Posts tagged ‘music’

A dying web, or a dead one?

App icons flying out of an iPhone

Billions and billions of customers served

While apps didn’t hit the 13 billion mark in the article I wrote in October (they did hit 10 billion in January ’11 so frankly, that’s close enough), some equally staggering stats have come out about Apps.

  • An estimated 4.5 billion apps sold in 2010, generating $6.8 billion in revenue
  • An estimated 15 billion apps sold in 2011, generating $19.7 billion in revenue
  • An estimated 21.6 billion apps sold in 2013, generating $29.5 billion in revenue
  • Of the nearly 400,000 apps live in May 2011, 62% are paid

While the numbers originally estimated in this October article were off, I believe the argument still stands.  Do you?

Here’s the original article:

I saw  on Gizmodo that 6.3 billion Apps from Apple’s App Store have been downloaded in just over 2 years. It took 5 years for music downloads from iTunes to reach this level.  This works out to be around 17 million apps downloaded each and everyday.

At this rate, the number of downloaded apps is estimated to reach 13 billion by the end of this year, the same as the number of songs downloaded from iTunes by the end of the year.  The fact that apps are reaching this big number at twice the speed of music downloads is pretty remarkable.

As a result, I’m beginning to buy Chris Andersen’s article in Wired Magazine where he argues the Web is Dead. (more…)


Amazon’s Cloud

Cloud computing, cloud syncing, cloud services, cloud storage.  It seems like anything these days with that ambiguous (and overused) word is sexy.  And the Cloud got a huge jolt of tangibility from Amazon’s launch of Cloud Drive and Cloud Player this past week.  But, the content industry is not too thrilled; more on implications in a bit.

Suffice it to say that the Amazon Cloud Drive and Player are consumer-oriented services that allow users to back up their local music libraries and play them remotely from anywhere via the Web or an Android device.   For you and me, that means if our tablet, laptop or smart phone crashes, our music would be left untouched and ready to be accessed on another device.  We can expect that Apple and Google will follow shortly with their own cloud offerings, but Amazon wins the First to Market Contest. For a decent read, check out the New York Times for an overview.

In terms of the experience, user reviews are also beginning to land (here’s a good one, there’s a decent one).  The most consistent positive callout is about the interface and ease of use.  On the negative side is the fact that uploading your entire music collection takes a ton of time and is generally a pain in the derriere.  Costs seem reasonable enough (free 5GB and $1 per GB thereafter).

OK enough facts.  Let’s now riff on the impacts of Amazon Cloud services on the music and movies businesses.

The labels are annoyed

Record labels are pretty well pissed off at Amazon for going to market without really consulting them and seeking out the appropriate licenses to stream music from the cloud to your devices.  Labels are concerned because they feel that some music in your collection isn’t “legit:” some music is either stolen from file sharing sites or ripped from friends’ CDs.  Besides offering a service that cuts revenue from labels on inappropriately obtained music, labels are worried that Amazon Cloud services will encourage friends to rip – and share – their music collections.

As Copyright and Technology points out, Amazon’s likely attitude toward the labels is “So sue me.” Simultaneously Amazon will argue that the labels owe them a favor for offering a competitive service to iTunes.  All I can say is that lawyers are licking their chops on the ensuing litigation that will undoubtedly occur.

And how about the studios?

While Amazon Cloud services are limited to our music collections for use across our non-Apple devices, Amazon will likely allow you to put your movie and television shows in the Cloud in the not so distant future.  Studios will undoubtedly resist Amazon Cloud services without the appropriate protections in place to make sure we nasty customers don’t steal and share with our friends.  I think we should expect some interesting (and litigious) discussions to come.

What about current industry efforts with the Cloud?

In an interesting twist, Ultraviolet, which has studio backing from all but Disney, is now faced with a few interesting scenarios to consider as the Cloud space materializes.  On the positive side, with Amazon’s launch into the Cloud, Amazon is educating consumers to what life looks like with “up there.”  So an optimist could argue that Ultraviolet will benefit from drafting Amazon’s efforts.  Another outcome for Ultraviolet is if Amazon joins the consortium and then potentially leverages Amazon’s considerable Cloud infrastructure. Good for Ultraviolet, but bad for the only member company that has skin in the game.  Neustar will need to figure out how to avoid being squeezed out by Amazon.

