TIME Media

Why Jay-Z’s New Music Service Won’t Beat Spotify

Celebrites Attend The Miami Heat Vs Brooklyn Nets Game - May 12, 2014
Jay-Z attends the Miami Heat vs Brooklyn Nets game at Barclays Center on May 12, 2014 in the Brooklyn borough of New York City. James Devaney—GC Images

Most people don't want to pay more for higher audio quality

Business mogul Jay-Z has a new acquisition to add to his collection of night clubs, clothing lines and luxury champagnes. The rapper’s company, Project Panther Bidco, is picking up European streaming music service Aspiro for $56 million, according to Reuters.

But while the Oslo-based service has managed to rack up 580,000 paying subscribers in Europe with a Spotify-like service, the company’s bet on high-priced, high-fidelity music streaming isn’t likely to take the world by storm.

Back in October, Aspiro launched Tidal, a new service for the U.S. and U.K. that offers millions of songs in a high-fidelity, lossless FLAC format, with essentially the same audio quality as CDs. Tidal boasts a library similar in scale to Spotify’s, but its tracks are higher in audio quality. That improved quality comes at a price: Tidal costs $19.99 per month, while Spotify’s ad-free version is $9.99 per month.

And if the last 15 years of the music industry’s fortunes tell us anything, it’s that people don’t want to pay more for high-quality audio files.

An entire generation of music lovers have now grown up without being regularly exposed to CD-level audio quality. Whether ripping CDs to create low-fidelity MP3s, downloading compressed audio files off of iTunes or streaming tracks from Spotify, most young music listeners have gotten used to low-bitrate listening. Audio quality on YouTube varies wildly and is often quite poor, but it’s still the most popular way for teenagers to listen to music.

Moreover, convincing people to pay $9.99 per month for music is already a tough sell, let alone $19.99 per month. Only about a fourth of Spotify’s 60 million users pay for the service, and it’s the platform with the largest paid user base by far. The industry may never convince fans to pay $120 per year (or in the case of Tidal, $240 per year) en masse considering that even at the music industry’s peak in 1999, music buyers were only spending $64 per year on songs, according to an analysis by Re/code.

(Read more: 8 Spotify tricks that will change the way you listen to music)

Of course, there is a precedent for a previously price-sensitive market suddenly being flooded with popular premium products. Dr. Dre and Jimmy Iovine convinced millions of consumers that their flimsy iPod earbuds weren’t good enough. They have since created a billion-dollar empire selling expensive Beats headphones that produce higher-quality sound. Like Beats, Tidal will now be helmed by a big-name music star who is also a deft marketer. Perhaps Jay-Z will find a way to make high-fidelity audio cool, too.

But with so many competitors crowding the market and offering, to the layman’s ears, more or less the same product—25 million or so songs that you can stream whenever you want—it’ll be a challenge to lure customers at a higher price. Aspiro and Tidal may find a successful niche among audiophiles, but Jay-Z’s new music service probably won’t unseat the industry’s giants.

TIME technology

The New FCC Definition of Broadband Could Change Everything for Comcast

New definition of broadband means that 63% of U.S. households would have only one choice for a broadband Internet provider

The Federal Communications Commission (FCC) made a formal announcement this week confirming what all of us already knew to be true: that piddling download speeds of 4 mega-bit-per-second (Mbps) shouldn’t count as broadband. (I mean, come on: it’s not even enough to stream a single episode of Peaky Blinders on Netflix.)

As of yesterday, the FCC now defines broadband as download speeds of 25 Mbps or faster.

That may seem like a bureaucratic hiccup — the FCC simply catching up with the times — but it’s actually really big deal.

The FCC’s redefinition fundamentally rewrites the rules on what the broadband market looks like, which dramatically changes the competitive landscape for companies offering broadband Internet service. And that, in turn, is the single most important factor in whether the Department of Justice approves Comcast’s $45.2 billion dollar bid to takeover Time Warner Cable.

Here’s how that works.

Until yesterday, Comcast was able to use the official federal definition of broadband (4 Mbps of faster) to plausibly and legally claim to compete head-to-head with basically every single Internet service provider out there, including glacial dial-up connections and old-school DSL lines. As a result, Comcast was able to claim — again, plausibly and legally — that even if it is allowed to buy Time Warner Cable, it will control only about 35.5% of the fixed (i.e. not wireless) broadband market in this country. That’s a big chunk, but it’s nowhere near monopolistic, right?

