Billboard reported Thursday that MasterCard Inc. (NYSE: MA) has launched a new campaign titled "Roots of Rock" that offers free downloads for cardholders from Universal Music Group. Apparently the free aspect of the campaign is limited and after 100,000 songs have been downloaded, MasterCard will begin to charge $0.80 per track. Even after the credit card company begins charging for downloads, pricing for tracks is still lower than Amazon.com Inc. (NASDAQ: AMZN)'s MP3 Store ($0.89) or Apple Inc. (NASDAQ: AAPL)'s iTunes Store ($0.99).
Cardholders who also make a purchase by August 31 will be "entered into a sweepstakes with a grand prize of having a meet and greet with Jon Bon Jovi, Eric Clapton or Kenny Chesney." MasterCard executive Amy Fuller told Billboard with the new campaign, the company has "created unparalleled music experiences with three of the world's most popular artists, providing consumers with an intimate perspective on these icons that few fans will ever have." But those fans will have to win the sweepstakes.
MasterCard's campaign to offer free downloads is like numerous other programs that are linked with music companies, but it offers to take the digital market to a larger consumer base. Lowered prices (eventually) for the campaign mean that Universal Music Group will continue to hold on to the lead in music sales, if only because the music company is the only one on board with MasterCard. Consumers that might not have ever downloaded a track may be enticed to try out the campaign and the sweepstakes. This type of growth is what the music industry will need if digital sales are ever going to replace physical sales successfully and completely.
When Wal-Mart Stores, Inc. (NYSE: WMT) releases a new line of jeans next month from Levi Strauss, the eyes of the apparel industry will be tightly fixed on the world's largest retailer. The new denim jeans, which will be from the "Totally Slimming" line of Strauss's "Signature" line of jeans made specially for Wal-Mart, will promise to be comfortable yet produce a tummy-tightening fit for you ladies out there.
Now, these type of jeans have been available from department stores for a premium price for a while now. They're designed to automatically change that figure (no lipo required) while not feeling like a 19th-century corset. Wal-Mart's contribution to the process will, of course, be it's sub-$20 pricetag. Expect these jeans to fly off the shelves, literally. Even in the face of an economic downturn in the U.S., Wal-Mart has plodded along just fine. Products like these -- with prices like these -- will only reinforce the retailer's staying power in uncertain times
Levi's new product is designed to hold in thighs and lift the butt, among other things. As usual in full-service discounters, you can buy all the ice cream and potato chips that will bulk up the cellulite, then find the clothing solution to hide that nastiness right in the next aisle. Wal-Mart's new Totally Slimming product was tested by Wal-Mart women shoppers last November and proved a large success. For $20 a pair, these will draw even more women into Wal-Mart stores. If the retailer is smart, it'll build a large ad campaign around this product.
Abbott Laboratories (NYSE: ABT) got approval for its new drug-coated stent. The products are used to open clogged arteries, often in the place of by-pass surgery. The field has been dominated by deeply troubled medical device company Boston Scientific (NYSE: BSX). It looks that the weakened company is in for much more pain.
According toThe Wall Street Journal, ABT "received regulatory approval for its Xience V drug-coated stent, which is expected to be the top seller in the roughly $2 billion U.S. market because it appears to be more effective than rival devices." Boston Scientific will sell the new Abbott product, but with 40% of the revenue going to its rival, it is hard to see how that is a good deal.
BSX has been beaten by competition at almost every turn. It took on tremendous debt when it bought medical device company Guidant. It faced trouble when some Guidant products hit quality control issues. Boston Scientific stents came under criticism a year ago, when medical research questioned how effective they were.
BSX traded at almost $45 in 2004. It is now at about $12. With new competition and a bad balance sheet, that is not likely to change much.
Douglas A. McIntyre is an editor at 247wallst.com.
When Google, Inc. (NASDAQ: GOOG) purchased wireless software development company Android years ago, its founder asked Google's co-founder Larry Page, "Is this interesting to Google?" It sure turned out to be, although the mobile phone operating system environment was announced almost a year ago and nothing concrete has shipped in a customer device yet. My bet is that Google isn't delaying development to fine-tune its software -- it's had years to do that and the money to boot.
