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Daniel Schreiber of SanDisk on the slotMusic Format

Buying music on CDs (physical media, for heaven sakes!) is so 90's -- everybody knows that digital music is the future, right? But contrary to the hype, CDs are far from dead. Like other research companies, Forrester Research projects that the sales of digital music downloads will eventually overtake CD sales -- but not until 2012.

But speaking at the CDSA Media Market Intelligence Summit (see previous post), Daniel Schreiber of SanDisk offered an alternative future for music delivery. In his view, the decline of the CD was not because people do not want music in physical formats, but instead was the result of the demise of the CD player -- Those shiny optical discs were so sexy when they were introduced, but now are just too big for today's lifestyles. CDs no longer fit in our world of hand-held devices, cell phones and PDAs.

But there is a physical storage format that does fit in these devices -- the tiny microSD memory card (about the size of a pinky finger nail), explicitly designed for use in mobile devices, and easily accessed on PCs with a SD card adapter. And some 80% of music-enabled mobile phones already sport a microSD slot. Hmmm ...

So SanDisk, in partnership with the four major music labels, has introduced the new slotMusic format (see previous post) -- music "albums" sold on standard microSD cards.

A typical slotMusic card release contains some 12 songs, and sells for around $14.99, much like a CD. Even better, the music is stored in standard MP3 format, without any copy protection, so you're free to copy it to other devices. And the cards are standard 1 GB microSD flash memory (about the size of a pinky finger nail), so they can be freely used to store any other data.

Schreiber said that 30 to 40 titles have been released in slotMusic format (more than the first year of CD), available from SanDisk (plus a Sansa slotMusic MP3 player), and from Best Buy and Wal-Mart. Schreiber pointed to new releases from Rihanna and Tim McGraw that already have seen 6% to 10% of sales on slotMusic.

Schreiber concluded by stressing the continued power of flash memory, which has has seen the pricing reduced 10,000X in the 18 years it has been available. In the late 90s, flash memory replaced chemical film in digital cameras, and more recently USB drives have replaced the floppy disk in computers. And we are now starting to see the Solid State Drive (SSD) doing the same to hard disks, especially in notebooks.

Schreiber echoed the Einstein quote, "The most powerful force in the universe is compound interest," looking forward to further compounding of the potential of flash memory. For example, through adding intelligence to the memory, not only for applications like built-in security and DRM, but even including a Web server to provide networked access to storage within a phone and network.

See my Portable Media Players Gallery for more on the Sansa slotMusic player and other music and video players

See full article -- SanDisk slotMusic - A New Music Format

More from Schreiber on Consumers and Physical Media ...

As manager of SanDisk's AV Business Unit (including the Sansa line of media players, a clear #2 in the market behind the iPod), Schreiber is very interested in how consumers access their music and use their music players.

His research shows that consumers still like tangible, physical connections to their music, not just in how it is delivered, but also in photos and t-shirts and even by saving ticket stubs. After all, the paperless office has not eliminated paper, and, even in this digital networked age, USB drives are still very popular for physically moving and storing data.

And for digital music, Schreiber says that the process is still much too difficult -- finding, purchasing and downloading tracks, and then connecting up the player and synchronizing the new music. As a result, discussions with consumers show that many people with MP3 players simply do not do downloading. Instead, there is typically a designated loader in the household (I guess much like the designated PC support person in your family).

Schreiber's data shows that some 90% of women with an iPod do not load it themselves. He cited examples of people who said that they were very happy with their player, and could not think of anything to improve it, and yet still were listening to the same 20 songs that a friend initially loaded for them, or who shipped their player to a family member every six months in order to load it with new music.

In comparison, Schreiber sees slotMusic as a convenient format for allowing consumers to easily access and play their favorite music. And there's a lot of places that these cards can be used -- some 500,000 mobile phones shipped list year with microSD slots, and another 750,000 will ship this year, for a total of over a billion portable handheld music-playing devices ready to play music (compare that to the number of CD players available in the infancy of that format).

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