'The Times They Are A Changin'

Nielsen's 2014 annual review of the music industry has negative signs in front of chain store sales (-20%), total new album sales (-14%), and sales of new songs online (-10.3%), with only positive signs in front of streaming music and vinyl album sales. This is despite CD sales in the US generating some $141 million last year.

Many believe that the book trade should learn from the digital revolution that is taking place within the music business. The reality is that the music business is very different and right across the music business there is both evolution and revolution. Some changes happening quickly and completely killing off the past, whilst others are slowly evolving. From creator to consumer digital change is taking place.

We see many changes at the consumer end. Technology has replaced the preceding technology. Eight track was replaced by cassette, cassette was replaced iTunes, iTunes downloads was usurped by MP3 downloads, which is being replaced with streaming on demand. This is without the parallel evolution from MTV to YouTube and the growth from digital internet radio stations and music discovery services such as Shazam.

Music owners have in the past been forced to replace their collections, but the new streaming technology now questions why they would want to reinvest yet again when it’s all available on demand. On demand is itself is fuelling subscription. The changes are logical but the speed of change is significant and the redefinition of ownership has enabled many to rediscover vinyl whose sound was of a higher quality, but its market share is still only 3.5%. When we first started this blog we thought Spiral Frog would capture the new market, but they failed to cross the line and their place was taken by Spotify.

Spotify now claim 35 million songs on their service and there are many more renditions now on services such as YouTube and SoundCloud. But even with this enormous repository of songs many still go unheard whilst others, like butterflies have one season in which they flourish.  

When you look at the production, distribution and business, change is often less revolutionary and more evolutionary. Social networks and self-promotional marketing are starting to eat away at the mid list. Unless you are in the top 1% which generate 80% of the money, then you may have to rely on the hit makers which now are TV driven by talent shows such as The X Factor, The Voice, Pop Idol.

To be a hit, you now need serious financial backing, or social pull. With these changes come changes in the reward structure for all. Some will say that there are now too many sticky fingers in the diminishing pot. So artists are having to rethink the old models and balance greater control and percentage of revenue, against lower revenues and often chump change return. A good friend and musician commented to us only this week that selling direct gave them 100% whilst scattering to the digital unknown gave them little. Merchandise, concert revenues and secondary rights are growing in importance. This impacts how artists are managed, make money, record and distribute. It changes where the producers and labels make their money and the increases the importance of the back catalogue and Intellectual property.

So can books learn from music?

The consumer end is very different and what is clear is the physical book isn’t going away in all sectors and will retain a major share of the market whilst the distribution economics can support it. However, like music the pot is not growing but changing and this is putting similar strains in the production and development area of the value chain. There are many similarities here with respect to back list, mid list and front list and self-publishing. Even signed authors are having to work harder on their social skills as publishers rein in the marketing and promotion to focus on the best shots.

The one thing that all media segments share is the polarisation of value at either end of the value chain and reducing influence of the middle to many.

Apple Gives Free 14 Right to Cancel in EU

We could never understand why Amazon allowed ebooks to be returned and found it very frustrating when every month one always appeared in the Kindle reports. Was it a lost sale? Did they not read what the work was about and returned it as rejected? Did they just not like it and returned it unwanted? Did they read it and then returned it for their money back on a free read? We will never know as Amazon doesn’t say.

Now just to raise the questions further Apple has just started to allow European users of their iTunes stores to “return” goods without giving a reason.

This may bring Apple in line with EU regulations passed in June which mandate online sellers to offer a “right of withdrawal” from distance sales. It is not in the interest of authors, publishers and even Apple. The regulations stipulate that customers may withdraw from an off-premises contract with 14 days of purchase without giving any reason. 

Apple’s iTunes terms and conditions have now been updated to include a “Right of cancellation” and states, “if you choose to cancel your order, you may do so within 14 days from when you received your receipt without giving any reason, except iTunes Gifts which cannot be refunded once you have redeemed the code.” 

The previous position was on a case by case basis and geared towards issues where the file had failed to download. This sensible approach still prevails outside the EU, but inside we appear to be in the grip and influence of some misguided mandarins in Brussels who understand little and take bold and misguided leaps into the dark.

Nothing new there then!

YouTube: Dire Straights Or Huge Opportunity?

We know that YouTube has become the channel of choice for many kids to listen and watch their music. After all why have a one dimensional experience when you and get two for free. The video archive continues to grow and some would suggest that it’s easier to find some obscure footage and music via YouTube than via the pure music routes.

