the REPORT
Issue 244 | 27 May 2010
Google’s cloudy music
ambition
Google may have been cast as the villain in its licensing
disputes with PRS for Music and GEMA, but last week’s
I/O conference saw the clearest signs yet that it has
grand ambitions in the digital music space. Its intention
to compete with Apple’s iTunes ecosystem will be
welcomed by labels, but its plans to let people stream
their home music collections are more intriguing.
Focusing on Google’s disputes with collecting Also in this issue:
societies only tells part of its music story until
now. The war of words with PRS for Music in PAGE 5:
the UK was public and heated last year, but
The streams, they
the two sides agreed a deal in September.
are a-changin’ »
Meanwhile, its spat with GEMA rumbles on:
earlier this month, talks about renewing the PAGE 6:
German society’s licensing deal with YouTube
The banners take
This report is registered to: joacotroniks joaquin.fernandez@warnermusic.com Joaquin Fernandez
broke down, with GEMA ordering the removal
it all? The future of
of 600 videos from YouTube, and claiming
mobile ads »
the backing of eight overseas collecting
societies, including ASCAP and BMI. PAGE 10:
However, there’s been a lot more going on Market profile:
within Google on the music front in the last India »
12-18 months. It launched a free ad-supported
music downloads service in China, backed
PAGE 11:
by labels keen to see any legal service put a
Podcast, broadcast,
dent in online piracy there. In the US, Google streaming: All
beefed up the music features of its main consumption is
search engine, offering streams of songs equal under the
from licensed services Lala and iLike with stream »
links to buy the downloads.
Regulars
All the while, YouTube was becoming a
PAGE 8:
significant music service in its own right.
Digital stats »
Recent research from BigChampagne
showed that in one week, the top 10 songs PAGE 9:
on MySpace Music were streamed a total of
7.5m times, while the top 10 music videos
Dealtracker »
on YouTube were watched 57.3m times.
Rihanna’s ‘Rude Boy’ was streamed just over
730,000 times on MySpace Music that week,
The Report is the copyright of
Music Ally Ltd and may not be
but its video was watched nearly 4.3m times distributed, copied or reproduced
on YouTube. otherwise without permission.
COVER STORY the REPORT | 27 May 2010 | Page 2
continued…
“We are making your whole music library
available to your Android device as a stream”
Vic Gundotra of Google
In January this year, YouTube launched
its Music Discovery Project, letting users
create their own playlists of music videos –
compounding the sense that YouTube is now
a bona-fide music consumption platform.
And, of course, it’s Google/YouTube’s
technology that underpins Vevo, the music
industry joint venture that’s looking to make
even more money from online music videos.
In short: Google is already big on music. But
judging from the announcements at I/O,
it’s only just getting started. During a day
devoted to its Android smartphone OS, its
engineering boss Vic Gundotra revealed
that Google’s Android Market will soon get a
website version, which will sell music as well
as applications.
There’s some technical wizardry involved
too. People will be able to click a button
on the Android web-store to buy a song,
and immediately it will start downloading
over the air to their Android smartphone. In
other words, there’s no iTunes-style syncing
required. “Why don’t you find an album or
song you like, and why don’t you just send it
to the device using the internet, over the air?”
said Google’s VP of engineering Vic Gundotra
during his I/O keynote. “And boom!”
It’s good news for the music industry. Google
says it is currently activating 100,000
new Android handsets a day sold by its
manufacturer and operator partners. When
the new store launches, people will have a
fast and simple way to buy songs from their
web browsers, and have them automatically
download to their phones. No details were
announced on label deals, pricing or launch
date, though.
However, this was only the first music
announcement by Gundotra. He went on
to talk about how Google will deal with the
songs people already have stored in their
home music collections, in their iTunes or
Windows Media libraries.
“I’ve got thousands of songs there. What do I
do with those?” he asked. “Well, we recently
acquired a company called Simplify Media,
COVER STORY the REPORT | 27 May 2010 | Page 3
continued…
and it is our intention to incorporate that
technology into the marketplace as well.”
Simplify Media was a developer whose app
allowed people to stream their home iTunes
libraries over the network to their iPhone or
iPod Touch. The company removed its app
from Apple’s App Store in March, blogging
that “after developing the technology behind
Simplify Media for over four years, it is time
for us to take it in a new direction”. That new
direction being to Google, it turns out.
Gundotra said at I/O that the technology will
remain the same when re-launched as part
of Android Market: it “allows you at home to
run a simple piece of software that makes
all of your non-DRM music available to your
Android device. We are making your whole
music library available to your Android
device as a stream.”
More cloud-based music, then. Or is it?
Music Ally’s immediate reaction to the news
was to wonder what the labels would make
of it. Music locker services like MP3tunes
and Psonar have raised hackles among
rightsholders, most recently at The Great
Escape in Brighton, when UMGI’s Francis
their Google account? And
if so, would this neatly
sidestep the legal questions
around users uploading
their own collections to
remote servers?
It should make for some
Keeling told Psonar boss Martin Rigby in front interesting licensing
of a watching audience that “you’re NOT able discussions. But it also lays
to do what you’re doing”. down another marker for
Google’s increasingly fierce
Start-up locker services are one thing, but competition with Apple.
it would be a different kettle of fish entirely With Android starting to
if Google was to launch a similar service. give the iPhone a run for
However, taking Gundotra at his word and its money, now Google is
based on Simplify Media’s existing app, training its sights on iTunes
Google’s plans are more about letting people – just as Apple’s store is at
stream songs from their own home PCs to the centre of its own cloud-
their own smartphones, rather than getting streaming rumourfest.
them to upload anything to Google’s servers.
Forget iTunes versus
We sense there’s more to Google’s plans than Amazon: iTunes versus
this, though. Services like Gmail, Google Docs Android’s Music Market
and Google Calendar are already entirely could be one of the defining
cloud-based, and the upcoming Google battles in the digital music
Editions will apply the model to e-books: space in the latter half of
people will buy an e-book once, and then 2010 and beyond.
have it reside on Google’s server ready to be
accessed from any device.
We wonder if this hints at how the music
section of Android Market will evolve
too: besides sending purchased tracks to
smartphones, could Google also make them
available for streaming to any device or Watch Google’s Music presentation
computer where someone is logged in with http://tinyurl.com/3xdor5x
 DIGITAL FORTNIGHT the REPORT | 27 May 2010 | Page 4

