Comes With Music... But No One Cares

from the thank-you-drm dept

Nokia got a lot of attention when it launched its "Comes With Music" concept -- where you buy a phone that comes with "free" all-you-can-eat music downloads for one year. Of course, the music comes wrapped in annoying DRM, though the music will keep playing (thankfully), after the year is up. Still, it seems like people aren't buying for the most part. A recent report shows only 107,000 users worldwide. This must be a blow to the major record labels who always seem to insist that "free music" drives pretty much every other business model. For example, BPI continues to insist that ISPs are basing their own business model on people sharing "free music." And you have record labels who are pissed off because they think that video games Rock Band and Guitar Hero aren't paying enough for all the benefit they get from the music. And, of course, there are all those collection societies claiming that every business that plays any kind of music needs to pay more, because it must be all that music that brings in the business. Well, it looks like Nokia is proving them all wrong. The music, by itself, doesn't seem to attract all that much business at all. Perhaps everyone should be asking for a refund.

Filed Under: comes with music, music, value
Companies: nokia

UK ISP Shows Why Kicking People Off The Internet Based On An IP Address Is Dumb

from the let's-use-some-logic dept

UK ISP TalkTalk has been a strong critic of the way the recording industry has tried to turn ISPs into copyright cops in the past. A year and a half ago it swore it would not be a copyright cop, and scolded BPI for suggesting it had any responsibility to enforce the entertainment industry's poor excuse for a business model -- while also complaining about "the most unbelievably rude letter" that BPI sent TalkTalk in demanding it do so. At the time, he told them:

"They're not just shutting the stable door after the horse has bolted -- the horse has left town, got married, and started a family."

Well said. Then, earlier this year, TalkTalk's CEO also pointed out how naive it was to think that the industry could do anything to stop unauthorized file sharing, noting:

If you try speed humps or disconnections for peer-to-peer, people will simply either disguise their traffic or share the content another way. It is a game of Tom and Jerry and you will never catch the mouse. The mouse always wins in this battle and we need to be careful that politicians do not get talked into putting legislation in place that, in the end, ends up looking stupid....

If people want to share content they will find another way to do it....

TalkTalk is continuing to show how silly the recording industry's plans are, by doing a little demonstration. The company sent out a security expert on staff to an ordinary street in Stanmore, Middlesex. Then it had him find all the WiFi connections there -- noting that many were totally open, and many others used weak security. From a few open ones, he went and downloaded some songs including Barry Manilow's hit Mandy and the soundtrack to the 1992 film Peter's Friends -- those two choices in honor of Peter Mandelson, the UK Business Secretary who suddenly became a supporter of kicking file sharers off the internet using a three strikes provision after dining with entertainment industry mogul, David Geffen.

To be clear, in this case, the music downloads were both done legally -- and the company checked with the WiFi access point owners first to make sure they were okay with it -- but the point is still clear. Just because you have an IP address, it doesn't act as any sort of proof. TalkTalk's director of strategy and regulation, Andrew Heaney made the point clear:

"The Mandelson scheme is every bit as wrong-headed as it is naive. The lack of presumption of innocence and the absence of judicial process combined with the prevalence of wi-fi hacking will result in innocent people being disconnected."

This, of course, is the same point that plenty of people have been making for ages, but the recording industry never has a good response. They also haven't been able to respond to a more important point: how will kicking people off the internet make anyone more interested in buying music?

Filed Under: three strikes, uk, wifi
Companies: talktalk

How Did Danger Not Backup Its Servers? How Did Microsoft Allow Such A Failure?

from the one-of-those-times-where-epic-fail-applies dept

I bought the very first Danger smartphone the day it came out (rare for me -- I'm not so much of an early adopter on mobile phones). One of the features I liked the best was the fact that all of the data on the phone was immediately and automatically backed up to Danger's servers. Since then, I've always been amazed that other providers didn't make similar features standard. Danger never fully lived up to its hype, and eventually sold out to Microsoft. It was never entirely clear why Microsoft would want Danger, but at the very least you would think that it would make sure that the servers were pretty safe and redundant. Or so you would think. Apparently Danger had a massive server failure and is warning people that their data may be completely lost. The company is telling people not to turn off their devices, as the only way to keep the data alive is to keep the phone going.

It's difficult to think of a system failure that makes a company look quite this bad. Tons of people have Sidekick phones and rely on server backup to keep their data. Not having a working redundant backup is a stunning sort of failure for Microsoft, and should remind people of the inherent dangers in relying on a cloud based service. While there are lots of cloud-based solutions that are quite useful, people are definitely going to need to be able to have alternative local and remote backups to make sure that, in this kind of situation, they're not totally relying on a company who should do things right, but perhaps did not.

