Will you buy potatoes on the Net ?

Once again we are hearing rumblings that online sales are killing brick-and-mortar sales. That story, if you remember, fueled the dotcom boom, which busted soon after.

Now many years later, people are more net savvy, there is a lot of stuff folks can buy online, but for a variety of reasons including technical and cultural, it may be again premature to talk about the imminent demise of the brick-and-mortar store.

Movie Gallery Inc., the second-largest U.S. video-rental chain, sought bankruptcy protection from creditors, citing increased competition from Blockbuster Inc. and Netflix Inc., according to a report from Bloomberg.

The point here is that Movie Gallery may have lost out to guys like Netflix, which save you the walk to a Movie Gallery store by letting you select online from a large repertoire. But the delivery of the DVDs is still done offline to the customer. So it is not a case of a brick-and-mortar play losing out to a pure online play.

A pure online play offering high quality, low-cost video downloads alone may not be as successful as Netflix, because that assumes large Internet bandwidth pipes to the home, which are not there yet across the US, and less so around the world.

In music too, don’t expect online music to wipe out the CD business. It is true that online music stores provide access to a much larger repertoire than a large brick-and mortar store can ever offer. But after the first flush of excitement over quick gratification, folks are going to take a long hard look at sound quality.

They will not only look at encoding bit rates, but at the encoding formats for downloaded music. These formats like MP3 are lossy, because to make files sizes smaller and manageable, they lop out a lot of music information that you would ordinarily find on CDs.

A lot of folks may go back to buying CDs if only because they offer better sound quality. A not-so-fringe benefit is that currently most CDs are not covered by DRM (digital rights management). I got back a week ago to buying CDs, after a downloading frenzy. The downloaded MP3 files were okay on a portable digital music player like an iPod, but the lossy character of the format really showed when the file was played on a home music system.

Finally, would folks buy potatoes and other groceries on the Net ?

I doubt it. Not a lot of folks buy vegetables without feeling them for solidity, consistency, and to spot out for those pernicious insects that tend to get to vegetables. They would rather go to the nearby store, or call up the store that has delivered reliably, quickly, and top quality stuff over the years. What is the buyer’s incentive to shift to buying online ?

Would folks buy art online, after taking a look at digitized images of a painting or sculpture ? Would die-hard shoppers give up the real-world shopping experience for clicks on a computer ?

Some categories like packed and branded products, we have bought and tried before, will most probably be purchased online. Coke cans for example, but certainly not designer wear, or furniture. Well known books by authors with impeccable credentials may be bought online if the store nearby does not stock it. Most people would still like to flick through the pages of a new book before they buy it.

Some of the conditions that proved the prophets of the online retail (etail) boom wrong in the late 1990s still hold good.

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Radiohead: unwitting players in an imaginary revolution

When Radiohead announced that it would allow downloads of its new In Rainbow album, fans and the media talked about a revolution in the music industry. Not only was the band by-passing the music labels, and offering its music directly to users, but it was offering the music for download in MP3 format at a price chosen by the user.

This move certainly appealed to the residual hippie in all of us, and also cheered up a lot of folks who have been chafing under DRM (digital rights management), and hoping for a revolution in the music industry.

It turns out that the downloads came at a sound quality that was not optimum, as it was encoded at a bit rate of 160 kbps (kilobits per second), according to a report in USA Today.

Contrary to earlier reports, the downloads were only promotional, and the CDs of In Rainbow, with top quality sound, will be on the shelves in January, according to the report. In fact, when I visited www.inrainbows.com last week, there was an option to pre-order for £40 a discbox.


In an interview to MusicWeek, the band’s managers Chris Hufford and Bryce Edge described the downloads as a mere “promotional tool”.

Far from being enthusiastic about digital downloads, both managers strongly favour the compact disc as a format of superior quality, according to MusicWeek. “CDs are a fantastic bit of kit,” Edge told MusicWeek. “You can’t listen to a Radiohead record on MP3 and hear the detail; it’s impossible.” Edge recommends labels get aggressive about promoting CD, according to MusicWeek.

