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THE INDUSTRY STANDARD'S
B E A T S H E E T
A Weekly Report on the Convergence of Music and the Net
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| http://www.thestandard.com |
Tuesday, January 9, 2001
TOP STORY:
* The Hardware Revolution
The latest and greatest devices promise music anytime, anywhere. But
is that enough?
NET NOISE:
* 8trackheaven.com
BEATS:
* Napster's New Deal, Bertelsmann's New Music Man
* Musicmaker Goes the Way of All Flesh
DOT DOT DOT:
* Sputnik7 to buy Epitonic.com ... Soundscan year-end numbers ...
Listen.com layoffs
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TOP STORY
~~~~~~~~~
The Hardware Revolution
The latest and greatest devices promise music anytime, anywhere. But
is that enough?
By Julene Snyder
Last week's dog-and-pony show - also known as The Next Generation of
My.MP3 event - at MP3.com's San Diego complex found CEO Michael
Robertson his usual enthusiastic self, excited to show an invited
audience of a few hundred industry types a passel of new stuff that
will highlight the artists and services of MP3.com. The keyword of the
day seemed to be "interoperability." In other words, what the people
want is new stuff that works with their old stuff, so they don't have
to toss out all their old stuff that won't work with their new stuff.
Or something like that.
Another theme running through the conference was a sort of musical
ubiquity. MP3.com President Robin Richards walked us through a day
that begins with you waking up to your favorite song streaming on your
alarm clock, listening to your album collection through your car radio
on the way to work, getting an e-mail message containing your favorite
songs when you get there and accessing your calendar through your cell
phone on your way home to see where a local band is playing. And as if
you haven't had enough, once you get home, you get on your computer to
set up a playlist that you then listen to through your stereo.
While it sounds faintly exhausting, this year promises to see the
release of all number of gizmos that will make that scenario a
possibility. Questions are, how much will it cost, how good will it be
and what's the catch? For those people who've already invested in
PDAs, laptops, cell phones, CD burners, high-speed Internet access and
top-of-the-line entertainment systems, the price tags of the newest
toys won't be a shock. But it also might be a tough sell, seeing how
your living room (and closet) probably already is overflowing with
gadgets.
Sony's Panja 1000 pledges to "provide everything you need to
experience the ultimate Web lifestyle without the need of a PC." For
$400, you get a broadband music player that somewhat lyrically
promises to "intertwine your television and stereo entertainment
systems with the Internet." You're required to pay another $9.95 a
month for Panja's Audio Blast Service, which inflates the price over
time. The company's partnership with MP3.com gives customers access to
the entire MP3.com catalog of artists, along with the ability to use
Beam It to listen to those CDs in your collection that sync up with
the ones in MP3.com's database.
What's most interesting about this particular technology is the
company behind it. As Newsweek and others point out, Sony's entree to
the market is an "about-face as abrupt as record label BMG's recent
embrace of Napster." Sony, of course, has been a leading proponent of
the Secure Digital Music Initiative and a litigant in lawsuits
attempting to put a stop to perceived copyright infringement through
such devices as MP3 players.
Speaking of unlikely corporate entrants, Intel's coming out with a
digital music player called the Pocket Concert Audio Player, which
will play both Windows Media and MP3 files and comes with an unusually
big 128MB of memory. Set to hit the stores in February, the unit costs
$300; for an extra $60, consumers can buy an accessory kit that
includes a car adapter and home stereo dock.
Meanwhile, at the Consumer Electronics Show this past weekend in Las
Vegas, Philips rolled out a $400 boombox with full Internet radio
capability. IM Networks (formerly Sonicbox) has partnered with Philips
Consumer Electronics to provide its iM Tuning Service, which will put
the iM band alongside AM and FM on the dial, letting listeners hear
Internet radio from around the world.
Rio, which came out with the first MP3 player, the Rio 300, a few
years ago, has to date sold more than 1 million portable players. The
next incarnation is the Rio 800 ($279.95), which offers up two hours
of music storage (64MB), but allows customers to add an extra hour
(32MB) for $99.95 and an extra two hours (64MB) for $169.95. A feature
that consumers have been clamoring for is becoming standard with
players like this - the ability to plug the device into your car's
cassette deck and listen to MP3s on the road. But if it's major
tuneage you want, check out Rio's in-dash car player, which was
demo-ed at CES and has the ability to store and playback up to 600
hours of digital music.
A study conducted by the Consumer Electronics Association, which was
announced at CES this past weekend, predicts that sales of MP3 players
will jump 54 percent in the next year to 1.8 million units. According
to Billboard Bulletin, the association thinks that the boom in
MP3-player sales "will help drive an overall expansion in sales of
home and portable audio products."
But, a recent foray to my local electronics store didn't offer up
anything as cool as that. While there was a display of digital music
players - complete with a large sign urging me to "rip ... download
... compress ... create music your way" - the offerings were
relatively slim. A chat with a 19-year-old clerk about the pros and
cons of messing with MP3s offered some insight as to why the average
consumer might not be ready to pony up many bucks for this relatively
new technology.