Another scenario includes Ultraviolet being a potential competitor to Amazon’s Cloud.  If the studios get a sudden change of heart to license content to Amazon, Ultraviolet may just evaporate.

Wrap up

The Cloud is heating up, for sure.  Google and Apple will launch something, and soon the Cloud will become a must have feature in any content service.  But the content industry will not go quietly into this Cloud-based world.  And like the legions of lawyers out there, I’m grateful for the job security and the articles to come.

What do you think?  What are scenarios with labels, studios, industry consortia?

Music has gotten…complicated

Who says  life used to be simpler?  I pretty much buy that statement lock, stock and barrel.  I think it’s difficult to refute that life is getting more complicated!

I came across a really cool set of data that illustrates this progression towards complexity in the context of the embattled music business.  In a nutshell,  in 1979 when there were 4 different revenue streams derived from music.  In 2010, that number of revenue streams has ballooned to 14!

On the one hand, it’s utterly intimidating to observe how fragmented the music space has become to  get and enjoy music. It’s no wonder that the seasoned industry execs sound like such old coots when they talk about the glory days! On the other hand, it’s terribly exciting to see that there are so many different ways to participate in the music business.  Call me optimistic, but where there is such massive disruption there is massive opportunity.

So I say bring on the complexity and let the innovators out there make some sense out of it.  Because in the case of music, people will ALWAYS somehow get and enjoy tunes that fit those little moments in this complex world.  And that demand will somehow be met – and profitably.

Do you see a disruption here?

As a follow up to to my bit on 8-tracks versus digital sales, following is a remarkable history of recorded music from 1973-2010 that will make any music exec’s stomach churn just a little more. The data really hit me like a ton of bricks after visiting a friend of mine who works at one of the few remaining music labels.  I was struck by a few things that weren’t altogether positive. 1) What on earth do all those people working at a label actually DO? 2) When will the grim reaper arrive?  I sensed a strange tension as the super-cool-chic music folks tried to hide their fear that a gaunt rich dude in jeans and a black mock turtleneck sweater was coming to slay them.  3) Where do old school music execs end up when their shift is done?  I mean these guys in their day partied.  Where do they end up now that the glory days are long gone?

Anyways, check out the happy times in 1998 versus the dreary days of 2010 in the album sales.  And then have a look at the singles trends.  It is breathtaking!

Not so much purple going on here

I'd say the purple is trending upwards

8 tracks beat digital album sales?

In the “isn’t data cool” category, check out this graph which compares 8-track sales to digital album sales.  While the game is far from over, I can’t help but notice that the growth rate for 8-track is better than digital albums.  It’s really no surprise since you can’t beat the convenience of downloading tracks.  But this is more eye-poking evidence to the music business that packaged music is all about singles and that the album is going the way of the Model T.

Here’s the blurb from the article.

The digital album may ultimately win this race, though cumulative 8-track sales are still much larger than digital album sales to-date.  And here’s a scary thought: at current growth rates, the brick-like 8-track could actually be hailed the victor.  Take a look at these shipment totals, based on RIAA figures dating back to 1973 (the format was actually introduced in the mid-60s, though we don’t have reliable figures for that pre-1973 period).

I’ve got no real pearls of wisdom here today, other than the obvious: if you’re in the music business and want to make living, embrace social media to get the word out.  Build an audience organically, and then get on the road to earn some cash.  Live performances are the only way to survive in this new game…

Information wants to be free

Today’s Digital Fool is a bit of a revelation, and I blame it on the crazy news lately about the high profile travails of Julian Assange and his WikiLeaks.  Let’s not focus on his problems in the UK; rather, let’s recognize the incredible tenacity this guy has in relentlessly pursuing his mission of setting all information free.  While I definitely don’t agree with setting ALL information free – such as those documents that can get an undercover operative killed in the field – I appreciate and commend his efforts at bringing more transparency to this world.

