Tuning the Business

Artists 'must benefit from touts'

2008-01-10T07:36:00.000-08:00

Artists and sports bodies should share profits from tickets resold on internet auction sites, MPs have said.
In a report on touting, they have stopped short of calling for a ban, but have told online touts to "clean up their act" because they exploit fans.

They also criticised event organisers and promoters, saying they helped to feed the market with non-existent or inadequate returns services.

The MPs' report calls for a voluntary industry code of conduct for reselling.

The Culture, Media and Sport select committee said up to 40% of tickets were being sold on the internet.

Dozens of UK venues and promoters gave evidence to MPs for the report, which concludes that "some secondary sellers indulged in dubious or suspect practices".

'Voluntary solution'

Committee chairman John Whittingdale said it was "neither practical nor in the interests of consumers" to ban ticket sales through the secondary market - where tickets are sold on.

Instead, the MPs are calling on representatives from all sides to come together to provide a "voluntary solution".

Mr Whittingdale said that if they failed to reach agreement on such a code, government legislation would be used as "a last resort".

The committee's report also said:

The internet had made it easier for people to profit from selling on tickets. It concluded this was unfair.
Organisers wanted to protect their industry, saying they could just inflate prices if they wanted to boost profits.
Organisers should let people get refunds in some circumstances.
There should be an "across-the-board commitment" that the "distasteful" sale of tickets for free events and charity events - such as Concert for Diana - will be stopped.
There should be a ban on reselling tickets given free to children or people with disabilities.
Mr Whittingdale said giving event organisers a share in profits from resold tickets was the "middle way".

"This represents a way forward which could benefit all concerned, and we call on all those involved in the debate to work together to develop it on a self-regulatory basis," he added.

The Arctic Monkeys are among those calling for a levy on resold tickets
The Resale Rights Society (RRS) - representing the managers of the Arctic Monkeys, Radiohead and Robbie Williams and more than 400 other acts - has already said it would support a levy being added to resold tickets.

A spokesman said the existing situation, where big profits can be made by touts with nothing going to the organisers or rights owners, was "unfair and must be addressed".
http://news.bbc.co.uk/2/hi/entertainment/7179834.stm

Radiohead-like business model has disappointing results

2008-01-05T13:22:00.000-08:00

Nine Inch Nails frontman Trent Reznor admitted that he is "disheartened" by the results of a new music business model he attempted.

As producer of rapper Saul Williams' new album 'The Inevitable Rise and Liberation of NiggyTardust', Reznor decided to employ a similar business model to that of Radiohead, which gave listeners the option of paying nothing for a download of the album, or $5 for higher-quality MP3s.

In a posting yesterday (January 3) on Nine Inch Nails' website, Reznor revealed the sales figures, saying, "Perhaps by revealing of all our data -- our 'dirty laundry' -- we can contribute to a better solution."

Giving the background that Williams' 2004 self-titled album sold 33,897 copies, Reznor revealed the following data.

"As of 1/2/08, 154,449 people chose to download Saul's new record. 28,322 of those people chose to pay $5 for it, meaning: 18.3% chose to pay."

Reznor added: "Is it good news that less than one in five feel it was worth $5? I'm not sure what I was expecting but that percentage -- primarily from fans -- seems disheartening."

On the positive side, Reznor pointed out that they hardly spent any money marketing the album, adding, "Saul's music is in more peoples' iPods than ever before and people are interested in him. He'll be touring throughout the year and we will continue to get the word out however we can."
http://www.nme.com/news/nine-inch-nails/33469

Wal-Mart shuts online video shop

2007-12-29T04:03:00.000-08:00

The world's biggest retailer, Wal-Mart, has closed its video downloading service less than a year after it started selling films online.
It stopped the service on 21 December, according to a message on the discount chain's video download website.

Wal-Mart said the decision had been forced by Hewlett-Packard withdrawing the software running the site.

The move ends a challenge to Apple's iTunes store, Amazon and Netflix to win customers who rent films over the web.

Hewlett-Packard spokeswoman Anna Ichel Buxbaum said the company had dropped the service because it "has not performed as expected" and would be looking at other digital entertainment ventures to invest in.

"The broader internet video space continues to remain highly dynamic and uncertain," Buxbaum said in a statement.

Competition

The service had launched in February offering 3,000 films and episodes of popular television shows to US customers to watch on a PC or a portable device compatible with Microsoft Windows Media Player.

The Wal-Mart downloads do not work on standard DVD players or on Apple computers or iPods.

The market for online video downloads has become very competitive with video rental chain Blockbuster buying Movielink over the summer to expand into this area.
http://news.bbc.co.uk/2/hi/business/7163722.stm

Fox films 'for rent via iTunes'

2007-12-29T03:58:00.000-08:00

Apple and 20th Century Fox studio are to announce a deal that will allow consumers to rent the studio's films through iTunes, media reports say.
They will have a limited time to watch films downloaded from the iTunes store, a source told the Financial Times.

If the reports are true, this looks like a new assault on the video and movie market, says BBC News technology correspondent Rory Cellan-Jones.

Apple shares traded above $200 for the first time on Wednesday.

Major event

The rumours about Apple's products and software to be unveiled at the company's major event of the year, MacWorld 2008 in San Francisco on 14 January, are swirling around, our correspondent says.

It looks like video could be a new key theme for Steve Jobs' Apple
Video sales on iTunes have been sluggish and the Apple TV - a set-top box linking the computer to your television - has failed to win a place in millions of living-rooms.

Besides, the big players in television and in Hollywood have been wary of doing deals with Apple, after seeing the position of strength that Steve Jobs' company has built up in the music business.

So the negotiations with the studios over movie rentals on iTunes have reportedly been tortuous.

Now it looks as though Fox, owned by News Corp, has decided Apple is the only game in town when it comes to getting movies onto new platforms, our correspondent says.

Legal way

Particularly interesting is the idea that Fox would sell DVDs with Apple's Fair Play DRM protection, making it possible to put a movie onto an iPod.

Of course, millions of people have already found ways of doing that, but this time, it would be legal.

Apple and Fox will be hoping this will have the same impact on consumers as the arrival of the iTunes music store, which encouraged some of the millions who were swapping songs on the internet illegally to start paying for music online, our correspondent says

http://news.bbc.co.uk/2/hi/business/7161609.stm

Warner agrees to use MP3 format

2007-12-28T02:15:00.000-08:00

Warner Music Group is making its music available for US downloads from Amazon in MP3 format without copy protection.
Warner had been holding out against using the format because MP3 tracks are easier to share between users and may be freely burned onto CDs.

Amazon.com's download store is a major US competitor to Apple's iTunes, which uses Digital Rights Management (DRM) to restrict the use of some of its tracks.

Warner's artists include Led Zeppelin, Aretha Franklin and Sean Paul.

Sony BMG is now the only major recording group not signed up with Amazon.com's download service, which is only available to US customers at present.

"By removing a barrier to the sale and enjoyment of audio downloads, we bring an energy-sapping debate to a close," Warner Music chief executive Edgar Bronfman said in an e-mail to Warner employees.

Amazon launched its US download store in September after reaching agreements to sell unprotected tracks from Universal Music Group and EMI.
http://news.bbc.co.uk/2/hi/business/7162280.stm

Death To Music Gives Away 10 Releases For Free Download

2007-12-26T06:25:00.000-08:00

posted Tuesday, December 25, 2007 at 10:43:30 PM by deathbringer.

DEATH TO MUSIC prodcutions have fulfilled all "anti-contractual obligations" by providing 10 releases (albums & EPs) for free over the past few months - available via the official website, www.deathtomusic.com.

Death To Music productions is the new "anti - record label" founded by James Fogarty - previously of experimental metal project Ewigkeit, also a former founding member of Black Metallers The Meads Of Asphodel, and was launched in order to release music for music's sake rather than the usual money-driven route of labels / distros / magazines in order to get music heard.

"...all these fucking labels and other vampires of the music industry are just not neccesary anymore for artists writing and releasing music in more underground styles - for me and many, many other hard-working musicians & bands, our music is first & foremostly about getting your stuff heard by people, and certainly not about working your arse off to make money for other people..."

"..as a statement of intent, I have now given away everything I have ever recorded, and now look forwards to working with new projects and artists on Death To Music....."

James was tired of having to deal with record labels who didnt treat their artists fairly, and subsequently burnt all his record contracts and reclaimed the music.

The first physical release is out now in the form of James Fogarty's new politico-industrial metal project The Bombs Of Enduring Freedom's self-titled debut album. You can check out some of their material on the band's MySpace page.

2008 will see the release of more projects who are choosing to collaborate with Death To Music productions in order to get their music heard, rather than the usual route of labels / distros / magazines.

http://www.metalunderground.com/news/details.cfm?newsid=32420

Radiohead, W/C In Digital Licensing Breakthrough

2007-12-21T04:12:00.001-08:00

Radiohead and its long-time publisher Warner/Chappell Music have launched a unique "all rights" digital licensing service for the alternative rock band's new album "In Rainbows," Billboard.biz can reveal.

The music publishing giant has created a global "one stop shop" solution for the critically-acclaimed set, which will enable potential rights users worldwide to secure licenses from a single destination, effectively side-stepping the label and traditional collecting societies networks.

For the new album, Warner/Chappell will administer all digital rights, including mechanical, performing, synchronisation, lyrics, master recordings, image and likeness, and will license synch rights for both publishing and master rights for TV and film synch uses in the offline world.

Jane Dyball, senior VP, European legal and business affairs, Warner/Chappell Music describes the new digital licensing development as an "experimental solution" which should benefit the Radiohead while "providing all their licensees with a new, highly flexible service."

Radiohead blazed a new trail when the band recorded the album independently, and released it digitally through its official Web site from Oct. 10, allowing downloaders to name a price to own a virtual copy.

The "honesty box" trial will conclude Monday, ahead of the album's tradition release through XL Recordings internationally on New Year's Eve. ATO Records Group will issue the album the following day in the United States, while Hostess Entertainment has a license agreement to release the album Dec. 26.

billboard.biz

Live Nation, CTS Team For Ticketing Platform

2007-12-21T04:11:00.002-08:00

Live Nation is entering the ticketing business. The live music giant has struck a long-term agreement with CTS Eventim, the Bremen, Germany-based ticket marketer and promoter, to launch a worldwide ticketing business, with effect from Jan. 1, 2009.

Through the initiative, unveiled today, Live Nation will exclusively license the Eventim platform in North America, while Eventim will provide back office ticketing services in the United Kingdom and ticketing services throughout Europe. Financial terms of the deal were not disclosed.

In a statement, Live Nation president/CEO Michael Rapino described the development as "a monumental step forward in the evolution of Live Nation into a next generation music company."

Rapino continued, "Eventim is the most technologically sophisticated ticketing platform in the world. Live Nation will use its most important asset, the concert ticket, to build artist careers and customer relationships, forge innovative sponsorship deals, create a fan and artist friendly secondary ticketing platform and provide a ticketing alternative for third-party venues. We believe that our partnership with Eventim will allow us to execute on this transformational vision."

Live Nation notes that the new ticketing platform will allow it to control customer data to create "enhanced ticket-based concert products," and capitalize on expanded distribution channels and sponsorship opportunities.

Meanwhile, Ticketmaster will handle ticketing for Live Nation's venues and thousands of events through the end of 2008. The contract between Ticketmaster and Live Nation dates back to 1998 and Live Nation's predecessor, SFX Entertainment. (Venues acquired as part of Live Nation's House of Blues acquisition last year are contracted with Ticketmaster through 2009.)

billboard.biz

Sony BMG To Embrace MP3s

2007-12-21T04:11:00.001-08:00

Sony BMG Music Entertainment is about to make its first foray into the MP3 format when it launches artist-specific digital download album cards in mid-January, sources say.

Apparently modeled on the iTunes digital download album cards, Sony BMG will place 40-50 album cards in about five large retailers. The cards will be a select mix of hit and catalog titles from artists such as Bob Dylan, Pink and Bruce Springsteen, as well as a few compilation releases.

The cards, which sources say are priced at $12.99, will come with a code that can be redeemed at a Sony BMG download store, which is expected to be called musicpass.com. Currently, no such site is live on the web.

Sony BMG is using an intermediary company, Incomm, which specializes in gift cards, to cut the deals with accounts. Sony BMG's move towards testing MP3 has been in the works for the last few months, sources say. They also add other MP3 tests are being contemplated by the company.

Sony BMG declined to comment.

billboard.biz

Thom hits the Radiohead treble

2007-12-21T02:03:00.000-08:00

Thom Yorke has revealed the enormous success of Radiohead's download-only new album "In Rainbows".

The singer says the group have made more digital income from the release than from the rest of their back catalogue put together.

Earlier this year, Radiohead left EMI Records and decided to release the follow-up to 2004's "Hail To The Thief" themselves.

Yorke says it's been a rewarding financial venture for them, helped by the fact that their former label had been taking a large proportion of download revenue.

He explained: "In terms of digital income, we've made more money out of this record than out of all the other Radiohead albums put together, forever - in terms of anything on the 'net.

"And that's nuts. It's partly due to the fact that EMI wasn't giving us any money for digital sales. All the contracts signed in a certain era have none of that stuff."

Speaking to wired.com, Yorke also revealed the inspiration behind the idea to give the album away back in October.

"It wasn't nihilistic, implying that the music's not worth anything at all, it was the total opposite. And people took it as it was meant. Maybe that's just people having a little faith in what we're doing.

"It was simply a response to a situation. We're out of contract. We have our own studio. We have this new server. What the hell else would we do?"

"In Rainbows" is released on traditional formats on December 31.
http://www.music-news.com/ShowNews.asp?H=Thom-hits-the-Radiohead-treble&nItemID=16910

Customer's response to iPod Touch

2007-12-20T04:44:00.000-08:00

http://youtube.com/watch?v=PeuUFWnjXcE

Universal Music Settles Lawsuit Against XM Satellite Radio

2007-12-19T06:11:00.000-08:00

Universal and other major record labels had sued XM over its Pioneer Inno portable music player, which enabled subscribers to record music on the device for playback later.

Universal Music Group broke away from other record labels and settled a copyright-infringement suit against XM Satellite Radio, the companies said. Terms of the settlement were not disclosed.
Universal, a unit of Paris-based Vivendi, joined other major record labels last year in suing XM over its Pioneer Inno portable music player, which enabled subscribers to record music on the device for playback later. The multiyear deal announced late Monday covers recording capabilities in current and future devices, the companies said in a joint statement.

In deciding to withdraw from the original suit, Universal said XM had agreed to provide "a new and exciting opportunity for music lovers around the world to discover and enjoy our content, while at the same time recognizing the intrinsic value of music to their business and the need to respect the rights of content owners."

"We are pleased to have resolved this situation in an amicable manner," Doug Morris, chairman and chief executive of Universal, said.

XM said the deal recognizes that the company is competing in a market in which consumers have more options than ever for music. "We commend UMG for being the first music company to take this step forward with us and look forward to continuing our discussions with our other partners in the music industry," Nate Davis, president and chief executive of XM, said.

Universal, home to such popular artists as Amy Winehouse, Jay-Z and U2, had joined other labels in claiming that XM's licensing agreement did not give it the right to record, distribute, or reproduce copyrighted music. The record companies argued in the suit filed in New York in May 2006 that the Inno essentially amounted to XM acting like an online store, such as Apple iTunes, that sells music downloads.

XM claimed to have done nothing wrong, and vowed to fight the suit. Legal experts said XM would likely argue that its device was no different than a digital video recorder that enables people to record TV shows and movies for playback later.

The lawsuit asked the court for a permanent injunction to stop the service, and asked for unspecified monetary damages that would be determined in a trial.

XM and its rival Sirius Satellite Radio are seeking approval from federal regulators for a merger. The companies argue that the music distribution business is so diverse and consumers have so many options that it's unlikely the market could support two satellite radio companies. Opponents, however, say the deal would severely stifle competition.

http://www.informationweek.com/industries/showArticle.jhtml?articleID=204805981

Social Music Overview

2007-12-18T03:59:00.000-08:00

Keeping with the theme of Mike’s Online Photo Editing Overview, I wanted to cover some of the entrants into social music. Music was probably the first type of rich media to really go “Web 2.0″ and it’s become a pretty popular place for startups. As a result, there are some great Rich Internet Applications built around social music. Anyone who makes music a part of their daily lives has no shortage of options when it comes to finding new music and sharing with friends.

FineTune

Finetune is a relatively new application written in Flash. It’s my favorite out of the bunch and I covered it on my ZDNet blog. What makes Finetune stand out is that in addition to the standard “artist radio”, it allows users to build playlists of specific songs. The minimum playlist is 45 songs and you can have up to three songs per artist. With custom playlists, you can make sure you’re only listening to songs you want. Finetune also gets points because in addition to the web version, it runs on the Wii and there is an Apollo-based desktop client.

Pandora

Pandora is the granddaddy of the bunch and it’s one of the Web 2.0 applications that Mike can’t live without. It is built using OpenLaszlo and provides the cleanest experience out of all the applications on the list. Pandora uses the Music Genome Project to generate a stream of songs that you’ll like based on how you rate previous tracks. You create stations around artists, songs or albums and you can provide feedback (thumbs up or thumbs down) on the songs Pandora chooses. Tech Crunch’s coverage of Pandora is here.

Last.Fm

last.fm is another Web 2.0 veteran and is more socially-slanted than the others. Tagging is a big part of the last.fm experience and you can tag any song that comes along in addition to being able to listen to “user tag radio” which is based on tracks that users have tagged with a specific genera. last.fm has a separate desktop application that “scrobbles” the songs you listen to and generates a music profile that you can share with friends. See Tech Crunch’s coverage of last.fm here.

MOG

MOG is all about a music community. It’s very blog-centric and revolves around user pages, or “Mogs”. You build your Mog around songs you’re listening too and artists you like. That builds something like a profile for you that users can browse to and comment on. It also uses this profile to suggest other people or music that you might like. Tech Crunch’s coverage of MOG is here.

RadioBlogClub

radio.blog.club is another music service that builds playlists based on an artist or song you specify. I’ve heard the least about it, but the interface is good. When you browse to the site and type in an artist or song, it builds a playlist of 10 songs for you. In my experience the recommendation system for radio.blog.club wasn’t the best, but they do allow you to embed their player on your blog. This seems to be the least robust of the applications but still worth a mention.

MyStrands

MyStrands started off as MusicStrands and is a downloaded desktop application that works with your current music players to build recommendations based on what you’re listening to. In many ways it’s similar to last.fm’s “Scrobbling” but MyStrands ties in with your mobile device and seems to provide a more social recommendation system. By tying in with music on mobile phones, MyStrands is a bit ahead of the others and it helps tie all of your music collections together. Tech Crunch’s coverage of MyStrands is here.

iLike

iLike is an iTunes plug-in that makes your music library more social. It tracks what you’re listening too and recommends songs and people with similar tastes. It hooks in nicely with the iTunes interface and recommends music as you’re playing songs. I listen to some pretty obscure stuff and the recommendations were good. They also have a widget for MySpace that is formatted to sit nicely in the “Music” section of the profile. Tech Crunch’s coverage of iLike is here.

iJigg

iJigg is a digg-esque music discovery service that I had a lot of fun playing with. Users vote on individual songs and the most popular rise to the top of the front page. You can’t do any “related artists” with iJigg, but you can browse by genre so that you can target your music discovery. The iJigg player can also be embedded on other sites so you can share it with friends. As this service gets more popular, I think it will be a great way for bands to get discovered. Tech Crunch’s coverage if iJigg is here.

http://www.techcrunch.com/2007/02/05/social-music-overview/

If you can't beat them-join them

2007-12-18T00:32:00.000-08:00

NEW YORK (Reuters) - XM Satellite Radio Holdings Inc said on Monday it has settled a patent infringement lawsuit filed by Universal Music Group and hopes to reach deals with the other music companies.

The dispute centers around XM's portable "Inno" device, which can store and record music from satellite radio.

Major music labels including Vivendi's Universal, Warner Music Group Corp, EMI Group Plc and Sony BMG sued XM in May 2006, saying the Inno infringes copyrights and transforms a passive radio experience into the equivalent of a digital download service such as Apple Inc's iTunes.

XM said on Monday it reached a multiyear deal with Universal, which will withdraw from the complaint. It said the pact covers all XM radios with advanced recording functions, including future products. XM did not give the financial terms.

"We look forward to continuing our discussions with the other music companies in hopes of arriving at a resolution that benefits everyone, especially consumers," XM said in a statement.

Warner Music, EMI and Sony BMG, a joint venture between Sony Corp and Bertelsmann AG, all declined comment.

Warner Music is in talks with XM to try to settle the dispute and expects a resolution soon, said a source familiar with the matter who spoke on condition of anonymity.

Janco Partners analyst April Horace said the Universal agreement would likely be followed by others.

"Once you've created a precedent in how to resolve that issue, I think it's easier to resolve the others," said Horace.

She said the two companies had likely agreed to a set fee for every related device XM sells, but noted that, since these devices were not XM's highest volume products, the payments were unlikely to have a material impact on XM finances.

The original lawsuit, filed in New York federal court, had accused XM Satellite of "massive wholesale infringement" and sought $150,000 in damages for every song copied by XM customers using the Inno, which went on sale last year.

