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Report: Some Major Labels Want Price Hike for Digital Music Downloads

Authored by Mark Hefflinger on February 28, 2005 - 3:55am.
New York -- Some of the major record labels are in negotiations with online music retailers to increase the wholesale price of digital music downloads, The Financial Times reported on Monday. One top label told The Financial Times it wouldn't raise prices because the market is not yet mature enough, while the paper noted that Universal Music and Sony BMG "are known to be particularly reluctant to disrupt the market for downloads." The report said that Apple CEO Steve Jobs was "angered" by the desire of some labels to increase the wholesale price of digital downloads, now believed to be about $0.65; most online retailers currently sell tracks for $0.99 each. Analysts cautioned that an increase in download prices could result in consumers returning to illegitimate services that offer free downloads. "It seems to me to be singularly bad timing," Gartner analyst Michael McGuire told FT.com.
tags: Downloads | Reports | Labels | Digital Music |

XM Satellite Radio to Raise Monthly Subscriber Fees to Match Sirius

Authored by Mark Hefflinger on February 28, 2005 - 3:53am.
Washington -- XM Satellite Radio announced on Monday plans to increase subscription fees to match those charged by competitor Sirius Satellite Radio. Beginning April 2, monthly fees for XM subscribers will rise from $9.95 per month to $12.95 per month, although the company will offer existing customers the ability to lock in the lower rate with a prepaid annual subscription -- with deeper discounts also available for prepaid terms up to five years. "This new pricing approach will help fund future technology development, enable us to offer more attractively-priced radios and maintain our programming excellence," said XM CEO Hugh Panero. "Together, these initiatives should result in XM exceeding its current target of 20 million customers by 2010." Along with the price increase, XM subscribers will get access to premium offerings, such as the XM Radio Online version of the company's programming, previously an extra $3.99 per month, and XM High Voltage ($1.99).
tags: VC | Satellite Radio | Subscribers | Sirius | XM |

Sony BMG to Increase Number of Copy-Protected CD Releases in 2005

Authored by Mark Hefflinger on February 28, 2005 - 3:51am.
New York -- Major label Sony BMG plans to increase the number of albums it releases with added copy-protection technology from SunnComm and First4Internet, with "a substantial number" of its releases to contain such technology by year's end, Billboard reported. BMG included SunnComm's antipiracy technology on a Velvet Revolver album that last year hit the top spot on Billboard's sales chart. The merged Sony BMG recently released a copy-protected album by the Chieftains, and plans to release additional copy-protected titles from Kasabian (March 8) and Susie Suh (March 29). One issue for consumers is the limited number of copies that may be made of copy-protected CDs. "We haven't set on what the number of copies should be, other than there should be a limited number; it shouldn't be infinite," Sony BMG sales enterprise co-president Jordan Katz told Billboard. "Our research shows that the consumer thinks that's fair. So you are seeing Sony BMG taking a leadership role in this area, with increasing traction throughout the year in terms of a number of (our) releases."
tags: Sony | CD | BMG | Releases | Copy-Protect |

Study: Few Search Engine Users Show Exclusive Allegiance

Authored by Mark Hefflinger on February 28, 2005 - 3:49am.
New York -- Most people who use Internet search engines don't have an exclusive allegiance to a particular site, according to new research from Nielsen/NetRatings. The firm found that users of the top three search engines -- Google, Yahoo and MSN -- often like to switch off between the sites. Specifically, 58% of Google searchers, 71% of Yahoo searchers and 70% of MSN searchers said that they also have visited at least one of the other top two search engines. "While it shouldn't surprise anyone that Google is the search engine to beat, it is critical that all of the major search players, including Google, recognize that they exclusively own only a minority of their users," said Ken Cassar, the director of strategic analysis at Nielsen/NetRatings. "This highlights an opportunity and a threat to all of the established players in the market, and underscores the importance of continued innovation in a highly competitive market that is anything but mature."
tags: Study | Search Engine | Allegiance |

