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E-commerce sales continue to boom in every sector but music. A recent comScore Media Metrix study shows that online sales of recorded music fell for the third straight quarter, while internet file-swapping sites continue to gain audience share. Third-quarter music sales dipped to $545 million this year, off 25 percent from last year’s $730 million. So far this year online music sales have dropped versus a year ago in every quarter by a double-digit margin. Meanwhile, sales of all products (excluding auctions) have increased by about 30 percent each quarter over last year. This time the music industry has some new faces to blame. Last year’s Napster demise has opened the way for several file-swapping sites to take the limelight, the most prominent of them Kazaa and Morpheus. Both increased their monthly U.S. home user base from less than 1 million in the second quarter of 2001. Kazaa grew to 4.6 million in the first quarter of ’02 while Morpheus ballooned to 7.1 million. Kazaa had improved to 9.4 million by the end of third-quarter 2002. Napster had almost 12 million in the first quarter of 2001.
Microsoft judge took tech stock hit
Although the Microsoft settlement didn’t end up costing the company as much as it had feared, it did prove costly for the judge who oversaw the case. In the midst of last year’s dim economic downturn, U.S. District Judge Colleen Kollar-Kotelly sold off her family’s technology stocks to avoid any appearance of impropriety. Don’t feel too sorry for her – the family holdings still equal almost $1 million – but Kollar-Kotelly did take a beating. She purchased up to $15,000 in shares of Sun Microsystems and Compaq, the former a fierce Microsoft competitor, in January 2001. When she was appointed to the Microsoft case seven months later, she sold the stock, then worth less than half per share than when she bought the stocks. Although Kollar-Kotelly had previously admitted selling tech stocks worth between $45,000 to $65,000, the full extent of her losses became public knowledge when she recently filed disclosure documents with the U.S. courts. U.S. laws bar judges from presiding in cases where they have a financial interest in the outcome.
Coming soon: Roll-up TV screens
TV screens, even the hip new flat ones, can be so bulky and difficult to move. British scientists are working to eliminate the problem. Last week glowing plastics company Cambridge Display Technology acquired rival Opsys in a move that should eventually result in the first roll-up TV and computer screens. CDT says it should have the technology ready by 2005. The new format will improve on the flat screen liquid displays so en vogue right now by making screens more energy efficient and thin enough to fold. Light goes in only one direction on the organic light-emitting diode (OLED) screens, which generate less heat than clunkier versions. Analysts predict sales in the billions of dollars for OLED screens by 2007. They also say that the innovation could have big implications for e-commerce, in that the more flexible format would allow consumers to place online orders just about anywhere. Although laptops and PDAs are obviously transportable, OLED screens would have better imaging capabilities, meaning customers can see a more accurate version of what they buy.
Play and win $250K in new online game
The “Push, Nevada” of online gaming has arrived. Entrepreneur Keith Griffin launched a new pay-to-play online gaming service Monday that promises monetary rewards to its fans a la the recently canceled ABC drama-puzzle. TerraQuest offers at least $250,000 to the first person to solve the “case.” It even originates from the same state as “Push.” Griffin’s MindQuest Entertainment is based in Henderson, Nev. The game does require some patience. Players are presented with six monthly installments, with a $25,000 prize awaiting whoever wins the monthly challenge. The story, described only as one of international intrigue, climaxes in one final challenge, to figure out a certain main character’s name, bank account number and a few other details. The winner will receive $250,000 plus 10 percent of the take from the $25 players shell out to download software and access the online information. Fantasy role-playing games have long monopolized the web pay-for-play market. But that may change as Electronic Arts soon rolls out The Sims Online, a version of the popular PC game. EA’s 2001 online offering, Majestic, was similar to TerraQuest, but went off the market after just a few months due to slow sales.
AOL introduces corporate IM software
America Online, which already dominates the instant messaging market, has introduced a new IM product for businesses. The Enterprise AIM Services suite alleviates corporate worries over security breaches or lack of control over messaging. The new suite allows system administrators to use corporate firewalls to keep control of messaging software. AIM allows managers to log, audit and create reports on messaging activity, all of which can be monitored for content. Encrypted message capabilities won’t be available until next year, at which time AIM will partner with VeriSign. The cost of the service will likely be between $34 and $40 per year. The corporate IM market has heated up after years without a specialized service. Yahoo already introduced a business IM service in October, while Microsoft is still working on its version.
November 5, 2002© 2002 Media Life
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