XM argued the Inno, which is manufactured by Pioneer Corp, is a legal device that lets consumers listen to and record radio as the law has allowed for decades.

"We are pleased to have resolved this situation in an amicable manner," Universal Music Chairman and Chief Executive Doug Morris said in a statement." XM is "recognizing the intrinsic value of music to their business and the need to respect the rights of content owners."

XM, with more than 8.5 million subscribers, is waiting for regulatory approval to merge with No. 2 satellite radio company Sirius Satellite Radio Inc. Sirius already has a deal with the recording industry.

http://news.yahoo.com/s/nm/20071217/wr_nm/xmsatellite_universalmusic_dc_7;_ylt=A0WTcUYWf2dHPgAB3wZHkPwA

Hi-tech tools divide social sites

2007-12-17T03:55:00.000-08:00

SOCIAL SITES: DAILY VISITORS
MySpace - 29 million
Facebook - 15 million
Friendster - 5.9 million
Orkut - 9.6 million
Bebo - 4.8 million
Source: ComScore July 2007

Social network sites are moving to make it much easier for software developers to write add-ons for the hugely popular web destinations.
Bebo, Facebook, Meebo and Friendster have unveiled plans to help them become more than places to keep in touch.

The add-ons will allow users to add extras, such as video and music clips, to the personal profiles they maintain.

The alliances behind the technologies also reveal the fierce competition between social sites for users.

Tough choices

In one of the broader announcements Bebo unveiled its Open Application platform which will produce a set of common interfaces that developers can use to create programs and applications that will work with the social network site.

At the launch Bebo unveiled partnerships with more than 40 developers, including NBC Universal, Flixster and Gap. A sample application produced using the tools allows Beboers to create an interactive avatar that models Gap clothes.

Significantly, Bebo's interface tools will work with Facebook's already announced development system. This will make it possible for the many developers who have written applications for Facebook to use their code almost unchanged for the Bebo network.

Despite the tie-up on tools, Bebo and Facebook will not become a unified network.

Bebo said it would also support Google's Open Social initiative which aims to create a unified system of tools that can be used on any and every social network site. The Open Social tools are due to appear in early 2008.

Social networking giant MySpace is backing Google's initiative.

In a further boost for Facebook instant messaging network Meebo announced its support for the tool set. Meebo said it had no plans to support Google's initiative.

At the same time Friendster announced that its development tools would be "open" so they can work on as many networks as possible. It has declared its support for Google's Open Social initiative.

Finally, Facebook has announced plans to license its development system to other sites. Since it was announced in May 2007 more than 7,000 applications have been written for Facebook.

This series of announcements shows how keenly contested this sector of the hi-tech market has become.

The deals and technological tie-ups are all about building up as large an audience as possible in a bid to dominate the sector.
http://news.bbc.co.uk/2/hi/technology/7144143.stm

Emi boss wants more rights from artists

2007-12-17T02:40:00.000-08:00

Emi's new owner, financier Guy Hands, wants artists signing to his label to agree to multiple rights contracts, allowing the music giant to profit from all aspects of their careers, from CDs to T-shirt sales.
Traditionally, music companies sign artists to recorded music contracts and they may also sign music publishing deals that entitle them to payment whenever the music is used.
However, Hands is understood to be planning to boost the number of multiple rights deals - sometimes called 360 degree deals. These mean the company will also take a share of tour and merchandising revenues.
One of the first to sign up was heavy metal group Iron Maiden, who joined EMI last week.
This type of deal is particularly suitable to artists such as Iron Maiden who get limited radio airplay but are hugely popular touring artists with strong record sales.
Music companies have been trying for some time to find other sources of revenue from their roster of artists as album sales fall in the face of the growth of online music.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=427657&in_page_id=3

Robbie Williams may quit EMI

2007-12-17T02:38:00.000-08:00

Robbie Williams's manager has raised the prospect that the star could quit EMI after he completes his final studio album for the struggling record company.

The singer, who is also contracted to release a best-of compilation, has been with the company for a decade and remains one of its biggest selling acts.
But his manager Tim Clark, co-founder of IE Music, told The Daily Telegraph: ''I would be very wary about signing him to any major at the moment."
Clark refused to comment on the star's current contract terms but said ''all options" were open once he has completed his obligations. That raises the possibility that Robbie could follow Paul McCartney and Radiohead, which have left EMI in the past two years and released new albums without a major label.
Last week EMI extended its 28-year recording relationship with heavy metal band Iron Maiden, in a deal that includes revenues such as touring, merchandise and sponsorship.
Williams is set to be the first major pop act to come up for renegotiation under EMI's new owner, the private equity giant Terra Firma.
Mr Clark said the internet offered opportunities for artists to reach their fans direct without the need for major labels. ''What concerns us with old ways is that we take overpriced and shoddy services, particularly now when we have a fantastic opportunity of getting to a fanbase direct. What we really don't want is the dead hand of multinationals throttling these brilliant opportunities," he said.
EMI's historic £80m 2002 contract with Williams pioneered the so-called 360-degree deal through a joint venture which manages the star's recording, writing, touring and performing activities.
He has yet to release an album since checking into rehab following his 2006 critical flop Rudebox. Terra Firma declined to comment.
EMI's rival Warner Music recently saw Madonna quit in a $120m (£59m) deal to join concert promoter Live Nation.

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2007/12/17/cnemi117.xml

Sir Paul McCartney puts his disillusion with EMI on record

2007-12-14T04:35:00.001-08:00

Sir Paul McCartney has accused EMI, his former record company, of becoming boring and taking him for granted. The former Beatle, speaking to The Times, complained that the British record company had become too bureaucratic – and how he had “dreaded going to see them”.

“Everybody at EMI had become part of the furniture. I’d be a couch; Coldplay are an armchair. And Robbie Williams, I dread to think what he was. But the most important thing was, I’d felt [the people at EMI] had become really very boring, you know?”

Last summer, after 4½ decades, Sir Paul left EMI to join the start-up Starbucks-owned record label Hear Music, which released Memory Almost Full. The album, which attracted positive critical reviews, has sold more than a million copies worldwide since its release this summer.

Sir Paul accused EMI of being unimaginative, telling him that he should “go to Cologne” to market a new record. “This idea became symbolic of the treadmill, you know? You go somewhere, speak to a million journalists for one day and you get all the same questions. It’s mind-numbing. So I started to saying: ‘God we’ve got to do something else’.”

EMI owns the rights to all the Beatles albums, which were released on its Parlophone label or the group’s Apple label. Although Apple was owned by the Fab Four, EMI retained the distribution rights in an agreement struck in the late 1960s and continued to distribute Sir Paul’s material after the band split up.

He also complained about the long marketing lead times demanded by EMI, the so-called process of “setting up a record” in an attempt to enhance sales, recalling that John Lennon was able to force EMI to release Instant Karma a week after he had written it in 1970.

Sir Paul said that he would ask EMI to release a song “next week”, to which executives would reply: “You can’t do that these days.” When told that EMI wanted six months “to figure out how to market it”, Sir Paul asked: “Couldn’t some bright people do that in two days? Jesus Christ, I said, ‘Look boys, I’m sorry, I’m digging a new furrow’.”

The comments are a further embarrassment for Eric Nicoli, the former EMI chief executive who left the music major after its takeover by Terra Firma, the venture capital group led by Guy Hands. But Mr Hands is unlikely to be quite so concerned, as he is thought to agree with Sir Paul’s criticisms of the previous regime.

Iron Maiden Closes Integrated Deal With EMI

2007-12-13T01:04:00.001-08:00

Heavy metal goliath Iron Maiden has struck an integrated international recording pact with long-time label home EMI, which branches out into other aspects of the band's business, including touring, merchandise and sponsorship.

The recording deal covers the world except the United States, where Sanctuary handles the band's works. Financial details were not disclosed.

Iron Maiden and EMI have a 28-year recording relationship. Since then, the band has since gone on to sell roughly 70 million albums, says EMI, including three No. 1 albums in the United Kingdom.

And as the group prepares to embark on an extensive world tour, its management team says the timing was perfect to renew ties with EMI and bring the music major into other aspects of its empire.

"For a band with a global following like Maiden, who rely on fan word of mouth, touring and marketing/sales expertise as they receive little or no radio or TV support, it is key that the 100% support and implementation of our visual marketing campaigns internationally is both effective and enthusiastic. EMI and their worldwide affiliates have always fulfilled this," comments manager Rod Smallwood.

The band's 14th and most recent album, "A Matter of Life and Death" opened at No. 1 on Billboard's European Top 100 Albums charts, following its release in August 2006.

The group's upcoming "Somewhere Back in Time" world tour has proved a box office smash, with stadium dates in Scandinavia, South America and Australia selling out in rapid fashion. The tour is due to kick off Feb. 1 at the Bandra Kurla Complex in Mumbai, India.

Iron Maiden recently confirmed their first-ever U.K. stadium show, at the 50,000-capacity Twickenham Stadium in London on July 5.

It looks all Christmasy for HMV

2007-12-12T13:43:00.000-08:00

Music and books retailer HMV has reported reduced losses as it gets ready for the festive season.
Pre-tax loss before exceptionals in the six months to October was £28.7m, down from £29.2m in the same period in 2006.

HMV's most important trading days are still ahead of it, with the retailer well prepared for Christmas, it said in a statement.

The firm has struggled in recent years against stiff competition from supermarkets and internet retailers.

"Less than a year into our three-year strategic plan, we are pleased with our progress," chief executive Simon Fox said in a statement.

"At this stage, the most important days and weeks of our financial calendar are still ahead of us, and our stores and websites are very well prepared for Christmas," he added.

Technology shift

The group, which runs the Waterstones bookstore chain as well as music stores in its own name, saw total group like-for-like sales grow 5%.

Like-for-like sales in HMV stores in UK and Ireland grew 9.2%, while sales at Waterstones were up 1.4%.

Sales at the HMV.com website rose 68%.

Overall, sales of technology products, games and DVDs were growing in line with the company's strategy, it said.

HMV stores in UK and the Irish Republic were "successfully exploiting the high growth games and technology categories", Mr Fox said.

Technology now accounts for 6% of sales in HMV UK and Ireland, almost halfway to the firm's three-year target of 13%.
http://news.bbc.co.uk/2/hi/business/7139870.stm

Microsoft buys UK mapping service

2007-12-12T13:40:00.000-08:00

Microsoft has bought online mapping company Multimap to expand its web business, the US firm said.
Multimap, which was established in 1996, is among the UK's top 10 visited websites, receiving more than 10 million users each month.

Microsoft hopes that the acquisition "will play a significant role in the future growth of our search business".

Web search giant Google, Microsoft's arch-rival, provides its own online mapping service, Google Maps.

'Huge opportunity'

Microsoft's internet empire also includes services such as Virtual Earth, Live Search and Windows Live.

Earlier this year Microsoft bought a 1.6% stake in social networking site Facebook for $240m (£117m) and US online advertising firm aQuantive for $6bn.

It has not revealed how much it is paying for Multimap.

Sharon Baylay, general manager of the Online Services Group at Microsoft, said that the deal with Multimap presented "a huge opportunity to expand our platform business beyond the UK and globally".

Multimap has offices in America, Australia, South Africa and Turkey, as well as in London, and has a presence in 48 countries.

http://news.bbc.co.uk/2/hi/business/7140920.stm

Spam advertasing growing LARGE

2007-12-12T13:33:00.000-08:00

This news will come as a shock to none, but the volume of spam has continued to rise throughout 2007. So much so, in fact, that spam researchers say that electronic junk mail has long surpassed the volume of human-issued e-mail this year, despite efforts to thwart it. One company, Barracuda Networks, goes so far as to say that spam now accounts for 90 to 95 percent of all e-mail, with no end in sight.

Related StoriesListen up: MP3 spam on the rise, despite being utterly stupid
The numbers come as part of the e-mail security company's annual spam report, in which it analyzed over one billion messages sent to its 50,000 customers. Barracuda says that the percentage of spam increased from 85-90 percent in 2006, and is way up from 5 percent back in 2001. After conducting a poll of 261 business professionals, Barracuda also found that over half—57 percent—consider spam to be the "worst form of junk advertising," almost double that of junk snail mail. Only 12 percent cited telemarketers as the worst.

95 percent is awfully high (and as far as I can tell, accurately describes the ratio of e-mail that hits the server for me), but not everyone agrees on those numbers. Symantec has observed the overall spam volume increase from an average of 56 percent of all e-mail traffic in 2006 to about 71 percent in 2007, Symantec spokesman David Forstrom told Ars.
It's hard to say which company's numbers are more accurate—"Different monitors can legitimately get different results," University of Calgary computer science professor John Aycock told us. What's important are overall trends. One thing that everyone agrees on is that spam continues to morph in an attempt to get through filters. Both Symantec and Barracuda say that they have observed an increased use in file attachments in 2007, like PDFs and images, and security software vendor MXSweep says that spammers are also focusing on sending MP3 and Excel spam.

Back in April, IDC predicted that spam would overtake human-issued e-mails in 2007, but this is one prophecy that we would have preferred didn't come true. The trend shows that the 2003 CAN-SPAM Act has done little to thwart spammers from upping the ante, despite suggestions to the contrary. A few charges may have been brought against spammers here and there, but the US government can only do so much when so many spammers are located elsewhere in the world and those in the US are so difficult to prosecute.

http://arstechnica.com/news.ars/post/20071212-report-95-percent-of-all-e-mail-has-that-spammy-smell.html

Apple TV- have you heard about that one yet?

2007-12-12T13:27:00.001-08:00

Why the Apple TV failed
By Charles Jade | Published: December 10, 2007 - 11:45AM CT

Way back in 1993, the first black Macintosh was a repackaged Performa LC 520 that came with a remote control—one that could control volume—and possessed a singular feature. The Macintosh TV let you watch TV using its cable-ready tuner, but not while you used the computer. It was an underpowered machine lacking expansion options, and it was canceled after a year. Fast forward 15 years and history may be repeating itself. Macworld reports on estimated numbers for the Apple TV in its first year.

“In addition to the 400,000 Apple TV units we estimate Apple has sold thus far, the company will be lucky to sell another 400,000 in the year-end holiday rush, short of our one million estimate,” said Forrester analyst James McQuivey.

Considering the level of interest, it will likely take more than luck to sell another 400,000 Apple TVs by Christmas. While "nearly half of all online adults" surveyed have heard of the Apple TV, only about 5 percent know—or apparently care—what it does, and fewer than 3 percent intend to purchase one. In contrast, Apple will likely sell 25,000,000 iPods this holiday season, but then there is no shortage of easily-available audio content. Not so with video for the Apple TV.

Forrester analyst James McQuivey previously noted that NBC Universal made up 30 percent of the video content at the iTunes Store. A year after the Apple TV went on sale, there will likely be less content available for purchase, which may be why Apple appears to have agreed to higher prices for movies. However, a lack of content is only part of the problem. People buy music and they rent movies. Nearly a year after the introduction of the Apple TV, there are rumors that rentals may be coming, but what about visual quality? The Apple TV is designed with HD in mind, but video at the iTunes Store isn't even DVD-quality.

If it isn't clear—and apparently it's not at Apple—the problem with the Apple TV is that its fate is ultimately in the hands of the content owners, not Apple. Those still thinking Steve Jobs will work out a deal with the movie studios like he did with the music labels need to understand that is exactly why he won't get such a deal. The best Apple can hope for in 2008 is high-priced, low-quality content, but that isn't going to save the Apple TV because it never should have existed in the first place.

http://arstechnica.com/journals/apple.ars/2007/12/10/why-the-apple-tv-failed

Bill Thompson thinks that iPod is mean..

2007-12-12T13:14:00.000-08:00

I want to admire Apple. I want to like them. In the last year I've bought - with my own money - three of its computers and two iPods, and enjoy them greatly.

But its business practices do not stand up to scrutiny, and when it comes to music downloads it is just as bad as Microsoft on servers, putting its time and energy into creating barriers to competition instead of letting its developers and designers concentrate on doing great stuff.

If Apple was serious about building a music industry around downloads and digital devices then it would open up its devices and interfaces to allow greater innovation and greater competition.

It would have faith in its own products to compete in this larger ecosystem instead of trying to lock everyone in with tactics that resemble those of IBM in the days of the mainframe.

I wrote a presentation this morning using Microsoft's PowerPoint, but displayed it using Apple's Keynote. Apple can sell Keynote because it took PowerPoint apart and figured out how the files work.

Had Apple been unable to do so, or found that every time it figured out what was happening Microsoft changed the format, it would have complained loudly.

Yet this is exactly the technique it is using against third party jukeboxes. And it is time it stopped.

Read the whole article on:
http://news.bbc.co.uk/2/hi/technology/7002612.stm

How companies confuse their customers when DRM is involved-laugh with these critics!

2007-12-12T12:51:00.000-08:00

Last Updated: Tuesday, 11 December 2007, 11:56 GMT
The DRM maze for consumers

The last few years in the history of digital content are littered with examples of Digital Rights Management (DRM) solutions that have been accused of being over complex and consumer unfriendly.

WESTERN DIGITAL - FILE LOCK OUT
Western Digital sells a range of networked hard drives, which allows users to share files across both a local network of home computers and across the net.
But the firm has now blocked remote access to 30 different types of media files, including MP3s and MP4s, to users running its Anywhere Access program.
The company says it has done this as an anti-piracy effort, to prevent people from copying and sharing copyright files.
But the block makes no distinction between files which are user generated, such as home movies, and paid-for, DRM-protected content.

ZUNE - SHARE AND SHARE NOT ALIKE
When Microsoft introduced its Zune media player to rival the iPod it boasted a supposed killer feature - the ability to share songs wirelessly with friends.
Unfortunately, the Zune not only failed to support the Digital Rights Management system Microsoft had pioneered for its partners, it also restricted the sharing of a song to "three plays or three days, whichever comes first".
Users were able to share a song but a friend had a limited number of plays and time, in which to listen to it.
And the restriction applied to any kind of music file - even if it was a track recorded by the user himself.
Strangely, many of the songs offered to Zune users for download from Microsoft's online store could not be shared at all due to "rights restrictions".
Microsoft has now lifted the time restrictions for listening to shared tracks.

NOKIA - FREE MUSIC?
The world's largest mobile phone manufacturer has decided to tackle rampant music piracy by offering tracks for free to its customers.
The Comes With Music service will let owners of its premium handsets download as much music as they like to their phone or PC from the Universal catalogue.
There is no cost to download or a subscription fee. But there is a proviso - if users want to burn the music to a CD to play on a separate player, or in the car, they have to pay out.

GOOGLE - NOW YOU SEE IT, NOW YOU DON'T
Before Google bought YouTube its foray into the world of online video was championed by its own-brand video store. The Google Video store let people buy TV shows such as Star Trek and CSI, which were protected by digital rights management.
Unfortunately, when Google decided to shut down the store in favour of supporting YouTube it left customers who had bought content unable to continue to play their videos.
Google initially offered its customers credit through its own online payment service, called Checkout, but after complaints it changed its mind and offered users a straight refund.
The issue highlighted concerns that digital content bought by consumers that is protected by DRM may not always be accessible if the content producer and/or distributors removes its support for the format.

SONY - THE ROOT OF THE PROBLEM
In 2005 Sony took a new approach to protecting its CDs from copying by including software on the discs which automatically installed on a PC if the disc was played in a computer.
The software was designed to prevent copying but it also left PCs open to potential hacker and virus attacks.
Consumers were not told of the software on the discs and the discs themselves gave no indication of the copy protection software stored on them.
After the problems were highlighted Sony released a tool which would remove the program from users' computers - but it too had security issues.
Sony ultimately recalled the discs with the software installed and after a series of high-profile, class-action lawsuits paid out to consumers who had bought the CDs.

ITUNES - DRM HERE BUT NOT THERE
When Steve Jobs issued his open letter decrying DRM on music many observers felt that the tide was beginning to shift against DRM.
Apple's iTunes store now offers users MP3s of music, without copy restrictions, from the EMI back catalogue.
But Steve Jobs has said the move did not mean an end to DRM on videos it sells via iTunes.
"The music and video markets are not parallel. The video industry does not deliver 90% of its content DRM-free," he said.

CONSOLES - HI-DEF FUTURE?
The Xbox 360 and PlayStation 3 are capable of producing high definition video, up to 1080p, or so-called Full HD resolutions.
If you buy the HD-DVD player add-on for the Xbox 360 you can playback movies in the highest resolution available today, assuming your TV can support it, while PS3s can play Blu-ray movies out of the box.
However, all Xbox 360 consoles sold in the first 18 months from launch, and the first few months in the case of the low-end PS3's availability, do not have a so-called HDMI port. This is a digital interface to output video and audio, which can encrypt the information being sent to the TV to prevent copying.
HDMI is part of a system which allows content producers to protect their material by placing a protection flag on it, called an Image Constraint Token. This means devices that do not have a HDMI port (or DVI port) will not be able to play the content at the fullest resolution.
Potentially, it means many Xbox 360 owners and some early PS3 enthusiasts would not be able to play their legally bought HD-DVD and Blu-ray movies in the best quality, despite the fact Microsoft and Sony are leading supporters of HD technology.
So far, no HD-DVD or Blu-ray titles released have used the protection flag, but the technology is there to be implemented and it could mean millions of console owners would only be able to play their films at a quarter of the potential resolution.

