From Apple to Vudu: 8 Netflix Alternatives Compared

Mike Isaac
September 21, 2011
http://www.wired.com/gadgetlab/2011/09/netflix-alternatives

The curtain hasn't even opened on Netflix's new DVD-by-mail spin-off company Qwikster, and many customers are already walking out.

The company recently revised its quarterly projections of net subscribers to show 1 million fewer customers than it had previously expected. Much to Netflix's chagrin, folks are realizing that the king of mail-away media isn't the only game in town.

We've taken a look at some of Netflix's (and Qwikster's) main competitors, and judged each service accordingly. Do the rest offer enough to stand up to the best?

Netflix/Qwikster

Also known as Netflix: Redux. It's the same service we know and love, only completely different. Faced with massive customer backlash in the wake of a price hike, Netflix split itself into two separate companies this week. The streaming service will retain the Netflix branding while the DVD-by-mail service will be named Qwikster. Netflix CEO Reed Hastings said the split will better serve customers in the long run because each company will be able to better focus on one type of service.

Netflix pioneered the DVD-by-mail service, creating an entire industry where one did not exist previously. But after serious flux in Netflix's new pricing system — which split the streaming and DVD mailing services into two separate plans starting at $8 a month minimum — there's no guarantee the company's customers will continue to stick around.

WIRED: It's been around the longest, and is the most familiar service. Massive offering of physical mail-away media. New game rental service sounds intriguing. Streaming to all iOS devices and Android smartphones.

TIRED: Can you say price increase? We don't like paying more money for the same service, and we're failing to see how splitting the companies in twain is going to benefit consumers. Streaming-only service still lacks selection compared to DVD catalog.

Amazon Prime

Amazon's elite-level service launched in 2005, offering two-day shipping on any of its products to members anywhere in the continental United States and other select countries for a reasonable $80 a year. Originally meant for those who couldn't wait more than 48 hours for their tangible goods, Prime expanded in February to offer instant, streaming movie and TV show access to existing Prime customers at no added cost.

WIRED: Fast shipping on everything Amazon! What other movie service offers that? Lower yearly rate than Netflix and Qwikster. Works with over 100 different web-connected set-top boxes, including the ever-popular Roku.

TIRED: Smaller media selection compared to other existing services. Lacks the DVD rental option that made Netflix famous.

Redbox

Redbox made it possible for legions of supermarket shoppers to pick up a movie on the cheap, without having to make multiple stops. Instead of leaving the grocery store (or 7-11, Walgreens or what have you) with only a TV dinner and a Mountain Dew in tow, Redbox's 30,000-plus DVD-rental kiosks make sure you won't go home alone on a Friday night again.

WIRED: Cheap, cheap, cheap. DVD rentals average two bucks a pop, with anywhere from 50 to 200 recent titles to select from in each kiosk, updated weekly. Game rentals to roll out this year.

TIRED: No streaming service? Bummer.

Blockbuster

Once the dominant force in the media-rental industry, Blockbuster has fared horribly over the past few years. After scoffing at Netflix's business model years ago, the big blue-and-gold company filed for bankruptcy last September.

However late, Blockbuster jumped on the bandwagon with its own Netflix clone mail-away service, but with the added advantage of allowing customers to return DVDs to brick-and-mortar Blockbuster stores. And finally, Blockbuster Express is a blue-and-gold Redbox rip, with kiosks placed in grocery stores and Kwik-E-Mart's across the country.

WIRED: The Dish Network acquisition could mean big things for Blockbuster when (or if) the companies get a game plan up and running.

TIRED: Brick and mortar is slowly dying, so the leg-up Blockbuster has on Netflix with in-store DVD exchange may soon be moot. Ripping off its two major competitors shows a lack of ability to innovate, possibly signifying that the company is still behind the times.

Hulu Plus

At $8 a month, Hulu Plus offers instant streaming access to a wealth of TV shows only a day or so after they've originally aired. But seriously, if you're paying a monthly fee, you shouldn't have to deal with mid-show commercial breaks. That's the whole point of paying for streaming service, right?

Still, I challenge you to find a more comprehensive archive of Hell's Kitchen reruns on the web.

WIRED: Streaming to all iOS devices and some Android smartphones and tablets. Tons of TV shows that aren't out to rent on DVD.

TIRED: Despite taking your $8 monthly fee, you still have to sit through asinine commercials. "Hundreds," not thousands, of movies to choose from. Again, no physical media. Rights agreements sometimes complicate how many episodes are available for viewing on the site.

Android Market

Google has struggled to keep up with Apple in its media service offerings, only recently debuting its movie rental service on the Android Market in conjunction with a complete interface makeover. Fortunately, renting flicks from Google is available on all Android devices running version 2.2 and up — that's something even Hulu can't say.

WIRED: Rental ain't pricey, averaging around two to five bucks a pop. Streaming to Android phones is nice. Compatible with PCs.

TIRED: No physical media. Not functional across all Android tablets.

iTunes and Apple TV

There's a down-payment to get Apple TV up and running in your home, and it's in the form of a small, sleek set-top box. Fortunately, it's only $100.

Along with Netflix compatibility, Apple lets you purchase and rent movies from its iTunes media store, along with the ability to buy TV shows (due to lack of customer demand, Apple discontinued TV show rentals last month). Further, you're able to watch streaming media on all of Apple's mobile devices. The company wants to hook you into an Apple-centric world, and the interconnection between its services makes it easier for customers to buy in.

