Will Music Search Level the Playing Field?

There's a lot of talk about the two new media search companies GoFish and SingingFish (AOL owned) and what it will mean to digital music stores. Basically these services search the net for media - GoFish returns only pay-for-download results, whereas SingingFish returns everything. So do these services level the playing field of digital music stores - allowing smaller niche sites to compete with the monstrous likes of iTunes and Amazon.com?

Yes and no.

Yes, in that it does level the playing. Someone searching for an obscure title or artist can now use these sites to locate that media. Alternatively, someone looking for the cheapest price for a common title now has that capability.

No, in that I believe people are going to find a service that appeals to them - and being creatures of habit, will return to that site for their music needs - as long as that service can fulfill the customers' niche needs. The reason why I like Rhapsody is that while it has a huge catalog, it also allows you to dive into the niches of music genres, giving you guidance along the way. The design of Rhapsody gives you recommendations based on an artists influences and who they have influenced - all linked together - creating endless paths into the world of music.

The problem with searching is that unless you know what you are searching for - it's pretty useless. The great thing about properly designed music sites like Rhapsody - is that you don't have to know what you are looking for. If you like a certain type of music - dive in and explore.

GoFish
SingingFish
Rhapsody

Who Is Making Money From Downloading?

It blew me away awatching Loudeye's stock finally take off this week. Loudeye is the company that provides the content for Apple iTunes, Amazon.com's music service, owns the European online music distributer OD2... and this week their stock tripled in value. Yeah, I know that means it went from $1 to $3, and is now back down to about $2.40 ... but still, that is a 140% increase in value. OK, if you've followed the stock you'd know it's initial IPO was $60...

But the movement in the stock shows people realize that someone's going to be making money off all these downloads. Is it Apple with 80% of the paid download share? They're saying it's a break even situation - and iTunes is really a loss leader for the iPod and getting people more into Macs.

Now consider this. On a 99 cent download, Apple nets about 4 cents, the artist gets 8 cents and the label gets 64 cents. But on a ringtone download, the retailer can net 75 cents! It's because of the difference in paying for the rights to a song and paying for the rights to cover a song. That, and ringtones are priced two to three times more than songs. So HEY! Music Stores! Start selling ringtones to cover your costs!!!