Music Personalization Companies See Opportunity in CE Devices
by Jay Kumar
Music personalization software companies searching for B2B niches hope to license applications that help portable audio device users create playlists. But two leading device makers say such technologies still need to be perfected before they become commonplace in CE devices.
With the increasing availability of digital music through Napster and CD-ripping software, consumers can amass sizable MP3 collections on their PCs. Portable audio players such as SonicBlue's Rio and Creative Technology's Nomad Jukebox offer ways to listen to that music away from the PC, but creating new playlists can be a slow and tedious process.
San Francisco-based MoodLogic develops software that analyzes various qualities of songs (such as tempo, beats, genre, vocal qualities, etc.) to help consumers manage their digital music collections and create playlists quickly. The company hopes to license its technology to online music subscription services, online CD retailers and CE manufacturers. MoodLogic is close to landing deals with two device manufacturers to package MoodLogic with their devices in time for the upcoming holiday season, according to MoodLogic co-founder and CFO Christian Pirkner.
"The main challenge for the device folks is to find an easy and intuitive way to fill that device with one click," said Pirkner. MoodLogic's PC-based software quickly builds playlists from the user's collection based on a selected song or genre; the playlists can fit a Flash memory-based player's 64MB storage capacity (which holds about an hour's worth of MP3 music), or can be larger, for users of multi-gigabyte hard drive-based players such as the Nomad Jukebox.
The software can also be used to recommend music to device users and encourage online purchases of either CDs or digital tracks; MoodLogic plans to help broker deals between CE makers and retailers, Pirkner said. The software could also be used for hard drive-based car and home MP3 player units.
Cambridge, Mass.-based Media Unbound also markets personalization for CE devices, although a stumbling block to deals has been the lack of legal downloadable music, according to Michael Papish, president and CEO of Media Unbound. The company creates a module that is embedded into both the device and PC; based on a user profile of music preferences, the company can create playlists.
In addition to CE companies, Media Unbound is marketing its technology to makers of CD-burning hardware and software, as well as developers of home media servers like ZapMedia and Ucentric.
Savage Beast has been in discussions with CE companies for several months about personalization features, said Tim Westergren, co-founder of the Oakland-based firm. "It's definitely a very important component of their future offerings," he said. "We see personalization as key to the growth of the device space."
Device makers agree that personalization features are important to MP3 players, but question how ready such technology is for the CE market.
"It's very important that people have a variety of ways of deciding what music goes on their player," said Mark Ireton, SonicBlue's vice president of audio technology. "The technology's got some way to go. Anything that purports or tries to be intelligent usually hasn't worked...We have to make sure the technology isn't more of a hassle to users."
Ireton said SonicBlue won't shy away from adding personalization technology to its players, but it must be a cost-effective solution. "We will certainly be adding things that help people select their music," he said. "It's not clear to me that there's a business model for an independent company. A challenge for our players is producing product at a reasonable cost."
Creative is examining a number of personalization applications developed in-house as well as by outside companies, according to Ken Fong, Creative's director of marketing. But the company has no plans to incorporate any new personalization features until at least next year, he added.
Creative's 6GB jukebox can store more than 100 hours worth of MP3s and other audio formats; the company plans to eventually release a 10GB player. Hard disk costs are dropping, allowing device makers like Creative to undercut manufacturers of Flash-based players [see 4.23.01 Dropping Hard-Disk Costs Let Jukebox Makers Sell for Less]. By 2004, portable hard drive-based jukeboxes will outship basic portable audio players, according to research firm IDC.
With all this storage space, jukebox users need a way to quickly organize playlists right on the device. Pirkner said MoodLogic's software can work both on the PC and in some cases, on the device itself.
Personalization features add value to a device, according to Webnoize analyst Ric Dube. Like the introduction of VCR Plus programming capabilities in VCRs, personalization would increase the functionality of an MP3 player and give the developer a competitive edge, Dube added.
But it may be difficult to convince first-time device buyers that personalization features are important. "It's not as obvious a sell to the consumer as VCR Plus was," said Dube.
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