Would You Like a Digital Tune with Your Latte?

Starbucks has always had an involvement in the music industry, selling CDs at the cash or even, in some locations I've seen (in the U.S.), equipped with digital music download stations where you can make your own custom CDs. Now, the java-fix supplier is teaming up with iTunes to offer a free Pick of the Week digital download to customers.

Visit any of 700 company-operated Starbucks locations in Ontario or Western Canada on a Tuesday, and the barista will hand you a complimentary download card with your purchase, good for 60 days to snag a music track on iTunes. You can't get any track you want, though. Each week, a particular song will be chosen by the Starbucks Entertainment Team and iTunes, and will include both Canadian and international artists. The promotion begins today, and the first Pick of the Week tune is Constant Knot by City and Colour.

Considering that Starbucks is a daily destination for many, this promotion could prove quite fruitful. Think about it: you'll get four free songs every month, and up to 48 a year! This is, of course, assuming that the store isn't "out of stock" by the time you arrive for your morning hot grande mocha java dark half-decaf no whipped latte. It's also great for artists, since customers will, assuming they download the tune, be exposed to new music they might never have otherwise been introduced to. And iTunes benefits since you'll have to download the iTunes software if you don't already have it; and might end up purchasing other tunes while you're there.

On the flip side, though, one could argue that the cost of that free song is already included in the high price you pay for the coffee. Either way, at least now you're getting something for that extra $0.50 you're forking over per drink. I'd be curious to know how many of the free tunes end up actually being downloaded versus forgotten in the back pocket of business men and trendy teens.

What's Had More Influence: the iPhone or the iPod?

The iPhone has stirred up the wireless industry like no other mobile device has. We haven't seen this much hoopla surrounding a product launch since, well, since the iPod came to market back in 2001. It's incredible that Apple has managed to challenge existing industry standard with not one, but two of its portable devices; especially since the company's history is as a PC manufacturer! But which product will have more of an impact on tech society as we know it: the iPod or the iPhone?

There's no doubt that the iPod is winning that race already. Not only because the device has been in existence for almost seven years now, but also because it has literally changed the way people listen to music and access content. Coupled with iTunes, the iPod defines a generation that surfs virtual albums on-the-go, and, arguably more important, downloads music from the 'net rather than purchasing physical CDs in store. The iPod used to be given flak as a device that encouraged low-quality music consumption and discouraged an appreciation for true audio. But with increasingly high-end docking systems, compatibility with a host of A/V receivers, and even audiophile tube amps from companies like Fatman, the iPod has been transformed into a gadget that simply encourages music in every way possible. And with the addition of photo and video playback, it has also helped fuel the shift toward portable media players, not just portable audio.

Meanwhile, the iPhone, which found its way into the U.S. market a year ago, has already shaken up the wireless industry. I'm not just talking about here in Canada, where the upcoming release of the highly-coveted gadget has caused consumer protest against high data rates. In the U.S., Apple managed to gain the kind of control over distribution and pricing of the phone that no other wireless manufacturer has been able to accomplish. Many have argued that the iPhone has begun an era where the wireless handset manufacturer has more control in what the consumer ultimately pays and receives, not the carrier.

So while the iPod has had a major impact on the industry, the iPhone, which is essentially a highly-sophisticated iPod that adds a larger screen, mobile phone, web browser, and WiFi functionality, will extend that reach. Add to these features its ability to accept third-party applications, and essentially transform into a full-fledged on-the-go computing device, and the iPhone will reach markets that the iPod merely skimmed.

The bottom line? Both of these devices have been influential to the technology sector. Perhaps 7 years from now, we can revisit this question again to see what each product has evolved into.

Happy Independence Day to our neighbours to the south!

Media Convergence is a Reality

The convergence of all sorts of media, from TV to print to online, and even radio, is an undeniable reality. But ever so often, I'll experience something that really opens my eyes to how much crossing over is actually taking place, in large part, due to emerging technologies. This time, my eye-opening experience came from two e-newsletters about a pair of my favourite TV programs, both of which appear on the pay-TV Showtime network.

