iPhone Users Have the AT&T Blues

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AT&T has long been vilified as the bane of iPhone’s existence, the only thing ruining what could be the perfect smartphone experience.  But, as reported by CNNMoney, they may be taking the blame for what would have happened to any network – yes, even Verizon.

By far, the biggest complaint among iPhone users – and the basis of an intensive Verizon advertising campaign – is that AT&T drops calls and has a spotty service map.  The network has been rated the lowest in customer satisfaction. These are problems, but are they really only AT&T’s problems?  CNN posits that, really, the industry in general was unprepared for the iPhone, or more accurately, the massive amount of data that iPhone users gobble up.

Daniel Hays, an expert in the wireless industry and PRTM consultancy partner, says, “The challenges that AT&T has are being faced by a lot of operators around the world:  Very rapidly growing usage coupled with dense populations.  Would it have been different on Verizon?  Probably not.”

AT&T itself admits that service is subpar in New York and San Francisco, two cities where iPhone users have the most dropped calls and patchy coverage.  But – there’s a big but coming – it probably would have been worse if another network had been chosen as the iPhone’s carrier.  AT&T does have the fastest 3G network, which has a coverage zone of eighty percent of the US population; their non-3G coverage is more extensive.

Verizon has gone on the attack with clever ads decrying AT&T’s coverage.  But Chris Larsen, an analyst for Piper Jaffray, wrote, “For Verizon…we still wonder if the network has the capacity and backhaul to support a device with an adoption curve of the iPhone.”  In other words, what would happen to Verizon’s network if its data traffic increased by 5000 percent?  That is exactly what happened to AT&T in the past three years.  And their network wasn’t quite ready for that increase – but neither would others have been.

That said, AT&T recognizes the need and the urgency of improving its network.  To address the concerns, they have deployed over 20,000 WiFi hotspots around the US to relieve data burden on the network.  They plan to double their network speed in the next few years, and, according to AT&T spokesman Fletcher Cook, they have improved network quality by twenty-five percent.  They may also institute a tiered data plan system so big data downloaders would pay more.

Larsen adds, “Unfortunately for AT&T, when it comes to network quality, perception is reality and right now Verizon has a more positive public perception.  If AT&T can continue to show improvement in network throughput, it may blunt some of the impact.”

It might be hard to give up the idea that AT&T is the root of all Apple evil, but maybe iPhone users should be glad the network has handled a 5000 percent data increase with only some dropped calls and patchy service, primarily in dense iPhone usage areas. What would a lesser equipped network have done?

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The Dalai Lama, Censorship, and iPhone

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Apple recently became the newest US tech giant to come under fire for alleged censorship.   In 2005, a Chinese journalist was sentenced to ten years in prison when Yahoo released email evidence from his private account to Chinese authorities.  Google’s sanitized Google.cn version has also been criticized because it blocks both porn and some search results of a politically sensitive nature.  Both Yahoo and Google responded to international disapproval by saying they were simply following Chinese law.

This was echoed yesterday by Apple spokesperson Trudy Muller when it was discovered that several iPhone apps related to the Dalai Lama and Rebiya Kadeer have been blocked in China. “We continue to comply with local laws.”  Both of these figures are exiled minority leaders, who are roundly detested by Chinese authorities.  Apps, including inspirational quotes by the Dalai Lama, a prayer wheel, and an app called 10 Conditions, which is based on a documentary of Kadeer’s life, are unavailable to the Chinese populace.

While the Dalai Lama is a more well-known figure in the US, Rebiya Kadeer garners her own media spotlight – and in China’s media, it casts a harsh glare.  She is a prominent businesswoman and advocate for the Uyghur people, a Muslim minority in Xinjiang, China.  She protests the “systemic oppression” of the Uyghur people by the Chinese government and has been arrested, sentenced to prison, and finally exiled to the US.

According to PC World, Apple normally lets the app developers decide which countries their apps will be available in.  However, this appears not to have been the case with these particular apps.  A developer based in China, whose identity he did not wish to disclose, said, “Given that Apple has cooperated with China before (by not distributing games), it’s of course very likely that it’s Apple, not the developers, that are [sic] preventing certain apps from appearing.”

This claim is bolstered by James Sugrue, designer of the blocked Dalai Lama quotes app.  “I didn’t know the app had been pulled, and wasn’t informed.  Apple reserve[s] the right to do this sort of thing, and while from a censorship point of view I disagree with this, I can understand why they did.”

