FINAL: MUSIC INDUSTRY'S ADAPTATION TO THE MOBILE PHONE

While music has recently become more mobile than ever with the advent and proliferation of portable media players, the surface of the mobility and ubiquity of music has only just begun to be scratched in terms of potential as a source of entertainment and as a source of revenue.

With the impending entrance of the iPhone into the cellular arena, and the continuing trend of mobile phones media capabilities continuing to rise, it is only a matter of time until a substantial amount of media entertainment will come from our media enabled phones. Right now, the entertainment scene including music and video on the phone is subsidiary at best to that compared to the entertainment we consume on our laptops or iPods. But the phone will soon become the power player amongst these devices and change the face of mobile media consumption.

This is going to happen in numerous ways, with many different forces (i.e. record labels, Cellular providers, and phone manufacturers) having to work together to create the all so coveted media enriched environment the consumer of today so desperately craves. So lets begin to explore what will be driving these innovations.

First, lets explore the role of streaming media to our mobile devices. This is the umbrella term that will pretty much be the framework for future media consumption in the mobile phone atmosphere. There are already products on the market that stream content from your home television to your adequately endowed cell phone. And even a 3rd party media streamer is in development to work with your Apple TV to even transfer your protected iTunes content to your mobile phone. However, these products are full of compatibility issues and they don't really produce the quality or dependability that consumers demand.

Yet as data networks improve with the development of WiMAX and other 4G technologies, the practicality and realization of streaming's true potential can be realized. People could truly not be limited by insufficient storage, meaning high quality content, even that with large file sizes, could be accessed at anytime, anywhere, with ease and speed. This has great implications for the music industry. For high quality digital tracks with additional metadata (i.e. video, webpages, photo's, etc.) to be delivered along with the music to a phone at anytime opens up this online store that can truly capitalize on people's impulsive nature by giving consumers the ability to purchase content at anytime through their mobile phone and have it successfully play in all of their many venues of choice (Car, computer, stereo, television). But to realize this dream, another innovation is going to have to emerge to help create this seamless media ecosystem.

As the amount of devices that we listen to our music and watch our video on increases, the ever dreadful problem of choosing the write file formats to best cater to consumers begins to emerge. In the recent past, the trend starting with Apple has been to create a proprietary file format (protected AAC) that can only be played on a single type of media player or cell phone, which creates a lot of interoperability issues.

This has been the case in the beginning of the digital music revolution because it was the only way the technology companies viewed distributing music digitally could be profitable to them. Case in point, Apple created the iTunes music store to sell iPods. However, this blogger might argue that iPods would sell themselves without any iTunes music store, just because they are so damn cool and trendy. But I digress.

Getting back to the importance of file formats, i think the past notion that proprietary formats are the best for the consumer is a dying sentiment, and now with evidence from the major players or Apple and Amazon, interoperability is in fashion, and oh how the consumers love this development. See, now that the major players are seeming to take the plunge and beginning to endorse DRM free tracks, interoperability becomes a real reality. While we are nowhere near the end of the tunnel, consumers will probably in the near future be able to buy all their music content at least with out any annoying DRM wrapper.

So what format does the future hold for us. Well as you can probably guess, it could be a toss up between formats. Unprotected AAC has gained a lot of popularity on other players such as those of Sony, Microsoft Zune, Nokia, and internet radio. This could mean a real competition for the all powerful Mp3, which by far as the most interoperability of all formats.

AAC is a new format so its quality is a little better than AAC's, but it's interesting that Apple is choosing to offer their first DRM free tracks in Mp3 format instead of the unprotected AAC. Could this be a preliminary forfeit making Mp3 the true format of the past and the future. Time shall tell, but whatever format is decided on, one thing is for sure, it won't have any DRM attached to it, for the mobility of music in the mobile phone atmosphere depends on it.

Which brings me to my next adaptation the music industry will have to achieve in order to benefit from the mobile phone technology. An important, and often overlooked part of the mobile media in the mobile phone industry, is the importance of service plans.

