2008-05-14T08:07:46Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22 Movable Type Copyright (c) 2008, Mark Mulligan 2008-05-14T08:07:46Z 2008-05-14T13:00:24Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9825 2008-05-14T13:00:24Z

Social music site imeem have been placed as the number one US music-streaming service in the US, ahead of Yahoo and AOL. The rankings aren’t from either of the main measurement companies (Comscore and Nielsen) so will doubtlessly be contradicted / challenged by other rankings. Also the difference between imeem...

Mark Mulligan Media Social music site imeem have been placed as the number one US music-streaming service in the US, ahead of Yahoo and AOL. The rankings aren’t from either of the main measurement companies (Comscore and Nielsen) so will doubtlessly be contradicted / challenged by other rankings. Also the difference between imeem and Yahoo is less than 10 percent so, depending on the strength of the methodology, within margin of error. But quibbles aside, if we take these numbers at a directional level it is clear that in a short period of time imeem has come out of nowhere and is competing on equal terms with the big boys. Social networks like MySpace and Facebook stole audience time and share away from traditional portals, communities and personal pages by offering something completely new. In the same way social music sites like imeem, Last.FM and Pandora are all causing upheaval to traditional online music destinations by providing audiences with a new, immersive experience. Streaming music sites have to date survived by offering an online approximation of radio (and music TV). But social music sites have changed the rules of engagement. If the incumbents like Yahoo want to remain competitive for young audiences, they’ll need to start learning the new language of social music. 2008-05-12T09:29:20Z 2008-05-12T14:25:04Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9818 2008-05-12T14:25:04Z

Another guest blog today from Jupiter's European Media Analyst Nick Thomas Tempting as it is to join the chorus of disapproval as details of UK broadcaster ITV’s latest PR disasters around voting irregularities emerge - and boy, do they make themselves an easy target - what are the wider lessons...

Mark Mulligan Europe Another guest blog today from Jupiter's European Media Analyst Nick Thomas Tempting as it is to join the chorus of disapproval as details of UK broadcaster ITV’s latest PR disasters around voting irregularities emerge - and boy, do they make themselves an easy target - what are the wider lessons for broadcasters adjusting to a world of declining revenues and fragmenting audiences? Yes, broadcasters need to create new revenue streams as audiences and ad revenues migrate online. Getting revenue from premium phone lines was never the long-term answer, not least because audiences are increasingly interacting via their laptops and mobile internet (ie voting for free) rather than via SMS and Premium calls. The latest publicity has now accelerated the decline of those revenues. What’s needed is a fundamental shift in the way broadcasters perceive their relationship with their viewers, in response to the shift that viewers are already making. As their viewers increasingly time-shift, place-shift, and multi-task across different platforms, broadcasters like ITV need to demonstrate quickly that ‘interactivity’ means more than simply fleecing their viewers via dodgy phone lines. Contrition is fine, but can ITV actually change what seems to be hard-wired behaviour among some of its execs? As revenues decline, broadcasters should also radically look at the value of their content. As new business models for content creation emerge – the likes of Kate Modern and Quarterlife are produced for a fraction of traditional TV budgets – broadcasters should not take the primacy of professionally created content for granted. Their viewers don’t. The growth of online video consumption creates new challenges for companies seeking to engage audiences. For more on this check out our recent report Online Video in Europe: Managing TV Audience Fragmentation. 2008-05-07T10:53:34Z 2008-05-07T15:45:58Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9804 2008-05-07T15:45:58Z

Now that the dust has settled on the Midem furore Qtrax have announced the important addition of Universal Music Group and Universal Music Publishing to their roster of content partners. You may recall that Universal were the first to sign up with competitor Spiral Frog. Universal have been carving out...

Mark Mulligan Media Now that the dust has settled on the Midem furore Qtrax have announced the important addition of Universal Music Group and Universal Music Publishing to their roster of content partners. You may recall that Universal were the first to sign up with competitor Spiral Frog. Universal have been carving out a niche for themselves as the ‘first to the table’ label partner for the more edgy digital music offerings. Whilst those services may have to pay a premium for UMG’s risk, they know that having them on board Universal will play the role of Pied Piper with the other labels eventually following cf Comes With Music, Spiral Frog, imeem. Though Qtrax has been signing partners for some time, their French Riviera faux-pas essentially relegates them to the level of new-entrant in the eyes of much of the market, so UMG’s ‘first to the table’ role fits perfectly here. As regular readers know I dubbed 2008 as the ‘Year of Free’ (after admittedly calling it too early in 2007). This time though everything is well on track. The irony of it all though is that the free pioneers like Spiral Frog and Qtrax will probably end up playing second fiddle to the likes of Nokia’s Comes With Music and quite possibly even Apple – who may well even beat Nokia to market with a pre-stored value / pre-loaded music device. 2008-04-30T15:39:04Z 2008-04-30T19:59:07Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9776 2008-04-30T19:59:07Z

