This week: an interview with Fred McIntyre, VP of product at CBS Interactive, focused primarily on Last.fm. In the news: the iTunes store widens its lead as the most popular music retailer in the US, Google is ready to take on Apple on the music front via Android and Simplify, Cakewalking is a software that allows blind musicians and producers to navigate through complex audio platforms like Sonar, in Spain the revenues from the tax on blank media have outstripped the mechanical revenues made from music sales and finally last week’s debate at Music Tank in London demonstrated that the physical product is not dead.
iTunes Store widens its lead as the largest music retailer in the US
Billboard Business reported on the new market share figures for music sales in the US – and the most striking one is that that iTunes is widening its lead and dominates the field. Apple’s music store went from a 21.4% share in 2008 to a 26.7% share in 2009. The trends in the physical market were reversed, with Wal-Mart losing 2.5% and settling with 12.5% – which was probably by all means a calculated risk since the company keeps reducing the shelf space reserved for CDs, and along the same lines the Best Buy share has dipped to 8.7%. The Amazon Mp3 store rose by half a point but is only at 1.3% – a far cry from Amazon’s and the labels’ aspirations and surprising given that often their prices are slightly lower than on iTunes.
Google taking on Apple on the music front as well?
ItProPortal and TechCrunch last Friday reported on Google’s latest announcements regarding its Android 2.2 or Froyo mobile operating system. Apparently Google is planning to introduce music in its Marketplace with the next upgrade and the process would be very similar to what happens today on the iPhone: you’d be able to find the music, buy it and download it directly on your device. At the moment there are no details as to which labels will be licensing their music for the service but with overall sales for Android-powered handsets overtaking the iPhone’s in the US it’s certainly a market that I would assume all labels would want to get a piece of.
In another even more intriguing note – Google announced that it acquired the start-up Simplify media – a platform that allows you to manage your music and photos across different devices and pieces of software including remote access from the web. Simplify had announced a change in direction and pulled its app from itunes back in March which suggests that the deal with Google took place then, and is planning to release a desktop app that will allow you to access your computer’s drm-free music collection from your handset. If this turns out to be a software that is solid and user-friendly it could be a real blow to Apple – the Cupertino company is apparently working on a music locker system in the cloud but is yet to announce anything officially. Google has never been great at handling Media, although Android 2.1 brought a number of positive changes to the User interface for its media player – whether the implementation is up to scratch to gather a large user base is anyone’s guess!
Digital Technology Allowing blind people to record music
I came across a great article on the Wall Street Journal this week that I really wanted to include in the line-up for the show. It’s about a piece of software called Cake Talking developed by the company Dancing Dots – which basically allows blind musicians to navigate and use music production software. The article is based on the experience of blind musician Raul Midon who although extremely accomplished was unable to use normal production tools because most of them are based on icons and screen prompts – just think at your usual Logic or ProTools window. CakeTalking now allows him to produce his tracks the way he wants them and tweak with the sounds in a way he didn’t previously thought possible – it directs him on the screen and reads out the different commands, and through a combination of these prompts and keyboard short-cuts Raul is now able to create complex pieces without anyone’s help. I just though this was a really great story on how technology can make a difference for musicians, although the development of these platforms is probably slowed down by the fact that since they are very niche products they are hard to monetize and I can imagine that there isn’t a great deal of funding for them… At the moment – by looking at the Dancingdots.com website – the CakeWalking software is available specifically for Sonar but I guess that there’s no reason why it could not be applied to other platforms in the near future.
In Spain revenues from the Blank Media tax overtake mechanical royalties from music sales.
Billboard reports that in Spain the amount collected by authors body SGAE through the tax imposed on the sale of blank CD and DVD has overtaken the amount collected through mechanical royalties that derive from music sales. It received 27.7 million euros from the tax but only 20.5 million euros through mechanical royalties. According to the IFPI the value of the Spanish music market declined by 14.3% in 2009 to 177 million euros. On the 11th of May Business Week had run a piece on how the European Union is pondering on whether this tax is acceptable or whether it breaches EU regulations. The case was brought up by Padawan, a Spanish maker of DVDs and CDs who refused to pay and was brought to court by the SGAE. Advocate General Verica Trstenjak of the European Court of Justice said that “A levy in favor of authors, artists and producers may not be applied indiscriminately,” to buyers who have clearly acquired the data media for purposes other than copying others’ work. Now her advice is generally followed by the court so if the ruling was in Padawan’s favor the SGAE could find itself deprived of a very important source of income.
The physical album takes centre stage at the Music Tank debate.
And now onto another piece from Billboard Business – they strangely seem to have better coverage of European music business events than most other news organizations ba
sed in Europe. This is a report on the Music Tank debate that took place in London last week and focused around the physical formats. the event was called “Never Mind the Box Set: The Album Post-iTunes” and aimed at analyzing the future of the album. During the debate a study by the Future Business Research Group was discussed which is basically the first-ever industry-wide segmentation of the British music-buying public. This study divides the music-buying public into a number of groups to give a few examples the “traditional fanatic” – slightly older tech savvy and obsessed with physical products – the “going digital” that has just moved onto digital and may pirate some content the “digital convert” that is following the totally legal digital route. These groups and the correlation between the groups and the amount of money they spend of music is meant to be a guideline as to where the Music Industry should concentrate its efforts. In regards to the call for innovation at the record-store level to drive digital consumption Gennaro Castaldo head of press at HMV spoke of an upcoming service by the chain which would allow customers to receive a legitimate digital copies of the songs they just bought on CD. Others talked about the importance of vinyl, or merchandise and of box-sets for higher-margin products. What’s certain is that physical is not going anywhere and that although digital is set to increase and has already conquered the singles market album sales are going to happen primarily in the physical world for quite some time.
Soundcloud Milestone announced.
The Soundcloud team announced last Tuesday that the company reached the milestone of one million users! I’ve been hosting the show on Soundcloud as well as on the usual RSS podcast feed for the past six months and I couldn’t be happier with them! Mhh now the only trouble is whether to still call it a start-up or not, what do you think?
And that’s all for this week, i really hope you enjoyed the show. You can find all the links to the stories in the show notes which are both embedded in the Mp3 file and on the blog at www.digitalmusictrends.com. You can also find the podcast on the Music Void at www.themusicvoid.com. Please email me with any comment or feedback – the address is email@example.com. Next week-end I’m going to be at the Future Music Camp in Mannheim which is super-exciting, I will be conducting a workshop on Interactive Music so if you’re planning to be there give me a shout – otherwise I’ll tell you all about it on the next episode of digital music trends. This has been Andrea Leonelli – have a great week and ‘Till Next time!