If record companies had their way, the internet would never have been invented. For much of the second half of the 20th Century, music fans who wanted to listen to the latest release from their favourite artist had to make a trip to their local record store to buy an album or single on vinyl, cassette or CD.
However, the mass adoption of broadband in the developed world at the start of the last decade soon destroyed what was a very cosy – and highly profitable – business model.
A generation has grown up illegally downloading music – and many music fans are content to use advertising-funded websites such as YouTube to hear almost any track you can think of.
In 1999 the global recorded music industry raked in $26.6bn – buoyed mostly by sales of highly profitable CDs. But as pirating took off the total slipped to less than $20bn in 2007 and last year was down to just under $15bn, according to industry body IFPI.
The arrival of Apple’s iTunes music download store in 2003 made it much easier to legally buy music online, but its growth has stalled as more music fans switch to streaming services such as Spotify. The transition is similar to the way that many consumers now rent movies online or through subscription services such as Sky or Netflix rather than buying a DVD.
Spotify’s jukebox-like service lets users play millions of songs for free with ads in between, or pay £4.99/$4.99 a month without those annoying interruptions.
Since starting in 2006, the Swedish company now has 20 million paying subscribers and another 55 million using its free service. Aware of which way the wind is blowing, Apple this week joins the streaming bandwagon with the launch of Apple Music.
It will offer users a three-month free trial, after which it will cost the same as market leader Spotify, but with no free tier.
Apple Music will have a crucial advantage over the likes of competitors such as Spotify: it will be pre-loaded on the hundreds of millions of iPhones and iPads being used globally via a software update. That saves Apple from having to do much marketing to promote the service, says Andrew Sheehy, lead analyst at Generator Research.
Rather than aiming to make a profit from music, he says Apple’s main aim is to give iPhone users another reason to keep buying its highly profitable devices. However, the company will use its might in the music business to persuade some big artists to offer some exclusive content – with Pharrell Williams being the first. His latest song, Freedom, will only be available on Apple Music. Similarly, Taylor Swift will make her music available on the service after pulling it from Spotify last year. There is no question that Apple’s move into streaming will make life much harder for the likes of Spotify.
Mr Sheehy predicts that up to 25% of Apple users will pay for Apple Music after the trial ends. “The competitive dynamics are very lopsided – it’s not a level playing field, but that’s not to say that Spotify cannot be a success,” he says.
Tim Ingham, editor of website Music Business Worldwide, says Apple is aiming to have at least 100 million subscribers after the three-month free trial ends.He argues Apple Music should be welcomed because it will “help remind people how exciting and integral to their lives music is”, adding: “Apple’s potential is far, far greater than what Spotify has achieved so far. Hopefully it will bring the glory days back to music.”
Given the enormous marketing power Apple can deploy to promote the new service – perhaps using some of its near-$200bn cash pile to do so – will this be the end for Spotify? Not necessarily.
Mr Ingham believes Spotify can be a “very comfortable number two” after Apple.
Some investors appear to agree. Despite the imminent arrival of Apple Music, Spotify said in June that it had raised $526m (£334m) in new funding and was now valued at $8.5bn (£5.4bn). That’s more than household names such as Sainsbury and Royal Mail are worth.
Unsurprisingly, Spotify also thinks it can survive the Apple onslaught. Mark Williamson, its head of artist services, says the company has only just “scratched the surface” after getting people to pay for music again. (To be fair, Apple probably deserves some of that credit for its iTunes store.)
While admitting that streaming “is not an easy business to be in”, Mr Williamson adds: “We don’t think it’s going to be easy, but we’re confident we can continue to innovate.”
The big challenge for Spotify is continuing to grow if it has any hope of becoming profitable. The company reported a net loss of €162m (£117m) last year – largely because its agreement with record companies and publishers requires it to pay 70% of revenues to performers and writers. Streaming is a pretty good deal for music fans – given that a monthly subscription costs little more than buying one album.
Many artists, such as Ms Swift, are less certain – mainly because they get paid far less for having a song played on a streaming service than for selling a CD or an album on iTunes. Some, like her friend Ed Sheeran, are quite happy to be on Spotify because they believe the exposure helps increase sales of concert tickets. Live music is worth more than sales of recorded music in the UK. Streaming generated revenue of about $2.2bn last year, or 14.7% of the total, according to analysis of industry figures by MBW. That compares with a 46% share for physical music (that means CDs, with a tiny bit of vinyl on top) worth $6.9bn. The rest of the pie is accounted for by sales on download sites such as iTunes and royalties generated by the use of music in advertising, films and television.