Apple is treading over old territory here:  back in June, the New York Times reported, “China is facing a storm of protest at home and abroad over new regulations requiring all personal computers sold in the country to include software that can filter out pornography and other “vulgar” content from the Internet.”  The definition of vulgar includes sites discussion human rights issues, Tibet, and other politically sensitive matters. Besides the censorship issue, opponents of this plan say that the software, Green Dam, has the potential to cause damage to servers or systems.

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Radio Stations Get a Break – Temporarily

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Radio stations pay fees to music licensing companies, such as BMI, to broadcast songs under their licensure.  The fees, then, go to the artists and songwriters in the form of royalty checks.  Yesterday, it was announced that stations would get a seven percent discount on their fees – but only until BMI, ASCAP, and the Radio Music Licensing Committee can come to an agreement about permanent fees.

BMI Senior VP for Licensing, Mike O’Neill, said of the decision (or non-decision, as it may be):

We’ve been negotiating with the RMLC for some time. Unfortunately, we did not agree on a permanent final fees nor suitable interim fees.  To ensure the continued flow of revenue to our affiliates and to ease the administrative burden on stations, we arrived at this provisional discount.  ASCAP had [already] [recently] agreed to this provisional discount with the RMLC and we decided to accept this discounted fee until the BMI rate court sets a proper interim rate.

When a rate is set, the fees will be retroactive to January 2010.  It is expected, of course, that the rates will increase over 2009’s fees.  Radio station representatives have not commented on the on-going fee saga, but BMI President and CEO, Del Bryant, says:

The radio industry’s use of music has been increasing steadily, especially as the result of digital technologies. Although we understand there is downward pressure on radio industry revenues, it still is important that BMI songwriters, composers and music publishers are fairly compensated by radio broadcasters who use music to drive their business.

There is no word on when a rate decision will be reached, but it is likely to be one more blow to the struggling radio industry.  In October of 2009, a Senate Judiciary Committee approved a measure which would require radio stations to pay performance fees to artists.  Don’t they do this?  No.  They pay fees to music licensing companies that will go to songwriters and producers.  This law would require they kick in to artists as well, according to an article in the Wall Street Journal.

Small radio stations, those making under $50,000 a year, would pay a $100 flat fee per year, under the proposed law, while mid-level radio stations could pay a flat fee that is determined based on income.  Large broadcasters, such as Clear Channel, would pay higher fees per artist.

The bill hasn’t been passed yet – there’s not enough support.  The National Association of Broadcasters strenuously opposes the bill and lobbied enough support to table the measure for now.  They claim that artists receive untold millions in free advertising from radio stations that play their music; that should count for something.

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The Mysterious Apple Tablet, or iSlate, or Whatever

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Back in July, there were rumors of a new Apple product – essentially a larger version of the iPhone – that would be released in September.  And then the Financial Times reported that this new product, called the iSlate or simply the Apple tablet, would be due out in time for the Christmas shopping season.  As we approach the New Year, tantalizing details of this tablet PC gain new life – and we may be a bit closer to its launch.  Really.

A tablet PC is a small mobile computer; in place of a keyboard is a stylus or touchscreen.  A slate, which is a type of tablet, is a super slim, lightweight computer that have been used for years by the healthcare and education professions, as well as positions which require data on site during fieldwork.  And this really is the only demographic in which tablets have made it big.  Apple is hoping to change that.

Though no one knows what Apple’s version will look like, speculation runs rampant.  Will it be more computer-like, allowing users to run Firefox and other Mac-compatible programs?  Will it be a big iPhone onto which users install apps?  A former Apple employee who worked on a tabled version of the tablet five years ago says that much of the technology in the new version is already commercially available in other Apple products, especially the iPhone.  Back then, lack of software was the major reason it was scrapped.  Because of the App Store, this is not seen as an impediment any longer.

TechCrunch writer, MG Siegler, writes, “And the truth is that Apple has already proven the concept. The iPhone is a tablet computer, just smaller…The iPhone is the computer I use the most now day in and day out. And again, I never thought I’d want one. So while the immediate use of the tablet in our homes already riddled with computer may not be apparent just yet, I have no doubt that it will prove itself to be very useful.”

But for what?  No details have yet been released, but that hasn’t stopped people from making educated guesses.  Here are some likely possibilities:

  • It will be “an iPod on steroids,” (according to PC World) with a ten-inch screen
  • The handheld slate will allow for gaming, HD movies, and web browsing more easily than with a smartphone.
  • It will feature 3G broadband, and maybe WiFi and GPS.
  • Instant on.
  • It will weigh less than two pounds and less than 0.8 inches thick.
  • It will be expensive.  No one knows how much $500 to $1000 is most likely (and more likely still it will be towards the latter figure).
  • It may have all-day battery life.