WIRED: Purchase prices are par for the course, ranging from $1 to $3 depending on whether you want to rent or own. Ability to buy entire seasons of a show is convenient. Rumors and speculation have long suggested bigger plans for Apple TV's future, though Apple itself is staying mum on any potential developments.

TIRED: Lacks an "all-you-can-stream buffet" option, which can get costly if you watch a lot of flicks. Though its library is extensive, iTunes alone doesn't contain the esoteric indie films that Netflix totes. So if you're subscribing to Netflix and buying through iTunes at the same time, charges could add up fast.

Vudu

Wal-Mart got in on the media-services game in 2010 by buying Vudu, another streaming media company. Initially the service was available only in a set-top box version, but Vudu has since extended itself to other platforms as a standalone media service in and of itself, available to Playstation 3 users, Boxee for OSX owners and Windows-based PC users.

WIRED: Rentals and purchases stay on par with most other services, settling in the $1 to $5 range for rentals, and upwards of $5 for purchases. Titles available the same day they're released on DVD, unlike other services that require waiting periods. Streaming video available on iPad.

TIRED: No monthly unlimited movie-streaming option.

Johnny Cash song iTunes' 10 billionth download

http://news.cnet.com/8301-17938_105-10460098-1.html

February 25, 2010
Johnny Cash song iTunes' 10 billionth download
by Dong Ngo

Yes, things really happen that way. Only this time, somebody is going like it very much.

Louie Sulcer of Woodstock, Ga., just won Apple's iTunes Countdown to 10 Billion Songs contest with the purchase of Johnny Cash's "Guess Things Happen That Way." This also means the song is the 10 billionth song downloaded from Apple's Store using iTunes.

With his purchase, Salcer got the best deal ever for an online music purchase, a gift certificate for music worth $10,000.

Apple announced the contest and started the countdown earlier this month as the number of songs downloaded from its store got closer to the 10 billion milestone. The company started selling music in 2003, ever since, on average, about 1.4 billion songs are downloaded each year. By far, it's become the biggest online music retailer.

What's most interesting is the fact that during the time of the contest, Johnny Cash's songs were never among those topping the popular purchased list. As a huge Johnny Cash fan, I find the winning song to be appropriate.

He's a great artist to mark a great milestone with.

Dong Ngo is a CNET editor who covers networking and network storage, and writes about anything else he finds interesting. You can also listen to his podcast at insidecnetlabs.cnet.com.

Steve Jobs - CEO of the Decade

http://money.cnn.com/2009/11/03/technology/steve_jobs_legacy.fortune/index.htm

Steve Jobs's legacy
Steve Jobs - CEO of the Decade
Harvard professor Nancy F. Koehn shows us how Steve Jobs stacks up with other great entrepreneurs in history.
By Nancy F. Koehn, contributor
November 5, 2009

(Fortune magazine) -- First and foremost, Steve Jobs is an entrepreneur. And that is how history will long remember him. Not primarily as a fiduciary or an institution builder or an administrator (though he has worn all those hats), but rather as an individual who relentlessly pursued new opportunities.

From the first Apple computers to the breakthrough innovations of the past eight years -- the iPod, iTunes, the iPhone, and his Apple stores -- he has chased new possibilities without being deterred by whatever obstacles he encountered.

Over and over again he has turned his eye and his energy -- and at times, it has seemed, his entire being -- to what might be gained by creating a new offering or taking an unorthodox strategic path.

That puts him in the company of other great entrepreneurs of the past two centuries, men and women such as Josiah Wedgwood, John D. Rockefeller, Andrew Carnegie, Henry Ford, and Estée Lauder.

Each of these people -- and especially Steve Jobs -- has been defined by the intense drive, unflagging curiosity, and keen commercial imagination that have allowed them to see products and industries and possibilities that might be. Each of these individuals has also been extremely hardworking, demanding of themselves and others. All have been compelled more by the significance of their own vision than by their doubts.

Jobs came of age in a moment of far-reaching economic, social, and technological change that we now call the Information Revolution. (Not so long ago -- in the early 1990s -- we used the term Computer Revolution, a shift in language that speaks to the breadth of change involved.) Wedgwood, the 18th-century British chinamaker who created the first real consumer brand, grew up in the Industrial Revolution, another period of profound change. And Rockefeller laid the foundations of the modern oil industry in the 1870s and 1880s, when the railroad and the coming of mass production were transforming the U.S. from an agrarian into an industrial society.

Like Wedgwood and Rockefeller, Jobs has had a sense -- analytic and intuitive -- that in a time of great transformation, a lot is up for grabs. Imbued with a perception of his own importance on a stage where everything from telephony to music distribution to consumers' relationships with technology is being disrupted, Jobs felt there was simply no time to lose.

This understanding has fueled the rapid-fire pace of his actions and his obsession with "what's next?" in products (although he would never rush to market a product he thought imperfect). It may have also fed his often harsh, dictatorial, and somehow still-inspiring management style.

People who work with Jobs talk about his maniacal attention to the smallest design detail. For Jobs, working in a world of engineers who are focused on the power of technology, this paradigm has never been enough. Yes, his products must be functional and fast. But they must also be beautiful.

One of Steve Jobs' two heroes reflects that commitment to both aesthetics and functional integrity. According to Oracle CEO Larry Ellison, a longtime friend, Jobs greatly admires Gustave Eiffel, the designer of the famous Parisian tower and the Statue of Liberty. "Eiffel is an interesting character," Ellison explained, "because he was a terrific engineer and had a wonderful artistic sense."

When Jobs decided to open the now remarkably successful Apple retail stores in 2001, the money and time that he and his team put into their design -- which involved building a prototype of a store in a warehouse -- were intended to create an experience that went deeper than retail.