Over the last two weeks

we loved… and we learned…
UMG International's VP of Digital “It’s going to be a tough, challenging industry for a few more years.” So predicted
Francis Keeling praising Spotify’s Phillippe Capron, CFO of parent company Vivendi following the news that Universal

14.05.10
Music Group's Q1 revenues were $1.bn, down 13.4% year-on-year, largely due to the
progress. "Spotify has been a big ongoing fall in recorded music sales. This, despite strong sales from UMG artists Lady
success," said Keeling in his keynote Gaga, Black Eyed Peas and Justin Bieber. More worryingly, the company reported a 1.7%
interview at Brighton’s The Great decline in digital sales (at constant currency), which it put down to weak ringtone sales.
Escape conference. It was a refreshing
Britons are still keen on physical product. 64% of digital music consumers in the
contrast to the usual grumblings from UK claimed to prefer owning music, while 73% aren't prepared to shift completely to a

18.05.10
labels that Spotify isn't converting music subscription model. That's according to a survey by HP, which found that even
free users to paying subscribers as quickly as they'd hoped. "It's among the most digital-savvy age groups of 16-24 and 25-34-year-olds, 39% are still
buying CDs and DVDs. Meanwhile, 14% of people between the ages of 16 and 60 have
absolutely heading in the right direction. The freemium model is never accessed any media content digitally.
certainly working at moving consumers from pirate services to legal
free services." Google made its move into music retail (and cloudstreaming). "Soon Android will let
you play all the music on your computer without syncing your hard drive to your phone,"

This was closely followed by an
announcement from Spotify that further
supports Keeling’s view that the service is
working hard to move users up the ladder.
Two new methods of access have now
been launched in the UK: Spotify Unlimited
and Spotify Open. Spotify Unlimited costs
21.05.10
supported free version of Spotify which
explained a representative at Google's I/O conference. "You'll do this by installing a small
caps people's monthly usage. They'll be
app on your desktop that will send your music – whether it's in iTunes, Windows Media
able to listen to the service, with ads, for Player, or anywhere else – to the Internet […] Once the files are online, your phone will
20 hours a month, with anything further have access to your entire music library whenever you've got an Internet connection."
requiring subscription.
iTunes widened its market share lead over Wal-Mart just as Apple faces US
We also loved the big thinking behind the

