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Companies joining to push music on memory cards
2008-09-22
NEW YORK - Just as vinyl once gave way to compact discs as the main physical medium for music, could CDs be replaced now by a fingernail-sized memory card? Perhaps not entirely, but SanDisk Corp., four major record labels and retailers Best Buy Co. and Wal-Mart Stores Inc. are hoping that albums sold on microSD memory cards will at least provide an additional stream of sales. The companies were expected to unveil plans Monday to sell memory cards loaded with music in the MP3 format, free of copy protections. Called "slotMusic," the new format is meant to address two intertwined trends. Most albums are still sold in a physical format -- 449 million were sold on CDs in 2007, while 50 million were sold digitally, according to Nielsen SoundScan -- yet CDs are decreasingly popular. Albums sold on CD dropped almost 19 percent last year. Given this, the record labels -- Vivendi SA's Universal Music Group, Sony BMG Music Entertainment, Warner Music Group Corp. and EMI Group PLC -- are hoping slotMusic can be another physical revenue source -- and one that is more versatile than CDs, given the kinds of gadgets people carry around these days. Unlike when the CD was introduced and people had to buy new players, many people already have the ability to play slotMusic albums, since many cell phones and multimedia players support microSD cards. These new albums will come with a small USB dongle that lets buyers use them with computers, too. "Particularly in this kind of economic climate, the idea of being able to use an electronic device you already own to enjoy music rather than going out and buying a dedicated player is pretty compelling," said Daniel Schreiber, who heads the audio-video business unit at SanDisk, which created the microSD card format and is working on the technology behind slotMusic. Schreiber said slotMusic albums will be sold on 1 gigabyte microSD cards, which means they will be able to hold a full album and related content such as liner notes and cover art. Buyers will be able to use extra space on the cards to hold songs and photos from their own collections. The cards and dongles will come in boxes similar to current CD packaging, and Schreiber expects the cost of slotMusic releases to be "in the ballpark" of current CD prices. It's not yet known exactly when -- or how many -- albums will be initially sold in the format, but Schreiber expects retailers to give a "sizable amount of shelf space" to slotMusic albums. The albums are expected to debut at multiple retailers, including Best Buy and Wal-Mart stores in the U.S., and later in Europe. Rio Caraeff, executive vice president of Universal Music Group's eLabs digital music unit, said the label will initially release about 30 titles in the slotMusic format. The titles will include old and new albums, such as one by singer Akon. "We want to provide the benefits of digital music to people who go to physical retail environments," he said. Asked whether he sees the format taking the place of the CD, Caraeff said, "I think we would certainly hope that would be the case, but I don't think we are so tied to that." NPD Group entertainment analyst Russ Crupnick sees a potential for slotMusic to emerge as a compelling format. He said the industry needs "desperately" to give people a new reason to head back into the music sections at brick-and-mortar stores. "Not that we want them out of the gaming section, but once they're done looking at `Guitar Hero' we want them to come look at the music section," he said.
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