But now that math has changed. If you use the FCC’s new definition of broadband, which excludes all the dial-up and most DSL and other super-slow ISPs that used to count as “broadband,” then roughly 12 million US households that previously qualified as having “access to broadband” no longer qualify. While the industry numbers vary a bit, that means that a combined Comcast-TWC could control more than 60% of the total fixed broadband sector. (Some estimates put it at 70% or higher.)

To put that another way, if the merger is allowed to go through, then a whopping 63% of U.S. households would have only one choice for a broadband Internet provider, according to a memo from the FCC in December. For the majority of those households, their “one choice” would be Comcast-TWC.

Suddenly, that’s beginning to look pretty darn monopolistic.

For the last 24-hours, both Comcast and Time Warner Cable have frantically downplayed the importance of the FCC’s redefinition. On an earnings call Thursday, Rob Marcus, the CEO of Time Warner Cable, called the FCC’s redefinition “somewhat arbitrary” and said it wouldn’t affect the merger at all. “I don’t anticipate that that has any practical implications for life going forward or for the DoJ’s analysis of the deal,” he said.

He and representatives from Comcast stuck with the script they’ve been pitching for the better part of a year. Since Comcast and Time Warner Cable serve different geographic areas, U.S. cable customers will have the exact same choices before and after the merger. If your only choice for broadband today is Time Warner Cable, then your only choice for broadband after the merger will be Comcast-TWC, they say.

The Department of Justice is expected to decide in the next six months whether the Comcast-Time Warner Cable merger is allowed to go through.

TIME Web

Watch This Farmer Herd Cows to Make Drone Art

This should be an Olympic event

Some people are very, very good at herding cattle.

Among those bovine bosses is Derek Klingenberg, a farmer who’s become a minor YouTube legend for his videos poking fun at pastoral life. His latest upload: “#CowArt with a drone,” in which he used a drone to record aerial footage of his artful mastery of pickup truck-based cattle herding.

Watch the video above, and feel free to have a cow, man.

TIME Security

Bitcoins Are Easier To Track Than You Think

Bitcoin
Bitcoin logo Ramón Espelt Photography—Getty Images/Flickr RF

The Silk Road trial shows how they can be tracked

Bitcoin is sometimes thought of as the prime anonymous cash of the Internet, believed to be as untraceable as an under-the-table payment to a babysitter or a drug dealer. But the dramatic trial of Ross Ulbricht, a 30-year-old man accused of running the contraband Silk Road marketplace, is finally putting those misconceptions to rest.

Federal agents said they were able to trace 3,760 bitcoin transactions over the course of a year to servers seized in the Silk Road investigation, Wired reports. A former FBI agent named Ilhwan Yum testified in court that he followed more than 700,000 bitcoins from the Silk Road marketplace to Ulbricht’s personal wallets.

How did Yum do it?

When federal agents arrested Ulbricht in San Francisco in Oct. 2013, they also seized his laptop before he could encrypt it. That machine gave Yum access to Ulbricht’s bitcoin address, which he then compared against what’s called the blockchain, a master list of bitcoin transactions kept to prevent counterfeiting. Comparing the two let Yum track bitcoin transfers from Silk Road servers near Philadelphia and Reykjavik, Iceland to Ulbricht’s bitcoin wallet.

In Ulbricht’s case, the transactions show Ulbricht was trading bitcoins during the same period that his defense attorney said he wasn’t involved with the website. But more generally, it shows that bitcoin isn’t always as anonymous as it’s made out to be.

[Wired]

TIME Companies

We’ll Soon Know More About Amazon’s Cloud Business Than Ever Before

Amazon Starts Music Streaming Service Without Universal
The Amazon.com Inc. Prime Music logo is displayed on an Apple Inc. laptop for a photograph in San Francisco, California, U.S., on Thursday, June 12, 2014. Bloomberg—Bloomberg via Getty Images

Amazon will start breaking out its cloud computing business

Amazon’s cloud business has long been more like a cumulonimbus than a cirrus — that is, not very transparent at all.

In its quarterly earnings reports, Amazon has traditionally buried its Amazon Web Services (AWS) cloud offerings into a category called “North America Net Sales (Other),” where it sat alongside a hodgepodge of other stuff. That made it difficult to tell how well the company’s cloud business is doing. Analysts could see the “Other” category skyrocketing (it grew 43% year-over-year last quarter) and make estimates accordingly, but they couldn’t tell with absolute certainty how much of that growth was thanks to AWS.

Now, that’s all about to change. In a conference call with investors Thursday afternoon, the company promised it will start breaking out AWS into a separate category beginning with its next earnings report, due in April.

“We just think it’s an appropriate way to look at our business in 2015,” Amazon Chief Financial Officer Tom Szkutak said on that call.

