VentureBeat

When you think about the 21st century digital lifestyle, The Beatles aren’t exactly the name that first jumps out at you. After all, the group still doesn’t have its music catalog for sale in any digital format.

But now, the biggest rock band of all time is apparently ready to embrace technology as the parties in control of The Beatles’ master recordings are in talks with video game makers, according to The Financial Times.

When you think of music and video games you probably think one of two things: Rock Band or Guitar Hero. Sure enough, both MTV Games and Activision, those games’ respective parent companies, are said to be discussing deals with Apple Corps (not to be confused with Apple Computer) and EMI, the two companies managing The Beatles’ music rights

So will you be playing some solos from “While My Guitar Gently Weeps” on Guitar Hero or rocking out with your friends to “Helter Skelter” on Rock Band anytime soon?

If the supposed deal to bring The Beatles to iTunes is any indication, no.

At nearly every Apple event over the past two years, talk begins swirling that the band is going to launch its catalog on the number one digital music retailer. (Apple chief executive Steve Jobs is a self-confessed Beatles fanatic.) That has yet to happen despite every member of The Beatles’ solo recordings being available on the service.

Social networking site MySpace and music have worked well together in the past. New bands got recognition, popular bands gained new fans. Now MySpace is looking to extend that relationship by launching a full-scale music store. This launch will be happening sometime within the next 5 days, according to Reuters.

The service will be appropriately titled “MySpace Music”, and is said to have the support of at least 3 of the major labels. Sony BMG Music Entertainment, Vivendi’s Universal Music Group and Warner Music Group Corp. would each have a stake in the new service along with MySpace parent News Corp. It is not clear if the other big label, EMI, is involved.

None of the companies are talking, so details are scant at this point, but the service is said to be a direct competitor to Apple’s iTunes. It’s well known that the record labels have long thought that Steve Jobs has held too much over their industry. Their slowness in delivering DRM-free music to iTunes while giving it to AmazonMP3 may be helping that service grow (our coverage). MySpace Music could well be an attack on another front.

The fact that EMI is not known to be involved in the MySpace Music partnership makes sense as well — EMI is still the only major label giving Apple DRM-free music, so they presumably have a pretty good relationship.

MySpace Music is launching now because News Corp. and Universal Music have finally settled a longstanding lawsuit, according to Silicon Alley Insider.

[photo: flickr/orange beard] 

The VentureBeat team is mostly taking a much-needed holiday break this week. In the meantime, here’s some of the latest news:

1. Apple devices to offer payment service?
2. Digg tells BusinessWeek that “no acquisitions are in the works” but we’re sticking by our story
3. Amazon Music Store to sell Warner Bros. music
4. Apple’s iTunes to rent Fox Studios movies
5. Web analytics service Compete examines Kayak-Sidestep travel site merger

Apple devices to offer payment service? — The company has recently filed a patent for “a wireless system that would allow customers to place an order at a store using a wireless device such as a media player, a wireless personal digital assistant or a cellphone,” Brian Caulfield reports. Phones in other countries, most notably Japan, can already be used to make credit card purchases at stores. Here in the US, we are still looking forward to this feature. (Image via Phone Different.)

Digg tells BusinessWeek that “no acquisitions are in the works” but we’re sticking by our story – Earlier this month, a well-placed source told us that social news site Digg has hired a bank to help it sell itself for $300 million or more. However, companies that are looking to sell usually won’t admit it publicly. Instead, they like to talk about how they’re focused on building a big business. True to form, Digg chief executive Jay Adelson only tells BusinessWeek about a number of new Digg features, and the potential for the company’s international expansion. He also says that Digg’s new advertising deal with Microsoft has been “great” since it started a few months ago.