Filed Under: backup, cloud computing, danger, server side, sidekicks
Companies: danger, microsoft

More Evidence Suggests That iPhone App Store Doesn't Really Sell That Much...

from the ain't-looking-so-good dept

Among people who really, really want to believe that there's a huge market out there for selling content directly, the iPhone App Store has recently become "Exhibit A." The thinking is that all you have to do is slap together that perfect Steve Jobsian user interface that just makes it so easy to buy, and people will start forking over their money. It was part of David Carr's argument when we debated newspaper micropayments. Except... there really isn't that much evidence to support even the claim that the iPhone App Store really sells that much. We were a bit skeptical of the early reports that people claimed offered "proof" that people would buy all sorts of apps. Then, earlier this year, we suggested that it was an early warning sign that so many apps on iPhones were never used at all or were used once and abandoned. Basically, that meant that people would test stuff out when they first got the phone, but sales would likely dwindle after that. More evidence was provided by an analyst firm that figured out how little money Apple was making from app sales (which is fine -- Apple is in it just to sell hardware, but it suggested that app sales weren't quite as amazing as people were claiming).

Newsweek is presenting some more evidence -- albeit anecdotal -- that the iPhone App Store isn't making very many people very much money at all. There are, certainly, a few folks at the top who are doing okay, but for most people there just aren't that many sales -- or the cost of getting those sales greatly outweighs the revenue that came in from them.

This isn't to say that the iPhone App Store is a failure. In fact, I'd argue it's been a huge success in making the iPhone significantly more valuable. But as evidence that there's a huge market out there of people willing to pay for content if it's just packaged up nicely? There's just not enough there to be convincing.

Filed Under: app store, apps, iphone, loss leader
Companies: apple

Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

Filed Under: android, business models, free, steve ballmer
Companies: google, microsoft

iPhone To Be Offered From Multiple Carriers, eh

from the in-God-Phone-We-Anti-Trust dept

Given all the talk in DC lately about anti-competitive exclusive cellphone distribution arrangements, it's very interesting to see a rumor broken by the Globe and Mail about the iPhone in Canada. According to The Globe, Rogers will soon lose its iPhone exclusive as both TELUS and Bell Mobility add the iconic device to their Christmas line-up. Bell and TELUS are migrating away from the CDMA technology they have used up to 3G, towards the more globally compatible GSM evolutions. To minimize costs, the two carriers are building a single shared-infrastructure network, on which they will both sell services. While Rogers, the long-time GSM user, will have the wider network footprint and offer iPhones fall-back to their 2G data networks when out of 3G coverage, that advantage is countered by TELUS and Bell offering 3.5G HSPA+ speeds to Rogers' 3G. Under current coverage conditions, iPhone urbanites might prefer the new entrants, while sub-urbanites may prefer Rogers.

What is most interesting here is the break from Apple's conventional one-country-one-carrier strategy, which has attracted the attention of more than a few countries' regulators. The Canadian case will be the first market where competing carriers offer the iPhone, without a regulator forcing Apple's hand. Perhaps Germany will follow Canada: there are rumors that T-Mobile will lose their exclusive deal with Apple by year's end, and British/Spanish carrier O2 will enter the market with preferable iPhone plans. In the USA, most of the hot water Apple is swimming in is because the FTC isn't happy with the iPhone app approval process, which nixed the Google voice app. But while the FTC branch is focused on the App Store, some Congressional Reps are voicing their displeasure at the exclusive iPhone deal with AT&T. Governments around the world aren't sure what to make of exclusive phone distribution deals - which, strangely, never seemed to raise an eyebrow until the iPhone. In France, the Orange-Apple 5-yr exclusive was smacked down by the feds who argued that an exclusive arrangement would add "a new element of rigidity in the sector which is already suffering from a lack of competition." But here's where I'm not so clear.

I agree that exclusives, when examined in isolation, are anti-competitive. But overall, I'm not clear on how a 2007 new entrant (Apple), with a disruptive device that lit a fire under the incumbent vendors, could be perceived as "anti-competitive" in terms of net results. In fact, the exclusivity has undeniably forced the competing carriers to work their butts off to come up with a comparable device, seeking it from the likes of Nokia, Samsung (which are scrambling to respond, though they'd never admit it), or newer players like HTC or INQ. The exclusive deals seem to be spurring competition. In contrast, in a world where every telco carries the iPhone, the telcos actually can worry less about offering something else that's equal or better. I suppose someday it could make sense to go after Apple exclusives, but why not wait until the net effect on society is actually negative in some measurable way? A good rule for government should be, "When in doubt, leave it alone."

Meanwhile, the Canadian case will certainly offer Canadians more choice among iPhone providers, and most notably iPhone plans. Canadians tasted the bitter flavor of inadequate competition when iPhone data plans were first announced there in mid 2008. Three-year contracts, no unlimited data plan, high per-MB pricing, and a triple lock-in. Yes, Canada may soon see more service competition around the iPhone -- but will Canada see more or less device competition?