And overhauling the initial store layout, not to mention going through three types of lighting just to make sure iMacs would shine as brilliantly in the stores as they did in glossy print ads, has paid off handsomely. Apple stores reached $1 billion in sales faster than any retail business in history.

Customers in the stores have no idea of the resources that Jobs invested in what was initially seen as a very risky venture for the company. And from Jobs' perspective, they do not need to know. As he once explained to Fortune, "They just feel it. They feel something's a little different."

Not surprisingly, Jobs has been widely labeled as one of the most hands-on CEOs in America. Biographers have said similar things about Andrew Carnegie, who was obsessed with the minute aspects of driving down costs in the young steel industry in the 1890s, and about Henry Ford, who, 20 years later, was fixated on all aspects of bringing a Model T to every American household.

Ford, as did Jobs, put great faith in his judgment about where consumer desire was headed. "If I had asked my customers what they wanted, they'd have said a faster horse," the carmaker allegedly commented. For virtually his entire career, Jobs has taken that comment to heart, serving as a kind of one-man band of market research and product development.

In an interview with Fortune, Jobs once described how he had turned new technologies into products: "There's a certain amount of homework involved, true, but mostly it's just picking up on things you can see on the periphery. Sometimes when you're almost asleep, you realize something you wouldn't otherwise have noted. I subscribe to a half-dozen Internet news services, and I get about 300 e-mails a day, many from people I don't know, hawking crazy ideas. And I've always paid close attention to the whispers around me."

The MacBook Air and the iPod, like the Macintosh in the early 1980s, owe much more to the "whispers" Jobs has heard, his imagination, and his precise product standards than they do to any organized focus group.

Estée Lauder, the ambitious, empathic entrepreneur who created a huge new market for fine skin care, cosmetics, and fragrances in the postwar period, had the same sixth sense about the consumer. She admired and sometimes emulated Old World European nobility, especially their classic taste and grace in everyday living.

And she brought this inspiration to the making, packaging, and marketing of her products. For Lauder, makeup was much more than a combination of chemicals that women used to improve their appearance. Cosmetics were a vehicle for self-expression and customer empowerment. They were also a source of daily joy and positive energy.

Like Lauder, Jobs is primarily concerned with products that enhance our everyday life, a belief that takes shape in Apple's "digital hub" strategy. According to Jobs, we are now in the midst of the third age of computing, the age of a "digital lifestyle" (the first era was the age of productivity, spanning 1980 to 1994, and the second was the age of the Internet, which lasted from 1994 to 2000).

In this stage of evolution, personal computers like the iMac and MacBook connect and enhance a wide range of products, from digital cameras to smartphones to MP3 players, all of which are reconfiguring how we interact with TV, film, and music as well as each other.

In this context, Jobs sees the products that Apple (AAPL, Fortune 500) has developed -- such as the iPod, iTunes, and the iPhone -- as offerings that help us each be better than we would be without them. Many years ago Jobs called the computer a "bicycle for the mind," a remarkable tool that greatly increases man's efficiency of locomotion, broadly conceived. Even now, as Apple releases products that expand our traditional notion of the computer, he continues to give us devices that complement and enhance our everyday life.

It is hard to imagine that his influence would have run so deep in our society if he hadn't been able to consistently communicate his vision of a richer digital life to employees, customers, Wall Street, and others.

And he has done this charismatically. Jobs has a kind of aura or mystery around him that has made him a celebrity. (In a recent Junior Achievement poll, American teenagers voted Jobs the person they most admire -- ahead of Oprah Winfrey and the Olsen twins.)

When the Apple founder, who is always meticulously rehearsed, walks onstage for a keynote event, the audience responds as if he were a rock star or a religious prophet. People scream. Employees, customers, analysts, and rivals hang on his every word. Industry experts run to their computers furiously to enter their latest blog entry on the future of high tech.

When he introduced the iPhone in early 2007, Jobs hailed it as a "revolutionary and magical product that is literally five years ahead of any other mobile phone." In design and capabilities, it was "like having your life in your pocket. It's the ultimate digital device." And it's ultimate marketing.

The more we learn about this brilliant, dogged, at times merciless, and yet supple entrepreneur, the more we realize that he believes he is out to change the world. And that's what seems to motivate him. He shows almost no need to display his financial worth and power. (Jobs does have a Gulfstream V, but there are few other trappings of great wealth around him or his family.)

No, the revolution of which Jobs is so much a part is unfolding by virtue of the products he makes and how consumers use them. It is a mostly peaceful revolution that will, in Steve Jobs' eyes, liberate men and women around the world.

More than 15 years ago, before most of us e-mailed regularly or had added the word "playlist" to our vocabulary, Jobs sketched out his vision of the Information Revolution's impact to Rolling Stone: "Putting the Internet into people's houses is going to be really what the information superhighway is all about, not digital convergence in the set-top box." And this development, in tandem with vast increases in computing power, meant for Jobs that the world is "clearly a better place. Individuals can now do things that only large groups of people with lots of money could do before. What that means is, we have much more opportunity for people to get to the marketplace -- not just the marketplace of commerce but the marketplace of ideas. The marketplace of publications, the marketplace of public policy. You name it."

If Jobs is right about the ways in which the Information Revolution both empowers individuals and democratizes existing power structures -- and the jury is still out on this -- his historical legacy may indeed be greater than his impact on business. It may just bear some resemblance to Jobs' other hero, Mohandas Gandhi, who staged another kind of peaceful and far-reaching revolution some 70 years ago and who saw opportunity where others saw only obstacles.

