Thursday, June 29, 2006


This year's Digital Media Conference (DMC2006) was produced by Digital Media Wire and held at the Ritz Carlton in Tyson's Corner, Virginia. Below, are some notes from last Friday's event called Music Matters, which as you can see, had the industry's real heavyweights weighing in on the issues...If you're interested in reading more live coverage from the event, just follow the link above and look for my posts from the other panels...I've also posted some photos on Flickr HERE!

Aydin Caginalp: The Industry Perspective - The sale of music downloads (online/mobile) has doubled in the last year and has helped to offset the 7% drop in physical CD sales. Most iPods contain files which are 66% ripped from CD’s and most are only half-filled. The empowerment of the internet is the empowerment of the artist.

Ted Cohen: Unfortunately, differential pricing went out the window at Apple’s iTunes for the next 2 years and the consumer basically loses in that decision. DRM? is still a problem and needs to be more transparent, although it is still necessary to support a variety of business models. He disagrees with Jim. The imperative that every kid has to fill their device with paid content is not true. He likes the value proposition with subscription services such as Rhapsody, Yahoo, MusicNow….which gives fantastic choice, but still needs good recommenders, filters and editorial to deliver the best consumer experience. It’s too hard to sift through all the content out there…We have the ability to produce and deliver content much quicker now…

Jim Griffin: The medium is the message, and MP3’s have won. That war is over. The format has been chosen…The labels already sell unprotected wave files since 1983 which is the number 2 file format. The business model of a buck a song is flawed and there is no 1 business model that wins. We have to think our way through it for the prime demographic - which is teenagers. We’re moving to a service business. The battle of the business models is a waste of time. Our competition now is a dwindling share of the consumer’s wallet and a clock that moves fast on people’s schedule. Charging by the minute is old news…tiered usage works. Our struggle is with other industries that already know how to do this. Keep government out of the interoperability legislation! (The judges barely know what happened when they watch a webcast….) In the past, we’ve licensed video extensively as a service model. People just don’t have the motive to record and keep/re-use video on their VCR’s and Tivo’s. Attack the motive NOT the mechanism.

David Pakman: You have to go with the consumer’s choice for MP3 and stop fighting it. The 80/20 rule has not corrected and democratized itself. But in reality it’s a 95/5 hit-driven situation. The industry has got to get better at selling the long tail material…and find the sweet spot other than the top hits. I don’t look at the industry as one big giant pod. The independent segment has doubled in the last 12 years. Our indie sales at emusic are doubling every month. Return rates on portable music devices are between 40-70 % because of the device interoperability problem. The major labels created the interoperability problem because way back when - they required Apple to use DRM and unfortunately the license agreement doesn’t allow the sale of music without it. Consumers are very smart and they make value propositions every day; so there is no right way or model…

Gary Cohen: I don’t have a major issue with DRM, the problem is the implementation of it. The reason for the DRM has got to change and we can’t wait for the politicians to do it. Nothing looks great on the horizon. They have 2.2 million songs on AOL’s Music Now that are protected. In addition to the subscription model, we also offer the dollar a song model too…We’re trying to become business model agnostic (i.e. a la carte, subs, ad-based). The problem becomes that once you get the content on your device – how are you going to access it? Having a flat-fee will grow the pie as music is everywhere. I’m a Mac fanatic and I love Apple and what they did, but I really believe that it’s incumbent on them to open up the device and model in the near future. The interoperability thing is what’s really holding things back. Everybody has to play nice…There’s never been a better time to be an artist now…(i.e. record a sonically superior song for $200 and upload it to CD Baby)

Dave Ulmer: It’s a phenomenal time for this industry, i.e., you can listen to practically anything that you want to – when you want to. Consumers are in control and they’re actually paying for content. One of the problems though is that we don’t know about the “non-hits.” Most people buy new portable music players every 14 months. It’s amazing when you think about that the total dollars of ringtones is three times what Apple generated from iTunes. Looking at the mobile space, purchasing over a phone is not free, compared to your always-on internet connection. The OTA distribution costs have come down, but they haven’t come down to “0.” I think we’re moving to a multiple delivery system; i.e. one low bandwidth version for your phone and one .wma for your PC. This combination of OTA delivery and sideload capability will proliferate. Apple is the only game in town because they put it all together right. New hits are being created with no radio play because of online discovery.

