Apple buys Lala

In a very interesting move and sign of things to come, Apple confirmed that it has bought Lala.com for an undisclosed sum. With these Apple enters into streaming music which would increase its revenue. Lala.com has about 8 million songs available for streaming and purchase. Users can listen to a song in full before buying. Unlimited plays of a song on the Web cost 10 cents, and an MP3 download can be had for an additional 79 cents (as against iTunes price which ranges from 69cents to $1.29 per song.

Implications for the Consumer Electronics Vendors

The expected explosion in the networked audio segment would have implications to the three major stakeholders of the eco system. We looked at the implications for the music industry and the broadcasters. In this post we will focus on the possible implications for the consumer electronics (CE) vendors.

CE vendors play a crucial role in bringing the music to the home. The growth of networked audio is directly dependent on the the no.of devices available in the market, its price point and ease of use. The vendors themselves will have to overcome the following challenges:

• Networked audio products would need strong sales support and consumer education to raise consumer's interest.
• Ease of use, high quality UI and robust wireless operation will be necessary to move the market from niche to high volume.
  
• Consumers expect to have more convenience and immediacy (no need to boot up a PC for example), therefore the existing wireless handheld devices should act as internet tuners.
• Consumers tend to already have devices that can access internet (Smartphones, PMPs and ofcourse PCs) and would be sensitive to price for adding another device/feature especially at a time when the world is recovering from the downturn.
• Whole Home Audio (WHA), is unlikely to appeal to the mass and may be a overkill. 
• Networking should add value to the existing products (internet radio, AVRs, speaker docs etc.,). This would ensure faster convergence so that more and more products will offer both docking and networked connectivity.
  

Thank you very much,


RamP!
ramp.ramp@gmail.com

Implications for the Consumer Electronics Venodors

After studying the implications to the broadcasters and the music industry, this post looks at the implications of the consumer electronics (CE) vendors. I can think of the following:

Implication for the broadcasters

As more and more audio devices get networked, it would have several implication for the stakeholders - The Music Industry, Traditional Broadcaster and the CE companies. In the last post we looked at the implications for the Music Industry and lets now see the implications for the broadcaster.

• The power of internet to reach across local and international boundaries would result in audience fragmentation. 
• Internet delivery is inherently low cost and presents low barriers of entry to competition. Contrast this with the higher investment costs for broadcast infrastructure. Besides In-car listening is still the largest segment of traditional radio listening and therefore the high cost infrastructure is likely to maintained for many years.
• Next generation networked audio products will come with better UIs and larger color LCD screen presenting a new opportunity for visual ads too, apart from audio-only ads.
• Digital features like pause, replay and seek, as well as on-demand content like podcasts would be introduced for broadcasting making the experience lot more interactive.
• Interactivity ofcourse is the biggest attraction of internet radio. Live broadcasting, e-commerce and interactive advertising would all get inside the home.

Thank you very much,


RamP!
ramp.ramp@gmail.com

Implications for the Music Industry

In the last post we looked at the changes that one could expect in the global music market. These changes would have several implications to the Music Industry itself, the Traditional Broadcasters and CE (Consumer Electronics) vendors. In this post, we will look into the implications to the music industry.

• Biggest change would be the importance of "webcasting" which is poised to become the main source of streaming audio, as opposed to the traditional radio's role in promoting the recorded music.
• Consumers likely to expect such webcasts to be free or very low cost. This would mean established subscription services like Rhapsody and Sirius (who currently charge about $12 a month) are likely to be challenged by new players charging very low subscription rates (example: Pandora) or even completely free.
• Low barriers to entry and the global nature of interner only mean that thousands of webcasters might emerge and this could challenge the current licensing structure of music rights.
• Advertising could be the way forward to make-up some costs.
  
• It would be interesting to see what Apple does. Currently iTunes dominates the paid download market, would they introduce subscription? or even free streaming? Or would they come up with yet another game-changing strategy?
  