Amazon Music Store to sell Warner Bros. Music — For some time, we’ve been hearing that Amazon’s music service has been growing quickly, as users are able to purchase songs and albums from it that don’t have restrictive digital rights management (DRM) software in place. DRM software technology is unpopular because it prevent you from buying a song then freely copying it to multiple computers and music-playing devices. Now, Warner Bros. will also sell music without DRM (press release here), following similar moves by EMI and Universal Music Group, who already sell large portions of their music catalogs DRM-free on Amazon. Apple’s iTunes has also begun to sell some DRM-free music — it has a DRM-free partnership with EMI, but not Universal. No word, yet, on whether Warner Bros. will offer DRM-free music through iTunes.

Apple’s iTunes to rent Fox Studios movies – Despite the competition from Amazon, Apple has more plans in the works for iTunes, the Financial Times reports. Apple will let iTunes users “rent” the latest DVD releases from Fox Studios — which means you can pay to download a digital DVD copy of the movie from iTunes for a limited time. Apple already lets you purchase Disney movies (Apple chief executive Steve Jobs is Disney’s largest individual shareholder), as well as a few Paramount titles. Aside from these companies, most studios have, like the record labels, balked at Apple’s efforts to cut deals with them. See the Wall Street Journal for more.

Web analytics service Compete examines Kayak-Sidestep travel site merger — Lots of detail on what Compete says is “among the most significant news items of 2007,” here. Our previous coverage of the deal is here.

Amazon’s music store has only been in business for a month, and rumors are flying that it’s already the #3 online music seller.

It’s still far behind Apple iTunes, but that might change. One rumor even pegs Amazon passing the second largest download site, eMusic, in revenue by the end of this year.

That leaves companies that don’t have a large online presence in a difficult position. Napster, Wal-Mart, Rhapsody and eMusic are all looking vulnerable and likely to lose out if Amazon’s growth continues.

Besides not DRMing its music, Amazon’s early apparent success can be chalked up to a clean interface, lower prices and most of all, the ability to easily transfer music to the iPod. Arguably, Amazon’s MP3 store has pressured Apple to recently drop prices and increase selection for DRM-free music on iTunes, called iTunes Plus.

Until recently, iTunes was by far the easiest legal way to buy digital music, as users could both buy music through iTunes and sync it effortlessly with their iPods.

Besides Amazon, the major record labels have also begun to test-sell music without DRM this past year, because they’ve had trouble negotiating song prices with Apple. What’s more, the DRM software used by the labels does not play on the iPod directly and none of the labels wanted to switch to Apple’s own DRM software, called Fairplay.

EMI was the first label to sell their catalog without protection and the results from their first quarter experiment have tentatively proven a success. The largest music label, Universal Music Group, followed suit a couple months ago and began selling DRM-free music files in a six month trial.

These four services need to take advantage of the new no-DRM world, or risk elimination:

1. eMusic
As the self-described number two company in the download business, eMusic surpassed the 150 million download mark recently. The most popular alternative to iTunes as well as most other services, eMusic’s catalog is comprised strictly of independent labels catering to knowledgeable music fans. It’s also
DRM-free. There’s a pattern here. Offerings that are simple (ie. DRM-free) or that are cheap, or both, do well. eMusic’s success shows that when the price is right (at $9.95 for 70 songs per month) and the music iPod compatible, digital download services can even flourish without major labels. Another success of eMusic is how it couples an intuitive web-based interface with insightful editorial content to guide users.

Beside the lack of major labels, eMusic gets negative marks for letting labels periodically drop out of the collection (when they decide the compensation is insufficient) as well as the service being shoe-horned into a subscription-based format that’s increasingly losing out to the pay-as-you-go model. Despite these shortcomings, Emusic is currently head and shoulders above the other offerings. It’s future is harder to predict, given its unconventional model, but eMusic provides the most comprehensive and gratifying user experience for the serious music lover.

2. Rhapsody
By selling its resounding failure of a service, URGE, and merging with Rhapsody, MTV has finally positioned itself in the role it knows best – advertising. With Rhapsody, MTV may be able to take advantage of its brand with a service worth promoting. While the Rhapsody software allows nice music management (for PCs only), Rhapsody’s website is far more crucial to its success. It’s generally intuitive and wide-ranging but still requires users to download software to stream music from the site.

