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As Downloads Dip, Music Executives Cast a Wary Eye on Streaming Services

Now even that certainty seems to have disappeared, as downloads head toward their first yearly decline.

So far this year, 1.01 billion track downloads have been sold in the United States, down 4 percent from the same time last year, according to the tracking service Nielsen SoundScan. Album downloads are up 2 percent, to 91.9 million; combining these results using the industry’s standard yardstick of 10 tracks to an album, total digital sales are down almost 1 percent.

After enjoying double-digit growth in the years after Apple opened its iTunes store in 2003, song downloads began to cool several years ago. But the rate of decline this year — weekly sales began to lag in February, and the drop has accelerated rapidly in recent months — has caught the business by surprise.

Music executives and analysts disagree about exactly what is causing this slowdown, but many cite streaming music services like Pandora, Spotify and YouTube as one possible cause. After a decade, consumers may be losing interest in buying downloads and instead turning to the streaming services, which make millions of songs available at the tap of a smartphone app, free or for a few dollars a month.

Even as downloads decline, however, some experts say that rapidly growing income from streaming may finally help turn the overall industry toward positive results. Last year, streaming and subscription services generated $1.03 billion in revenue, up 59 percent from the year before, according to the Recording Industry Association of America, and many of these providers are reporting robust growth this year.

Whether streaming has had any demonstrable effect on sales remains intensely debated, though. Do Spotify and YouTube, which let users choose the songs they play, cannibalize sales, or lead listeners to songs they may buy later? And do Pandora and other radiolike providers — Apple introduced a similar feature, iTunes Radio, last month — compete with sales at all, or just with radio?

“We just don’t know that consumers are abandoning one to go to the other,” said David Bakula, a senior analyst at Nielsen.

Some experts also point to the rise of Android devices as a possible factor in the drop in downloads. While phones using Google’s operating system now represent a majority of sales, Google’s Play store remains eclipsed by iTunes, by far the dominant music retailer.

Some research also suggests that Android users may spend less money on music than Apple customers. The NPD Group, a market research firm, reported this year that 54 percent of iPhone users — whose operating system is iOS — said in a survey that they were likely to buy music, compared with 30 percent for Android customers.

“As Android expands its market, and if Android users are less likely than iOS users to pay for music, we should expect to see evidence of changes in digital sales,” said Glenn Peoples, the senior editorial analyst at Billboard.

No publicly available sales data directly supports this premise, however, and others dispute it. Mr. Bakula, the Nielsen analyst, said that “whether or not Android users download less than iOS users, there’s no reason to think that that is having any impact on year-over-year sales.”

A Google spokeswoman declined to comment.

Whatever the reason for the decline in downloads, many analysts and executives say they are bullish on the industry’s prospects, largely because of the rise of streaming.

“A variety of access models are collectively generating a healthy amount of revenue for labels and artists,” said Jonathan Lamy, a spokesman for the recording industry association. “We’ve still got a ways to go, but when you add up revenues from all of these models, in the aggregate, they represent real revenues now and prospects for a bright future.”

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Google Escalates the Competition in Map Services

First Apple built maps, and now Facebook wants its own mapping service. In the tech industry, maps have become essential, primarily because of the explosion of mobile devices, on which maps are a critical application. Maps are also seen as the gateway to commerce, both online and in the real world.

Yet even as maps have become a must-have service, Google, the leader in online mapping so far, is showing that experience pays dividends.

On Wednesday, Google unveiled a new Google Maps, by far the biggest redesign since it introduced Maps eight years ago. Google announced the maps at its annual I/O developers conference, where it also showed off new tools for search, photo editing and to-do lists, along with a music service and features for Android and Chrome apps. Many of the announcements had an undercurrent — one-upping Apple. From its new music and photo services to maps to voice commands that rival Siri on the iPhone, Google seemed to be offering alternatives to Apple products.

But the new maps service was the biggest announcement.

“The future of search starts with maps. That’s where all the commerce is going to be done and that’s what everyone’s fighting out,” said John Malloy, a partner at BlueRun Ventures, which invested in Waze, a crowdsourced mapping service that Facebook has shown interest in acquiring. “To monetize mobile traffic, maps are a critical ingredient.”

Google’s revision of its map service comes less than a year after Apple removed Google Maps from the iPhone and replaced it with its own version, which has had problems with accuracy. Facebook and Microsoft also think maps are so important that they need their own services.

When users who are logged into Google visit Maps, they will see the places they frequently visit highlighted, like restaurants, museums and their home. Google learns the places they go by drawing information from all of Google’s services — including search and Maps history, Google Plus posts and information in users’ Gmail in-boxes.

Like many of Google’s new announcements, the service hovers over the line between useful and creepy. Google revised its privacy policy to allow it to pull users’ information from across products. It says that makes them more useful, but it also means Google knows increasingly more about individuals.

When users visit a new city, Google will recommend places to go based on their preferences and those of people with similar tastes. The maps change in real time, so if you click on a museum, other museums in the city pop up and the small roads and landmarks needed to navigate to that museum appear.

“We can build a unique map for every place and every click,” said Bernhard Seefeld, the product management director for Google Maps. The new service is available only to people who sign up for it to start, It will come to mobile devices later.

Local search on maps is now easier to use, for advertisers as well as for consumers. Search results, which are labeled ads or offers, can be sponsored listings or coupons from nearby businesses.