Right now, it is in my opinion, that data plans are not reasonably priced and that consumers cannot be expected to be paying over $100 a month for unlimited data and a sufficient phone minutes. For consumers to really begin to embrace the mobile media market on their cell phones, the first step has to be taken by the Cellular providers and lower the cost of the unlimited data plans. While it is unknown for sure what data plans Cingular will offer with the upcoming iPhone, it is sure to be a point of discussion on top of the $600 price tag that is being tagged on the phone itself. But data rates and phone plans are really only the tip of the iceberg.

The real key to an explosion of media on the phone and in a mobile environment is to embrace the subscription model. I think this model is perfect for really boosting the popularity of consuming music and video on a mobile devcie, because it matches the subscription phone service that you are already being provided by the cellular providers. However, I have some important stipulations that should be considered.

For a subscription based model of consuming media on a cell phone be implemented, there should also be an a la carte system, like iTunes is presently, to supplement those who prefer to buy their media. So this is what a reasonably priced subscription model should look like. For $35 a month, a user gets a substantial ammount of phone related privlages (minutes, text messages, multimedia messages) and unlimited data usage. To complement the unlimited data usage, for $15 a month, the phone user can have access to their choice of subscription service, be it Napster or a rumored iTunes subscription model. Also, the user, if he or she chooses, can in addition to the subscription model, can purchase a la carte any material they can access on the subscription service at no extra cost or complication.

This sort of subscription model gives the consumer true freedom to choose what media ecosystem to be a part of, choose how they purchase their media, and how they access it.

To be honest, the only real adaptation the music industry has to achieve is to give its consumers more freedoms and choices in how they digest the medium. This is truly the future of music in the mobile spectrum. A plethora of choices, possibilities, and configurations will eventually capture more consumers which I believe will inevitably result in more profit for the industry, and help it retain its once prominent status.

Consumers have been demanding this now for a decade, and in retaliation have resorted to illegal downloading because their demands have been ingored and not respected. Well with the continuing development of higher speed data networks in the cellular spectrum, the music industry gets a much undeserved second chance to claim back a generation that they lost, and make it right. So as the future gets closer and closer, the time for the industry to step up and heed the demands of this blog, gets closer and closer, and with that a new era of music and media can emerge. A truly mobile media.

Getting Closer to Streaming Paradise

This week, its been highly publicized that Sling Media, the developer behind the ever so popular SlingBox, is already working hard on bringing compatibility of their SlingBox media streaming device to the Apple TV.

While seeing a strong interest from developers in the Apple TV is not necessarily a surprise, the fact that Sling Media is going to try to enter this space of the iTunes ecosystem before Apple does is a very interesting development.

However, while this would be a great device for users of other media enabled phones such as the Treo, I believe people who are really invested in the iTunes model, which is the target audience for an Apple TV, will also likely purchase an iPhone. And it would be shocking to see if Apple did not develop similar capabilities into the iPhone at its inception or soon after. This may be related to some of the hidden features within Leopard or the iPhone that Steve did not quite want to let go when he announced the iPhone.

But I digress. I want to focus on the importance this sort of development would have on mobile media. This would be a giant first step into really removing all constraints of storage and allow users to truly enjoy their purchased media anywhere, anytime, providing there is a sufficient internet source around to handle the streaming of the copy of RoboCop you bought this morning of the iTunes store.

Coupled with the recent announcement of DRM-free music being offered from EMI, Apple seems to be highly invested into furthering this seamless iTunes ecosystem to other devices, namely the iPhone, and finally creating an environment where people can enjoy what they have purchased with little hassle, beautiful simplicity, and seamless integration into the devices they already or will in the future own.

Sling Media's development on making their device compatible with the Apple TV is important, because I believe it will persuade Apple even further into releasing this type of architecture and integrating it into their products.

Still the success of these kinds of streaming applications rests heavily on the continuing development of next generation wireless networks in this country. WiMAX will undoubtedly play a huge role in the future of this technology.

So it appears with these recent developments that we are getting closer to the streaming paradise of which we all dream.

Mixed Feelings

After having some time to consider Monday's announcement by EMI and Apple, I still have mixed feelings with their new system of selling DRM free music in the iTunes store.