Rhapsody is also tentatively throwing itself into the DRM-free market with select offerings from Universal artists. Along with the push in publicity for the service, Rhapsody offers files compatible with iPods and is beginning to branch out into the cellphone music business with Verizon. These are all good signs for future success for the service, but currently the company is too busy trying to sell its niche Rhapsody-to-Go subscription service and undersells its compatibility with iPods.

3. Walmart
Walmart began advertising DRM-free downloads a couple months ago, also with the intention to undercut Apple’s standard prices - the same selling point as when the Walmart first entered the digital download industry. The first sell doesn’t to appear to have worked, but Walmart is nothing if not persistent, and really big. They do annoying things like only offering edited versions of their music, a practice that might as well render popular genres like hip-hop useless.

Although Walmart’s service has often been described as sterile, more noteworthy is that it forces users to shop with DRM-afflicted preview clips even for DRM-free music. If Walmart’s online store is expected to blossom in an iPod-dominant market, the service’s interface will need to be re-hauled from the ground up to reflect it. Currently the site is unhelpful at best and aggravating the rest of the time. Without serious changes, Walmart will maintain its dominance as a price leader, without leading anything else.

4. Napster
The web-based service allows streaming of music for even non-subscribers, but has few other positive aspects worth mentioning, so we’ll focus on the negative. The site is stripped-down and offers few editorial notes to help discover new music and nothing beyond mere lists of artists as “recommendations.” Napster is actually clunkier than Walmart’s bare interface and is nowhere near as cost effective, considering the DRM restrictions. Perhaps the most damning aspect of the service is the frequent note found when attempting to buy music – “Napster is not compatible with the iPod.” For a company that’s already been killed off once before, this zombie will most likely get sawed apart.

The Universal Music Group, the world’s largest music label, plans to sell a significant portion of its catalog without copy protection software for at least the next few months, according to the New York Times.

It’s one more sign that the industry’s united stance behind digital-rights management anti-piracy technology may be falling apart.

Universal will offer the rights-free music through retail services like RealNetworks, Wal-Mart, Amazon.com, Google, and other sites, the Times said, but won’t be offered through Apple’s iTunes — a possible sign that Universal wants to compete with iTunes, or at least shift momentum away from Apple which has become the largest, most powerful music service.

Previously, EMI Group moved away from digital-rights, and signed a deal with iTunes. Under that agreement, though, songs are sold at a higher price — $1.29 instead of 99 cents.

Updated

Today the arrival of the iPhone will leave time for little else.

Here’s a smattering of companies already exploiting the iPhone’s launch for a little publicity of their own:

Zoho offers iPhone version — The Pleasanton, Calif. online web application company is offering its Zoho office applications for the iPhone, called the iZoho. This allows users to view documents (and edit docs), spreadsheets and presentations. Zoho says it has simplified its interface especially for the iPhone.

Visto Mobile announces support for iPhone — Corporate email can be accessed through an IMAP connection to the iPhone’s built-in email application (announcement here).

Etelos has customer relations management (CRM) for the phone — See here, and here.

Updated to correct for an error in the New York Times piece:
EMI Music and Snocap announce MyStore partnership — Snocap will sell the label’s music through its MyStores, online stores that people can add to blogs or Internet sites. This time, it will play music from a major label that is compatible with the iPod. So far, Snocap has only sold independent label music in the MP3 format (NYT has details.)

More here from Read/WriteWeb on the iPhone development frenzy.

Update: Cellswapper lets you exchange your phone contract, letting you get out of your current plan by finding someone else who will take it over — so that you can afford the rather expensive iPhone, and not pay a termination fee. (Our coverage here.)

The latest action

Apple to release EMI music without anti-piracy technology — In agreement with music label EMI, Apple is making EMI songs available without digital rights management (DRM) through its iTunes music store. The music will be higher quality, and tracks will cost $1.29, or 30 cents more than the standard 99 cents. This means you can take those songs and put it on any device you want to, a significant development.

