Posted Aug 21st 2007 9:42AM by Douglas McIntyreFiled under: Industry, Consumer experience, Competitive strategy, Apple Inc (AAPL), Wal-Mart (WMT)
It must be that Steve Jobs got the top job at Wal-Mart (NYSE: WMT). He has been crying for the music industry to offer music without copyright protection, and the world's largest retailer has just become his best friend.
Wall-Mart's large online music store will begin to offer songs that can be played anywhere - transferred from device to device. The songs will be sold for 94 cents per track and, according to Reuters, "the new format let customers play music on almost any device, including iPod, phones and Microsoft Corps's Zune portable media player."
The announcement may be bad news for two large music companies that have not already decided to move full-speed into DRM-free downloads, Sony BMG and Warner Music Group (NYSE: WMG). They fear that if music can be moved anywhere and shared, that it will cut into units sales from customers who cannot now get songs from friends and neighbors. Champions of open downloads like Mr. Jobs say that CDs are already routinely ripped so that most digital music is not protected anyway.
Music publishers continue to be pounded by the industry's new model. They earn less on downloads from services like Apple (NASDAQ: AAPL) iTunes than they do from CDs, but sales of the physical discs are falling fast as consumers move away from the format.
Good for Apple and bad from companies like Warner.
Douglas A. McIntyre
Source: http://www.bloggingstocks.com/2007/08/21/wal-mart-presses-the-music-industry/
CNN) -- Apple announced Wednesday that it was overhauling its line of iPod digital music players for the first time in two years to include more storage and bigger screens. A new product, the Wi-Fi-enabled iPod Touch, was also unveiled, as well as a new version of iTunes that will feature ringtones for the iPhone.
CNN.com asked readers to share their ideas about what they think should be included in new versions of pocket-sized gadgets like the iPod and iPhone.
Below is a selection of the responses, some of which have been edited for length and clarity:
Daniel Moir of Eden Prairie, Minnesota
I think the iPod needs to increase in storage capacity. With movies and TV shows now available in iTunes, it takes up a great deal of space if you put some of this stuff on there. I have had the 80G most recent version and can fill it in a heartbeat. They shouldn't have anything new introduced until they can hit at least 160G.
Catherine Keup of Atlanta, Georgia
I'd love if there were an application that doubled as a GPS navigation system. I'm always getting lost, but I always have my iPod on me too.
Todd Bemis of Atlanta, Georgia
I believe the disk functionality of the iPod should be password-protected. I store files on the thing, and would like those items to be protected, especially since iPods are such obvious targets for thieves. Should be pretty simple. I'm surprised it's not in there already.
Mark Quigley of Sandy, Utah
The current 80GB iPod is near perfect in performing the task at hand. The only thing lacking is better integration: Bluetooth or something else is needed for wireless headsets, car stereo systems and syncing with the linked PC.
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Brandon Tingley of Brussels, Belgium
Call me old-fashioned, but it would be nice to be able to read books on my iPod. There would be room for a small library on it ... just think, listen to music AND read while commuting.
Dan Gleason of Mapleton, Utah
Give me an iPod / iPhone / PDA with GPS and voice navigation!
Dianne Otto of Houston, Texas
I use the Nike iPod on my daily runs and would like to see an option for intervals (i.e. beeps on the minute, 5 minutes, 10 minutes) and also a heart monitor option without the chest strap. It gives calories, time, distance and pace, but heart rate would be a nice feature.
Jonathan Zabala of Monrovia, California
To keep up with the trend-setting vision of the iPod, I think the next iPod should have wireless capabilities ... iPod meets MySpace wayfinding. Imagine an iPod with a user profile, like MySpace or Facebook, with Wi-Fi. So, if you're listening to your iPod and someone within a certain radius of you pops up on this conceptual iPod Wi-Fi network. This allows all iPod users within a certain radius of each other to communicate, text, be friends, share music and/or sell music or playlists. If you can [sell] your playlist or music to another fellow iPoder, i.e. you would make 20 cents for every song sold from your iPod library, Apple would make another 20 cents, and the music producer would make their 60 cents. Everyone wins. Just another way of the new methodology of communication. An iPod that is Wi-Fi, texting capabilities, and can communicate with other iPods in a certain area. The entire iPod phenomenon carries over into an exclusive iPod Wi-Fi communications network.
