Sorry: The correct URL is http://www.broodingsavage.com/business-analysis/ad-supported-music-2.html

The latest attempt at new music distribution may be to give the music away free, but this is unsustainable from a cost/revenue perspective. There is not enough advertising demand available to subsidize the $30billion digital music market with ads; and if the inventory were created anyway, it would seriously deflate the display and keyword ad market.

Digital music market is now at $30 billion and rising (including illegal downloads). While digital advertising is only at $20 billion and slowing.

There's an excellent analysis at Brooding Savage blog.
http://www.BroodingSavage.com/journal/2008/2/7/ad-supported-music-1.html

I received the release today (around 11:00 CET), and I spent the day playing with my new toy. I give it a 85% positive rating.

The interface is much changed. Not quite so simple as we’re accustomed, but still intuitive. There’s really only 2 new features: but they transform the product’s value. 1) Direct interface to iTunes Store, and 2) Movie Rentals.

The iTunes store on TV works well. I had some trouble accessing my iTunes account, so I had to create a new account on the PC, then reconnect. Not terribly difficult or time consuming. Once in, everything worked like a charm. Buying a song on TV simultaneously downloads it to my PC and AppleTV.

See the full review at http://www.broodingsavage.com/journal/2008/2/13/appletv-upgrade-is-here-review.html

I received the release today (around 11:00 CET), and I spent the day playing with my new toy. I give it a 85% positive rating.

The interface is much changed. Not quite so simple as we’re accustomed, but still intuitive. There’s really only 2 new features: but they transform the product’s value. 1) Direct interface to iTunes Store, and 2) Movie Rentals.

The iTunes store on TV works well. I had some trouble accessing my iTunes account, so I had to create a new account on the PC, then reconnect. Not terribly difficult or time consuming. Once in, everything worked like a charm. Buying a song on TV simultaneously downloads it to my PC and AppleTV.

See the full review at http://www.broodingsavage.com/journal/2008/2/13/appletv-upgrade-is-here-review.html

AppleTV is not the first product to envision this type of user experience. Remember the old AOLTV service? It included overlays like this, including chat and instant messaging features tied to the channel being viewed. Very cool for its day.

AOL has approved patents for these and other technologies. There were also synchronized games to play along with broadcast TV, and news and sports scores, and interactive tie-ins with TV commercials.

It's questionable whether all of Apple's patent applications will be approved. There's tons of prior art of the subject. One of AOL’s patent authors has an interesting post at http://www.broodingsavage.com/journal/2008/2/10/apple-patents-time-machine-appletv.html

The latest attempt at new music distribution is to give the music away free.... see SpiralFrog or QTrax. Unfortunately, this is completely unsustainable from a cost perspective, and counterproductive to the music retail market. The digital ad industry is simply not big enough to support the digital music industry.

There's an excellent analysis at Brooding Savage blog. http://www.BroodingSavage.com/journal/2008/2/7/ad-supported-music-1.html