Music sites primarily earn revenues from subscriptions, music downloads, advertisements and the different products sold through its sites. Most music sites are allowing downloads at approximately 99 cents per song and analysts say it is not enough to cover the costs. Currently most of the music sites are losing money. Napster (NAPS) and Real Networks (RNWK) are burning significant amount of cash every quarter and need to rethink their business model. Subscription rates vary from $8.99 per month for Yahoo! Music Unlimited to $9.95 per month for Napster to $12.99 per month for Rhapsody Unlimited. >>>
SM: Where did you get the idea for your current venture? What is your domain experience in the segment? Any particular reason that led you up to this venture?
JW: I co-founded my first startup in 1997, with that same roommate from Boston. While trying to raise capital and recruit a head of engineering, the potential VP ended up recruiting us into SegaSoft Networks. I became the Director of Product Development. We started from scratch and made an amazing start to building what would have looked like Xbox Live Arcade, had it shipped. (Our system was eventually sold to Nokia and became the gaming network for the N-Gage.)
On top of the great technology, great team, and the fact that we were getting paid to make a video game network, the head of the (parent) company was an inspiring man. Okawa-san lived in Japan when the bombs were dropped on Hiroshima and Nagasaki. It was his dream to end war by uniting the children of the world through multiplayer gaming, and he used some of his billions to make sure a modem shipped with the Dreamcast console. Unfortunately, SEGA couldn’t hold itself together. >>>
James Altucher asked Jim Cramer, “What’s the one thing the WSJ should do going forward?” They agreed that WSJ should not only have news, but also Opinions that can move stocks. Here’s my take on how that can be accomplished in a very Web 2.0 way. >>>
It has been a month since the launch of the iPhone and in this post we will see how Apple (NASDAQ: AAPL) has been doing since the launch.
Following the launch, estimates of the first weekend sales of iPhone took the figure to an over optimistic and ridiculous level of 700,000. The announcements from AT&T and Apple brought it down to 146,000 activations and 270,000 sales (including accessories, it appears). Though it looks modest in comparison to the earlier estimates, it is nevertheless a strong sale and Apple expects to sell 1 million iPhones in the first three months. May be more. The iPod took a bit of time to hit its stride, and there is no reason for the iPhone to not follow suite. >>>
Over the last few weeks, we have reviewed the iPhone’s Component Vendors. Here is a recap of the articles:
iPhone’s Inside Beneficiaries provides an overview of the various players.
We covered Samsung, one of the top component providers, who also has the manufacturing and design capabilities to become the iPhone’s major competitor in the future. Samsung (0593Q:London Stock Exchange) accounts for approximately $76 or 30% of iPhone’s total component cost in the 8 GB version. Overall, I am very bullish on Samsung as a company, and deem it as one of the best positioned to leverage the convergence device movement. And if there’s one company that can make all this great stuff happen at a much lower price-point, Samsung is it! >>>
Top Music Sites and Rankings
Among the online music portals, AOL Music has 15.66% market share (including Napster’s 2.6% market share) and more than 350,000 music subscribers to its credit. The site attracted 161,497,557 users in December 2006. AOL Music is the leading online music site with 25.2 million unique visitors, followed by Yahoo! Music with 23.9 million unique visitors. AOL Music, originally known as thedj.com was founded in 1996.
SM: Mowing your way to MIT!
JW: I used my mowing money to pay my half of the cost for one of the first Intel 8088 processor personal computers. I guess I didn’t use my old TI-994A enough, so my parents were convinced that the new ‘toy’ would just gather dust unless – or even if – I had some skin in the game. Their only other really questionable belief as parents was insisting that “video games will just rot your brain”. I now make my living making video games for the personal computer. But they were right about pretty much everything else. >>>
WSJ reports that Maggie Wilderotter has joined Yahoo’s Board. This may be considered as the first big move by Jerry Yang to catalyze change in the company.
And my central thesis on Yahoo’s turnaround rests on Web 3.0 and verticalization. If you have access, read my article on RealMoney, that further details the strategy and the opportunity: Yahoo!’s Still Asleep.