New music services reach for slice of digital pie

After 2006 -- a year when virtually no one managed to launch a digital music service in competition with Apple's dominant iTunes -- 2007 was a refreshing change of pace. Several fresh faces emerged onto the digital music scene this year, buoyed in part by record companies' newfound willingness to experiment with different business models, but also by the departure of several high-profile competitors. By far the most visible service to throw in the towel this year was MTV's Urge; now, a new entity called Rhapsody America joins Rhapsody's technology with MTV's editorial and music curation staff. Sony began the slow dimming of the switch on the struggling Connect music service. The company in August announced a gradual shutdown that will begin in March, laying off about 20 employees and reallocating the remainder to another division.

Zune, though, is hanging in there. This year, the Microsoft service was upgraded with a decidedly social networking-oriented strategy. The Zune Social initiative incorporates user profiles (called Zune Cards) that members can use to list their favorite artists, post widgets onto other social networking services and let others sample music in full-song fashion. Meanwhile, a host of such companies as Snocap and Lala tried a more "distributed commerce" approach -- where digital vending machines called "widgets" let artists offer downloads from their own social network profiles, as well as from their fans' profiles, rather than forcing consumers to visit digital megastores like iTunes. And the year ended with Radiohead's monumental decision to sell its new album directly from its Web site and let fans set the price.

View: Full Story @ Reuters

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