Apple’s iTunes music software and online store may have its detractors, but that hasn’t stopped its continued rise in popularity — at least not in the US. MacWorld.com is reporting that Apple’s iTunes store is now the second-largest music retailer in the United States. Wal-Mart continues to hold the number one spot, with thousands of locations around the country, and it’s own fledgling online music store.
The industry research firm NDP reported the results this week, and noted a continuing decrease in the sale of music CDs, especially among the younger generation.
iTunes now has an estimated 50 million customers, and is closing in on 4 billion songs sold. The iTunes catalog of music tracks is also estimated to be the largest in the world, with approximately 6 million songs on offer.
The NDP report paints a dismal picture of CD music sales in the US, noting that the all-important 18 to 49 demographic are buying less and less CDs every year. For example, the report claims that 48% of teenagers in the United States didn’t buy even a single CD during 2007. That number was up sharply from the 38% who shunned CD albums in 2006. The NDP claims that as many as one million consumers “opted out” of the CD music market in 2007, and projected trends expect this number to grow significantly in 2008.
Poor performance by music CDs led to increased sales for Apple’s iTunes in 2007, but not all consumers are dropping CDs in favor of iTunes; the popularity of peer-to-peer music and video sharing software continued to rise in 2007, growing 17% from 2006.
The report indicates that iTunes is now responsible for 10% of all music purchased in the United States, and the number of consumers buying music online increased to 29 million last year, a significant rise over the previous year.
Surprisingly, the largest area of growth in online music sales is among consumers between the ages of 36 and 50, so it’s not just the teens that are signing up on iTunes.
These figures are certainly good news for the music industry, which has struggled to come to terms with the new digital marketplace, and has seen overall music sales plummet over the last 10 years.
Amazon.com’s MP3 store also made a significant dent in online sales in 2007. In fact, all of the major online music distributors saw increases last year. In 2008 we can expect to see CDs continue to lose ground, and online stores such as iTunes and Amazon.com attract new customers.
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REM may be getting a bit long in the tooth as rock bands go, but the group is still breaking new ground in its approach to recording and releasing songs and videos. The band has decided to release a whopping 11 videos for a single track from its new album.
But what makes things even more interesting is REM’s decision to release the videos under an open-source artistic license, allowing and even encouraging the band’s fans to freely download and share the videos online. Even better, the band is suggesting that viewers remix their own version of the videos — also known as a “mash up” — and upload them to a special YouTube page for the whole world to see.
While REM has stopped short of releasing the new album for free — as Radiohead did with their latest offering — releasing a multitude of videos under the open source artistic license is an interesting twist, and one sure to provoke controversy in the litigation-happy music industry.
Oddly enough, the music industry has always sought to retain tight control over its artist’s music videos. But when you really think about it, this is a ridiculous position for the industry to take. After all, how can it possibly be good for business to restrict the usage and sharing of what is, in effect, a promotional video for their product?
In most industries, a promotional video to encourage the sale of products would be made available to all and sundry. And if your promo video wound up being an online favorite and was shared freely by millions online, all the better. At the end of the day, a music video is a promotional tool to sell albums — nothing more, nothing less. So why in the world would any sensible businessperson want to restrict the usage of this promotional tool? Like many music industry decisions, it defies common sense.
REM’s decision to “unlock” its music videos and allow them to be edited and remixed by fans is a brilliant concept, both artistically and economically.
But REM is not the only group to adopt an open-source attitude. The Shins have encouraged their fans to upload videos of the band’s recent Austin, Texas performance. The reason? The band has compiled the user-uploaded video clips into a full-fledged music video. REM and The Shins both have the right idea: encouraging fans to become part of the creative process is the wave of the future.
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You have to love the Federal Communications Commission — or hate them. The FCC is now proposing a $1.4 million indecency fine against ABC television because of a 2003 episode of NYPD Blue, which the Feds say crossed the line of decency, by exposing a partially nude woman.
Yes, this is how the American taxpayer’s money is being spent — by going after so-called “indecent” TV footage from five years ago. The episode of NYPD Blue in question aired February 25, 2003, and according to the FCC, contained “patently offensive” material. So what exactly was the “patently offensive” material that has led the FCC to pursue this case for five years and now threaten a million-dollar fine?
“The side view of a human female breast”
Yep, that’s it. The FCC has spent five years and millions of taxpayer dollars pursuing an indecency case over the side view of a female breast. And it’s interesting that the Federal Communications Commission considers the side view of a female breast to be “patently offensive.” I don’t think it takes a brain surgeon to figure out that the FCC is run and controlled by males of a “certain” age. I’m not sure how many women would consider the side view of the female breast to be “patently offensive.”
But the FCC sees themselves as a friendly watchdog, and they repeatedly claim their mandate is to “protect children” from being exposed to indecency on television. A logical question that arises from this thinking is, “are there any children in the world that have not seen the side of the female breast?” Of course not — the idea is absurd.