Thank you very much,


RamP!
ramp.ramp@gmail.com

Global Music Market: Today and Tomorrow

So far we have understood internet radio, how networked audio is expected to grow and the challenges that needs to be addressed for the explosive growth. In this post, lets take an overview of the music market of today and tomorrow:

The present music market is characterized by the following:

• CD ripping and file sharing contributes for 80-90% of the music
• Personal music is stored in handheld devices and PCs
• Apple dominates both the paid-for music and the hardware (iPod)

We could see a shift in the coming years to:

• Growth in subscription and ad-funded (free) music services
• Growth in on demand music from the internet (as an alternative to storage in devices/PCs)
• Improved connectivity to audio devices (growth in mobile music, if you will)

The above is captured in the following graph:
One can easily notice the following trends in the "music market"

• Collecting music has a huge momentum and is likely to continue for many years
• Audio technology has become personal (PCs have become media players)
• DLNA makes interop easier between streaming music sources and audio devices
• Internet radio services are popular and is likely to drive networked audio products
• In the next 2-3 years most of the medium-high end audio devices will have networking as a standard feature (see what Sony's CEO has to say on this in CES 2009).

Ofcourse for all these things to materialize they are certain key enablers, as discussed in one of the previous posts. In the next posts I'll focus on what all these would mean to various stake holders.

Thank you very much,


RamP!
ramp.ramp@gmail.com

Key Enablers

Three major things need to happen before networked audio takes it wings:

1. Awareness:
Connected home audio is still in its nascent stage and appears very "techie". An awareness is needed for the mass market adoption. Also, current major players are mostly start-ups and tier-3 companies that have little marketing budget and no brand position. This is changing though rapidly as increasingly tier-1 companies are getting connected to the networked audio segment.

2. Price Points:
A transition need to happen from pricey $2000 AVRs into sub $500 audio boxes so that more users can afford. Once this happens the shift would be towards volume game. It is expected that most big brands will have a sub $500 systems in 2010.

3. Usability:
This one is a major problem for any disruptive device. Current devices are all seen "techie" and complex to use. The following changes are likely to increase the usability:

• Entry of major CE brands that know the CE market is expected to refine user experience for mass market devices
• WiFi set-up made simple by the use of WPS standard
• Color LCDs and intuitive GUI makes navigation easier
• Popular music services like Pandora, Raphsody etc., are making the content discovery simpler

What the future folds for network audio

OK, now we know what is an internet radio. What's the future look like? Why not look at what Sony's (arguably the biggest audio brand) CEO has to say in CES 2009:

Ninety percent of Sony products will connect to the internet and to each other by 2011. Sir Howard Stringer promised the 2009 CES crowd in the show’s opening keynote. Examples were woven throughout the lengthy session that smartly kicked off with a stand-up routine by Tom Hanks: a WiFi CyberShot camera that goes on sale today and can send images directly to Bravia sets as well as online; the next-gen Sony Dream Machine, an always-connected clock radio produced with the folks at Chumby; video that can move between the Bravia and the PSP; Gracenote, which can manage music content across platforms; and so on. But seamless only works when everything around it is, well, seamless. For instance, Sony’s Cyber shot demo worked only because, unlike mere mortals in the ballroom, it had access to a wireless network. The Chumby radio will wake you up with the latest music video from Bruce Springsteen—as long as your home network is up.

Does anyone need more persuasion?

What is an Internet Radio?

What is an Internet Radio? - this is the first question I hear in India, when I tell folks that we are making chipsets that power stand-alone Internet Radio devices. Internet Radio is an audio broadcast service that is accessed via internet. Internet Radios are different from on-demand file serving and from podcasting, in the sense that it offers listeners a continuous stream of audio, where the listener have no control (much like terrestrial or traditional radios). However the distinct advantage of the internet radio, is that its accessible from any place that has internet connectivity (though there are some licensing issues which we would look into) and is particularly popular among expatriates and among listeners that are not happy with their local stations.

Want to try? Visit vTuner and get instant access to over 11,000 internet radio stations.

Some of the popular internet radio services include Pandora, Rhapsody, Sirius, Last.fm etc.,

How does one listen? The easiest way to listen is from a PC that is connected to the internet. However, there are several standalone devices and AVRs (Denon, Pioneer etc., in the market that can be used to play the internet radio by connecting directly to internet through WiFi.

About the Wireless Channel

I make a living by working in the area of (mostly) software development in Telecom/Wireless. This blog is an attempt to capture the underlying technologies, standards, trends, devices in the market and just about everything that is happening in the wireless world.

Thank you very much,


RamP!
ramp.ramp@gmail.com