Mobile TV Chip Developer Frontier Silicon Raises $28 Million

Authored by Mark Hefflinger on February 28, 2005 - 3:49am.
Watford, England -- Frontier Silicon, a U.K.-based fabless manufacturer of semiconductors for digital radio, TV and wireless TV products, announced that it has raised $28 million. The company, voted by the VC advisory board of the Fabless Semiconductor Association as the U.K. "Start-Up to Watch", said it planned to use the funds to bring digital TV to mobile phones. Frontier Silicon has developed two products, the Apollo and Kino computer chips, which allow mobile phones, PDAs and other devices such as the Apple iPod to receive and record digital TV broadcasts. Irish venture capital firm ACT led the round, in which Apax Partners, AltaBerkeley Venture Partners, Quilvest and Bluerun Ventures (formerly known as Nokia Venture Partners) also participated.
tags: Mobile | VC | TV | Frontier Silicon |

Online Ad Developer BlueLithium Raises $11.5 Million

Authored by Mark Hefflinger on February 28, 2005 - 3:46am.
London -- BlueLithium Inc., a performance-based advertising network, announced on Monday that it has raised approximately $11.5 million in first round funding, led by WaldenVC and 3i Group. BlueLithium said it would use funds to further deploy its optimization technology and to expand advertising sales operations internationally, especially in the U.K. "Since we focus on digital media investments, we have seen many companies in the online advertising and marketing space," said WaldenVC general partner Steve Eskenazi, who will become a BlueLithium director. "With its AdRevolver optimization technology and its long list of satisfied customers, BlueLithium immediately stood out to us as a company that has the opportunity to build long-term, sustainable advantages over its competition." BlueLithium, which reached more than 100 million unique users worldwide as of last December, said its network currently includes more than 1,000 sites and delivers several billion impressions per month.
tags: Internet | VC | BlueLithium |

Report: Online Entertainment Revenue to Grow 130% by 2009

Authored by Mark Hefflinger on February 28, 2005 - 3:45am.
South San Francisco -- Online entertainment services such as video, music downloads, games, gambling and adult content are expected to generate revenues of $15.8 billion in 2005 and reach $36 billion in 2009, according to a new report by South San Francisco-based RHK, a provider of telecommunications research and analysis services. While online gambling, online adult content and online games already have established multibillion-dollar markets, video and music will be the two fastest growing segments over the forecast period, the firm said. "Broadband connectivity has been a key driver and will gain even more significance in enabling new forms of content services through the introduction of new high-quality digital features that will enhance the user's experience," said Stephane Teral, the principal author of the report.
tags: Internet | Reports | Revenue |

Report: EU Launches Investigation Into iTunes Pricing

Authored by Mark Hefflinger on February 25, 2005 - 4:10am.
Brussels -- The European Commission has launched an investigation into Apple Computer for charging more for iTunes music downloads in the U.K. than in France or Germany, Reuters reported. "There is indeed an investigation on our own initiative," an unnamed Commission spokesman told Reuters. "We have made informal requests to Apple just to gather information." Reuters said the probe, which comes in response to a complaint filed with the U.K. Office of Fair Trading by consumer association Which?, was still in its early stages. Which? complained that consumers in the U.K. who must pay $1.51 per download are prohibited from using websites in France and Germany, where downloads cost just $1.31. Apple charges $0.99 for songs in the U.S., and $0.80 per song in Canada. "We look forward to the Commission taking action to ensure that the market for digital music is a single European market and serves all of Europe's consumers equally," Which?'s Phil Evans told Reuters.
tags: Reports | iTunes | Investigations | EU |