Jobs' ability to change technology, music, and entertainment has earned him great authority. Ironically, Jobs has chosen not to exercise it outside the boundaries of his industry. Unlike Rockefeller and Carnegie, each of whom created powerful foundations with big agendas for social change, Jobs has shown little interest in philanthropy. And he rarely speaks out on political or environmental issues. For a man as passionate as Jobs, one who loves Bob Dylan and the countercultural zeitgeist that he has come to represent, this seems strange. Out of keeping with the enormous ego for which Jobs is famous (and infamous). But maybe that's next.

Nancy F. Koehn is a historian at the Harvard Business School; her most recently published book is titled "The Story of American Business."

Report: Apple to Save the Album

http://www.pcworld.com/businesscenter/article/169107/report_apple_to_save_the_album.html

Report: Apple to Save the Album
Jonathan Seff, Macworld.com
Monday, July 27, 2009

With the iTunes Store, Apple has done perhaps more than about any other company to help propel the proliferation of (legal) music downloads. And in doing so, Apple has also helped hammer the nail in the coffin of traditional CD sales thanks to Apple's simple distribution method and way for users to quickly find and download just the songs they are interested in. Which makes a story in the The Financial Times, reporting that Apple is joining forces with the major record labels to restore the album format, all the more interesting.

According to the article, Apple and the four major labels are working to stimulate album download sales "by bundling a new interactive booklet, sleeve notes and other interactive features with music downloads," including photos, lyrics, and video clips.

The project--which the Financial Times story attributes to "four people familiar with the situation"--is supposedly called 'Cocktail.' (Perhaps that's what the story's authors plied their sources with to get the information.)

The story suggests a September 2009 launch for the project (and, somewhat randomly, maybe alongside the oft-rumored tablet device that AppleInsider was predicting only a few days earlier for an early 2010 launch). Of course, this information comes from the same people who reported that Apple was planning a subscription-based music service, which has yet to see the light of day, so take it with as much salt as you can stomach.

The real question is, would this gimmick actually work? Apple already restricts some song sales to album-only purchases (usually based on the songs' lengths) and offers digital liner notes with certain albums as well as album-only exclusive content. That obviously hasn't made people jump back on the album bandwagon.

Are people not buying complete albums because they don't have enough incentive to do so, or because much of what makes up an 'album' these days is mostly filler to pad the few good songs a band is able to come up with meet its contractual obligations to the same labels that are purportedly working with Apple?

Sure, it would be nice to have lyrics for songs embedded with each track (great for winning bar bets over mondegreens such as "the girl with colitis goes by"), but part of the joy of buying CDs--and records or even cassettes before them--is the tactile delight of thumbing through liner notes after sliding them out of a jewel case. I'm not sure that adding more stuff to a download will really make a huge difference.

I'd even go so far as to say that the only real way to spur album downloads is to charge less for them...

FeedBack: RIP! A Remix Manifesto

I actually wasn't that aware of Girl Talk until I saw the film at a screening a few weeks ago. Even though I was initially uncertain about how I felt on the subject, the film did a remarkable job of swaying my opinion in favor of copyright loosening. Particularly the discussions and illustrations of the manners in which culture builds upon the past. I'm glad to see the film is available on iTunes and through their website (http://www.ripremix.com/getdownloads/) now because it will certainly spur some interesting discussion.

Edward L.

RIP! A Remix Manifesto

From Disinfo.com:

Can you find Girl Talk on iTunes? You can if you watch...

RIP! A Remix Manifesto

An "Open Source" Documentary About Copyright and Remix Culture

Filmmaker Brett Gaylor explores issues of copyright in the information age, mashing up the media landscape of the 20th century and shattering the wall between users and producers. The film's central protagonist is Girl Talk, a mash-up musician topping the charts with his sample-based songs. But is Girl Talk a paragon of people power or the Pied Piper of piracy?

Which side of the ideas war are you on?

2012: SCIENCE OR SUPERSTITION Review

2012: SCIENCE OR SUPERSTITION
Konformist Review
Robert Sterling, Konformist.com

I remember as a kid in 1979 viewing the "documentary" The Late Great Planet Earth at the Century 21 Theater in San Jose, narrated by no less an esteemed individual as Orson Welles. (This, along with him doing the voice for Magnum P.I.'s Robin Masters and commercials for both Paul Masson wine and the Dark Tower board game, was my early exposure to the cinematic master.) Like the Star Wars Trilogy, a movie theater next to the Winchester Mystery House was the perfect place to see the film. Based on the best-seller by Christian fundamentalist Hal Lindsey, it was incredibly frightening, depressing and filled with doom, warning the audience they were facing Armageddon if they didn't listen to a God whose views were identical to Jerry Falwell and Pat Robertson. Okay, so it wasn't the most logically cohesive documentary ever made, but you had to give it credit: in an era of The Shining, The Omen and Suspiria, it held its own in its ability to scare the fuck out of viewers.

2012: Science or Superstition, by the Disinformation Company, lacks the guilty pleasure quality of The Late Great Planet Earth. 2012, after all, isn't a shameless dive in paranoia and apocalyptic fear that made Lindsey's doc such a fun trip. Instead, it is a thoughtful examination of the different views and opinions on what lays in store for Planet Earth on 12-21-2012, when the Maya calendar predicts the end of time.