Szkutak is right. Cloud computing is a growing part of Amazon’s total business, with that “Other” category earning $5.4 billion in revenue last year compared to $3.7 billion in 2013. It’s also an increasingly competitive field, with rivals like Microsoft, IBM and Google all ramping up their efforts in the category. Amazon investors, then, ought to know exactly how well AWS is doing.

That Amazon is ready to break out AWS into a separate category is also a sign it’s confident in the numbers. Perhaps as an early tease, it let at least one boastful fact slip on Thursday’s earnings call: More than 1 million customers use AWS as of the end of 2014, from individuals to big web companies like Netflix and Pinterest. That’s a nice milestone to brag about before getting into the nitty-gritty later this year.

TIME satellites

These People Just Took a Selfie From Space

Satellites are the ultimate selfie stick

In what was basically the opposite of a close-up, workers at Israel Aerospace Industries recently posted for a so-called “space selfie.”

About 300 employees for the company lined up to spell the initials “IAI” as one of their own passing satellite snapped a picture from above at an altitude of about 325 miles.

TIME Music

Jay Z To Buy Streaming Music Service Aspiro for $56 Million

Jay Z performs at The Staples Center in Los Angeles in 2013.
Jay Z performs at The Staples Center in Los Angeles in 2013. Kevin Winter—Getty Images

The hip-hop mogul wants to challenge Spotify

Taylor Swift isn’t the only artist to throw up roadblocks in Spotify’s march toward music streaming domination, as Jay Z has now made an offer to purchase a streaming service of his own.

The hip-hop mogul — real name Shawn Carter — is in the process of buying the Scandinavian music streaming company Aspiro for a reported $56 million. Project Panther Bidco Ltd, a company controlled by Jay Z, told Reuters on Friday that it had made the move to purchase the service after watching Aspiro for some time and finding it to be “an innovative high-quality company with strong future growth potential.”

Aspiro’s main shareholder, the Norwegian media group Schibsted, has said they’ve accepted the offer.

Aspiro runs two music streaming services, both of which are ad-free. One is WiMP, which has limited availability in Europe, and the other is Tidal, a high-definition audio service that is available in the U.S., Canada, the U.K., Ireland, Finland, the Netherlands, Belgium and Luxembourg.

[Reuters]

TIME Companies

How Amazon Just Posted its First Profit in Months

Key Speakers At The "Ignition: Future of Digital" Conference
Jeff Bezos, chief executive officer of Amazon.com Inc. and founder of Blue Origin LLC, speaks at the Ignition: Future Of Digital conference in New York, U.S., on Tuesday, Dec. 2, 2014. Bloomberg/Getty Images

Amazon Prime is looking like a big win for the e-commerce empire

Amazon investors got a breath of fresh air Thursday when the e-commerce giant announced it made a profit for the first time after two consecutive quarters of steep losses. The company made $214 million in the fourth quarter and saw its revenue rise 15% to $29.3 billion, sending the company’s stock up 13% in after-hours trading.

So what can Amazon thank for its profitable quarter? It’s looking more and more like Amazon Prime.

Amazon’s membership program appears to be paying off in spades for the company. Prime members get free two-day shipping, access to unlimited music, TV shows and movies — some of it exclusive — and a host of free ebooks and a slew of special deals. And it turns out Prime subscribers, who increased in number 53% last year, buy more from Amazon, watch more on Amazon, and spend more time on Amazon.

“When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping,” Amazon CEO Jeff Bezos told investors Thursday, referencing a March 2014 decision to increase Prime’s price to $99 a year from $79.

Amazon jealously guards precise data about Prime members’ purchasing habits, but outside research groups have done plenty of speculating. According to a paper released this week by Consumer Intelligence Research Partners, Amazon Prime members number around 40 million in the U.S. and spend about $1,500 per year, compared to about $625 per year for non-members. If that estimate is in the right ballpark, Prime members are a huge boon for the company.

“Amazon Prime members spend more than other customers, on average shopping 50% more frequently, and buying more expensive items each time,” said Josh Lowitz, a co-founder of CIRP who helped conduct the study.

It’s no wonder Amazon treats its Prime members so well. This quarter, the company announced several new benefits for them: A free two-hour delivery service called Prime Now in select areas, unlimited photo storage in Amazon’s cloud, and a new television show produced by Woody Allen exclusively for Prime members. Those bonuses could very well help Amazon sign up yet more Prime members, potentially keeping the company in the black for yet another quarter.

