If you're into classic movies - and are continually frustrated by the lack of selection at your local video store - you'll be happy to hear that MGM has stuck a deal that will see classic films such as The Great Train Robbery, Rocky and Dances with Wolves available to be downloaded on iTunes. For movie lovers, this is a major announcement as MGM has one of the largest film libraries in the world. Movies downloaded from iTunes will be in near-DVD quality at a resolution of 640x480.

It's fascinating to see the movie studios be so pro-active in striking deals to expand their distribution networks on the Web. You have to wonder what the music industry would have been like today if it had adopted the same approach. Of course, music and movies are completely different animals - one creates product that lasts less than five minutes and can be downloaded in seconds, while the other creates two-hour products that can taken a long time to download depending on your Internet connection. Another advantage the movie industry has over music is people tend to have a stronger emotional connection to movies as opposed to most music, which is here today and gone tomorrow.

The latest issue of Wired Magazine (a healthy 284-pages, including the holiday buying guide) arrived today with a cover story on YouTube ("YouTube Grows Up"). I haven't got around to reading it yet but it got me thinking about the many similarities between YouTube and Napster.
Both services came out of nowhere and quickly became popular with millions of users looking for free content. Napster, unfortunately, incurred the wrath of the music industry, which was far from prepared to consider the idea of selling music on the Web. On the other hand, YouTube's popularity came at a time when the large content producers, broadcasters, etc. had already realized there was a new distribution model to be leveraged even if the business models weren't fully-baked yet. While Napster got lawsuit-ed into oblivision (well, neutered and eventually sold to Roxio as a shell of its former self), YouTube was snapped up by Google for $1.6-billion, and its founders - Chad Hurley and Steve Chen - are hailed as entrepreneurs heroes.
So what's the difference between the two players? Napster was clearly ahead of its time, and the music industry didn't have the time, energy or creatively to counter-attack or strike a deal with Shawn Fanning. Meanwhile, YouTube's time was/is nearly perfect because everyone knew video was going to be big on the Web, and had started to gear up for it. It didn't hurt that Apple launched the video iPod, which hammered home the "hello, video is here" message.
Another difference is YouTube has been able to reach licensing agreements with content owners, while Napster failed to bring any of the major labels onside. Of course, it's still left to be seen whether Google can turn YouTube into a business (aside from making it yet another platform for AdSense). I wonder whether Napster would have enjoyed the same kind of adoration if Fanning had started it in late-2004 or late-2005 rather than 1999. Would it have made a difference? Would the record labels have embraced it as an exciting new way to distribute content? Who knows, it might have even been a legitimate rival to iTunes.
For more thoughts, check out Peter Cashmore, eHub and, of course, Mark Cuban.

If you thought the Recording Industry Association of America's legal battle against people who downloaded music for free was vicious, you ain't seen nothing yet when it comes to the war being waged against Russian's AllofMP3.com, which lets people buy CDs for $1 to $2. In the latest skirmish, Visa International has suspended its credit card service to AllofMP3, which in turn has decided to embrace an ad-supported business model that will see it give away music for free. If you've been using AllofMP3's service, you should cash in your credits soon because the company will also adopt technology that will force its users to play downloaded music on AllofMP3's software. And you'll only be able to play it on one computer at a time. The question of whether AllofMP3 is legitimate hinges on how Russian's copyright laws are interpreted. AllofMP3 claims it's operating by the law of the land by handing over 15% of its revenue to the Russian Multimedia and Internet Society. The music industry, which is still fighting the free phenomena seven years after Napster appeared on the scene, refutes this idea. Of course, AllofMP3's future could hinge on whether Russia wants to get into the World Trade Organization. If the WTO insists on AllofMP3's shutdown as part of Russia's admittance into the WTO, the little music service that could may be no more pretty soon.

In my Web 2.0 world, money talks as much as cool, new ideas and services. This is why MySpace's move into the digital music business is so intriguing because it's another way one of the world's most popular online destinations is trying to create a viable business. MySpace plans to sell songs from three million independent bands through an arrangement with Shawn Fanning's Snocap. “The goal is to be one of the biggest digital music stores out there,” MySpace co-founder Chris DeWolfe told the New York Times. “Everyone we’ve spoken to definitely wants an alternative to iTunes and the iPod. MySpace could be that alternative.” No doubt, this is an ambitious strategy but fraught with many questions. For example, how much sales appeal will these three million bands actually have? MP3.com, for example, painfully discovered there was little interest when it attempted to sell non-mainstream music a few years ago. Another question is whether MySpace "members" have any interest in spending money online and, if so, how much? We're talking about teenagers who have disposeable income but how much will be left for MySpace digital music after clothes, wireless bills, etc. Don't get me wrong, I'm not dissing MySpace's plans because any effort to exploit a user base of 106 million members is a positive - and there's lot of good things about diversifying your revenue base beyond advertising. As for MySpace creating an alternative to iTunes and the iPod, that could be a Don Quixote-like assignment. If MySpace really wants to get into the digital music business, it would be better off trying to carve off its own niche rather than trying to knock off an institution such as iTunes. Perhaps it could position itself as the place to discover undiscovered bands. Mathew Ingram also has questions about the "sale-ability" of MySpace's three million band universe, and he makes a good point that the traditional record companies are the ones who really should be worried. Rob Hyndman is far more bullish, suggesting the music labels will be "eager to to get first dibs on whatever the MySpace model manages to develop".

Technorati tags: MySpace, iTunes

The BBC has a story on how the British Phonographic Industry wants political leaders getting together at the G8 Summit to talk about Allofmp3.com, the Russian music service selling music for 10% of regular prices. Allofmp3.com claims it's doing nothing wrong because it "operates in full compliance with all Russian laws". AllofMP3, which is the second-most popular music downloading site in the U.K., is an interesting beast because the fact you have to pay to play allays some or much of the guilt felt by many consumers who had been shying away from free services such as Kazaa and BitTorrent but not quite willing to use iTunes yet. Granted, paying $1.42 for Rihanna's hot, new CD, "A Girl Like Me", doesn't seem quite right but it's on the up and up until someone (Vladamir Putin, the RIAA?) says it's not. For now, the G8 should ignore the music industry's pleas for help so it can focus on the real issues such as the growing crisis in the Middle East.