Original URL: http://www.theregister.co.uk/2004/11/19/inspired_music_vending/

Digital music download coin-op to offer 'all formats, all DRMs'

Inspired thinks big but lacks the content

By Tony Smith

Posted in Media, 19th November 2004 12:51 GMT

Analysis Inspired Broadcast Networks (IBN) CEO Norman Crowley has pledged to support all DRM-protected music formats, including Apple's FairPlay, when his company rolls out its fleet of pound-a-download digital music vending machines.

However, he admitted that it may take some time before the company is able to sell songs to passing punters. While licensing negotiations are underway, IBN has yet to sign up a single music label to its Urban Digital Vending (UDV) service.

Formally launched in London this week, IBN's UDV roll-out will see coin-operated vending machines sited shortly in the capital's King's Cross and Waterloo railway stations. Crowley told The Register a further eight machines may appear in the city before Christmas ahead of a more aggressive 2005 roll-out that is set see up to 20,000 music delivery boxes installed throughout the country.

IBN's parent company is Leisure Link, one of the UK's biggest gaming machine and jukebox providers, so there's little doubt that it can deliver a significant number of vending machines to suitable locations during the roll-out phase. According to Crowley, IBN has already won the backing of hospitality company Welcome Break and fashion retailer NewLook, and hopes to sign Coffee Rupublic shortly. Woolworth's Group subsidiary MVC is already using compatible machines as in-store listening posts. IBN also has Coca-Cola's support, and the drinks manufacturer will be co-branding a number of the vending machines, which will also serve up said beverage. Lastminute.com's upcoming ticket sales machines will likewise be able to offer downloads.

Initially, however, many of these machines will not sell songs. While IBN has licensed over 2m songs for playback through it's The Music digital jukeboxes - which are rapidly replacing Leisure Link's CD-based players - its public performance licences don't cover digital downloads.

Crowley said IBN is in talks not only with the major labels but key independents too, all with the aim of delivering that 2m-track database to download customers. Right now, even iTunes doesn't offer that many songs in the US, let alone the UK, and it's ahead of all the other digital music providers in the market today.

To be fair, Crowley's taking a longer view, out to a year or so down the line when the vending machines are in place and initial label signings have already allowed IBN to begin offering downloads. In 12 months' time, it's possible that the UDV network will be able to offer significantly more songs than iTunes or Napster do today. But by that time, so will they.

IBN's negotiations are likely to be made more tricky not only because Crowley is adamant that the service supports iPods - given the Apple player's market share, he'd be daft not to want to include it - but the anonymous nature of cash-purchased downloads. With no explicit link to a form if ID - typically a credit card, and at the very least an account with the music provider - getting the DRM right will be harder to achieve, and the music industry will need to be persuaded that IBN can get it right before signing on the dotted line.

Apple's refusal to date to license FairPlay isn't going to help, but Crowley's keenness on supporting all such systems, means he's going to have to take Sony's MagicGate and Windows Media DRM too. It also means supporting Apple's preferred format, AAC, plus Sony's ATRAC and its derivatives, and Windows Media Audio. Putting in place content delivery licences to cover all these bases will be no mean feat.

Asked what technlogical innovation he'd most like to see coming to the digital music industry over the next 12 months, and Crowley puts a universal DRM system at the top of his list.

Phones matter more than MP3 players

Help may come not from the usual digital music suspects but by way of the mobile phone vendors. No handsets yet support DRM in the UK, though it's starting to happen in the US, courtesy of Microsoft's Windows Media Player 10 for Windows Mobile 2003 smart phones. However, other handset makers are expected to roll-out DRM enabled player software during 2005. Given the mobile phone market's general preference for standards - MPEG 4 for video, for example - it's likely to lead the way with better cross-vendor format and DRM support.

That plays into IBN's hand not only by reducing the range of technologies it will need to support, but also because of Crowley's belief that it's mobile phone users who will be more attracted to UDV systems than iPod or Zen Micro owners.

The drive to buy on impulse that Crowley is hoping to tap into, particularly purchasing with cash, is likely to appeal to punters who see music as being more disposable, less a part of a collection, and that's generally not how you'd profile the owner of an expensive, high-capacity digital music device.

More and more phones have memory card support, and as 512MB and 1GB cards come down in price, plenty of folk will, in a year's time, have handsets capable of storing a decent number of tracks, says Crowley. Quite a few will have Bluetooth, too, and while IBN's vending machines sport slots for all the key memory card formats - not to mention USB and Firewire - many will allow tracks to be transferred across and ad hoc Bluetooth link. And thanks to IBN offshoot The Cloud's move to equip Leisure Link systems with Wi-Fi access, in order to build its hotspot business, users will also eventually be able to download tracks using 802.11 wireless technology, Crowley says.

And Wi-Fi, he adds, offers the potential for fast, 3G-beating download speeds. When the full network of 20,000 vending machines is up and rumning, it can even challenge the near-broadband mobile phone system for availability, he believes.

But technology is of little value if you don't have the content, and that's what UDV's future hinges upon. Crowley called upon broadband connectivity partner BT Retail and its CEO, Pierre Danon, to give UDV his thumbs-up. The strength of partners like BT, Coca-Cola and Woolworths will, he hopes, help persuade not only the music industry but the DRM owners that they need to work with IBN. Launching the service before the download content is in place is a risky opening gambit, but probably one that needs to be made, Crowley feels, to get the licensing negotiation game going.

Will it win the licenses it needs? That depends on the changing landscape of the digital music market over the next year or so, as Apple's lead in music players and online music sales is challeged by more sophisticated Windows Media-based devices, and how aggressively it pursues the mobile phone market. Given the growth seen in legal downloads, it's hard to see content providers being unwilling to come to an agreement with IBN, particuarly while it's a content seller's market. ®

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