The New iTunes

In an effort to stay ahead of the market and respond to what the critics say are shortcomings, Apple has made some significant changes to it's market-leading iTunes music site.  Here are the upgrades along with some comments:

• 3 pricing tiers - $.69, $.99 and $1.29.  Sounds good on the surface but the last thing the music industry needs to do is increase the price of any music with the economy in the shape it's in (Been to a mall lately?)  In theory the $.69 price point is attractive, but just how many of the songs that you really want do you think will be priced at this point? And how many of the hits do you think will be priced at $1.29 (how about all of them). Will be good for new artists though.

• Most albums still priced at $9.99.  Just image how much more music would be sold if the price for catalog (older albums) was $6.99?  That's the kind of initiative the music industry should be taking to increase sales (they do it already on CDs).

• DRM free.  DRM stands for digital rights management, which is built-in restrictions on illegal copying.  Another item that sounds good, but the only people who really ever seemed to care about DRM were the people that were going to steal it anyway.  Nice gesture but ultimately irrelevant. 

• Wireless downloads to the iPhone.  Now this is something to get mildly excited about. Until now you had to buy the song via iTunes on your computer, then transfer it later to your iPhone. This feature eliminates an unnecessary step.

• iTunes Plus.  Also looks like it might be a cool addition, but at a price. Not only do you get better audio quality thanks to the 256kbs encodes, but it will play on as many computers as you want, instead of the 5 that you're now limited to. The price is an extra 30 cents a song or 30% of the album cost. Worth it? To many consumers, probably not. To Apple? Let's see: 6 billion downloads x .30 = $1.8 billion!

So despite what it may look like on the surface, this announcement is anything but groundbreaking. Interesting, yes, but don't look for the future of digital music downloads to change a lot as a result. For more details, check out the Apple press release here.

9 All-Time Bad Tech Predictions

The prediction business is always like walking a tightrope over a waterfall. You're a lot more likely to fall off than make it to the other side. Here are a few of the most egregious forward-looking flubs of the past 109 years, courtesy of Info World:

• "Everything that can be invented, has been invented." - Charles Duell, Commissioner of the US Patent Office, 1899

• "I think there is a world market for maybe five computers." - Thomas Watson, president of IBM, 1943

• "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." - Darryl Zanuck, executive at 20th Century Fox, 1946

• "Nuclear-powered vacuum cleaners will probably be a reality within ten years." - Alex Lewyt, president of Lewyt vacuum company, 1955

• "There is no reason anyone would want a computer in their home." - Ken Olsen, founder of Digital Equipment Corporation, 1977

• "Almost all of the many predictions now being made about 1996 hinge on the Internet's continuing exponential growth. But I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse." - Robert Metcalfe, founder of 3Com, 1995

• "Apple is already dead." - Nathan Myhrvold, former Microsoft CTO, 1997

• "Two years from now, spam will be solved." - Bill Gates, founder of Microsoft, 2004

• "The Macintosh uses an experimental pointing device called a mouse. There is no evidence that people want to use these things." - John Dvorak, noted tech writer and columnist, February 1984.

After the upcoming CES, NAMM and NAPTE conferences this month, I'll provide some trends and music and technology predictions for 2009.  Stay tuned!

Games As A Music Revenue Source

Games like Guitar Hero and Rock Band have been a big help to the bottom line of record labels and games alike. Through November, about 22 million units of Guitar Hero have been sold since its introduction in 2005, with another 5 million units of Rock Band since it came on the market in 2007.

While the major labels complain that the licensing fee is only a fraction of what it should be, artists are making out just fine since they also control (and therefore license to the game maker) their image and likeness. In fact, it's been reported that Aerosmith made more money from the June release of Guitar Hero: Aerosmith than either of its last 2 albums.

At first glance this seems like the future of the music business. After all, everyone wants another revenue stream to replace what's being lost from the decline of the CD. The problem is that the only ones who benefit are the ones who need it the least - the legacy artists like Aerosmith.

If the music industry is to survive, it needs ways to promote new artists and new music. It needs a musical "farm team" where the artists learn their craft then make it their art (remember - "art is something you do for yourself: a craft is what you do for everyone else"). And it really needs new revenue streams to sustain these artists on at least a subsistence level until they graduate from to the big time. Unfortunately games aren't the answer.

Digital Sales Hit New Weekly High

According to Soundscan, US digital sales hit a new high for the week of Dec. 22 - 28 with 47.7 million sold.  That's an increase of about 126% from the previous week.

Why such an enormous sales increase?  People filling up iPods to be given as Christmas gifts for one thing.  Redeeming iTunes gift cards received over the holidays is another.  Either way, it was a big end of the year for digital music.