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Does the Pono bring an opportunity for premium streaming?

Does the Pono bring an opportunity for premium streaming?

We’ve been short-changed by Apple and the MP3 revolution, argues ISBA’s Bob Wootton – but could the Pono offer a high quality alternative to iTunes?

Given my double life – adman/lobbyist by day, musician by night – I spend a fair amount of time thinking about both music and the business of music as well as the business of media.

What prompted me was all the noise around the Kickstarter crowdfunded Pono device, backed by no less a name than Mr Crazy Horse himself, Neil Young.

Pono is a high-quality portable media player. The larger hi-res music files it stores and plays demand more storage, so the entry level player has a capacity of 128GB, several times that of your average smartphone and allegedly capable of storing about 2,000 songs. That’s about what I have on my 16GB iPhone, which is enough to clog the memory and make software updates a real chore.

Storage being so compact these days, the Pono founders’ choice of a triangular prism (Toblerone) shape is a rather curious design for something that could and should slip into a jean pocket.

As there’s no market for hardware without content, Pono also promises an online store for hi-res digital music files like those which already change hands between hi-fi enthusiasts. A ‘high-quality iTunes’, if you like.

This is where my thinking turned grumpy, because I suddenly realised how short-changed we’ve been by Apple, a company whose products I otherwise tend to love. Let’s look back…

Once there was vinyl (I’m discounting reel-to-reel tape, which was never a consumer phenomenon even in the days before such terms existed). With all its inconveniences – easily scratched, bulky, only played for 20 minutes before needing changing etc – carefully looked after, to the discerning music fan especially vinyl sounded really, really good.

Many years on, it still does. So much so that vinyl has defied its doomsayers and continues to make resurgences. It was always the choice of DJs for its tight, organic bass, and amongst enthusiasts for its warmth and finer detail across the spectrum. It’s currently enjoying yet another modest boom amongst people who care about sound. (Costly tube/valve amplifier sales are also booming, but that’s another, albeit connected, story).

Then we got compact cassette tapes. Very convenient – they worked in cars and some could run for longer than the twenty minutes of a vinyl LP. But for manufacturing efficiency, they were recorded at high speed and because of their narrow tape being played back at low speed they were disappointingly lo-fi. Over time, they became the cheap, nasty alternative to vinyl, but still did big business for some years.

Pono makes me wonder if there isn’t an incremental business opportunity here for Spotify – ‘super-premium streaming’ of the same high-quality audio files that Pono is punting.”

Moving quickly past the dreadful and forgettable US-centric phenomenon of 8-track audiocassettes, we got to CDs. Launched by a dear mate of mine who came up with the (quite fraudulent) idea of smearing a disc with marmalade to demonstrate on live TV how resilient these things were, they raised the bar and offered great convenience and much higher-quality sound to many more people. But to those that cared they still didn’t sound as good as vinyl, a debate which rages even today, almost 40 years later.

Sidestepping the further flops of Mindisc (mini, enclosed CDs) and Digital Audio Tape (like mini VHS tapes, duh), along came the record-industry slayer, the digital music file format, and iTunes stepped into the breach to ‘become’ music retail. It has cornered the market with about two-thirds of all sales – a nice earner indeed. (Though for all their protestations of doom, the intermediated record companies’ costs collapsed as they no longer had to manufacture the media on which their content is delivered).

History lesson over. My grump focuses on price versus quality, because MP3s and their like, whilst convenient as heck, don’t sound so great. Better than cassettes, sure, but nowhere near CD-quality, let alone vinyl. Yet allowing for the gradual and long-term decline in pricing overall, their cost is comparable with the superior formats they have supplanted.

So net, and regardless of the consumer benefit of a more convenient way of searching for and buying albums and individual tracks, people are being sold an inferior-quality music format for at best a more or less parity price.

Regular readers will know that I love Spotify, but have long wondered about its business model and why it doesn’t drop the price of Premium so it picks up many more paying subscribers. (I now understand that this is because they make more from advertising interventions to non-paying subscribers than they can from paying subscribers).

Nevertheless, the announcement of Pono makes me wonder if there isn’t an incremental business opportunity here for Spotify – ‘super-premium streaming’ of the same high-quality audio files that Pono is punting. It looks technically possible as it’s certainly not as bandwidth hungry as video streaming of almost any kind. And if Pono’s backers are after a big ‘push to market’ this could be it.

Selfishly, I’d love to see consumer-friendly distribution of hi-res audio files beyond Pono devices alone. Indeed, I can imagine the re-emergence of a stratified market in which people acquire or access the music they love best on higher-priced hi-res formats, while they pay less for more disposable music on cheaper formats like MP3. (Just like we once did CD’s, vinyl and cassettes).

Of course, over time, this will signal a reduction in the price of MP3s. But that would be nothing more than a market in operation, and what’s wrong with that?

Transparency vs. independence?

Since my last column, ‘Can Trading Desks Come Clean?‘, I’ve had a lot of incoming, which is great. It seems that many advertisers are quite rightly now asking questions that strike to the heart of the transparency of their trading desk arrangements.

The independent players are understandably jumping in with claims of greater transparency. I say ‘claims’ because firm proof is harder to come by and auditors are clearly playing catch-up in the online space.

Tom Denford of consultancy ID Comms has published an interesting commentary on this dilemma recently. I think we’re going to hear a lot more noise, and then hopefully much greater clarity, in this important space. More anon, as they say…

R.I.P.P.O.G.

The courtship announced at a high-profile Parisian rooftop tryst last July is officially over. Decoy rumours over ‘regulatory hurdles’ and ‘taxation issues’ morphed into Thursday’s announcement of the termination of the unconsummated merger between Publicis Groupe and Omnicom Group inc.

It’s a victory for competition, but God only knows at what cost to the two parties. Estimates of £200 million are circulating, plus the damage to personal and corporate reputations and the legion human consequences. And naturally enough WPP’s Sir Martin Sorrell is feasting on the outcome.

Bob Wootton is director of media & advertising at ISBA.
@bobwootton / @ISBAsays

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Nigel Jacklin, Managing Director, Think Media Consultancy, on 28 May 2014
“I never bought an MP3 player as the idea of having to transfer 1,000 albums and CD's onto an inferior thing and then having to repeat the exercise 5 years later didn't appeal to me. Whilst I hadn't expected it would take (10?) years for better device to turn up, I'm happy not having an MP3. My own stuff has just been re-released as a 4LP set (vinyl on demand VOD123) and I find it much easier to locate physical things with different coloured covers. On the other hand much music is disposable so quality perhaps less important. And while we're on strange things my professor friend pointed out that someone called Beck released something as sheet music only recently.”
Stephen, Market analyst, Ofcom, on 27 May 2014
“If you go into a music shop and listen to the same MP3 on an Apple product and a Sony product, with the same good quality headphones, you'll see that the Apple sound is vastly inferior. Coupled with people using the even worse earphones that come as standard with Apple products and you can see the vast majority are happy with low quality playback through low quality earphones, but hey, the wire is white so it's cool! Add to this younger generations growing up having never really heard vinyl etc. so they don't even know what music could sound like! The market for high quality may be shrinking all the time. The painted portrait replaced by the selfie.”

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