RealNetworks Rhapsody: ‘few new MP3 buyers’
p2pnet news view Music:- Is there a digital music boom?
Vivendi Universal, EMI, Warner Music and Sony BMG would certainly like the world to think there is.
But is it real, or only make believe?
Coolfer says the former is true and that RealNetworks is missing out on much of it.
“RealNetworks announced Q4 2008 and full-year earnings last week (read SEC filing),” says the story, going on »»»
Taking into account digital trends, RealNetworks’ music gains are fairly disappointing. The company’s music revenue increased 8% for the entire year and 8.2% in Q4. Those gains are well behind the increase in U.S. digital download revenue (about 30% in 2008) and the high adoption rates of free, ad-supported services for both PC and iPhone.
In 2008, RealNetworks launched an MP3 download store with a multi-million advertising campaign (from this press release, $50 million over a year and $15 million in Q3 alone). In addition, it has a partnership with Verizon Wireless that effectively gives it a nationwide sales force – Verizon customers are now able to sign up for Rhapsody at Verizon retail locations and the Verizon Wireless web site.
Says Coolfer:
“If you take out a $5.34 million increase in Rhapsody revenue, you’re left with $7.5 million that is accounted for by MP3 store sales and Verizon over-the-air downloads. It’s not a terrible number, but it shows what little success Rhapsody has had in selling more digital downloads. And that’s a problem. Part of the company’s music strategy is to lure MP3 buyers to its higher-margin subscription service. Few new MP3 buyers means few potential subscription customers.”
Coolfer – RealNetworks’ Music Gains Disappoint, February 17, 2009
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February 18th, 2009 at 2:17 pm
they are all pushing this subscription angle, which ONLY lines the pockets of the cartels. how is the subscription supposed to know which article to reimburse for the sale when they sell music in bulk? the answer? fuck the artist, like the MAFIAA cares about the artist. just look at what they are doing to their customers.
sales are down… awwwwwwwwwwwwwwww. give consumers what they want and they might pay for it. remember, you are competing with ‘FREE’.
Business Model. FAIL.
February 18th, 2009 at 2:17 pm
…which ARTIST to reimburse…
February 18th, 2009 at 3:39 pm
“Taking into account digital trends, RealNetworksâ music gains are fairly disappointing. The companyâs music revenue increased 8% for the entire year and 8.2% in Q4. Those gains are well behind the increase in U.S. digital download revenue (about 30% in 2008) and the high adoption rates of free, ad-supported services for both PC and iPhone.”
RealNetwork brand awareness is largely negative. They screwed up their users too often in the past. MP3 buyers have some choice when to pay for music made by kartels and they go to iTunes and Amazon instead of Real.
This blog entry is priceless: http://jogin.com/weblog/archives/2004/02/29/real_obnoxious
February 18th, 2009 at 4:47 pm
I agree with the Reader’s Write above. RealNetworks screwed their customers long ago and got a name for themselves…a negative one. I won’t have any sort of player by RealNetworks. Not today, not tomorrow, in fact, never. So feeling this way, why in the world would I pay money to support such a company? Much less the ones behind it; the majors.
This is one of those things I have a real hard-on about. When companies, well known for screwing over their customers, want to sell me something I run the other way, making sure my hand is over my wallet in the process.
Once again the majors show no sign of a clue on what it is going to take to get the public buying. They all want this subscription model because of it’s steady monthly inflow of money. They are however, not offering something that is worth a subscription. You quit paying, what you bought quits working. I value my money more than that and I want something in return for it. I don’t get that if the use just evaporates up into the air.
Most potential customers feel this way and that is why the subscription model isn’t working. They just as well be selling air for the value they are presenting in trade for my money. I get air for free, why pay for it?
February 18th, 2009 at 5:37 pm
If a paying subscription model doesn’t appeal to you I can understand. I have tried them before and as my music consumption slows after an intial burst the monthly fee’s remain the same. The Zune Market place hybrid model is NOT in canada but I think it is closer to making sense than straight rental. $15 and you keep $10 worth of music. the $5 rental fee is a great way to sample full lenght most anything else instead of 30 second clips at iTunes or Amazon before you love something enough to buy it.