The primary purchase of each e-newsletter was to advise me that the new season would begin in September. But this wasn't the only focus: I was also informed on the many ways I could catch up on or review older episodes. The first method was one I already know about: watching them on-demand through my cable TV provider. Of course, I can also purchase the first season on DVD at my local retailer; or pre-order the second season DVD. But other, not-so-typical options included downloading the first two seasons on iTunes (U.S. customers only, of course); and joining the official Facebook fan page. So while the e-mail clearly advises that Showtime is the only place I'll be able to access the new season once it starts in September, the network has found multiple ways to keep me engaged before then, as well as monetize its existing product.

In a separate newsletter for the second show, the options became even more tech-savvy. I was told about things like a behind-the-scenes blog; and a neat Wiki where fans can do things like write their own episode guides, add to character profiles, and add images or stats on the actors.

It's a far cry from the days when I would handwrite a fan letter and mail it to an actor I had a crush on, only to receive a photocopied letter and signed photo in the mail 6-8 weeks later. Now, avid TV watchers can actively interact with the shows, and have multiple ways to catch up on old episodes. This emphasizes not just the rapid convergence of media industries, but also the reason why: consumers want choice in the way they interact with and consume content. I won't be entering any Wiki information, nor downloading episodes via iTunes (even if I could). But knowing that the options are there, and that people who do prefer those methods can engage in them, is satisfying in itself.

Is Apple Biting the Hand That Feeds it?

Is Apple biting the hands that feeds it, i.e., itself? This very question was posed to me the other day by a colleague who was trying to figure out Apple's strategy of offering iPods with massive capacities, yet iTunes songs as paltry 128 Kbps (or, in some cases, 256 Kbps), digital files. It's highly unlikely that the average consumer could fill an 80 GB iPod with tunes of such a small size (it would take approx. 20,000 128 Kbps 4-minute tracks to do so!), so what does Apple expect us to fill these nifty devices with?

The obvious answer is "other stuff". Higher-quality songs ripped from physical CDs, downloadable videos, including podcasts, TV shows, and full-length movies (much of which can be obtained from iTunes), and even photos. Let's face it: iPods aren't just for music anymore, which is why capacities are getting so huge. Not to mention that content loaded onto these portable players won't always be exclusively from iTunes, despite how this might be the ideal scenario in Apple's eyes.

Nevertheless, my colleague, who's a heavy iPod (and iTunes!) user, pointed out the obvious paradox between what's offered in the hardware and what's offered in the software, and how this can be perceived by dedicated music lovers. We'll give you massive storage capacities, like 80 and 160 GB, but the best quality tunes we can offer for you to load within these hard drives is 256 Kpbs ? "The last song I downloaded from iTunes sounded horrible," he told me. "I'm thinking of just going back to buying CDs and ripping the music onto my iPod."

Realistically, if most people thought this way, it would be the answer to the music industry's prayers! Is it all a conspiracy? A strategically concocted plan to offer semi-mediocre content online so that, once consumers get over the initial honeymoon phase of digital downloading, they go back to appreciating pristine audio quality again and buy CDs? I doubt it. But it does leave something to think about.

Going forward, my colleague predicts a significant drop in iTunes downloads as more and more consumers become fed up with the audio quality of digital tunes and move back to buying CDs that they can rip and load onto their iPods. After all, they have to fill those massive hard drives somehow! I tend to think the other way: that, rather than consumers moving away from downloadable sites like iTunes, the tracks offered by such sites will become better in quality as time goes on, and DRM (hopefully) becomes a thing of the past.

As for today, iTunes just surpassed Wal-Mart for the title of number-one music retailer in the U.S. The download site has more than 50 million members, and has sold more than four billion tunes since it launched back in 2003.