Part one of another semi-regular series, this week Apple and Nokia Apple and Nokia have their horns locked in an intriguing corporate duel, each opening up secondary fronts on their opponent’s turf in a bid to out-flank them: Apple with the iPhone and Nokia with their music strategy. The new...

Mark Mulligan Media Part one of another semi-regular series, this week Apple and Nokia Apple and Nokia have their horns locked in an intriguing corporate duel, each opening up secondary fronts on their opponent’s turf in a bid to out-flank them: Apple with the iPhone and Nokia with their music strategy. The new ‘away’ business of each is comparative small fry in their opponent’s ‘home’ marketplace but is so disruptive to force their opponent to reassess the rules of engagement. The application of Apple’s characteristically innovative approach to devices to the iPhone has set new standards for what high-end phones need to look and perform like, despite the fact it accounts for a miniscule fraction of global handset sales. Similarly Nokia’s Comes With Music is setting the standard for next-generation music services despite the fact it’s not even been launched yet. The implied question is what will the defensive counter-thrust of each company be? I’ll leave the Nokia part aside as mobile is not my area of expertise but I’ll take a stab at the Apple part. Over the course of much of much of this century Apple has innovated hard with the iPod, typically launching the ‘iPod-killer’ before the competition can. The iTunes Music Store (iTMS) however has remained relatively untouched – what changes that have been implemented have been evolutionary rather the often revolutionary approach to iPod refreshes. Apple has simply not been under any serious competitive pressure to evolve iTMS since its launch. It has, since the word ‘go’, been the best-of-breed offering, and for nearly as long the market leader, increasing its dominant market share with each year. Now with the emergence of new approaches to digital music (subsidized subscriptions, social music, ad-supported) Apple is at risk of looking like yesterday’s digital music offering. (Indeed Nokia seems to be stealing all the press, something Apple traditionally pride themselves on). This matters to Apple because the role of iTMS is to enhance the value proposition of the iPod. If iTMS acquires a market perception of being outmoded, the whole iPod value proposition is affected. So what will Apple do? I’ll make my personal predictions around one or more of the following happening before the end of 2008: · A subscription service (probably covering music and video) but with some sort of ownership story for music and a predominately rental story for video. (An optional pay-as-you-go payment model would be well suited to driving additional a la carte sales). Using the licensing territory that Nokia has carved out Apple could offer permanent ownership on iPods and computers, but not CD burning. This would of course make it highly important for the next option… · DRM-free across all a la carte catalogue. Olive branches need to be extended to the majors, but Apple needs to beat the rest of the pack to universal availability of DRM-free. It would also help Apple address the issue of iPod owners having music optimized phones as a secondary music player · Pre-installing iPods with content (music and video). A great way for Apple to differentiate at point of sale and to charge premiums for devices in the face of increasing price pressure. · Social discovery features, perhaps facilitating opt-in profiles that incorporate users' iTunes based listening behaviour and iTMS purchasing behaviour. Apple being Apple (i.e. impossible to predict) none of the above may ever happen, but whatever does, Apple needs to do something soon. 2008-04-28T14:51:38Z 2008-04-28T19:49:35Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9766 2008-04-28T19:49:35Z

Another Comes With Music ‘insider’ story in today’s Register, attempting to throw further doubt on Nokia’s business model for the offering. This is the second ‘insider’ CWM story in as many weeks, which begs the question ‘why?’. Is it just because CWM is newsworthy, or are some vested interests getting...

Mark Mulligan Media Another Comes With Music ‘insider’ story in today’s Register, attempting to throw further doubt on Nokia’s business model for the offering. This is the second ‘insider’ CWM story in as many weeks, which begs the question ‘why?’. Is it just because CWM is newsworthy, or are some vested interests getting information in the public domain to help negotiations perhaps? 2008-04-28T09:49:37Z 2008-04-28T14:35:56Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9763 2008-04-28T14:35:56Z

Hot on the heels of their deal with Nokia, SonyBMG have inked a deal with UK based ad-supported download service WE-7. I’m sure the guys at We-7 are very relieved to be able to plaster Leona Lewis and Mark Ronson all over their site as a quick peek at the...

