Blog

iTunes drops DRM – embraces variable pricing

Nick | 07 Jan 2009, 09:42

Apple Inc has announced major changes to the way its iTunes digital music store will operate, including:

- Songs downloaded on its iTunes Plus service will be free of digital rights management protection (DRM)
- Variable pricing at three different price points
- 3G iPhone users will be able to download tracks and ringtones directly, opening up a new and potentially lucrative market

FT.com reports:

“EMI, the UK music group, agreed to drop DRM in 2007. Vivendi’s Universal Music, Sony Music Entertainment, Warner Music and many independent labels will now follow suit.

“The three-part agreement, heralded by Tony Bennett singing ‘The Best Is Yet To Come’, could boost digital music sales, as the iTunes store is by far the largest download service, having sold 6bn songs to 75m customers since it launched six years ago.“

Music Industry Blog suggests that despite the dominant player choosing to abandon DRM, the technology will continue to play a key role in future:

“It is, however, crucial for future differentiation of the next wave of digital music services. Subsidized and ad supported services such as Qtrax and Nokia’s Comes With Music give consumers music for free but with DRM restrictions. DRM will become the key tool for differentiating premium from subsidized. The more you pay, the less DRM you have.“

The changes to iTunes are the result of protracted negotiations with the music labels, which have been able to develop a position of greater strength through the cultivation of alternative services, such as those provided by Amazon, Nokia and MySpace, which now pose a real threat to iTunes’ market share. 

The complex dynamic between content producers, platform owners, format developers and the consumer is a central issue for much of the creative economy. C&binet seeks to encourage co-operation and sharing of best practice across the spectrum of creative industry.

Quincy Jones leads call for creation of US Arts Secretary post

Nick | 06 Jan 2009, 11:47

Quincy Jones, the legendary US musician and producer has called for President-elect Obama to create a new position of Arts Secretary, prompting nearly 10,000 people to sign an online petition in support of the idea.

“My passion in life now, and one of the first conversations I’ll have with President Obama, is to beg for a Secretary of the Arts,” he told a New York radio station on 15 November 2008. He has repeated his call on a number of occasions since.

One of the key challenges to developing a coherent set of supra-national policies for the creative economy is that there is no standard international definition of the creative economy. The US is the world’s single biggest market for the arts. Recently, Secretary of State Andy Burnham, in an article on the Huffington Post expressed his wish that the Obama administration would present the opportunity to establish a new US-UK dialogue on many of the challenges facing the creative industries and that c&binet could help to play a facilitating role. Mr Burnham’s department, the Department for Culture, Media and Sport has no obvious counterpart in the US.

Although an Arts Secretary would only have a remit to address one aspect of the creative economy, the establishment of such a post would recognise the importance of creativity to US social and economic development.

Graphic designers save the world

Nick | 05 Jan 2009, 14:34

In this recent article on c&binet we suggested that a key challenge for creative consultancies is to demonstrate their value as problem solvers. Similarly, much of the discussion at the Liverpool c&binet dinner was focused on how the forum could be used to serve a higher purpose – to address wider challenges than simply money-making.

A Dutch design company SPRANQ has shown how it can be done, by developing the “ecofont“, a simple creative innovation which helps to reduce a problem faced by virtually every business – by cutting printer ink consumption by up to 20%.

As the Guardian (UK) Environment Blog says:

“Sometimes, life’s simplest innovations can turn out to be the most useful… As it’s now widely accepted that printing should be minimised, there seems little reason as to why most homes and workplaces couldn’t switch some or all of their printing to the new typeface.

“All right – a new typeface isn’t going to solve the planet’s problems, granted (and it might not be the best choice to use in a cover letter for that dream job), but surely innovative thinking like this is a positive step in conservation on any scale?“

SPRANQ has made the design free to download.

Peter Molyneux: Dry 2009 could put pressure on prices

Nick | 05 Jan 2009, 10:59

C&binet ambassador Peter Molyneux  has told the BBC that he expects 2009 to be a “dry year” for the video games industry and believes there will be pressure on prices.

