Telstra has revealed the addition of almost one million new mobile services in the six months to December 2011, but Sensis revenues plummeted 24 percent in 12 months.
When I first heard that the New York based SpiralFrog website is going to offer free music downloads supported by advertising, I have to admit I was sceptical that it would make any serious impact on Apple's dominance of the online music market.
Even though Universal Music had signed a two year deal with SpiralFrog,
I thought, "So what?" Universal was just one company and the departure
from user pays for downloads to an ad driven model was just too radical
and untested. However, now that EMI has also signed with SpiralFrog,
I'm not so sure.
Let's face it, music lovers hate paying for their music. When the
original Napster file sharing service hit the scene, it was an
overnight sensation.
Then filesharing music was made illegal and Apple siezed the
opportunity to introduce a relatively inexpensive way for users to
download the music tracks they liked, subject to strict digital rights
management rules. Users still didn't like paying for music but being
able to choose 20 of your favourite tracks at your leisure for less
than US$20 and being able to build your own library was acceptable.
However, no one in their right mind would choose to pay for something
that they can get for free, especially music. In the case of
SpiralFrog, from December US users are going to be able to download
music from two of the biggest recording companies in the world for zero
charge. It will all be advertising supported.
This is one of those paradigm shifts that companies that dominate
markets such as Apple and Microsoft fear. There may be 50 million iPods
in the market but the alternative players are springing up like flowers
in full bloom. Most of them have licensed the Windows Media Player DRM
and, although SpiralFrog will not support downloads to CD, these days,
you can substitute digital music players for CDs in most instances and
they make more sense, given that it is becoming common to plug them
into the home and car hifi systems.
I am certainly not alone in thinking these thoughts either. We just did a recent poll on iTWire and the results are revealing.
The poll asked the question: Will iPod lose market share to the new
online music services and MP3 players coming on the market? The result
was split almost down the middle. Of 370 respondents, 191 (51.6%)
answered no, 179 (48.4%) answered yes.
It must be stressed that at present we are talking about SpiralFrog
versus iTunes not MySpace versus iTunes. MySpace is a different kettle
of fish because to date MySpace has not signed any deals with recording
companies. However, that may happen and, if it does, MySpace will
become a serious player in the music space. On that day, Apple might
just have to do some serious thinking about retructuring the iTunes
business model if it wants to keep driving iPod sales.
David Bass
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