Mark Mulligan Europe Hot on the heels of their deal with Nokia, SonyBMG have inked a deal with UK based ad-supported download service WE-7. I’m sure the guys at We-7 are very relieved to be able to plaster Leona Lewis and Mark Ronson all over their site as a quick peek at the top 10 artists on the service to date suggests a rather unfortunate combination of limited catalogue and a skewed early adopter base: #3 Uriah Heep (what the ??!!!) #4 The Kinks #6 The Searchers #7 Emerson Lake and Palmer #9 The Troggs And (admittedly much) further down the list there are even the long-lost 80's glam metal guys W.A.S.P., which brings back memories of my misspent heavy metal youth. But I’m being unfair, this is a relatively new service just getting off the ground, and is different from the more well known ad-supported duo in that its focus on the advertisers is so strong, it almost feels like it is an advertiser’s service first and a music service second. Which is no bad thing, as the ad-supported offerings are only going to make it if they get their ad story right. Jupiter’s got a European report coming out soon looking at the opportunity in Europe, on a country by country basis, for ad-supported and subsidized offerings, compared to the premium download opportunity. Watch this space for more details. 2008-04-22T12:22:08Z 2008-04-22T12:11:56Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9736 2008-04-22T12:11:56Z

Nokia today announced that SonyBMG has signed up to Comes With Music. It's another important step forward for this potentially game changing service. Though no further details have yet been confirmed (e.g. launch date) it shows that Nokia are maintaining the momentum which will be crucial to a successful launch....

Mark Mulligan Media Nokia today announced that SonyBMG has signed up to Comes With Music. It's another important step forward for this potentially game changing service. Though no further details have yet been confirmed (e.g. launch date) it shows that Nokia are maintaining the momentum which will be crucial to a successful launch. Also announced were a couple of cool new entry level music phones. 2008-04-19T13:08:05Z 2008-04-19T18:21:32Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9723 2008-04-19T18:21:32Z

Paid Content report ‘well informed music industry’ sources as claiming that Nokia have guaranteed Universal Music $33.5 per handset for Comes With Music. That works fine for getting UMG to the table and kick starting the subsidized subscription marketplace, but it doesn’t scale well if you want a full choice...

Mark Mulligan Media Paid Content report ‘well informed music industry’ sources as claiming that Nokia have guaranteed Universal Music $33.5 per handset for Comes With Music. That works fine for getting UMG to the table and kick starting the subsidized subscription marketplace, but it doesn’t scale well if you want a full choice of catalogue. Add in the other four majors and the indies (assuming they’ll each want a fee that is proportionate to UMG’s based upon their respective market shares) and you’re up to over $130 a handset. If this was just a MP3 player we’re talking about then you could make an argument for some small margins based off a premium consumer price point. But we are of course talking about phones, and phones that will also do many more things than just music and voice. And as such there’ll be complex subsidy and other such negotiations with handset operators and other content partners and internal content divisions at Nokia. So it’ll either: • It’s going to have to retail at a very premium price point and thus price out much of the target young market, or • Nokia are very bullish about how much additional revenue CWM will generate and it’s associated additional benefits (handset market share, customer retention etc) Then, for the UK, add into the mix the UK music industry’s current call for a blanket license on MP3 players (to drive revenue from format shifting). Would this apply also to devices such as CWM handsets for which a license fee has already been paid? If the license proposal was adopted in legislation it would need to have a specific addendum to exempt devices with licensed content components. Otherwise that’s yet more on the cost side of the equation for Nokia. UPDATE - Nokia have publicly rejected the claims that they are paying Universal such a high fee for the device. 2008-04-16T12:45:58Z 2008-04-16T12:43:51Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9711 2008-04-16T12:43:51Z

Another guest blog from Jupiter's European Media analyst Nick Thomas A story about ITV caught the eye yesterday. It was something of a self-inflicted PR disaster. In an attempt to reinvigorate the flagship ITV1 brand, the broadcaster reverted to a strategy that served it well in the past by buying...

