One More Spin of the Format Upgrade Cycle for Music Industry: Preloaded microSD Flash Cards
By Mike McGuire | September 22, 2008 | 3 Comments
In hopes of giving the physical format-upgrade cycle one last spin – not to mention maybe increasing the standard unit price the majority of consumers pay for prerecorded music to anything more than $.99/song — all four major music labels have banded together with SanDisk to announce“slotMusic” an effort to build consumer interest in the distribution of DRM-free, high-bit-rate-encoded songs on 1GB microSD memory cards.
But wait a minute, we’re about six years into the legitimate online music market, and the labels want to take us back to the days of physical media?
Apparently, they do want to focus on physical. For SanDisk, the motivations are easy to understand: another way to ship more packaged flash memory. For the labels, however, the reasoning is a bit more elusive. I believe what we’re seeing is the last gasp of the bundle for music. By throwing more “stuff” onto the microSD “album,” the industry is looking to make the package as attractive and profitable as possible. I say that because my guess is that the unit pricing for a slotMusic card will be more than a CD. Retail pricing for a slotMusic card has not been released and no availability date was announced today. SanDisk executives said they expect the slotMusic cards to be in the channel by the holiday buying season. (WalMart and BestBuy are the two retailers on board first. Interestingly, each has been mentioned in news reports as reducing the amount of square footage they dedicate to CDs.)
SanDisk and the labels are touting slotMusic effort as the answer for what they claim is a significant number of music consumers who desire not just ownership of music bits on a hard drive but also the packaging everything else – liner notes etc. (SanDisk said the parties had done market research to support this claim but did not have the methodology, sample size etc. available when we spoke last week.) Some key benefits cited by the SanDisk executives:
· The growing number of mobile phones with microSD slots
· Instant gratification: The SanDisk argument is that “buying” a song online involves finding it, downloading it and synching it to a portable device. The “time to play” can be hours. With the slotMusic cards, one can buy them at retail and pop them in a device’s slot and play immediately.
· As previously mentioned, no DRM and minimum encode rates will be 256kbps, with many planned to be released at 300kbps or higher. (By comparison, most of the songs in Apple’s iTunes store are encoded at 128Kbps.)
To me, it remains an open question whether a significant number of consumers will actually respond to the notion of extending the old concept of the “bundle” even though the bundle can now include not only songs but also video, lyrics, and any number of items. It’s the songs consumers are after and today’s digital natives seem to be quite comfortable going out and acquiring that other information as needed.
It will be interesting to see if the slotMusic cards can become the ’08 holiday season’s must-have stocking stuffer or the latest example of a technology that misses a market shift.
Then again, “green” consumers might be crossing it off their lists since it appears the retail packaging for the fingernail-sized microSD cards is about the same size as that of a CD.