Survey: Nearly Half of Americans Aware of Internet Movie Downloads

Authored by Mark Hefflinger on February 25, 2005 - 4:09am.
New York -- Nearly half of Americans are aware of the ability to download a movie off the Internet, although only 4% have actually done so, according to a survey conducted by New York-based market research firm Ipsos-Insight. The survey found younger Americans have downloaded movies -- mainly off file-sharing networks -- in greater numbers, as 12% of those ages 18 to 24 reported having done so, as did 8% of those ages 12 to 17. "With the music industry struggling in the past few years to define and integrate the role of digital acquisition methods into the existing marketplace, it appears that the motion picture industry is presented with a unique opportunity to learn from the evolution of that category," said Ipsos-Insight vice president Matt Kleinschmit. The survey also revealed that 34% of Americans over 25 "have never heard of downloading full-lengthe movies off the Internet," while 27% of 12-17 year-olds said the same. "It's important to keep in mind that traditional movie watching options such as going to the movies and renting movies still hold the lion's share of movie watching behavior," added Ipsos-Insight senior vice president Lynne Bartos.
tags: Internet | Downloads | Movies | America | Survey |

EU Consults Microsoft Rivals to Ensure Sanction Compliance

Authored by Mark Hefflinger on February 25, 2005 - 4:04am.
Brussels -- The European Commission announced on Friday that it is consulting with customers and rivals of Microsoft to determine whether the software giant is truly complying with recent EU sanctions against it. "We have asked market participants to give us their comments in the next few days," said Commission spokesman Jonathan Todd. "By the end of the first week of March, we should have all of the comments, and we will make up our mind after that." The Commission has already rejected one proposed name for the stripped-down version of Microsoft Windows -- "Windows XP Reduced Media Edition" -- on grounds that the word "reduced" would make it unattractive to consumers. Todd said the Commission had yet to decide whether any of the other proposed names were satisfactory. The EU has ordered Microsoft to offer a version of Windows without Media Player, as well as provide competitors with protocol information. If the Commission decides Microsoft is dragging its feet, however, it could fine the company as much as 5% of its average daily turnover.
tags: Microsoft | EU | Rivals | Sanction |

NPR Flagship Station KCRW to Offer "Podcasts" of Radio Programs

Authored by Mark Hefflinger on February 25, 2005 - 4:03am.
Santa Monica, Calif. -- KCRW, a flagship FM station for National Public Radio (NPR) based in Santa Monica, California, announced this week that it will begin "podcasting" its programming beginning on March 1. The free podcast service will enable owners of an Apple iPod or other MP3 player to go online and select KCRW programs to be automatically recorded on their computers and transferred to their portable players, for listening away from the radio or computer. "KCRW sees podcasting as a further extension of the radio station. The programs on our website have proven to be as popular as they are on the air; so it makes sense to allow more people to hear them, especially with the portability that podcasting offers -- it's KCRW To Go," said KCRW general manager Ruth Seymour. The station will offer 22 programs via podcast, including its nationally syndicated "Left, Right & Center," "To the Point," "Bookworm" and "The Treatment." The station has also partnered with WNYC in New York to cross promote and share podcast content online. KCRW said that copyright issues prevent it from offering music programs like its venerable "Morning Becomes Eclectic" via podcast, "but efforts are underway to make this possible in the future," the station said.
tags: Podcasts | Radio | NPR | KCRW |

Electronics Makers Think Fee for Antipiracy Technology is Too High

Authored by Mark Hefflinger on February 25, 2005 - 4:00am.
Amsterdam -- A number of consumer electronics makers are unhappy with the high license fee being proposed by companies that invented technology to secure the transfer of music and other media to cell phones and other portable devices, Reuters reported on Friday. The Open Mobile Alliance (OMA) has proposed a $1 per device charge for its antipiracy technology. "This kind of price is certainly unreasonable. It's not in proportion to the economic value," one senior executive at a top five mobile phone maker told Reuters, who also pointed out that the $684 million in royalties from each cell phone sold last year is greater than total Web music sales last year. "This is too expensive," added a senior executive at a global top three consumer electronics firm. The chairman of the digital rights management working group at the OMA admitted that the licensing terms "have kicked up a lot of dust. People are debating if these are reasonable terms," Jan van der Meer told Reuters. Companies that developed the antipiracy technology include InterTrust, ContentGuard, Sony, Matsushita and Philips -- who pooled their patents and are represented by a licensing group called MPEG LA.
tags: Electronics | Antipiracy | Too High |