VIRGIN - SHUT OUT
When Virgin launched its digital offering, including a subscription "music club", in 2004 Sir Richard Branson boasted: "With a strong music heritage behind us, as a record label and a retailer, Virgin has a huge advantage, and platform to launch a digital service that will become the ultimate destination to buy, stream, burn and enjoy the best the music world has to offer."
Like many online music stores, it came with DRM designed to prevent copyright theft and to enable users to rent their music.
But when the site shut down in September this year it left members of The Music Club unable to play their songs, because they could no longer renew their monthly fee.
For customers who had paid extra to transfer their music to an MP3 player this was doubly frustrating.
http://news.bbc.co.uk/2/hi/technology/7136527.stm

DRM explained and hacked

2007-12-12T12:47:00.000-08:00

WINDOWS MEDIA DRM

Windows Media DRM is used in the BBC's iPlayer
Windows Media DRM is a Microsoft-produced copyright protection system intended to "securely deliver content for playback on computers, portable devices and network devices".
The system has been updated several times since it was first released in 1999. The most up-to-date release is version 11.
Various tools have been created to strip files of the DRM, such as FairUse4WM, a program released in August 2006 by a hacker named Viodentia.
Nine days after the crack first appeared, Microsoft released a new version to prevent FairUse4WM from working. Within three days hackers released a new version of the tool.
The tool can be used to strip DRM from programmes with the BBC iPlayer.
On 13 July, a new version of the tool called 1.3fix-2 was released. It can be used with Windows Vista and can also strip DRM from songs downloaded from Microsoft's online music store, Zune Marketplace.

FAIRPLAY

Several tools have been released to circumvent FairPlay
FairPlay is the DRM of choice for Apple products.
It is built into the Quick Time media player and is used by the iPhone and iPod. Protected music from the iTunes store also uses the system.
Users can copy downloaded songs to a CD and then copy the disc back on to the computer to remove the DRM - but the quality of the music is affected.
The first tool to circumvent FairPlay was a program called QTFairUse, released by infamous hacker Jon Lech Johansen, in November 2003.
Since then several versions of the program have been distributed to keep up to date with new versions of iTunes and FairPlay.
Other programs such as Playfair, Hymn and JHymn have also been developed to get around FairPlay. Following updates to the DRM and legal action by Apple, these systems no longer work.

AACS

AACS is used by both next generation DVD formats
The Advanced Access Content System (AACS) is the DRM of choice for next generation HD DVD and Blu-ray discs.
It was first introduced on high definition discs in June 2006 and uses a system of keys to decrypt content in a player.
These keys can be revoked by the AACS licensing authority if compromised.
Six months after the first discs hit shelves, a hacker known as muslix64 released a tool called BackupHDDVD which circumvented AACS on a Windows PC. Several other similar tools followed.
Many keys were made available on the internet.
In April this year, hackers discovered a method to retrieve the crucial keys using a tweaked HD DVD drive for an Xbox 360. The hack still works even when keys are revoked.

CSS

Many of the tools allow DVDs to run on open source software
Content Scramble System (CSS) is used on almost all commercially produced DVD-Video discs.
It was first introduced in 1996 by the DVD consortium.
In 1999, hacker Jon Lech Johnasen, along with two anonymous hackers, cracked the system and distributed the DeCSS tool on the internet.
Following its release, the system was also found to be susceptible to a so-called brute force attack, where thousands of different codes are tried in order to break the encryption.
On average, the DRM could be stripped off a movie in 24 hours using this method.
Since 1999, hundreds of different variants have appeared on the net, many developed to add DVD support to open source movie players.
http://news.bbc.co.uk/2/hi/technology/6944830.stm

Hard-discs block the file sharing

2007-12-12T12:44:00.000-08:00

One of the world's largest hard disk manufacturers has blocked its customers from sharing online their media files that are stored on networked drives.
Western Digital says the decision to block sharing of music and audio files is an anti-piracy effort.
The ban operates regardless of whether the files are copy-protected, or a user's own home-produced content.
Digital activists say it is the latest step in a so-called war on copyright theft that is damaging consumer rights.
The shift to a digital world in which all forms of content, from books, music, and TV programmes to films, can be shared effortlessly around the world between people with an internet connection has produced an unprecedented upheaval in attitudes to media, copyright and consumer rights.
http://news.bbc.co.uk/2/hi/technology/7136069.stm

Universal Sets Music Free on Imeem

2007-12-11T02:12:00.000-08:00

The beleaguered music industry is beginning to show more enthusiasm for free, advertising-supported business models. The latest sign: Universal Music Group has agreed to provide its songs to online social network imeem.
Imeem now boasts deals with all four major record companies, including Sony BMG Music Entertainment, Warner Music Group and EMI Group, all of which have already inked deals with the social network.
It's a sharp turnaround from earlier this year, when none of the majors were willing to sign on to imeem's new ad-supported interactive service. In fact, Warner sued imeem, arguing that by allowing its members to upload and share MP3s of Warner music, it was infringing on its copyrights.
But in July, Warner dropped its suit and struck a partnership with imeem under which the major label allowed free, full-song streaming of its music in exchange for a cut of imeem's advertising revenue. Sony-BMG Music reached a similar deal with imeem in September, followed by EMI in October and now Universal. A source familiar with the Universal pact said the label is also receiving a small payment each time one of its songs is streamed.
Fueling the shift is the music industry's continuing struggle with sliding sales of compact discs, which still account for the vast majority of their recorded-music sales. Revenue from paid music downloads continues to grow, but isn't close to making up the difference.
Imeem isn't the first ad-supported music service to gain the support of all four major labels. Universal, Sony BMG, Warner and EMI have also been making their music available to ad-supported music downloading service Ruckus. Ruckus had an early advantage over other services in securing the majors' cooperation because it targeted colleges and universities, where illegal music downloading is a particularly serious problem.
Whether imeem succeeds will depend on how robust a community it can build on its site. It claims to have 19 million users; deals with major labels and leading independent music companies will help it grow that audience further.
In the meantime, imeem says it has signed advertising deals with major marketers such as Apple, Nike, Microsoft and Toyota. Imeem's label partners are also beginning to explore promotional opportunities on the site. For instance, Warner Music has created an imeem page to promote the release of Mothership, a new Led Zeppelin greatest hits collection. Warner has posted a selection of live concert videos on the page and is holding a Zeppelin trivia poll contest.
When imeem members upload songs and videos by partner-label recording artists, other users can stream them in full. For the moment, imeem has an advantage over News Corp. social-networking giant MySpace, where Universal has restricted its song and video clips to 90 seconds, citing the absence of a licensing deal. Universal also filed a copyright infringement suit against MySpace in 2006.
In a statement, Universal Music Chairman and Chief Executive Doug Morris made it clear why his company was treating imeem and MySpace differently.
"Imeem has developed an innovative way to make our artists' music a central part of the social-networking experience," Morris said. "More importantly, they've done so the right way--by working with [Universal] to provide an exciting musical experience for consumers, while ensuring that our artists are fairly compensated for the use of their works."

http://www.forbes.com/business/2007/12/10/imeem-universal-music-biz-media-cx_lh_1210bizimeem.html

Hands tries a different tune with EMI

2007-12-11T02:08:00.000-08:00

Is Guy Hands right about EMI? That is the debate raging in the music industry as Hands' private equity lieutenants from Terra Firma crawl over the company that signed the Beatles in an effort to make his bumper £3.2bn acquisition stack up.
Hands attempts to reassure EMI stars
The former investment banker is seeking deep cost savings from an industry notorious for its rock and roll profligacy.

About time, say some executives fighting sliding CD sales and rampant web piracy. But creatives at the company behind Kylie and Coldplay fear that Hands is playing a dangerous game.He has criticised some artists for simply negotiating the best advance rather than "working with their label to promote, perfect and endorse their music", as others do.He has since written to EMI artists seeking to reassure them that they are "at the epicentre" of his plans to turn the struggling business around.
But some artists' managers question the ability of a financial wizard, whose previous investments have included pubs, landfill sites and service stations, to appreciate the subtleties of an industry famous for its stadium-sized egos.
"He's not dealing with motorway cafes in Germany or pubs," says Jazz Summers, manager of EMI indie stalwarts The Verve. "I have found him bright and willing, but since reading his statements, Terra Firma need a lesson in artist management."
Summers is a founder member of the self-styled Black Hand Gang, a clutch of EMI artist managers that look after acts such as Robbie Williams, Pink Floyd and Phil Collins, who clubbed together in recent years to deal collectively with the company on particular issues.

The gang met recently but have decided to reserve judgement on Terra Firma's radically new approach to the music industry until a review is complete.
Spearheading the artist relations part of that review is former BBC director general Lord (John) Birt, a notorious cost-cutter. Summers, however, says he thinks Birt has a better understanding of the record business than Hands.
That will be critical, say insiders, because EMI, perhaps more than any of the other three music majors - Universal, Sony-BMG and Warner - has built a reputation for taking care of its artists.
Terra Firma is believed to be turning down over half of EMI's proposed new artist signings and Hands is expected to seek fewer, more focused and better-organised investments in talent.
These will cover not just recording deals but also merchandise, live performances and media appearances, backed up by a longer-term strategy to make a return.
As part of its review Terra Firma has asked EMI to analyse a dozen artists, from international stars like Norah Jones to break-through bands like The Bees and local acts, to evaluate what type of artists will generate the best returns across those categories over time.
"It's exactly the sort of stuff they should be doing," says one industry executive. "The industry is full of executives who have been around for years who know a lot about music but are not financially or commercially literate."
But while EMI's commercial and financial departments are said to be relatively encouraged by Hands' approach, the creative and marketing types are fretting about the new financial rulebook.
Hands has declared war on waste at EMI. Parties, candles, flowers, the £5.6m Mayfair flat, they are all being consigned to annals of rock history.
"He is absolutely correct," says Jeremy Lascelles, chief executive of smaller rival Chrysalis Music. "There is a criminal amount of waste in every major record company, and that is one of many reasons why the economics of the record business have gone so awry."
Meanwhile, any EMI execs that expected an end to short-termism after the company de-listed have been disappointed.
Under previous management, many divisions in the recorded music business were being run on a three month view as the bosses strived, and all too often failed, to hit the City's six monthly forecasts.
While they await Hands' long-term strategy announcement, executives have been told they will receive no bonuses unless the company hits a £150m underlying earnings target by June of next year - again, a mere six month time horizon.
Terra Firma, which owes Citigroup £2.5bn on its purchase, is confident it can beat that profit figure, however, thanks largely to cost cutting - starting with a clampdown on CD returns.
It is understood that EMI had 65m CDs returned by retailers last year, at a cost of almost £100m. Mr Hands' team have issued instructions for the company to stop overshipping, a practice it has been accused of in the past, along with most of its rivals.
"The music industry is an extraordinary industry with which to do businesses," says Richard Corbett who founded music database company Ricall in 1998 after a career in management consultancy working for companies in many different sectors.
"Rather than people focusing on 'why should they do a deal', it's 'why shouldn't we do a deal'. It doesn't surprise me at all that someone from outside wants to come in and rip up the rule book."
But beyond the short-term savings, EMI will have a bleak future unless it uncovers new talent and gets the best out of its existing roster, say experts. Last week's pre-Christmas chart positions - just six EMI acts in the top 75 - revealed the company to be woefully lacking in both departments.
''They don't seem to having any hits at the moment, which is always a pretty good measure," says Paul McGuinness, who manages Universal Music giants U2.
''I wish them luck at EMI - it's a good business going through a bad patch. I believed [Terra Firma] when they acquired company when they said they are holding for the long term and intending to invest."
But Marc Marot, the former head of Island Records who now manages DJ Paul Oakenfold and Yusuf Islam (formerly Cat Stevens), says the key problem at EMI is common to every major label in the world.
"Capitalism and artistry are often very strange bedfellows. You can't force an artist to come up with the goods. To a large degree Hands is probably right, but to an even larger degree... no pontification from senior management anywhere will change the way artists work and think, and the more you whip them the worse things will become."
EMI's finances may be ripe for a private equity-style shake up, but this is almost certainly Guy Hands' bravest bet to date. The real unanswered question is, can he make it pay off?

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2007/12/10/cnemi210.xml

Why online is better than offline

2007-12-07T06:01:00.000-08:00

http://www.ifpi.org/content/library/digital-music-report-2007.pdf

2007-12-07T05:51:00.000-08:00

http://www.ifpi.org/content/library/digital-music-report-2007.pdf

Telecom Italia France (Alice) launches free music download service

2007-12-07T03:11:00.001-08:00

Telecom Italia’s French internet service provider (ISP) Alice has launched a free music download service for its triple-play subscribers. AliceMusic offers them access to EMI’s catalogue of more than 315,000 titles, downloadable for free in a .wma format under Windows Media DRM. Alice subscribers will need to extend their contract to twelve months in order to sign up to AliceMusic and will have to renew the service on a monthly basis thereafter, to continue to qualify for free downloads.

http://www.telegeography.com/cu/article.php?article_id=20876&email=html

EMI executives face losing bonuses

2007-12-07T03:07:00.000-08:00

EMI's new owner Terra Firma has told executives at the music group they will receive no bonuses unless the music company hits a £150m underlying earnings target by next June.

Terra Firma are to study artist returns, from international stars such as Robbie Williams [pictured] to breaking stars and local acts
The private equity giant has also imposed a hiring freeze and told EMI to slash its £250m marketing and promotions spend by more than 10pc between now and the end of June.
Terra Firma has also asked EMI to present a sample of around a dozen different artists - from international stars such as Robbie Williams, Coldplay and Norah Jones to breaking stars and local acts - to study which type of artists produce the best returns.
Terra Firma is striving to impose private equity-style management on the company and is working on a strategic review.
Separately, Terra Firma boss Guy Hands has told EMI staff that they should ''not try to be or act like artists themselves" and that Terra Firma plans to display ''leadership" which in the past had been "confused".

EMI's previous bonus scheme ran from March to March, but managers are being set new targets for the year to June. Even if they achieve divisional targets they will get nothing unless the group profit target is achieved.
Sources close to Terra Firma insist that EMI's £150m earnings before interest, tax, depreciation and amortisation (ebitda) target does not relate to the private equity group's banking covenants with Citigroup, which loaned £2.5bn towards its surprise acquisition of the company this summer.
In the year to March 31, 2007 EMI saw ebitda slump from £276m to £174m on revenues down 16pc at £1.75bn. However, Terra Firma is comfortable it can beat £150m, helped by its clampdown on costs.
The cuts in marketing spend are expected to target parties and other discretionary spending.
Terra Firma has parachuted approximately 45 people into EMI to help its review but has imposed a ban on replacing any leavers unless exceptional cases can be made.
It is also clamping down on overshipping. It is understood that EMI had 65m unsold CDs returned to it by retailers last year at a cost of about £1.50 per unit, almost £100m in total.
In the letter to his staff, Mr Hands writes that Terra Firma is ''driving value-added changes" in several ways. These include: ''Making the people in the business understand what it is they are supposed to be doing, that is, that they are there to serve the customer and the artist and not to try and be or act like artists themselves; and changing the culture and displaying leadership where previously there was little and, what little there was, was confused."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/12/07/cnemi107.xml

BurnLounge- the community powered digital music service

2007-12-06T16:01:00.000-08:00

BurnLounge provides music fans with the necessary software and an expansive catalog of music, to create and sell music (and fan merchandise) to peers from their own digital music stores. This consumer-driven retailing model draws on the power of peer relationships and shared interests of its seller’s communities. After purchasing the software, participating sellers can sign up as “fans” for free and redeem their BurnReward points for products, services or music downloads on BurnLounge. Affiliates pay an additional $6.95 per month but can redeem BurnRewards points for cash. Music Mogul have to pay a one-time set-up fee off $215 and $14.95 per month to gain access to Business Management features, which allows them to build teams.
http://www.coolbusinessideas.com/culture_music/

Ad-supported free music downloads [TrendCentral]

2007-12-06T15:59:00.000-08:00

May 25, 2007
Free Music by We7
While the terms “free” and “legal” aren’t usually used together to describe the business of music downloading, a new platform called We7 has developed a system that does just that. Currently in beta, We7 gives brands the chance to communicate with users by "grafting” a short (around 10 seconds) audio or video ad to the front end of the file. Custom tailored to each user through demographics and preferences supplied by the user, these ads in turn provide revenue to the artists. And after about four weeks, users are given the option to have the track ad-free. Users can play their DRM-free files on any device, and can share these files via We7 with whomever they’d like.
http://www.coolbusinessideas.com/culture_music/

Jango: Social Internet Radio [Cool Hunting]

2007-12-06T15:57:00.000-08:00

Cool Hunting: Imagine an online social network that provides free, on-demand online music but without the legal anxiety of peer-to-peer networks. More interactive than conventional internet radio, though not as gratifying as Napster was in its glory days, Jango is a New York City-based music site with a large database of songs and artists and is instantly addictive.
Now in its beta launch, there's a waiting list for new members though the first 100 readers to click this link can join. If you don't make the cut, not to worry. The site maintains a waiting list and it should only take a couple of days for an account to get activated. Once you're in, you can invite three of your friends.
The interface couldn't be more simple. Simply type in a musical artist you like and the site will play their songs. You can also specify how broad your tastes are by setting it to play only the artists you have identified or you can opt to hear artists it considers to be in the same genre. This isn't risk free. After adding a few classic rock bands the site began playing The Eagle's "Hotel California." Luckily by clicking on the frowning face icon, I was able to banish that song from ever playing again. Conversely, you can tag songs you like and the site will make sure to keep them in the mix.
http://www.coolbusinessideas.com/culture_music/

New Business Ideas: Cell Phone 2.0

2007-12-06T15:50:00.000-08:00

New record label MMS & Buy is launching a service that enables music fans to get information about music, simply by taking a photo of the CD case and sending it via MMS (multimedia messaging) to their server. In an instant you’ll receive ringtones, video clips, concert tickets and further information about your favourite music artists.
http://www.smallbiztrends.com/2007/09/new-business-ideas-cell-phone-20.html

Bands want slice of profit from resold gig tickets

2007-12-06T15:28:00.000-08:00

Radiohead, Robbie Williams and Arctic Monkeys joined calls yesterday for a levy to be added to tickets resold on the web to allow musicians to claw back some of the profits made by touts and fans.
The acts' managers, together with about 400 other artists, including KT Tunstall and the Verve, said the move was vital to bring some regulation and rigour to a market they described as "the wild west".
They proposed the creation of a Resale Rights Society, which would collect a fee from each ticket sold on eBay and other websites such as Seatwave, Viagogo and GetMeIn.com that have sprung up to satisfy the demand to trade concert tickets
They said the levy would help to ensure that money raised from the boom in live music flowed back into the industry rather than the pockets of venture capitalists.
With the increased demand for tickets, resale values have soared, fuelling a sizeable secondary market. According to the information service Tixdaq, the market is already worth around £200m a year in the UK. In October, £2m was spent on tickets for the Spice Girls alone.
Marc Marot, chairman-elect of the RRS and the former chief executive of Island Records, said the levy proposal was a "grown-up solution" to a "completely unregulated area".
"The secondary ticketing market offers benefits to music fans and the live music industry alike. It does not make sense to try and criminalise it," he said. "On the other hand there are real issues of consumer protection here. It is unacceptable that not a penny of the £200m in transactions generated by the resale of concert tickets in the UK is returned to investors in the live music industry."
Marot said the move was not intended to boost the bank balances of big names such as Mick Jagger and Sting but to help new artists who increasingly make less money from recorded music sales and rely on income from gigs to make a living.
As record sales have plummeted, the live scene has boomed in recent years with new artists and reformed supergroups playing to wider demographics in better quality venues. A Mintel report in July said the market was worth £743m a year.
But ticket websites have criticised the proposal, insisting they provide a legitimate service that merely reflects the market value of tickets and claiming that the new levy amounted to a tax on consumers.
Eric Baker, chief executive of Viagogo, said: "We don't understand the concept of taxing fans to buy tickets that have already been paid for.
"That someone who bought a Robbie Williams ticket should pay an additional tax to Robbie Williams if they resell the ticket is completely nonsensical.
"If I sell my Ford car, and have already paid for it, I don't have to pay Ford again when I sell it.
"A lot of people sell their tickets because they can no longer make the concert but wouldn't get a refund. So why should they pay for that?" Once a ticket had been bought, he added, its holder should be allowed to do what they wanted with it.
Joe Cohen, the founder and CEO of Seatwave, said his company had invested millions of pounds in building a "safe and transparent place for fans to buy and sell tickets" and would not welcome the creation of the RRS. "This is just a bunch of pigs at the trough," he said. "They see some money and they want it. Our focus is to bring prices down in the secondary market and all this does is raise prices for consumers while adding no value at all."
An eBay spokesperson said it would examine the detail of the proposals, adding that the majority of ticket sellers were genuine fans who could not make the gig. "We would question why a consumer should need a licence to resell a ticket that they have already paid for, particularly when in the overwhelming majority of cases they are denied a refund if they can't go. People are already concerned about the booking fees they pay in the primary market and it is not clear why they would be willing to pay even more to event promoters."
But Marot said RRS-affiliated sites would provide protection to buyers if tickets were fake or missold, or if concerts were cancelled, which was currently only offered by a small proportion of the estimated 240 exchange sites.
He said websites signing up to the plans would be obliged to offer such guarantees and if an artist opted out of having their tickets resold, they would have to respect their wishes.
Participating websites would be awarded a kitemark and receive the backing of artists, promoters and management in promoting the sites. But they would refuse to cooperate with those who didn't and would also examine several avenues for possible legal action. The group is also believed to be in discussions with ticketing giants such as Ticketmaster about helping them launch RRS-endorsed secondary ticketing sites.
The culture, media and sport select committee is due to deliver its report on secondary ticketing in the coming weeks. Detailed negotiations over the size of the proposed levy will begin in the new year.
Explainer: The eBay factor
The rise of eBay as a ticket touts' dream was perhaps inevitable: the auction site now has an estimated 14.5 million users in the UK and more than 10m listings at any one time.
Counterfeiters and ticket touts can reach a larger audience than ever before and you can be sure that whenever a big event is looming, eBay will be loaded with tickets for sale.
That is why event organisers are coming up with increasingly inventive ways to try to beat the ticket resellers.
The over-subscribed Glastonbury festival targeted eBay users as part of its crackdown last summer.
Even though "tout-proof" tickets included images of the buyers, some were up for auction on the site to "bidders with a strong resemblance". Glastonbury organisers matched bidders with details given in the ticket registration process, asked them to withdraw their bids and said they would not be admitted to the festival.
Yesterday, eBay was listing pages of tickets for the Spice Girls reunion tour in January, most asking upwards of £100 for tickets that cost £55-£75. Led Zeppelin's one-off reunion next week is even more in demand; tickets that were originally sold for £125 through a lottery draw are now on offer for up to £1,000, though organisers are insisting that fans won't be allowed into the gig if the ticket holder's name doesn't match the card that paid for the ticket.
eBay has made few concessions to event organisers, pointing out that reselling tickets is not illegal and saying that under the terms of the site, sellers are required to list the original ticket value. But the site was forced to back down in June 2005 when free tickets for the Live 8 concert started appearing on the site. Organiser Bob Geldof and then creative industries minister, James Purnell, both publicly condemned the sales, forcing eBay to relent and remove tickets from the site.Jemima Kiss and Mark Sweney
http://music.guardian.co.uk/news/story/0,,2222013,00.html

Pepsi To Give Away 1B Songs; Sony to Drop DRM?