February 18th, 2009 at 5:38 pm
well, mp3’s are so 1999. If I pay for a CD I get a “perfect digital copy”. Why would anyone (with a decent download rate) in it’s right mind buy a product that only contains ~10 percent of the content that a CD song contains.
the market those sellers must compete with is named lossless quality downloads: https://thepiratebay.org/browse/104
February 18th, 2009 at 6:19 pm
For me, mp3’s work. One is that they don’t take up the space that a perfect digital copy does. For another, my hearing isn’t that good any more. So having a cd with a bit rate of 3000 doesn’t help as opposed to a bit rate of only say 320. So instead of getting those 10 or 12 songs on a cd, I’d rather have a choice of 20 albums on the same cd.
February 18th, 2009 at 6:24 pm
What on earth are these “CD” things you are all talking about???
February 19th, 2009 at 11:47 am
‘Costly Device’
February 20th, 2009 at 5:00 pm
Hi everyone- Lacy from RealNetworks here. It’s always interesting to read comments about music. People are SO passionate about music- myself included- that it always brings in different points of view. First to the commentors that have had bad experiences w/ Real- I’m sorry that you didn’t have the experience we were hoping for. I’ve commented on that on this blog before and truly hope that you’d be willing to give us another shot as we’ve cleaned up our act. Secondly- to the subscription music talk- personally, I never thought I’d want a subscription service, but it’s amazing. The pure selection is fantastic, along with the ability to sample and listen to my music wherever I want. It’s been a totally awesome thing for me.
February 20th, 2009 at 5:09 pm
I get that now for nothing, w/o your (cough) apps.
remember Lacy, you are competing with FREE.
February 20th, 2009 at 5:11 pm
and, personally, I think that subscription based revenue model is admitting that the content is so substandard, it has to be sold ‘in bulk’, as for me, Ill pass.
February 20th, 2009 at 5:21 pm
here you go Lacy, my collegue came up with a killer idea.
One time fee, lifetime membership for any particular genre, say Rock. Ship me every single CD every created for every Rock genre made for 2500usd. With continuous updates until I die. Every AC/DC, Metallica, and all other rock bands ON CD, no DRM, no strings, to do what I want with it for life. Ensure that the artists get 80% of the profit, distributed equally, and PROVE THEY GET IT, and this model I would give you my money. The artists make the content, the labels just sell it. If 10% is good enough for God, its good enough for the MAFIAA.
2500usd for each genre, Rock, Country & Western, Blues, whatever, with a list of what I am getting, ON CD, and even a high profile file sharer like myself would seriously consider it. Until you start treating your customers that keep you in business with respect, I will continue to share music for free.
Make it worth my while for what I pay, and ensure the artist gets paid, and NOT the MAFIAA, and I would gladly give you my money.
stw
February 20th, 2009 at 5:58 pm
To your point, Surfer, artists get paid each time a song is streamed. Do I know how much? No, but we’re committed to paying the artists.
February 20th, 2009 at 7:10 pm
hi lacy. i thought you disappeared. just lurking, huh?
i donât use realmediaâ¦i actually donât know of anyone who does and itâs been a long while since iâve seen any modern website that uses it. any old real files i have i converted to mp3 or divx or xvid. realplayer hasnât existed in my system for half a decade.
anyway, real and others donât seem to get the message that consumers do not want to rent music or video. they do not want to have to rely on dedicated players for certain media. they do not want to be restricted by geography to use any online service. doing things like this loses potential customers forever, and is ridiculous in the 21st century.
joss whedon gave away dr. horrible to everyone on the planet and raked in the dosh through sales on itunes, merchandise, and dvd sales.
monty python gives away their stuff on gootube, and in less than three months their dvd sales increased by 23,000%.
when rhapsody, napster, and others go bust (and they all will, sorry), where will all of the customerâs music and money go? who will reimburse them for obsolete media players? apple? realnetworks? i donât think so.
apple is sort of on the right track by getting rid of drm and some other restrictions.
as iâve written here – and proved – many times before, the performers are the last in line to receive royalties, if at all. the lionâs share of profits goes directly into the pockets of the cartels and never sees the inside of a performerâs bank account, due to the greediness of certain corporate entities and their devilish ways of cooking the books (also proven here numerous times), publicly crying to the poor house, inside laughing all the way to the off shore bank.
jon, myself, and others who frequent p2pnet have actually discussed these things with famous and not-so-famous performers and they all have said the same thing, including the fact that the labels are absolutely not interested in artistic endeavors. they only care about the moolah. their bottom line is the bottom line. paying royalties is not in their business model or budget.