Along with Janet Jackson’s so-called “wardrobe malfunction” during the Super Bowl halftime festivities a few years ago, the 2003 NYPD Blue episode has remained a bone in the throat of the FCC, and the commission has spared no expense in pursuing the “breast incident.”
Meanwhile, you can practically hear the Europeans laughing all the way from here! The puritanical, and let’s face it, impractical, attitude of the Federal Communications Commission has now reached absurd proportions. The commission now appears to have the respect and relevancy of a heard of clowns filing out a Volkswagen.
Perhaps it’s time that American citizens realize that the FCC is an outdated, Victorian institution that no longer deserves federal funding. The Federal Communications Commission doesn’t add anything to our culture, and doesn’t “protect” anyone from anything harmful. Ergo, there is really no need to continue funding this bloated, patronizing institution.
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Wired.com is reporting that Yahoo is negotiating with major music labels to offer unprotected MP3s for sale, or perhaps even for free as part of an advertising-based new online music service. Wired is reporting that Yahoo has met with representatives from Universal Music Group, Sony BMG Music Entertainment, Warner Music Group, and EMI to secure the rights to offer music from the big for labels through a new — as yet unnamed — Yahoo online music portal.
Traditionally, online music sites have offered music in a “protected” MP3 format, which uses Digital Rights Management (or DRM) technology to limit sharing and copying of the music files. Apple’s iTunes, for example, provides most of its downloadable music as protected music files using DRM, as does Rhapsody and many of the other big players in the online music arena.
But increasingly, online music sites are feeling pressure from consumers to drop the DMR, and provide music in a standard MP3 format, which can be copied, burn to CD, or otherwise used as the purchaser sees fit. Amazon.com’s new MP3 store is spearheading the new unprotected MP3 movement. Amazon is providing millions of popular music albums and single tracks, all in standard MP3 format, without DRM or any other type of “protection.”
Although Amazon’s MP3 store is still new, its impact is already being felt throughout the industry, and increasingly, online music purchasers are demanding that the tracks they buy be free of any Digital Rights Management, so they can copy the music to a CD or another computer if they like. Yahoo, like iTunes, obviously would like to compete with Amazon.com’s new unprotected MP3 policy. Yahoo spokeswoman Carrie Davis says the company now wants to “offer music without any Digital Rights Management protection,” and has initiated ongoing negotiations with the major music labels work out the details.
For several years now, Yahoo has offered free streaming music and videos on its flagship portal, Yahoo.com, though most of these services required a subscription fee. The company now claims to be phasing out the subscription-based business model, and focusing on an advertisement-supported music service. The company has also recently expanded its music pages online by adding song lyrics.
Although the exact format of the new Yahoo music service has not yet been revealed, it is clear that an advertising-based revenue scheme will play some role in Yahoo Music’s restructuring. And if the company gets their way, unprotected MP3s could be available on the site as soon as late summer. But with Amazon.com’s new music store gaining momentum every week, the real question is, will that be soon enough?
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Last.fm, the CBS-owned online music network, is launching a free music on demand service that will allow users to listen to their favorite tunes anytime. Reuters is reporting that Last.fm has partnered with the four largest music companies worldwide and has obtained the cooperation of more than 150,000 individual music labels and artists to provide the new on-demand service with content.
The new service will allow Web surfers in the US, Germany and Great Britain to stream songs by their favorite artists online at no charge. Users will also have the option of buying a downloadable MP3 version of the song through Amazon.com’s popular new MP3 store.
The combination of CBS, all of the major music labels and Amazon.com gives Last.FM a powerful platform from which to operate, and an operating and advertising budget to rival any terrestrial or satellite radio station in the US. The new on-demand music streaming service will be entirely funded by advertising placed on the Last.FM web site, and profits will be shared among the various music companies involved.
The announcement of the new service has been a long time coming. It has taken nearly 6 years for Last.fm to realize their dream of a free on-demand internet music portal, as they began negotiating with individual music labels and distributors back in 2002. Back then, Last.FM cofounder Martin Stiksel says, “they wouldn’t even take our calls.”
But perseverance has paid off for the fledgling music web site, and they have now procured the cooperation of the biggest players in the industry, giving them a solid foundation from which to challenge the superiority of iTunes, Rhapsody, and other online music distributors.
Although the concept of streaming on-demand music online is anything but new, many startups have failed to garner the cooperation of the major music labels, resulting in very limited play lists, and pages of red tape regarding digital rights management and other legal matters.
But while London-based Last.FM appears to be succeeding in the online music distribution game, many other “webcasters” are struggling, or going out of business altogether. For example, Pandora, a competing UK on-demand music distributor, has announced it will close up shop later this month due to “outrageously high” royalty fees. Other online music services find themselves and the same position, and will have to carefully consider whether they should continue to compete in the shrinking online music market.
But by partnering with so many of the industry’s big players, Last.FM has at least a solid chance to succeed where so many other startups have failed. With CBS funding the site, many experts feel that if Last.FM cannot succeed online, no one can.
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