26.05.10
latest marketing element in the Gorillaz antitrust enquiry over tactics. According to Billboard, iTunes’ share of the US account
£4.99 a month, and offers unlimited ad-free base was 26.7% last year, up from 21.4% in 2008, whilst Wal-Mart's share dropped from
multimedia campaign. It kicked off with a
music – but ONLY on the computer, which 15% in 2008 to 12.5% in 2009. Meanwhile an antitrust investigation by the US Justice
‘Passport’ book (which actually resembled Department, over iTunes’ strategy began. It is claimed that Apple tried to prevent labels
is perfect for the workplace. If users want
the real thing) being given away with last from running exclusive deals and promotions with the rival Amazon MP3 Store.
mobile access, better sound quality, offline
week’s NME. Inside was an augmented
access and other premium features, they'll
reality code that, once snapped with an
still have to sign up to the £9.99-a-month From the archives… (click to view archives)
iPhone, brought to life a 3D animation of
Spotify Premium service. Meanwhile,
the characters home, Plastic Beach along Issue of 30th March 2006 Now we say...
Spotify Open is the new flavor of the ad- Well, it was fun while it lasted. Phenomenally Even more popular than ever, video site YouTube
with information about a forthcoming tour.
popular video sharing site YouTube originally is still allowing plenty of copyrighted material to
allowed pirated TV shows to be watched online be watched online – as long as it’s broken up in
“F*** those motherf***ers” but has taken steps to stem the copyright
infringement. From now on, YouTube users
to segments lasting no longer than 10 minutes.
So why doesn’t YouTube apply the same sort of
Quote wishing to upload clips of more than 10 minutes analysis to any series of videos each roughly 10
Viacom on Google, gleaned from another batch of entertaining emails in length will have to register officially with minutes in length?
of the
released as part of the ongoing court battle. YouTube's special content provider scheme.
fortnight
TRENDWATCH the REPORT | 27 May 2010 | Page 5

The streams, they are a-changin’

