Creative unveils $40 MP3 player

Holding on to a mere four percent of the MP3 player market, according to NPD Group, Creative is hoping to take a bite out of Apple's huge lead by aiming low. The company has unveiled a $40 MP3 player, the Zen Stone, in an attempt to offer an alternative to the ultrapopular iPod Shuffle but at half the price. The 1GB Zen Stone comes in five colors (black, white, red, blue, pink, and green) and holds up to 250 songs. Like the Shuffle, it doesn't have a display screen, so users must configure playlists and playback preferences on their computer. The Zen Stone, at a little more than two inches wide and less than one and a half inches in height, hits stores May 14.

"The Creative ZEN Stone, at just $39.99, opens up a huge new market for MP3 players," Creative CEO Sim Wong Hoo said in a statement. "This is an incredible price for everyone to get a superior quality MP3 player capable of holding up to 250 songs. Whether it's your only player or a second player to take with you anywhere, the low price lets you think of MP3 players in a whole new way. You can loan it to a friend just like you would a CD or a mix tape and not have to worry about it, but you'll like it so much that you'll want another, so you always have one with you."

Real ups price for Rhapsody

As Napster continues to gobble up subscribers through former rivals like Virgin and AOL Music Now, RealNetworks is upping the price for its Rhapsody subscription service. In the company's earnings announcement last week, Real said that the price of Rhapsody Unlimited is being hiked to $12.95 a month from $9.95, while its portable Rhapsody to Go will stay at $14.99. The subscription base rose to 2.67 million from 2.55 million at the end of the fourth quarter of 2006.

In a conference call to discuss the earnings, Real CEO Rob Glaser discussed the performance of the subscription-based model. "I think it is fair to say that the subscription category, if you look at the overall category growth, is not as high as we think it could be and there is a whole set of factors for that, and it is fair to say that this interoperability question in general has had a stultifying impact," he said.

Rhapsody also recently inked a deal with Dischord Records, home to bands like Fugazi, Minor Threat, and Shudder to Think, to include the label's catalog in its subscription service. The deal marks the first time the bands have been available in a subscription format.

Zune inks South Africa

As rumors swirl today that Microsoft's Zune is set to unveil a new MP3 player, the company has announced that it has signed a deal to bring a substantial catalog of South African music into Zune Marketplace digital store. Zune inked an agreement with South Africa's Gallo Music Group, marking the firm's first deal with a digital retailer. The Gallo catalog represents the entire recorded history of South African music from the 1930s to today, including "The Lion Sleeps Tonight," which was originally released in South Africa before becoming a hit on the soundtrack to The Lion King. The catalog also includes songs from the likes of Ladysmith Black Mambazo, Lucky Dube, and Simphiwe Dana.

Pandora cuts non-US users, promises big news

As it scrambles to deal with the fallout of the Copyright Royalty Board's change in Internet radio royalty rights, music recommendation service Pandora has excluded non-US listeners. Company founder Tim Westergren explained the move in a blog post: "Tonight we began the heartbreaking process of blocking access to Pandora for listeners outside the US. While the DMCA provides us a blanket license in the US, there is no equivalent in other countries. After a year of work, only the UK and Canada have shown enough progress for us to feel comfortable allowing continued access." Pandora now operates a geo-IP detection system that blocks non-US users. In an email to US users, Pandora also promised some big news on May 22.