By: Gino Lattarulo

Referring to Part 1 of ” The Future Of Digital Music”

So Who , or what, is going to win the digital music wars?  Will digital downloads from the likes of Apple iTunes (NASDAQ:AAPL) still be around in 10 years or will everything be self contained in a “Cloud” structure.

Lets look at the pros and cons of each and then I’ll give my .01 cent opinion.

Digital downloads: Let’s face it, MP3.com changed the world.  As soon as music files became coded for quick transfer over the Internet, the whole place exploded.  The need for tangible CD’s quickly diminished and was replaced by digital players.  The sound files have an infinite shelf life, limited only by the condition of the actual player itself.  The consumer can purchase an entire album of songs for a lower price ( including artwork ) without ever having to leave their home.  Not only that, but the likes of pioneering file sharing sites like Napster provided the masses with as much free music as they could consume.  It was, and still is, a time of mass confusion and evolving.

Cloud Formats: Online radio has evolved into personal web libraries.  Sites like Grooveshark and even Youtube (NASDAQ:GOOG) allow you to pull up any song in the world and create unlimited playlists for your own custom library of virtually any song in existence.  We can’t really lump Pandora or Slacker into the cloud category because they are exclusive to radio style streaming, meaning that the user has no control over what plays other than the music genre.

So what does all of this mean for the direction of your music?  Personally I think the future lies almost entirely in the clouds.  So to speak.  It will take some time to realistically widen the scope of the Internet to allow for such an increase in web streaming.  The obstacle here is still buffering and streaming coverage for mobile users, but as more and more mobile devices and hotspots (like your car) become tethered to the internet we will see the direction shift.  Devices like Apple’s Sky Dock, which has an FM modulator and boost antennae built in, is made for Sirius / XM (NASDAQ: SIRI) and enables the user to stream their iPhone.  Although this device is seemingly proprietary, it gives us a glimpse of the what will happen in the coming years with Cloud streaming.

The main trade off with the Cloud structure versus actual downloads is sound quality.  Online streaming is pretty much maxed out at 192 kbps while digital downloads can be had at CD quality bit rates.  On the other hand, in the Clouds you have any song you want at your finger tips without having to pay for it and you can store the songs in an online virtual library.  The next ten years will definitely be very interesting.  When I was a kid ( I mean younger) I always wondered what would replace the CD.  I only wish I could see the evolution of music 100 years from now.

Of course,  If there is actually anything left after the governments of the world get done burning everything to the ground, we’ll be back to playing tiger skin bongos and bone flutes for entertainment anyway.

Peace.

By: Gino Lattarulo

I am saddened  by the news that Apple (NASDAQ:AAPL) has purchased and is closing down the LALA.com website, which is an online music service that provided (free) the ability to upload your entire music library to their servers to have a cloud like iTunes experience.  That in itself is no big deal.  What really drew me to this web site was the cost structure to pay for music.  A person could sample music from whatever artist they wish and then have the choice of downloading the entire collection in mp3 form for around $ 7.00 ( .89 cents per song ) or purchase the entire collection exclusively for online use for about  $ 1.00  ( .10 cents per song).  For a geek like me who has strayed from the shackles of tangible hardware players (except for my XM radio (NASDAQ:SIRI) and almost exclusively listens to music on the web, this was a perfect arrangement.  I even have access to it in my car.  Take a Netbook , FM transmitter, and Satellite Internet card and you are done.  OK , so it isn’t CD quality stuff but it’s a small price to pay for an unlimited library of music.  How long do we think it is going to be before the touch screen PC is manufactured into vehicles for this exact reason?  Not very long once the networks have beefed up bandwidth to offset inconsistent buffering issues. In any case, I think we can all guess why Apple purchased this LALA company.  They are squashing any threat to iTunes.  Not that there is a huge contest of course.  iTunes is obviously the king of the digital download land but cloud formats are quickly becoming the new sheriff in town and they are here to stay.  If I had to hazard a guess, I think Apple wants to use this LALA cloud structure for the Itunes experience.   If they are smart, they will. And we all know they are.

Enter Grooveshark.com. (more…)

By Rick King -

Surprising investors – Sirius XM Radio (NASDAQ: SIRI), which hosts programming for Howard Stern, Rosie O’Donnell, Opie & Anthony, and Oprah Winfrey, anounced break-even earnings for the first time since the merger of Sirius and XM Radio this past year.  Wall Street had mainly expected a 2 cent loss and investors were waiting anxiously in the aisles this morning during it’s Q3 FY09 Conference Call.  Even through the difficult economic crisis of this past year, the company continues to show signs of continued growth as it improves its finances and minimizes operating costs each quarter. (more…)