It’s a solid system for word-of-mouth music downloads, and it’s certainly more personal than a recommendation algorithm, but two major problems are holding back the People’s Music Store from greatness. The lack of content, chief among these issues, is on the way to being solved, with Universal signing on to provide 300,000 tunes for download. The Killers, Abba and Amy Winehouse are among the newly-available artists.

The label will be the first major to climb aboard, and wisely so. Labels should jump on any sales opportunity they can, especially those that actively encourage more and more sales. “We are excited to have the Universal Music catalog on People’s Music Store because it shows that forward-thinking labels are willing to try new ways of connecting artists with fans,” said founder Ged Day, who also created the DRM-free indie boutique Bleep.com.

Now, about that other problem: Much of the content at the People’s Music Store is walled off for US consumers, including the new tracks from Universal. From reading earlier articles about the site, I see that consumers outside the US have run into similar problems with existing songs.

I know international licensing is complicated, but consumers should at least be able to filter out the stores and bands that are inaccessable to them. Really though, record labels should find a way to make their content available to everyone.

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Billboard reports weaker sales for iTunes tracks whose price changed from 99 cents to $1.29 a week ago, but overall revenues for the Top 100 still rose by roughly 10 percent.

iTunes adopted a “variable pricing” structure on April 7 as part of a new agreement with record labels. While most tracks still cost 99 cents, some popular songs became 30 cents more expensive, while a selection of random classics were priced at 69 cents. Forget about storming off to another service; Amazon, Napster, Lala, Rhapsody and Wal-Mart. The deal also marked the end of Digital Rights Management on iTunes tracks.

Looking at some of the $1.29 tracks whose sales were holding steady in the weeks before variable pricing, you can get a pretty clear picture of the effects. Sales of “Beautiful” by Akon dropped from 57,941 last week to 52,760 this week. That means the song generated an additional $10,699 at the new price level. The less-popular “Stanky Legg” (what?) by GS Boyz slipped by 2,994 in sales but still earned an extra $2943.54.

Missing from Billboard’s report are statistics on the songs whose price decreased. Along with the costlier tracks, iTunes launched two compilations — Rock and Classic R&B — at 69 cents per song. I have a feeling revenue increased for those songs, simply because they were lifted from obscurity and offered on sale.

All of this makes me wonder whether the recording industry will try to push prices even higher in the future. Thus far, the “voting with your wallet” concept hasn’t worked, so what’s the threshold at which consumers will resist? $1.50 per song? How about $2?

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Using an advanced authentication method, NBC Universal will require online viewers to prove that they subscribe to a cable, satellite or telecom subscription TV package. Even then, the customer’s service provider must agree to this deal with NBC Universal beforehand.

The report in Sports Business Journal says the authentication will be limited to live footage, while some archived footage will be available for free.

Though much of NBC’s coverage will appear over the airwaves (free to anyone with an HD tuner and antenna), the paywall is probably meant to placate service providers due to the coverage NBC spreads to its subscription channels, such as MSNBC. Without being privy to the interactions between the network and service providers, I can’t say outright that authentication is a boneheaded move on NBC’s part. It could just be a necessity in the crazy world of content licensing.

But there should be some option for non-subscribers to watch the games online, and it should be robust rather than a second-class medium. Look at what Major League Baseball is doing with its MLB.tv offerings: Picture-in-picture, live highlights, DVR, player tracking. These are luxuries that go far beyond what the TV can do, and in my opinion, they’re worth paying for.

Give me a menu of which games are happening right now, and let me open a few of them in separate frames. Give me reminders of when the next Curling match is set to air and let me watch later if I miss it. I want a clickable ticker packed with highlights from around Vancouver. Please don’t give me the same thing I could get on cable, but harder to watch. As a cable divorcee, I’d throw $20 on this hypothetical service for the duration of the games.

But these are fantasies, to be sure. Maybe NBC Universal will learn after it endures another year of subpar viewing numbers.

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Ars Technica’s Ben Kuchera has word from a “reliable” insider — with a proven track record of breaking stories — that this will happen for the upcoming PSP game Patapon 2. Kuchera suggests that Sony is testing this retail download model to gauge whether it will work for other games, maybe even setting the stage for a UMD-less PSP.

Why would Sony hang on to retail at all with this release? Because as much as video game publishers would love to kill the middleman, they need that shelf space. Digital distribution doesn’t share equal footing with hard copy sales. Besides, cutting out Gamestop and other retailers could potentially force them to drop the PSP in retribution. Despite the strained relationship between publisher and retailer, no one wants to rock the boat.

As a result, we might have this bizarre solution in which consumers can pay $20 plus a trip to the store for a $15 game that they can download at home. You pay more for the luxury of an empty box.

Whether the rumor is true or not, I can’t imagine retailers lovingly embracing the idea in the long run because they’d be digging their own graves. Once enough retail shoppers realize they’re getting duped at retail, they’ll abandon the store. GameStop also loves the used game market, and won’t give it up without a fight.

Retail downloads might work in the present simply because of shelf appeal, but Sony and other game publishers can’t have it both ways forever. Eventually, they’ll have to commit to a download-only future — brick-and-mortar be damned, consoles can be distributed other ways — or commit to physical media and all the retail baggage that comes with it.

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If there is a Barnes & Noble e-reader, it’ll have plenty company. There’s Plastic Logic’s upcoming device. Fujitsu is about to release its fancy FLEPia in Japan. Magazine publisher Hearst is working on an e-reader. Rupert Murdoch is making noises about jumping into the market. And then there are the gadgets that are already here: Amazon.com’s Kindle 2, Sony’s Reader, and dark horses such as the iRex iLiad.