Microsoft Hires "Final Fantasy" Creator to Develop for Xbox

Authored by Mark Hefflinger on February 25, 2005 - 3:58am.
Redmond, Wash. -- Microsoft has announced that the creator of the "Final Fantasy" video game franchise, which has sold 60 million units worldwide, has joined Microsoft Game Studios to develop roleplaying game titles for the Xbox. Nironobu Sakaguchi left Japanese developer Square Enix, which publishes the "Final Fantasy" franchise, in 2001 to found his own game studio, Mistwalker. Sakaguchi, who was inducted to the Academy of Interactive Arts & Science Hall of Fame in 2000 for his work on "Final Fantasy," will create two Xbox-exclusive roleplaying titles for Microsoft Game Studios. "Sakaguchi-san has taken role-playing games -- traditionally a niche market -- and introduced them to a broad and diverse audience across the globe," said Peter Moore, corporate vice president of worldwide marketing and publishing at Microsoft. "We are ecstatic to work with Sakaguchi-san and celebrate what this news means not only for Xbox, but for gamers worldwide."
tags: Xbox | Microsoft | Final Fantasy |

MPAA Sues Oscar Nominated Movie File-Swappers

Authored by Mark Hefflinger on February 24, 2005 - 4:23am.
Los Angeles -- The Motion Picture Association of America (MPAA) on Thursday filed a third wave of lawsuits against individuals allegedly trading movies on Internet file-sharing networks, targeting in particular those swapping Oscar-nominated films that have seen their DVD screeners leaked online. The MPAA did not say how many individuals it sued with the current wave of litigation, but did mention that films including "Sideways" and "The Incredibles" were part of the investigations. The MPAA has launched two previous rounds of lawsuits against both individual movie file-swappers, and operators of servers in countries including France, Finland and Holland that host movies traded on peer-to-peer networks like eDonkey and BitTorrent. Recently, LokiTorrent, one such server site, agreed to shut down and pay the MPAA a $1 million settlement.
tags: MPAA | Movie | Oscar | File-Swappers |

Warner to Sell DVD Movies for $2.65 in China to Combat Pirate Market

Authored by Mark Hefflinger on February 24, 2005 - 4:20am.
New York -- Warner Bros. Entertainment has announced plans to release a slate of DVDs in China for as little as $2.65 each, in a bid to counter the rampant movie piracy in the region, The Wall Street Journal reported. Pirate DVD movies regularly sell in China for just $1. Initially, the roster of 125 discounted DVDs will not include any extras, but Warner plans to offer such features on later releases that will sell for about $3.38 in China. "It's pretty daunting going into that market to release a legitimate product," Warner Bros. chairman and CEO Barry Meyer told The Journal. "But we really think if we can get in there, we can be a part of the solution and not the problem."
tags: Movies | China | DVD | Warner | Combat | Pirate |

AOL Launches Local Search Service

Authored by Mark Hefflinger on February 24, 2005 - 4:20am.
Dulles, Va. -- Keeping pace with search rivals Yahoo and Google, America Online on Thursday launched a new local search service, available to both subscribers and non-subscribers. The service, known as AOL Local Search, aggregates content from AOL's Yellow Pages and CityGuide, as well as the company's Moviefone and MapQuest services and content from outside partners. "Local search is an important and growing category of search services given that 20% of all online look-ups are for something nearby," said Jim Riesenbach, the senior vice president of AOL search and directional media. The service is designed to help users find local businesses, events, movies and other information.
tags: AOL | Local | Search Service |