Some experts predict that you will be able to do about 90 percent of what you do on your laptop on the tablet – which, with its tiny, lightweight design, makes it functional, portable, and convenient.  The big question is whether Apple can make this work when other tablets have failed to make a splash.  We’ll see – possibly very soon.

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Grandma’s Misfortunes Help Randy Brooks Rake in the Royalties

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There are Christmas songs that are so much a part of the season that, though we only hear them for one month a year, we know all the words to.  Jingle Bells, Rudolf the Red Nosed Reindeer, Have Yourself a Merry Little Christmas – you’re singing them in your head, aren’t you?  Whether you want to or not.  In the midst of snowy white sleigh rides, jingling bells, and flying reindeer, there is one Christmas “classic” that definitely stands out:  Grandma Got Run Over by a Reindeer.

Randy Brooks wrote the song, obviously, as a kind of joke.  He got his idea from Merle Haggard’s song, “Grandma’s Homemade Christmas Card,” which featured a more traditional Grandma.  “In it,” says Brooks, “his grandma didn’t die, but listening to the song, I thought she was going to.  Country music featured so many songs like that – two verses that get you to fall in love with the character, and then ‘kill ‘em!’  I thought it would be better to kill them in the first line, and then if you came up with three verses and a chorus, you’d have something.  So I came up with the first line, and there was no looking back.”

The song took off.  In a big way.  Perhaps due to lyrics like the following:  “She’d been drinkin’ too much eggnog/And we begged her not to go/But she’d left her medication/So she stumbled out the door into the snow.”   This irreverent view of Grandma struck a chord with listeners, and the song has consistently been a top seller.  The song has been played all over the US and world; has been installed in plush toys and is a ring tone.  Brooks thinks about 40 million copies of the song have been sold in one form or another.

And forty million copies sold means a nice royalty check for Brooks.  With the revenue from sales, while “not quite enough to handle two college tuitions,” Brooks has been able to handsomely supplement the income he earns working at American Airlines.  The checks keep rolling in, some years better than others, but they are remarkably consistent for the music business.  “In some years,” Brooks says, “the royalties make my day job my second job.”  Not bad for someone who wrote one hit song.

That is what Brooks is remembered for, and he doesn’t mind all that much. “It’s always awkward to be introduced into situations that have nothing to do with music, like a funeral, as ‘This is Randy Brooks – he wrote “Grandma Got Run Over by a Reindeer. That’s the downside of being remembered for one thing.  But at least it’s being remembered.”  And that is more than can be said of many one-hit wonders.  Have a Merry Christmas, and go easy on the eggnog.

SNL Takes on iPhone

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More good news for Google.  On Saturday Night Live’s Weekend Updated, anchor Seth Meyers, joked, “It was reported this week that Google would soon launch its own cell phone as a challenge to the iPhone.  Also a challenge to the iPhone?  Making phone calls.”  Ouch.  While you can do pretty much anything on an iPhone, or with the apps from the App Store, the most basic feature – making phone calls – is the most frequent complaint.  And the butt of jokes, as it turns out.

SNL is not the first to lampoon iPhone coverage area and propensity of dropping calls:  Verizon has built a whole advertising campaign on the perceived shortcomings of the Apple smartphone.  In one holiday-themed ad, the gang from the Island of Misfit Toys sees the iPhone coming and wonders why it’s there.  The elephant with the spots says, “What are you doing here?  You can download apps and browse the web.”  Then a 3G coverage map appears, and suddenly they all understand.

AT&T is the exclusive carrier for the iPhone and those in densely populated regions often have trouble making calls on the strained network.  Ralph de la Vega, AT&T’s wireless chief, acknowledged that these areas “are performing at levels below our standards.  This is going to get fixed.  In both of those markets [New York and San Francisco], I am very confident that you’re going to see significant progress.”  How?  The network says that by the end of this year, they will have spent $18 billion on upgraded.  They will have added more towers to provide better coverage for both rural and saturated areas and upgraded equipment.

Interestingly, though, AT&T’s SEC (Securities and Exchange Commission) filing indicates that they have spent less on network construction each quarter since the iPhone’s inception.  In another vein, de la Vega didn’t deny that the network may come up with a tiered pricing system.  According to AT&T, only three percent of iPhone owners use as much as 40 percent of the network capacity.  A tiered payment system would charge those users more.  In any case, though, it remains that the carrier that offers unlimited data can’t seem to keep up.

