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.
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
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.
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
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
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.