Google Earth, which shows 3-dimensional satellite imagery, is now incorporated into the online version of Google Maps, instead of being accessible only as an app to download. Google can do this because of a new technology that renders graphics inside a browser, instead of downloading images from a server.

Google’s chief executive, Larry Page, said the new maps, which have a cleaner and more intuitive layout, fit into one of the company’s major themes.

“It’s getting technology out of the way,” said Mr. Page, standing in front of a giant, real-time black and gold view of the Earth from Google Earth. “All the context that’s in your life, all these different sensors are going to pick that up and make your life better.”

Google also emphasized that specific devices would not matter as much as the ability to do the same things across devices.

Brian X. Chen contributed reporting from San Francisco, and Vindu Goel and Ben Sisario from New York. (Because of an editing error, an earlier version of this note said incorrectly that Mr. Chen contributed from New York.)

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Ride-Sharing Services Grow Popular in Europe

PARIS — On a recent Friday evening, Vincent Accart maneuvered his 20-year-old Mercedes station wagon through the rush-hour traffic to a rendezvous at a busy fuel station on the edge of Paris. There he met three strangers who hopped into his car for a three-and-a-half-hour drive to Rennes, in Brittany. It had all been arranged beforehand, via the Web.

For more than a year, Mr. Accart has been making the weekly commute to Paris, where he found new employment last year after losing a job closer to his home in Rennes. To amortize the cost of fuel and tolls — about €150, or $195, for a round trip — he fills the other seats in his car, using a French Web site that arranges shared rides.

“When my car is full, it covers 75 percent of the cost,” he said, adding that moving to Paris was not an option because of the prohibitive cost of housing his six-member family. “I’m not doing it to make money, just to be able to keep my job.”

One of the side effects of the European economic crisis is a surge in carpooling, as people from many walks of life seek to cut their outlays on travel. Workers making daily treks to and from the office, students heading home for the weekend and even vacationers chasing the sun are turning private vehicles into the newest form of public transportation. Rising environmental awareness may have fueled the trend.

Paradoxically, the growth of ride-sharing services has given Europe a competitive advantage in one niche of the digital economy, where European ventures in other businesses have often struggled to keep pace with those of bigger American rivals or have simply copied U.S. ideas. Two European companies, BlaBlaCar, based in Paris, and Carpooling.com, based in Munich, are global leaders in ride-sharing. With recent capital infusions from outside investors, they are accelerating international expansion.

“It started out a bit like hitchhiking, but now it’s almost like booking a seat on a train,” said Nicolas Brusson, a co-founder of BlaBlaCar. “The potential market is huge.”

The volume of business is impressive. BlaBlaCar says it arranges 400,000 rides a month — the equivalent of more than 1,000 French high-speed trains, loaded to capacity. The number of drivers and passengers who have registered on the site has grown from 100,000 in 2009 to 2.3 million today.

Carpooling.com says it is even bigger, with more than a million rides booked monthly via its site and more than four million registered users.

The sites work in similar ways. On BlaBlaCar, registered drivers offer seats at prices of their choosing; the company caps these rates to prevent drivers from making profits on the trips. Passengers pay for tickets online and the company keeps a commission. Carpooling.com also shows fares from partner services like Deutsche Bahn, the German railroad.

Revenue from ride sharing remains modest. Mr. Brusson said it posted about €1 million in sales last year, about $1.3 million, but he added that this total was more than doubling each year.

Accel Partners, the Silicon Valley venture capital firm, recently pumped €7.4 million into BlaBlaCar. Daimler, the German car manufacturer, invested an undisclosed amount in Carpooling.com, whose other backers include a German venture capital firm, Earlybird.

“One thing I like about BlaBlaCar is that it is not a copycat, it is an original idea coming from Europe,” said Philippe Botteri at Accel Partners, who sits on the BlaBlaCar board.

With international expansion in mind, both companies recently adopted new names. In their domestic markets, BlaBlaCar and Carpooling.com still operate Web sites under clunkier, local-language names: covoiturage.fr in France, which uses the French word for carpooling, and mitfahrgelegenheit.de, employing the German for “ride-sharing opportunity.”)

While most of BlaBlaCar’s business is still in France, the company has opened sites in Britain, Italy, Portugal and Spain and is considering other markets. From its stronghold in the German-speaking countries, Carpooling.com has rolled out sites covering much of Europe.

In the next few months, Carpooling.com plans to start its service in the United States, where no ride-sharing site has established a nationwide presence on a comparable scale.

Paul Nassif — Children & Family Services Says Adrienne Maloof’s Child Abuse Claim is Unfounded

Paul Nassif
Child Abuse Claim
UNFOUNDED


TMZ has learned ... the Department of Children and Family Services has determined Adrienne Maloof's child abuse claims against estranged hubby Paul Nassif are unfounded, and Paul will go to court tomorrow to get his kids back.

As we first reported, Adrienne went to court last week, claiming Paul choked one of their kids and struck another.  Adrienne submitted declarations by several people, including Dr. Charles Sophy, who claims he interviewed the boys and they verified the abuse.

But we've learned DCFS strongly disagrees.  Sources tell us DCFS has written a report -- after interviewing the boys -- categorically concluding there was no such abuse.

Sources tell TMZ ... Paul is going to court Wednesday to ask a judge to throw out the temporary custody order -- along with the order prohibiting Paul from going near his kids -- on grounds Adrienne phonied the claim. 

What's more, we're told Paul will ask for sanctions against his estranged wife, claiming she viciously concocted the abuse story to get revenge.