And all of this has led to a subpar customer satisfaction ratings.  A survey by Consumer Reports this month ranked the network last in wireless service and customer satisfaction.  Guess who was number one?

What has Apple and AT&T’s response been?  They put out a slate of new ads last month, featuring actor Luke Wilson.  They counter that they can provide 300 million people in the US with coverage; its 3G coverage extends to 230 million.  They’ve pointed out that you can’t make a call and browse online at the same time with Verizon.  They’ve also published a list of why they’re better:

  • Speed – Only AT&T has the nation’s fastest network. Verizon doesn’t.
  • Smartphones – AT&T has the most popular smartphones. Verizon doesn’t.
  • Talk & Browse – With AT&T you can talk and browse the web at the same time. You can’t do that with Verizon.
  • Apps – AT&T gives you access to over 100,000 apps. That’s way more than Verizon.
  • Coverage.  You want coverage?  We’ve got coverage.

While it is hotly disputed whether iPhone is a joke or, as users would strenuously argue, the best smartphone ever, it remains that Verizon has the funnier commercials.  Apple better get on that.

A Look at the Android OS

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Business people love their BlackBerries; everyone else loves their iPhones.  Poor Android, trying to break into that market.  But not so fast.  A recent poll shows that while there is a slight decrease in the number of people interested in an iPhone, there is an increase in the number of people looking at Android phones.  Google’s upcoming release of its Nexus One is seen as somewhat of a gamble – moving into a market dominated by Apple and RIM.  But maybe not so much of a gamble if this poll is any indication.  Senior VP of mobile at ComScore, Mark Donovan, says:

With handsets on multiple carriers, from multiple manufacturers, and numerous Android device models expected to be in the US market  by January, the Android platform is rapidly shaking up the smartphone market.  While iPhone continues to set the bar with its App Store and passionate user base, and RIM [Research in Motion] remains the leader among the business set, Android is clearly gaining momentum among developers and consumers.

So why the interest?  What is Android offering users?  The Nexus One, Google’s phone that is due to be released in January, is independent of carriers.  This can be beneficial to consumers for two reasons:  it allows Google to develop the phone how they want, and when it arrives, it will be unlocked.

The Android platform is already being sold in multiple devices, including the Samsung 17500 and HTC’s Hero and Magic.  The ComScore report found that smartphone users, such as those targeted by the iPhone, are more likely to use mobile media features and use more of the phone’s features.

This is how Google and Android are finding their way into the market.  There are over 50 new Android phones being released in 2010.  HTC’s Legend, for instance, will have a 3.2 inch AMOLED touchscreen, a 5 megapixel camera, digital compass, WiFi, FM radio, and Exchange support – features that appeal to those targeted by Apple.

But what does Android offer now?  Rumored phones due out next year don’t tell us much about what we can get now.  Android 2.0 offers a multitude of features including:

  • Multiple accounts for synchronization and synchronization for multiple data sources.
  • Quick Contact – instant access to contact info.
  • Exchange support and combined inbox.
  • Camera with built-in flash, digital zoom, scene mode, white balance, color effect, and macro focus.
  • Virtual keyboard
  • Bookmarks with web page thumbnails
  • Support for double-tap zoom
  • Support for HTML5
  • Actionable browser URL bar
  • The Android Market

You can find more info on Android OS on their online resource guide.

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Turning the Karaoke Bar into a Speakeasy

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Among the shady, illicit actions that could occur in a bar, karaoke would seem to rank pretty low on the list.  Not for BMI.  A while ago, we wrote about BMI and Taylor Swift suing Boomer’s Sports Cellar in Lewiston, Idaho because the small bar used some of her songs during a karaoke night.  The same situation is playing out with Chuy’s Mesquite Broiler in Tucson, Arizona for the alleged unauthorized use of fourteen BMI-licensed songs during two karaoke nights in February of this year.

Chuy’s owner, Mark Evenson, said, “We haven’t done anything wrong.  We answered the complaint, but they [BMI] wanted us to do ridiculous stuff.  Our attorney said to take it to court and see where it goes.”  Where is went was to the neighborhood of $49,000.  The bar was ordered to pay $3000 for each one of the fourteen songs, plus $6120 in legal fees, and $574 in taxable costs.

Mr. Evenson didn’t appear in court, so BMI won the default judgment against the bar.  It’s not clear what the “ridiculous stuff” is, though one could argue the entire suit was ridiculous.  Why?  Mr. Evenson maintains that he had third-party contractors handle the karaoke nights.  They, he says, were properly licensed by BMI, so there is no need for his establishment to be as well.

