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November 6, 2007
Back to the future
I'm back at Virgin Megastores again, except it's now zavvi entertainment group following the recent management buyout. I'll be heading up online operations for the next few months, so expect posts here to be sporadic at best.
Of course, if you're buying any entertainment products you owe it to yourself to buy them from the site. And do let me know how you get on.
October 22, 2007
Why not subscription?
Interesting to note that AT&T and Napster have done a deal to offer Napster's 5 million tracks to AT&T customers. It appears to be aimed at mobile customers which might explain why they're going with a download-to-own model, but surely there's an opportunity to offer a bundled subscription service for an extra $5 or $10 per month.
Maybe it'll follow later but as I've said before this is the real opportunity in music delivery.
October 10, 2007
More momentum for music subscriptions
Tivo has announced a tie-up with Real Networks to make the Rhapsody Music Service available to anyone with a Tivo box and a broadband connection. The Rhapsody on TiVo service will cost $12.99 for TiVo subscribers, and be available at no additional cost to existing Rhapsody subscribers with broadband-connected TiVo boxes.
In a week when Ted Cohen argued that subscription services will win over a la carte purchasing, maybe this is one more step towards achieving traction. Two more things need to happen, however, before they'll really take off.
First there needs to be complete, seamless integration in the home between the set top box, TV, PC and sound system. This applies equally before digital distribution of film and TV can be successful. And second, the price will need to be absorbed into a total entertainment bundle from Sky, BT, Virgin Media or whoever. But it will happen, trust me.
October 1, 2007
BBC buys Lonely Planet
I see that BBC Worldwide has bought travel guide publisher Lonely Planet. As someone who is currently working on a new business with some areas of crossover with BBC operations, I'm starting to understand why the commercial sector must resent BBC entering into so many diverse areas and bringing its inbuilt competitive advantage into play.
Now, I don't know enough about the commercial arrangement or indeed BBC Worldwide's funding to write with any authority, but jeez, if I was in the travel publishing business I wouldn't exactly be doing cartwheels today.
September 26, 2007
They're killing my baby!
In the wake of the Virgin Megastores MBO, Virgin is also shutting down its digital music store and subscription service. I spent 5 months managing the development and delivery of the site, so I'm sorry to see it go.
Sadly, despite having a stunning user interface, a catalogue of 2.5 million tracks and the Virgin brand behind it, it was never going to work for a number of reasons.
First, the margin available after the record companies and musicnet have taken their share is tiny - pennies per track. So the only way to make money is to sell large volumes of tracks.
This needs investment, which Virgin has been unable to provide. It's hard enough supporting a retail chain in a declining market, let alone sinking money into an online service with less than 1% market share, that will take years to become profitable - if it ever does.
Then there's Apple, which of course, dominates the download market. It's somewhat easier for Apple to operate in this market since its real objective is to sell iPods, not music. The only way to take on iTunes is to compete on one or more of catalogue, convenience or price and it seemed to me that there was a lack of flexibility and interest from the record companies in supporting attempts to do so. Virgin wasn't able to.
Amazon might, though - its new download store is offering higher quality (256Kbps) tracks at 89 cents (10 cents less than iTunes) with the benefit of Amazon's one-click buying. There's also an MP3 Downloader application that automatically adds purchased tracks to iTunes or Windows Media Player libraries. It's been a long time coming, but hopefully Amazon will provide the real competition that the market needs.