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What do Metallica and SanDisk (Nasdaq: SNDK) have in common? For both, the memory remains.
The metal band was singing about faded rock stars trapped in their glory days. The data storage company, however, is hoping that music-filled 1 GB microSD memory cards will lure in consumers who fondly remember when their favorite songs were purchased on albums preloaded on physical media and weren't downloaded via the Internet.
SlotMusic, SanDisk's new initiative, offers an entire album of digital rights management-free music on a memory card -- along with liner notes, cover art, lyrics and the occasional music video. It's the result of a deal with four major music labels that targets consumers looking for high-fidelity alternatives to MP3 files that can be played on any device with a microSD slot, including phones. Prepackaged bundles will come with a USB (universal serial bus) adapter so buyers can also play their slotMusic cards on a computer. The music plays at a bitrate of 320 kilobits per second.
Pricing has not been announced yet, although SanDisk officials have said they expect the cost to be similar to that of a CD.
Selling Albums in a Singles World
"I don't think this is the savior for physical media," Danielle Levitas, senior analyst for IDC, told the E-Commerce Times. "We've been down this road before." SanDisk, in fact, previously tried the Super SD format for music in a size slightly bigger than microSD cards. "High-fidelity alone isn't enough to create a huge demand or a significant uptick in CD sales 
. Convenience (of downloading) is even more important than high fidelity."
Music buyers' tastes have drifted away from the album format, said Gartner (NYSE: IT) analyst Mike McGuire.
"The larger question is: What is the consumer interest in a programmed packaged bundle of stuff?" McGuire told the E-Commerce Times. "Are we at a point where consumers what to pay for a large bundle of stuff, or do they just want the song? In terms of lyrics and cover art, the average consumer who's into online music can go out and search for that information anywhere through Google (Nasdaq: GOOG) or Yahoo"
SanDisk, however, deserves credit for negotiating DRM-free music and for giving buyers a chance to own a 1GB memory card that can be filled with personal music or photos once its music is downloaded to a device, McGuire said.
The Mobile Phone Option
Many mobile phones include a microSD slot for downloading personal media, but JupiterResearch's surveys show that most people aren't using their phones for listening to music -- yet. "We have about 6 percent who actually listen to phone music," Sonal Gandhi, a JupiterResearch analyst, told the E-Commerce Times. "The music-listening public is still going after MP3-dedicated players. People haven't changed their behaviors yet to listen to music on their phones."
The iPhone, however, may be training a new generation of device lovers to listen to music on a phone, Gandhi added. "SanDisk may be trying to tap into that market early on, but again, buying a whole album is not as popular. People can easily download a single and load it on a phone."
Levitas says there may be hope for SanDisk's slotMusic in Western Europe and Asia, where "we see the phone emerging as a multi-media playback platform. It's already cannibalizing sales of MP3 players in some regions. But in the case of the U.S., most people aren't managing their media like that if they already have an MP3 player."
Sweet Memories in the Making?
Pricing will be key. "It may get some additional sales for the music, but it isn't where the market is going," Gandhi said. "It's not so much of a game-changer."
And while four major labels -- Vivendi Universal, Sony, Warner Music and EMI -- are on board at launch, consumers in the target market won't tolerate a weak slotMusic catalog for long, McGuire said.
"They have to ramp up to what's available in retail stories and at least what's available on the subscriber services like Rhapsody. Buyers are going to see these in retail outlets and look for something they want, and they're only going to want to hear, 'it's not in yet,' a couple of times."
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