Debra DeLoach of Gainesville, Florida
Thank you for the opportunity to comment on iPod changes. I would like the iPod to add the ability to use batteries for power. I am constantly having to re-charge my near-dead iPod Mini (4 GB) and have grown tired of doing so. My 13-year old daughter has a non-iPod MP3 player that uses batteries. She listens to her music at her convenience, while I'm a slave to the charger.
James Riley of Temecula, California
There are two major gaps as I see it, both involving Internet connectivity. First, the iPod of the future will have a built-in wireless (WI-FI) connection to allow for downloads over ANY wireless network (rather than having to pay AT&T per byte). It will also play Internet radio stations. (live feed from flash streams on the Internet). Finally, it will have expandable capabilities so that the memory, processor, and other features can be purchased and installed by a typical user.
Greg Shaffstall of Hilliard, Ohio
I love my 60 GB iPod video, but I would love to have some customization options native to the Apple firmware. At least change colors of some things, maybe add a wallpaper. I would also like a more in-depth shuffle feature, one that doesn't generate a playlist but can choose a random song on-the-fly.
Native, fine-tuning EQ options. Presets are ... OK, but everyone's ears are different and not everyone uses the same speakers and/or headphones. Possibly a hardware shuffle slider button. In addition, when a song comes on, I often find myself in the mood to hear more from that artist. I feel like I want to hit a button to go straight to that artist's directory and play more, but, alas, I have to sift back the main menu and go from there.
I bought an InvisibleShield for my iPod. While I love and forget about it, it doesn't cover it completely, mainly the corners. Why shouldn't Apple be able to apply its own scratch-proof covering? No one wants their iPod to get scratched. How cool would it be if it were entirely scratch-proof out-of-the-box?
Dan Miller of Bayside, New York
IPods as well as cell phones should have emergency contact information available at the touch of a button that will give emergency contact info as well as any medical conditions kind of like the vial of life concept. That way if something happens to someone it can be common knowledge that their information is available by finding such common items that people carry with them everywhere.
Peggy Baggerman of Carrollton, Texas
Let me delete songs directly from the player. I like to add the entire CD into my iTunes but don't always want all those songs forever on my iPod.
Ray Davis of Knotts Island, North Carolina
It's simple. Use a larger body to create a flash player such as Nano that has more memory. A 30 GB Nano is what is needed (or higher). This could be accomplished by using multiple memory stores.
Ricky Konkolewski of Columbus, Ohio
Goodbye wheel. Hello all-screen.
Shari Cline of Vancouver, Washington
I would like to be able to transfer movies from DVD to my iPod. It would be nice to be able to load music or movie that I own that are different file formats. Also replaceable battery.
Robin Phillips of Charlotte, North Carolina
The new iPod should include more wireless features. It should come with Bluetooth-capabilities and Bluetooth enabled earbuds. You should also be able to do wireless synchronization between your Bluetooth enabled Mac or PC and be able to wirelessly sync your iTunes with your iPod. I also think it should come with the Internet connectivity, so that users can connect to the iTunes store, buy and download music right from the iPod.
Michael Brechlin of Fayetteville, Arkansas
In a new iPod I would like to see a built-in fm tuner, and built in Bluetooth. I would also like to see larger capacity flash-based storage space and lower pricing.
Dean Gittleson of Valley Center, California
I would like to see a fingerprint reader and a credit card reader and use my iPhone as a secure point of sale appliance.
Jeanne Carter of Beavercreek, Ohio
Bookmarks are needed. For example, when watching a video and the unit is turned off, it will go back to that spot ONLY if you go back to video. But say you want to listen to a book or song, and then go back to the video...your place is lost. This is an easy fix as Palm Pilots can already do this feature with books and game book marks.
Greg Hoile of Marietta, Georgia
All iPods will become solid state and therefore have no possible failure from hard drive crashes. They should also be upgradeable in terms of RAM as well as the operating system version and version of iTunes. The minimum capacity should be around 50 GB. Ideally, the iPhone should double as an iPod, to become the only piece of hardware that
The Digital Freedom Campaign: Fighting For Consumer Rights
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The Digital Freedom Campaign was launched about one year ago with the mission to protect the rights of artists and consumers, allowing them to use digital technology without unreasonable government restrictions and the threat of lawsuits. The Campaign is not a lobbying organization, but rather an awareness group to educate consumers about their rights and facilitate dialog about innovation and technology. A number of artists, independent record labels and advocacy groups such as the Consumer Electronics Association, Media Access Project, TheRecordIndustry.com, the Home Recording Rights Coalition and OutboundMusic.com are all partners in the Campaign, and they are currently spreading the word about the hot button issues of Digital Rights Management (DRM) and royalty rates for Internet radio stations, among other topics.