Random thought triggers

Which brings me to my inspiration for today.  You see, I inadvertently combined the WikiLeaks saga with news about yet another consortium releasing new standards in the marketplace to inspire me to set information free.  Let me explain.

DDEX, the Digital Data Exchange, made up Sony, The Orchard, Warner Music Group, Universal and Apple to name a few, announced that it had released “a set of standards for XML messages for the business-to-business communication of information between organizations operating in the digital content supply chain.”

Huh?  So there are 18 companies trying to revive the music business, um, through standards? I guess that’s what they’re trying to do.

Sounds familiar

Wait a minute – this sounds an awful lot like what Keychest was trying to do and what Ultraviolet is currently trying to do.  I had a hunch, did some more digging, and I discovered I really am a Fool. Despite the fact I’ve written about UV before and have been interested in watching its progress, I now realize that my company is part of the Ultraviolet consortium.  And now, the Assange in me thinks the right time to bring light to what the entertainment and technology industry is up to.

While I’m not going to go so far and post actual documents, I’ll be dedicating the upcoming posts to insights and concerns .

Rentership beats ownership

There has been lots of recent buzz in the press about Redbox announcing its digital service in 2011. Today, Wal-Mart announced that it is (finally) doing something with its $100 million acquisition of Vudu. These announcements got me to thinking about the not-so-subtle shift  from Ownership to Rentership and my personal conflict of what this is doing to the entertainment industry.

Redbox and Wal-Mart are up to something

As way of background, Redbox insinuated that it would add a Web-based rental service to its network of DVD kiosks next year.  This means if the Coinstar-owned company is going to deliver on its promise, Netflix may have a competitor sometime in 2011.

Wal-Mart announced with that Toy Story 3, customers will receive a download code that they can use on their nearest Vudu player to stream the movie at any time without the disc involved.  Does this signal that Wal-Mart is finally getting into action in digital? Maybe Wal-Mart will do something else with Vudu, like team up with Redbox.

These movements tell me that big players are laying the groundwork to help me rent more content than ever before.

From Ownership to Rentership

A great article in Wired talks about how we are slowly moving away from an Ownership Society of the American dream of owning stuff like houses, cars and collections of CDs and DVDs.  Instead, we are moving to more practical Rentership Society where we can enjoy unlimited choice that comes without the cost burden of owning stuff.  For those of you who have thrown a ton of cash into a kitchen remodel only to find out that you break even on the sale of a house, you understand.

While I’m holding on to my house and not moving into a rental down the street, my personal shift from Ownership to Rentership is really clear in how I consume media.  I no longer faithfully go to Best Buy every Tuesday to get the latest.  I now wait a bit, sample stuff from iTunes or Grooveshark or or Pandora and then, maybe I buy it.  Instead of buying the DVD, I rent it from Netflix.  And NOW, as I recently wrote, I am increasingly viewing stuff through Neflix my AppleTV.

What about entertainment?

But wait a minute.  I am conflicted.  I am a happy consumer, but what does this do to the entertainment business?  With labels (and just forget about artists) making fractions of pennies for each stream, subscription service revenues don’t really amount to a hill of beans. With this trend, artists will have to work a helluva lot harder to perform their music live and make money.  With more than 50% of a studio’s revenue coming from selling movies and TV, well, let’s just say that renting does not make them much money either.  At this rate, studios stop making movies.  Scary stuff.

So what’s the entertainment industry doing about it?  Lots of companies have invested in consortia like UltraViolet and Keychest to answer these questions, but what are they thinking in terms of rental?  I am skeptical of industry groups doing anything in the best interest of the customer.  Afterall, content owners just want to protect their bottom line. The entertainment industry needs to remember:

Everything, everywhere, all the time. That’s the dream of the Rentership Society. And we’re almost there. If you want to be able to possess some things, in some places, some of the time, well, keep on buying. But I vote for infinite abundance, on demand. Doesn’t that sound like the new century’s American dream? – From Wired’s Abandon Ownership!

Are you moving from ownership to rentership?  What does it mean for the industry?


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