The $49,000 is just a drop into BMI’s $905 million dollar bucket, but it is quite likely a huge burden to Chuy’s.  Mr. Evenson owns thirty-nine bars; he most certainly knows that he needs licensing in order to play music.  Or he’d be in court all the time with BMI.  In this case, is it the karaoke vendor’s fault?  Were they not properly licensed?  And if the bar has to be licensed too, why should the contractors bother?   The judgment, it should be noted, wasn’t exactly a “win” for BMI.  A default judgment just means the other side didn’t show up.

There seems to be two different reactions to this news:  on one side, people say of course he should pay.  The artists should be recompensed for their work, and if you profit from their work, you have to kick a little back to them.  Yes, this is true (though, again, did Chuy’s or the karaoke vendor have to be licensed?).  On the other hand, many people think that $3000 per song is not only punitive, it is ridiculous.

BMI spokesman Jerry Bailey said, “It’s definitely about the money as well as the judgment.  We will take appropriate steps to secure the judgment.  This is not new to us.  We are experienced in this area.  Our attorneys know what to do.”  He says that these types of judgments send a message to bars and restaurants playing music.  It certainly sent Chuy’s one – though they plan to appeal.

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A Good Time to Be an Intellectual Property Attorney

3108953696_becf566e06Nokia has had a tough year:  its market share fell from 41 percent in the second quarter of 2009 to 35 percent in the third quarter; the company has had to lay off thousands of employees; they closed their flagship stores in Chicago and New York; and they are facing competition big and small throughout the world of smartphones.  According to the New York Times, the Finnish company is locked in battle with Apple at the moment, the two trading claims that the other infringed on their patent rights.  It’s not the first such suit, nor is it likely to be the last for the cell industry.

The downturn in the economy has not only forced companies to develop or seek out the newest, fastest, and smallest technology, it has forced them to fiercely safeguard those technologies from other companies.  In the latest of alleged intellectual property infringements, Nokia is suing Apple, claiming they infringed upon ten different patents, including those involving security and encryption features and have been Nokia to get a “free ride.”

Apple fired back, alleging Nokia had appropriated thirteen of Apple’s patents.  Why is this a big deal?  Nokia has spent $60 billion in the last two decades for research and development.  The company wants to maintain any edge it has – and also keep any of the other smartphones, like the iPhone, from gaining from them.

Bill Tai of Charles River Ventures, a venture capital firm, says, “As competition has intensified and margins have deteriorated, companies are trying to put up barriers to protect their positions.”

And that seems to be all Nokia wants from their lawsuit.  Jan Ihrfel of Swedbank, says, “There is no expectation that Nokia will gain a financial windfall from these suits.  I think it was more Nokia trying to send a message.”  Nokia knows that these lawsuits are costly, for both sides regardless of the official outcome.  For instance, Research in Motion (RIM), the designer and manufacturer behind the BlackBerry, settled a lawsuit with Visto, a mobile email provider.  The settlement came with a $267.5 million price tag for RIM – $168 million of which went to legal fees.

The message Nokia is sending is, “Stay away from our patents.”  Jan Ihrfel said the lawsuit was a “line in the sand,” drawn by Nokia, warning Apple and other competitors, away.  In addition to the action against Apple, Nokia filed eleven other lawsuits against Samsung, LG, and others.

Nokia is hardly alone in suing.  Intellectual property lawyer Clive Thorne says, “…in general, there has been an increase in litigation in the industry. There is an attempt to gain technical advantage. Mobile technology is fast-moving. The commercial life of products is limited. There is urgency in ensuring that I.P. rights are protected.”  According to financial records, nearly all cell phone makers are involved in some sort of patent lawsuit.

Nokia may be struggling in the US, but it has a dominant market share in Europe.  The company hopes to keep that edge there and improve in the US with innovative features for users.  What will they come up with in order to compete with the iPhone or Google’s new smartphone due out in early 2010?  Maybe they can make headlines for something other than lawsuits.

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Holiday Shopping? Don’t Forget Your iPhone

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According to the New York Times, cell phones have replaced elves as Santa’s best helper.  Remember back in the old days when you would have to drive to a store, then walk or drive to another one to compare prices?  Maybe you dialed the old rotary phone and called the store to ask the prices or the store’s hours or used a catalog to order gifts.  Today, you can use your trusty iPhone to handle the rigors of shopping so you can save money and time – and have more of both with which to shop.

iPhone is projected to increase their app offerings from 100,000 this year to 300,000 in 2010; Android is gaining ground and increasing from 20,000 for 2009 to 50,000 next year.  And holiday shoppers are reaping the benefits.   A survey conducted by Deloitte, an accounting and consulting firm, found that twenty percent of shoppers planned to use their phones this season.  What can you do with a phone, besides actually calling a store?