As Mr Ingham says, streaming is yet to capture the attention of most consumers, who might like music but will only buy a couple of CDs a year. Given that many so people – especially millennials – seem quite happy to get their music fix from YouTube, Apple might face a bigger battle to get fans paying for music than it anticipates.
Ofcom today published data on the volumes of consumer complaints made to Ofcom against the major providers of telecoms and pay TV services.
The latest report covers the three-month period from January to March 2015 (Q1), and reports on the complaints made to 13 providers of fixed line telephone, fixed line broadband, pay monthly mobile and pay TV services.
This is the seventeenth quarterly Ofcom report to include complaints data by provider, and the thirteenth report to include data for pay TV complaints. By publishing complaints data, Ofcom aims to provide consumers who are looking for a new provider with useful information they can use to easily compare providers’ performance. The quarterly reports also provide an incentive to providers to improve their performance.
The total volume of telecoms and pay TV complaints made to Ofcom decreased slightly in Q1 2015.
While overall complaints volumes were marginally higher in Q1 for broadband and pay TV services, fixed line telephone and mobile pay monthly services both saw a reduction in complaints. The volume of complaints about mobile pay-as-you-go services remained at similar levels to Q4 2014. Broadband services continued to attract the most complaints.
Claudio Pollack, Director of Ofcom’s Content and Consumer Group, said: “Publishing provider-specific complaints data is one way we’re able to help consumers make informed choices about the services on offer to them. The reduction in the total volume of complaints is welcome, but there is still room for providers to improve their performance. This report is one of a number of ways we seek to give providers incentive to address areas of customer dissatisfaction.”
Landline telephone services – In the landline telephone market, EE continued to generate the most complaints, with volumes increasing from 0.36 per 1,000 customers in Q4 2014 to 0.39 in Q1 2015. The main complaint drivers for EE landline customers were problems changing provider (33%), concerns about faults, service and provision (28%) and complaints handling (18%).
BT, Plusnet and TalkTalk also generated landline complaint volumes above the industry average of 0.13 per 1,000 customers. The level of complaints from Post Office HomePhone customers (0.13) was in line with the industry average.
Sky (0.05 per 1,000 customers) and Virgin Media (0.07 per 1,000 customers) attracted landline complaints volumes below the industry average. Sky generated the lowest number of landline customer complaints.
EE generated the most complaints for broadband as a proportion of its customer base during the first quarter of this year, with 0.51 per 1,000 customers. This reflected an increase in complaints about EE’s broadband since Q4 2014 (0.42 per 1,000 customers in Q4 2014), and the highest level of complaints since Q1 2013.
Problems relating to faults, service and provision (37%), billing, pricing and charges (20%) and complaints handling (20%) were the main drivers of complaints about EE broadband. BT, Plusnet and TalkTalk all generated complaint volumes above the industry average, with TalkTalk also seeing a complaints increase (up to 0.26 per 1,000 customers). Virgin Media complaints (0.09 per 1,000 customers) were below the industry average, but had increased since Q4 2014 (0.06 per 1,000 customers). Sky’s relative complaint volumes (0.05 per 1,000 customers) fell below Virgin Media’s, making it the best performing broadband provider.
Mobile pay-monthly services – Vodafone continued to generate the highest volume of mobile complaints per 1,000 customers (0.14), a similar level to Q4 2014. The main drivers of Vodafone complaints were problems with billing, pricing and charges (33%), complaints handling (29%) and concerns around faults, service and provision (16%).
Both EE and Talk Mobile also generated complaints volumes higher than the industry average (0.10 and 0.11 per 1,000 customers respectively), although both providers did see a reduction in complaints since Q4 2014. Virgin Mobile, O2, Three UK and Tesco Mobile all generated complaints volumes below the industry average of 0.08 per 1,000 customers. Tesco Mobile generated the lowest volume of complaints per 1,000 customers (0.01) for the fourth consecutive quarter.
Pay TV services – BT continued to generate the highest volume of pay TV complaints per 1,000 customers (0.15). TalkTalk Group generated the second-highest complaints volumes (0.12 per 1,000 customers) and saw an increase in complaints since Q4 2014. The number of complaints against Virgin Media was in line with the industry average (0.04 per 1,000 customers). Sky was the only provider to generate fewer complaints than the industry average (0.01 per 1,000 customers), and it remained the best-performing pay TV provider.
