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MusicTeller Designs an ATM for Digital Tunes
 
Kiosk service tests dispensing digital music to specified players (for a fee).
Tom Spring, PCWorld.com
Monday, March 12, 2001
Digital music is hardly lapsing with Napster. Among the competing digital music services being heard is from Etc Music, which is field-testing a service that lets you refill your portable player with music from its strategically placed kiosks.
"We are trying to do for music what the ATM machine did for cash," says Mark Hardie, founder of Etc Music.
[]In Boston, Etc Music's MusicTeller kiosks let you withdraw songs to your portable digital music players, as you would money from an ATM to your wallet. Not only do MusicTeller kiosks let you browse, buy, and download music tracks, but you also get access to a 3GB online personal digital music vault to store all your digital music files.
Eventually, MusicTellers will be located everywhere from music shops and 7-Eleven stores to airports and ski lodges, Hardie says.
The trial is broadening soon, Etc Music is announcing this week. This summer, it spreads to four Djangos music stores in California, Oregon, and Washington. A formal launch of the service is planned for later this year, with 100 MusicTellers slated to be installed by 2002 and 500 more by 2003. By that time, Hardie hopes to have inked deals with major record labels.
Etc Music has already secured deals with a number of smaller record labels, including Rykodisc, The Rounder Record Group, and Strictly Rhythm. It also claims SonicBlue, maker of the popular Rio digital audio players, as a major investor.
Direct-to-Portable Downloads
To try the MusicTeller service, you have to buy a Rio600 or Nike PSA digital music player from one of the participating retail outlets. With the player, you get a $10 pre-charged plastic MusicTeller card similar to a phone card pre-loaded with minutes. When you purchase a song through a MusicTeller kiosk, the card is debited. In the future, Etc Music plans to sell MusicTeller cards at select retailers.
The goal is to make buying and downloading music directly to your portable player as easy as using a bank's ATM. First, select the music you want from tracks sorted by genre using a touch-screen display. Currently, MusicTeller offers only 100 digital music tracks, severely limiting the service's appeal.
In a test of MusicTeller, I simply picked six songs, costing a total of $10, and was prompted to swipe my MusicTeller card to pay. Hardie says actual prices for individual songs will be closer to $2, and $6 for preselected song combinations, when the service launches.
Next, I was directed to fit my Rio600's USB connector directly onto a corresponding plug jutting out of the front of the MusicTeller. It took about one minute to download six songs, or 30MB, directly onto my Rio player. In theory, the tracks I just bought are automatically sent to my online locker hosted by Myplay.com. But this first field trial of MusicTeller isn't linked to the Net; the Djangos trials will support the online storage.
When MusicTellers are linked to the Internet, kiosks will also connect me to my personal online digital library of music. I'll be charged a nominal fee to gain access to a MusicTeller-branded version of Myplay.com. Then, I will be able to access songs that I've purchased through MusicTeller as well as ones that I've downloaded from Napster or elsewhere, and uploaded to my locker.
That would come in handy when I'm on the road stuck with ten songs on my Rio that I've already listened to twice.
Etc Music plans to support a larger number of portable digital music players, but today only supports the Rio and Nike devices. When MusicTeller isn't in use downloading music onto players, Etc Music plans to earn money by showing video advertisements, offering free promotional songs, and playing music previews to prospective music buyers.
MusicTeller Plays Nicely With the RIAA
Staying in harmony with the omnipotent music industry is a big part of Etc Music's plan. At issue is protecting the copyrights of record studios that are worried songs will be distributed for free online once in a digital format.
But Hardie says copyright is not an issue, because MusicTeller lets each record label implement its own scheme for copyright protection and MusicTellers can support it. However, record labels haven't adopted any so-called digital rights management schemes for their music on a large scale.
But the real coup for Etc Music may have less to do with preventing piracy and more to do with appeasing the Recording Industry Association of America's old habit of selling $16.95 CDs in brick-and-mortar record stores, says Eric Scheirer, analyst with Forrester Research.
"So far the industry hasn't been interested in technology that drives consumers away from a music store," Schreirer says. MusicTellers located in record stores still drive foot traffic to plastic CDs, which remain the bread-and-butter merchandise of the recording industry.
Could 64 Million Napster Users Be Wrong?
Industry watchers are divided on what impact the ongoing Napster saga could have on Etc Music's success. Napster's clampdown to protect RIAA members' copyrights may, in fact, sway reluctant record companies to open their vast music troves to Etc Music if they feel copyrights are protected, Scheirer says.
Or, a damaged Napster could dampen the interest of people to build and manage digital music collections online, says Ric Dube, analyst with the market research firm WebNoize. That could translate into fewer people being willing to pay MusicTeller for access to a digital music locker, Dube says.
"If Napster succeeds or fails, it is not going to affect us," Hardie says.
Analysts don't hear a hit yet. Obstacles abound, such as outfitting MusicTellers to support the multitude of digital music players already on the market. Another challenge is persuading the music industry to let Etc Music sell their tunes. To date, the music industry hasn't shown any interest in innovative new technologies for distributing music, Scheirer says. The third hurdle is making MusicTellers as common as ATMs.

http://www.pcworld.com/news/article/0,aid,44043,00.asp