TIME technology

The World’s Most Profitable Company Ever Was Launched in My Grandma’s House

Nowadays, the famous garage is mostly filled with my grandma’s laundry, cat litter, and her Ford sedan

My grandma’s house is your typical white, one-story house in the suburbs of the Silicon Valley—it has rustic red brick accents, baby blue trim, and a perfectly manicured front lawn. It’s also happens to have signs out front that read “No Trespassing. Security Cameras Are Filming. All Pictures Must Be Taken From Street.” To me, my grandma’s house is a second home, but to the rest of the world, it’s the place where Apple, Inc., was created.

Steve Jobs grew up in this Los Altos house throughout his childhood. In 1976, according to oft-repeated legend, he hatched the beginnings of Apple here, and put together the first 50 computers in the garage with Apple’s co-founder Steve Wozniak. (Wozniak recently said that that they didn’t do any manufacturing in the garage – they just finalized the computers in there. But the garage did represent them better than anywhere else.) In 1989, my paternal grandmother (Marilyn Jobs) married her second husband (Paul Jobs, Steve’s adoptive father). Soon after, my grandma moved into the house with the (not-yet-quite-so) famous garage.

As a kid, I always looked forward to going to my grandma’s house. It was a 25-minute drive across the South Bay from where my family lived in San Jose. I always knew we were within five minutes of my grandma’s house when we exited the 280 Freeway onto Foothill Expressway. As we turned onto my grandma’s street, we passed a strip mall with a Chevron Gas Station, a Trader Joe’s, and a Peet’s Coffee. When our car pulled into the driveway, my grandma would open the front door, smiling and waving at us from the porch. I always jumped out of the car and greeted her with one of my biggest hugs.

My grandma’s house is where I met my newborn brother for the first time because I was staying with her while my parents were in the hospital. It’s the place I went to after preschool to wait for my parents to pick me up and eat spoonfuls of smooth Skippy peanut butter while curled up in a reclining chair. It’s the place I went when I was sick, snuggling in bed to watch “Tom and Jerry.” It’s the place where, to this day, my family still goes to celebrate birthdays and eat my grandma’s delicious cake.

Throughout my childhood, my parents always mentioned that grandma’s house was a special place and to me it was, but in a completely different way. So when I was 10 and my parents told me about the wider significance of my grandma’s house, I shrugged it off with a laugh. How could this quaint place have been Ground Zero for such a world-famous company that steered the course of today’s technology?

Despite its celebrity status, this three-bedroom, three-bathroom house built in the early 1950s is a humble place. In the living room, porcelain Lladros figurines, Hummel collectibles, and blue and white China fill a curio cabinet by the fireplace. A Japanese bobtail cat named Daisy is always lounging in the small kitchen. A box of Betty Crocker white cake mix and a generic tub of chocolate frosting can always be found in the cupboard, waiting for grandma’s touch of love to make them special.

In 1976, the two-car garage was filled with computer boards, components, wires—and the promise of a great company. In fact, the garage was so packed with Steve Job’s equipment that Paul was forced to build a second garage in the backyard to store the cars. Nowadays, the garage is mostly filled with my grandma’s laundry, cat litter, and her Ford sedan. The only remnants of the garage’s famous past are a few of the original wooden shelves and wood-paneling wall, as well as the same cold concrete floors. It’s funny to think of people traveling hundreds of miles to catch a glimpse of this “treasure trove”!

Paul Jobs passed away in 1993, but my grandma still lives there. I’m in college now, 379 miles away in Southern California, but always visit when I come home on breaks. It’s pretty awesome to imagine that some of the first ideas for a world-renowned company were thought of in a place where I spent so much of my childhood. As a graphic design student, I truly appreciate the innovation that came out of the garage at my grandma’s house. Like so many people, I have an iPhone. When I gaze at it, I’m reminded that technology revolutions have to start somewhere—even if that somewhere is in the garage of a humble home.

Megan Chovanec is a freshman at Chapman University. She wrote this for Thinking L.A., a partnership of UCLA and Zócalo Public Square.

TIME Gadgets

Amazing Super Slow-Mo Video Shows How Your Camera Works

See how cameras work at 10,000 frames per second

Ever wonder exactly how your DSLR camera works?

The Slow-Mo Guys, who post all sorts of neat super slow-mo video on YouTube, just uploaded a video that shows exactly what happens when you press the shutter release.

In the footage, you can clearly see the camera’s viewfinder mirror rise before the shutter drops to expose the digital sensor and record an image. Then the shutter closes and the mirror comes back down to complete the process. The video above shows the same process for a whole bunch of different shutter speeds.

Neat!

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