To think it all started with MTV or to quote Dire Straights' 'Money For Nothing.'.

Now that ain't workin' that's the way you do it
You play the guitar on the MTV
That ain't workin' that's the way you do it
Money for nothin' and your chicks for free

Billboard now report that they believe that YouTube is planning to introduce a subscription music service in weeks, which if correct could blow many traditional players off the scene. The assumption is that they will be offering a free service plus a premium one and Billboard believe that the premium service will also be tied to unlimited access to the full catalogue and the ability to cache for offline listening and removal of ads.

Video will clearly set YouTube apart from not only Google’s own Play service but also Spotify, Pandora, Apple’s iTunes Radio and others.

YouTube has committed to trailing offline video, giving creators the option of offering offline viewing to their videos. Google Play Music All Access licences also appears to give them the ability to launch the service obviating the need to go back to the table. Now the Premium service will generate both ad and subscription revenues and of course may feature high on many search requests.

We all think that we understand the landscape and that things don’t change. However, this is a classic sea change opportunity that if introduced as described and price attractively could change the music market. It starts from a place others aren’t at and can’t quickly catch up with and feeds on a growing two dimensional consumer trend. Finally, it also is fed by consumers own videos and bootlegs which up to now have been seen as interesting but…

iRadio to iTunes

Apple broke the album mold and introduced us to not back to singles but tracks. It priced these at a point that was attractive and tied it t their iPod, iPhone, iMac, iPad and the rest is history. Now they plan to introduce iRadio to the family and hope to cash in on the move to music on demand.

So how will they fair against the established communities such as Pandora, Google’ ‘All Access’ and Spotify. Will they be able to lure customers away from subscription based services to what is reported to be an advertising paid model? Will consumers accept free with ads even if it links seamlessly to iTunes to buy?

The challenges Apple face in trying to close down on this low margin high volume business is not just consumers and attracting advertisers but also convincing the music producers and publishers that another low margin licence service will work for them. They already have disparity between existing revenue models and Apple are unlikely to want to pay the going rate for their licences. It is rumoured that Apple has signed a deal with the Warner and Universal for their music rights but has still to complete on the latter’s publishing rights. It has still to close a deal with Sony with a few days to go to their launch of the service. All deals are based on Apple paying a fee for the music rights and a separate fee for the publishing rights on music streamed. The interesting aspect is the ratio of the number of times an individual will play the same tune versus the cost to purchase. The user doesn’t care and may play a track 50 times but the meter is running and everyone else will be watching. In Apple’s case they have to either pull in the necessary advertising revenues or sales through iTunes to cover the royalties. But why would a user buy a track when they have unfettered access to play it for free?

The challenge for the music business is grappling with the clear migration from purchase to subscription or ad based licence deals. The music business has a track record of poor transition to new models and technology and only recently has started to see the new shoots of a digital recovery, but this has been on the purchase model which may not prevail as more become switch on to on-demand streamed services.

The challenge to Apple is that they are not leading this market and are coming relatively late to the party. They believe that the tie to iTunes will work in their favour but other will argue that it will further heighten the difference between owning all one’s library of music and merely playing it when you want to at a lower operational cost. 

'False Sale' without 'First Sale'?

Some ask why ebooks are so cheap to buy today. Some will point to the fact you don’t actually buy them and therefore you are just paying a perpetual rental charge for something you can’t give away, sell and don’t actually own.

What started and looked a serious report on Bruce Willis, in the Daily Mail. The report claimed Willis was taking on Apple over ownership of his vast iTunes library of music may have exposed a few facts to a very wide audience. The story was based on the fact that digital music files can’t be passed on to others and that they in fact die with their owner, or should that be guardian. Irrespective of how much was paid and the value of the library, it all turns to dust on death.  The story was denied in the Guardian and supposedly went away, but like any plausible story, people then asked, forget Bruce what about me and is it true?

We have those who say that passing on one’s media to their relations is akin to leaving them the food in the fridge – a waste of time and they don’t want it. Leaving someone your favourite Beatles music assumes that they want it and like it. They point to passed on 78s and old vinyl that can’t be played. They suggest that it rare to find that the next generation will appreciate and value the same music as the last.

Then there are those who believe that collections of media, be they music, books, pictures, videos can help define who we are and that this alone is a reason to preserve their library and their identity.