Mark Mulligan Europe Another guest blog from Jupiter's European Media analyst Nick Thomas A story about ITV caught the eye yesterday. It was something of a self-inflicted PR disaster. In an attempt to reinvigorate the flagship ITV1 brand, the broadcaster reverted to a strategy that served it well in the past by buying a top-notch US show for its primetime Saturday 9pm slot. Pushing Daisies is pretty good too, and also stars homegrown actress Anna Friel. According to one reviewer, 95% of straight men in Britain are in love with her. Not sure about the methodology but the findings sound about right. Cue acres of press coverage and a decent first-night audience. But then ITV let slip that with only eight slots available in the schedule (for a nine-week series) they would simply drop the second episode. It’s a decision that beggars belief, and a missed opportunity to highlight the multi-platform credentials its been working hard to acquire. A 30-second brainstorm in the Jupiter office generated the following solutions: start the high-profile new show with a double-bill; offer the second episode as an exclusive on itv.com to drive traffic and showcase a service which is losing out to the BBC’s iPlayer; showcase the second episode on one of its digital channels; or a combination of all these. Plenty of people within ITV could have come up with this list, but none of them it seems, is running the place. The incoming controller of ITV1 can expect a busy few months banging heads together. 2008-04-14T13:41:19Z 2008-04-14T18:38:20Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9701 2008-04-14T18:38:20Z

Radiohead have consolidated their reputation with their Nude remix initiative in partnership with Apple. They have made vocal, guitar, base, drums and strings / fx parts available for download via iTunes and invite fans to create their own remixes and post them to a specially designed web site. This has...

Mark Mulligan Media Radiohead have consolidated their reputation with their Nude remix initiative in partnership with Apple. They have made vocal, guitar, base, drums and strings / fx parts available for download via iTunes and invite fans to create their own remixes and post them to a specially designed web site. This has to go down as one of the best implemented pieces of digital music marketing I’ve seen. This isn’t by any means the first time that artists have empowered their fan base to remix their tracks, but it’s certainly a best-practice case study for implementation and has some really nice touches: • Selling the parts as full price singles on iTunes (I, for example, paid nothing for Rainbows but just spent the best part of 5 pounds on the parts) • Allowing fans to vote for their favourite remix (thus drawing in new audiences such as the fans of the remixer rather than the band) • Creating Facebook and Myspace widgets for remixers to use to get friends to vote. All in all a really cool initiative. Over one and a half thousand mixes have been submitted so far And if you’re interested you can hear my remix here (which for the record was done in Logic Audio). And of course feel free to vote for my mix ;-) 2008-04-07T09:28:57Z 2008-04-07T14:22:05Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9683 2008-04-07T14:22:05Z

(The first in a semi-regular series of digital music marketing case studies) Interesting marketing by Warner’s Infectious Records; the Subways are giving away their (rocking) new single as an MP3 download via their site. The video is also heavily featured on MySpace music (and has been for quite a while...

Mark Mulligan Media (The first in a semi-regular series of digital music marketing case studies) Interesting marketing by Warner’s Infectious Records; the Subways are giving away their (rocking) new single as an MP3 download via their site. The video is also heavily featured on MySpace music (and has been for quite a while now). However you can’t buy the download on most download stores yet and even on iTunes you can, currently, only buy the video. So if you want it on CD, the free download is your option, for a little while at least. Great way to reward the fans anticipating the album release and also to reach a wider audience through the video promotion. 2008-04-03T13:01:05Z 2008-04-03T12:50:27Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9675 2008-04-03T12:50:27Z

MySpace’s long awaited Music Service looks set to be announced later this week or early next. Though details are unsurprisingly patchy at this stage it looks set to include ad supported streaming and MP3 downloads. Reports indicate that Universal, Sony BMG and Warner are on board or on the verge...

Mark Mulligan Media MySpace’s long awaited Music Service looks set to be announced later this week or early next. Though details are unsurprisingly patchy at this stage it looks set to include ad supported streaming and MP3 downloads. Reports indicate that Universal, Sony BMG and Warner are on board or on the verge of being, with EMI yet to sign on the dotted line. The labels will take an equity stake in the new service. Of course this service should have been live long, long ago. MySpace has established itself as a crucial element of the music marketing process in a ridiculously short period of time, and music is also a key driver of its audience. Jupiter’s research shows that nearly a third of European social networkers buy music they discover on MySpace and Bebo, rising to close to a half in the UK. If that is the conversion ratio when a purchase is a minimum of a URL and numerous clicks away, the potential of an integrated offering is undoubtedly significant. I’ve heard from a few contacts in the labels that MySpace has been overplaying its hands in negotiations, essentially implying that it is doing the labels a favour and should be rewarded for it. Be it as it may that a symbiotic relationship of sorts exists, this is still the labels’ content and they still need revenue. Acquiring equity in the store hits something of a compromise. But it also represents the era of transformation the music industry is entering. CD sales may be declining and digital revenues may be modest, but consumption is at least as strong as it has ever been. What the record labels need to do is create a revenue generating framework around consumption and understand that purchasing will be much less central to future revenues than it has been historically. Expect many more innovative services and mould-breaking partnerships as the labels throw everything at the wall to see what sticks. 2008-03-31T13:47:45Z 2008-03-31T13:45:48Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9664 2008-03-31T13:45:48Z