Google allegedly joins Microsoft in bid for the major online ad company, DoubleClick — DoubleClick is an online site that lets advertisers deliver ads to Web sites, and is considered a sort of middleman between advertisers and publishers. Without owning such a property, Google remains perceived as more heavily dependent on advertisers, who make up most of its business, and thus more likely to favor their interests. At this stage, the talks are rumors. Bankers generally try to drum up support for a deal, and have an interest in generating speculation. The latest, reported by the WSJ, is that the sale price is $2 billion.

InfoWorld closes print edition, and recriminations begin — IDG has shut the print edition of InfoWorld, and there’s a good interview here with IDG’s leader Pat McGovern about the future of news. He gets into a scuffle with former Industry Standard chief exec John Battelle about the failure of that magazine. McGovern blames Battelle for not selling during the bubble, and gunning for a billion dollar IPO. Battelle responds, saying McGovern’s got it wrong. Others support him. In comments to the interview, McGovern fires back, saying he doesn’t have it wrong, etc. Who cares? The Standard’s advertising base would have disappeared anyway, whether or not it was sold.

Photobucket worth $300 to $400 million? — At least, that’s according to rumors reported by Techcrunch, which says investment banker Lehman Brothers is trying to sell the private Palo Alto, Calif./Denver, Colo. company. We’d caution against taking these numbers at face value, given that bankers always push for a high value (they generally get a 7 percent or so cut of the transaction). The site’s success stems from its convenient storage of photos, and the ability to easily link to those stored photos from other sites, such as MySpace (see story in Fortune). Photobucket has a whopping 36 million registered users and adds another 85,000 per day, according to leaked data. Note that only positive data was released, such as skyrocketing revenue predictions ($4.35M in 2005, $9.34 million in 2006, and more than $32 million predicted this year). Nothing about the company’s costs.

Iminlikewithyou, the latest dating site with buzz — This site lets you flirt with your prospective date, but also makes you compete in an auction-like system. You start with 500 points, and lavish points on the girl you like, in an attempt to outbid rivals. If you lose the bid, you lose your points. This is meant to discourage you trying for a girl who is out of your league. You can stock up on points by filling out questions, which lets the site find out more about your tastes. This site was originally nurtured by YCombinator, and subsequently has received more money from undisclosed angels. The site lets you see who is logging in. We saw Digg co-founder Kevin Rose logging in over the weekend, for example.

Yahoo opens its popular email program to outside developers — Shortly after announcing unlimited storage for its email service, the company has opened up its Yahoo Mail API, to let developers build applications on top of the service. Now it has stepped ahead of Google’s Gmail in most respects. Yahoo Mail has more users, has more storage, and more a friendly API policy.

Search Physics raises angel round — The San Francisco is building search engine technology that extracts information from Web sites, but hasn’t launched yet. (Thealarmclock)

Cisco buys Mountain View-based SpansLogic for around $6M — See story here, and why this is bad for another company, NetLogic. SpansLogic was backed by ATA Ventures.

Freedom-2 removes tattoos — Go ahead and get your tattoos. Freedom-2 offers technology that allows you to get tattoos that are permanent, yet removable if you change your mind and want to get rid of them. Apparently Freedom2Ink uses pigments and dyes that are encapsulated in a polymer bead. They are absorbed in the skin but can be removed easily with laser treatment — which breaks the beads and lets the dye spill out. The New York company has just raised $1.5 million in a first round of capital, led by Brightleaf Capital and other individuals.

Openfloodgate, another YouTube for docs — Like Scribd, this site makes it easier to post documents online than say, via your blog. Tina Seelig, an adjunct professor of entrepreneurship at Stanford, who owns the site, said it offers more control over content than Scribd, because it gives you the option to limit viewing to private groups. However, the content available for public viewing is easily copied. She has self-funded the site. The works, from art to poems, are stored as PDFs, but are turned into images on the page. Here’s a tour.

Finally, see the latest deals — A reminder to check here daily for the latest news about investments in start-ups. Today, we’ve got Vyatta, Mimosa, Sana and more, and also an overview of the lastest on IPO activity.