In the physical world there is no problem – goods can be handed down, retained and even sold or given away. However, in the digital world things are not so clear cut. We stumbled into the digital age without addressing the ‘first sale doctrine’, which enabled the buyer own the physical file. Today there is no second-hand market for music files, ebooks, games, videos and software. There are a few exceptions and challenges, but in the main you buy a licence not the file. So when Jeff Bezos talks about holding thousands of files on your Kindle he forgets to clarify what the word ‘hold ‘actually means. He is not alone and the whole question of ownership is avoided today.

We have written about challenges to this ‘false sale’ without ‘first sale.’

We have argued for the sale of licences to be made clearer and the need for media markets to move to a more logical on demand rental offer, which would at least remove the current ambiguity. However, the easiest solution is to allow digital goods the same rights of resale as physical ones. There may need to be a registry, but anyone who has read this blog knows we are strong advocates of a rights registry for what is a rights business.

So what about Bruce Willis and his vast iTunes music collection? Well those without DRM should be easy to pass on, albeit against the terms of purchase. Those with DRM remain locked until the service dies, the format dies , the device dies, or the person who bought them dies. It doesn’t take a genius to work out that ebooks are in a worse shape due to our continued support of DRM and the DRM constructs that are in play today and the fact that unlike music, videos and games most of us only read a book once.

Related articles:

http://bookseller-association.blogspot.co.uk/2012/01/first-sale-doctrine-digital-threat-or.html

http://www.dailymail.co.uk/news/article-2197248/Bruce-Willis-fights-leave-iPod-tunes-family-Actor-considering-legal-action-Apple-battle-owns-songs-downloaded-iTunes.html?ito=feeds-newsxml

http://www.guardian.co.uk/technology/blog/2012/sep/03/no-apple-bruce-willis

http://techcrunch.com/2012/09/03/bruce-willis-itunes-music-library/

Video Killed the Radio Star?

We were recently introduced to music such as Devo’s ‘Whip it’, The Who’s 1970 live Isle of Wight appearance, Aretha Franklin’s ‘Precious lord’ and we also regularly get alerts via Facebook to watch videos of musicians, some famous and some less famous, and songs we have often not heard before. They are all streamed via Facebook and we have also used Facebook to share videos of artists with our friends.

Today we learn that we are not alone in enjoying this multi media musical experience and a new survey by Nielson now claims that teenagers today prefer to watch their music. YouTube has surpassed radio and CDs to become the most popular way young Americans listen to music. Some 60% of the 3,000 polled now use YouTube to listen to music.

Who would have thought in the early days of MTV that video would become the preferred way to listen to music and why isn't MTV at the centre of the market today?

YouTube’s vast library of music clips contains some licenced videos and some uploaded by users and  is making it a FREE and effective source of music. But the numbers in the survey also show that its not all one way traffic and that consumers now use many ways to get to what they want to hear. Radio, iTunes, physical CDs all still command attention whilst only 17% said they use file-sharing software and some 72% had purchased music in the last year. The message is clearly that music is available from many sources and many are free but they still will buy music.

Perhaps the obsession some in the music business have over filesharing needs to be given a reality check. Perhaps the change in business models and licencing has more to do with artists lower revenues than piracy?

Although Google has many music licensing deals there remains disputes with others over rights and in Germany one group has demanded that YouTube to pay at some €0.006 per video stream. The challenge is somewhat like bolting the stable door after the horse has bolted and like many cultural shifts, revisiting licensing arrangements doesn’t always work out retrospectively.  

Its interesting that the likes of Facebook and YouTube can effectively share the same users and content via their two separate services that both individually can earn on the associate advertising revenues that the music industry just missed seeing. Youtube may hold the video and render it, but increasingly they do so via other social platforms and on a global basis.

Digital Eloquence

When we wrote the Brave New World report, we expected the digital audio market to take off. After all, the devices were already there, the download mechanisms existed, the bandwidth was there and MP3 was going DRM free with music. All we had to do was to plug in the earphones. But it didn’t happen and instead the ebook lurched forward, took off and we forgot the audiobook. The reasons for the lost audio opportunity were many; Amazon’s acquisition of Audible and their retention of the old book club model, the lack of digital content, the cost of production and subsequent high ticket price of audiobooks, rights etc.