"I can fit 10 hours worth of MP3s on one CD," said the clerk. "And, it
only costs me 50 cents a CD. Then, I can play it in my car, on my
stereo, wherever. Plus, me and my friends trade our stuff all the
time. When it's so easy to burn CDs, what do we need this stuff for?"
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NET NOISE
~~~~~~~~~
8trackheaven.com
Sure, the sound quality was awful. Yes, there are far, far better
options today. And of course, those of us old enough to remember
8-track tapes have long since replaced them with CDs (except for "Best
of Bread" - somehow, I never did get around to upgrading that one).
But, there are plenty of intrepid souls who'd rather snuggle up with
the past than the future, and clearly, the folks behind this
tongue-in-cheek homage to the lowly 8-track tape are among them.
Inspired by the now defunct 'zine "8-track Mind," there's a subversive
element at work here that's nigh-on inspiring. Witness an excerpt from
a short essay examining the big "why" question: "The plan of
corporations to make you re-buy the same music over and over again on
different formats is, as one tracker puts it, 'backwards thinking.'
Commit an act of consumer disobedience with us and reject the unjust
laws of a marketplace ruled by greed." On a more whimsical note, the
8-track's "unpredictable speed changes, tracks bleeding into each
other, and sudden breaks in the middle of songs help you to hear your
favorite tunes in a whole new way." 8-Track Heaven is a virtual trip
back to the days when cool dudes drove Camaros and the debut Boston
album was on endless loop. In a word: Bitchin'.
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BEATS
~~~~~
Napster's New Deal, Bertelsmann's New Music Man
European indie label Edel Music - which is self-described as "one of
the biggest independent record labels in Germany" and counts the
Pharcyde, Roxette and Jennifer Paige among its artists - has signed a
deal with Napster that allows the file-swapping company to put Edel's
catalog on the service while promoting Edel musicians through
Napster's Featured Music Program. But one indie, no matter how huge in
Europe, does not a consensus make; the other four big labels have yet
to jump aboard the Napster bandwagon. Meanwhile, Napster's big
partner, Bertelsmann, has named Rolf Schmidt-Holtz president and CEO
of its music division. According to The Industry Standard Europe's
Michael Learmonth, Schmidt-Holtz is a "recording industry neophyte,"
who's spent his career as a corporate dealmaker. Forrester Research
analyst Eric Scheirer summed the deal up for Reuters neatly, saying,
"It's not really clear what Napster is getting out of this except
that Edel may be the first label to say something about Napster other
than it was suing the company."
Read more about Napster at
http://www.thestandard.com/article/display/0,1151,21192,00.html?nl=bts
Read more about Bertelsmann at
http://www.thestandard.com/article/display/0,1151,21310,00.html?nl=bts
Musicmaker Goes the Way of All Flesh
Last week's news that Musicmaker.com had shut down its Web site and
was a hair away from closing altogether seems inevitable in
retrospect. The company's board unanimously voted to liquidate and
dissolve the company, and once shareholders approve the liquidation,
the company will be shut down, thus avoiding bankruptcy with the
voluntary liquidation. The Standard's Learmonth points out that
although the company's shares shot up to $281 on its first day of
trading in July 1999, the release of Napster a month later did not
bode well since "consumers showed an overwhelming preference for free
downloadable music," and the idea of buying customized CDs on the Web
took a further blow with the advent of relatively cheap, rewritable
CD-ROM drives. Read more at
http://www.thestandard.com/article/display/0,1151,21259,00.html?nl=bts
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DOT DOT DOT
~~~~~~~~~~~
Sputnik7 to buy Epitonic.com ... Soundscan year-end numbers ...
Listen.com layoffs
Sputnik7.com, which was started by Island Records founder Chris
Blackwell, announced Wednesday that it will buy music content site
Epitonic.com for an undisclosed amount of cash. New York-based
Sputnik7.com will get licensing agreements with "about 350 indie
labels, including Ubiquity, Sub Pop, New Albion and Beggars Banquet,"
according to The Industry Standard's Hane Lee and Kathi Black.
Read more at
http://www.thestandard.com/article/display/0,1151,21245,00.html?nl=bts
... The year-end numbers are in, and it looks like Napster hasn't
quite managed to kill the record industry just yet: Soundscan reports
that total music sales for 2000 rose 4 percent to 785.1 million units,
and word is that it was a very merry Christmas indeed for the
industry. Of the big five, Universal is way out in front, with 26.8
percent of market share. It's neck-and-neck for the next three spots,
with BMG at 16.3 percent, WEA at 15.5 percent and Sony trailing by a
nose with 15.2 percent. Hapless EMI lags behind the pack with a lowly
9.7 percent. ... Last week, music download directory Listen.com laid
off 42 employees. The company is far from the poorhouse, though; a
cool $60 million still remains from its most recent VC round.
Read more at
http://www.thestandard.com/article/display/0,1151,21238,00.html?nl=bts
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Editor: Steven Zeitchik (szeitchik@thestandard.com).
Deputy Editor: Michele Keller (mkeller@thestandard.com).
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