Opinion and analysis of the day's music news.
Should Spotify Launch Without All The Majors?
-- The latest rumor – just a rumor – about Spotify has the company considering a U.S. launch without one or more of the four major record labels. The end of 2010 is just one month away, and Spotify executives have said numerous times they expect to debut in the U.S. by the end of the year. Certainly one way to meet that goal would be to take whatever licensing deals have been negotiated and get the product to market as soon as possible.
Since companies get only one chance to make a first impression, launching without one or more of the majors would be a risky move. Take either Universal Music Group or Sony Music out of the picture and Spotify would be without titles that account for more than 25% of U.S. market share. Warner Music Group accounts for about 20% of U.S. sales and would be sorely missed. Forging ahead without EMI would mean about 10% of U.S. market share would be missing.
If Spotify launches without a major, it will find the size of its catalog doesn’t matter until it matters. That is to say a service may have 10 million tracks, but the size of the catalog isn’t as important as its hit rate. People expect services to have just about everything they want to hear. They want services like Spotify to closely replicate their personal music collections. If users run across holes in the catalog with any frequency, they will become frustrated with the service. Some will turn away and be difficult to get back.
What’s more important: an arbitrary deadline or creating the best possible product? Considering the way early adopters, bloggers and reporters tend to put extra effort into finding faults with over-hyped Internet startups, the answer should be obvious. If Spotify wants to do the right thing for its U.S. launch, it will not launch without a full, robust catalog when it chooses to launch. (The Guardian)
EMI Wants EFF Out Of Cloud Case
-- In its lawsuit against MP3Tunes, EMI has asked the court to bar the Electronic Frontier Foundation (EFF) from filing an amicus brief, a brief filed by an interested party who is not part of the legal action. EMI has accused MP3Tunes of copyright infringement related to its online locker service. The EFF supports MP3Tunes and its cloud-based storage technology.
But EMI has argued the EFF’s brief is “a pure advocacy piece” and causes “additional burden” because it is too long. In the event the court decides to admit the EFF’s brief, EMI has asked the court to allow submissions from parties that support its position in the case. (Wired)
Breaking Down eMusic's Pricing Change
-- As expected, eMusic has switched to dollars and cents from the system of song credits it has used for many years. In the past a subscriber paid a monthly fee for a certain number of credits that were redeemed for songs and albums. Now, that same monthly fee is put toward songs and albums that are priced in currency rather than credits.
Songs are priced at 49 cents, 69 cents, 79 cents or 89 cents apiece. Album prices are predictable but vary according to the number of tracks. Neil Young’s “Le Noise” has eight songs (priced individually at 89 cents each) and costs $7.12. Matt and Kim’s “Sidewalks” has 10 songs (priced individually at 79 cents each) and costs $5.99. !!!’s “Strange Weather, Isn’t It?” has nine songs (priced individually at 49 cents each) and costs $4.41. In all three cases, the price of the album is the product of the number of songs times the price of any one song. But because the albums’ individual song price varies, they have very different prices.
Sometimes an album’s per-song price is less predictable because it has varying individual prices. Steely Dan’s “Aja” has one song that costs 49 cents and five songs that cost 69 cents. For all seven songs, the album costs $3.89 – an average of 56 cents each. U2’s “The Joshua Tree” has songs that cost 49 cents, 69 cents and 79 cents. The entire album goes for $6.49 – an average of 59 cents each.
In the end, these price variations may not matter much. Digital music buyers are used to variable pricing, and eMusic customers are accustomed to searching out good deals. What’s important is that customers now have a well understood unit of measure by which to compare songs and albums. In addition, labels now have more freedom in setting prices for songs and albums.
According to the eMusic website, more than 80% of music available prior to November will retail its current pricing. Some songs and albums will be priced higher. “Most albums” are priced between 25% and 35% below the iTunes a la carte price. But remember that when a customer does not spend unused credit by the end of the month, all of that month’s purchases will effectively increase in price. For example, if a customer with $15 of credit spends only $14, an album listed at $5.99 will have an effective price of $6.42.
5 Businesses Killing The DVD
-- 24/7 Wall St. runs down five businesses that are killing the DVD: cable TV and video on demand; Netflix; Internet-enabled Blu-ray and television; Apple TV; and Hulu. Piracy did not make the list but was mentioned in the article. Movie piracy had been commonplace for many years and undoubtedly has an impact on DVD sales. But since there is no legitimate investment opportunity around piracy, it makes sense that 24/7 Wall St. left it off this list.
In discussing the impact of Hulu, the post has this interesting tidbit: “DVD sales for TV shows have declined 14% from mid-2009 to mid-2010, according to Nielsen…Today, (Hulu) is the only Web site that offers feature-length video content that it is in the top ten by views per month, according to comScore’s October report. The report also provides that the average Netflix viewer watches nearly 3.5 hours per month, second only to You Tube’s average of 4.5.” (24/7 Wall St.)
Opinion and analysis of the day's music news.