  • Why drive all over, call all over, or wonder if you are getting the best deal?  You can get an app like ShopSavvy, compare prices, and save a whole lot of time.
  • Do some virtual coupon clipping.  Apps from MyCoupons.com and other sites offer coupons on products you actually want.
  • Need some feedback?  Some items are expensive, and we don’t want to take a chance on getting a very pricy dust collector.  Why not send out a twitter and get instant feedback from other consumers?  Everyone loves to give their opinion online, and it will benefit you immensely.  RetrevoQ lets you do this right from your phone – big, expensive box in hand.
  • Shop in a store, but check prices online.  A smart shopper in Silicone Valley choose five books at a bookstore.  The price was $80.  He quickly consulted Amazon, found he could get the same books for $50 with free shipping.

This also allows you to ask a brick-and-mortar store to match the price.  Many retailers do this if you show them an ad.  People are doing this with apps from iPhone and other smartphones..  It’s worth it to ask – and retailers are trying to accommodate this because they need the business, especially at this time of year.

  • Placing orders on smartphones can be a pain, but because people are demanding it, developers are providing it.  Many online retailers are providing phone optimized sites so users don’t have to scroll through pages intended for computers.  They can enter info more easily and check out quickly if they have an account at that store.

There are some kinks to work out (like spotty connection in some places, info that is sometimes inaccurate, and clunky applications) but development has been rapid.

Alexander Muse, co-founder of Big, which developed ShopSavvy, says, “This empowers consumers to make a smart decision.  Already, retailers are starting to figure out, ‘I need to be in this game.’”  The game is shaping up to be a good one for consumers.

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Didn’t They Already Get Paid for That?

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Licensing fees are good.  They provide the musicians whose music we enjoy to get paid.  It’s their job, so they absolutely should get paid.  But have you ever felt that we are paying, paying, and paying some more?  This issue is coming to the forefront as ASCAP (the American Society of Composers, Authors, and Publishers) demands royalties from establishments where the game, Guitar Hero, is played.  Does this help or hurt artists?

Whenever bars, restaurants, stores, or other establishments want to play music, they must pay a licensing fee.  PROs (performing rights organizations) and licensing companies than divvy the fees up based on how often they a particular artist is played.  Recently, many bars and clubs have stopped offering live music to their patrons because the licensing fees are too steep – or just too arbitrary and confusing.  Many places have been offering the music game, Guitar Hero, so they can have music and a participatory environment, similar to karaoke night.

But ASCAP is saying, “Wait a minute.  You have to pay for that too.”  Owners may counter that they have paid for it.  They shelled out $100 for the Guitar Hero bundle.  Isn’t that enough?  No, it’s not, according to ASCAP.  They say that the songs on Guitar Hero should be considered “performances of registered songs.”  They have singled out a bar owner who only allows original live music (no cover bands or songs) so he doesn’t have to pay a licensing fee.  He offers Guitar Hero.  “Patrons are paying for the entertainment of the game not for the licensing value of the music,” he says.

ASCAP, not surprisingly, disagrees and says that the real value is in the songs (and not in your buddies pretending to be David Bowie or the Beastie Boys).  The songwriters, then, should get a cut of the profits.  But didn’t Activision pay them already when the game was developed?  And bar owners have to pay again for songs that are being performed in fun, more so people can make fools of themselves, not because they want to seriously perform “Under Pressure,” and cut a record deal?

What is the effect on the artists, who ASCAP purports to be protecting?  The fees that would generated by playing a video game are likely very negligible.  And as many have pointed out, as artists try to free themselves up for fans, the PROs try to restrain them.  Techdirt writes that ASCAP “has been particularly ridiculous…of course, the end result has actually been harming many up and coming songwriters and musicians, as more and more venues forgo music entirely, because it’s just not worth having to pay up the fees that ASCAP charges.”

This doesn’t hurt artists or writers like those feature on Guitar Hero, who can forgo a few buck – quite literally, a few bucks.  But it does hurt artists who get exposure at venues like this.  Fees are necessary to ensure that musicians and songwriters earn a living – but how many times do we have to pay?

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The Google Phone: A Challenge to the iPhone?

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Each day, people around the world use Google to find everything from products and services to information and addresses.  The search engine handles 235 million searches every day. Adding gmail and other offerings has expanded Google’s reach, and now they’re looking to take on Apple’s iPhone.  The phone was developed to help the search giant move into the thriving smartphone industry.  Will it really challenge the iPhone’s dominance?