On average, Ofcom receives just under 300 telecoms complaints a day from consumers. These individual contacts are analysed – alongside customer service satisfaction data and other sources of evidence – to help inform when and where additional consumer protection measures may be needed. Earlier this year, Ofcom extended an industry-wide monitoring and enforcement programme looking at providers’ compliance with requirements for complaints handling procedures.
Two separate investigations into Vodafone have also been launched, looking at its compliance with Ofcom’s rules on complaints handling, metering and billing, and sales and marketing practices.
In October 2014, Three was fined £250,000 by Ofcom for failing to comply with rules on handling customers’ complaints. A current investigation into EE’s complaints handling procedures is ongoing.
The biggest change to telephone calls in years will take place on Wednesday, affecting 175m phone numbers.
From 1 July, all Freephone numbers which begin 0800 or 0808 will become free for consumers to call from all phones, whether mobile or landline. In addition, landline and mobile charges will become clearer for calls to service numbers starting 084, 087, 09 and 118.
People use these ‘service numbers’ every day for finding out information, contacting a business or helpline, or using competition, directory-enquiry, entertainment and voting services.
Ofcom research shows that every year, callers in the UK spend a total of 250m hours calling these service numbers, spending around £900m between them. Until now, callers to these numbers have not generally been told by the service provider how much they will be charged.
But under changes brought in as part of UK Calling, prices will be clearer on telephone bills, in marketing materials and in advertising.
From Wednesday, charges for service numbers will be made up of an ‘access charge’ going to the phone company, plus a ‘service charge’ set by the company or organisation being called. Phone companies are responsible for setting their access charge, making it clear to consumers on their bills and informing new customers of the charge when they sign up to a contract.
Separately, the service provider – the party being contacted – will be required to specify its service charge wherever it advertises or communicates the phone number.
From Wednesday, consumers will be able to: know that when they call a Freephone number from a consumer mobile the call will be free; understand the exact cost of making a call to a service number call by adding the access and service charges together; compare the prices of different service providers more easily; and choose a provider with a competitive access charge when signing up to a new landline or mobile deal.
What callers will see
Previously, callers have been given information such as: “Calls cost xp per minute from a BT landline. Calls may vary from other landlines and calls from mobiles may cost considerably more.” Under the new system, the cost of calls will be explained in a simpler format such as: “Calls cost xp per minute, plus your phone company’s access charge.”
With service number charges being made clearer, many organisations that used 084 and 087 numbers in the past are moving, or have already moved, to using an 03 number. Calls to 03 numbers cost no more than calls to geographic 01 and 02 numbers and are now used by most government departments, major banks, public bodies and not-for-profit organisations.
Also as part of UK Calling on Wednesday, calls to Freephone numbers (beginning 0800 and 0808) will become free for consumers to call from mobile phones, just as they generally are from landlines.
Sharon White, Ofcom Chief Executive, said: “UK Calling is the biggest change to telephone calls in over a decade. Together we spend around £900 million a year calling service numbers, so it’s important that people understand the cost before they pick up the phone. Callers will be able to see what they’re paying and where their money is going. You can visit ukcalling.info for more information on the changes, and what they mean for you.”
Google is launching a free version of its music streaming service Play Music. Google Play Music already has a subscription-based service, where users pay monthly to listen to an unlimited amount of tracks.
The free version will be made up of curated playlists designed for different times of the day and tailored towards what you are doing.
The new free service, initially only available in the US, will include adverts similar to the Spotify model. It uses Songza, an internet radio app that Google bought a year ago
In a blog post, Google product manager Elias Roman said: “Even if you’re not already a Google Play Music subscriber, we’ve got you covered. Google Play Music now has a free, ad-supported version in the US, giving you a new way to find just the right music – and giving artists another way to earn revenue. The new free, ad-supported version of Google Play Music is launching first in the US. It’s available on the web today, and is rolling out this week to Android and iOS.”
Google said it hopes the new free version will encourage people to sign up for the subscription-based tier of the service, which costs $10 (£6.34).
The service had around 815,000 paying subscribers in the US last December. For now, Google isn’t announcing any expansion of the free tier outside the US, though the paid plan is now available in 52 countries. It’ll compete against Apple’s much-publicised new music service, which is due to launch on Tuesday 30 June and will be free for the first three months.
Earlier this week, Taylor Swift wrote an open letter to Apple over their plans to not pay artists during the 90-day Apple Music trial. It led to the company reversing its stance and it now says it’ll pay royalties for streams during that time.