Streaming is here to stay as a way of consuming music, but we7, MOG is making mobile part of its bigger Grooveshark
upsell, having unveiled its iPhone app at
the business models around it remain fluid. Recent comments SXSW in March, with plans to charge users Grooveshark has been a bête noire for labels
from WMG boss Edgar Bronfman Jr. show the reservations $10 for web and mobile access. However, one for some time, due to its lack of licensing
area that’s been slower than expected is the deals. UMG sued it in January, claiming it
among some rightsholders around ad-supported models. had refused to sign licensing agreements
company’s international expansion. It raised
But as on-demand streaming services battle to prove they can $9.5m in new funding in late-February, with or respond to demands that it implement
deliver a ‘net benefit’ to the industry, the pace of innovation is plans to launch in the UK shortly after. Those copyright filtering software on its service.
plans have yet to come to fruition, though. However, it does have a licensing deal with
swift. Here’s a catch-up. EMI, signed in October last year as the
Spotify The company now finds itself in the position MySpace Music resolution to another lawsuit. Interestingly,
of bowing to label desires for a premium we’re seeing more hostility to Grooveshark
Spotify’s recent update was a major one, Out of all the big on-demand streaming from rival (licensed) streaming services at the
upsell, all the while still banging the drum
introducing Facebook-powered social services, MySpace Music is the one that moment. They see its continued existence as
for ad-supported music as an important
features allowing its users to see what their remains wedded to a purely ad-supported detrimental to their own attempts to balance
model for the industry. We7 recently
friends had been listening to, as well as send model. MySpace co-presidents Mike Jones their books. Grooveshark tried to launch an
announced its first month where its ad
and receive track recommendations using and Jason Hirschorn were grilled on-stage iPhone app in February, but was rejected by
revenues outweighed its per-stream licensing
its new Inbox. Some of those features have at the TechCrunch Disrupt conference this Apple.
payments – an announcement which came a
also been extended to Spotify’s iPhone app. week about reports the music service is
month after it signed a deal for Yahoo to sell
It’s the new pricing options that are equally its display advertising.
losing $10m a month while it struggles to Last.fm
significant in the eyes of rightsholders. The make ad revenues pay for its licensing costs.
Judging by Jones’ comments, it will be label After a tough couple of years, Last.fm
£4.99-a-month Spotify Unlimited brings down MOG pressure that will decide if (or, more likely, announced last month that it’s canning
the barrier to (paid) entry, while the free
US streaming service MOG All Access has when) MySpace Music goes premium. “We're its on-demand streaming service to focus
Spotify Open option looks like the long-term
been premium from the start, charging $5 a constantly talking to the record labels, and entirely on discovery and scrobbling. That
replacement for Spotify Free, capping usage
month for its mixture of on-demand music so that could change. Right now, we're a included signing deals to work with other
at 20 hours a month to encourage more
and personalised radio. Like Spotify and valuable music discovery service for them.” streaming firms like Spotify, MOG and we7,
upgrades.
letting their users scrobble songs played
on those services to their Last.fm profiles.
We7 “Engagement with features like user profiles
Previously solely ad-supported, we7 recently and personalised radio stations has remained
introduced its own tiered premium offering much higher than usage of on-demand
– with a £4.99-a-month online-only option playback,” said a blog post. However,
and £9.99 for online plus mobile access. That unsigned bands can still make their songs
mobile option is currently only available for available for full streaming on Last.fm – but
iPhone owners, with Android to follow soon. they won’t receive any royalties for doing so.
FEATURE the REPORT | 27 May 2010 | Page 6
The banners take it all? The future of mobile ads
Mobile full-track downloads still
haven’t taken off, but comScore
thinks labels are missing a trick
by not investing more in mobile
advertising. With a battle royale
brewing between Apple and Google
in that space, now may be a good
time to investigate mobile ads.
At the height of the ringtones boom, mobile
phones looked like a cash cow that the music
industry would be able to milk for years. Not
least because the next obvious step was
full-track music, bought and downloaded
over the mobile network. With big operators
queuing up to launch their music stores, the
future looked bright.
You don’t need us to tell you it hasn’t quite
worked out as planned. But more evidence
was provided last week by metrics firm
comScore, with the latest finding from its
MobiLens survey of European mobile users.
Across the five biggest European markets
– the UK, France, Germany, Italy and Spain –
54m people are listening to music on their
phones: equal to 23.8% of mobile users.
However, only 4.3 m people (1.9%) are
actually downloading music direct to their
phone over the network, compared to the
20.3% who are sideloading music from their
PC to their handset.
The percentage of mobile users downloading
music OTA has not overtaken the percentage
who download ringtones in any of the five
markets, although it’s likely to soon in the
UK, where the percentages are 2.1% and 2.2%
respectively. This says more about the faster
decline of ringtones there than any great
jump in full-track downloads.
None of this is surprising. However,
comScore’s Alistair Hill has drawn some
interesting conclusions from the survey
by cross-referencing it with the company’s
separate data on mobile advertising
campaigns.
ComScore asked mobile users in the five
European countries which mobile stores
they’re buying music from. Some 28% said
iTunes, but 22% said the Nokia Music Store.
Surprisingly close, given the common
perception that Nokia’s store hasn’t been a
roaring success compared to the iPhone-
fuelled iTunes.
Hill says he went looking for the reasons in
comScore’s datasets and found that Nokia
has been making heavy use of mobile
advertising to direct mobile users to its
store. It’s been placing banner ads on mobile
websites, some of which simply promote the
store itself, while others focus on specific
artists including Lady Gaga, Black Eyed Peas
and Rihanna.
He isn’t surprised that this is paying off,
though. According to MobiLens, of the 54m
people listening to music on their phones in
the EU5 countries, 42% have a smartphone
and 47% browse the mobile internet. That’s
compared to 25% and 25% for all mobile