2007-12-05T06:48:00.000-08:00

Amazon and Pepsi are gearing up to give away 1 billion digital songs in a year-long "bottle-cap" promotion starting next February, Billboard's Ed Christman reports. (That's a lot of songs: For context, Apple has only sold 3 billion songs since 2003, and 1 billion in the first six months of this year). More interesting is Ed's assertion that the giveaway, coupled with Wal-Mart online's insistence that record labels only provide it with music in MP3 format, has Sony-BMG (SNE) thinking about ditching DRM/copy protection for its downloads.Sony has been the most dogmatic in its public proclamations about hanging on to DRM and copy protection, so it'd be a real surprise to see them drop DRM altogether. Ed says the label "is now considering an MP3 test," but doesn't provide much more detail...
He does offer a lot of details about the billion-song promotion though: It's supposed to kick off during the Super Bowl, and is a repeat of a 2004 stunt where Pepsi (PEP) offered to give away up to 100 million tracks. The big difference: The first promotion used Apple's (AAPL) iTunes store as the retail outlet, and this time it's going through Amazon (AMZN), which sells DRM-free tracks that can be used on any software or player.
http://www.alleyinsider.com/2007/11/amazon-pepsi-giving-away-1-billion-songs-sony-dropping-drm.html

Napster: Needs A New Business Model -subsciptions don't work

2007-12-05T06:44:00.000-08:00

Napster's 2Q highlights: Revenues are up 24% y/y, to $31.6 million, and the company has stopped burning cash. The lowlights: It's no longer burning money because it's retreating from its core business: Selling all-you-can-eat music subscriptions. A year ago the company spent $8.5 million on sales and marketing, and this quarter that number had shrunk to $5 million.The results: six months ago the subscription music service had 830,000 subs, three months ago it had 770,000, and now it has 750,000. The company says that last drop was expected, because kids stop using the service during the summer. But it's not as if those numbers will swell this fall: NAPS projects only a 4% revenue increase for next quarter. So instead of talking up its core subscription business, Napster is now pinning its hopes on the mobile industry. Music on your cellphone may one day be a real business, but hard to see why Napster is going to be the company that will capitalize on it. In the meantime, Napster has concluded that PC-based music subscriptions aren't a growth business -- the same conclusion that Yahoo! Music, RealNetworks and MTV have already come to.
http://www.alleyinsider.com/2007/11/napster-we-need-new-business.html

Songwriters Assn. Pushes For 'Piracy' Fee

2007-12-05T06:40:00.001-08:00

The Songwriters Association of Canada is pushing forward with a proposal to charge Canadian Internet and wireless users $5 per month to compensate for losses due to file sharing. "We propose an amendment to the Copyright Act which would establish a new right: The Right to Equitable Remuneration for Music File Sharing," the organization wrote in a press release. The Songwriters Association is a lobbying and educational organization based in Toronto. The organization says it is proposing a $5 fee that would "remove the stigma of illegality from file sharing.""In addition, it would represent excellent value to the consumer, since this fee would grant access to the majority of the world's repertoire of music," the organization said. The proposal comes at a time when many critics of the music industry have suggested touring and merchandising revenue can replace lost income from deteriorating CD sales. "I wholeheartedly believe that this model for file sharing should be embraced in all countries," said former Guess Who guitarist and BTO frontman Randy Bachman in a statement posted on the CAB site. "I fully support this proposal and if I can help to get it accepted and made legal, please let me know."However, songwriting and publishing associations have been critical of this position, pointing out that many of those they represent only write music and do not perform live. Based on the CAB's proposal, and a Yankee Group study that predicted 7 million residential Internet users at the start of 2007, approximately $420 million in annual revenue would be generated through the fee. "This would present a major financial improvement for the music industry," the CAB wrote. "Since the license fee would be paid by all internet and wireless accounts, the amount of income generated annually could adequately compensate the industry for years of declining sales and lost revenues, and would dramatically enhance current legal digital music income."

http://www.billboard.biz/bbbiz/content_display/industry/e3i3429e07b4feb0c53a93a581e0a839109

Layoffs Continue At Island Def Jam

2007-12-05T06:38:00.000-08:00

Staffing cuts continue at Universal Music Group’s Island Def Jam division. A&R representatives Paul Pontius and Rob Stevenson have exited, following last week’s departure of executive VP of promotion Greg Thompson. Additionally, the staff of imprint Stolen Transmission, which was co-founded by Stevenson and blogger Sarah Lewitinn, was also let go. In total, ten staffers have been cut to this point.Via her personal blog, Lewitinn has stated that she plans to continue running Stolen Transmission as an indie.

http://www.billboard.biz/bbbiz/content_display/industry/e3i9eba3643cbe2f2198da29611a6eb6043

New interactive floor-in Dutch language

2007-12-05T06:35:00.000-08:00

Nieuw voor evenementen of beurzen : de interactieve vloer
05-12-2007 - De Eyestep is hét nieuwe interactieve mediaconcept dat Tripitch Mediacreatives nog dit jaar introduceert. Eyestep maakt het mogelijk om persoonlijke beweging en interactieve software op een unieke manier te combineren.
Het systeem herkent beweging van mensen en reageert direct met een animatie. Niet alleen de ‘gebruiker’ wordt verrast, maar ook voorbijgangers staan vol bewondering naar de vloer te kijken. Ook de (winkel)vloer wordt nu interactief!
Consumenten kunnen op evenementen, beurzen of in de winkel kennis maken met de interactieve vloer. De EyeStep tovert iedere vloer om in een spannende, interactieve plaats vol actie en fun. Het unieke van dit concept is dat de consument zonder enige inspanning direct in contact komt met het belevingsmedium en het merk.
http://www.evenementnieuws.nl/nieuws/3806/Nieuw+voor+evenementen+of+beurzen+%3A+de+interactieve+vloer.html

More Facebook Music Rumors

2007-12-05T04:01:00.000-08:00

Is Facebook finally going to take on MySpace as a place for bands and music fans to hang out? We’ve heard various Facebook Music rumors before. The latest one comes from CO-ED Magazine.com (so you know it’s got to be true!).

According to CO-ED’s executive editor Stephen Gebhardt, who says he heard it from a group of marketing managers at a major music label, Facebook has been holding secret meetings with all the music labels and will announce Facebook Music next week at New York’s ad:tech conference (where it is also expected to announce its social ad network).

Here are the details Gebhardt was able to gather: Facebook Music will essentially be a way for musicians (or their labels) to create their own fan pages just like on MySpace, each with a separate sub-domain within Facebook. Facebook members will be able to join any artist’s network as a “fan.” This will be similar to joining a group, but centered around music. Members will be able to listen to streamed songs, watch videos, add music to their own pages, find out about upcoming tours, and meet other fans. Facebook is also supposedly working on sales widgets for these pages (to be introduced at a later date) so that artists can sell downloads directly through Facebook. (Watch out iTunes).

MySpace, Apple, Google . . . who will Facebook pick a fight with next?

The Record Industry's Decline

2007-12-05T03:59:00.000-08:00

This is the first part of a two-part series on the decline of the record industry. Today we're including Brian Hiatt and Evan Serpick's report on where the music business went wrong, from the current issue of Rolling Stone, as well as an interactive graphic illustrating the industry's slide. Tomorrow, check back with RollingStone.com for interviews with industry leaders on the future of the music business.

Sales figures courtesy of Nielsen SoundScan
For the music industry, it was a rare bit of good news: Linkin Park's new album sold 623,000 copies in its first week this May -- the strongest debut of the year. But it wasn't nearly enough. That same month, the band's record company, Warner Music Group, announced that it would lay off 400 people, and its stock price lingered at fifty-eight percent of its peak from last June.
Overall CD sales have plummeted sixteen percent for the year so far -- and that's after seven years of near-constant erosion. In the face of widespread piracy, consumers' growing preference for low-profit-margin digital singles over albums, and other woes, the record business has plunged into a historic decline.

The major labels are struggling to reinvent their business models, even as some wonder whether it's too late. "The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. "The labels have wonderful assets -- they just can't make any money off them." One senior music-industry source who requested anonymity went further: "Here we have a business that's dying. There won't be any major labels pretty soon."
In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million. Digital sales are growing -- fans bought 582 million digital singles last year, up sixty-five percent from 2005, and purchased $600 million worth of ringtones -- but the new revenue sources aren't making up for the shortfall.

More than 5,000 record-company employees have been laid off since 2000. The number of major labels dropped from five to four when Sony Music Entertainment and BMG Entertainment merged in 2004 -- and two of the remaining companies, EMI and Warner, have flirted with their own merger for years.
About 2,700 record stores have closed across the country since 2003, according to the research group Almighty Institute of Music Retail. Last year the eighty-nine-store Tower Records chain, which represented 2.5 percent of overall retail sales, went out of business, and Musicland, which operated more than 800 stores under the Sam Goody brand, among others, filed for bankruptcy. Around sixty-five percent of all music sales now take place in big-box stores such as Wal-Mart and Best Buy, which carry fewer titles than specialty stores and put less effort behind promoting new artists.

Just a few years ago, many industry executives thought their problems could be solved by bigger hits. "There wasn't anything a good hit couldn't fix for these guys," says a source who worked closely with top executives earlier this decade. "They felt like things were bad and getting worse, but I'm not sure they had the bandwidth to figure out how to fix it. Now, very few of those people are still heads of the companies."

More record executives now seem to understand that their problems are structural: The Internet appears to be the most consequential technological shift for the business of selling music since the 1920s, when phonograph records replaced sheet music as the industry's profit center. "We have to collectively understand that times have changed," says Lyor Cohen, CEO of Warner Music Group USA. In June, Warner announced a deal with the Web site Lala.com that will allow consumers to stream much of its catalog for free, in hopes that they will then pay for downloads. It's the latest of recent major-label moves that would have been unthinkable a few years back:

In May, one of the four majors, EMI, began allowing the iTunes Music Store to sell its catalog without the copy protection that labels have insisted upon for years.
When YouTube started showing music videos without permission, all four of the labels made licensing deals instead of suing for copyright violations.
To the dismay of some artists and managers, labels are insisting on deals for many artists in which the companies get a portion of touring, merchandising, product sponsorships and other non-recorded-music sources of income.

So who killed the record industry as we knew it? "The record companies have created this situation themselves," says Simon Wright, CEO of Virgin Entertainment Group, which operates Virgin Megastores. While there are factors outside of the labels' control -- from the rise of the Internet to the popularity of video games and DVDs -- many in the industry see the last seven years as a series of botched opportunities. And among the biggest, they say, was the labels' failure to address online piracy at the beginning by making peace with the first file-sharing service, Napster. "They left billions and billions of dollars on the table by suing Napster -- that was the moment that the labels killed themselves," says Jeff Kwatinetz, CEO of management company the Firm. "The record business had an unbelievable opportunity there. They were all using the same service. It was as if everybody was listening to the same radio station. Then Napster shut down, and all those 30 or 40 million people went to other [file-sharing services]."
It all could have been different: Seven years ago, the music industry's top executives gathered for secret talks with Napster CEO Hank Barry. At a July 15th, 2000, meeting, the execs -- including the CEO of Universal's parent company, Edgar Bronfman Jr.; Sony Corp. head Nobuyuki Idei; and Bertelsmann chief Thomas Middelhof -- sat in a hotel in Sun Valley, Idaho, with Barry and told him that they wanted to strike licensing deals with Napster. "Mr. Idei started the meeting," recalls Barry, now a director in the law firm Howard Rice. "He was talking about how Napster was something the customers wanted."

The idea was to let Napster's 38 million users keep downloading for a monthly subscription fee -- roughly $10 -- with revenues split between the service and the labels. But ultimately, despite a public offer of $1 billion from Napster, the companies never reached a settlement. "The record companies needed to jump off a cliff, and they couldn't bring themselves to jump," says Hilary Rosen, who was then CEO of the Recording Industry Association of America. "A lot of people say, 'The labels were dinosaurs and idiots, and what was the matter with them?' But they had retailers telling them, 'You better not sell anything online cheaper than in a store,' and they had artists saying, 'Don't screw up my Wal-Mart sales.' " Adds Jim Guerinot, who manages Nine Inch Nails and Gwen Stefani, "Innovation meant cannibalizing their core business."
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Even worse, the record companies waited almost two years after Napster's July 2nd, 2001, shutdown before licensing a user-friendly legal alternative to unauthorized file-sharing services: Apple's iTunes Music Store, which launched in the spring of 2003. Before that, labels started their own subscription services: PressPlay, which initially offered only Sony, Universal and EMI music, and MusicNet, which had only EMI, Warner and BMG music. The services failed. They were expensive, allowed little or no CD burning and didn't work with many MP3 players then on the market.

Rosen and others see that 2001-03 period as disastrous for the business. "That's when we lost the users," Rosen says. "Peer-to-peer took hold. That's when we went from music having real value in people's minds to music having no economic value, just emotional value."
In the fall of 2003, the RIAA filed its first copyright-infringement lawsuits against file sharers. They've since sued more than 20,000 music fans. The RIAA maintains that the lawsuits are meant to spread the word that unauthorized downloading can have consequences. "It isn't being done on a punitive basis," says RIAA CEO Mitch Bainwol. But file-sharing isn't going away -- there was a 4.4 percent increase in the number of peer-to-peer users in 2006, with about a billion tracks downloaded illegally per month, according to research group BigChampagne.
Despite the industry's woes, people are listening to at least as much music as ever. Consumers have bought more than 100 million iPods since their November 2001 introduction, and the touring business is thriving, earning a record $437 million last year. And according to research organization NPD Group, listenership to recorded music -- whether from CDs, downloads, video games, satellite radio, terrestrial radio, online streams or other sources -- has increased since 2002. The problem the business faces is how to turn that interest into money. "How is it that the people that make the product of music are going bankrupt, while the use of the product is skyrocketing?" asks the Firm's Kwatinetz. "The model is wrong."

Kwatinetz sees other, leaner kinds of companies -- from management firms like his own, which now doubles as a record label, to outsiders such as Starbucks -- stepping in. Paul McCartney recently abandoned his longtime relationship with EMI Records to sign with Starbucks' fledgling Hear Music. Video-game giant Electronic Arts also started a label, exploiting the promotional value of its games, and the newly revived CBS Records will sell music featured in CBS TV shows.
Licensing music to video games, movies, TV shows and online subscription services is becoming an increasing source of revenue."We expect to be a brand licensing organization," says Cohen of Warner, which in May started a new division, Den of Thieves, devoted to producing TV shows and other video content from its music properties. And the record companies are looking to increase their takes in the booming music publishing business, which collects songwriting royalties from radio play and other sources. The performance-rights organization ASCAP reported a record $785 million in revenue in 2006, a five percent increase from 2005. Revenues are up "across the board," according to Martin Bandier, CEO of Sony/ATV Music Publishing, which controls the Beatles' publishing. "Music publishing will become a more important part of the business," he says. "If I worked for a record company, I'd be pulling my hair out. The recorded-music business is in total confusion, looking for a way out."

Nearly every corner of the record industry is feeling the pain. "A great American sector has been damaged enormously," says the RIAA's Bainwol, who blames piracy, "from songwriters to backup musicians to people who work at labels. The number of bands signed to labels has been compromised in a pretty severe fashion, roughly a third."

Times are hard for record-company employees. "People feel threatened," says Rosen. "Their friends are getting laid off left and right." Adam Shore, general manager of the then-Atlantic Records-affiliated Vice Records, told Rolling Stone in January that his colleagues are having an "existential crisis." "We have great records, but we're less sure than ever that people are going to buy them," he says. "There's a sense around here of losing faith."

Universal Music plays iTunes hardball with Apple

2007-12-05T03:57:00.000-08:00

Does Apple’s iTunes store need U2?
That’s the crux of a game of chicken being played between Apple and Universal Music Group, which counts U2 and other big name artists in its stable. Who’s going to blink?
The New York Times and others are reporting that Universal Music Group told Apple that it will not renew its annual contract to sell music through iTunes. The reports, which cite unnamed sources, indicate that Universal Music is looking to market its music at will. The bottom line there is that Universal can pull its music at any time if there’s a spat.
Clearly, Universal Music is looking for leverage. This anonymous source sure seems to be getting around. Meanwhile, it doesn’t hurt that Universal Music’s move can ride the iPhone publicity wave a bit.
What’s truly shocking about this showdown is that it didn’t come earlier. The music industry has chafed as Apple CEO Steve Jobs has become the industry’s kingmaker. Music companies want subscription services on iTunes. Jobs says no. Music industry wants to raise prices a bit. Nope. You get the idea. At some point, music firms need to make Apple a little less dominant.
Meanwhile, other music services abound and Universal probably wants the best deal it can get. The problem with this strategy: iTunes dominates the music scene.
So what’s going to happen? Universal will raise a ruckus that may amount to a little more leverage, but in reality both parties need each other. And unless all the music companies revolt–Sony BMG has reportedly reupped–Universal doesn’t stand a chance.
Ultimately, Universal’s spat could alienate iPod users, who happen to be customers. Not that annoying customers is anything new to the music industry, but it’s not the brightest strategy.

Everything in the music industry is up! (except those plastic discs)

2007-12-05T03:55:00.001-08:00

At a speech last week I was asked a question that has come up every day since the Radiohead (and Madonna, NIN, Prince, etc, etc) announcement: What's going to happen to the music industry?
To which I answered "Which music industry?" You don't mean just the one that sells CDs, do you? Because it's a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don't look so bad at all.
Indeed, it appears that every single part of the music industry except the sale of compact discs is up.
Concerts and merchandise: UP (+4%)
Digital tracks: UP (+46%)
Ringtones: UP (+86% last year, but probably just single-digit percent this year)
Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
Even vinyl singles (think DJs): UP (more than doubled in the UK)
And, if you include the iPod in the music industry, as I'd argue a fair-minded analysis would: UP, UP, UP! (+31% this year)
Only CDs are down (-18%). They're around 60% of the industry not including the MP3 players, but just around 25% if you do include them.
So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they're in. Madonna's switch from a label to a concert promoter should be a clue. This quote from an excellent article (it's worth reading it all) in Entertainment Weekly says it all:
''Soon a lot of these companies won't define themselves as record companies,'' says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ''They'll define themselves as artist development companies. If you're involved in an entire career with an artist, then everyone's interests can be aligned."
I think most music will soon be free, as artists give away the product as marketing for their performances and licensing, and as a celebrity accelerant that creates more opportunities to make money than just from the sale of a record.
And for those who say that this avenue is only available to artists at the head of the curve, such as Madonna and Radiohead, I'd point out that the other group poorly served by the labels are those at the bottom of the curve, the many thousands of bands who fall below the radar of the hit-driven majors. I'd argue that they, too, have nothing to lose by letting their music go free, nothing to lose but the prospect of becoming indentured to companies stuck in last century's model of monetizing music.