Filed Under: canada, competition, exclusivity, iphone
Companies: apple

Palm Finally Realizes It Needs To Help, Not Hinder Developers

from the back-to-its-roots dept

We've been getting on Palm lately for the widespread mistakes the company made in building out a strong developer community. Despite having had strong developer communities in the past, with the Pre, it seemed like Palm decided to simply copy everything (even all the bad things!) that Apple did with the iPhone app store. It was a terrible case of iPhone cargo cultism, that seemed to assume that if they just copied the iPhone's every move with developers, things would be just like the iPhone. Now that that's backfired, it looks like the company has come to its senses. It's brought in some Mozilla developers and opened things up wide. It's done away with the fee for developers. It's openly allowing people to offer their apps directly to Palm users without having to go through an insane and arbitrary approval process. And, the new folks promise this is just the beginning of a much more open offering. It's about time. This is the sort of thing that Palm should have done before it launched.

In the meantime... there are still other problems showing up, including odd complaints about hidden limits on how many apps you can get through the Pre app store, without any clear response from Palm. So, for every step forward...?

Filed Under: developers, open, palm pre
Companies: palm

The iPhone Is Not The End Of Innovation

from the it-keeps-on-going dept

There's just something when we see a dominant technology out there that makes people assume that no one will ever out innovate it, and then fear that we're stuck with the dominant player forever. Adam Theirer has a post discussing this concept in relation to a recent paper by Robert Hahn and Hal Singer, Why the iPhone Won't Last Forever and What the Government Should Do to Promote its Successor, which highlights how dominant platforms often appear insurmountable, but often quickly are defeated from unexpected sources. Thus, worrying about things like exclusive arrangements or if the platform is too closed off may be a waste of time. Eventually, the market ends up taking care of it. The paper points out that previous technologies are often declared the "end of innovation" as well, such as the Motorola MicroTAC flip phone (I had one, ages ago), which Fortune described in 1989 by saying:

Portable phones won't get a lot smaller than this one. After all, they have to reach from your ear to your mouth.

Take a look: And no more innovation ever happened in mobile phones over the past twenty years, right?

Filed Under: innovation, iphone

Will People Pay CNN To Help Them Report The News?

from the shouldn't-that-work-in-the-other-direction? dept

I've been seeing good reviews for CNN's new iPhone app, that's apparently well-designed. Lots of people are pointing out that the app is being offered for $2, as they wonder if people will "pay for the news." Except, of course, anyone with an iPhone can access cnn.com for free via their browser. So, if they're paying for anything, it must be additional features or convenience that the app allows -- not the content itself. And, for all the good reviews of the app, there's one "feature" being promoted that I'm not so sure I understand. Everyone keeps talking up how the app will turn anyone with an iPhone into an on-the-spot reporter:

Among the high points of the CNN app: It offers the chance to essentially join the CNN reporting team. Readers are invited to submit their own photos and video clips to iReport, a feature CNN already uses on its Web site for gathering material from the public.

Reading this, all I can think is that CNN is asking people to pay it to work for CNN. If it works, bravo for CNN, but that does feel a little backwards, doesn't it? I can totally understand user-generated content sites where people do work for prestige rather than money, but I'm not sure how enticing it is to get people to pay to do work for you...

Filed Under: citizen journalism, iphone apps, news, reporting
Companies: cnn

See, The Palm Pre Can Be Offered For Free

from the was-it-such-a-ridiculous-suggestion? dept

A little over a month ago, I suggested that Sprint and Palm were making a big mistake in not offering the Palm Pre for free (more specifically, saying that Sprint should subsidize the full price). I don't think I can recall a post where more people told me I was so totally wrong. People insisted it was the dumbest idea ever, and that it would harm the brand value of the Pre, while costing Sprint way too much money. Yet, I still stand by that claim. Sprint doesn't make money selling the phone, it makes it by getting people to sign up for at least two years of Palm Pre service -- which is on the higher end of the service scale. The Pre is not as good as the iPhone, and did very little to really stand out from the competition. So the way to get around that is to offer the device for free.

At least some people seem to agree.

The device is now being offered in the UK... exactly as I suggested: free with a two year contract. At the same time, through some tricky step following, you can actually get the device for free in the US as well. I don't see how that takes away from the prestige of the device at all. If anything, it's only going to help make it easier for some people to at least try it out as a phone.

Of course, my other big complaint with the Palm Pre -- its weak developer support still stands. Famed developer Jamie Zawinski just wrote about his absolutely ridiculous experience trying to get two simple apps available on Palm Pre phones. It's taken months, and they're still not available, even though he wants to make them available for free. Instead, as with the iPhone, the "approval" process of getting apps into the app store are positively ridiculous. I had been seriously considering getting a Palm Pre (in fact, a few months ago, I was positive I was going to get one), but without real developer support, it's just not worth it. I'll wait until a decent Android phone is available instead.

Filed Under: palm pre, pricing
Companies: palm