The problem is the wireless environment in the U.S., for starters. The competitive landscape is so tightly controlled that Google's mantra of "open access" just won't sit well with wireless carriers used to telling customers what they can and cannot do with their phones. If you think U.S. consumers have control over their wireless lifestyles, a quick trip to Europe will dispel that notion pretty fast.
If Google really wants to make Android the ubiquitous, free and open mobile operating system it wants it to be, what are the alternatives to having partnerships with mobile carriers who will, of course, be afraid of Google? Google has bid on wireless airwaves before (only to have the goal of allowing open devices accessible to closed networks), but this time, I see it going down the mobile virtual network operator route, plain and simple. Although the MVNO model has largely failed in the U.S., Google doesn't have a national wireless network to operate. But with its large pockets, it sure can buy wholesale from the existing carriers and place its Android customers with service -- and then, give them anything they want. Like, mobile search results with ads next to them.
Everyone in the music distribution business wants to be like Apple (NASDAQ:AAPL) iTunes. No wonder. It has over 80% of the market. Rhapsody, a competing download service, said yesterday that its subscribers could play their music on the iPod. It feels that should improve their customer base. Maybe. But, probably maybe not.
Now, Nokia (NYSE:NOK) has signed up Warner Music (NYSE:WMG) to its mobile phone music service. The big handset company has done deals with three of the four largest record labels.
According to the FT, "Consumers who buy Nokia phones featuring Comes with Music will be allowed to download as many songs as they like from Universal Music, Sony-BMG and Warner for a year." Now Warner is on board.
Getting a piece of the iTunes business will be hard, but Nokia probably has a better chance than anyone else. It sells 40% of the world's handsets, over 400 million a year.
But, consumers are used to getting their music from iTunes. Nokia may have a service, and it may have distribution, but it does not have a music brand or product loyalty in the download subscription business.
The loyalty part is important.
Douglas A. McIntyre is an editor at 247wallst.com.
Starbucks (NASDAQ: SBUX) recently began very wide distribution of Pike Place Roast. It tastes more like the coffee most people brew at home. It is inexpensive. It has drawn new customers to the coffee retailer.
And some people think it tastes like sewage.
According toThe Wall Street Journal, "the new strategy, which played down the company's more-established robust roasts, has touched off a debate about what customers think Starbucks should stand for: bold coffee for connoisseurs or a tamer brew for the masses?"
Starbucks founder Howard Schultz has been concerned about bringing the company back to it roots, the look and intimate feel of the company's early stores, but the new drink seems to run counter to that.
The Pikes Place product says much about what is wrong with Starbucks. Its appeal has been the originality of its products, but it needs coffee that will help its sales, which have been weak, grow again. Starbucks seems to be of two minds, which is never good for a company working on turning itself around.
With the economy in the dumps, what Starbucks does may not matter for now. Traffic is being hurt by consumer spending. The shares in the company are way down. Pike Place is just another cup of coffee.
Douglas A. McIntyre is an editor at 247wallst.com.
Billboard reported Monday that MTV Games, a division of Viacom Inc. (NYSE: VIA), will release the second installment of the popular Rock Band game this September. Rock Band first came out late last year in direct competition with Activision Inc.'s (NASDAQ: ATVI) Guitar Hero franchise, but where Guitar Hero only offers guitar simulated play, Rock Band offers a wide range of instruments and vocal game play. Rock Band also features an online store where users can download additional tracks for the game.
Rock Band 2 will be released at a time when a number of other music-related games, and according to MTV Games the game will feature "new and 'improved' drum and guitar controllers, a larger soundtrack, and new online modes and customization options." Additionally, all previous controllers and downloaded songs will also be compatible with the new game, so players will not lose those features or be required to buy new input devices. The game will initially only be available on Microsoft Corporation's (NASDAQ: MSFT) Xbox 360 platform but will expand to other systems by the end of the year.
Rock Band and Guitar Hero alike have revolutionized many listeners' interface with the music they love, simply because it expands the "play-ability" of many users who may not have ever picked up or tried to play actual instruments. Those listeners aren't lazy by any means, but these two game franchises expand the experience of playing music in a way that has never been possible before.
