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.

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.

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.

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.

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.

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.

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.

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 ;-)