3 in 5 'didn't pay a cent' for Radiohead album

2007-12-05T03:51:00.000-08:00

Radiohead's grand experiment in 'honesty box' music sales may have gone a little flat after a report found that three in five people downloading the band's latest album did not pay a cent for it.
Of the 1.2 million people who have downloaded In Rainbows since it was released last month, 62 per cent did not pay anything, and 12 per cent accounted for more than 52 per cent of the revenue from sales.
The average price paid was $6 (£2.90) globally, but this figure was propped up by the 12 per cent who were willing to pay between $8 to $12 (£3.90 to £5.80) - the approximate cost of downloading an album from a retail service like iTunes, the report, by comScore, concluded.
American music-lovers were the most generous, paying on average $8.05 (£3.89). Outside the US, the average amount parted with was $4.64 (£2.24).
ComScore tracks - to the last detail - the online behaviour of more than two million people worldwide, so its figures are not based on a survey. Shortly after the album's release nearly a month ago, online polls suggested that the average purchase was £4.
At the time, the band's decision was viewed by some as a future direction for the industry, which has struggled to combat declining sales in the face of widespread illegal downloading.
Other prominent musicians, including Trent Reznor from the band Nine Inch Nails, praised Radiohead for experimenting with a model, and Guy Hands, head of the private equity firm Terra Firma which recently bought EMI called the move "a wake-up call which we should all welcome and respond to."
But labels and other industry representatives expressed disappointment in the wake of yesterday's report, saying that while a band with an established fan base was able to take such risks, it was not an option for new bands, who still benefit from the support of labels.
Tim Dellow, co-founder of Transgressive, a smaller, London-based label, said: "It's depressing. Radiohead might have made a killing off this, but it was largely because of their fanbase built up over time with the help of a major label and its distribution and marketing channels."
"Most new acts don't have fans who would shell out £40 for the box set, and any profits (from this type of venture) would be impractical for making a living out of music."
Mike Driver, editor of DrownedinSound, a music news site, said that younger bands would find the honesty box method "unlikely to raise their profile any more than making a couple of tracks available on MySpace."
Fred Wilson, managing partner of Union Square Ventures, which invests in small, internet start-ups, said: "This shows pretty conclusively that the majority of music consumers feel that digital recorded music should be free and is not worth paying for."
A source at one of the major labels said that allowing fans to pay what they wanted for music would never work, because people would always steal. "Radiohead tried to spin this is offering a service for fans, but it was nothing more than a marketing ploy to make themselves relevant again and prepare for their next release. The reality is music has real value, and there has to be a way of capitalising on that."
A spokesman for Radiohead was not available for comment.

Nokia and Universal’s Proposed Music Tax

2007-12-05T03:43:00.001-08:00

It’s good to highlight inventions that, while flawed, show where things may be headed. One worth watching is the “Comes With Music” program just announced by Nokia.
The idea is that some cellphones will be bundled with the right to download an unlimited number of songs for a year. The big flaw is that right now, only songs from Universal Music Group, the biggest record label, are offered.
Nokia isn’t saying yet what phones the service will be offered on, how much extra they will cost, and so on. It did say that the service will allow people to download songs and play them on their computers as well, and that it hopes to bring in other labels before it introduces the service in the second half of 2008.
More broadly, this is one step toward an idea that Universal has been pushing called Total Music. In that scheme, a range of consumer products could include the right to download and listen to music: computers, phones, Internet service, MP3 players. Universal is talking to some big companies, including Microsoft, and some other record labels, according to a record industry executive, but doing anything in the music business is slow, and this idea is more complicated than most. Terms haven’t been set but the manufacturer or service provider might pay a few dollars per month per user.
Total Music has been ridiculed by a number of bloggers, but I think it might be a savvy way to solve the music paradox: Artists (and the labels that fund their work) deserve to earn something for their work. But since the CD format makes it so easy to copy and exchange music files, it’s almost impossible to get many people to pay for their music directly.
I’ve always thought that the logical answer is to create some sort of pooled fund of royalties. Those would come from various places including through ASCAP and BMI, which license public performances, through the compulsory license that pays songwriters for radio play, and the Audio Home Recording Act, which pays both music labels and composers from a tax on some home recording devices and blank media.
Getting all the various parties and Congress to agree on some sort of tax scheme may be downright impossible. So Universal is trying to build what amounts to a private sector tax into other products and services consumers buy. This might be easier than going to Washington, but I’m not sure how much easier.
There are all sorts of things wrong with this idea: If the tax is linked to something general, like Internet service or a computer, it makes people who don’t listen to much music pa as much as music addicts. And it requires copy protection software to control what devices can play songs and to prevent them from being played if a user doesn’t renew the music service after the initial free period.
But there are lots of things wrong with every other business model for music. Who is happy with today’s system, in which labels charge money for music but lots of people don’t pay? And there are inequities in the favorite scheme of the digerati– give music away free and have artists make money on concerts and t-shirts.
To my mind the best answer is to let consumers do what they want to do and get the money worked out on the back end.

http://bits.blogs.nytimes.com/2007/12/04/nokia-and-universals-proposed-music-tax/?ref=technology

RCRD LBL Launched

2007-12-05T03:42:00.000-08:00

Now here’s a cool idea. RCRD LBL is a new mp3 blog which actually pays the artists.
Dreamed up by the folks behind the music tech site Engadget, RCRD label has just launched, and it looks like a winner. Basically, it’s an ordinary mp3 blog with commentary, but the people who post the music actually own the rights to put up the tracks for download. Think of it as a thumbed nose to the hoards of bloggers who offer up tracks in the name of “spreading the word”. Because this time, the artists actually get paid: The site is funded through advertising revenue. Sounds good, yeah? The site caters for electronic fans, too: early posts include free downloads of Italoboyz’ ‘Victor Casanova’, Ewan Pearson’s remix of Supermayer’s ’The Art of Letting Go’ and The Field’s ‘Over the Ice’. RCRD LBL have big dance labels signed up to the concept, including Kompakt, Modular, Warp, Ghostly and Dirtybird. Fingers crossed that it works.

http://rcrdlbl.com

File-sharing operator's lawsuit against record labels dismissed

2007-12-05T03:41:00.000-08:00

LOS ANGELES—A federal judge on Monday threw out an antitrust lawsuit brought by the operator of the LimeWire online file-sharing service against a coalition of major record labels, concluding the firm failed to make its case that it has been harmed by the recording companies' business practices.
U.S. District Judge Gerard E. Lynch in New York granted the record companies' motion to dismiss the federal antitrust claims brought by New York-based Lime Group LLC.
He also dismissed several claims brought under state laws "without prejudice," which gives the company the option to pursue the claims in state court.
In his 45-page ruling, Lynch wrote that the vast majority of Lime Wire's claims "fail to allege an adverse effect on competition market-wide."
LimeWire allows computer users to make files on their PCs available to a multitude of other computer users all connected to each other, a method known as peer-to-peer file-sharing.
Lime Group had claimed the record labels sought to monopolize the online distribution of music and refused to license their works to the company in an effort to put it out of business.
The firm contended it sought to reach an agreement with the labels so that it could field a licensed music service, but the record labels refused to broker a deal, insisting it use a filtering system approved by the labels or reach an agreement with iMesh Inc., a rival file-sharing service that has been operating with the
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blessing of record labels since settling a copyright infringement case in 2004.
Lynch concluded Lime Wire didn't show any facts to suggest the record companies' actions were "anything other than independent decision-making by each company to refrain from doing business" with Lime Wire.
Lime Wire had also contended the recording companies had fixed prices for online music, but Lynch concluded that the firm failed to establish it had been harmed by any alleged price fixing.
Lynch also rejected claims by Lime Wire that the record labels had engaged in unfair business practices, including hacking the firm's file-sharing network and claiming it promotes child pornography, on the grounds that the alleged actions were not anticompetitive.
The lawsuit was a counterclaim to a copyright infringement lawsuit brought last year against Lime Group by record labels owned by the four major recording companies: Vivendi's Universal Music Group, Warner Music Group Corp., Britain's EMI Group PLC, and Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG.
That case is still pending.
The Recording Industry Association of America, the record labels' trade association, declined comment.
A phone call placed after hours to Lime Group was not immediately returned.

http://www.mercurynews.com/news/ci_7626997?nclick_check=1

MySpace launches new music program

2007-12-04T07:11:00.001-08:00

Social networking site MySpace launched a new music program Tuesday that will provide exclusive video content from recording artists.
The MySpace Transmissions site will also offer audio tracks that U.S. users can buy as well as a private recording session with artists and video question and answer segments.
The first artist featured is James Blunt, who recorded five songs exclusively for MySpace including "Same Mistake." MySpace, a division of Fox Interactive Media Inc., said it will name additional artists participating with MySpace Transmissions in the coming weeks.
MySpace Transmissions content will be archived and available on-demand through MySpace Transmissions and MySpaceTV.
Fox Interactive Media is a unit of Rupert Murdoch's News Corp.

http://www.businessweek.com/ap/financialnews/D8TAKT700.htm

Bleak Friday begins holiday season for music retailers

2007-12-04T07:09:00.000-08:00

NEW YORK (Billboard) - Disappointing sales performance during Thanksgiving weekend has merchants feeling pessimistic about music's prospects for the holiday selling season and worried about what will happen to CD sales in the new year.
Merchants reported a comparable-store music sales decline ranging from 15 percent to 25 percent for the weekend that begins with Black Friday, although they said robust movie and videogame sales helped soften the blow.
Nielsen SoundScan data backs up those merchants' reports. Album sales totaled 13.9 million during the week ended November 25, an 18 percent decline from the 17 million sold last year during the Thanksgiving weekend.
Merchants cited the lack of hit releases as the main reason for the decline. "If the labels had put out a new hit CD for the week, sales might not be down so much," Newbury Comics head of purchasing Carl Mello said. "You have to put something out to get people to buy music."
Mello wasn't the only merchant feeling frustrated by the release schedule.
"I can't remember a Thanksgiving that didn't have any superstar releases on the Tuesday before," Value Music president Rob Perkins said.
'DREAMING' PAYS OFF
At the 25-unit, Brighton, Mass.-based Newbury Comics, CEO Mike Dreese reported that "our biggest new release during Thanksgiving was OneRepublic ("Dreaming Out Loud"), which sold 489 units." But during Thanksgiving week 2006 at Newbury, he said, seven new titles -- by Jay-Z, the Beatles, Killswitch Engage, Tom Waits, Brand New, U2 and Snoop Dogg -- exceeded that figure.
Even the Latin market suffered from a lack of releases, said Ritmo Latino president David Massry, who called the holiday weekend "very disappointing."
Not everyone had a bad holiday, however. Label executives said Best Buy, Circuit City, Target and Wal-Mart had strong music sales -- at least on Black Friday, if not for the whole weekend. Wal-Mart's combined sales for top hit titles were up nearly 50 percent, sources said, but that apparently was largely due to its Eagles exclusive and Garth Brooks' "Ultimate Hits." Wal-Mart is traditionally the No. 1 seller of Brooks titles, even when it's not carrying a Brooks exclusive.
Online merchants also enjoyed a Thanksgiving bonanza, according to Alan Tuchman, CEO of Alliance Entertainment Corp., the largest music fulfillment wholesaler for online stores. "Our overall online business was up significantly during the weekend, beginning Thanksgiving day," he said. "We were up about 15 percent."
By store type, album sales at chains (including merchants like Trans World, Best Buy and Barnes & Noble) were down 40 percent, indies were down 22.6 percent, and mass merchants were down 6 percent. However, nontraditional outlets were up 17.7 percent.
A lot of attention goes to the post-holiday "Cyber Monday," but Tuchman said Thanksgiving Day itself was huge. "When people didn't have broadband at home there might have been a Cyber Monday," he said. "But nowadays people are at home on their PCs and laptops looking at the Black Friday advertising deals and buying away."
SOFTWARE SHINES
The biggest-selling title at most traditional music stores was Josh Groban's "Noel," which scanned 405,000 units last week, according to Nielsen SoundScan. The No. 2 title was Alicia Keys' "As I Am," which scanned 349,000.
This year, however, only 11 titles topped the 100,000 mark, compared with 19 titles last year. Overall the top 20 of the Billboard 200 produced nearly 2.9 million units, a 23.8 percent decline from the 3.8 million units that albums in the top 20 scanned in the same week last year.
Regardless of new releases, hit albums were scarce and couldn't stand up to other entertainment software products.
"The holiday weekend may sound like a sales disaster, but that is only if you are worried about music," Newbury Comics' Dreese said.
Other product lines helped make up for some of the music shortfall, as merchants reported that overall comparable-store declines ranged from 4 percent to 10 percent.
At the 10-unit Exclusive Co. in Oshkosh, Wis., for example, general manager Stephanie Huff reported that DVDs were up 216 percent Thanksgiving week. TV shows drove the DVD surge, she added.
Such videogames as "Guitar Hero" and game platforms also pushed traffic into stores. In fact, Nintendo's Wii system is already out of stock at most stores, and it looks as though skimpy product allocations will keep customers roaming from store to store to find the item.
Value Music's Perkins said the calendar could help retailers this year. "There are 32 days between Christmas and Thanksgiving," he said. "That extra day is humongous and will give us a positive impact at the end."
But another merchant said the weak music performance so far leaves him worried about next year. "It ain't looking good," he said.

http://www.reuters.com/article/musicNews/idUSN0132742320071201

Ringtone demand falling, track downloading increasing

2007-12-04T07:07:00.001-08:00

A mobile phone industry analyst has spoken about the reasons why ringtone sales are declining, while full-track downloads on handsets are increasing. Dan Winterbottom, principal analyst at Informa, said that "music is always the key revenue driver" for the mobile industry's entertainment sector. This is despite his observation that the traditionally lucrative ringtone market "is declining". He believes that people aren't growing tired of having tracks like Leona Lewis's recent download number one as the greeting when someone phones them, but instead "are finding ways of getting ringtones onto their handsets whereby they don’t actually have to buy them". This is something the mobile industry seems resigned to. Consolation comes in the form of Mr Winterbottom's observation that mobile owners are "moving into full-track downloads more and more". His eye, and ear, has been particularly caught by Vodafone's Omnifone service, where for £1.99 per week, music fans can access over 1,200,000 tunes. As soon as you stop paying your subscription all downloaded tracks will vanish from your device. In a further boost to the download market, the BBC reported on Monday that US mobile phone giant AT&T says it will give its customers direct access to digital music service Napster.

http://www.mobilemarketingnews.co.uk/Ringtone_demand_falling,_track_downloading_increasing_18375283.html

EMI Japan Presses Button On Mobile Download Site

2007-12-04T07:06:00.001-08:00

EMI Music Japan has launched a mobile download site on NTT's docomo i-mode and Softbank Mobile's Yahoo! Mobile (Y!keitai) service. The MOBAEMI mobile site will also be available on Japan's other main mobile phone service, KDDI's EZweb, from Dec. 6.MOBAEMI consists of a paid download service for purchasing ringtones, full-track downloads, ringmovies and ringvoice products from the EMI catalog, according to the music major. Customers can opt for a subscription plan or purchase tracks "a la carte." Users earn points for each purchase, which they can redeem for further purchases and content.Hiroshi Yamazaki, associate executive GM of EMI Music Japan's business development group, tells Billboard.biz that reason behind starting its own mobile site was because "we would like to expand our digital sales." He added: "We also want to gather marketing data and do one-to-one marketing directly."EMI Music Japan already provides ringtones and full-track audio to customers through other mobile providers and PC download providers, Yamazaki explained."The 'official' aspect is the big impact and important for customers," Yamazaki continued. "We want to convey directors' comments, promoters' comments and things officially." Content from MOBAEMI will include exclusive items, input from artists and breaking music.Currently, EMI's mobile catalog includes approximately 15,000 titles across all genres of music, which are available through more than 100 Web sites including some 30 mobile service providers (MSPs).Earlier this year, "Flavor of Life" by EMI-signed Japanese superstar Hikaru Utada became the best-selling mobile track ever in Japan, with mobile sales of 6.6 million out of total digital sales of 7.3 million.According to the Recording Industry Association of Japan (RIAJ), mobile music sales in Japan grew in the first half by 143% compared with the year before to ¥31.859 billion ($290 million). Japan's Telecommunications Carriers Association forecasts that by the end of 2007, more than 80% of the nearly 100 million mobile phones in the country will be 3G enabled.

http://www.billboard.biz/bbbiz/content_display/industry/e3i99b6bc589cb7bc84e6d6922995bb1452

UMG Applies Online Streaming Policy

2007-12-04T07:03:00.000-08:00

Details of a relatively new online music streaming policy from Universal Music Group have emerged as a result of one artist's communication with her fans.Colbie Caillat, who found an early audience on MySpace, apologized to fans via her MySpace profile for suddenly limiting her streaming songs to shorter clips. "Due to circumstances beyond my control, I have to swap the songs out on my page for 90 second versions instead of full-length versions ... Every Universal label has to comply immediately," Caillat wrote.A source close to the situation confirmed that the policy is indeed being applied to all UMG labels and artists. According to the source, streaming music will be limited to either 90-second clips or full-songs that contain promotional voice-over messages. Excluded are any services with which UMG has struck a commercial licensing deal that compensates them for each stream. According to the source, UMG is concerned that unlimited free on-demand streaming of full songs online will substitute the need to buy the track or the album. "It goes from in the beginning being promotional, to becoming substitutional when it becomes large numbers," the source says. The policy is a few months old, the source says, and applies to all online services -- not just MySpace.

http://www.billboard.biz/bbbiz/content_display/industry/e3ida2e9d7e0740c3cf24fddb0b5fc9e94f

Napster, Amazon MP3: Digital Music Done Differently

2007-12-04T07:00:00.000-08:00

Napster's music-subscription service has a great playlist function; Amazon's MP3 store is easy to navigate and very affordable.

When it comes to acquiring digital music, is it better to rent or buy? Napster's recently renovated music-subscription service and Amazon.com's newly erected MP3-download store make compelling arguments on each side. Napster 4.0 presents more options than ever, while Amazon's store makes song downloading about as easy and affordable as it gets.
The basic premise of Napster remains the same: Pay $10 per month, and have at the service's entire catalog of tunes--add songs to your library, create playlists, and listen to everything on your PC for as long as you're paid up. Lay down an extra $5 a month for Napster To Go, and you can load all those tunes onto any PlaysForSure portable device.
Now, though, you can listen to tunes via Napster's Web site, rather than having to download an application to your PC--handy if you're using a public computer or if your office's IT person is particularly uptight. To purchase or transfer tunes to a portable player, you'll still need to use the desktop app, which has been nicely updated to mirror the Web interface. Unsurprisingly, online performance lags that of the desktop app (page loads take several seconds).
Pay to Own

Amazon's MP3-download store has two things going for it: Its music is cheap and can play on pretty much any MP3 player. Amazon doesn't dabble in subscriptions--pay 89 or 99 cents for a track, and it's yours. Whether you'll find what you're looking for is hit-and-miss, however. Sure, Amazon offers DRM-free songs from both EMI and Universal (as well as indies such as Merge and Rounder). But it has only 2.3 million songs, compared with Napster's total of over 5 million tracks.
Amazon's store is still in beta, but it feels polished. From the home page, you can view new and notable albums, the day's top songs and artists, and other highlights; a list of genres resides in the left sidebar.
Once you home in on a song or artist, click the play button next to any track to listen to a quick-loading 30-second preview, or go straight for the purchase by clicking the Buy MP3 button. You can download 256-kbps songs to your hard drive or use Amazon's application, which manages your purchases and easily transfers them directly to iTunes or Windows Media Player.
Napster provides endless listening options anywhere you can get your hands on a PC. But if you want to buy a song or an album, check first at Amazon: It's cheap, it's unrestricted, and it offers seamless transfers.
Napster 4.0
Offers killer playlists and listen-anywhere convenience. Price when reviewed: $10 per monthwww.napster.com
Amazon MP3 (Beta)
Watch out, iTunes: This easy-to-navigate store has cheap music.Price when reviewed: $0.89 or $0.99 (single tracks) www.amazon.com

Nokia, Universal Music Team Up

2007-12-04T05:18:00.000-08:00

LONDON -- Nokia Corp., the world's largest mobile phone handset maker by sales, Tuesday said it had joined forces with Universal Music to offer unlimited music downloads for a year on phones bundled with its new Ovi Web-services platform.
The deal with Universal, the world's largest music company by sales, sees Espoo, Finland-based Nokia significantly ramp up its competition with Apple Inc. for consumers of music via mobile phone handsets. Nokia launched the Ovi platform and a set of multimedia services to hit stores ahead of the crucial Christmas trading period.
The service, dubbed Comes With Music, will allow users to keep the music after their yearly subscription charge expires, Nokia said in a statement.
Universal's artists include U2, Rihanna and Amy Winehouse.
Nokia said it was in discussion with other music groups about using their music. "We set out to create the music experience that people are telling us they are looking for -- all the music they want in the form of unlimited downloads to their mobile device and PC," said Anssi Vanjoki, executive vice president and general manager for Nokia.
The deal with Universal, owned by France's Vivendi S.A., comes after Nokia in August launched Ovi, a platform designed to allow users to buy music and play games, in a bid to take on Apple's iPhone.
Nokia last year bought music portal Loudeye for $60 million to create the core of the service.
Nokia has also agreed deals on Ovi with mobile operators Telefonica S.A. and Vodafone Group PLC, the world's largest mobile operator by sales.