All of which leaves me thinking one thing: I wish that the publishing and technology industries would take a deep breath, step back, and declare a moratorium on new e-book gizmos and platforms until they can agree on one file format for e-books that’ll work on every reader. It would be nice if that format was free of copy protection, but I’m willing to settle for DRM as long as it works well, and works with everything,

The books I’ve bought for my Kindle will work on the Kindle and other devices Amazon chooses to support, such as the iPhone. (Which means that even if another company comes up with a gadget that’s ten times better than the Kindle, I’m unlikely to switch,) The books Sony sells work on Sony’s reader. We don’t know what formats a Barnes & Noble e-reader will work with, but I’m guessing it doesn’t want Amazon or Borders selling tomes for its hardware. And so on.

One of the multiple wonderful things about human eyeballs is that they’re compatible with everything you can look at: I’ve got books I’ve owned since I was two that I still pull out from time to time. But e-books that are tied to a particular platform are dead ends: You’ll be lucky if you can still read them five years from now, let alone a few decades into the future.

I cheerfully admit that I’m pretty much ignorant when it comes to what’s going on with open e-book standards. I just know that I’m not going to get too excited about any new e-reader until I know that any digital book or magazine I buy anywhere will work on it…

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In a protest outside of the guild’s Manhattan office today, demonstrators urged the guild to cease its campaign to remove text-to-speech from the Kindle. The guild maintains that it goes beyond the publishing rights that Amazon has acquired, and could impact audio book sales.

Amazon has yielded to the guild’s demands, and is permitting the feature to be turned off on a per-title basis. To its credit, the guild has worked out an agreement for the voice feature to always be an option for people with disabilities.

“Authors want everyone to read their books. We’ve been strongly supportive of the rights of the blind and disabled to obtain books…We know how to balance the interests, to make sure there is special access to books for people who need it but still protect markets that authors depend on. Audio-books is one of those markets,” Paul Aiken, executive director of the Authors Guild, told News.com.

My feeling is that text-to-speech should be broadly available as part of an accessibility pack. While I take Mr. Aiken at his word, today’s protest served to remind the guild that it has an obligation to the blind that transcends its sales and the exercise of its intellectual property rights.

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One thing we’ve still been unable to locate? Those 69-cent tracks. Nowhere to be found — maybe we’re missing them? But I guess if we’re looking at things overall, the price increase isn’t as widespread as some may have thought.

The price hike certainly opens up the door to Amazon MP3. All songs on that store are still 99 cents, but this could be more a function of a different expiration date on that store’s contract with the record labels. Then again, this could be a veiled trick to push all of us to music stores other than Apple in an attempt to break iTunes dominance.

Record labels have made it no secret that they aren’t happy that Apple is pretty much the only game in town when it comes to digital music.

In any case, Amazon MP3 is showing signs of life. While iTunes had a 87 percent share of the market in 2008, its competitor has managed a 16 percent share, the best showing so far for anybody according to NPD data.

Amazon’s music store is having a good deal of success with the older crowd, so the company may find it prudent to begin targeting this demographic a little heavier in an attempt to gain some more share.

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Credit Suisse estimates that YouTube has a gross income of $240 million a year, but that its expenses far exceed that, totalling an astonishing $711 million. According to the report, about half of YouTube’s expenses come from meeting bandwidth demand, while the remainder derives from licensing costs, hardware, marketing, and other operational expenses.

The analysts determined YouTube’s bandwidth costs by assuming that 375 million unique visitors would visit the site in 2009, with 20 percent of those users consuming 400 kilobits per second of video at any given time. That works out to 30 million megabits being served up per second. That’s a heck of a lot of bandwidth to devote to videos of sneezing pandas.

However, Credit Suisse’s revenue forecast deviates from other reports. In March, Jefferies Co. said that YouTube would earn $500 million, and Screen Digest predicted $120 million in earnings earlier this week.

The Credit Suisse analysts’ proposed path to profitability is for Google to change YouTube’s business model to place an emphasis on premium content over user-generated content–like Hulu. NewTeeVee, a blog dedicated to online digital media, reported that Google is poised to unveil a site redesign that will do just that.

That would be the end of YouTube as we known it, but we are living in a new economic reality. YouTube built its business without ever having any viable way to become profitable in the short term, and it cannot continue to lose money just because its users are accustomed to receiving free entertainment. That just does not cut it anymore– shareholders won’t tolerate white elephants forever. Even Google shareholders.

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The contest is over, and I’m happy to announce the winners. Here they are (click on their names to see the stuff they submitted):

Jesse Tobler
Dennis Pasley
Jerad Heffner
Josh Martin

Congratulations to all four–and thanks to everybody who contributed.

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Today, blogger Long Zheng’s watchful eye took notice of a job listing on Microsoft’s Web site seeking a software engineer to help its Zune team, “deliver great digital entertainment features into the living room, including on demand music and video.”

The job requires an engineer with experience developing user interfaces to deliver “rich online media experience delivering music and video from the cloud.”

The listing is dated just days after the company announced that it was restructuring the Zune product group into distinct software and hardware divisions. Microsoft’s goal may be to bring Zune services to third-party devices, CNET reported.

A separate job listing is seeking a database programmer to help Microsoft open Zune stories for other countries or regions.

The company has already made inroads into the living room with its Xbox console. Windows Media Center Edition has failed to make much of an impact. It would make sense for Microsoft to offer a Zune store through a future edition of the Xbox that would serve as a digital media hub. If nothing else, it would help the company compete in the living room with Apple TV, which analysts have projected could sell as many as 6 million units this year.

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