There was much speculation when Jon Rubinstein joined Palm in 2007 that he’d eventually run the company if it could get back on track.  He was lured out of retirement for the challenge, had the support of the company’s investors who’d recruited him, and was loaded with fresh ideas.  Many thought it was a question of when not if.  Now they have their answer.  Wednesday, Palm announced the former Apple exec’s promotion to chairman and CEO. 

Earlier in his career, while at Apple, where he oversaw the iPod’s development, Rubinstein was part of a team of many talented executives.  At Palm, he’ll talk the helm of the entire ship.

Known as an effective manager, a team builder and an engineering whiz, Rubinstein spearheaded the rapid deployment of the iMac and the development of the iPod division as Apple’s head of hardware engineering.  Since joining Palm as executive chairman, he’s been the head (more…)

Last week, Activision Blizzard confirmed several rumors about its planned slate of music-based video games including verification that the next single-band installation of Guitar Hero would revolve around the 80’s superstar rockers, Van Halen. (The band had more Billboard Hot 100 hits than any other rock band in the decade).  Not to be outdone, today rival MTV Games, maker of Rock Band, countered back with news that they’re working on a game built around a band that helped to define the 90’s music scene: Pearl Jam.

Details about the game are scarce.  At this point its even a guess whether the Pearl Jam title will be a full fledged game, or simply a “track pack expansion” for the Rock Band series. All that’s been revealed is the game is scheduled for sometime in 2010.   That, and that fans will have some input on the game’s development. Through a promotion with Rhapsody, the band is asking fans to vote on songs for inclusion at their website.  More details on Rock Band: Pearl Jam are expected to come out at E3, the gaming industry’s big trade show, next month.

Whatever the game turns out to be, one thing to watch: how the marketplace responds to the new titles.  (more…)

CBS has been working to make last.fm a more integrated part of its digital porfolio. In late March, Last.fm announced its streaming music service would no longer be free in some international markets.  Tuesday,CBS said it will bring the more than 100 websites in the CBS Radio portfolio and Last.fm together into a single new unit to be called the CBS Interactive Music Group.

David Goodman who joined CBS Radio in 2002 will lead the new combined unit.  Goodman became President of Marketing in 2005 and President, Digital Media and Integrated Marketing in 2007.  Before CBS, he spent six years at the Warner Music Group.   Goodman will report to Neil Ashe, the president of CBS Interactive.

The combined group will reach more than 40m people, the company said. 

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Ask an accountant or economist to define the value of an iPod Shuffle, or what it’s worth, and you might get a few dissertations in reply.  Ask what it costs? That’s a little easier to peg.

Market research firm, iSuppli, has done a teardown of the device and estimates the diminutive MP3 player is made from a minuscule $21.77 in parts.

Business Week reports in its summary that nearly half of that comes from two Samsung parts: the controller chip and flash memory.

The price is purely hardware, and it is merely an estimate. It doesn’t include development costs or sales and marketing expenses but even so, it suggests the gross margin on the player should (more…)

As announced in January, and forecast a little more than a week ago, Apple officially made the switch from 99 cent songs to tiered pricing on iTunes today.  

For the better part of six years, Apple’s had resisted record label pressure to make the shift.  Steve Jobs argued the pricing needed to be “fair” to offset the temptation of downloading a pirated song.  Raising prices too high, he said, would drive customers away.  99 cents was simple, and sufficient.

Apple backtracked and conceded in a Macworld announcement, but only after the record companies agreed to remove Digital Rights Management restrictions (DRM) from the music in the catalog, and to allow Apple to sell songs wirelessly over 3G in exchange.

Under the new arrangement, the music store is now entirely composed of DRM-Free, 256kbps songs priced at 69¢, 99¢, and $1.29.  (Upgrading previously purchased songs to the higher bit rate, and encryption free format can be done for 30¢ a track).

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Legend has it, the great blues musician Robert Johnson went down to a crossroads and made a deal with the devil.  In exchange for unfounded musical talent, the story says, he traded his soul.   It was a yes or no choice; be a guitar hero, or not.   He chose the immortality of his music.

The music industry is hardly so fantastic but like the legend, the thin line between the industry’s successes and failures, or evolution and regression, seems to hinge on the big decisions made when the road of progress forks.

Looking at the music business over the last decade, as its struggled to evolve to the changing digital landscape, two pivotal moments jump out.  The first was the evolution of file sharing networks and how the music industry chose to handle them.   The second was the advent of Digital Rights Management (DRM) encryption and how the music industry steered its early use.

Now, it’s starting to look like the industry is reaching a third crossroads: license fee rates for streaming services .

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The recording industry has had a love affair with the idea of variably priced music for years.  As a tool, it’s a way to manage supply or even manipulate demand. If an album (or single)  isn’t selling or there’s excess inventory, for example,  the price can be trimmed and the bargain used as a lure.  If sales are good, or an album is starting to climb a key ratings chart, price adjustments can tweak the momentum.  

The practices are common but in the digital world, some retailers have fought against it.  For the better part of six years, Apple’s resisted its use at iTunes but that’s changing.

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