Rhapsody, a music download service owned by Real Networks (NASDAQ: RNWK) and Viacom (NYSE: VIA), will make yet another run at Apple Inc.'s (NASDAQ: AAPL) iTunes. According toReuters, "Digital music seller Rhapsody is launching a $50 million marketing assault on Apple's iTunes, offering songs online and via partners including Yahoo Inc. (NASDAQ: YHOO) and Verizon Wireless."
Why the venture thinks it will have real success is anyone's guess. Downloading to Verizon Wireless phones is not exactly the kind of novelty that is likely to draw customers. The service will have one important new feature, though. Rhapsody subscribers have not been able to play their music on iTunes. Under the new push, that will change.
Memo to Rhapsody: The horse has already left the barn. Keeping the service off of the iPod for so long has helped iTunes move into a unassailable position.
Real Networks, which dominated the multimedia market with its Real Player from the late 1990s until about five years ago, was slaughtered by Apple when it offered a device coupled to a music store with the launch of the iPod.
There is no catching up now. The race is over.
Douglas A. McIntyre is an editor at 247wallst.com.
China is the world's largest cellular phone market. Without it, Apple's (NASDAQ:AAPL) quest to grow iPhone sales quickly would be hindered.
Apparently, however, Apple is now getting close to a deal.
According toReuters, "Apple is no longer insisting on a revenue-sharing policy, so the biggest hurdle for China Mobile to bring in the iPhone has been cleared, but there are practical issues still to be resolved," said China Mobile (NYSE:CHL) spokeswoman Rainie Lei. Apple will not get a piece of the subscription fees attached to the phone, but it will move into a position to sell millions of iPhones on the mainland.
The news is likely to push Apple's stock up. China sales could eventually equal all of Europe's sales combined and may, at some point, rival sales in the US.
Apple's biggest problem in China may be the price of the phone. The upper and middle classes there may well pay for an expensive smartphone. The less well-off are likely to stick to products that cost well below what would be $100 in the US.
But Apple does not need to sell iPhone to all 1.3 billion people in China. It would probably be happy if just half those people bought the new 3G product.
Douglas A. McIntyre is an editor at 247wallst.com.
Google, Inc. (NASDAQ: GOOG) continues to make transparency about all people and businesses its top priority. In releasing Trends for Websites this week, the world's largest search information company made it impossible for websites to hide their numbers from all eyes, including consumers and advertisers. Are you a media buyer who wants to know the reach of a prospective website before you even contact them to negotiate? Visit Google's Trend for Websites site and find out instantly.
Google then one-upped itself by announcing the Ad Planner product for advertisers. This new product will allow media buyers and advertisers to get an immense amount of help on the best web properties in which to spend ad money. In other words, Google is making life easier for its advertisers to find the largest-impact website in which to advertise -- without trial and error. Of course, the new Ad Planner service is free.
Google's unabated quest to become the world's largest advertising company continues to move forward. Although these two products may not get much attention from the media after this week, these are huge impacts in terms of the business model that keeps Google's entire money chest afloat: advertising revenue. When Google said that "we want to help you figure out where your target audience is" in announcing Ad Manager, it wasn't kidding. The more it makes its ad customers successful, the more business it will bring in. Everyone's happy, and Google remains solidly on top of the new media advertising world.
That the developing and developed world will need considerably more electricity in the decades ahead would not surprise most investors / readers.
That both economic zones can achieve this goal while adding a minimal amount of soot to the atmosphere, however, would.
And the technology that will undoubtedly serve as a key energy-generation component in emerging markets' 21st century power grid? You guessed it: nuclear power -- the power generation form that has lagged in the United States for more than 20 years, due to environmental regulations.
China, India push forward with plant plans
China and India are two emerging market nations that recognize that nuclear power is an essential part of meeting future electricity demand. Nuclear power will account for more than 5% of China's power output by 2020, Bloomberg News reported Monday. Meanwhile, India will start three nuclear reactors this year.
Economist Glen Langan said that while nuclear power is not, strictly speaking, a renewable energy, it has to be considered as part of the next-generation energy mix [along with wind and solar power] to meet the U.S.'s growing demand for electricity.
You have to look hard to find good news about Citigroup (NYSE: C) these days. but despite all the bad headlines, the company continues to find new ways to innovate.