realnetworks may pay the labels, but the labels do not pay the performers, technicians, etc who do the work. so you can understand why you arenât getting a welcome reception here – youâre working for some of the most despised people on the globe.
who can change this? well, real can do something to start it, actually. how? by providing quality âproductâ without restrictions, rental fees, no dedicated players, no drm, and demanding that the labels make public weekly or monthly lists that prove how much each performer has been paid in royalties from each service, whether digital, on air, streaming or sales. the list goes on.
also, demand that real and other distributors not be restricted to IP address distribution restrictions.
sure, you can do it. real can demand it because the labels want you to distribute it for them. if one company makes the demand, others will probably fall into line and do the same thing if you stick to your guns.
everyone would like to see their favorite performers be paid for whatever enjoyment they give, but not every performer can sell millions of cds or earn $20m/film. most donât actually earn that much, and no one is certainly deserving of that much, either.
(although peter jackson is still waiting for royalties from king kong that were stolen by the studio.)
if the distributors like real can get together on demanding the labels prove to the public where the money went to (the bulk should go to the performers), they might find their sales increase.
of course, it might be too late in the day for a drastic change like this because the labels donât want to let go of the purse strings, even though the consumer left them in the dust years ago. And many performers (many more than the cartels will admit) are following suit and finding ways to give their stuff away for free and reaping large financial benefits from the gesture.
as has been said before, youâre competing with âfreeâ. why do you distributors continually try to make people buy something they donât want? consumers are more savvy than they were in the 60s and 70s, when current business models, ad revenue calculations and ad copy were basically formulated. i donât buy things i donât want. but i might be interested if i was offered something i do want, and be allowed to pay for it thatâs most convenient for me – bank transfers. no paypal. no credit cards. no checks. no money orders.
but, there are more indie performers who need exposure, so realnetworks and other distributors should instead look to them to form good relationships in distributing their works and remunerate them fairly.
and, realnet, etc. should be bound to make public exactly how much in royalties was paid to each performer on a weekly/monthly basis. whatâs good for the goose is good for the gander. donât demand something of the labels that you refuse to do yourself in the same position.
**********
as far as giving real another shotâ¦youâll recall a few months ago i was hoping to do just that with another real product. but because of previously undisclosed restrictions (which you did apologize for) iâve been unable to give real another shot.
also, you ignored my last email to you which had several specific questions. i thought weâd started on a good relationship and was surprised real decided that rather than answering my questions, it would just ignore me and hope iâd go away.
well, i havenât gone away, and iâm still waiting for answers to my questions.
so please tell meâ¦why should i give real another shot?
btw, as a side note: i donât read corporate blogs. i leave that to jon and others who donât mind wading through all the BS PR propaganda. you know that p2pnet is a place where meaningful discussions take place (usually), so i hope youâll refrain from saying more things like:
âI never thought Iâd want a subscription service, but itâs amazing. The pure selection is fantastic, along with the ability to sample and listen to my music wherever I want. Itâs been a totally awesome thing for me.â
that sounds completely like it was written on madison avenue for a 13 year-old to say in a commercial. i don’t think you’re 13
, but it doesn’t sound like something a woman would say unless she’s being paid to say it.
and anyway, i donât believe you actually pay to use the service, as youâre an employee of realnet and major media/telecommunications companies usually give their services to their employees for free.
so when rhapsody dies, you wonât have lost a cent.
February 20th, 2009 at 7:34 pm
amen, we, the consumer have had it with the extortion cartels. P2P file sharing networks may be the minority, but we grow every single day that the RIAA sues another innocent victim, when they are in fact, pushing people away from their draconian business model and toward free.
I, personally would purchase music that I like, If I had PROOF that the artist received the majority of the sale instead of some asshat who sued their only viable opportunity (Napster) out of existence in order to ‘control content’. The genie is out, there is no going back, their business model is unsustainable in an atmosphere of educated consumerism.
suing their customers ‘because we had no alternative’ is just absolutely bullshit, and the public knows it. If you re-evaluate every single statistic without considering file sharing, you will find that the MAFIAA’s legitimate customer base is dwindling for obvious reasons OTHER than file sharing.
consumers are aware, and we WILL get what we want, with, or without the RIAA/MPAA/IFPA/CRIA, or Real. period, end of rant.
stw
February 25th, 2009 at 8:39 pm
cool!!!