Warner Music Group To Form Digital Label

Mercury News: Warner Music Group has announced plans to form a digital label, tentatively named Cordless, which will release songs exclusively for download over the internet or to mobile phones. It's a belated adaption to the decline of the album... not necessarily the CD, I think. As the article points out most albums have no more than three hit tracks, with the rest being regarded as "filler" by all but the die-hard fans and are simply there to justify the album price. With the advent of individual downloads people are less willing to pay for an album when they just want a single song. This affects the way the new label will do business....
"An artist is not required to have enough material for an album, only just enough to excite our ears,'' Bronfman said in his speech. "Rather than releasing an album every couple of years, every few months the label will release 'clusters' -- three or more songs -- by an artist.''
It will see a wider range of music too: "Warner's e-label will be headed by noted music figure Jac Holtzman, a technophile who pushed early adoption of the compact disc, the LaserDisc and now can be spotted in Warner's New York offices with a flash drive dangling from his neck. Since his e-label starts with modest production budgets of about $30,000, rather than millions, Holtzman is free to sign more eclectic acts, like Devo bassist Jerry Casale's new group, Jihad Jerry and the Evildoers." (via Ringtonia)
Related stories:
Apple & Record Labels Square Off
Can Cell Phones Save the Music Business?
Universal Music Group Gets A PhoneOf Its Own

Apple iPod Phone To Be Released Sep 7? With Cingular?

Apple is touting a big announcement at a 10 a.m. (PDT) press conference next Wednesday (Sep 7) at the San Francisco's Moscone Center. NYT suggests in a story that it is the much-expected Apple-Motorola iTunes phone.
Roger Entner, a telecoms analyst with Ovum, said he had been told by an industry executive that the new phone, to be made by Motorola, would be marketed by Cingular Wireless. The software will allow people to transfer songs from a PC to the mobile phone, then listen to the songs, presumably through headphones.
WSJ also says the same thing, quoting sources. Cingular is expected to make the phone available in time for the holidays.
Also, Apple may introduce a line of iPods intended to replace its hugely popular iPod mini line...

Apple & Record Labels Square Off

NY Times (reg required): It's well known that many record labels aren't happy with the 'one price fits all' approach to digital music sales taken by iTunes, and there is speculation that when the contracts come up for renewal early next year some labels may not renew them unless Apple changes its pricing strategy. Of course, Apple controls 75-80% of the digital download market, so it will be a gamble whether that situation will see people changing where they buy their music or simply not buying from labels that aren't available at the iTunes store.
iTunes Japan launched without songs from two major labels -- Sony BMG Music Entertainment and Warner Music Group -- but that didn't stop it outpacing the monthly sales of its competitors within the first few days of launching the service.
Some record lables (Universal Music Group and EMI Group were mentioned in the article) recognize that they will probably lose a pricing battle with Apple and are instead "counting the months until the major wireless phone carriers enter the business of selling songs to mobile phone customers. <strong>Since there are many more mobile phones in use than there are iPods, the industry thinking goes, the arrival of a broad mobile music market will erode the leverage Mr. Jobs now holds</strong>".
The problem with that thinking is that it's a dead-set certainty that the record labels are going to want a higher proportion of the profits from song sales than Apple. iTunes reportedly makes about 4c from from every 99c song download, while the lowest percentage for mobile content in the west is currently the 14% taken by o2 UK...most are a lot higher, although whether that can be sustained is another matter. The upshot is that the price of mobile music will have to be significantly higher than the iTunes store just for the record companies to get the same amount of money for each song. Of course, that's what the record labels want...but there's a general consensus that it's not what the consumer wants.
The article also mentions another sore point for music execs is "the fact that Apple generates much more money selling iPod players than it does as a digital music retailer, leading to complaints that Mr. Jobs is profiting more from tracks downloaded to fill the 21 million iPods sold so far than are the labels that produced the recordings", <strong>which is a fairly silly complaint to have, kind of like saying that Nokia is profiting more from mobile content than all the mobile content companies</strong>, so therefore the price of mobile content should go up. Besides which, the same argument will apply to the mobile phone industry, so a change of device isn't going to help anything...
And in closing, a great quote from Gartner:
"As I recall, three years ago these guys were wandering around with their hands out looking for someone to save them," said Mike McGuire, an analyst at Gartner G2. "It'd be rather silly to try to destabilize him because iTunes is one of the few bright spots in the industry right now. He's got something that's working."
<strong>Related stories:</strong>
--Movie-Quote Ringtones Talk Of The Town
--Can Cell Phones Save the Music Business?
--Ministry of Sound & Sony BMG Sign To i-Mode Service

Can Cell Phones Save the Music Business?