http://online.wsj.com/article/SB119676374309413001.html?mod=googlenews_wsj

Digital developments could be tipping point for MP3

2007-12-03T08:41:00.001-08:00

NEW YORK (Billboard) - Warner Music Group (WMG) and Sony BMG Music Entertainment are feeling increased pressure to follow EMI and Universal Music Group's lead in distributing music in the MP3 format, which forgoes restrictive digital rights management technology.
A yearlong download promotion planned between Pepsi and Amazon is among several developments forcing WMG and Sony to consider the format, Billboard has learned,
News of the Pepsi promotion, which is expected to be announced February 3 during the Super Bowl, coincides with Wal-Mart's ultimatum that major labels supply walmart.com with their music in MP3, sources said.
Labels said they have been watching the success of an MP3 test that Universal Music Group (UMG) began in August. The major label continues to allow the sale of 85 percent of its current catalog as MP3s. Sources said UMG is on the verge of permanently embracing that digital format. But a source close to the testing insisted that the decision is still up in the air while the company awaits conclusive results from the trial, which are due in mid-January.
Meanwhile, Disney's Hollywood Records has joined the list of major-distributed labels testing MP3 at Amazon and walmart.com. The company has supplied 30 to 40 titles from its mammoth catalog in the MP3 format. A check of those sites shows the latest albums from Atreyu and Grace Potter & the Nocturnals on the Hollywood label available in the MP3 format, though they are not available at iTunes.
EMI began selling its music in MP3 format in June. WMG and Sony BMG Music Entertainment both declined to comment, but have continued to publicly maintain their separate stances in favor of using digital rights management for downloads.
Sources said Sony BMG is considering an MP3 test. The company initially was steadfast against MP3 and wouldn't allow its independent distributor, RED Distribution, to engage in negotiations on behalf of its labels with Amazon when the merchant was trying to set up its MP3 download store. But Sony BMG management relented and let RED become involved in those negotiations. The parent company, however, refused to supply Amazon with its catalog in the MP3 format.
PEPSI FREE
Pepsi's track record with download giveaways may be motivating labels. According to sources, Pepsi will feature a download promotion on the inside of 5 billion of its soda bottlecaps. Sources said Pepsi customers will need to collect five caps in order to exchange them for a download; this yields the potential for 1 billion redeemable tracks. A Pepsi spokesperson declined to comment.
Pepsi's first stab at giving away free music downloads, which was conducted in partnership with iTunes in 2004, was also promoted via a highly visible Super Bowl campaign. It resulted in 5 million people downloading free songs in the space of three months -- 5 percent of the 100 million tracks that were offered.
While the 5 million digital tracks redeemed in the campaign reportedly fell short of the 25 million target redemption rate, that was in the early days of digital distribution, when Apple was reporting selling digital tracks at a rate of 2.7 million per week.
Since then, with the widespread success of the iPod -- which is likely to be even more popular come Christmas -- digital track sales have grown by 416 percent, from the 142.6 million tracks scanned in 2004 to the 735.4 million tracks accumulated so far this year, according to Nielsen SoundScan. Based on trends of the past few years, Billboard estimates that digital download sales could increase by another 5 million per week in 2008.
In the week after Christmas in 2006, track sales totaled 30.1 million, a 51 percent increase from the 19.9 million scanned in the corresponding week of the previous year -- which was, in turn, a 197 percent increase over the 6.7 million scans generated during the corresponding week of 2005. Digital downloads generally increase drastically after consumers receive iPods and iPod gift cards for Christmas.
In the new Pepsi promotion, sources said, Amazon will serve as the supplier for the downloads, and customers will need to visit a specific redemption store on the Amazon site to access music from participating labels. All majors have been approached about participating in the offer, but the price that Amazon is willing to pay appears to be a sticking point for some labels.
Sources said that Amazon will pay labels in the area of 40 cents per track. This compares with the 65-70 cents labels currently receive from Amazon for digital track sales and the 70 cents they get from Apple.
Regardless of which labels ultimately sign on, the Super Bowl commercials will nonetheless double as the coming-out party for Amazon's digital download site, which soft-launched September 25. Since then, without aggressively promoting its download business, Amazon has captured about a 3 percent market share of the digital download channel, Billboard estimates. The store has a 6 percent market share of all CD sales.
WAL-MART's WISHES
Another factor driving the labels' decisions, sources said, involves mass merchant Wal-Mart alerting WMG and Sony BMG that it will pull their music files in the Windows Media Audio format from walmart.com some time between mid-December and mid-January if the labels haven't yet provided the music in MP3 format.
Wal-Mart declined comment. "It's a matter of policy that we don't publicly comment on speculation," walmart.com spokeswoman Amy Colella said. "We know digital music is important to our customers, and we're very pleased with the recent performance and customer response to our digital music offering."
Though Wal-Mart maintains a modest 2 percent market share in the digital download arena, its market share for physical CDs is considerably larger: about 22 percent, Billboard estimates.
Finally, given the steep decline in U.S. CD sales -- so far, down 18.6 percent year to date compared with 2006 -- music executives have expressed their worries about what the new year will bring for the physical format. Switching to a digital format that is compatible with all portable devices, including the all-important iPod, could help merchants like Wal-Mart and Amazon capture some of iTunes' 70 percent market share, and perhaps boost the size of the digital marketplace.

http://www.reuters.com/article/musicNews/idUSN0132743320071203

EMI Could Sell Recorded Music Business to Google, Warner, or News Corp.

2007-12-03T06:19:00.001-08:00

The smallest major record label, EMI, was acquired by Terra Firma earlier this year, and according to a document the company sent to potential investors, Terra Firma may be looking to get out of the recorded music business in 5 years.
Terra Firma is in the process of selling 15 percent of its interest in EMI, and, according to the investor document, plans to sell off its recorded music business in 2012. The document named Warner Music Group, Google, and News Corp. as potential buyers.
To attract an asking price of $19.4 billion -- nearly triple what Terra Firma paid -- the company says it can cut costs by $270 million per year. (EMI's rumored urge to cut funding to the RIAA is probably related to these general cutbacks.) . While cutting costs, Terra Firma says it will increase yearly profits from $126 million in 2007 to $1 billion in 2012. The market for recorded music is reportedly declining 10 percent annually.

http://blog.wired.com/music/2007/11/emi-could-sell.html

Radiohead guitarist attacks EMI owner

2007-12-03T06:16:00.000-08:00

Radiohead guitarist Ed O'Brien has said EMI's new owner "doesn't understand the music industry".He blamed Guy Hands and his company Terra Firma for the band's decision to leave the music giant, their long-time label, earlier this year."EMI is in a state of flux," he explained. "It's been taken over by somebody who's never owned a record company before, Guy Hands and Terra Firma, and they don't realise what they're dealing with."O'Brien told Observer Music Monthly Radiohead had wanted to reach a deal and added: "It was really sad to leave all the people [at the label]. But he wouldn't give us what we wanted. He didn't know what to offer us. Terra Firma doesn't understand the music industry."Hands's private equity company bought EMI for £2.3 billion in July and it has since reportedly fallen out with several artists.

http://www.digitalspy.co.uk/music/a80973/radiohead-guitarist-attacks-emi-owner.html

Warner Music seeks new deals as net slides

2007-11-30T06:59:00.000-08:00

Nov 30, 2007 04:30 AM
Warner Music Group Corp., home to Green Day and Missy Elliott, right, said yesterday its fourth-quarter profit slipped 58 per cent amid a softer international market and a decline in CD sales, but results topped Wall Street estimates.
The New York-based company said earnings for the quarter ended Sept. 30 fell to $5 million (U.S.), or three cents per share, from $12 million, or eight cents per share, in the prior year.
Quarterly results included $9 million in restructuring and implementation expenses and a $12 million benefit for a settlement with Bertelsmann AG related to Napster. The prior-year period included a $13 million gain on a Kazaa online music sharing settlement.
Quarterly revenue climbed 2 per cent to $869 million from $854 million in the year-ago period. Analysts polled by Thomson Financial had expected net income of two cents per share on sales of $874.8 million.
Warner Music Group is one of many recording companies struggling amid an industry- wide, multiyear decline in CD sales. Warner Music has stepped up efforts to find new revenue, focusing on agreements with artists beyond music sales so it can take a cut of touring, merchandising and artist management.

http://www.thestar.com/Business/article/281223

Even The First Copyright 'Pirates' Didn't Do Much Harm

2007-11-29T07:12:00.000-08:00

Since the original meaning and purpose of intellectual property laws has become so distorted these days, it is quite useful to look back at the history of such things and why they were put in place. That's why we often talk about the debates on intellectual property held by Thomas Jefferson and James Madison. It's why we bring up things like the problem of patent sharks in the nineteenth century. The more you look, the more you realize that many of the big "problems" people insist are happening today in the intellectual property world really aren't all that different than things that happened in the past. William Patry has been posting a few interesting posts lately on historical views of copyright -- but even more interesting is an article in Toronto's Globe and Mail, where the author discusses the first known case of someone copying another's writings being referred to as a "pirate." It was apparently first used in 1701 to describe people who had copied a poem by Daniel Defoe, called "The True-Born Englishman" in order to sell it themselves. The most interesting part: Defoe actually learned how to take advantage of the situation, rather than whining about it. If only today's copyright holders could learn what Defoe figured out 300 years ago. It is true that Defoe was upset... but not at people copying and making money off of his work. He was upset that they made mistakes in copying his poem. He published a corrected version, noting:
"I should have been concerned at its being printed again and again by pirates, as they call them, and paragraph-men; but would that they do it justice and print it true according to the copy, they are welcome to sell it for a penny if they please."Defoe quickly realized that obscurity was a much bigger threat than "piracy" and by encouraging these "pirates" to sell copies of his work, it built up his own reputation and allowed him to go around the cumbersome publishing process of the time. The rest of Defoe's career was then built off of his name recognition since that poem was so widely distributed, allowing him the ability to make much more money off of future works. In other words, even the original "victim" of "piracy" quickly recognized how it could be used to his advantage, rather than worrying that it was a threat.
http://www.techdirt.com/articles/20071127/215734.shtml

Official: P2P music not harming Canada

2007-11-29T06:52:00.000-08:00

Published Monday 5th November 2007 15:14 GMT
Another study of P2P networks has found that music file-sharing has no detrimental effect on the CD racket and, if anything, is associated with higher physical sales.
This time the verdict comes from two University of London economists working for Canadian government business tentacle Industry Canada.
Birgitte Andersen and Marion Frenz crunched government-sponsored research data, and concluded: "Among Canadians who engage in P2P file-sharing, our results suggest that for every 12 P2P downloaded songs, music purchases increase by 0.44 CDs. That is, downloading the equivalent of approximately one CD increases purchasing by about half of a CD."
http://www.theregister.co.uk/2007/11/05/birkbeck_canada_p2p_cd_sales/

Warner Music profit falls; industry in slump

2007-11-29T06:35:00.000-08:00

Sales of digital music at Warner were up 25 percent at $130 million during the quarter but this could not make up for the short-fall in CD sales.
U.S. album sales are down 14 percent year on year, according to data from Nielsen SoundScan, as more fans choose to buy music as individual songs through online stores such as Apple Inc's iTunes, or resort to using free file-sharing services to get music.
Warner Music stock is down nearly 70 percent since the start of the year as evidence of a faster-than-expected deterioration in music sales has become more clear to investors.
http://news.yahoo.com/s/nm/20071129/media_nm/warnermusic_results_dc_1;_ylt=A9G_Rz1xy05HqBQBChFHkPwA

Universal Music Group's view of the digital world

2007-11-29T03:24:00.000-08:00

Wired has a revealing article on Universal Music Group's CEO Doug Morris and his views on the digital music industry. The article provides insight into how only an outsider like Apple could accomplish what the music industry was unwilling and unable to create -- a successful digital distribution system. Morris's attitude is shockingly revealing as to the underlying motives of the music industry and how it has affected their decisions.
[Morris] wants to wring every dollar he can out of anyone who goes anywhere near his catalog. Morris has never accepted the digital world's ruling ethos that it's better to follow the smartest long-term strategy, even if it means near-term losses. As far as he's concerned, do that and someone, somewhere, is taking advantage of you. Morris wants to be paid now, not in some nebulous future. It was this attitude that prevented the record labels from letting go of the CD and embracing online distribution. To be fair, however, Morris claims that nothing could have been done differently:
"There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"Even now, their major efforts are not intended to satisfy any particular need or necessarily build a long term model, but instead to wrest the control they inadvertently gave to Apple with the creation of the iTunes Music Store. iTunes remains responsible for the largest portion of Universal's digital music sales. To counter, Morris is presently involved in a making their Total Music plan a reality. Their plan is to offer users a "free" subscription plan for unlimited access to all their music. The plans would be subsidized by hardware vendors interested in taking a piece of the action from Apple's iPod and iTunes.The author points out that this plan may be ignoring a strong consumer preference for flexibility and simply be trading in one proprietary format for another, but Morris doesn't appear to care:
Unfortunately, Total Music will almost certainly require some form of DRM, which in the end will perpetuate the interoperability problem. Morris likely doesn't care. He is more committed to Total Music -- or any other plan that allows protection -- than he is to a future where music can truly be played across any platform, at any time. "Our strategy is to have the people who create great music be paid properly," he says. "We need to protect the music. I know that."

http://www.macrumors.com/2007/11/27/universal-music-groups-view-of-the-digital-world/

EMI wants to cut funding to trade groups like the RIAA

2007-11-29T03:22:00.000-08:00

A Reuters article this morning reports that British-based music company EMI "wants to cut its funding to the industry's trade bodies... which could deal a blow to the fight against music piracy." Trade groups are the entities that "represent music companies and the fight against illegal piracy." Between the four major label groups: EMI, Warner Music Group Corp. (NYSE: WMG), Universal Music Group, and Sony BMG; the International Federation of the Phonographic Industry told Reuters that over $130 million each year goes to funding companies like it and the Recording Industry Association of America.Groups like the RIAA have an important mission of course, and this plan would severely limit the fight against piracy, but one music industry giant dropping out certainly would not add too much of a burden. We should not be surprised that EMI is the company to come out with this plan, even before Terra Firma took over in September the music giant had dropped the digital protection against piracy (Digital Rights Management technology) encoded into its media files.File sharing and piracy costs the recording industry loads of money every year (Reuters estimates that value in the billions) but it seems clear that the music industry cannot fight piracy while undergoing a major shift away from the "traditional" markets it has utilized for over 50 years. CD sales are plummeting while digital sales steadily grow. One label may not be able to change how piracy is tackled, but the current DRM-free approach coupled with new resources to market those products might make a difference. What difference, if any, is still to be seen. Just apply the Radiohead approach to everything and let consumers name the price of music. Many surely have some conscience...

http://www.bloggingstocks.com/2007/11/28/emi-wants-to-cut-funding-to-trade-groups-like-the-riaa/

Another band goes digital

2007-11-27T03:17:00.000-08:00

My Bloody Valentine go digital
The plan is that they will release the album themselves via the Internet, but there will also probably be a vinyl release,' the band’s London-based manager, Vinita Joshi, said.
But the band is unlikely to follow Radiohead’s pay-what-you-like download model for its new recordings, he added.
http://www.music-news.com/ShowNews.asp?H=My-Bloody-Valentine-go-digital&nItemID=16517

Digital Will Not Offset Physical Slide In Next 5 Years

2007-11-26T04:52:00.000-08:00

November 20, 2007 - Digital and Mobile
By Antony Bruno, N.Y.According to a new report from JupiterResearch, digital music sales will not offset falling CD sales anytime soon. In its "U.S. Music Forecast, 2007-2012," JupiterResearch analysts say that while digital spending will increase to $3.4 billion over the next five years, CD sales will continue to fall. "That means digital music sales will not compensate for lost CD sales in five years," JupiterResearch VP and research director David Card in a statement. "Nor will they return the overall industry to growth. But digital's where the growth is." Music subscription services like Rhapsody and Napster aren't expected to play a significant role in that timeframe either, with analysts calling it a "niche" service.
http://www.billboard.biz/bbbiz/content_display/industry/e3i6ed02f115f5e252ec544e2c86c12138c

Legal Wrangling Puts NIN Remix Site On Hold

2007-11-26T04:49:00.000-08:00

November 21, 2007 - Legal and Management
By Jonathan Cohen, N.Y.A Trent Reznor-sanctioned home for fan remixes of his music is on hold due to a pending lawsuit between Universal Music Group and Google and News Corp.UMG is the owner of the master files Reznor has made available on NIN.com for fans to manipulate as they wish. In its suit against YouTube.com owner Google and MySpace.com owner News Corp., the company alleges those sites do not have "safe harbor" under the Digital Millennium Copyright Act because their users have uploaded Universal-owned content without permission.As such, sanctioning NIN remixes that may include content not owned by Universal would open the company up "to the accusation that they are sponsoring the same technical violation of copyright they are suing these companies for," Reznor says on NIN.com.So, Universal told Reznor they will no longer host the remix site and is "insisting" that Nine Inch Nails host it."In exchange for this they will continue to let me upload my Universal masters and make them available to fans, BUT shift the liability of hosting them to me," he says. "Part of the arrangement is having user licenses that the fans sign (not unlike those on MySpace or YouTube) saying they will not use unauthorized materials. If they WERE to do such a thing, everybody sues everybody and the world abruptly ends.""We are challenged at the last second to find a way of bringing this idea to life without getting splashed by the urine as these media companies piss all over each other's feet," he concludes. "We have a cool and innovative site ready to launch but we're currently scratching our heads as to how to proceed."The Nine Inch Nails remix album, "Y34RZ3R0R3MIX3D," was released Nov. 20. It includes reworkings by members of New Order, Laydtron and the Faint, as well as some tracks created by fans.
http://www.billboard.biz/bbbiz/content_display/industry/e3i6f6c2995a3a0f7b53b35438942ba6f7c

BETA Records Preps Discovery Service

2007-11-26T04:46:00.000-08:00

November 21, 2007 - Digital and Mobile
By Antony Bruno, N.Y.BETA Records, an online marketing and promotion service for indie artists, is planning a new site, expected to go live early next year, that lets users discover new bands based on their similarity with bands they already know. The company implemented audio fingerprinting technology from Audiobaba to power the service, that aligns indie artists with more mainstream acts with a similar sound. Users will enter in the name of an established act, hit search, and the results will list a number of new emerging artists that have similar styles and sounds.
http://www.billboard.biz/bbbiz/content_display/industry/e3i6f6c2995a3a0f7b5cc91b69178baa382

Artists Create New Music Revenue Models

2007-11-25T05:54:00.000-08:00

Years after the Napster revolution liberated music, industry labels are still hot on fighting the war on piracy. Earlier this month, the association representing big players like Capitol Records and Sony BMG hailed their first victory ever on the legal front, a $222,000 penalty against a Minnesota woman found guilty of illegally sharing music online. But few, if any, believe this isolated win will alter the decisively linear trend of those swapping tunes on the web. At this point, people see the content issue as settled: free music is their right. If the establishment standing in their way has any knowledge of history, they’d work to find new ways to engage “the people” in order to stay relevant—or perhaps more importantly, employed.

This past week at CMJ, musicians, managers (and those aspiring to be) filled rooms at NYU’s Kimmel Center to hear industry advice on how new bands can “make it” in these changing times. One panel, “Music Business Primer: Marketing and Promotion”, had a message for the music industry—you’re not going to win this one, recognize that free music is the future and just work to control it. The panelists suggested that bands should consider releasing free downloads as a way to build community around their music. The MuseBox’s George Davis described the new revenue model well: “It’s all about tickets and t-shirts.”

Prince has been working this model with much success. The artist, who escaped his contract with Warner Music in 1994, had the music industry in a huff when he gave his most recent album away with a British newspaper. A digital music pioneer, Prince also lent early support to P2P and was one of the first to sell music directly from his website. Now Madonna is following suit by leaving Warner Music and signing with Live Nation for a $120 million 10-year deal. As she explained, “The paradigm in the music business has shifted.” While the deal will require Madonna to produce three more albums, the real focus is clearly on expanded touring and merchandise that Madonna, as her own brand, can sell to fans. The Live Nation deal includes all-things-Madonna, including everything from her website to DVDs, music-related TV and film projects, and corporate sponsorships. For someone who is a walking commodity, perhaps this is the best way to go.

But free music can actually make money again. Bands and labels should stop working outside the trend and, instead, ride the digital wave by directly engaging fans. A great case study is the Peoria, Arizona band The Format, which recognized the loyalty of its fans and stopped releasing their albums in the traditional fashion. Their 2005 EP, “Snails”, was made available exclusively online and at their concerts. In 2006, the band, having been dropped by Atlantic Records, was on its own when its new album, “Dog Problems”, leaked online two months before its release. Instead of losing out on the inevitable file-sharing about to take place, the band debated for all of two hours before releasing its CD for a discounted $7.99 on its website. Within the first hour, the site sold 600 downloads, and 2,000 within the first month. Loyal fans actually paid for music they could have gotten for free when given the digital avenues to do so.