The interview in MusicWeek was published October 8, ahead of October 10 when the downloads were available. It is hence tought to justify that Radiohead ot its managers did a con job. It is just that these days users and the media are hoping for a revolution in the music industry, to the point of imagining and contriving one.

This week there was again widespread coverage on Led Zeppelin offering their music for the first time online next month.

To my mind nothing earthshaking about that. Like the music labels, the British rock group is exploring alternative channels as CD sales have been flagging. Don’t look for revolutionary meanings between the lines ! This is a plain business decision. "The addition of the digital option will better enable fans to obtain our music in whichever manner that they prefer," guitarist Jimmy Page said Monday, according to this report.

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Universal Music short on ideas to take on iTunes

Universal Music short on ideas to take on iTunes

Universal Music has plans to allow vendors of digital music players to bundle unlimited downloads of its music for free to users, according to a report in BusinessWeek.

Universal will make its money by charging the device makers for the monthly subscriptions to the music. Makers of music players and mobile phones may then have a decent chance to overthrow iPod’s dominance of the digital music player market, as they can package downloads from Universal’s vast inventory of titles, as well as potentially from Sony BMG Music Entertainment and Warner Music Group, the report suggests.

But the deal is not likely to be a threat to the iPod any time soon. I doubt users are going to buy a second tier device just for the free music, even if it is “all you can eat”. Music fans want the entire experience – that is a good player with excellent music.

Currently the iPod is perceived to be the best player, and a strong iconic brand as well. Users have put up with a lot of crap from Apple Inc., including its various proprietary locks, but that is because they love the iPod.

Consider the figures. Apple had sold over 100 million iPods from the product’s launch in 2001 to April this year. In contrast, for all its marketing muscle, Microsoft Corp. has sold only 1.2 million units of its Zune since November. Will free music downloads change that ? I doubt it.

It is also not clear whether Universal’s Total Music will be free of DRM (digital rights management). If it is, the music is more likely to be downloaded for Total Music devices, and end up getting played by iPods users who never paid for the devices or the music. To avoid that, device makers will certainly insist on some kind of DRM. That will most likely mean that this music won’t play on iPods, and yes the non-DRM music on iTunes will not play on these devices. Once again the outcome will be fragmentation and chaos.

Universal, Sony BMG, and Warner Music are better off setting up an online store for non-DRM music of their own, that offers the basement rates the companies are willing to offer device makers. That way, like eMusic, another digital music download service, the music labels will have access to iPod users as well as users of other devices.

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Amazon.com gets onto MP3 music bandwagon

Amazon.com Inc. has launched Public Beta of Amazon MP3, a digital music store, signaling competition for Apple Inc.’s iTunes, and eMusic, the two big players in the digital music downloads business.

While iTunes predominantly uses a proprietary DRM (digital rights management) for its music downloads, eMusic offers music downloads in the MP3 format, without DRM protection. Downloads without DRM come without copy restrictions and controls, and can be played on any audio device supporting the popular MP3 format.

Amazon MP3 has over 2 million songs from more than 180,000 artists represented by over 20,000 major and independent labels, the company said in a statement. The downloaded files can be played on any audio device, Amazon said on Tuesday.

Most songs are priced from 89 cents to 99 cents, with more than 1 million of the 2 million songs priced at 89 cents, the company said. Songs on Amazon MP3 are encoded at 256 kilobits per second, which gives customers high audio quality at a manageable file size, according to Amazon.com.

Most large music labels have shied away from MP3 downloads, which is the reason why eMusic sells mainly music from independent labels. To make headway in this market, Amazon.com will have to introduce music guides and expert reviews to help users choose good quality music. The term independent labels has often come to mean amateurish music generated by out-of-garage operations, a problem many users encounter currently on eMusic.

Only Universal Music Group and EMI Music Publishing, among the big labels, are currently offering music at the Amazon.com store.

Amazon.com announced in May that it would open an online digital music store later this year, and also said that the music would be free of DRM controls. The company also invested in August in a music download firm called Amie Street Inc.

The MP3 music can be downloaded from Amazon here.

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