iPod sales outlook dims

Almost since its arrival on the scene in late 2001, the iPod has been the dominant figure in digital music. Although that fact won't change anytime soon, Apple's earnings report earlier this week revealed that its competitors might be making a dent in the Apple juggernaut.

Apple said that it shipped 22.1 million iPods in its October-to-December quarter, up just 5 percent from the same quarter last year. The incredibly popular iPhone has certainly played a part in that, but even counting the 2.32 million iPhones sold during the quarter, that amounts to 24.42 million and a 15 percent unit growth over the previous year's quarter. That's impressive as usual, but less than the previous quarter, which saw 17 percent iPod growth and 30 percent growth when counting the iPhone.

iPod competitors should hold off on their celebrations, but at least for one quarter, iPod sales seem to have slowed a bit.

Target tests digital music service

The digital music efforts of big-box retailers to date have been tepid at best, but Target is dipping its toes in the digital waters once again, two years after aborting its launch of a digital music subscription service. Target is now selling John Legend's Live From Philadelphia album in a DRM-free MP3 format online through a special promotion with Sony BMG that includes exclusive access to the CD as well.

Target.com is selling the MP3 version of Legend's album for $10, but is not selling individual songs as singles. The digital sale of the Legend is not accompanied by a full digital store yet, given that it's only a one-off powered by technology provider HipDigital. Target is also selling DRM-free MP3 music cards through a deal with Sony BMG.

Last.fm inks full-song deal with majors

The day that Last.fm's some 20 million users--and its corporate parent--have waited for has arrived. The music-based social networking site said this week that it has inked deals with all four major labels, as well as most of the major indie players, that will let users stream songs for free on the site.

The new ad-supported service lets users listen to any song in its catalog three times each, at which point the track can be purchased via one of Last.fm's affiliate partners, which include iTunes, Amazon, and 7 Digital. Users will also be given the chance at that point to learn more about Last.fm's forthcoming music subscription service.

In addition to the label deals, the company also introduced an "Artist Royalty" program for independent artists. These artists can upload their music directly to Last.fm and receive payment directly from Last.fm for each stream. Last.fm wriggled out of the legal wrath of the major labels by agreeing to share ad revenue. Ads will be small, short video commercials that run alongside the music, and can be targeted based on users' demographic information.

The service also recommends similar music, lets users create customized Internet radio stations, and requires no software download and no login.

Last.fm to date has compiled some 20 million unique monthly listeners across 240 countries. CBS bought the company last May for $280 million.

Report: Yahoo in talks for MP3 service

Everyone is looking to get into the DRM-free game. Almost two years since then-Yahoo Music chief David Goldberg told an audience of technology and music executives that DRM technology was hurting the business, his former employer is now in talks with the major record labels to launch an online music service that will offer songs as unprotected MP3s, according to the Associated Press.

All four major labels are now offering at least some of their catalogs in the MP3 format, with Amazon MP3 being the only online retailer so far to begin selling MP3s from all the majors.

Carrie Davis, a spokeswoman for Sunnyvale, Calif.-based Yahoo, told the AP that Yahoo has often said it wants to offer music without copy protections, and the subject has been part of its ongoing talks with record labels. But Davis denied that discussions with record labels on the matter have stepped up in recent weeks or that anything is imminent.

Rock Band maker touts music downloads

With the music industry constantly on the hunt for new revenue streams, it certainly seems to have found one with the Rock Band video game franchise from MTV's Harmonix. The game maker said this week that music fans have bought more than 2.5 million song downloads tied to the game, just eight weeks since the game's release. The downloads have been sold through the game at about $2 each, MTV said on Thursday.

"The music industry is in, how do we say, challenged times, and we were testing the consumer's desire for more gameplay around popular music," Van Toffler, president of MTV Networks' Music, Logo and Films Group, told the AP.

MTV said the most popular offering was a three-song pack of songs from Metallica, followed by bundles from The Police and Queens of the Stone Age. The top-selling single was Foreigner's '80s anthem "Juke Box Hero" followed by Creedence Clearwater Revival's "Fortunate Son" and Weezer's "Buddy Holly."