Fast forward to this month, when Radiohead made headlines through the digital-only release of its seventh album, “In Rainbows”. Radiohead’s decision to offer their album for a customer-selected price is an unprecedented example of how bands can leverage their fan base to make money off digital music—and build hype. Radiohead made the announcement about “In Rainbows” exclusively on its website without any forewarning, shocking both fans and the press. Jeff Gerst, an independent media consultant and self-described “superfan” who worked with Radiohead in 2000 told NGT, “There it was, with a little post on the website, without some big buildup, like finding a treasure in the woods.”

Fans turned the pay-what-you-want option into a test of loyalty, with an estimated two-thirds of fans actually paying an average of $5-8 for the album. While that’s about half of price of an iTunes album, take the following into account:

1) When an estimated 1.2 millions fans downloaded the CD on its release date, many had never heard the album’s music before—it wasn’t on the radio or leaked on the web. And many paid for it anyway.

2) The band released the music on its own, giving it direct access over the estimated $6-10 million it generated on day one. With a record label, the band would have needed to sell 10 times more albums to reach that same profit.

3) While some fans voiced outrage over the download’s reduced quality (not as good as a CD, but better than iTunes) and statements by management that the digital release was only a promotion for the physical CD, a reported 700,000 orders have already been placed for the extremely pricy $81 special edition “discbox” debuting in December.

4) The 10-song digital release is a mere 43 minutes, significantly less than the average CD—meaning the band is producing less material but still marketing it as a full album. The band is actually adding 8 more songs in the “discbox” edition, which means more fans will be compelled to buy the “discbox” later on.

5) In November, the band will start planning an old-fashioned physical CD release in stores, which it still expects to do well despite the digital offering. As manager Bryce Edge told the U.K.’s Music Week, “If we didn’t believe that when people hear the music they will want to buy the CD, then we wouldn’t do what we are doing.”

Other bands are reportedly working on their own plans. Shortly after Radiohead, Nine Inch Nails announced plans to divorce from Interscope Records, saying that would work towards a “direct relationship with the audience.” Oasis just released their first download-only single, “Lord Don’t Slow Me Down.” Meanwhile, artists including Mos Def, White Rabbits, and Cold War Kids are signing up with RCRDLBL, the Downtown Records/Peter Rojas venture that pays artists for exclusive digital tracks with online advertising dollars.

So what does this all mean? Well, it means that clever marketing will help the music industry thrive again. It means that controlling one’s music instead of handing it over to old-school record labels with outdated methods will yield bigger payoffs. It means that releasing music when customers want it, in a way that makes them feel like their money is worth something—is a part of something—will reshape the music world into a reality that works for everybody.

France unveils anti-piracy plan

2007-11-24T04:30:00.000-08:00

French web users caught pirating movies or music could soon be thrown offline.
Those illegally sharing files will face the loss of their net access thanks to a newly-created anti-piracy body granted the wide-ranging powers.
The anti-piracy body comes out of a deal agreed by France's music and movie makers and its net firms.
The group who brokered the deal said the measures were intended to curb casual piracy rather than tackle large scale pirate groups.
http://news.bbc.co.uk/2/hi/technology/7110024.stm

Music exec says business model is 'done'

2007-11-24T03:49:00.000-08:00

A celebrated record producer who was recently named co-chairman of Columbia Records, Rubin made startlingly candid statements in Sunday's edition of The New York Times Magazine about the effects of the iPod, digital downloads and piracy on the music industry.
"Columbia is stuck in the dark ages," Rubin told the Times. "I have great confidence that we will have the best record company in the industry, but the reality is, in today's world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it's going to be a declining business. This model is done."
http://www.news.com/8301-10784_3-9770503-7.html

Yahoo works with Sony BMG to let users upload and edit music videos

2007-11-21T03:21:00.000-08:00

Yahoo Inc. has expanded a deal with Sony BMG that will give the Web portal's users greater access to the entertainment company's music videos, including the ability to edit hit songs into their amateur clips.
The agreement, announced Tuesday, aims to make Yahoo more appealing to online video fans in the face of stiff competition from YouTube, Google Inc.'s rival video service.
Under the deal, Yahoo will offer more Sony BMG music videos to more of its users across the globe. In addition, users will be able to add some of that music to clips that they create at home, offering a legal alternative to widespread piracy of Hollywood entertainment.
The videos will be available on Yahoo's various video properties, such as Yahoo Video and Yahoo Music. Users also can embed the clips on their personal Web sites, such as Facebook , using software called widgets.
Financial terms of the partnership were not disclosed. Generally, in such arrangements, Internet companies share revenue from online advertising with the copyright holders.
Sony BMG, a recording industry powerhouse, is a joint venture between Sony Corporation of America and Bertelsmann A.G.
Bruce Springsteen, Christina Aguilera, Foo Fighters, Justin Timberlake and Bob Dylan are among its biggest artists.
The deal marks the first time that Yahoo has been able to license music from a major recording company for its users to upload and edit. But Yahoo, in Sunnyvale, is still playing catch-up to its main competitor because Sony BMG entered into a similar video deal with YouTube last year.
YouTube, a subsidiary of Mountain View's Google, was the most popular video destination in September, with visitors viewing 2.5 billion videos, according to comScore Inc. Yahoo was a distant third, with 381 million videos viewed.
Because of piracy fears, Hollywood has been reluctant to make all of its content available online. Many studios also have criticized Internet companies for failing to do enough to stop the problem, particularly Google, which was sued earlier this year by Viacom for $1 billion over allegations that it failed to adequately remove pirated material from YouTube.
As part of the deal announced Tuesday, Sony BMG's music will only be available through a Yahoo branded video player, because of the copyright protections built into it.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/21/BUG7TG3U0.DTL

Kylie launches her new album on USB stick

2007-11-20T04:52:00.000-08:00

The Facebook campaign coincides with the release of Kylie’s latest studio album, 'X,' on 26 November, which will also be released globally on the same day on a limited edition USB stick. The USB will contain the full album, the video for 'Two Hearts,' the trailer for 'White Diamond,' plus a link to exclusive online content. The USB release will come in lavish packaging, making it a real collectable for Kylie's fanbase.
http://www.music-news.com/ShowNews.asp?H=Kylie-launches-Facebook-application&nItemID=16392

Nokia EMI deal

2007-11-19T06:35:00.001-08:00

Nokia's efforts to make its Music Store service a success have been taken up a notch as the manufacturer has signed a deal with EMI to offer users Kylie Minogue's new album five days prior to its general release. Minogue's new album, X, will be available to buy digitally from Music Store on 21 November for £8 while its general release date is 26 November. Individual tracks cost 80p. It is the first time a Minogue album has been released digitally prior to its general release.Regional manager for Nokia Music UK & Ireland, Richard Sandford said: 'Less than a month on from launch, the Nokia Music Store is already bringing the best music to fans in the way they want, when they want it.' He added that more Music Store exclusives were expected to follow.Music Store also released an exclusive Nokia version of the new Girls Aloud album, Tangled Up, this week. It has also offered exclusive versions of The Killers and Andrea Bocelli albums in recent weeks.

http://www.mobiletoday.co.uk/content/17264.asp

EMI Styles Hair-Raising Promotional Partnership

2007-11-16T07:55:00.000-08:00

EMI Music U.K.'s Charisma Records has struck an innovative arrangement which will promote its artists while salon customers are having their hair styled. Through the arrangement, i-vu will feature Charisma content across the interactive digital screen media firm's in-store network.U.K. chart toppers Plain White T's, DJ David Guetta, rising U.K. singer/songwriter Tom Baxter and R'n'B artist J. Holiday are among the first wave of participating artists, whose clips will feature on 1,600 interactive screens in more than 200 hair salons across Britain.The i-vu screens will offer two music videos in a 45-minute loop. Interactive touch functions on the screen will allow the viewer to access additional information on each artist, including tour dates, album releases and other promotional information. "Our aim is to make it as easy as possible for consumers to access our artists and music," comments Mark Poston, director of Charisma Records, in a statement. "The powerful interactivity of the i-vu screens really closes the distance between artist and fan and we're very happy to be the first music company to partner with i-vu." I-vu has partnerships in place a host of salon brands, including Clipso, Cobella, Headmasters, Nicky Clarke, Richard Ward, Rush and Trevor Sorbie.

www.billboard.biz

Digital Music's Dirty Little Secret

2007-11-16T05:48:00.001-08:00

The All-American Rejects went platinum two weeks ago. The alternative rockers celebrated the event in Las Vegas, but it wasn't the band's new CD that lapped the million-unit mark. The company's "Dirty Little Secret" single had just sold its millionth copy as a digital download.
Things like this should be making the music industry ecstatic. Digital music means fewer CDs to press, package, and ship out to retailers. And the smaller amount of inventory means that there is also no dread of costly returns once a hyped-up project pulls up lame.
This should be a Nirvana nirvana or a Green Day green day, but the blissful ka-ching melody is ringing hollow in the ears of the music labels. The industry execs are not satisfied. Donning the watchdog street clothes of the Recording Industry Association of America, the record labels have gone on to sue music fans and satellite radio providers while giving the industry's digital-download gorilla -- Apple Computer (Nasdaq: AAPL) -- an earful over pricing instead of a heaping bowl of warm gratitude.
It's embarrassing. It's troublesome. It's greed at the first sign of a lifeboat.
The day the music liedRemember when the music companies were pointing to peer-to-peer piracy as the root of waning CD sales? Industry sales have fallen in four of the past five years, and they somehow think it isn't due to a disconnect with what the masses wanted.
Digital music, in both legal and illegal forms, had stimulated consumers' music-listening appetites. The labels just didn't get it at the time. By and large, they still don't.
This doesn't mean I condone the original incarnation of Napster (Nasdaq: NAPS). It's just that everything from the iPod's success to the whitewashed reconstruction of the Napster model to the financial turnaround at Warner Music Group (NYSE: WMG) would have never happened if not for tens of millions of teens hitting up the peer-to-peer networks for pirated downloads.
Behind every disruptive technology, there is always an established industry crying foul. Digital downloads are no different, only this is a unique situation because the whining has come from the same camp that stands to benefit the most from the disruption.
Music-file sharing may have hurt the music makers in the near term, but it was also the perfect set of training wheels to teach the masses how to embrace portable music-listening solutions. Does anyone really think that Apple's iTunes store would have lapped the billion-download mark if consumers hadn't already gotten a taste from Napster?
Piracy is bad, but in this case, it proved to be no different from the chicken joint at the mall's food court that hands out free samples on toothpicks, all to bring in the bigger sale down the road. OK, so maybe the original Napster situation was more like mall patrons swiping the samples when the chicken joint is looking the other way, but the end result is the same. Consumers are hungry for digital music, and the labels remain the top choices on the menu.
Model citizensThere is money to be made in distribution by piggybacking on others' content. No one does this as well as Google (Nasdaq: GOOG). It is the leading search engine because it is able to sift through the content of others better than its rival sifters do.
That doesn't make the content creators any less important. In digital music, most of the attention has gone to the digital-music streamers and peddlers, such as Apple, Napster, and RealNetworks (Nasdaq: RNWK). The credit is well earned, but the music industry itself will be the ultimate beneficiary. You already see it in the stunning digital-music growth at Warner, offsetting moribund growth elsewhere.
The record labels were left for dead a couple of years ago. The five major labels were in a daze, scrambling for either new ownership or sector consolidation. There is money to be made there, especially after the companies become the lean, mean, high-margin machines that they are capable of in this glorious digital age.
There are other opportunities, of course. Motley Fool Rule Breakers subscribers have already been exposed to a few of them in XM Satellite Radio (Nasdaq: XMSR) and Akamai (Nasdaq: AKAM). XM is benefiting from ears being awakened to music that matters again. Akamai is there to speed up digital distribution of online stores like Apple's. Both companies are clear plays on the renewed interest in recorded music, but they are also lifelines to the music industry itself. XM is able to provide deeper playlists in narrower niches than conventional radio can, and it's going to drive music sales higher. Akamai makes the downloading process more efficient, and that, too, will sway music fans to go digital.
So let's hope that the major labels will can it on the whining. It lacks vision, even for an industry that is more concerned with eardrums than eyeballs.
Relish the disruption. The dirty little secret is that the joke isn't on you.

Is Cyloop Music's New Business Model?

2007-11-16T05:47:00.000-08:00

Soon, you'll be able to hear the entire music catalogs of labels like Warner and EMI for free, without commercial interruptions, on a social networking site called Cyloop.com. Cyloop.com, headed by Argentine-born Demian Bellumio, began life as ElHood.com, a social network website geared toward Hispanic musicians. The company changed its name to Cyloop in August with goals to expand globally, including English-language offerings. On Monday, Cyloop.com announced it had signed deals with heavyweights like Warner and The Orchard, which distributes the music of about 6,000 independent labels. Members can stream as much music as they want and create playlists to save and share with other members. The catch: You have to be logged in to Cyloop.com to play the music. And, forget about downloading the songs to your computer.
http://www.hispanicbusiness.com/news/newsbyid.asp?id=82032&cat=Today's+Most+Popular+Stories&more=/news/newspopular.asp

Universal Music's Bright Idea

2007-11-16T05:44:00.000-08:00

The recording industry has often seemed maddeningly unaware of some of the most interesting developments in music today. However, Vivendi's (NYSE: V) Universal Music Group is experimenting in Europe to try to boost CD sales once again. It might just be a much-needed musical makeover.
Universal Music is testing different levels of packaging and pricing for CDs. For example, a basic CD will have a low-cost cardboard case and a lower retail price to compete with cheaper digital versions. "Deluxe" editions will cost more but will include more durable jewel cases with locking mechanisms (it'll be harder to bust the jewel cases, much less the CDs inside) as well as bonus content for hardcore fans.
As news reports noted, music giants like Sony's (NYSE: SNE) BMG, EMI, and Warner Music Group (NYSE: WMG) have made few attempts to innovate with the CD format for the past 20 years, despite recent sagging sales. With cheaper digital music now available, it makes perfect sense for the recording industry to recognize that CDs lend themselves more toward a truly collectible experience than a costly, cookie-cutter product destined to collect dust.
Of course, Universal Music's move to get on the right track is hardly a surprise, with variations of the idea already floating around. Although I struggle with my addiction to Apple's (Nasdaq: AAPL) iTunes Music Store, I have definitely fallen for some higher-priced collectible CDs lately. I'm a sucker for B-side and rarity compilations, which sometimes include bonus artwork, booklets, and lyrics, as well as large cardboard covers that hearken back to the heyday of the LP, once more giving your musical taste a higher profile on the shelf. Packaging and extras like these could help the music industry lure diehard fans, especially now that the labels can also add bonuses like videos or live footage to the package. (Apple's already experimenting with a digital version of the "package deal.")
Initiatives like this might not save the CD -- digital music has clearly entrenched itself with consumers -- but it could certainly help bolster the format's lagging sales growth. The major labels' considerable bellyaching over music sales and complaints about piracy's threatening effects -- and their inevitable surprise and shock that consumers might actually pay for digital music -- only exposed them as an old-fashioned industry apparently loath to give consumers the changes they demanded. There's clearly no excuse for the industry to suppose that the old way is the right way any longer.

Warner Music: Me and YouTube

2007-11-16T05:43:00.000-08:00

Warner Music Group (NYSE: WMG) has taken an interesting step in courting the youth market: partnering with Internet video sensation YouTube to distribute its music videos to the site's large audience. It's a particularly interesting development considering the fact that a rival music giant had harsh, threatening sentiments for YouTube just last week.
Warner Music has made a deal with YouTube through which it will post music videos to the site and share any revenues garnered from related advertising. YouTube has been gradually adding ads to its wildly popular site.
Just last week, Vivendi's Universal music arm had some fighting words for YouTube and News Corp.'s (NYSE: NWS) MySpace, implying it plans to strike back at both sites for copyright infringement. Although I had to admit that Universal had a bright idea recently, its attitude toward current community-based trends shows that it just doesn't get where things are headed and continues to ignore what appeals to its very own customers.
Warner Music, on the other hand, is showing that it does indeed get where things are headed, and wants to play ball. A Wall Street Journal article quoted Alex Zubillaga, the company's executive vice president for digital strategy and business development, as saying, "This is a phenomenon which kids have embraced which is only going to continue to grow. We're much better innovating and embracing this than trying to stop it."
Indeed, many companies are trying to find ways to harness user-generated video and make media companies happy -- consider Google (Nasdaq: GOOG) Video. However, like it or not (and some companies haven't liked it -- consider General Electric's (NYSE: GE) and Vivendi's NBC Universal's reaction to one viral success on YouTube last winter, although NBC played nicer recently), YouTube is clearly the player that has caught on with the masses. (I waste an extraordinary amount of time viewing clips on YouTube, myself.)
Apparently YouTube is not only attaching advertising to its site, but it's coming up with an automated system that will troll its site to digitally identify copyrighted material and attempt to pay some advertising revenues to copyright holders that have decided to play nice (if not, such infringing videos will be removed from the site). YouTube is obviously trying not only to operate more profitably (it's well known the start-up has been burning far more cash than it generates), but also reach out to media companies and circumvent the legal problems that could potentially hurt its popular though nascent business. It's a tall order, but it's obviously looking at ways to address all these issues.
Music companies should think outside their traditional boxes and embrace these new trends, as Warner is trying to do, but many still seem to operate under the notion that playing the tough guy won't hurt their images with their customers. Right now, Warner is putting many of its rivals to shame by illustrating that it's willing to work with the will of the crowd, not against it.

MySpace: Walk the Plank, Pirates

2007-11-16T05:42:00.000-08:00

News Corp.'s (NYSE: NWS) MySpace may be erring on the side of caution in its recent move to block copyrighted musical material within its social networking site. But people who count on MySpace continuing to be hot virtual real estate may find that, over the long run, moves like this one could end up as strategic errors, converting "hot" into "not."
MySpace has a deal with Gracenote, a company that provides technology to identify copyrighted materials, to help it police its site for illegal uploads on MySpace pages. Gracenote is also known for providing the database that identifies users' music for Apple's (Nasdaq: AAPL) iTunes. Ironically, MySpace is well known for its musically focused teen fan base, who often do post clips of copyrighted works, a practice some might call darn good advertising. (MySpace plans to eventually sell music, too.)
I've seen a few articles floating around here and there recently, discussing how some teens are fleeing MySpace for various reasons. These include boredom, social pressure, uncomfortable or even scary situations (think stalkers, con artists, or other sketchy encounters), or even the invasion of privacy they feel upon realizing their parents and teachers are signing on and monitoring their pages. Facebook (recently rumored to be eyed by Yahoo! (Nasdaq: YHOO) as an acquisition target) recently loosened its standards for who can enter that previously youth-oriented site. Some buzz implies that teens aren't happy about opening up their domains to us square adults -- which shouldn't come as any surprise.
Meanwhile, copyright is a controversial issue these days. There's a legitimate argument that playing a little bit fast and loose with copyright has helped make some sites -- and their content -- increasingly popular.
Consider Google's (Nasdaq: GOOG) YouTube. Although YouTube is trying to convince copyright holders to share ad revenues instead of pulling copyrighted video clips, that's not cutting it with some companies. For instance, YouTube has been asked to pull SouthPark and other Comedy Central clips off its site. Interestingly, a recent Reason magazine interview with South Park creators Trey Parker and Matt Stone indicates that they have no problem with fans downloading their show, but it seems that Comedy Central and/or parent Viacom (NYSE: VIA) isn't amused by its presence on YouTube. (Some interesting asides: SouthPark is a popular download on for-pay iTunes. And in another ironic twist, former Viacom crony CBS Corp. (NYSE: CBS) seems to "get it" -- it's been uploading some high-profile clips to YouTube itself, like Katie Couric's recent interview with Michael J. Fox concerning Rush Limbaugh's comments.)
I think corporations that take the hard-line approach run the risk of alienating their most coveted potential customers -- teens, techies, and early adopters who are all about a new way of consuming content (a way that also helps popularize content through viral means). It wouldn't be the first time media companies have shot themselves in a foot this way, but one lame foot might keep them back in the race to the Net's next hot thing.

Recording Industry Gets It? Not.

