Thursday, August 10, 2006

Nokia's purchase of Loudeye

The announcement a few days ago (which I saw reported in New Media Age) that Nokia is to purchase Loudeye is both bold and brave and certainly something that I think everyone should sit up and take a look at.

In the mobile music space you have iTunes sitting pretty with Napster version 2 looking to make an impact. Offerings from HMV and Virgin do not seem to be making much of an impact against these two (and specifically iTunes) whereas you then have the web2.0 offerings typified by Pandora, and the Kazaa p2p file sharing network that has recently pledged to go legitimate.

Meanwhile you have a sleeping giant in the form of Sony with their Walkman brand.

Nokia's bid looks to me like a concerted effort to remain a player in the overall entertainment mobile space which only really Apple can claim to have done anything approaching this scale. In many ways I'm a little dismayed that it wasn't Sony who put the bid in as then you would have the streaming content, the rights and the method of delivery all together in one package. Nokia have definitely decided to do something to shake things up and I hope that this move wakes a few other people up in the space, because at the moment there is an awful lot of people who just seem to be giving up instead of fighting for their marketplace, and to my mind that is a case of coming up with innovative ideas for the marketplace rather than simply looking at how to market whatever products they currently have.

My biggest issue is that music downloads seem to be focused very much on the 'single' and I don't see anyone taking the album seriously. That is a natural path to take when your market is the single buying teenage marketplace but that has never really been what the real music business was about. The great seminal works were always albums. People bought Rumours, not simply the Chain. They also bought Disintegration and not simply Lovesong. I think there is a massive opportunity for someone to own the album buying download space and make what I suspect will be some very impressive margins.

Its interesting that Radiohead used this argument against iTunes and refused to provide their content to Apple, and I can remember having this conversation years ago with Midge Ure when he pointed out that great bands were a result of nurturing which then led to enormous record sales at the third or fourth album. His argument was that somewhere out there was the next U2 and that the business was geared up to miss them because they couldn't produce quick wins.

These days with Myspace producing the next big thing I still think there is room for the album buying public to have a channel left open to them. I will be very interested what happens next.

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