July 27, 2009

By By Antony Bruno, Denver

Apple and the major record labels are working on a new system that would allow them to include a digital, interactive version of the CD booklet to albums downloaded from iTunes, according to a report in the Financial Times.

The effort, dubbed "Cocktail" according to the anonymous sources cited in the story, would add such items as photos, lyric sheets, liner notes and other assets to the booklet, which iTunes users would purchase as a full album. The music from the album would then be accessible from within the interactive booklet directly, sidestepping the need to open and find the music in iTunes.

Exactly what kind of integration the booklet would have with the iPod is not yet clear, but according to the report there could be some designs for featuring the format on the rumored tablet-sized portable computer Apple is said to be developing as well. The first examples of these booklets will be for sale in September.

According to a report from CNET, music industry executives first proposed the idea of interactive album booklets over a year ago but was rejected. The story quotes unnamed sources as saying the labels are now "steamed" that Apple is trying to take credit for this iteration of the idea. Additionally, it claims Apple's decision to limit the technology to Apple devices is another example of its walled garden approach.

The issue of including more digital assets with digital album sales has been an ongoing issue for the music industry for some time. Warner Music Group tried adding interactive booklets to iTunes albums two years ago using Flash technology, but a security issue killed that initiative.

Also holding things back is the fact that until recently, if the Cocktail project is indeed on track, labels haven't coordinated on the technological and operational standards needed to provide the same content across multiple services.

Whether such a capability will help sell more albums is a question left unanswered. Much depends on pricing, device compatibility, impact of the additional content provided, and of course the music itself. Digital distribution tends to support a release format characterized by smaller bundles of songs released on a more frequent basis.

While the bigger fans of a given band have shown a propensity to buy deluxe packages-both digital and physical-there's no guarantee an interactive booklet will cause the mainstream digital buyer to purchase more albums over tracks.

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