That doesn't mean there isn't some scary shit in it. Much of the documentary focuses on a theory that argues our sun has an evil twin - a twin that's coming to Earth December 2012. When it hits, we'll have a disaster on our hands worthy of a Michael Bay blockbuster with bitchin' CGI special effects. (Of course, this proves God doesn't have perfect foresight after all: shouldn't he have realized the destruction of mankind is the ultimate summer popcorn flick?) Other theories pursued are a change in the planet's magnetic fields or solar blasts. Pretty cool stuff, indeed.

But in the end, 2012 is not a gloomy forecast of mass annihilation, but rather a pretty upbeat journey. It's not so much a Black Sabbath song as the B-52s "Love Shack" - the upside of the end of time. It's really an end of an age that is coming at this date, the documentary argues, and the endtime is more metaphorical for a transformation in humanity. (I'm sure the Obama cultists will use this as further proof on how "transcendental" Barky is.)

For fans of the cult TV show Disinfo Nation (and count me as one) the style will seem familiar, which is certainly a plus. This is not merely because Disinformation produced both, but because the dude who shot and cut Disinfo Nation, Nimrod Erez, is the director here. (Doing a Robert Rodriguez impersonation, he also did cinematography and film editing duties here.) It also includes an awesome cast of experts, including Robert Bauval (The Orion Mystery, The Egypt Code), Graham Hancock (Supernatural, Fingerprints of the Gods), Jim Marrs (Alien Agenda, Rule By Secrecy) and Douglas Rushkoff (Cyberia, Media Virus.) A pretty eclectic collection and 2012 definitely was a mind-expanding journey for this viewer. Apparently, I'm not alone, as 2012 hit number one on Apple iTunes documentary charts and the top ten on the New Releases list. Looks like there is a market for a smart documentary about apocalyptic visions after all. Swallow that, Hal Lindsey!

2012: SCIENCE OR SUPERSTITION
Genre: Documentary
Street date: January 27, 2009
Sug. Retail Price: $19.95 (DVD) / $9.99 (iTunes)
Catalog #: DIS051
UPC #: 826262005191
Running Time: 78 mins. + extras

Lions Gate to give iTunes copy on DVDs

http://www.businessweek.com/ap/financialnews/D8VALS4G1.htm

Lions Gate to give iTunes copy on DVDs
March 10, 2008
NEW YORK

Film and television producer Lions Gate Entertainment Corp. said Monday that it is working with Apple Inc. to provide customers who buy certain DVD and Blu-ray movies with an included digital copy of the movie through iTunes as well.

Lions Gate said the first movies that will include digital copies will be the special edition DVD and Blu-ray versions of "Rambo" and the film "The Eye."

"Rambo" be available on May 27 and "The Eye" will come out on DVD during the summer.

Lions Gate said it and Apple will make a number of other Lions Gate DVDs available with digital copies via iTunes later in the year.

Consumers can insert eligible DVDs into their computers, enter a code into iTunes and the film will be copied to their iTunes library, Lions Gate said.

In January, News Corporation's Twentieth Century Fox and Apple said they would make a variety of DVDs available for which customers could get digital copies through iTunes.

Apple shares fell $1.12 to $121.13, while Lions Gate shares fell 6 cents to $8.74.

When will iTunes replace Wal-Mart as No. 1?

http://www.news.com/8301-10784_3-9880001-7.html

February 26, 2008
When will iTunes replace Wal-Mart as No. 1 music retailer?
Posted by Greg Sandoval

Apple's iTunes will likely whip past Wal-Mart Stores to become the largest U.S. music retailer sometime this year.

The NPD Group issued a report Tuesday that said Apple had outpaced Best Buy and Target to become the No. 2 U.S. music retailer. Unless the downward trend in CD sales suddenly reverses, Apple will be No. 1, said Russ Crupnick, the NPD Group's president of Music.

"Digital sales were up close to 50 percent and CD sales were down 20 percent last year," Crupnick said. "Even at half that growth rate in digital sales, Apple will in all likelihood catch Wal-Mart this year."

Anybody in their teens or early 20s is going to ask, "So what else is new?" To them, digital downloads has been part of their lives for years. It's only natural that a download store emerge as the top seller.

But anybody older is going to remember that it wasn't too long ago when music buying meant flipping through CD racks at the former retail powerhouses, Sam Goody and Tower Records.

"That's the question that the music industry has to answer soon: How do we get young people to start paying for music again? They've got to make it easier for teens to buy online."
--Russ Crupnick, analyst

Tower no longer operates retail stores, and Sam Goody's owner is renaming whatever locations it hasn't closed. "Yeah, it's astonishing--just in the post-Napster era--to see what's happened to the retail-sales environment," Crupnick said.

Apparently, the transition from offline to digital sales is occurring faster than most people expected. (Remember how record executives used to whip out statements like: "Discs are still how most people listen to music."

They may have been right then, but perhaps that won't be the case much longer.

Consider that the music industry is seeing pressure on CD sales from multiple fronts. In the offline world, there is a sort of death spiral going on, Crupnick said. As CD sales continue to slide, retailers like Wal-Mart, Best Buy, and Target devote less and less floor space to discs--which of course serves to erode sales even further.

Amazon.com, the e-tailer that used to be synonymous with ordering CDs off the Internet, has opened a music-download store to challenge iTunes.

Then there is the teen market that is abandoning CDs in droves. According to the report issued by NPD on Tuesday, nearly half of all U.S. teens (48 percent) did not purchase a CD last year. That is up from 2006, when about 38 percent of teens made no CD purchases.

Older music fans are transitioning at a slower rate but it's happening there too. In total, NPD Group said that the music industry waved bye-bye to about 1 million CD buyers last year.