Jonathan Coulton, an independent artist involved in the Campaign, says the cause is important to him because, “Fair Use of material is eroding. The iPod is a perfect example. It’s a great device. I have one and love it. But when you buy a song from iTunes, the technology locks you into that device. Why can’t you move the song around to all the different pieces of equipment in your home? It’s a dangerous, slippery slope, so I was thrilled to meet some people who are attempting to counter balance these large corporations.”
Coulton says that as an independent artist, both file sharing and Internet radio are important drivers for his career. “I’m attempting to exploit the fluidity that exists because of technology,” he says. “An important part of my business model is the idea that I can put music out on the Internet in a form that is easy for people to get, listen to and pass along. Because I have a different business model than Sony Records for example, the idea that people will pass along an MP3 of my music is a good thing. There’s a struggle going on where the old guard is at conflicting opinions with artists like me. We want very different things from technology. I don’t think anybody knows the real effects of something like file sharing on the bottom line. It’s a really complicated economic issue. It’s very hard to distill it down into basic cause and effect. I am of the opinion that it helps me, and it may very well be that it hurts the old business model. But it’s a crime to inhibit a technology for someone’s business interests.”
The bottom line for artists like Coulton and the Digital Freedom Campaign is that new technologies create important opportunities for artists and fans, and the group is working to maximize those opportunities while ensuring that both consumers and content creators are treated fairly. The group’s Web site, DigitalFreedom.org, offers an Artist of The Month with DRM-free downloads, petitions, news about digital law-making and other information. FMQB spoke to one of the founders of the Campaign, Maura Corbett of Qorvis Communications, about why in this ever-changing technological world, digital rights are more important than ever.
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How did you get involved with the Digital Freedom Campaign?
I am a partner of Qorvis Communications, where we’ve made a name for ourselves by working with technology companies, whether it’s bringing a new technology to the market or difficult policy issues regarding new technologies, whether they’re being debated in Congress or at the FCC or wherever. Sometimes we almost act as a translator in explaining to the media and to the public and policy makers how the new technologies work and what the issues are so they can make good decisions. The Digital Freedom Campaign has been around for a little less than a year. The campaign came together through a couple of trade associations and consumer groups. We now have more than 150 artists and record labels who have signed up. It’s really a growing, grassroots movement as much as it is a campaign.
What drew you to this cause and why do you feel strongly about it?
I feel strongly about it personally and professionally. I come from a family of musicians, and I used to hack around myself. I had a band here in Washington, DC for a while that actually played at the Internet Freedom Rally on Capitol Hill in June of 2001. The band was called Satellite Red. To stand up there in front of the Capitol and look down the Mall, while playing for Internet Freedom was really amazing and fun. Also, I have a long history in representing new technologies and consumers, to advocate for them in Washington, whether it is related to content copyright issues, telecommunications and Internet issues, or privacy and competition in broadband. SaveNetRadio [the debate over streaming royalty rates] is another cause we’re working on right now, which is a big deal.
If many online broadcasters are forced to shut down because of high royalty rates, do you see that as infringing upon people’s digital rights?
Yes, and the thing that’s really sad about the debate (which has gotten lost) is that Webcasters already pay royalties, and they pay more than most. So this isn’t about them not wanting to pay royalties. It’s about them paying royalties that are not in excess of their revenues. The irony is that almost 40 percent of the music played on Internet radio is from independent and new artists, so it is a driver for new music. It’s also the only vehicle that has a “buy” button next to the song. It’s just bizarre that the labels and SoundExchange would come after, essentially, their best distributor. It’s a very sad debate. Big and small Webcasters will get hurt and will get out of the business, and then we’ll be back to where we started.
How do you feel that DRM-free music benefits artists and consumers?
Certainly the Campaign is on record that commercial piracy is wrong and illegal file sharing is wrong. But it’s good business to give your customers what they want, instead of suing them. What DRM did in practice is put consumers in chains, and took away their freedom to use products they legally purchased for personal use. So far Universal Music Group and EMI have come out and said, “We’re going to offer DRM-free music, and sales are encouraging.” Our point is that the balance between these two things benefits everybody because it’s a new revenue stream for labels, and it’s the ability for consumers to exercise their freedom to use the content they legally acquire to create, innovate, listen, and do whatever.