Monday, June 26, 2006

DCIA's P2P Media Summit

Last Thursday on June 22nd, the Distributed Computing Industry Association held its inaugural P2P Media Summit - which consisted of 7 panels and 5 keynotes by some very distinguished guests. The DCIA is a voluntary organization representing all sectors of the distributed computing industry (including content providers, software developers and distributors, and service-and-support companies) and is engaged in developing standards-and-practices to advance this innovative consumer-based distribution channel. Several awards were given out with the Pioneer Award going to MetaMachine (eDonkey), the Groundbreaker's Award to Arvato Mobile, the Trendsetter's Award to LTDnetwork (developer of Qtrax) and the Innovator's Award went to INTENT MediaWorks. The event was held at the Holiday Inn at Tyson's Corner in McClean, Virginia and was well attended with over 100 guests. I will post a summary of my notes soon...In the meantime, HERE's a link to some photos. The organization also publishes an excellent weekly newsletter that I recommend opting into...

Thursday, June 15, 2006

Melodeo Releases Open Source DRM

Yesterday via press release, Melodeo, announced PachyDRM, an open source digital rights management (DRM) initiative designed to accelerate a broad and secure market for "any media, on any network, on any device."

PachyDRM includes the release of the Melodeo DRM source code and specification, now openly available at Commercially deployed by Melodeo since 2004, PachyDRM has been licensed by leading device manufacturers and endorsed by major content providers.PachyDRM is a proven solution for all leading business approaches, including pay-per-download transactions and subscription services. Among its distinctions, the PachyDRM code was used for the world's first commercial deployment of legal peer-to-peer music file sharing on mobile phones in Canada, and it has been selected by Access Media as the basis of legal, protected digital content distribution in China.

The PachyDRM code has been implemented on multiple mobile phone platforms and is now extending to other devices including the personal computer. "We believe PachyDRM fills the critical need for an open, freely available and technically viable solution," said Jim Billmaier, CEO, Melodeo. "The industry needs a working, open alternative to onerous, closed, and proprietary technologies such as Apple Fairplay and Microsoft DRM."The specification and client-server reference source code for PachyDRM can be downloaded for free HERE.

Free Virus Scan

Here's a healthy computing tip: If you happen to be using a computer without virus protection software (or your subscription has expired) you can go to and find the link for their "Active Scan" - run that on your computer and it will search for viruses for free. Your computer will NOT be permanently protected, but it will find whatever you have on their now.

Real Drops Music Prices

Just when you thought there was no margin on digital music sales, Real Music Store has dropped the pricing on on old favorites and new releases:

- Song downloads $.69
- Whole albums $6.99


Warner Brothers is doing a good job going after the long-tail and is helping to redefine television. The new Superman channel starts tomorrow and includes: - The A&E Special- 'Look, Up In The Sky! The Amazing Story of Superman'- 'The Adventures of Superman'- 'Lois and Clark: The New Adventures of Superman'- Max Fleischer Superman Cartoons.

Blogger Help : What is BlogThis! ?

Here's a really quick way to post to your blog by using a handy dandy Google add-in called "BlogThis!." Whenever you hit a webpage that is news worthy, just hit the Blogger icon in the Google tool bar and a post is automatically added to your blog. It is definitely a time saver :)BlogThis! will work with almost any browser and operating system including IE 5 or greater on both the PC and Mac, Mozilla 1.0+, Safari, Camino, Firefox, and Opera. It does not work with Netscape 4.