users. “People who listen to music on their
phones are more likely to browse the Internet
and almost half own smartphones,” he says.
“Nobody [besides Nokia] is really bothering
to advertise music on the mobile internet,
and I think the music companies are really
missing a trick here. There’s an opportunity
to target people in terms of advertising at the
Miniviva
point where they’re consuming the music.”
things have gone quiet since the deal was
It’s true that mobile advertising hasn’t been a
announced.
big area of focus for music marketing. In the
last year, we’ve only written about one such So how big is the opportunity in mobile
campaign – for Geffen UK’s pop act Mini Viva. advertising? There are certainly a lot of ads
The label teamed up with mobile ad network being seen by mobile users. In the last nine
AdMob in September last year to run text and months alone, AdMob has served more
banner ads within iPhone and iPod Touch than 100bn ads within applications and
applications, sending people through to the mobile websites, while rivals Jumptap and
iTunes Store to buy the band’s single. Millennial Media are estimated to be serving,
respectively, 9bn and 7.3bn mobile ads a
Meanwhile, also late last year, EMI worked
month.
with cosmetics brand L’Oreal to run a mobile
advertising campaign promoting free Fierce competition has also helped mobile
downloads from a host of artists, including advertising to evolve. Beyond text links
Coldplay and Katy Perry. The campaign also and banner ads, there are now full-screen
ran online, but 95% of the downloads came multimedia and video ads, as well as
from mobile handsets according to EMI. advances in targeting letting mobile ad
campaigns focus on individual handset types
Another deal for AdMob in September saw
– good for ads that send people to a specific
it sign the exclusive rights to sell ads within
store like iTunes or Nokia Music Store – and
the Tap Tap Revenge music games from US
location. One problem is that labels can’t
developer Tapulous. The two companies
planned to work together on new mobile always measure the true effectiveness of
ad formats with a musical focus, although ads: they can see how many people tapped
The banners take it all? The future of mobile ads the REPORT | 27 May 2010 | Page 7
continued…
through to the iTunes Store from an iPhone
ad, but not how many of them went on to buy
an album or song.
Mobile ad networks admit that the music
industry is still at the exploratory stage when
it comes to mobile advertising. “Currently,
music labels are at a very small scale using
mobile sporadically to promote new releases
and tours,” says Marcus Startzel, SVP of sales
at Millennial Media. “Most of the actions
revolve only around immediate purchase,
versus engagement. Consumer engagement
is increasingly important for brands, whether
they are retailers, auto manufacturers or
artists. Mobile is a critical engagement point.”
Startzel says that movie studios have been
working with mobile ads for longer, and that
some of the lessons learned about effective
campaigns for films could translate well to
music. “There is now a clear art and science
in mobile movie promotion. There are times
within every campaign when the studio may
direct consumers to a persistent mobile site,
versus a landing page, versus downloading
a specific application. We know how far in
advance to trigger banner launch; we know
when to heavy up, and we know how to flex
the network model to help these key clients
reach their goals.”
If labels have been holding off, the second
half of 2010 may be the time to invest more
heavily in mobile ads. The market is about
to get a huge shake-up courtesy of Apple
and Google, who both now have their own
in-house mobile ad networks.
Google heard late last week that the
US Federal Trade Commission won’t
block its acquisition of AdMob, which
was announced back in November,
while Apple is about to launch its new Purchased a ringtone 3.7% 3.4% 3.8% 5.3% 4% 2.2%
iAd mobile ads service, based on the
technology of its recent acquisition
of one of AdMob’s rivals, Quattro
Wireless. iAd was the main reason the
FTC didn’t block the Google/AdMob
deal: it sees the upcoming battle between
Apple and Google as healthy for innovation.
But back to music. iAd will be part of the next
software update for Apple’s iPhone operating
system, OS 4, which is expected to be
available in mid-June. When it was unveiled
last month, CEO Steve Jobs explained that
iAds will be mini-applications in their own
right, which sit within existing iPhone apps.
Rich media is a big part of it: a Toy Story iAd
included interactive mini-games, while one
for Nike focused on video.
The potential for labels is clear: an album
could be promoted using a rich iAd with
audio and video, which takes people straight
to the iTunes Store to buy it. However, only
the biggest albums and artists are likely to
get the treatment in the early months of iAd.
Ad agencies say the cost of a wide-ranging
iAd campaign could be $1m, although that
may be bumped up as high as $10m for the
few brands that have iAds available when the
platform launches. Definitely for Lady Gaga-
% of mobile subscribers
Mobile music users EU5 France Germany Italy Spain UK
Listen to music 23.8% 21.1% 25.8% 21.1% 30% 22.6%
Listen to music sideloaded from PC 20.3% 17.6% 22.2% 17.8% 26% 19.4%
Downloaded music direct to mobile 1.9% 1.9% 2% 1.7% 1.6% 2.1%
Source: comScore
Data: Three month average ending March 2010
% of Direct to
sized marketing
Mobile music store Mobile downloaders No. of people
budgets, in other
words. iTunes Music Store 28% 1.2m
Nokia Music Store 22% 0.94m
Google and
AdMob haven’t Vodafone Music Store 13% 0.56m
announced their Orange Music Store 9% 0.39m
plans, although
Jamba 7% 0.3m
they’re expected
to launch Source: comScore
Countries: EU5 (UK, DE, FR, IT and ES)
something Date: Three month average ending March 2010
similar to iAd for
Google’s Android
smartphone operating system. In theory, apps, but the bigger opportunity might be to
Google’s huge databases and experience try to drive direct sales of the music itself.
in search and targeting could prove an
“The music companies should wise up to this
advantage too, to offer mobile ads that are
and start to think about how they promote
more effective than the competition.
to mobile,” says comScore’s Hill. “The music
In summary, the labels that have been industry complains about how hard it is to
ploughing their mobile marketing budgets sell digital music, but they may be missing
into standalone apps for artists may now an opportunity, particularly on iPhone. With
have more reason to divert it into ad the ease of downloading from iTunes on your
campaigns within other apps and mobile phone, why not put an advert out there just
sites. These adverts could promote the artist targeting iPhone and iPod Touch owners?”
TOOLS the REPORT | 27 May 2010 | Page 8