With its largely secretive development and code name, Nexus One, it is clear that Google didn’t want to release information prematurely or before they were sure that they could compete.  The Google phone is being tested now by employees and may be on sale in early 2010.  Google’s VP for product development, Mario  Queiroz, said in an announcement:

At Google, we are constantly experimenting with new products and technologies, and often ask employees to test these products for quick feedback and suggestions for improvements in a process we call dogfooding (from “eating your own dog food).  We recently came up with the concept of a mobile lab, which is a device that combines innovative hardware from a partner with software that runs on Android to experiment with new mobile features and capabilities.

In an effort to take a different direction from the iPhone, it is rumored that the Google phone will be unlocked.  That means that it can be used on any network; the SIM card stores the user’s data and it can be used in any phone that it is inserted into.  iPhone is most assuredly not unlocked as AT&T is its carrier.  This would allow greater freedom and options, but it does mean that the phone will likely be more expensive.

When they have great deals – like free phones when you sign up for a plan – they are subsidized by the carriers because you will have to use their services.  With unlocked cells, there is no subsidy.  It’s a trade off between initial payout and the choice of carriers later on.

Another difference that Google will have to overcome is the development of Apps.  Apple has 100,000 apps for the iPhone, and developing the apps itself is an easy process.  For Android-operated phones, like those created by T-Mobile as reported by Bloomberg, however, the widely different designs make it hard to develop apps.  This has led many to stop trying to make Android apps and just adding to the already large Apple Store.  Google will have to – or has already – develop a more user-friendly, developer-friendly system.

What will the effect of Google’s phone be on other Android phones, which have used Google’s engineering and design expertise, and have become bestsellers in many areas of the world?  Many Android providers hope that the move will bring attention to the Android infrastructure itself, upping the brand’s profile in general while hopefully not drawing all their business away.

There are other questions that Google has had to weigh.  Will its release actually drive users to Microsoft Windows Mobile or Symbian?  Will it help or hurt Android phones?  Jack Gold of J. Gold Associates, says, “If you want to bring Microsoft [which has been losing share] back into the game, I can’t think of a better way. Kevin Burden of ABI Research says, “This is kind of playing with fire.”  We’ll see if the gamble pays off in a few months.

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imeem’s Independent Musicians

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Last week, we posted on the demise of music streaming site, imeem.  It was acquired by MySpace for their burgeoning music program.  imeem, which had 16 million worldwide users, offered free music and video streaming and sharing.  The fees demanded by licensing companies proved to be too steep – it was rumored that the streaming site was $30M in debt to licensing companies, though that was denied this last summer.  This week, a new issue is emerging for the downed site and musicians it featured.

When MySpace took on imeem, they did not take on its debt or liabilities.  This means that that $30M – or whatever the actual figure is – is somewhat in the wind.  It also means that as many as 110,000 independent artists will not get paid for material that was sold on Snocap.

Snocap was a digital rights and content management company that imeem bought in 2008.  They wanted to use content fingerprinting to help distribute royalties and registry technology so users could upload and share music for free.  The goal was for labels and artists to have greater control of their material and earn a profit.  In essence, it was a digital store that independent artists and labels could use to reach fans.

MySpace purchased the ailing imeem for less than $1M – and this includes the technology and intellectual property that the site owned.  $1M for imeem to settle debt and pay 110,000 independent musicians:  guess who is not going to see their money?

The Washington Post, meanwhile, reported that many of imeem’s 16 million users are angry – not only at the failure of their site, but at MySpace for being the greedy big guy who stepped all over the little guys. Users twittered messages like the following, “Imeem, one of the best music sites, died, destroyed by MySpace,” and, “RIP imeem, I will dearly miss you. All the more reason to hate myspace. They sold out on Dec. 8th.”

But, as many have pointed out, imeem was well on it way out.  It was flat-lining before MySpace stepped in and took it over.  There was really no greed, per se, especially as it seems to be a losing proposition given the royalty payments.

imeem’s demise has been keely felt throughout the streaming industry.  It underscores how difficult it is for free services to operate with the staggering royalty payments.  Even MySpace and Spotify, which are partly owned by record labels, are losing money because of these payments.  Without backing like that, there is no way free streaming sites can survive.

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A Very Bob Dylan Christmas to You

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This may come as a surprise to Bob Dylan fans – or it may not, since he loves to run contrary to fans’ expectations – but Mr. Tambourine Man himself has put out a Christmas album.  Sean Wilentz, the official historian at BobDylan.com, Princeton American History professor, and author, says, “Bob Dylan here is adding a new dimension to Christmas music – with a voice that is infinitely recognizable.”  And who doesn’t want to hear that voice singing “Here Comes Santa Claus”?