Music remains popular, according to report, which found the amount of music acquired by consumers went up 6 percent. The trouble is that less of it is being paid for. Spending among Internet users fell from about $44 per capita to $40.

It must also be said that not all of Apple's success is due to the growing digital demand. Apple has flat out done a better job of retailing than competitors, Crupnick said.

For example, the music industry should follow Apple's lead and direct their attention to teenagers, Crupnick said.

Teens lack credit cards and this often prevents them from buying at almost everywhere but iTunes, Crupnick said. Apple avoids credit cards by pushing the gift cards, which teens can pay for at retail locations and then use them to purchase songs online by keying in a code. No credit cards needed.

"That's the question that the music industry has to answer soon," Crupnick said. "How do we get young people to start paying for music again? They've got to make it easier for teens to buy online. Apple CEO Steve Jobs has done a wonderful job of this. Teens have a way to do commerce with iTunes."

Tags:Apple, iTunes, Wal-Mart, Best Buy, Tower Records

iTunes No. 2 music seller in US

http://www.businessweek.com/ap/financialnews/D8V23V300.htm

The Associated Press
February 26, 2008
NPD: iTunes No. 2 music seller in US
By RACHEL METZ

Apple Inc.'s online iTunes music store is now the number-two music retailer in the U.S. behind Wal-Mart Stores Inc. as measured by unit volume, market researcher NPD Group said Tuesday.

NPD said that iTunes moved into second place due to the amount of music it sold during 2007, which was based on a 12-track CD equivalency for song downloads.

The market researcher began tracking music sold stateside during the middle of 2006. In the fourth quarter of that year, Best Buy Co. took second place behind Wal-Mart, while Target Corp. took third place and Apple's iTunes store fourth place, NPD analyst Russ Crupnick said.

For the full year 2007, Best Buy came in third and Target fourth, he said.

Crupnick called Apple's move to the number-two spot "fairly understandable given the pressure that's been on CDs and the almost 50-percent growth in digital downloading in the past year."

About 10 percent of music acquired in the U.S. was through legal downloads in 2007, and consumers who bought digital music legally through pay-to-download Web sites grew by 5 million to 29 million in 2007, NPD said Tuesday.

Meanwhile, an estimated 1 million consumers did not buy CDs in 2007, and 48 percent of U.S. teenagers didn't buy any CDs during the year, up from 38 percent in the year before, according to NPD data.

"It wouldn't surprise me if we see the same things continuing into 2008 because what our research is showing is that teens are continuing to check out on the CD," Crupnick said.

NPD also said that the amount of music consumers bought in the U.S. rose 6 percent in 2007, though the decline in CD sales and increase in legal digital download sales still led to a 10 percent overall decrease in music spending.

Apple shares fell $2.55, or 2.1 percent, to $117.19 in morning trading, while Wal-Mart shares rose 80 cents to $51.13.

Will The iPod Kill Blockbuster?

http://www.forbes.com/technology/2007/12/28/apple-movie-rental-tech-media-cx_bc_1228apple.html

Apple's World
Will The iPod Kill Blockbuster?
Brian Caulfield 12.28.07

Burlingame, Calif. - Forget the cavernous big box stores that laid waste to the retail landscape a decade ago. Apple Chief Executive Steve Jobs' tiny iPod has turned his company into a category killer for the digital era--first wiping out music stores and now, potentially, the corner video store.

Starting in mid-January, the Cupertino, Calif., computer and gadget maker will take on Blockbuster and Netflix by renting movies from Fox on its iTunes digital media store, according to a report first published in the Financial Times earlier this week.

While older models of the iPod--and its low-end iPod Shuffle--can't play digital video, the gadgets now have a proven record of disruption, with customers bypassing record stores to tap into illegal distribution networks, along with Apple's iTunes music store, to fill the up their devices.

The result: Sales of CDs fell more than 30% to 614.9 million units last year from a peak of 881.9 million in 2000, according to the Recording Industry Association. Once sprawling chains, such as Tower Records, have shuttered.

Apple, however, isn't the first major tech company to offer digital video rentals. Amazon rents movies to users of PCs and TiVos via its Unbox service. Microsoft is even offering digital movie rentals on its XBox 360 game console. Neither company, however, poses the same threat to DVD rental companies as Apple, which has an installed base of more than 100 million digital media devices that consumers carry in their pockets.

Since Apple first began offering video content in its store two years ago, Jobs has expanded the company's video offerings. The weak link: the AppleTV set-top box effort. Some industry observers estimate that the device has sold fewer than 1 million units since it went on sale earlier this year, so video rentals could surely revive the effort.

Despite Apple's movie rental push, Blockbuster and Netflix won't disappear tomorrow. They likely will continue to slug it out in the business of renting digital video discs. Blockbuster has moved to counter the threat from Netflix, which mails movies to customers who queue up their orders online, with a Web-based service of its own. Netflix, meanwhile, allows customers to rent digital movies for their PCs.

Still, their days might be numbered: The iPod has killed before. It will kill again.

Shares of Netflix sagged 2.19% to $26.85 in Friday trading. Shares of Blockbuster fell 1.03% to $3.86. Apple rose 0.40% to $199.37.

10 Worst Tech Products of 2007

http://tech.yahoo.com/blogs/patterson/9908

10 Worst Tech Products of 2007
Tue Dec 18, 2007

Would you be surprised to learn that a certain Windows upgrade made the list? Behold the worst tech of the year, including a pair of $7,250 speaker cables, ad-riddled video downloads that expire after a week, a much-hyped TV set-top box that's dying on the vine, and more.