First, the obvious problem with this new digital offering is the price hike. Raising the price to by 30% is not the right message to be sending to consumers. This is another addition to the continuing and seemingly unwavering entitled attitude that the record industry exhibits on a day to day basis.

Consumers have been clamoring for years that the price of music is too high. In fact, a strong case can be CD's impending death can be significantly contributed to the high price of music. So while it appears that the people who sell us music are deaf to our complaints as consumers, they decided they would be doing us a favor by offering us a product at a higher price than before when we could already get the same product in the record stores.

I guess what I would really like to see the record industry invoke is consistency within their product line. Why would you charge more for a essentially costless form of distribution for the same freedoms that you can get on a CD.

The $0.99 model was working fine, and actually provided a nice clean, generally accepted value for music, and to add confusion to the iTunes music store by offering a completely different kind of track with completely different rules at a higher price, when people already don't understand what DRM exactly is, it just seems crazy.

Shame on Apple for adding confusion to their simplistic design. This is one instance where Apple chose cool over functionality. Apple has been great at making these two things go hand in hand, but I can't see how this is going to work in the same way.

I did mentioned I had mixed feelings early, so now I can elaborate on the positives that might come to this. Apparently, albums of the new unprotected content will still cost $9.99. This is a huge accomplishment, and actually makes sense.

This, although probably small at first, could have an sizable effect on the album culture in music today, and might drive people to buy more albums. This is obviously good for the industry as the more music bought, the more money the make.

But on a grander scale, this could alter our societies current viewpoint on the way we listen to music. Right now we are a singles based culture, but if people can get unprotected content and a reasonable price, $9.99, then why wouldn't people be inclined to buy more albums. Kudos on the EMI and Apple making this a precedent from the beginning. This should force the other labels when they jump in the DRM free pool to adhere to this kind of pricing.

Let the Revolution Begin

In yet another groundbreaking announcement involving Steve Jobs and the digital music industry, EMI and Apple came together earlier today to announce the beginning of a new era in digital music sales. In may, Apple will begin selling EMI's entire digital catalog without any DRM wrapper. Alongside the DRMless format, the unprotected tracks will feature "higher fidelity" than the previous offering. However, there is a catch for all these great new features. The consumer is going to have to hike up a little more cash. These new tracks will cost 1.29, or 30% more than the previous offerings. These tracks are going to be marketed as premium tracks, and will be sold alongside the regular tracks that are already on the iTunes Store.

I am feeling such a mix of emotion regarding this announcement. Lets start with the positives.

This has dealt a huge blow to the digital music industry. When one of the biggest label groups, which accounts for "70% of songs sold today", decides to go against the grain and offer there music in an unprotected format, the implications and the stakes are at an all time high. Apparently, EMI has done their research and found that people would prefer to buy unprotected tracks at a higher price at about a rate of 10 to 1. EMI's confidence entering the digital market without any armor to protect them is quite inspiring and will definitely be closely watched by the other big 3 label groups.

Another positive that should have happened a long time ago is the increased fideltiy in the audio tracks. This is long over due, and should help EMI sell more music for all those high fidelity nerds out there. I think that for some, the increased fidelity will prove to be as much as a selling point as the DRMless format. The details are a little scarce on the increased fidelity, so it will be interesting to see how this turns out.

Now to the negative aspects of this announcement.

Obviously, the price hike is not a positive to this development. I think that music has become so ubiquitous and a part of our daily lives, that the last thing the digital music market needs is a price hike. EMI and Apple are banking that the pros outweigh the cons of the price hike.

Another problem with this is that this is the first time that Apple has really strayed from its consistent pricing model of $.99 model per song. I think the labels will now see this as a weakness in Apple's seemingly impenetrable negotiating armor, and they will definitely try to exploit this.

For some users this could be seen as a step in the wrong direction for those who iTunes to have an optional subscription model. Apple has always been dedicated to the idea that people should own their music, and this announcement is just one step further into that model.

Its obviously too early to really see how the public will react, but the promise for the digital music industry seems a little brighter without the darkening shadow of DRM looming over.