Spotify announced last month that it would be offering video content for the first time and the world’s second largest streaming site, Deezer, announced is adding more than 20,000 new podcasts to its service. On Tuesday Peter Tonstad, the boss of the Jay Z’s music streaming service Tidal, left the company after three months in the job.
EE put a ‘steak’ in the ground as the official technology partner of Glastonbury Festival 2015 by revealing plans to offer an innovative new charging solution and double-speed 4G WiFi in one at this year’s event via the 4GEE Charging Bull.
The unique EE Power Bar charging station at Glastonbury takes the form of a larger-than-life bull statue. Those on site who spot the festival-themed Charging Bull will be able to plug in their EE Power Bar – a portable mobile phone charger – for a quick power top up on the go.
The official Power Bar can also be swapped for a fully charged one once it runs out of juice at either of the two large Power Bar Exchange cabins this year. EE predicts it will handle over 200,000 swaps over the weekend thanks to the popularity of its queue-busting swapping scheme.
EE’s Charging Bull also acts as a double-speed 4G WiFi hotspot – available to all for free – which means while revellers stop to boost their battery power they can also log on and upload pictures, videos and messages from the festival in record time.
Spencer McHugh, Director of Brand at EE, said: “As social media usage on our network continues to soar, we have worked with Glastonbury to deliver the most connected festival experience ever for 2015. As well as the 4GEE Charging Bull there will be multiple public WiFi hotspots on site for all to use and through our EE Power Bar Exchange service we are delivering the biggest phone charging operation of any music festival in the world. We want to help everyone there stay in touch with friends and share every memory, using our innovative technology to get the most out of their experience at the UK’s biggest music festival.”
EE will also install a 4G network on site for the Festival weekend, which will power the double-speed 4GEE Bull, continuing to bring a superfast broadband experience to the most rural parts of the UK. EE’s 4G coverage today reaches 90% of the UK population in over 500 large towns and cities, and an additional 5,000 rural villages and small towns.
The 4GEE Charging Bull will be positioned by the main EE Recharge tent and Power Bar Exchange on site – both of which are visible on the map within the Glastonbury 2015 app – and is open to all from Thursday to Sunday – 10am-10pm.
The official Glastonbury 2015 app, developed in partnership with EE shows all the latest news, set times, lives streams of the BBC’s coverage over the weekend and features improved social media integration this year, helping friends connect on site. It is available to download now for all smartphone users on any mobile network.
SoftBank Robotics Corp. and SoftBank Mobile Corp. today announced that ‘Pepper’, the world’s first personal robot that can read emotions, will go on sale in Japan starting June 20, 2015.
SoftBank Robotics Corp. and SoftBank Mobile Corp. today announced that ‘Pepper’, the world’s first personal robot that can read emotions, will go on sale in Japan starting June 20, 2015.
With 1,000 units available for purchase in the month of June, customers will be able to place orders for Pepper online starting from 10:00am on June 20. Before the sales launch, on June 19 a special drawing for a limited number of 30 units will be held at SoftBank Tokyo Station GranRoof Front (Chiyoda Ward, Tokyo). Additional shipments of Pepper will follow from July onward.
In conjunction with the sales launch, Pepper will not only be able to read emotions — Pepper has evolved to have emotions. Pepper’s emotions use emotion functions developed by cocoro SB Corp. that enable robots to artificially generate their own emotions. These emotion functions in Pepper are modeled on the human release of hormones in response to stimuli absorbed by the five senses which in turn generate emotions. In addition to Pepper’s emotion recognition functions, Pepper has capabilities to generate emotions autonomously by processing information from his cameras, touch sensors, accelerometer and other sensors within his “endocrine-type multi-layer neural network.”
With this emotion function, Pepper’s emotions are influenced by people’s facial expressions and words, as well as his surroundings, which in turn affects Pepper’s words and actions. For example, Pepper is at ease when he is around people he knows, happy when he is praised, and gets scared when the lights go down. Depending on the emotion at the time, Pepper raises his voice or sighs, for example. Pepper’s emotions can be seen on the heart display, which shows different colours and movements. Furthermore, a number of robot apps have been developed to make life fun with an emotional robot. The ‘Pepper’s Diary’, for example, links Pepper’s emotions with daily family events that are recorded with pictures and photos.
With the sales launch, approximately 200 robot apps will be available for download from the app store in addition to the pre-installed basic apps. Special robot apps that can be acquired by using ‘cocorogumi’, which are obtained by spending time with Pepper, will also be available. SoftBank plans to expand the lineup of robot apps.