We were stimulated with launch of Silksoundbooks.com in June 2007. It appeared to have all the boxes ticked being backed by top tier actors such as Bill Nighy, Judi Dench, Richard E Grant and Jane Horrocks and it was also selling titles at a reasonably low price of £7.95. It was as if the classics were going to get a lift and digital audiobooks were to happen. Sadly the 60 initial titles remain and the expected ‘1,000 within three years’ didn’t happen.

Last night we were a panel guest on Litopia After Dark and met a fellow panellist BJ Harrison. BJ has started his own classic digital audiobook venture based in Utah. He again has chosen the classic public domain route and now has some 150 titles all recorded by himself and available via thebestaudiobooks.com and his iTunes ‘The Classic Tales Podcast’ , which in its first award-winning season registered 3rd in their overall iTunes podcast charts. B.J. Harrison mixes the world of classic short fiction from Poe, Dickens, Hardy, Stevenson, Fitzgerald and many others, with the longer classics of Twain, Dumas, Stevenson. The list of authors reads like a ‘Who’s Who’ of classic literature and he has not restricted it to North American. His prices are very very keen and should appeal to a wide audience seeking a listening read at a bargin price. Its approach is very similar to the successful action Wordsworth Editions took to bring down the price of printed classics.

We were stimulated by what BJ has achieved and although some may say its only on a small scale, it again raises the opportunity and a way to do things differently. He mauy have taken a similar route to Silksoundbooks in adopting the classics but there is no reason why the approach and model can’t be used by authors under a collective umbrella.

Does the audiobook stand in its own space, or will it become just a text to speech device feature, or an additional file element to an enhanced ebook?

We think that the audio format has a place and is not just for the visually impaired. Again we are drawn to Dickens and the short instalment or episodic release. The enthusiasm with which he captivated hie audiences and drove his sales of the books. What a fantastic way to release a story in the digital age and even a different way to sell and market a story..

To listen to the 'Litopia After Dark' podcast 'Million Dollar Voice'

Via Radio Litopia

To visit BJ Harrison’s web emporium of digital eloquence

Apple and Friends Enter Into The Christmas Spirit

On the twelfth day of Christmas Apple could have given you, no a single partridge, pear tree, leaping lord or gold ring but twelve tracks for free. One, for each and every day of Christmas.

We should not mock and deride Apple for showing their generosity and Christmas spirit. So for just your email address, you can now sign up to receive 12 free downloads over Christmas. The deal will run from December 26th, till January 6th (or the ‘12 days of Christmas’). Exactly what you get each day is up to Apple. It just like Christmas, you have little say in what you receive , but that’s the point isn’t it? Instead of an unwanted jumper, or a pair of woolly socks, you could get that band you hate most, or Lily Allen. However, the company claims that the list will be populated by “some of the biggest star performers on iTunes”, so Lily may not make the cut but there again The Ting Tings may!

Daily updates will be posted on the iTunes (UK) Facebook page and each download will be available for just 24 hours. The ‘friends ‘ who are sponsoring the event are; The Times, Capital FM, Heart Radio, Ticketmaster and O2.

iTunes Continues to Dominate Digital

A new report from the NPD Group claims that 25% of all music sold in the US is sold through the iTunes Store and paid digital music downloads have continued to grow to 35% from 20% in 2007.

iTunes remains the clear market leader across all music sales, followed Walmart (14%) and then Best Buy came in third. When looking at only online sales, iTunes generated a staggering 69 % of the digital music sales in the 1st half of 2009, followed by Amazon MP3 with just 8%. CDs continue make up 65% of all music sold, with Walmart leading the physical sales market with 20% market share. However, digital music sales are growing at 15 to 20 %, and CDs falling by an equal proportion, forces NPD to predict digital music sales will nearly equal CD sales by the end of 2010.

The interesting observation would be the continued power of iTunes in the digital market. It raises the opportunity of Apple becoming the media source store, for not just music, but all digital files, including books.

Apple Tablet To Change Media?

Back in January this year we reported on the rumour that Apple could be developing a killer device - new larger iPod Touch, which we predicted would clearly not only rewrite the notebook world but obliterate the eink readers in a heartbeat. Now that rumour is closer to reality and the Financial Times and others are reporting that Apple is racing to offer a portable tablet-sized media computer in time for the Christmas shopping season.

Forget the 1984 Kindle, Sony and the ever coming Plastic Logic this could be the Walkman and iTunes plus moment for video, TV, Music, Audio and of course ebooks. It will be the same as the step change from black and white TV to colour but with all today's channel offers!

