VentureBeat

SanDisk and the record companies are launching a new music format today dubbed slotMusic. The company hopes music companies will publish entire albums on SanDisk flash memory cards that are smaller than a postage stamp and are expected to replace the music CD.

In an age of downloadable music, the new  slotMusic format for distributing MP3 songs is a long shot. But it has heavy-duty support. SanDisk has been trying out the idea for a number of years. The format is now being embraced by four major record companies: EMI Music, Sony BMG, Universal Music Group and Warner Music Group. Major retailers supporting it include Best Buy and Wal-Mart. While these are big players, the move seems like a stop-gap measure to push back against the $1-per-song downloading trend that has taken over the indsutry. The companies are hoping that convenience of the memory cards will shift behavior patterns.

The slotMusic cards can fit into mobile phones, but they won’t play on Apple’s iPhone or iPod products. That may be a killer problem, since more than 4 billion songs have been downloaded from Apple’s iTunes music store since 2003. The cards store 1.1 gigabytes of data and can stream music at a high-quality level of 320 kilobytes per second. Albums are expected to cost about $15 and will be stocked near the ever-vanishing CD racks in stores.

As Apple chief executive Steve Jobs likes to remind everyone, the iPhone is still an iPod — in fact, the best one Apple has ever made. With this in mind, Apple is apparently pushing to make music a central part of its upcoming 3G iPhone release.

Apple is in discussions with the major music labels about expanding music services on the device, according to The New York Times. The hope is that some new agreement can be in place for a launch in June. As many of us know by now, the 3G iPhone is expected to launch in June.

A key part of these discussions is said to be ringtones — Apple wants more of them available. Also being talked about are the so-called “ringback tones” which play a song of your choice on another person’s cellphone when you call them.

The big component of the deal however may be Apple’s desire to sell the entire iTunes music library on the mobile version of iTunes that runs on the iPhone. While current iPhone owners are able to access the store when they are on a Wi-Fi connection, with the addition of the mobile broadband 3G technology in the next iteration of the device, it should make it so people can buy music anytime, anywhere.

Something like that could certainly make for a nice slogan when Jobs takes the stage in June.

Ringtones are, in my opinion, one of the greatest rip-offs in the history of mobile devices — right up there with text messages. Who on Earth would pay $0.99 for a 20-second ringtone when you can buy the same full song for the same price? Believe me, I know it’s a huge business, I just can’t for the life of me understand why.

I sincerely hope Apple isn’t planning on making ringtones a key part of its strategy. If Apple and the music labels were smart they would team up to make it so that ringtones were included with all iTunes purchases made on the iPhone. That could really spark some sales from the device.

Naturally, for all of these things the record labels are thought to want a larger cut from Apple. New agreements could also be used as leverage to get Apple to allow for variable pricing for music tracks on the regular iTunes store. Apple has shied away from doing this in the past, but recently allowed certain HBO television shows to be sold for a dollar more than the until-then standard of $1.99.

Also supposedly still being discussed is the idea of a subscription-based iTunes music service. Universal Music Group is said to be pushing for this. Something which I’m still not sure is a good idea — for Apple at least.

As has been very clear, Apple does not cave in very easily. Many of the labels are still apparently holding back on giving iTunes the same DRM-free music that they give to other services such as AmazonMP3 — another move seen as a negotiating tactic. But rather than give the labels the upper-hand, Apple has sat back and let promises go unfulfilled.

[photo: flickr/kien pham]

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.

GoFish, a video-sharing site much like YouTube, has acquired another video site, Bolt, to save that company from lawsuits that threatened to sink it.

The $30 million transaction, first reported by the NYT, is reportedly being used by New York’s Bolt to pay a settlement of “several million dollars” to Universal Music Group, which had sued Bolt for copyright infringement. (See merger filing here)

Thus ends the topsy-turvy ride of Bolt, the company started in 1996 to target teenagers, and once backed by investors like Highland Capital, America Online, and Oak Investment with more than $66 million. It had even filed to go public in December 1999, with only $4 million in revenue and no profit — just as the dot-com meltdown began. It was forced to pull its IPO.

So co-founder and chief exec Aaron Cohen and co-founder Lou Kerner bought the company back from investors in 2004. Which is why Cohen tells the Times: “This deal is economically painful to Bolt shareholders…It is setting a precedent that companies that violate copyright at minimum risk litigation.”

Bolt apparently had revenue of $7 million by the end of last year. It had 5.3 million users in the U.S, according to ComScore Media Metrix.

GoFish, a two year old San Francisco company, went public last year through a reverse merger, so called because it merged with company that was already publicly traded but had no operations. GoFish has little, if any revenue, but has a market value of $134 million. GoFish.com had 1.4 million users in December.

Cohen and Bolt president Jay Gould are now involved with a project, called WikiYou, which has received seed funding from First Round Capital and Mayfield Fund, reports NewTeeVee.

Universal Music Group, whose artists include U2, Mary J Blige and Mariah Carey has finally made good on its threat to sue — filing against online video sharing sites Grouper and Bolt for allowing users to swap pirated versions of its musicians’ videos.

These companies are smaller than YouTube, and thus are easier targets for Universal, which might be seeking to use these cases as precedents for a wider fight– regardless of any short-term licensing agreements it may have signed with YouTube after that site got the huge resources of Google behind it. (Or, Universal may be happy with the copyright filtering technology agreed to in its deal with YouTube and Google, and so is now going after the renegades).

Bolt and Grouper say the Digital Millennium Copyright Act gives them protection, because it suggests that a site is in the clear if it takes down copyrighted content. The question is whether a site should be required to use proactive means to avoid such content, and whether its technology promotes sharing afterward.

UMG lawyers argue the sites are copying, reformatting, distributing and creating derivative works from Universal’s musicians. So Universal is testing a narrow definition of DMCA for the first time. In this way, Bolt and Grouper make for interesting case examples.

Grouper, in particular, is significant. Grouper users can download the videos to their computer, iPod, or PSP — and once they have a physical copy, they can view it and share it with whom they please (similar to the old Napster with music), Steve Poland points out.

Bolt, however, operates much like YouTube, allowing users to view only Flash versions of the videos in their web browser without any ability to copy the video to their physical computer.

Thus, these suits are a great way for Universal to test these two models under the DMCA.

Gill Sperlein, general counsel of adult-entertainment company Io Group, which filed a complaint against another video-sharing site Veoh Networks, told the WSJ (sub required): “They’re making a copy, so that’s direct copyright infringement. Then they’re posting it on their Web sites and financially benefiting.”

Bolt.com had 8.1 million unique visitors in August, according to online measurement company, Comscore, while Grouper had 1.8 million visitors — a fraction of YouTube’s 72.1 million visitors.