Statistics:
Radio Sales Mobile
Universal Music Group – Q1 2010 Shazam
Q1 2010 – UK Market share of US music retail –

24% Of all radio listening was digital (up from $1.1bn Revenues (down 13.4% Y-o-Y) 2009 25m
20.9% in Q4 2009) New users added in the last
1.7% Decline in digital sales (attributed 40.1%
26.7% six months
Breakdown of digital radio listening to weak ringtone sales) 12.5%

platforms Source: UMG, May 2010 7.1%

8.7%
75m
Sony Corp's Music division – fiscal year 4.9%
Total installed base
2% ended 31st March 2010 Source: Shazam, May 2010
2.9% iTunes Verizon Wireless, Sprint

$5.6bn Revenues (up 35% y-o-y) OTA full-track downloads

ADAB Nextel, T-Mobile, AT&T and

4%
Wal-Mart Zed

15.%
Digital TV
* the comparative figure is affected by the buyout
Best Buy Others
(UK, France, Germany,
Internet
of BMG's 50% stake in Sony BMG.
Amazon
Italy and Spain)
Other

1.9%
Source: Sony, May 2010 Source: Sony, May 2010

Online Of mobile users are down-

loading OTA full-tracks
Source: Rajar, May 2010
YouTube Vs MySpace Music (in one week) (nearly 4.3m people) in five
European countries
6Music, Q1 2010 Streams of Rank on site for Top 10 total
Rihanna's 'Rude Boy' Rihanna's 'Rude Boy' streams
Q1, 2009 Q4, 2009 Q1, 2010
YouTube 4,282,376 4th 57.3m
Listeners per week 681,000 - 1.02m MySpace Music 732,014 4th 7.5m 21% 28%
Average listening - 5.5 7.7 Source: BigChampagne, May 2010
7%
9%
hours per week 13%
22%

Source: RAJAR, May 2010 Gaming

6Music…
… plays three times as many unique songs as the average
Rock Band Network >400 Tracks made available by artists
9,000
Apple’s iTunes Store

station than any other station and labels since launch* Nokia Music Store

Users signed up for its free version *the network beta launched in January 2010 Vodafone Music Store
… plays four times as many songwriters get performance
royalties than any other station Rock Band Orange Music Store

700 Users that have upgraded 1,100 Songs that have been licensed Jamba

750 Songwriters who get paid by 6Music but

no other stations.
to the paid 'premium creators
membership' for the franchise
Other

Source: PRS For Music (chief economist Will Page), May 2010 Source: Harmonix, May 2010 Source: comScore, May 2010
TOOLS the REPORT | 27 May 2010 | Page 9

Dealtracker:
Google was extremely active over the past fortnight. Coupled
with new statistics on the company’s Android platform
(see stats page), Google announced a new section to its Android
Market which will allow people to browse songs on the web,
purchase them, and have them sent directly to their Android
phones.
Google also acted on the hot topic of the moment by acquiring
cloud content company, Simplify Media. Simplify Media’s
iPhone app has been removed from the App Store as Google
Deals
18.05.2010 – GVL – Germany
German collecting society GVL has created new partnerships with various international rights societies including
the PPL (UK), ADAMI (France), AIE (Spain), RAAP (Ireland) and SENA (Holland).
20.05.2010 – SeeSaw – UK
On-demand video service SeeSaw has added a number of premium content channels from partners including
the BBC, MTV, Comedy Central and Disney.
20.05.2010 – Myxer / Sony Music Entertainment – US
Myxer has signed a licensing deal with Sony Music Entertainment, which becomes the third
major label on its roster. VIEW all