So here we go...in alphabetical order:

Apple TV: Apple's foray into the living room seemed like a no-brainer, and this HDMI-packing, Wi-Fi- and Ethernet-enabled set-top box looked like a sure-fire success. From the beginning, however, Apple TV was hamstrung by the meager movie selection (and now dwindling selection of TV shows) on iTunes, plus the fact that you can't browse or buy videos directly over the box. Even worse, Apple seems to have lost interest in its home theater "hobby," with a full six months passing since the last Apple TV software update. Short of a sudden infusion of new features, look for this once-promising box to go the way of iPod Hi-Fi.

iPod Battery Replacement Kit: One of the chief complaints I hear about the iPod (and the iPhone, for that matter) is that the battery is sealed in the casing, with Apple adding insult to injury by charging $60 to replace out-of-warranty iPod batteries (or $86 for the iPhone). So here's Blue Raven's $30 iPod battery replacement kit, which consists of a new battery, a tiny screwdriver, and a plastic thingy that looks like a mini crowbar (similar kits are available for the iPhone). I tried it with my old iPod, and I replaced the battery all right, but I also managed wreck the crummy plastic tool and scratch the heck out of my once-shiny iPod in the process. Next time I want to scratch up my gadgets, I'll save $30 and use my own little screwdriver, thanks very much.

Microsoft Surface: Unveiled in May with great fanfare, Microsoft's jaw-dropping Surface computer—a touch-sensitive tabletop PC that immediately invited comparisons to Tom Cruise's mid-air dragging-and-dropping in "Minority Report"—whipped the tech press into a frenzy of excitement. But scratch Surface and you'll something a little shy of elegant, including a full-on Vista PC and five (count 'em, five) motion-detecting cameras mounted beneath the 30-inch touch-sensitive sheet. Oh, and then there's the $5,000-to-$10,000 price tag. And of course, in true Microsoft fashion, the first Surface systems (intended primarily as kiosks in retail and hospitality venues) have reportedly been delayed until spring. Something tells me it'll be a long, long time before we see these babies in our living rooms.

NBC Direct: Give NBC credit for trying a little of everything when it comes to online video, but here's a service that's got a few too many restrictions for comfort. Yes, you can download full, free episodes of shows like "Heroes" and "The Office," but you have to sit through commercials, and you can't transfer shows to a portable player or another PC, and the videos won't work on a Mac...and the shows expire in a week, rendering the files unwatchable. Great.

Palm Foleo: It was a two-pound sub-notebook—sorry, smartphone companion—that was supposed to connect to your phone via Bluetooth and let you type emails, surf the Web, and edit documents with a full-size keyboard and screen. As I've written before, the Foleo might be a good idea in a decade or so, when our supercharged smartphones become our primary computing devices. But when it was announced in June, reviewers dog-piled on the Foleo, complaining that the $500 gadget would be just another device we'd have to lug around. Smelling a flop, Palm benched the Foleo before it ever saw the inside of a store.

Pear Audio "Anjou" speaker cable: I'm sure this pair of 12-foot speaker cables sounds just fine—but the $7,250 price tag puts it in contention for tech rip-off of the year.

Ringles: The big music labels still think the CD can be saved, and the "ringle"—a a $5.98-to-$6.98 bundle of three songs, plus a ringtone, all in an eye-catching slip cover—was the latest in a line of painfully sad attempts to lure us back into brick-and-mortar music stores. Last time I checked, however, CD sales were still tanking.

SunRocket VoIP: More of a service than a gadget, mind you, but still one of the biggest tech debacles of the year (and one, as many readers pointed out, that I should have mentioned in my recent "10 Tech Train Wrecks" post). SunRocket was, in fact, a perfectly fine VoIP service—that is, until July 16, 2007, when the financially strapped company abruptly closed its doors and disconnected tens of thousands of customers without warning. Well, that's one way of handling customer service.

Windows Vista: Where to begin? Vista arrived in stores months late, forced untold thousands of users to upgrade their hardware, made mincemeat of software and drivers that worked perfectly well in XP, ended up lacking many of the bold-faced features we'd been promised, and came saddled with new and annoying set of video DRM schemes. At least Vista now boasts an option for downgrading back to XP. (Now, before you Mac fanboys out there begin gloating, let me remind you that Leopard shipped a full six months late, and that many users are still suffering from sluggish, buggy systems after upgrading.)

Wireless USB: Just imagine it—the convenience of USB, without all the wires. Sounds awesome! Too bad the first examples of Wireless USB technology have fallen flat. Case in point: the IoGear Wireless USB Hub & Adapter, a device that's supposed to deliver speedy wireless connectivity within a range of about 30 feet. Reviewers took a crack at the $200 IoGear hub (including our own Chris Null) suffered slow and spotty connections from only a few feet away, and promptly went back to their old, but reliable, USB cables. Wireless USB may well be the wave of the future, but "future" is the key word.

New Challenge for iTunes music store

http://www.mercurynews.com/breakingnews/ci_6679649

New Challenge for iTunes music store
Wal-Mart, Viacom and RealNetworks make move
By Scott Duke Harris
San Jose Mercury News
08/21/2007

Apple's online music empire is under siege. In separate announcements, Wal-Mart and an alliance of Viacom and RealNetworks announced business initiatives that put Apple in their cross-hairs.

Stepping up its competition with Apple's iTunes music store, Wal-Mart Stores has started selling some of its online music catalog without anticopying software known as DRM. The move complements Wal-Mart's sales of MP3 players that rival Apple's iPod.

