, but it remains to be seen just how many of them will seek out friends on Ping — and just how easy it is for them to do so.
Universal Music Revenues Off 5% In First Half
Vivendi faulted slackening demand for physical product, as well as fewer major releases, for a 5.4% revenue decline at its Universal Music Group during the first half of 2010. Total revenue for the label group during the period topped $2.4 billion. The parent company looks for a stronger second half from its music division, with releases from the likes of Black Eyed Peas, Kanye West, Maroon 5, and Duffy. More on the financials at Billboard.
Label Execs Muse On Prospective iTunes Overhaul
Record industry executives tell the Wall Street Journal’s All Things D that Apple may be planning to introduce a Web-based version of the iTunes music store — but not necessarily for streaming customers’ digital music collections. A Web-based storefront could make the store easier to access on mobile devices, and foster closer ties with customers via their social network profiles.
Pay For Play 2.0: Radio Broadcasters Propose Digital Music Framework
Radio broadcasters are seeking to remain viable in the digital age in a new proposed deal that would see station owners pay record labels $100 million annually in performance fees.
The proposed framework, released earlier this month by the National Association of Broadcasters, follows urging from Congress last year for stations to work out a payment deal directly with the Recording Industry Association of America. Such a payment scheme would make terrestrial broadcasters a bit more like Internet radio stations, which paid labels some $180 million in performance fees last year, according to the New York Times.
But broadcasters want some concessions in return, including a government mandate on cell phone makers to include FM radio tuner chips in all mobile phones. Such chips would enable stations to better compete with the likes of Pandora and Last.fm.
The proposed requirement is receiving pushback from hardware makers, which characterize the chips as bulky drains on cell phone batteries. “We are completely, inalterably opposed to this,” the Consumer Electronics Association’s Gary Shapiro tells the Times.
By the newspaper’s account, the RIAA — whose members are themselves desperate for new revenue sources in the digital age — is in favor of the FM chip requirement, and confident that the parties will come to terms on the issue.
Another Spotify Exec Steps Down: Report
Paul Brown, Spotify’s SVP of Strategic Partnerships, is leaving the European streaming music service after 18 months, according to Billboard. Brown is the second member of the Spotify team to announce his departure this week; Rasmus Andersson, Spotify’s head of design, said he is leaving the company to join Facebook. Late last month, Billboard reported that Spotify remains confident about a U.S. launch later this year, though its Stateside licensing deals with major labels may make for a different service than the “freemium” model the company markets abroad.
Indie Band’s No. 1 Album, By The Numbers
The Arcade Fire landed atop the Billboard 200 chart this week, with its third album “The Suburbs” selling 156,000 units. Nearly two-thirds of those sales — some 97,000 units — were digital; as the LA Times points out, download sales were likely driven by Amazon.com’s week-long $3.99 price promotion on the album.
Laura Ballance, co-founder of indie label Merge Records (which released the album), tells the LA Times that she has mixed feelings about Amazon’s aggressive price point. “Devaluing music is something that concerns me greatly,” she says. “But it’s hard to draw a hard line on it. At this point, people can download music for free if they really want to. If you’re trying to get people to buy music, people who wouldn’t otherwise, maybe that’s the way to do it. Just to make it so cheap that it tips the scale.”
Meanwhile, Billboard’s Glenn Peoples notes that the album enjoyed healthy first-week sales on vinyl: The 6,100 LP units accounted for 4% of total sales, according to Nielsen SoundScan, and would have been enough themselves to put “The Suburbs” on the No. 67 slot of the Billboard 200 chart.
Warner’s Digital Music Biz Slows; Bronfman Optimistic About ‘Mobile Space’
As Warner Music Group reported a loss for its sixth consecutive quarter, the company said its digital business — which now accounts for 27% of total revenue — grew by just 2% (via WSJ). But CEO Edgar Bronfman Jr. says he is optimistic about the prospects of music services for mobile/wireless devices — a space that Google and other “major corporations” might enter over the next 12 to 18 months. All Things Digital and paidContent have the close read on Bronfman’s earnings-call comments.
Apple Backing Away From Cloud Music Proposal: Report
Cloud-based music distribution — a service many in the tech press expected Apple to add to iTunes following its acquisition of Lala — appears to have been tabled at the company. As of yet, Apple has not struck the requisite licensing deals with major labels to unveil such a service, according to CNET. What’s more, the company is telling label executives that if it adds any cloud-based features to iTunes in the next few months, they will be “modest in scope.” CNET speculates that Apple may be shifting its cloud focus to video distribution.
Setback For Spotify’s U.S. Prospects
Spotify, the European streaming music provider, is approaching its licensing negotiations with U.S. labels entirely anew, in efforts to launch some version of its proposed “freemium” service Stateside before the end of the year, according to Billboard. The music trade magazine’s sources say negotiations “have reverted back to square one.”
Hailed as a pioneering model for digital music distribution, Spotify’s proposed mix of free ad-supported streams and paid subscriptions threatens to be a non-starter with labels in the U.S. — even as the likes of Apple and Google are rumored to be hashing out details with labels for their own streaming music services.
More analysis at All Things Digital, which raises the question of whether all four major label groups, or just some of them, are holding up the Spotify launch.
Google Adds Music Licensing Counsel
With its hiring of music licensing attorney Elizabeth Moody, Google may be taking another step toward the development of its own digital music service, Billboard reports. Moody has worked as an associate at the law firm Davis Shapiro Lewit & Hayes, which according to Billboard has represented MySpace and other services in their licensing negotiations with labels.
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