plans to use its technology as part of the new Android music

store. Google also launched Google Wave to the public this
Launches
fortnight, as well as Google TV which will merge traditional
TV with web videos and incorporate lots of personalisation 13.05.2010 – Geodesic – US
US firm Geodesic is launching a cloud music app for iPhone, iPod Touch and iPad called Mundu Radio. It blends
features. access to internet radio stations with personalised playlists. The app will cost $2.99 to download, with no
further charges.
In the world outside of Google, US mobile content firm
Myxer signed a third major deal that will see Sony make full- 19.05.2010 – mSpot – global
Mobile entertainment distributor mSpot has launched a cloud-based mobile music service, allowing users
tracks, ringtones, wallpapers and other content available to upload their collections and stream songs from various devices.
through Myxer – but only in the US for now. Myxer has similar
agreements with Warner Music Group and EMI. 20.05.2010 – Google – global
VIEW all
Google is planning to launch a new section of its Android Market mobile store for music.

Mergers, Acquisitions & Investments

20.05.2010 – Google – global
Google revealed that it has acquired Simplify Media, a cloud-content company that lets people stream their
iTunes library to any device.

20.05.2010 – TweetDeck – global

TweetDeck has raised $3m in a second round of funding.

24.05.2010
Gaikai, a cloud-based video game streaming service, has raised over $10m in its second round
Click here to search all the latest deals, launches of funding.
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and investments across the globe

