You may have overlooked this latest boneheaded record biz move while slogging nog and waiting under the mistletoe over the holidays, but the latest bright idea from the industry braintrust is this: a digital download album card. Yup, it’s not quite a compact disc, yet not really a mp3, but rather a gift card that will allow the recipient to download a copy of a classic album in DRM-free mp3 format. As reported by Billboard.biz, Sony BMG will launch this project in mid-January, placing 40-50 cards each in around five large retailers to test the concept. The cards will be priced at $12.99 and will come with a code that you redeem it on the yet-to-be-launched Sony BMG music store at www.musicpass.com. The cards will offer a mix of custom compilations as well as albums from the label’s artists like Bob Dylan and Bruce Springsteen.

Now why on earth would I want to buy what amounts to a music gift card, either for myself or for a friend or relative, for $12.99 when I can just buy a CD? Checking at Amazon.com, much of the back catalogs of both Dylan and Springsteen, to name but two Sony BMG artists, are available on CD for $10.99 or less, with some CDs going for as little as $7.97? Also, Sony BMG execs have obviously forgotten all about the online music store that they already operate. Although Sony announced that they’d be closing their Connect music site in March ’08 in order to move towards a Windows Media platform (Connect currently offers mostly proprietary ATRAC format downloads, I believe), why not keep the store open and merely convert it to offer mp3 files rather than spend twice as much to create a new web site from scratch?

Unlike a lot of commentators you’ll run across online, I think that a label music store is a good idea, if done properly. Many self-appointed experts in the blogosphere say that branded label stores won’t work; for instance, the Silicon Alley Insider says that “label-specific online stores make zero sense – if you want music you're going to go where you can get all of it in one place – like Apple's (AAPL) iTunes.” In regards to this one-stop shopping mentality, hell, there are only four major record labels still hanging around like last summer’s kudzu – not quite a glut, by any standards. If Sony BMG were to offer high-rez, DRM-free mp3 files of the bulk of its historic and acclaimed catalog online, music lovers would visit. Ditto for the other three major labels….

However, this music gift card scam smells like the desperate actions of yet another major record label trying to tweak the nose of Apple’s Steve Jobs and steal away some business from iTunes. Here’s a better idea: sell these album gift cards for $5.99 and give two-bucks to the retailer (resulting in a respectable 33% margin). Subtract 80-cents for the songwriters, take another 19-cents to cover the cost of the gift card, and split the remaining $3.00 on a 50/50 basis with the artists. At the end of the day, you might be surprised at what you sell...any other way, and this is just another stupid, over-priced, non-starter of an idea that will do nothing for the consumer, the label and, most importantly, for the artist….

01/07/08 Update: U.S.A. Today has a story this morning on the Sony Musicpass program, the latest industry snake oil that they're trying to get us to swallow. These music gift cards will go on sale on January 15th in Best Buy, Target and Fred's (?!) stores and will be expanded into traditional music retailers like Coconuts, FYE and Wherehouse, along with other retailers like Winn-Dixie, on January 31st. "The bigger picture is to make our music available in many different formats, through many different channels, in many different ways," Thomas Hesse, president of Sony BMG's global digital business, is quoted as saying in the article. Tom, really, why does anybody at Sony BMG think that this is a good idea when people can download the same music from iTunes for less money? Sony BMG feels "strongly that there's a group that will enjoy carrying the imagery of an artist they love around with them, or sharing it with their friends," Hesse tells U.S.A. Today. Uh, right....