Do you feel that DRM inhibits people from legally buying digital music? Would illegal file sharing decrease if it wasn’t for DRM?
The early results from sales of DRM-free music support that. Most Americans don’t want to steal music, but they want to be able to buy it the way they want to buy it, instead of renting it over and over again, which is sort of what DRM forces you to do. As more and more people shift to DRM-free music, the sales will bear out that this is better for both consumers and businesses.
Why is it that some labels, like EMI and Universal, have embraced selling music without DRM while others have not?
Old business models. It’s like turning around a very big ship. It takes time. That’s why these recent developments are so positive, because companies can see in business terms that this makes sense. Listen to your consumers and sales will follow. It’s a new way of doing things. The natural reaction from the content companies is to see [new technology] as a threat rather than an opportunity. So their natural reaction is to sue, instead of looking at it, taking a breath and understanding what it means.
Innovation has always driven this economy, and that’s not going to change. But what it requires of the big content companies is a willingness to change their business model. You’re not going to stop change and innovation. You can either adapt and continue, or fight until it’s so far ahead of you that you’re lost. The Internet has presented challenges for everybody to rethink how they do things. It’s a good thing. Change is good, and both old establishments and new businesses are benefiting in different ways from the Internet. If you can’t beat ’em, join ’em, because the Internet is going to be around for a long time.
Tell me about the legislation you are currently supporting – The Fair Use Act and the Perform Act.
It’s important to qualify that we are not a lobbying organization. We don’t go to the Hill and lobby. However, when we see Congress or content companies doing positive things, we’ll support it, and likewise if they do bad stuff. Fair Use, the ability to use content for your personal use, is an underpinning of the Internet itself. You can argue that the Internet itself is based on copying. It was Einstein who said he didn’t have an original idea; he just built on what was already there. That is what everyone does. The Fair Use Act protects that concept. Copyright is a privilege given to a creator of content so that the government will protect them for a certain amount of time. Eventually they contribute that work to the public interest after a certain amount of time and then it is just another layer in the fabric of innovation and creation. Fair Use is based on free speech. It allows the public to copy, distribute, perform or transmit portions of a work for their personal and non-licensed use. There have been bills that want to weaken Fair Use and others that want to strengthen Fair Use, or just codify Fair Use where it is. The Perform Act is about putting DRM on Digital Audio Transmission. As we’ve explained before, we don’t agree that DRM is the way to go.
We support anything like the Perform Act or the Fair Use Act because the digital age has confused Fair Use. It has made illegal copying easier, but that doesn’t mean you throw the baby out with the bath water. The law still states that you can have an unauthorized reproduction of content for criticism, commentary and creativity. It’s particularly important with the arrival of the digital age that we continue to protect that. That’s why we will come out and comment not just on legislation but on actions by businesses and content companies. We don’t want to be there saying, “bad, bad, bad,” because that’s not a way to move things forward. We want to be a voice of balance, so when people we’ve previously criticized do good things, we’ll draw attention to it.
How do you raise consumer awareness of these issues?
That’s the most important part, because it’s not like consumers are up at night worrying about this stuff. In many instances, consumers are unaware they have these rights. You put in a DVD or you watch a football game, and all these warnings come on: “You’re going to go to jail if you do anything with this.” That’s not true. There is a law that protects consumers so they can use the content they legally acquire for noncommercial and private use. When the RIAA comes and sues a college student, the student doesn’t necessarily know his or her rights. If what they did is illegal then what they did is illegal, but they may not be aware they have legal rights. We are trying to educate the public that commercial piracy and illegal file sharing are wrong, but you as a consumer or an artist have rights too. It’s important that these two things be balanced.
What public events do you hold to educate people about this?
The Digital Freedom band showcase is one of them. We go out to music festivals and talk to people. We have something called Digital Freedom University (DFU) that is setting up chapters at colleges and universities across the country. We’ll be holding band showcases and debates on college campuses throughout the fall. Colleges are a perfect setting. You’ve got professors on either side. We’re not going there presenting one side of the technology issues. We want to show the spectrum so people can learn. There are college students in universities getting sued, and these are the people who are at the forefront of digital technologies and creativity. College is the natural place to go and let people know what their rights are and what their rights aren’t. That’s one of the most exciting parts of the campaign.
**QB Content by Mandy Feingold**
Source: FMQB.COM
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