MARKET PROFILE the REPORT | 27 May 2010 | Page 10
India:
3G paves the way for mobile downloading
Last month, and after 121 rounds,
bidding for India's highly valued
3G spectrum (and the 71 licences
available in the 22 circles into
which the country is geographically
divided) has finally come to an end.
The 34-day auction not only brought in
an unexpected £10bn for the country's
Exchequer, it also marked the next stage in
India's mobile music industry and the genesis
of a full-track music download market.
For those unfamiliar with the market in India
need – it's all about mobile. In a country of
almost 1.2bn people, there are only 50m
fixed-line internet connections, of which only
16m resemble anything like broadband.
While the parallel market of mobile
broadband has haltingly jumped into this
breach and is growing rapidly, the real music
industry in India comes through the mobile
phone. Recent figures show more than 545m
mobile subscribers and a record number of
new subscribers in March of 20.31m.
Almost exactly a year ago, India’s leading
operator Bharti Airtel, with a 31% share of the
market, announced that its music revenue
had exceeded those of Saregama, India’s
largest music record company service
for the first time. This gap has broadened
considerably in the intervening 12 months.
At the time of writing Airtel’s mobile music
revenues now even outstrip SMS monies.
Vodafone has launched an interactive voice
response-based radio service, Vodafone
Music Junction, which offers customers
a library of more than 150,000 songs at a
monthly rental rate of 30 rupees (with a total
listening time of 30 minutes). This service is
of particular use to illiterate Indians who do
not need to read a SMS to set up the service.
Now that the 3G auctions are over with
Airtel, Vodafone, Reliance and Idea the
proud owners of pan-Indian licences, these
operators will be looking to reclaim the huge
licensing costs for 3G by taking mobile music
to the next level.
Faster mobile download speeds mean full-
track music downloads should be possible,
especially in the urban areas of India where
3G services are expected to begin and where
there is 77% mobile penetration as opposed
to only 13% in India’s rural areas.
Ringback tones (RBTs) still dominate the
market and currently take up more than
75% of mobile music revenues. Plus the
good news for the operators is that RBTs are
completely piracy-free.
This augurs well for paid-for full-track
downloads where even the most respectable
of Indians regard piracy as a legitimate
channel for content.
The goal is to convert this stealing culture
into purchasing full-track music and India’s
leading handset maker Nokia (with more
than 40% of the market) is attempting to
change attitudes. It offers unlimited free
music (via Ovi Music Unlimited, the local
name for Comes With Music) from its
library of 4m songs to its consumers on five
premium-priced handsets and freely admits
it is taking on the pirates.
Nokia won’t be the first and the last to try to
break the pirate’s stranglehold. Other labels
such as T-Series, which owns more than
200,000 songs and 30,000 music videos
and movies, has tried to battle piracy by
launching music on pen drives and memory
cards, but to little effect.
However, perhaps the pirates are not the only
ones holding back the growth of an already
explosive market; it may already be the three-
company cartel that is in place.
Music sales are heavily driven by movies with
three/four song and dance numbers being
launched per film and the music launch event
is the public’s first exposure to the film.
The aforementioned T-Series has the best
relationship with Indian film producers.
It pays up-front for rights and pays big. It
corners advertising and radio play and then
uses Hungama, the champion of the harmful
30%-70% revenue share between publishers
and operators, to distribute them.
Finally there is OnMobile, the platform for
RBTs and the company that has been the
default provider of RBTs since 2004. It
India stats
Population:
1.17bn (July 2010 est.)
GDP per capita:
US $3,100 (2009 est.)
Fixed-line internet users:
50m (2008)
Mobile phones:
545m
Exchange rate:
£1 = 66 rupees
Source: World Factbook
works closely with T-Series and Hungama to
effectively control the RBT market and will be
hoping to do the same with full-length music
downloads.
However, there is always the Spotify effect,
a service that is still not available in India.
According to a recent report by KPMG-Ficci,
80% of Indian mobile phone users would
happily accept a message from advertisers
in return for free music downloads, thus
bypassing the current delivery of RBTs by the
T-Series, Hungama and OnMobile triumvirate.
A lot can change in India in an hour, let alone
a day. It may be the emergence of MVNOs
and other flexible companies that may pave
the way for full-track downloads using 3G,
but that will happen if today’s incumbents are
complacent. It’s going to be an interesting
year.
OPINION the REPORT | 27 May 2010 | Page 11
Podcast, broadcast, streaming:
All consumption is equal under the stream
Danny Ryan, MD of Kudos Records Ltd.
Next month we quietly launch
our Playdio Service (on-demand,
interactive, playlist radio). Calling
Playdio a "service" is a rather
grand way to describe what is
really nothing more than bundling
spoken word with existing music to
create radio-like playlists. However,
Playdio does illuminate some
exciting broadcast possibilities. As
commercial streaming clients (both
standalone and web-based) become
ubiquitous, we rapidly approach
a point where there will be little to
distinguish between broadcasting,
podcasting and music sales.
Let's take the Playdio concept a logical step
further. Rather than just uploading static
spoken word segments to streaming music
services, let's say we were able to supply
live spoken word audio streams, with the DJ
of these streams able to remotely trigger
track plays from a service's catalogue on a
listener's computer or phone. Perhaps, using
some clever cache technology, the DJ could
also perform cross-fades, speak over intros,
use parts of tracks as sound-bed – all those
features we take for granted with linear
radio. All this would, of course, be housed
in a perfectly intuitive user interface for the
broadcaster.
Such an arrangement could provide many of
the enhanced user experiences of Playdio,
but in a live broadcast setting. Listeners
could graze. They could dip in and out of
the live radio show, add any tracks they hear
to their own saved playlists, and navigate
sideways through any artist's complete
catalogue. Alternatively, of course, they could
simply listen to the show while they do the
ironing!
Shows could be archived as Playdio playlists.
Playlist links could be emailed to friends,
posted to Facebook or tweeted to followers.
Premium service subscribers could listen
to them offline, on the Tube for instance.
And, of course, on Playdio each play of
each stream by any user in the chain would
earn the content creator (either the various
music rightsholders, or the DJ) an ad- or
subscription-funded royalty. Such a platform which simply cannot be bettered in the free
could put a complete music library at the environment; features that represent value to
disposal of even the most modest webcaster. the consumer.
A radio revolution is born!
A few years ago, one of the major label
The benefits to the consumer and the heads (I can’t remember which one) voiced
broadcaster are self-evident. The benefits to the opinion that "technology got us into this
the content owner are even more compelling mess, and technology will get us out". At the
time I thought he had completely missed the
Imagine:
point. I now think he might be right, though
• receiving international broadcast income I strongly suspect he had a different type of
monthly, untouched by a cascade of technological solution in mind.
collection societies;
All of us in the content business are grappling
• that servicing your digital retail partners with this new environment. We have learned
or aggregator IS ALSO servicing radio; that applying technology that only serves the
• having an audit trail of your broadcast needs of the content owner will simply not be
usage and an end to the unfairness of bought by the consumer. We need to develop
black box and blanket agreements; those services which appeal to the consumer
first and foremost. We can't compete with
• an end to collective licensing agreements
free on price, but we can certainly provide
based on arbitrary definitions of usage
far superior, more interesting and engaging
(interactive/semi-interactive/non-
services.
interactive).
The new digital environment and the supply
chains that have been established have
made access to market more open than ever.
Developments like the above could extend
that access right across a new broadcast
landscape where content consumption is
consumption, without any regard for what it
is, or how its bundled.
A record label's USP is no longer its ability
to control the supply of its music. Its USP
is now its exclusive ability to engage with
legitimate services that provide features
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