The touch-sensitive computer is predicted to have a full colour, 10 inch screen and have internet connectivity like the iPod Touch with full access to the web and to Apple’s online stores for software and entertainment. It will be coming to market at a time when video streaming is taking off, mucis streaming is hear, downloads could not be easier and importantly for books when market hype is starting to met market demand.

The big question is not whether there is a market demand for such a product aligned to a service such as Apple’s, nor is it about whether Apple will create a great device but on the price and service ties. It will be interesting to see if the service to support the device is tied to an exclusive carrier or open and whether the price can remain low enough to be a ‘no brainer’ for Christmas. If the price can be competitive with the current iPhone and iTouch it certainly will move.

Start saving now, a major media step change is about to happen.

Palm Continues to Taunt Apple

Palm has taken a decision to re-syncing its Pre Web OS to iTunes. This follows iTunes issuing an update to block their previous hook up.

The question now is whether this latest twist will end up in court? On June 16, Apple issued an iTunes support document that said it does "not provide support" for non-Apple hardware that attempts to use iTunes for synchronizing content from a Mac or Windows PC. Palm’s openness would suggest that they are taunting Apple and expecting a reaction. If Apple were to turn the other cheek then it may be an open invitation for others to follow and could undermine iTune dominance in the market. Others see it as strengthening iTunes in the same way that the adoption of MP3 made it more attractive to a wider audience.

However there is another viewpoint that Apple is open to the Palm approach in that Palm hasn't done anything to Apple's software, only its own Web OS software and therefore there is little that they can do legally. Palm has not violated Apple’s software so has not infringed any copyright.

Until there is clarity, or the Apple engineers devise code that prohibits Palm, it would appear that Palm wish to continue to synch to iTunes software and taunt Apple.

Palm Pre blocked on iTunes

The Palm Pre had enabled itself to be recognised by iTunes, such that when you plugged it into your computer, iTunes thought the Pre was an iPod and proceeded to download music, video and picture files onto it. However, when iTunes 8.2.1 stops that and in Apple’s own words, “addresses an issue with verification of Apple devices.”

Apple may have blocked the access, but in doing so, they merely send the Palm Pre users elsewhere to use other sites. The world of 'exclusive' is not where we should be going in the digital market and this is yet another instance of xenophobia.

Spotify Android Move

It has been widely reported that Spotify, has demonstrated an offline version of the service running on a Google Android mobile phone at Google's I/O developer event and it appears that just like the desktop client it’s a potential winner. It even has "offline mode" that uses cache to store a playlist and turns the phone into an offline MP3 player with Spotify as its client.



Spotify is working on several mobile versions but the big question is wheter Apple will allow or block what is a clear threat to iTunes. Here is an earlier TechDigest video 'showing' Spotify on a iPhone.

Digital Music Just Got Cheaper and DRM Free

Often price wars are won by no one but the consumer. The producer is often out of the control loop and their RRP becomes meaningless, other than to act as a discount mark. The reseller may control the price and discount but its often down to the depth of their pockets, the nerves to fight it out and the margin hit they can stomach. Supermarkets can often cross subsidise pricing, but ‘one product offer’ stores such as music and books only often have the one product mix, one opportunity and when they make steep discount move these are made its often in hope that they can be retracted as quickly. No retailer wants a discount war unless they are in control and have the margin to play it.

Today we see price wars breaking out in the music download market. They are not driven by the producers, nor the artists but by two giants who want to destabilise the others offer and capture share.

Amazon has launched a new campaign reducing the price of 100 of its mp3 downloads to 29 pence. This is only a small number of its 5 million music downloads on offer but is focused at those that sell, current chart toppers and genre leaders.

The response from Apple was to introduce a new three-tier pricing system for downloading tracks from its 10 million track iTunes online store. Downloads now cost either 59p, 79p or 99p per track with the majority of songs priced at a price of 79p. Apple’s tracks will now be DRM (Digital Rights Management)free and able to be played on any player not just Apple's iPod.New releases will now often be priced 99p.

Major labels said the price of a song should reflect how much buyers were willing to pay for it. That is wise of them and obvious to everyone else! By removing DRM protection from the downloads we see the death of the highly unpopular DRM-limited music.

The music legal download business is now moving into uncharted waters with the big two potentially squaring up on the only thing they can – pricing and the rest now wondering how the battle will unfold. What is certain is this is the beginning not the end of this price war and their biggest competitors don’t charge but operate different business models.