But there is more than one reason to buy the album, Christmas in the Heart.  A donor advised fund (DAF) has been set up to funnel the royalties that the album earns to various charities worldwide.  CAFAmerica, a nonprofit “dedicated to expanding borderless charitable giving,” is working in conjunction with Columbia/Epic, a Sony Music Entertainment label, to raise funds for CRISIS.  This charity works to end homelessness through education, work, housing, and health and wellness initiatives.  And so far, an incredible $125,000 has been earned by the album.  CRISIS will be able to receive grants to continue its work.

Susan Saxon-Harrold, CAFAmerica’s CEO, said:

We are thrilled that CAFAmerica will be able to assist Columbia/Epic and Bob Dylan in supporting grants to CRISIS and other charities in the United Kingdom and United States. Bob Dylan’s generosity, lending both his name and his music to this noble effort, will ensure that many thousands of people do not go hungry during the holiday season. CAFAmerica is delighted to find a charitable solution to assist Bob Dylan and his record company in supporting the causes they are committed to globally. Supporting a charitable initiative like this one in perpetuity is a bold move and is likely to result in a real difference in lifting people out of poverty.

Most of the album’s US royalties will go to the US charity, Feeding America.  The World Food Programme will also receive grants.  Bob Dylan said of his choices, “The problem of hunger is ultimately solvable, which means we must each do what we can to help feed those who are suffering and support efforts to find long-term solutions.”

Donor advised funds are vehicles for charitable giving that are administered by third-parties, such as CAFAmerica.  This is an extremely popular method of giving because tax and legality issues ensure that the recipients get the maximum amount possible.

Bob Dylan is a music pioneer; love him or hate him, he has one of the most recognizable voices in history.  A musician of his stature can raise more money for charities with one album than many people could in a lifetime.  The donation of the royalties from Christmas in the Heart’s is quite likely a first in the music business, but hopefully far from the last.

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An Exercise in Creative Writing

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One of the iPhone’s claims to fame is that there is an app for everything; over 100,000 apps cover virtually every interest and hobby.  There are apps for music, travel, cooking, reading, and even a new Playboy app.  What Apple isn’t so keen on, however, are apps with fake reviews.  This led to about 1000 apps getting the boot from the App Store.

Glyn Evans, blogger at iPhoneography, broke the story on app developer Molinker’s fake reviews with the help of a reader.  What happened?  Evans’s reader wrote a letter to Apple’s Phil Schiller.  Here is an excerpt:

MAJOR FAKE AppStore Reviews & Ratings ALERT:
Please investigate for I have just looked at 44 of the reviewers who posted reviews for this Molinker Inc app “NightCam Pro” & EVERY Review except 2 of the 44+ are ALL FAKE 5
????? reviews… If you investigate ALL have ONLY reviewed ONLY Molinker apps. A little odd that 42 of 44 US reviews are poorly written & that all users have only written reviews for either All Molinker photography apps (giving 5 star reviews to 6-7 Molinker apps ONLY no other apps by any other developer) or the same 2 apps.

 

This reader was interested in purchasing Molinker’s photography apps, particularly NightCam Pro, when he noticed that the reviews were overwhelmingly and suspiciously positive.  And badly written.

 

Besides photography, Molinker also developed iPhone apps for currency converters and travel guides.  The posting of false reviews, often called astroturfing, had serious backlash for the once prolific app developer.  Phil Schiller confirmed to Evans that Molinker had gotten the ax.  “Yes, this developer’s apps have been removed from the App Store and their ratings no longer appear either.”

 

Molinker’s apps, which accounted for one percent of the App Store’s offerings, were removed summarily.  Another blogger contacted the Chinese company and asked for comment.  The listed owner of the Molinker site, Ma Kun, had this to say:

 

We got email from Apple yesterday [Sunday 6th] which told us our contract is changed to pending status. Actually, we do not know what’s wrong so far. We had contacted Apple for such sudden changes, hope we can get quick response and actions from Apple.

Because consumers quite often look to reviews to help make purchase decisions, the practice of astroturfing can be very damaging to the wallet as well as the reputation of the company behind the falsely hyped products.  So be on the lookout:  if something looks too good to be true – and the spelling and grammar are atrocious – you might want to hold off shelling out money.  Far better are reviews that offer balance pros and cons, as well as useful information whether for iPhone apps or any other product.

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