Music price comparison site

6 08 2009

comparedownloadscreenshotThe internet is filled with dozens of sites that let you compare prices of things like car insurance, utilities, credit cards and even meerkats. Such sites are popular since they allow the consumer to get the best possible deal without the hassle of going to each individual store and comparing prices. Well, there is a new comparison site, imaginatively named Comparedownload.com, that allows you to compare the prices of music downloads from different stores like 7digital, Amazon, Tesco Digital, We7 and iTunes.

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Comparedownload.com is the first website in the UK that allows music fans to compare the price of music downloads and seems to have stumbled upon a gap in the market that seems so simple and obvious now that its mentioned. The website’s founder, James Bott, says that it was the frustration of having to search through different sites for the cheapest price for music downloads that lead him to develop this website.

 

According to the International Federation of the Phonographic Industry (IFPI), only 5% of total music downloads are done so legally. This means that there is a huge market for legal downloads if the other 95% are tapped into. If the market potential for online downloads is indeed so huge, why has it taken so long for a site that allows the consumer to compare prices of downloads to be launched? And that too this isn’t a venture by some business seeking to exploit a gap in the market, but the result of someone’s frustration and need.

 

Maybe its because there aren’t enough sites selling music legitimately that have huge catalogues that can be compared. The reason for that is perhaps that its too hard for sites trying to sell music legitimately to bring all the record companies together and convince them to allow a website to sell their songs. And if the website doesn’t have a wide collection of songs, customers will obviously not come. The other quick and simple alternative is file sharing, which of course is illegal.

 

There is of course another alternative, buying a CD. But what if you only want one single, and not the whole album? Also, it’s a lot less convenient than downloading music. CD sales, according to the IFPI, dropped by about 15% last year. Of course, the music industry will be quick to put the blame for the drop on illegal file sharers who want to listen to music, but pay nothing for it. But I don’t think that all those who share music do so because they are heartless or get some sort of pleasure by “stealing” someone’s work, as they are often portrayed. I think it’s a bit hasty to attribute the drop in sales of CD’s to online file sharing. Maybe its because the way people view music and the way they want to obtain their favourite music is changing.

 

Recent surveys suggest that an increasing number of people who previously got their music from file sharing are switching to legitimate music streaming sites like Last.fm, We7 and Spotify. But the business models of such music streaming is completely different from those of the music companies. Music companies want to charge the consumer for each individual download and control how many times the music is moved around whereas music streaming sites view the delivery of music as a service that would allow revenue to be generated by displaying relevant ads and through sales of complementary products like merchandise, tickets to gigs, etc. The biggest hurdle again for such streaming services I think are record labels that may need a lot of convincing to let the sites stream their music. Many are sceptical about streaming sites generating significant revenue that would compensate for the drop in CD sales.

 

To a certain extent, I think that it’s fair to say that the music companies are victims of their own greed and their inability to view the internet as a means of diversifying rather than viewing it as a threat to their business. There are a huge number of online retailers selling all kinds of things from books to computers and they have been operating for quite some time now. Yet, the number of online music sites are still quite low and only now beginning to increase. No wonder then that although you can buy pretty much anything on the web, it’s still relatively hard to buy music legally. It must be so hard to get them all on board and agree on particular business model that it takes somebody with utter determination and nerves of steel with financial backing to achieve a deal. Imagine the kind of problems that Steve Jobs must have faced of convincing each and every record company to make their catalogue available for sale when Apple was planning to launch the iTunes store.

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Google’s new operating system

9 07 2009
Google Chrome Source:Google.com

Google Chrome Source:Google.com

Google announced on its blog that it is going to launch its own operating system next year based around its web browser, the Google Chrome. The Google Chrome OS will initially be targeted at the netbook market. It will be open source and based on the Linux kernel. Since it’s a Google product, it’s going to be free as well. The blog claims that the new OS will be light weight and more focused on getting the user onto the internet within seconds of booting up rather than waiting minutes for the computer to load.

This step is perhaps the next best logical step for Google since the online world is its home ground. Right now, it depends on other providers providing the user with a platform-the OS and the browser-to get onto the internet and access its services. It solved part of the problem last year by launching its own web browser with the hope that it would come together with all its online applications to provide an integrated experience to the user.