Meanwhile, Viacom's MTV Networks and RealNetworks announced a merger of their digital-music services, hoping for a bigger share of the growing market for downloads. The combined service will be called Rhapsody America, Van Toffler, president of MTV Networks, said today on a conference call. RealNetworks, based in Seattle, is the owner of the Rhapsody music service.

The competitors are battling Apple's dominance, with its iPod and iTunes music store, which has more than a 70 percent share of online music sales. Digital track sales have risen 48 percent this year, according to Nielsen SoundScan.

"We're going to do a lot more than we've ever done," Rob Glaser, RealNetworks' chief executive officer, said on the call.

Meanwhile, Wal-Mart reached an agreement with two major labels, Vivendi SA's Universal Music Group and EMI Group to sell "DRM-free" single tracks for 94 cents a track and albums for $9.22.

The move shows that music industry has begun to bend to the wishes of retailers and Apple CEO Steve Jobs, who has called upon record companies to drop "digital rights management" software, or DRM. Most record companies demand that DRM software be used to prevent rampant copying. But Jobs argues that DRM has been ineffective in limiting piracy, but has limited sales and degraded sound quality.

Apple has its own DRM, which requires iPod users to buy from iTunes and limits iTunes tracks from playing on other devices. In late May, iTunes started selling thousands of tracks without DRM under an agreement with EMI Group.
--------------------------------------------------------------------------------
Bloomberg News contributed to this story. Contact Scott Duke Harris at sdharris@mercurynews.com or (408) 920-2704.

Universal in Dispute With Apple Over iTunes

http://www.nytimes.com/2007/07/02/business/media/02universal.html

July 2, 2007
Universal in Dispute With Apple Over iTunes
By JEFF LEEDS

Steven P. Jobs, the co-founder and chief executive of Apple, is an emerging force in the mobile phone business, thanks to the snaking lines of gadget fans who queued up last week to buy the iPhone. But now he faces a headache in an industry Apple already dominates — digital music.

The Universal Music Group of Vivendi, the world’s biggest music corporation, last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.

Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.

Universal’s roster of artists includes stars like U2, Akon and Amy Winehouse.

Representatives for Universal and Apple declined to comment. The move, which comes after a standoff in negotiations, is likely to be regarded in the music industry as a boiling over of the long-simmering tensions between Mr. Jobs and the major record labels.

With the shift, Universal appears to be aiming to regain a bit of leverage — although at the risk of provoking a showdown with Mr. Jobs.

In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs’s stance on song pricing and the iPod’s lack of compatibility with music services other than iTunes have become points of contention.

By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.

But if Apple were to decide not to carry Universal’s recordings, the music company would likely sustain a serious blow: sales of digital music through iTunes and other sources accounted for more than 15 percent of Universal’s worldwide revenue in the first quarter, or more than $200 million. (Vivendi does not break out revenue from Apple alone).

If push came to shove and Universal decided to remove its catalog from iTunes, it might not necessarily instigate a broader insurrection against Apple. The second-biggest corporation, Sony BMG Music Entertainment, recently decided to sign a new one-year contract making its catalog available to iTunes, according to executives briefed on the deal. A spokeswoman for the company, a joint venture of Sony and Bertelsmann, declined to comment.

Some industry observers have cautioned against taking on Mr. Jobs directly. “When your customers are iPod addicts, who are you striking back against?,” said Ken Hertz, an entertainment lawyer who represents artists like Beyoncé and the Black Eyed Peas. “The record companies now have to figure out how to stimulate competition without alienating Steve Jobs, and they need to do that while Steve Jobs still has an incentive to keep them at the table.”

But other music industry executives say the major labels must take a harder line with Apple at some point if they are to recalibrate the relationship. In particular, they say, it is unfair for Mr. Jobs to exert tight control over prices and other terms while profiting from the iPod. Mr. Jobs, in February, noted that less than 3 percent of the music on the average iPod was bought from iTunes, leading music executives to speculate that the devices in many instances are used to store pirated songs. (Of course, users can also fill their players with songs copied from their own CD collections.)

Apple has now sold more than 100 million iPods, and the device’s ties to iTunes have helped make Apple the leading seller of digital music by a wide margin. The iTunes service accounts for 76 percent of digital music sales, and the contract talks come as it is on the rise — Apple recently surpassed Amazon.com to become the third-biggest seller of music over all, behind Wal-Mart and Best Buy, according to data from the market research firm NPD.

All of that has transformed Apple into a prominent gatekeeper, wielding influence as a tastemaker by highlighting selected artists on iTunes storefront, and as an architect of the underlying business dynamics.

Apple has stuck to a pricing system that charges a flat 99 cents for a song since iTunes started four years ago (except for the recent introduction of songs without copy protection, which carry a higher price). Mr. Jobs has long argued that a uniform system and low prices will invite new consumers and reduce piracy.

But some music executives have been chafing at the flat rate that Apple has insisted upon in its contracts with the big record labels, and they have been pressing publicly or privately for the right to charge Apple more for popular songs to capitalize on demand or, in the event of special promotions, to charge less. Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying “we believe that not every song, not every artist, not every album, is created equal.”

In the backdrop of the pricing dispute is an investigation by European regulators who are studying the roles of the music companies and Apple in setting prices in certain international markets.

At the same time, Mr. Jobs has refused the industry’s calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.

Mr. Jobs has argued that sharing the software with other companies would increase the likelihood that its protections would be cracked by hackers, among other problems. Instead, he asked the music companies to drop their insistence on copy protection altogether. So far, only one of the four music companies, EMI, has made a deal to sell unrestricted music through iTunes.