Video Game Publisher Activision Announces 4-for-3 Stock Split

Authored by Mark Hefflinger on February 24, 2005 - 4:18am.
Santa Monica, Calif. -- Video game publisher Activision has announced that its board approved a four-for-three stock split, which will be paid in the form of a dividend to shareholders on March 22. Stockholders will receive one additional share of common stock for every three shares held on the record date. Following the transaction, Activision will have 200 million shares of outstanding stock. The Santa Monica, Calif.-based company also said it has called a shareholder meeting on April 4 to discuss approval of increasing the number of its shares from 225 million to 450 million. "By increasing the total number of authorized shares available for issuance, we will improve our long-term financial flexibility," said Activision chairman and CEO Robert Kotick.
tags: Activision | Stock | Video Games | 4-for-3 |

Robertson's MP3tunes Offers $399 Digital Music Recorder

Authored by Mark Hefflinger on February 24, 2005 - 4:16am.
San Diego -- MP3tunes, a digital music store start-up launched by MP3.com founder Michael Robertson, on Thursday introduced its MP3beamer, a digital music storage device and software that can be used to make songs universally accessible from computers, home stereos, PDAs and portable devices. The $399 hardware device is about one-third the size of a PC, features an 80GB hard drive capable of holding up to 1,400 CDs, and runs on the Linspire operating system -- developed by another Robertson venture of the same name. The device can stream music wirelessly to home stereos and entertainment centers with the purchase of a separate media receiver, as well as to any Internet-connected device via a Web and Java interface. In addition to the device, MP3beamer also offers a $69 software-only version that will enable the same music storage and remote playback on any PC. The MP3beamer supports Apple's iTunes software and its iPod players, in addition to various other players and WinCE and Palm-based PDAs. However, since MP3beamer is based on the MP3 format, it does not support songs purchased from the iTunes Store, Napster or other services that use protected formats. The MP3beamer "acts like your own personal digital music recorder [DMR]," said Robertson. "Just as a digital video recorder stores video and allows you to play it back on TVs, a DMR lets you add a music track or album to MP3beamer and immediately have it available on your home stereo, iTunes, PDA or portable device -- virtually any device with speakers or a headphone jack."
tags: Digital Music | MP3tunes | Robertson |

Digital Music Retail Developer MusicGremlin Raises Funds

Authored by Mark Hefflinger on February 24, 2005 - 4:14am.
New York -- MusicGremlin, a developer of digital music retail technology that delivers downloads directly to secure portable devices, announced on Thursday that it has raised an undisclosed amount in its second round of funding, led by Allen & Company LLC. The company has raised more than $5 million to date. New York-based MusicGremlin says its technology will enable consumers to purchase and download digital music directly to portable devices without the need of a PC, as well as share their music collections directly from their devices. The company, which said it will use the funds for working capital and to expand its operations, added that it has developed its second generation product and is in the process of licensing its technology to consumer electronics firms.
tags: VC | MusicGremlin | Digital Music |

Report: Vertical Search Will Drive Online Marketing Growth

Authored by Mark Hefflinger on February 24, 2005 - 4:13am.
New York, N.Y. -- In the online search-engine market, rapidly rising keyword prices on broad-based search engines will soon stabilize and industry growth will depend substantially on the value provided by "vertical" search engines, according to a new report from JupiterResearch, a technology market research firm. "The trend will cause a sea change in how advertising spending is allocated online and force media firms in vertical categories to embrace performance-based advertising pricing models," said Niki Scevak, an analyst with JupiterResearch. "If vertically focused media firms do not seize this opportunity, search engines like Yahoo and Google, as well as a number of established and startup vertical search engines like Shopping.com and Sidestep will enter to satisfy the market demand," Scevak said. The new report found that paid search spending in the U.S. is highly concentrated; just four categories -- retail, financial services, media and entertainment and travel -- accounted for 79% of the $2.6 billion spent on paid search in 2004, according to the report.
tags: Internet | Reports | Vertical Search |
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