We often watch other media markets to learn lessons and with the debate still ongoing on ebook pricing,DRM being the normal ebook practice, the current High Street madness on book discounting, then perhaps music is worth watching today.

Does Apple Share Our Dream?

Reuters deliver an interesting report that claims that Apple will take third-quarter delivery from Taiwan touchscreen specialist Wintek of a newly developed 10-inch touchscreen. Wintek already supplies small screens for Apple iPhones, and Reuters now report from a confidential source that Wintek now has received orders for the larger ones. However although Wintek have officially confirmed Apple is a major client they declined to comment on any new product development.

Taiwan media is rife with speculation claiming that Apple is currently developing a touchscreen PC and there are also claims that Taiwan's Quanta Computer, the world's top contract laptop PC maker, would manufacture the actual devices for Apple.
So as everyone speculates those potentially in the know remain tight lipped which obviously adds fuel to the fire. We have already speculated about a larger iTouch which with a 10” screen could certainly start to redefine the market bringing the weight of the Appps Store and its 250k applications, the power of Apples PC platform, iTunes, video and of course books all together under what would be a very compelling offer and in full colour for Christmas.

Such a move would seriously dent the eink looky-likies create a natural home for a media and start to separate the PC and the phone strengthening as opposed to weakening their offers. Alas it may be a dream – but it’s a good one!

Should Music Contracts Reflect Today's World or Yesterday's? Part 2

No sooner had we posted our copy yesterday than the jury has ruled in favor of Universal Music Group in the label's court battle against Eminem's former publishing company FBT. This means that the royalty rates will stay as they are.

A verdict for the producers could have brought millions of dollars for artists whose contracts with record labels pre-date digital download sites and mobile phone ringtones. It also has probably strengthened the resolution of artists, such as The Beatles, who have todate refused to sell their recordings on iTunes, because they receive so little of the proceeds.

Should Music Contracts Reflect Today's World or Yesterday's

The one-week trial between Universal Music Group (UMG) and F.B.T. Productions (Eminem) closed this week with FBT asserting that ‘When a music fan buys a song off of iTunes, the record label hasn’t done very much to get it on their playlist, and thus doesn’t deserve the lion’s share of the profits.’ About $1.6 million is a stake, with Eminem seeking three times the current royalty in the trail and the implications of any outcome on others is obvious.

F.B.T. claimed the download arrangements are similar to the one UMG has with traditional record clubs, and under this licensing agreement, Eminem gets 50% of the profit. When an album is downloaded on iTunes, it falls under the “records sold” provision of the agreement, giving Eminem an 18.23% royalty rate. F.B.T. are claiming that Universal simply grants a license for iTunes to distribute the recordings and by doing so, minimises its manufacturing costs.

Lawyers for UMG countered that they put millions of dollars into building the technology to send music files to digital retailers, and so deserve the royalty they currently receive. UMG, state that because record clubs fall under a separate part of the recording agreement they have with the artist, the situation is not comparable. They point out that the royalty rates are the same (18.23%) for cassettes, vinyl and CDs, even though the manufacturing costs vary considerably. So if a digital download costs less for the record company to manufacture, why should that rate change?

Some artists would say that they lost out when they moved from vinyl to CD's. They are cheaper to manufacture, but the packaging deduction went up from 10% to 25%. They lost when they moved to downloads, since labels would still charge for packaging under existing contracts. How can an artist be held under a contract to not-yet-developed technology in record contract negotiations that took place years ago?

If FBT wins this case, it will have a bigger impact on smaller bands and also bands that are held to contracts signed in the 60s and 70s. Contracts that were signed before digital downloads became prevalent often have a different royalty rate for albums than singles which could seriously be impacted as digital downloads consider all tracks as singles and are paid at the lower rate under these contracts.

Should artists have the right to renegotiate their contracts when new technology emerges to deliver their music? Universal is not only fighting Eminem's F.B.T. in court, but their entire roster, and this again shows the level of the mess that digitisation is heaping on the music producers and why they are haemorraghing artists and some would say trust.

There is a lesson here for all media companies who believe that they can roll old contracts forward with little regard to the spirit in which they were entered into or the fact that things have changed.