Which way will things go? Only time will tell. What's your prediction?

TV Content Going to the Web, Web Content Going to the TV...I'm Confused

The "hot" trend today is to take TV content, like popular shows, movies, clips, and even commercials, and make them available online. But it also seems that there's a rapidly growing trend to do the reverse: take Web (or just PC) content, like YouTube videos or family home movies, and make them available for the big-screen TV experience.

iTunes is the obvious example of the former, offering tons of movies and TV shows for download to the PC. But there are plenty of other sites and services that do much the same: YouTube, Joost, Miro, and Slingbox are just a few. The advantages to this are obvious: you can watch video on-the-go (in an airplane or train, for example) rather than being tied to your living room. In many cases, you're also able to load that video onto a portable device, like an iPod or other media player, for an even more "portable" and untethered experience.

But wait: now that we've perfected (albeit with nasty copyright restrictions) the TV-to-Web experience, the exact opposite trend is emerging, bringing valuable Web and PC content to the TV. Enter devices and services like AppleTV, Xbox LIVE Marketplace, and, most recently, YouTube, which has just partnered with TiVo (in the U.S.) to permit playback of its videos on the big screen via a new TiVo DVR and software upgrade.

While it appears that the Web is king, there's also an inherent desire to enjoy video the way we've become accustomed to doing. So while there is tons of cool, user-generated video online, and while you can watch your home movies on the computer screen, people still want to gather 'round in the living room and enjoy the fancy new big-screen plasma or LCD. On that same note, we've grown to understand that the Web can serve as a sort-of archival storage space for all kinds of neat video. If you saw a hilarious commercial on TV last night and want to share it with a co-worker, it's probably available online. If you want to learn more about a breaking news story that interrupted your fav show, there's probably video footage on the Web that provides additional information.

For someone looking from the outside in, this might all sound confusing. First you want to access TV on the Web, but then you go back to watching the TV in your living room anyway? I don't get it. But really, it's not an either/or situation. What consumers want is the ability to access all kinds of content everywhere. In other words, producers of content that's typically available through cable or satellite providers can benefit a lot from what the Web has to offer, and vice versa. It's almost a no-brainer proposition.

Falling CD Sales, P2P Sites Still Plague Music Industry

A new study conducted by The NPD Group confirms that CD sales continue to fall, and peer-to-peer download Websites remain a problem for the music industry's profitability and sustainability. According to the research group, U.S. consumers acquired 6% more music in 2007, but music spending overall was down by 10%, from US$44 per capita to US$40.

Why? Even though the number of Internet users that engage in P2P downloading remained flat at 19%, the number of files each person downloaded went up. What's more, the habit is becoming increasingly popular among the teen and "tween" crowd.

Making the situation even worse, NPD says that approx. one million customers completely stayed away from buying physical CDs in 2007. Almost half (48%) of teenagers said they did not buy one CD throughout the entire year!

Despite the grim outlook, there is a small silver lining. NPD reports that legal music downloads were up 5% when compared to 2006, representing 10% of music sold in 2007, with 29 million U.S. customers having obtained their digital tunes legally. Not surprisingly, Apple's iTunes service led the pack. But what is somewhat surprising is that iTunes was the second most popular spot to obtain music overall, overcome by only Wal-Mart!

If that isn't a clear indication of the direction the market is going, I don't know what is. The world's largest retailer sold the most music, which makes perfect sense. But to say that a digital download service rather than a traditional retailer came in second is an incredible achievement.

Now that the mistake-that-is DRM restrictions is slowly fading to oblivion, we might see interest in legal download sites rise this year. If the industry stops trying to find bundles and wonky subscription rates/plans and just focuses on giving customers tunes they want for a set price (either individually or by album), this would be a good start. Buying music digitally should be just as easy as it is to buy a physical CD. I just want to buy good quality tunes that I can play anywhere I want. No bells, no whistles, and no restrictions.