Based on pretty good authority, Bell Canada is close to buying Puretracks, a small Canadian music downloading service that has been around since late-2003. There are a number of ways to look at this deal. It suggests Puretracks is struggling financially amid tepid interest from local consumers and/or competition from iTunes, which has become the site to buy music given the success of the iPod. It may also be a harbinger of things to come in the online music industry as smaller players find themselves unable to compete, which may lead to consolidation. For Bell, it's an intriguing strategic move. At first blush, it gives Bell control of Canada's leading online music site. This means Puretrack's relationship with Telus will likely come to an end soon after the acquisition is consummated. In theory, it also gives Bell an efficient way to sell music to wireless users as more devices become MP3-enabled and MP3-friendly. I suspect Bell isn't paying much for Puretracks so the upside could be fairly significant.
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Mark Evansthe blog - examines the world of telecom and technology from a distinctly Canadian perspective.the person - lives in Toronto, CA with his wife and three children, and works as director of community with PlanetEye Inc. 
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End of the Line For Small Music Sites?
by
Mark Evans
on Wed 01 Mar 2006 08:10 AM EST | Permanent Link
Based on pretty good authority, Bell Canada is close to buying Puretracks, a small Canadian music downloading service that has been around since late-2003. There are a number of ways to look at this deal. It suggests Puretracks is struggling financially amid tepid interest from local consumers and/or competition from iTunes, which has become the site to buy music given the success of the iPod. It may also be a harbinger of things to come in the online music industry as smaller players find themselves unable to compete, which may lead to consolidation. For Bell, it's an intriguing strategic move. At first blush, it gives Bell control of Canada's leading online music site. This means Puretrack's relationship with Telus will likely come to an end soon after the acquisition is consummated. In theory, it also gives Bell an efficient way to sell music to wireless users as more devices become MP3-enabled and MP3-friendly. I suspect Bell isn't paying much for Puretracks so the upside could be fairly significant.
Comments
Re: End of the Line For Small Music Sites?
by
Anonymous
on Wed 01 Mar 2006 11:01 AM EST | Permanent Link
Mark: It could also suggest that Canada's inability to slow the flow of Internet piracy has made it difficult for online music services to make any money. Ever notice that iTunes Canada never releases any number or sales results or number of tracks downloaded? Could that be because it is embarrassingly low? If iTunes is struggling, then Puretracks.com will have even more difficulty.
RT Re: End of the Line For Small Music Sites?
by
Anonymous
on Wed 01 Mar 2006 11:10 AM EST | Permanent Link
Think about who's selling it too. Puretracks is owned by MoonTaxi Inc., which is a subsidiary of Universal Canada.
If Universal is looking to sell content through iTunes, it doesn't make sense for them to own a competitor (Puretracks). I wouldn't be surprised if Bell is picking this up pretty cheap. I think them using it for mobile MP3 purchasing is a good guess too. Re: End of the Line For Small Music Sites?
by
Stuart MacDonald
on Wed 01 Mar 2006 11:28 AM EST | Profile | Permanent Link
Well, I tried to use Puretracks. Several times. My findings:
1. Usability is *lousy*. Probably one of the worst online purchase experiences I ever had the misfortune of coming across. 2. The DRM management is *lousy*. The certificate hung up, and the work around was painful. 3. The lack of DRM compatibility thing is just a killer. They hitched their wagon to the MS star, and as you say, that hasn't worked out so well given the iPod device's success. Plus, for all its' failings, iTunes works *much* better. Then there are questions of branding, distibution, da da da...It's sad to say, but if their target was only Canada - I don't know if it was - well, they were likely stillborn anyway. You just can't efficiently build a world class online experience if your revenue flows are Canada-only. Maybe Bell sees it differently, but they will have to work at it if they are going to turn it around. -- Stuart Re: Re: End of the Line For Small Music Sites?
by
Anonymous
on Sat 17 Mar 2007 05:07 AM EDT | Permanent Link
1. What's lousy? The site? The song? The download?
2. Puretracks didn't make DRM, it's how they're allowed to sell the product. 3. What do you want it to be compatible to? They've been around for awhile; can't be all bad... Re: End of the Line For Small Music Sites?
by
Anonymous
on Wed 01 Mar 2006 06:49 PM EST | Permanent Link
Apart from the DRM issue, standards compliance of the site is atrocious; it's a full-on Failed Redesign that (impotently, as it turns out) attempts to exclude Mac users and, I suppose, anybody who’s left-handed or Muslim or from Alberta from using its site. It's an embarrassment that would fit in beautifully with the remainder of Bell's Web presence. – Joe Clark
Re: End of the Line For Small Music Sites?
by
Tyler
on Wed 01 Mar 2006 11:52 PM EST | Profile | Permanent Link
Well, your source was spot on Mark -- Bell announced the deal at 7 p.m. this evening. Not surprisingly, they didn't say how much the deal was worth, meaning it was immaterial. Also, they didn't buy it outright but took a majority interest. I don't think Telus needs to be worried, given the business model of Puretracks is no different than Bell selling wholesale to its competitors.
Re: Re: End of the Line For Small Music Sites?
by
Mark Evans
on Thu 02 Mar 2006 07:10 AM EST | Profile | Permanent Link
i still don't understand the advantage of bell buying a stake in puretracks given it could license the technology. maybe it believes there are better profit margins and control to be had. my take is bell paid peanuts for puretracks, which seems to have lost any mojo it might have had to iTunes.
Re: Re: Re: End of the Line For Small Music Sites?
by
Stuart MacDonald
on Thu 02 Mar 2006 01:00 PM EST | Profile | Permanent Link
Well, there is something to be said for buying existing-but-busted-code, if fixes are relatively evident. You get it waaaay cheaper, for one. And I would also not be shocked if something in Puretracks' distribution deal with MSN required that they remain a going concern in order for them to maintain rights to the music sales category, so this deal keeps that door closed for others. And though I have no clue what trump card Bell could play there with their Sympatico/MSN deal, my guess is very little as, for instance, Bell likely has to go a long with global deals MSN cuts out of Redmond or whatever. Could also be that doing the deal this way gives Bell better pricing on downstream content from Universal ("take this thing off our hands and we'll cut you a break for X time").
If it was just about the technology, you're right - they might have just hit reset, done a license thing and built something new. But something else is going on here. - Stuart |
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