Digital Music Trends – Episode 39

This week: an interview with David Nelson, CTO of and an interview with Megan Elliot, organizer of the Sounds Digital event in London. In the news former Sony Music CEO Don Ienner unveils the IMHO media Player, Rapidshare takes a tough stance on piracy, Spotify is rumored to be set for a Q3 launch in the states, Shazam reaches 1 million downloads through Nokia’s Ovi store and CBS indicates that may finally become profitable.

Digital Music Trends – Episode 39 by digitalmusictrends

IMO Entertainment launches IMHO, a new social media player blending music, videos, games and advertising.

Various news outlets such as Billboard Business and Music Ally reported on the launch of the IMHO social media player this week. The player is produced by IMO Entertainment, a company lead by Don Ienner, previously CEO of Sony Music Label group and Columbia Records. The idea behind the player is that it brings together music, video and gaming under a single roof that is cloud-based and geared towards social sharing. The player’s monetization revolves around virtual money that can be purchased outright via Paypal or earned through the exposure to advertising the level of which can be customized within the player, the virtual IMHO money that can be spent to purchase content, personalize your avatar or purchase virtual goods. At the moment the player features 150 radio stations, a partnership with digital distributor the Orchard as far as the music is concerned and over 900 games provided by RealNetworks. The player is geared primarily towards Facebook users, who have demonstrated time and time again how virtual goods done right can generate a huge cash flow – see Farmville’s history for details. The idea seems certainly pretty solid, but the real problem will be finding a balance between free content and paid content. If relatively new users were to experience that the majority of the content on the player requires payment they will soon be turned off by the experience, but just like in Farmville, if enough is given away for free to get them hooked to the platform then they will probably agree to buy almost anything, no matter how daft the purchase may appear. Due to Facebook’s fundamentally unsuccessful strategy up to now in regards to content distribution of music and videos many companies are competing to create an experience that can capture the imagination of the hundreds of millions of people who use the platform every day. IMHO has now captured the industry’s attention, it’s now up to them to demonstrate whether they can live up to their own hype and reach a mainstream audience. 

Rapidshare goes all-out against piracy and wants to direct pirates to legal sites for the purchase of content.

Rapidshare, the online file storage and delivery service, has decided to crack down on piracy. The service, which has been widely known to be a sort-of safe harbor for sharing copyright protected material, interestingly decided to start cutting off accounts of known file uploaders and started issuing warning letters to downloaders, probably in a bid to avoid a crippling lawsuit by the entertainment industry. The move took many by surprise as after all Rapidshare’s business had grown dramatically thanks to its sharing-friendly reputation. Torrentfreak, though, offered a different angle on the story after unveiling a letter that was written by the company’s General Manager Bobby Chang addressed to representatives of the entertainment industries. In the letter, Mr Chang condemns new companies that are cropping up with the sole purpose of being cyberlockers for the safe exchange of copyrighted material. He also refers to infringing users as criminals and makes the interesting proposal to deny access to copyrighted material when searched for and replace it with links to sites where the users would be able to buy a legitimate copy of the same item he searched for.

 The move has got to be positive news for the music, film and games industry but ultimately pointless as many users who want to continue exchanging files without restrictions will probably just migrate to other services who may have kept a lower profile and therefore so far avoided legal problems. Although this new stance is likely to damage Rapidshare in the short term and reduce its user base it’s certainly a clever move. First of all it greatly reduces the chances of having to fight expensive lawsuits in court. Second the company has now reached millions of customers so even if some were to leave the service chances are that many would stay on and keep it a viable commercial enterprise. Third, if the re-direction of users to legitimate sources was to work I assume it would involve some sort of affiliate sales fee and that could slowly replace the revenues previously generated by copyright-infringing users. I am very interested in seeing how Rapidshare will fare in the next 12 months as the results of this gamble are at the moment completely unpredictable. 

Spotify might be aiming at a Q3 launch in the United States

In An interview released to Bloomberg the VP of of Spotify Paul Brown hinted that the service is aiming to go live in the US in the third quarter of this year. Brown said that Spotify is buying server space in random parts of the United States to ensure the smooth running of the service once online and it is still ironing out the details of the licensing deals with the labels. Billboard Business writer Antony Bruno, who picked up on the story, reports that there are also fresh rumors regarding the relationship between Spotify and Google. A couple of months ago, when the Nexus One was first announced, rumor had it that it was going to feature Spotify as an embedded feature. This failed to materialize at the time – also probably because the deals with the labels are not yet finalized – but it does not mean that it won’t happen in the next iteration of the Google phone or that Spotify won’t become a more prominent feature in new versions of Google’s mobile operating system, Android. 

Ovi Store starts gaining some traction as Shazam reaches 1 million downloads. 

While I spend a lot of time talking about iPhone and Android apps I almost never cover the progress of other app stores. Nokia’s Ovi store, launched last year, is finally starting to gain some traction. The store, which offers apps for Nokia’s own symbian mobile operating system, announced that Shazam was the latest app to reach the 1 million downloads milestone. The store seems poised at becoming increasingly popular in 2010 as Nokia sells more and more symbian-based smartphones and although it may not yet make financial sense for smaller businesses to develop for it certainly starts to be a more appetizing market for larger players who can absorb the development costs. For example, Shazam has over 50 million customers so one million is a very small percentage, but given the scale it can still amount to significant revenues. The Ovi brand is becoming quite popular, so much so that Nokia decided to re-brand its Nokia Music Store as Ovi Music. Ovi Music will be rolled out to all Comes with Music customers around the world in 2010 and in many countries it has actually supplanted the Comes With Music brand – for example Russia, Malaysia and India. There are no plans for a re-brand in the UK where the marketing campaign for Comes With Music had been so extensive that any such move would really confuse consumers.

CBS aims at making profitable this year.

Robert Andrews from Paidcontent published a days ago an interesting interview with’s Product VP Fred McIntyre – you can find it and listen to it via the link in the shownotes. 

The key points are that CBS is as committed as ever to the brand, seeing it as the only service that successfully ties in the listener’s music experience across multiple platforms and services. CBS aims at making the division profitable by 2010 by being very focused on the subscription business. Outside of the Uk, US and Germany requires a monthly subscription which currently drives about a quarter of the company’s revenues. In the interview, Mr McIntyre indicated that the number of subscribers is in the high tens of thousands. Rolling out new features for subscribers as well as enriching the way integrates with different platforms and devices are both high on the list of priorities for the company. It seems that after a number high-profile departures last year, CBS is finally finding a way of turning things around at 

Well, that’s all for this week, i hope you enjoyed the show.

A few exciting developments for the podcast this week. First of all as I mentioned before I’l be covering Sounds Digital in April, then at the end of May I will be covering Future Music Camp in Mannheim as well as hosting a workshop on interactive music services over there. Finally I just confirmed that I’ll be at the Future Music Forum in Barcelona at the end of September. You can find links to all these events on the front page of the the site at, where you will also find links to the iTunes and RSS feeds, a contact form and other goodies. 

To contact me directly with news stories, comments and feedback the email is and you can follow me on twitter, the handle is digimusictrends

Have a great week and ’till next time! 

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