Business Matters is a daily column that offers insight, analysis and opinion on the day's news.

-- Lord Mandelson, the British Business Secretary, will forge ahead with his legislative measures to cut off the Internet connections of illegal file sharers. As a part of the Digital Economy Bill, offenders' Internet service will be "suspended" for short periods. The length of those periods has not yet been hashed out. A number of industry executives are on the record as saying Britain needs tough penalties against repeat file sharers. And now that BSkyB has launched Sky Songs, its music store/streaming service, content creators can point to a slightly larger carrot for consumers. Virgin - the ISP, not the record label - is supposed to launch its music service by the end of the year. Beyond the policy issues of account suspension, big questions linger about the potential effectiveness of these ISP-based carrots and Mandelson's whip. (Times Online)

-- Grooveshark, the online streaming site, unveiled a new redesign yesterday. The new interface received favorable comments from some prominent tech blogs, and most pundits noted the company's new licensing deal with EMI in predicting a positive future for the service. But the best comment came from the Los Angeles Times' Jon Healey. After running through some of Grooveshark's shortcomings (difficult to save an album to one's personal collection, lack of editorial content, no mobile version), Healey boiled Grooveshark down to its essence: "But it's free, and that price is hard to beat."
If you're wondering why streaming services have such a long, uphill climb to sustainable success, it is the attitude that says, "Well, the price is good - because it's zero." That attitude puts extra pressure on the need for (a) high ad rates or (b) a high conversion rate. Like many of its peers, Grooveshark has both a free version and a paid version. Unlike some others, Grooveshark offers on-demand streams. Those are more expensive than non-interactive streams. A high rate of converting users to the paid version is the key for these types of services. Throughout the industry, doubt lingers about these services' ability to attract paying customers. The value propositions just aren't there yet. (Los Angeles Times)

-- The Electronic Frontier Foundation has created a "Takedown Hall of Fame" to honor what it considers the worst examples of threats to creative freedom on the Web. Usually "takedown" refers to a takedown notice as defined by the DMCA. Warner Music Group's entry in the Hall of Fame is for misusing, says the EFF, YouTube's Content ID system. That's a technology-aided measure, not the same thing as a takedown notice. But the effect is the same. (EFF

-- Notes from Apple's 10-K SEC filing: iPod net sales down 12% in the fiscal year ending September 29, 2009. The iPod's per-unit revenue dropped $18 to $149. The iTunes store has double-digit growth in every region. Total iTunes revenue increased 21% to $4.036 billion. (mocoNews)

-- Consumer confidence is up in 45 out of 52 countries compared to six months ago. In the U.S., consumer confidence rose for the first time since early 2007. (NielsenWire)

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