Marvel Digital Comics

Marvel Digital Comics have announced that Spider-Woman will be the subject of a digital motion comic with voice actors playing the part of various characters from the Marvel Universe. The new comics will be available for purchase on iTunes will be released with the motion comic will coming out first, followed by the print comic a week or two later. Astonishing X-Men, War of Kings: Warriors and Dark Reign: Made Men will also be released as a motion comics soon

Marvel.com now hosts games, videos and content as the Marvel Digital Comics Unlimited portion of the website, with more than 5,500 comic books available for subscription, including web-exclusive content.

Marvel is hopeful that using these motion comics as a gateway to print comics and will get people interested in reading comic books. They have also adopted a streaming approach as opposed to a downloading one. This gives them additional from a piracy standpoint.

The graphical visual nature of the comic book combined with the story length offer a real opportunity for a migration to digital form. Interesting they offer a potential co-edition between print and online where comic fans will always want the paper as a collectable but probably enjoy the convenience of digital. Digitisation also offers a new audience, further rights extensions and merchandising tie ins and potential extensions into games and film. We believe Marvel is clearly taking logical steps and that comics are entering an exciting era.

Music DRM RIP

In some 10 years the music business has rewritten itself and now has a different perspective on digital. Yesterday in San Francisco Apple finally announce that it would drop the anti-copying restrictions on all of the songs in its iTunes Store and also importantly change its pricing structure to allow record companies to set prices. Last year iTunes sold 2.4 billion tracks, but even this was not enough to compensate for the 20% decline in CD sales.

Apple had started the track based price revolution but was not now in control of it and the iTunes price point of 99 cents had to go as Amazon and others were blowing it away already. The result is that the majority of songs on iTunes will drop to 69 cents beginning in April, while the big front list songs will go for $1.29 and some will remain at 99 cents. The music industry hope that this will increase legal digital downloads and appeals to consumers.

More and more services now sell MP3 unrestricted files and the writing is clearly on the wall for DRM in music. Apple clearly seen this in 2007 and had wanted to move in the same direction. However, the music moguls at some majors wanted to play silly games allowing rivals to iTunes to sell MP3 files, whilst retaining the restriction on Apple. Apple are to now also offer customers a one-time fee to strip copying restrictions from music they have already bought. Some would even question the logic of charging 30 cents a song or 30 percent of the album price when consumers can do it easily for themselves for free.

The one interesting move that was announced was that customers would now be able to download songs directly from iTunes via wireless networks to their iPhone without having to go through their computer.

So what do we think of these announcements?

On pricing the reality is the music companies will find it hard to maintain this model and consumers will cherry pick the bargains and buy selectively at the best price. By creating multiple price points based, not on scarcity but demand, some may think that they will shoot themselves yet again in the foot. The reality is they have created only one price point - 69 cents and two that the consumer will object to paying for.

It is the consumers, not Apple, that have in 10 years overturned the music industry on DRM and its anti-copying restrictions and the music majors have finally been brought to their senses yet again.

Apart for the consumer, the one winner out of this is probably the iPhone.

iPod Touch Rumours - Evolution or Step Change?

If Apple wanted to sound out the market, then planting a story to gauge market reaction would make a lot of sense. We don’t know that they have done this, but there is much noise today in the market of a new larger iPod Touch, which if it were to happen, would clearly not only rewrite the notebook world but obliterate the eink readers in a heartbeat.

Apple have apparently been experimenting internally with a large form of tablet for some time but have never taken the bold step into the market. However the huge success of the iPhone , iTunes and IPod family has brought touch screens to everyone and there are now considerable numbers of games, videos, and even books that could find a common home. Apple claim that over 300 million applications have been downloaded since they launched their App Store last July. 2008.

The current iPod touch has a 3.5 inch screen and ranges in price between $229 and $399 so we can expect a iTablet to be higher but it effectively starts to merge the laptop and the IPod with Apps Store and iTunes and in doing so create a family that could hurt the likes of Microsoft, all PC manufacturers and media moguls such as Amazon. It is interesting to note that we all thought that Microsoft was unstoppable, but Apple has continued to chip away, gain iconic status and attack the media market from a completely new angle.

Steve Jobs said he wasn't going to build an ebook reader. He hasn't. He however is building a media platform in which ebooks are accommodated and find a natural home!

The idea of a wireless mini-tablet with the multi-touch interface is insipring. We have seen the pulling power of the iPhone and iPod now to have something a little larger making DVD players, notebooks and ereaders redundant, would be not only natural, but also a clear step change. We predict it would be a category killer that would redefine the category and if it were to happen we certainly want one!