Week of September 3, 2007

Apple's Tagging Strategy

Friday, September 7, 2007

Two news items this week shed light on what Apple's future strategy is for building its domination of digital music sales. The basis of the strategy is for users to "tag" songs they like--no matter where they hear them--and then have the iPod later sync up and purchase/download those songs from iTunes.

The first indication of this was a pretty explicit implementation as announced by the HD Radio camp. The next generation HD radio sets will be integrated with the iPod to allow song tagging. This means that you can mark ("tag") a song while listening to your HD Radio, and when you later dock your iPod onto the unit, it will download the song to your iPod via iTunes.

The other news item was more subtle but cleared the decks for this tagging strategy. This was the release of the new wi-fi enabled iPods announced on Wednesday. While nothing in regards to tagging was announced, the rumors of such a capability were swirling well ahead of the launch announcement, and implementation would be easy. With the new iPod, a user could conceivably listen to any kind of Internet-based streaming audio and tag songs they like for future iTunes purchase.

The future with such an implementation is pretty clear: Users can listen to practically any audio content source--from terrestrial radio to a podcast--and then simply push one button to purchase, download, and then own the song. One of the hurdles for Apple is that such a process involves a lot of different pieces, and these kind of things tend to work better with open standards. So while Apple is putting the pieces in place for a tagging world, expect both the open source community and other companies to be doing the same thing.

Congress making noise about terrestrial radio royalties

Thursday, September 6, 2007

In an interview with the San Fernando Valley Business Journal a few days ago, Congressman Howard Berman of California indicated that the topic of performance royalties for terrestrial radio will be may be addressed again. Berman is the Chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property. While this committee does not have jurisdiction over the FCC, it has the power to pass laws affecting performance rights and copyright law.

Berman's committee is in the middle of the controversy over performance rights of Internet broadcasters. When asked about other issues affecting radio that his committee might address, Berman brought up the idea of repealing terrestrial radio's exemption from performance royalties. He said that he believes that terrestrial radio should pay a percentage of revenue for the sound recording rights, just as it does currently to the songwriters.

Radio stations in virtually every other country around the world pay performance royalties, as do webcasters. In fact, terrestrial broadcasters also must pay this royalty if they choose to stream their station online. The exemption is simply for the terrestrial broadcasts, which historically has been one of the main reasons that terrestrial radio stations in the US have been reluctant to stream.

iPhone outsells all other smart phones

Wednesday, September 5, 2007

According to iSuppli, an online research group, in July, its first full month on sale, the iPhone outsold all other smart phones, including Blackberry, Palm Treo and phones from Nokia, Motorola and others. The iPhone got 1.8% of the market in July. That figure matched the sales of LG's Chocolate, one of the most popular phones on the market this year. According to the research, the typical iPhone buyer is male, under 35 years old, a college graduate...and $500 poorer this month.

Microsoft Loses Office Document Battle

Tuesday, September 4, 2007

Microsoft was presenting its new Office XML document format to the international standards organization (ISO) so that it would be made the standard for all office-type documents (spreadsheet, word processing, etc.). It lost its "fast track" application by a mere percentage point. The company can now adjust its proposal based on objections from those that didn't vote for it and re-submit in 2008.

If approved, the document format that Office now uses would be open and usable by all companies (like the common jpg format for photos). The fear from those that didn't vote for standardization is that Microsoft would control the development of the format, even with it being an open standard.