Business 2.0: [by James Pearce] : Will mobile music save the music industry or will they find some way to stop it? The article makes the case that ringtones are becoming the new singles market..."Looking to build buzz around hip-hop artist Cassidy, Sony BMG shunned CD singles and MTV sneak previews. Instead, the label chose a track called "I'm a Hustla" from Cassidy’s new album and turned it into a 25-second sample that could be downloaded as a ringtone...
The $2.49 song clip, known as a mastertone, was an instant hit. In four months it was downloaded half a million times. By the time the album finally debuted in June -- at No. 5 on the Billboard chart -- the ringtone had gone platinum. "The ringtone market is the singles market of our time," says Thomas Hesse, president of Sony BMG's global digital-music division."
Of course, the record industry's euphoria is based on the assumption that ringtone prices will stay as high as they are now and that they will be able to charge even more for full-track songs on mobiles.
Mind you, there is evidence in the article of realism. "We think that, for some people, the phone will eventually replace the MP3 player," says Thomas Ryan, a senior VP at EMI. That comment is a lot more sensible than the idea that mobiles will destroy the MP3 player market, although I think the biggest mobile music market will be in people who wouldn't buy an MP3 player anyway.
And I liked this comment...
"As soon as full song downloads take off in a few years, mastertone prices will likely drop. Thomas Dolby Robertson, a former pop star who founded Retro Ringtones, thinks the clips will eventually be free. "We're sort of like drug dealers, using ringtones to get people hooked on digital music," Robertson says. (via Ringtonia)
Related stories:
--Mobile Operators Switch Sponsorship To Music
--Ringtones — And Their Theft — On The Rise
--Be An Online Ringtone DJ

Mobile Operators Switch Sponsorship To Music

Dow Jones: [by James Pearce] Mobile companies are switching their sponsorship from sports events to music festivals in the belief that it offers a better window into the youth market and a better way to differentiate themselves.
"There's more bang for your buck in the music arena. Because there is more opportunity to offer relevant products and services, there is more opportunity to drive revenue," said Paul Samuels, head of sponsorship at O2...O2's Samuels said sponsoring live music events enables it to target the key 16-34 year old audience but more generally, music offers sponsors access to a much broader spectrum of people than sports sponsorship".
"Virgin Mobile's Kydd explained that music is key to driving data usage amongst mobile phone users as it provides them with an obvious way to personalize their phone through ringtones, real-tones and other music content..."Music is the most personal thing you can play with on a phone. It also ties in with a consumer's desires. The impulse to buy the latest phone is the same as buying the latest music," Kydd said." Or buying the latest shirt of your team...I can see that music would appeal to a broader range of people, and possibly a younger demographic, but I think sports offers at least as much mobile content to sell as music...then again, are sports-based ringtones classified as music or sports? Or both?
Of course, one of the things about music festivals is that they tend to be counter-culture, so sponsors have to do a lot more than cover a place with their logo.
"You have to be smart. You can't just turn up and exploit the relationship between the fan and the band. The more-savvy music customer will accept corporate involvement as long as they benefit from it," said Julian Diment, head of commercial & brand partnerships at Orange.
Finally, the article quotes Vodafone Group's David Wheldon, global director of brand and customer experience, as saying that major sporting events give international awareness which is difficult to achieve with music.
"Wheldon said global sporting events provide a "gigantic global platform" for creating value, whereas music is more effective at the local level. He said Vodafone sponsors festivals in Holland and Portugal where it wants to promote its brand, but overall, looks for marketing opportunities which translate across borders."
I've noticed mobile companies sponsoring a lot of music festivals, but had assumed it was more to demonstrate how big they were in the hyped world of mobile music than as general advertising.
Related stories:
--Top 10 Ringtone Downloads At Glastonbury Festival
--Mobiles & Music Festivals — A Perfect Fit
--Orange Expands Mobile Music Services, Promotes At Music Festivals