“2008 was the year that the Nintendo Wii got even better, more than anyone really thought possible when it first launched. The 360 did well, although it was put into the shade somewhat by the Wii. PlayStation 3 has been disappointing to say the least.

“We – as developers – are finally comfortable with the next-gen consoles and we saw a slew of sequels this year. Gears of War 2, Fallout 3, Fable II, the seventh Tomb Raider. We’ve got into a rhythm [of sequels at Christmas] which is all fair and well while people are buying games but we have to make sure we don’t get complacent.

“Next year, well, it’s all looking a bit dry… Everyone says games are good value for home entertainment, despite the relatively high price. I’m not so sure. I think we’re going to see a lot of price pressure put on games.

“And as for Lionhead: now we’ve got Fable II out of the door we can focus on our other project – it’s super secret for now – but we might announce it next year.“

Digital drives rise in US music sales

Nick | 03 Jan 2009, 09:24

Album sales down overall

Nielsen’s annual US market report shows that overall music sales rose in 2008 despite a drop of 14% in sales of physical albums.  The uplift was driven by a rise in digital album and single sales of 32% and 27% respectively, which took the total number of downloaded songs past the 1 billion milestone for the first time. These figures are expected to reflect an overall decline in the US music market, even after alternative revenue streams such as licensing and artist 360 deals are taken in to account.

“You can see the overall unit sales as a positive, but their model is really built on album sales and that just continues to decline,“ said Silvio Pietroluongo, director of charts for Billboard magazine. “Music consumption has never been at a higher clip, it’s just a matter of trying to turn it into revenue,“ he added.

The LA Times reports that:

“Universal Music Group remained the industry’s big dog, with a nearly 32 percent share of the album market, followed by Sony BMG Music Entertainment, at 25 percent. Warner Music Group claimed 21 percent of sales, and the smallest of the major labels, EMI Music, had a market share of 9 percent.“

Meanwhile, The Times (UK) predicts that figures for the UK market in 2008, due out later this month, will show that:

“Total UK music sales will have fallen to £1.33 billion, if the 10 per cent decline is confirmed. However, executives were hoping that Christmas success of Take That’s The Circus, and the single sales of Alexandra Burke’s Hallelujah would improve the picture, reflecting the fact that sales of the top albums are holding up.

“A spokesman for Universal Music UK, the record company behind Amy Winehouse, said: “Ten years ago, an album just getting in the Top 20 would end up selling 75,000 copies. But today, it’s going to sell about 50,000 – and when the market is down like that, it makes finding the big hits more important. It is the middle of the market that is weakening.”

“Last year, global sales fell to their lowest level since 1986, and this year’s continuing decline in the UK and US – two of the top three markets – will see the industry hit another low.“

Immersive video gaming could be growth area for education industry

Nick | 02 Jan 2009, 09:47

Research by the Harvard Graduate School of Education and published in Science suggests that virtual gaming can help students develop develop critical-thinking skills and enhance their understanding of science and maths and can be particularly beneficial for students that respond poorly to traditional teaching environments.  Professor Chris Dede explains:

“Many academically low-performing students do as well as their high-performing peers in River City [one of the games assessed in the study]. By stepping out of their real-world identity of poor performer academically, which shifts their frame of self reference to successful scientist in the virtual context.“

The research implies that closer collaboration between educational publishers, software and video games developers could be an important growth area for the creative economy in future. Educational software and gaming is still relatively small compared to the publishing industry. According to Thad McIlroy on The Future of Publishing:

“The combined print publishing business for the education industry is worth in the range of $20 billion per year in North America. Depending of which figures you accept, this could represent some 50% of total book sales.“

The US educational software market, by comparison, is worth only $2 billion and a recent study for the US Department of Education cast doubt on the effectiveness of many new tools compared with traditional teaching methods.