Danish telco TDC has announced the launch of a subsidized subscription service that will “offer consumers unlimited music downloads ‘bundled' with private broadband or mobile subscriptions, at no extra cost.” TDC broadband and mobile customers will automatically be able entitled to access the music offering free of charge. At first...

Mark Mulligan Europe Danish telco TDC has announced the launch of a subsidized subscription service that will “offer consumers unlimited music downloads ‘bundled' with private broadband or mobile subscriptions, at no extra cost.” TDC broadband and mobile customers will automatically be able entitled to access the music offering free of charge. At first sight PLAY appears to be a predominately PC and mobile centred experience, though it’s not immediately obvious whether you can utilize both platforms unless you subscribe to both broadband and mobile. I’ll be getting further details from TDC soon. Play is essentially a tethered download service, with a download store incorporated. Crucially access to downloaded tracks expires when the broadband or mobile subscription ends. This gets to the crux of the business proposition for TDC. Danish Online household penetration is near saturated and will grow by just 2 percentage points in 2008. Similarly nearly 90% of those online households already have broadband and this share will grow also by just a few percentage points. In short the broadband market is saturated. This offering is differentiation with a predominate view to retention. However the label licenses have significant costs associated with them so TDC will have to be seeking to recoup some share of the costs (advertising?) as music alone is not enough to differentiate in the fiercely competitive world of home broadband. It’s a innovative looking service (though full portability could be an issue) and is one of a few such offerings that have been in the pipes for some time. To understand where it fits in the future of digital music read our latest report on Next Generation Music services. P.S. TDC assure me that despite the fact the service goes live at one minute past midnight that this is not an April Fools. 2008-03-19T23:05:16Z 2008-03-20T03:01:52Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9631 2008-03-20T03:01:52Z

Nokia’s Comes With Music looks to be gaining some much needed momentum, with EMI announcing they are in negotiations to license to the offering. With Omnifone’s MusicStation Max and rumours of Apple deploying a similar approach for iPods Nokia are at risk of being beaten to the punch in their...

Mark Mulligan Media Nokia’s Comes With Music looks to be gaining some much needed momentum, with EMI announcing they are in negotiations to license to the offering. With Omnifone’s MusicStation Max and rumours of Apple deploying a similar approach for iPods Nokia are at risk of being beaten to the punch in their own game. They need at least two of the majors on board before launching CWM, and of course really they need them all. If EMI do sign up it should be a matter of time for the others to follow. The longer term issue is whether the terms Nokia are agreeing create a sustainable market framework for subsidized subscription offerings. 2008-03-19T10:09:41Z 2008-03-19T14:10:41Z tag:weblogs.jupiterresearch.com,2008:/analysts/mulligan//22.9627 2008-03-19T14:10:41Z

More on the enforcing piracy debate: the four majors have sued Ireland’s leading ISP Eircom, demanding that filtering technology be deployed to combat illegal downloading of music. Eircom unsurprisingly protest and ask how they will be able to tell whether traffic is copyrighted or not without first of all looking...

Mark Mulligan Europe More on the enforcing piracy debate: the four majors have sued Ireland’s leading ISP Eircom, demanding that filtering technology be deployed to combat illegal downloading of music. Eircom unsurprisingly protest and ask how they will be able to tell whether traffic is copyrighted or not without first of all looking at potentially innocent user’s traffic data. There are ways to narrow this down beyond reasonable doubt for many networks but they are typically labour intensive and not an explicitly integrated part of the filtering implementation. It's worth noting though that this specific case covers filtering, which is related to but technically seperate from enforcement and, to some degree, from policing. Filtering can be implemented without monitoring traffic. But savvy users can find ways round filtering, which could mean that the hardcore sharers are left largely unaffected. There is clearly a strong case for finding common ground and for ISPs and content owners to work as the 'partners' they publicly claim to be. Common ground typically infers a degree of compromise, which brings us back to the issue of finding cost and time effective solutions which bring genuibe benefit to both parties.