Melodeo Plans Free Podcast Downloads To Mobiles

SeattleTimes: [by James Pearce] Melodeo has announced plans to offer free software to enable mobile users to download podcasts directly to their handsets (demo). There are other podcast-to-mobile software, but the ones I've seen go through the computer or are only available on one carrier. If I've missed one let me know...
The move is described as an "awareness drive", and is intended to get people used to downloading and listening to audio on their mobiles as well as to raise the profile of Melodeo's music service. The software will initially be available from the website in September for Symbian phones, with a Java version to follow soon after.
The article quotes IDC analyst David Linsalata as saying that most consumers don't know what operating system they have, and of course offering free content is a good way to encourage people to find out.
The whole idea is a pretty good one, using free content to promote paid services without cannibalising them and at the same time offering an incentive for people to work out how to use the advance functions of their handset -- people will normally do more to get free content than content they have to pay for. (via Ringtonia)
SeattlePI: Newly appointed CEO Jim Billmaier, who joined Melodeo last month after 10 years at Digeo and Asymetrix, said podcasting is a natural extension of the company's mobile music software. Up until now, Melodeo has focused on delivering full-length music tracks to wireless subscribers in Spain and Canada.
Related stories:
--Mobile P2P To Become Online's Asylum?
--Pod2Mob: Podcasts on Your Phone
--Mobilecast — Podcasts To Mobiles

Universal Music Group Gets A PhoneOf Its Own

Billboard: Universal Music Group has partnered with white label mobile phone service provider SingleTouch Interactive to market a music-focused mobile phone, called MoveU Mobile...it will have ringtones and other music-related mobile content goodies.
The MoveU phone will ship with selected ringtones, but users will have the option to pay an additional monthly fee -- as yet undetermined -- for unlimited access to master and polyphonic ringtones. The phone will be sold later this year for $99.95 at Wal-Mart and other retail locations.
Additionally, SingleTouch will create phones branded for individual UMG artists, sold through each artist's website, with preloaded content specific to that person. SingleTouch already has sold 7,000 units of a Hilary Duff-branded phone and is in the process of rolling out a Barbie-branded model.
NYTimes: [Even though the service only has ringtones for now] it is expected to sell entire songs eventually- once the phones are able to store and process the information, and the DRM issues are resolved.
The artist-specific phones might have some chance of success, but a general service focused on one music label is pretty lame.

Nokia's Music Phone To Use iTunes?

Update: So much for that: Nokia denies any deal.
Reuters: This will add to the storm of speculation around Apple iTunes' mobile plans..it has publicly announced it is working with Motorola, but nothing has been launched as of yet.

Now a Finnish newspaper is reporting that Nokia will incorporate iTunes in its upcoming music phone N91.
"I've seen already a phone like that," Anssi Vanjoki, head of Nokia's multimedia unit, told the newspaper. [The original newspaper article in Finnish is here]
Nokia unveiled in April its N91 multimedia phone which will have a 4-gigabyte hard drive to store thousands of songs...it will be launched in Q4.
Related: Nokia Launches Mobile With Hard Drive

Users Don’t Want MP3 Mobile Phones

Pocket-Lint: [by James Pearce] A survey run by gadget site Pocket-Lint found that 72% of 4184 visitors to the site from around the globe had absolutely no interest in listening to music on mobile phones. This is one of those “glass of water” results, since 23% of responents said they do listen to music on their mobile phone, and 20% of the installed mobile user base is a signficant amount.
Of course, surveys like this have a number of problems, including selection bias and (depending on how the surveys are run) people voting multiple times.
Still, it is another result which indicates that mobile phones are not going to morph into MP3 players that just happen to be able to connect to the mobile network…the most important part will always be the phone. Handsets with embedded MP3 players offer a lot of benefits for mobile users and the mobile industry, as long as they are integrated into the phone in a good way.

Sprint Nextel To Launch Mobile Music Download Service

Reuters: Sprint Nextel, the combined mobile behemoth which closed the merger last week, will combine wireless service plans in early September and launch a mobile music download service in time for the holidays, the company officials said at a media tour today.
Len Lauer, the COO of the combined entity, said that it plans to sell mobile song downloads at prices above Apple iTunes music service, which charges 99 cents a song. "Customers are paying $2 for a shortened version of a song for a ringtone. Will they pay the same for a full song, having the convenience of having it on (a cellphone)? I think they will," said Lauer.