Take its joint venture Mobile Money Ventures LLC (MMV), which is an alliance with SK Telecom. Basically, this is a new company that is building new financial mobile applications.
All in all, it's pretty cool. The application helps with tracking and payments (there are also person-to-person transfers). Plus, you can even get mobile coupons and rewards – and send them to friends.
More importantly, the interface is intuitive and quick. It has a slick iPhone feel.
While the mobile banking market is still in the nascent stages, it looks like the growth rate will be particularly strong (just as was the case with ATMs during the 1980s). No doubt, Citigroup is making the commitments to be a top player in this important category -- which is likely to lead to more customer engagement and hopefully more profits for the long haul.
Nokia (NYSE: NOK) has decided it would like to get beat up and spit out by the entertainment industry. It also thinks it can compete with Apple (NASDAQ: AAPL) in the content distribution business.
Nokia is the world's largest seller of handsets, with about 40% of the market. Since the margins on that business are being pushed down by lower price for phones sold in places like China and India, the firm needs somewhere else to turn for revenue. Hollywood, where budgets mean nothing, seems like a good choice.
According toThe New York Times, Apple's lock on digital music could help Nokia. The paper writes, "Another possible advantage for Nokia is that music companies welcome a challenger to Apple. They are wary of Apple's growing power in digital music distribution."
But Apple is not the only problem. Dozens of companies from Amazon (NASDAQ: AMZN) to Sony (NYSE: SNE) are trying to get a piece of the portable entertainment pie. Most content is likely to be available to all distributors under some kind of contract. The large media companies have little reason to restrict themselves in exclusive deals.
The reason Nokia will probably never be a big "media" company is that a hundred other companies want the same thing. Everyone can't win.
Douglas A. McIntyre is an editor at 247wallst.com.
Some wonder whether Sprint (NYSE: S) can do anything to turn around its fortunes. It almost always ranks last in customer service among cellular carriers. It is still losing subscribers and its stock is down to $8.22. A year ago, it traded at almost $23.
Sprint continues to lose money. The firm has decided to get more deeply into the smartphone business with a product that it hopes can challenge the Apple (NADSAQ: AAPL) iPhone, which is marketed by AT&T (NYSE: T). Fat chance.
According toThe Wall Street Journal, the No.3 cellular service provider "will be taking on the iPhone with a lower price for its own touch-screen smart phone, the Samsung Instinct."
While the new handset may be a good one, it is hard to find a product that sells itself more than the iPhone. The Apple phone is part of a cult of buyers who love products from Jobs & Co.
And even if the Samsung phone was better than the Apple product, Sprint's customer service may well undermine its sales. A hot product only does well for a short time if the company that markets it has an awful reputation for taking care of its subscribers.
Douglas A. McIntyre is an editor at 247wallst.com.
In order to drive up market share in those niche PC categories, Dell Inc. (NASDAQ: DELL) is joining the fray of the miniature laptop PC with the new "E" and "E Slim." Wow, those are catchy names. Many manufacturers offer ultraportable mobile PCs designs, but many have also failed miserably. Now Dell wants to get in on the action of those who would love to purchase a high-margin, tiny laptop for all those internet tasks. These are dubbed "netbooks."
Dell joins fellow competitors Hewlett-Packard Corp. (NYSE: HPQ) and Taiwan's Asus in making a tiny laptop PC that uses flash memory instead of an actual hard drive and comes with a display that is less than 10 inches measured diagonally (standard laptop screens are 15.4 inches). HP unveiled its miniature notebook just a month ago, so Dell did not waste a bit of time here. In addition to the "E," Dell's "E Slim" takes aim at the larger, ultra-thin laptop market made famous by Apple Inc.'s (NASDAQ: AAPL) MacBook Air, and followed up with HP's recently announced Voodoo Envy.
What are all these manufacturers trying to do with all the slim-n-thin and tiny laptop designs? First of all, find some margin playroom now that the popular laptop PC category has seen shrunken retail prices as of late, although the Dell "E" will start at $299 when it debuts later this summer. Also, to continue finding those niches, there is pent-up demand. The "pocketable" laptop PC has been forever elusive, but some of these designs are getting very close to finding the perfect balance between usability and portability.