The latest offering takes the idea a step further. The concept isn't so much selling the music on a USB key, but selling access to the music plus access to an online community only for those that have bought the album.
Bonus content for fans on USB-stick albums [The Age]:
The Australian music industry is getting behind a new locally developed music format that will allow consumers to access an ongoing stream of bonus content and listen to their collections from any computer or mobile phone.[...]
People who buy the albums register with an online locker system that not only makes a back-up of the songs - which can then be accessed from any other computer or mobile phone - but also provides access to a swathe of bonus content provided by the artist on an ongoing basis such as photos, videos, lyrics, artwork, new tracks and even concert tickets.
The format is called "USB DDA".
It's unclear what format the songs on the USB key will be, but they are presumably lossy compressed (even though a dirt cheap 1Gb key would fit a lossless album on it).
The website seems to infer that you don't get songs as such, but an EXE file you can run that plays the files and also allows you to transfer the songs to other devices (mobile, iPod etc.), or burn a CD.
What is made clear, is that they'll cost the "same as a CD". So is that $15? $20? $30?
I like the keyring attachment the USB keys have with the album cover on it. I like the concept of buying a connection to an online community of other people who like and supporter the album. But otherwise... this product isn't for me.
I like CDs.
If it wasn't for the fact Quan of Regurgitator's new album is coming out on this format, I probably wouldn't have mentioned it at all.
All I can think now is, even though I supported him and bought his physical CD album, I'm being left out of what might be extra awesome online content because I bought the "wrong" format...
Probably not their intention.
Update: Gizmodo indicates that the files on the keys are WMA and MP3 without DRM.
I think the one clever point of this is the "exclusive content" carrot. I'm not interested on a per CD basis, but I think a concept like this might work for artists.
I reckon buying fan club "keys" to access exclusive band content (not just exclusive album content) could really work.
Record companies could really leverage off the apparent desire their customers have to register (on Facebook for example) as "fans" of particular artists. It really should be the bands and record companies supporting this, not random third parties.
Update 2: Sorry.