So, an operating system that is oriented for the internet would be ideal for a netbook since such devices with low processing power are likely to be used for things like accessing the internet. However, totally depending on the internet to provide all the functionality assumes that the netbook would be constantly connected to the internet. The most popular method of accessing the internet through a netbook is by using a dongle that connects to the internet via the mobile 3G network. Although such dongles can be obtained cheaply through deals, which include the dongle and the netbook, such deals have incredibly small download allowances. Since there would be a lot of exchange of data with the internet, the download limit would be quickly reached. So, Google should not only work with manufacturers to get its OS onto their devices, but also with the telecommunications companies and explore new ways of providing cheap internet access with huge download caps where the cost is subsidised by advertising-Google’s main business.

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The news media are referring to Google’s announcement as “Google taking on Microsoft”. I think that’s a bit premature to think that Google’s new OS,which depends on cloud computing, will offer all the functionality and applications that Microsoft’s operating system, which largely depends on software hosted locally, can provide the user. Especially since all we have from Google is an announcement, and not an actual product that can be tested, compared and bench marked.

That is not to say that Microsoft shouldn’t be worried about Google’s OS. That’s because currently, users that want Windows on their netbooks are offered Win XP and not Vista. The other alternative is a Linux based OS. Most users prefer XP although its expensive and old because they are familiar with the user interface and have apprehensions about switching to an unfamiliar system. That is why Linux distributions, most which are free and some of which already offer a light weight OS some as small as 50Mb, do not have many users since they are seen as being complicated and “techie”. But with a popular name like Google attached to it, it wouldn’t take long for these apprehensions to go away and for users to start switching to Chrome OS.

It would be interesting to see how Google goes on to monetize its operating system. Microsoft of course gets its revenue by charging a huge price to those who wish to use its operating system and so does Apple to those who wish to use its OSX, although its not so pricey. Linux distributions depend on a community of developers and some organisations get their revenue by providing support to businesses that use Linux operating systems and also by providing customised solutions. Google will obviously fall back on its core competency-its advertising business. That’s how it currently generates most of its revenue, by advertising to those that use its products.

Like in most cases, at the end of the day, it all depends on how Google execute their plan. If they become complacent and start thinking that anything that has the Google brand attached to it will become popular, their OS may not turn out to be a Windows killer. It will be interesting to see what the end product looks like when the beta version is released later this year.

And if any of its previous products are to go by, expect the Google Chrome OS to be in beta till the year 2020.

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Sales rise amidst the credit crunch

19 12 2008
Oxford Street, London

Oxford Street, London

According to figures released by the Office of National Statistics (ONS), the volume of sales between September and November rose by 0.5% as compared to the three months before it. This may not sound good, but compared to all the doom and gloom and the difficulty of obtaining credit, it does sound good. Also, the value of weekly sales in November were 2.9% higher than in November last year.

However, the high street retailers beg to differ with the figures. The British Retail Consortium (BRC) said that the figures released by the ONS were optimistic and painted a “rosy picture” of the current difficulties. According to BRC’s own findings, the sales value actually fell by 0.4%. Experian reported that the footfall (the amount of traffic generated by shoppers visiting the stores) in stores for the first three days of the week had decreased by 11.5% compared to last year.

It seems hard to believe that the increase in the volume in sales could have lead to a increase in the value of sales. After all, the increase in the volume of sales is largely due to a wave of heavy discounting by the high street retailers, especially after Woolworths slashed its prices to get rid of its stock. It is likely that the spectacular and well-publicised offers by retailers would have made some reluctant consumers go out and spend. It is also equally likely that many who generally would have waited for Boxing Day sales have instead done their shopping before Christmas since they feel that the discounts offer good value for money. After all, there is a limit to the amount of discounts that the retailers can offer before it starts eroding their profits. So many consumers may feel that the discounts are as good as they are going to get. If this is true, what would happen is that the average amount of sales during the Christmas period hasn’t really increased, but the shopping has been concentrated to a few weeks before Christmas.

The reason for this difference in figures, according to Reuters, is that the figures of “the ONS figures capture internet shopping more fully”. According to the ONS, the value of online sales was £220 million in November and it accounted for 3.8% of the total retail revenues. According to Experian, its company Hitwise which is an online competitive intelligence service, found that the websites of high street retailers had 22% more visits than its internet-only rivals. This could explain why the sales have increased even though the number of shoppers visiting the stores seem to have decreased.

Many shoppers percieve the prices of online retailers to be cheaper than their high street counterparts. And this has been shown to be true in most cases. After all, they do not have to worry about expensive overhead costs like rent and sales staff. However, many shops on the high street nowadays allow their customers to haggle and bag bargains, and this is not available to online shoppers.

It would be interesting to see the figures of  the overall retail sales before and after Christmas since that would allow us to see the whole picture.
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