This autumn, SoftBank plans to launch a dedicated model for enterprises, ‘Pepper for Biz’. Details will be announced at SoftBank World 2015, which will be held in July.
Furthermore, a developer programme beta version service for developing and distributing Pepper applications will be offered by Aldebaran, the joint developer of Pepper and subsidiary of SoftBank Group in France, starting from early July.
People strolling along London’s Southbank this morning were shocked to spot a giant, furry, purple statue in their usual path.
The impressive Wi-Fi powered installation at the busy London hotspot, is a 10ft replica of the leading star of Three’s latest campaign, Jackson the puppet. Passers-by will be able to connect to the internet for free via the giant Jackson, for four days from 12th-14th June, as part of the mobile network’s mission to make it right for the people of Britain, allowing everyone to receive a seamless mobile experience.
Jackson was introduced to our screens for the first time in Three’s latest epic TV creation, which aired on Friday 5th June, and follows on from the viral successes of Dancing Pony and Sing It Kitty. It is already showing signs of similar stardom, being viewed by over 1.5m people on YouTube in its first week online.
The revolutionary puppet leader has been created by the world famous Jim Henson’s Creature Shop, renowned for inventing The Muppets.
Jackson’s statue will go on a mini-tour of the UK this week, visiting Birmingham (19th June) and Manchester (26th June), to make it right for even more people.
Last year Three’s 2014 viral advert #SingItKitty became a global hit. The advert featured Starship’s power anthem, ‘We Built This City’, and turned a shared moment between a young girl and her adorably cute pet kitten into an epic journey that saw the duo belt out a powerful rendition of the song, whilst tearing up the cul-de-sac on a pink tricycle.
New broadband rules will help subscribers get out contracts if their connection speed is too slow. Until now, customers would find themselves stuck in a deal after the first three months – unless they were up for paying a buy-out fee. Under new Ofcom rules, they’ll now be able to leave at any point but only if their broadband is slow enough.
So does it affect you, how bad does it have to be and how do you test your speed? – The new rules apply to internet service providers (ISPs) using digital subscriber line (DSL) technology. That means BT, EE, Sky and TalkTalk are all affected, but Virgin Media – which uses a cable-based system – is not affected. When a customer signs up to a deal, providers have to tell users the range of speeds a customer can expect.
However, there is another measurement that companies are less likely to mention: the minimum guaranteed access line speed (MGALS). This is the fastest download speed delivered to the slowest 10% of customers on a similar service. Until now, users could get out of their broadband contract without paying an extra fee within 90 days if their home fell below the MGALS. Under the new rules, they can do this at any time, as long they give the provider a “reasonable” opportunity to fix the problem.
How bad does my connection have to be? – It all relates to the MGALS. For example, let’s say there are 10,000 homes within 4km (2.5 miles) of the local phone exchange. If the fastest speed achieved by 10% (1,000) of the slowest properties was 7Mbps, that would be the MGALS for the area.
If your speed falls below the MGALS level, then you will be allowed to leave your contract without paying extra – no matter how far into you’re agreement you are. Your internet provider will be able to tell you what the MGALS is for your area.
So how do I check my speed? – There are a few ways to do this. Plenty of websites and service providers offer internet speed checking tools including peoplesphone.co.uk under the Broadband, Landline & TV section. The distance your home is from the telephone exchange, the time of day you go online and the number of people in your home using the internet at the same time, can all play a part in slowing down your connection. Your provider will be able to tell you what speed they expect you to get before you sign up to a deal.
New measures that will allow customers to cancel their broadband contract if speeds fall below an acceptable level and make it easier to change broadband providers are a welcome step for rural people, says the Countryside Alliance.
Outlining the strengthened Code of Practice on broadband speeds today (11 June), OFCOM said broadband providers need to provide better information so customers can compare offers and services, make it easier for them to switch their provider, improve their contract terms and handle complaints better.
Sarah Lee, head of policy for the Countryside Alliance, said: “This is very good news for rural people, many of whom are paying for speeds they cannot receive because of a lack of infrastructure in their area.
“Broadband is no longer something that’s nice to have but a must have for everyone living in the UK, including those in the countryside.
“For too long rural homes and businesses have been in the slow lane of a two-speed digital economy. Being able to get out of contracts with companies that cannot provide a service and change providers to those who can, could prove very useful, as will better customer service and complaints handling.”