2007-11-16T05:41:00.001-08:00

This article previously stated that the RIAA is lowering the rates for artists for digital content. In fact, it is attempting to lower the rates for publishers for this content, but in the author's opinion, that would still have an impact on the artists themselves.
When it comes to what consumers want these days, is the recording industry starting to get it, or not? Judging by some news headlines last week, I'm still leaning heavily toward "not."
An Associated Press article pointed out that despite the recording industry's traditional paranoia about copyright issues, particularly online, it is slowly starting to experiment with making online content available using the unrestricted MP3 format. Despite the ease with which users could copy it, since MP3 doesn't include restrictions to guard against piracy, its major benefit would be that the content is compatible with a multitude of devices, most notably Apple's (Nasdaq: AAPL) dominant music player, the iPod.
Limited content from a handful of artists here and there has been made available in MP3 format through venues like Yahoo!'s (Nasdaq: YHOO) online music store. If the experiment is a success and expands, it could be helpful to the online music services that would like to compete with iTunes, but have little traction given the fact that the iPod is such a popular device -- and maybe they could give iTunes a bit of a run for its money.
This experiment, while tentative (the article mentions only a few tracks and artists distributed using this approach), may show that the recording industry is starting to get it, in terms of recognizing that compatibility, not to mention compatibility with the top dog in MP3 players, is an important part of online distribution. But then again ...
I also ran across news citing HollywoodReporter's claim that the Recording Industry Association of America (RIAA) is attempting to lower the royalties its members pay out to publishers for digital content, including ringtones, which should trickle down to the payments the artists themselves are getting. Songwriters, composers, and artists can be one and the same and often participate in royalty-sharing agreements with publishers, and even if third-party publishers' payments were lowered they would be likely to charge the artists more. The RIAA is the trade association for the recording industry, and major labels EMI, Sony's (NYSE: SNE) BMG, Warner Music Group (NYSE: WMG), and Vivendi's Universal Music Group are all members.
The recording industry always contended that piracy hurt not only its own profits, but in effect took money from the pockets of the artists themselves. Lowering the royalties the major labels pay to artists would, of course, in effect mean the recording industry is shooting itself in the foot once again.
Industries that don't present themselves as particularly friendly to customers and suppliers are tasty candidates for disruption, and that's been abundantly clear regarding the recording industry for years now. Regardless of copyright law, let's just face it: Consumers don't seem to think highly of the major labels, and the RIAA in particular. Why should they, when it tries to keep the status quo and avoid innovation by filing lawsuits against children and grandmothers? I recently wrote about SNOCAP, created by Napster (Nasdaq: NAPS) creator Shawn Fanning, and its deal with News Corp.'s (NYSE: NWS) MySpace, and I can't help but think artists will increasingly form direct relationships -- and commerce -- with fans. In the not-so-distant future, will we really need the major labels as middlemen, hit machines, and tastemakers? The Internet's making distribution and payment easy, and users are coming to the conclusion that with the help of technology and like-minded fans across all niches, they can find what entertainment they like among countless choices without the labels' marketing schtick and tired avenues like banal Top 40 radio.
The AP article pointed out that the well-known MP3 format some labels are experimenting with is, obviously, one of the oldest digital music formats. Maybe that's an ironic way to end this piece; what do you make of an industry that's still looking backwards to "innovate"? And seeks to cut payments to its bread-and-butter talent -- who's ripping off artists again? Maybe one day some of these old-school industry execs will be forced to pick up some instruments, because they'll be the only ones left at the labels, singing the blues.
Do they get it or don't they? It's hard to tell sometimes.

Google and Simon Fuller plan IPTV service

2007-11-16T05:41:00.000-08:00

Story link: Google and Simon Fuller plan IPTV service by Jan Harris
Rumours are circulating that Google is in talks with Simon Fuller, the founder of 19 Entertainment, about launching an IPTV service to distribute entertainment and music in new and innovative ways.
The partnership is believed to involve creating original content which would compete with major UK TV networks.
Google has been paving the way to expand its internet TV services after launching a Video TV and film service last year on a pay-to-view basis.
Google now owns YouTube and has built up its content through major deals with producers and broadcasters including ITN, CBS and Sony BMG.

Quick Take: RIAA Changes Gears Just Before Hitting Brick Wall

2007-11-16T05:40:00.000-08:00

Maybe you saw my diatribe against the Recording Industry Association of America (RIAA) earlier this week and shook your head at the assertion that the coalition has to change gears now. Well, the change is happening in Internet time, which is somewhere between "instantly" and "yesterday."
Today, Ray Beckerman's RIAA litigation blog noted that the attack lawyers' lawsuit boilerplate has changed dramatically, and no longer tries to pin a "making available" claim on the hapless defendant. In a nutshell, that claim used to be a central pillar in the RIAA strategy, because it's fairly easy to show that some files were made available for download from a given IP address. Easy money if the lawsuit were to go anywhere.
But few of them ever did, and many suits have been thrown out because it isn't actually illegal to have a pile of files ready for others to download. Someone actually has to download them, which is a much harder point to prove. Sony BMG (NYSE: SNE), Warner Music (NYSE: WMG), Vivendi's (OTC BB: VIVEF.PK) Universal Music, and EMI (OTC BB: EMIPY.PK) can't lean on that crutch anymore.
It's real. It's happening. There's no way the RIAA could afford to start many more lawsuits when the chances of winning dwindle to nothing. Good riddance.
Related Foolishness:

SNOCAP's Indie Spirit

2007-11-16T05:38:00.000-08:00

SNOCAP's still at it, at least in terms of symbolizing the disruptive influences rippling through the music industry. This time, it hit headlines with a deal with an entity called Merlin -- and the idea of magic for indie labels.
According to a press release from Merlin, a licensing agency for independent labels, its agreement with SNOCAP will allow musical content from "potentially thousands" of independent labels worldwide to be distributed through MySpace, as well as other sites that allow html to be edited. Merlin claims such independents represent 30% of overall music market share and 80% of new releases. (And of course, while Merlin says that it wants to function as "the fifth major" in the industry, according to a Reuters article, one might wonder at what point -- and to what degree -- bands will start going on their own.)
In November 2005, I identified SNOCAP as an interesting private entity to keep an eye on, not least because it was headed up by Napster (Nasdaq: NAPS) creator Shawn Fanning. SNOCAP's technology allows sites to sell music directly to fans. Although it took a while, last September it announced that it was going to be a part of MySpace's bid to become a music retailer, which was significant, since MySpace has been a big success with young people and music was arguably one of the drivers of its popularity.
SNOCAP provides digital licensing and copyright management tools. MySpace's SNOCAP MyStore is live, and sells unprotected MP3 files which, importantly, are compatible with Apple's (Nasdaq: AAPL) iPod music players.
Merlin says it represents and seeks to license Web 2.0 new media. According to Reuters, it secures licensing deals with emerging media such as that found on MySpace and Google's (Nasdaq: GOOG) YouTube.
Giving indie labels a better form of distribution is as significant as allowing artists to sell directly to fans, another possible effect if MySpace's music commerce initiative really takes off. It's interesting in the sense that it could take some of the shine out of Apple's iTunes, which has been the pioneer in paid digital music downloads. But it also poses an interesting question for the major record labels, Sony's (NYSE: SNE) Sony BMG, Vivendi's (NYSE: V) Universal Music, Warner Music Group (NYSE: WMG), and EMI.
I've long wondered whether the days where major music labels and other old-school media concerns function as middlemen and tastemakers are drawing to a close; at the very least, it seems they face serious challenges. After all, the Internet eases distribution, and consumers today can easily find entertainment without relying on the majors -- word of mouth, recommendations engines, and similar community-driven Net innovations are just a few ways, with many of these falling into the Web 2.0 arena.
It remains to be seen how well MySpace's music store will resonate with users, but it doesn't seem difficult to imagine that it will be a success, given the site's popularity and history of musical overtones. Overall, music seems to be taking an interesting turn these days, making this Fool wonder whether labels will eventually become an anachronism if artists can just as easily communicate directly with -- and sell to -- their fans.

5 Alternative Business Models

2007-11-16T05:37:00.000-08:00

The record industry is in dire trouble and the major record companies know it. Instead of recognizing that the record industry’s aging business model, even with the intervention of Jobs, is a broken one and in desperate need of a fix, the response has largely been litigation coupled with the introduction of technology, in the form of DRM, designed to enforce copy protection, which, ultimately, just inconveniences paying customers. If the iTunes model isn’t the answer, and business can’t go on as usual, then what is?
Here are five alternative models for selling music, many of which are actually being tested by artists, entrepreneurs, and even the major record labels themselves.
http://www.last100.com/2007/10/11/music-industry-five-alternative-business-models/

CD Is the New Vinyl

2007-11-16T05:35:00.002-08:00

Hold your head up, fellow musicians.
It's easy to get discouraged over the latest Nielsen SoundScan music retail data. CD unit sales fell a staggering 19.3% during the first half of the year. After watching compact disc sales dip in all but one year on this side of the millennium, 2007 isn't bent on reversing the trend.
These are physical discs that we're talking about, with hard-to-open wrappers and plastic jewel cases that chip way too easily. It's a different world in cyberspace, which saw a 60% surge in digital album sales over the same six months.
Unfortunately for those who fear shrinking pies, only 23.5 million virtual discs were sold. The actual CD platform moved 205.7 million copies. Combine the two formats, and the music industry still suffered a 15% dive in unit sales through the end of June this year.
It's not just quality failing quantityCynics would argue that the quality of the content, or lack thereof, is feeding consumers' apathy. With last week's top-selling album belonging to Miley Cyrus -- better known as Disney's (NYSE: DIS) Hannah Montana to the preteen set -- it's easy to blame the pipeline.
That would be a shortsighted. The charts tell us a more compelling story.
Second on the chart is American Idol winner Kelly Clarkson's My December. Go a few notches lower, and you'll find Paul McCartney's latest CD. It peaked at the third slot a couple of weeks ago, twice as high as his previous studio album. With a Disney soundtrack, an artist launched by a Fox TV show, and McCartney's release on Starbucks' (Nasdaq: SBUX) Hear Music label, it's easy to see that the hottest titles are coming from unlikely sources.
For traditional labels like Warner Music Group (NYSE: WMG), EMI, and Universal, that may be an even bigger problem than sluggish CD sales. The majors can offset the pain of sluggish CD sales with fatter margins elsewhere. In addition to the beauty of inventory-free sales through Apple's (Nasdaq: AAPL) iTunes and other digital distributors, the top music companies can cash in by selling ringtones, not to mention the relatively new revenue stream of ad-sharing through video websites like YouTube and MySpace TV. The major labels' challenge to make sure that they have a product that consumers crave.
Web-savvy bands are launching their careers through social networking sites. Websites make it too easy to promote new material, sell merchandise, and reach out to engage their growing fan bases while creating more interactive relationships.
In the worst-case scenario for the labels, the distribution power will shift toward recording artists. And the best-case scenario? Well, basically, the exact same thing happens -- just a bit more slowly.
The new eardrum economySo what will die first: CDs or major labels? Neither will go down without a fight. Nearly 90% of the albums sold so far this year were physical CDs. That figure will shrink over time, but there are still too many music fans who prefer to own tangible products, even if their first step is to copy the CDs to their computers and transfer them over to their portable media devices.
It doesn't hurt that the digital industry is priced to move singles, not full-length albums. It's a symbiotic relationship between CDs and downloads right now. Pressed onto physical discs, singles could never cover the overhead at $0.99 a pop, no matter how briskly they sold. However, pricing digital albums at the same $10 mark at which many new CDs are now priced gives the actual product the edge.
Add it up, and you'll find that we can't kill the CD for now. The fate of the major labels actually rests in their own hands. They've already gone through waves of consolidation and layoffs, but they may still need to become even more nimble.
The labels don't have to die -- they just need to adopt a new approach to the game. Major labels aren't as relevant as they used to be. Instead of bankrolling CDs and slick videos, they'll need to grab a bigger cut of artists' success beyond mere album sales.
Whether this involves snapping up companies like Live Nation (NYSE: LYV) and IAC/InterActiveCorp's (Nasdaq: IACI) Ticketmaster, or taking a more material stake in the acts they sign, the music industry will look very different in five years.
Stagnancy is a tune that no one wants to hear.

The RIAA Wins, but What Does It Lose?

2007-11-16T05:35:00.001-08:00

The recording industry won a legal victory Friday, when jurors found Minnesota's Jammie Thomas guilty of illegally downloading and then sharing music, and slapped her with a $222,000 fine. This victory is significant since it probably gives the industry even more justification to continue its crusade against music fans.
The jury decided to fine Thomas $9,250 for each of the 24 songs (many looked like contenders for Really Lame '80s Night parties, in my opinion). That's quite a premium, since tracks go for $0.99 a pop on Apple's (Nasdaq: AAPL) iTunes or for $0.88 apiece on Wal-Mart's (NYSE: WMT) service, for example.
My Foolish colleague Anders Bylund recently noted a legal boilerplate change suggesting that the industry might back away from the idea that making a track available for downloading, even with no takers, was worth pursuing because so many of those cases had been thrown out of courts. In Thomas' case, it wasn't proven that anyone actually downloaded the files, yet she's being forced to pay anyway, so the RIAA may disappoint Anders and not back down after all.
If the logic sounds fuzzy to you, you're not alone. Some consider the whole idea illogical. The major labels -- companies like Sony (NYSE: SNE) and Bertelsmann's Sony BMG, Vivendi's (OTC BB: VIVEF.PK) Universal, and Warner Music Group (NYSE: WMG) -- are apparently pouring millions into pursuing music fans. Judging from comments at the trial, they have nary a clue how much they're losing from illegal downloading, among other details that point to utter cluelessness.
Those who own these companies' shares should think long and hard about this crusade -- spending millions to gain a couple of hundred thousand here and there (or settlements in the couple of thousand-dollar range) doesn't sound like the smartest use of cash, does it?
What short-term thinking and a short-sighted waste. The RIAA's "strategy" seeks to distract attention from its anachronistic business model, and an industry that goes out of its way to inspire fear in its customers strikes me as one that investors would do well to avoid.
Millions are spent on these punitive endeavors (instead of on innovation), and by winning, the industry's quite likely losing any remaining shred of consumer respect. The RIAA may continue beating up on its customers, but in the long run, I'll bet it will end up as stuck as a broken record on an endless loop of trouble.

Good Riddance, Major Labels

2007-11-16T05:33:00.000-08:00

Will the last band to leave a major label please unplug the amplifier?
Last week, Radiohead announced that it's going solo and releasing its next album digitally, without the helping hand of a major label. Nine Inch Nails followed suit this week. Now Britain's Telegraph.co.uk is reporting that Oasis and Jamiroquai may follow suit.
Can you believe it? Being unsigned is the new signed. That could make the tens of thousands of garage bands and webcam crooners that amass modest yet dedicated followings on sites such as News Corp.'s (NYSE: NWS) MySpace and Google's (Nasdaq: GOOG) YouTube the new music-industry leaders.
Well, not exactly. Established artists have every incentive to leave a label. The real industry profits lie in touring. Once they have a dedicated fan base, it's more important to nurture that than to have labels bankroll CDs and place songs on the radio.
Besides, have you seen the perpetually falling state of CD sales? Have you heard the thin playlists on terrestrial radio?
Labels are in trouble. Warner Music Group's (NYSE: WMG) unsuccessful bid to land EMI earlier this year wasn't so much about synergy as it was about survival.
And in a case of atrocious timing for the industry, this comes on the heels of the record labels' $222,000 legal victory against a Minnesota mother who allegedly made songs available on a peer-to-peer file-sharing network.
No matter where you stand on the issue, you have to agree that the labels may lose more than they gain here, even before you begin to back out legal costs. How many irate music fans, upset over the decision, will make it a point not to buy CDs anymore?
Great! Just what the record companies need: another reason to explain away free-falling sales of prerecorded music. Labels are already struggling with their unfeasible business models. Can they really afford to make themselves even more repulsive to both artists and fans?
The dynamics have changed. Broadcasters such as Disney (NYSE: DIS), java brewers such as Starbucks (Nasdaq: SBUX), and stardom magnets such as CKX's (Nasdaq: CKXE) American Idol are the new architects of the music industry.
Cue the major labels funeral mixtape. Make sure it's got NIN's "Head Like a Hole," Radiohead's "Creep," Jamiroquai's "When You Gonna Learn," and Oasis' "Don't Look Back in Anger" on it. If the labels still can't figure out that the songs are about them, why bother mourning.

Rethinking the Music Industry Business Model

2007-11-16T05:29:00.000-08:00

First, treating all your customers as criminals doesn't create much loyalty or willingness to buy your product. Especially in a market where the product is based on being a fan, not filling a need. You want your fans to be happy -- not pissed off. Second, the basic economics are there. On the supply and demand curve the supply of digital goods is infinite, meaning that the trend over time will absolutely be for the price to get pushed towards zero. It's just the way the market works. That's not a bad thing if you embrace it and recognize that, rather than lost revenue, free content represents free promotion. After all, the hardest part of becoming a success in the music business is the marketing to get your product known. The third, and final, aspect of this is how new technologies have dramatically decreased the costs of every other aspect of the music business. Creation, publishing and distribution are all now much cheaper due to the onward march of technology, forcing a shift in how we think about copyright issues. Based on all of this, it's not hard to come up with a variety of different business models that are based on (1) using the music as a promotional good to get a lot more attention in a crowded market (2) offering customers what they want, and offering them plenty of different ways to get it and (3) building tremendous loyalty from happy customers who feel much closer to the musicians and are much more willing to spend money on secondary products (merchandise, concerts, access).
http://techdirt.com/articles/20060825/095653.shtml

The Music Industry's Downward Spiral

2007-11-16T05:27:00.000-08:00

By Alyce Lomax October 10, 2007
24 Recommendations
Listening to Nine Inch Nails' Pretty Hate Machine with my friends Liz and Laurie is one of my fond but hazy college memories. Almost 20 years later, Nine Inch Nails' Trent Reznor has ditched the traditional music industry, having announced that his band is now liberated from record labels. (Oasis and Jamiroquai may be heading that way, too. My Foolish colleague Rick Munarriz covered the developments earlier today.)
A long time comingYou could probably see this coming. According to CNET's blog, Reznor's been showing his displeasure lately with his label, Interscope -- owned by Vivendi's (OTC BB: VIVEF.PK) Universal Music Group -- and told fans at an Australian concert in reference to his music: "Steal it. Steal away. Steal and steal, and steal some more and give it to all your friends." According to the article, he was expressing frustration at how much the labels charge for CDs.
"Steal it" is hardly a new idea. Back in 1992, when I bought Gub, an early album from mercurial industrial supergroup Pigface (which has had an ever-changing lineup of musicians, including Reznor in those early days -- and he was on that album), the packaging had a sticker on it that pretty much said the same thing. A good paraphrase of that sticker would be: "Steal this album, and if you won't steal it, at least copy it and give it to all your friends." It's a little ironic, since that album was on the Invisible label from Martin Atkins, which certainly wasn't a major. But the point was probably not only to make an antimaterialistic, troublemaking message, but also to help spread the word abut the band and get people to come to the shows.
Of course, the music industry only grudgingly tolerated copying before the Internet provided the framework for massive file-sharing, and the industry's getting meaner all the time and hitting closer to home. At the recent high-profile trial over file-sharing in Minnesota, an industry lawyer was quoted as saying that making a single back-up copy of an album, such as you might do when you load it onto your computer and iPod, is stealing. According to Salon, the lawyer said that's "a nice way of saying 'steals just one copy.'" That makes me wonder whether they think they can come after you if you sing a song in the shower.
I never bought Pretty Hate Machine, although I had it in my dubbed tape collection. However, in the subsequent years, I bought up a whole lot more Nine Inch Nails for my CD collection; two of my all-time favorite albums are The Downward Spiral and The Fragile. My point is, you could call me a thief in 1989, or you could call me a lifelong fan in 2007.
Creative Destruction 101When I wrote about the RIAA's legal victory earlier this week, expressing my opinion that the music industry's shortsightedness is probably a fatal error, I received an irate rebuttal from one guy who seemed to think that I don't believe artists should get paid, and of course that's not the case. I know some people seem to take it as a point of pride that they never pay for music, and I can't get behind that.
However, I have a funny feeling that most music lovers are itching for the opportunity to support their favorite bands without feeling like they're getting gouged by middlemen. After all, digital piracy really began to take off when CD prices did, and many argue that the industry doesn't pass money on to most artists in any meaningful way, even while it complains that piracy hurts artists.
Reznor made his announcement on the official Nine Inch Nails website, and although it doesn't reveal any more details, it will be interesting to see what Reznor plans with his next album. Will he do something similar to Radiohead's "pay whatever you want" campaign? Or maybe bundle it with a Sunday newspaper the way Prince recently did?
Investors can see this entire drama as an apt lesson in Joseph Schumpeter's economic idea of "creative destruction," which is only a losing situation for those who don't evolve.
The future of music is bright. Music is more popular (and more easily distributed) than ever, and that includes diverse niche offerings. Musicians can distribute digitally on Apple's (Nasdaq: AAPL) iTunes. News Corp.'s (NYSE: NWS) MySpace has teamed with Snocap to help artists deal directly with fans as well. Some musicians just set up a website and a PayPal account.
The RIAA -- and its members, including Sony (NYSE: SNE) and Bertelsmann's Sony BMG, Warner Music Group (NYSE: WMG), and Universal -- may have enjoyed a legal victory last week, but their long-term worries remain. Having several major bands give them the heave-ho within a week seems to be a significant sign that the time is ripe. When it comes to the traditional music industry's business model, these developments sound like yet another crack in a broken record.

Richie Hawtin (DJ and owner of M_nus label) On The Future of Music Sales

2007-11-16T05:21:00.000-08:00

Will downloading kill music?

Last year Minus wrote our biggest royalty cheques ever because of digital sales. If people can buy stuff digitally at a good price they generally will. People don’t want to rip other people off as long as they don’t feel they’re getting ripped off themselves. To do this properly you need to be able to track what’s happening with a record and bring people into an on-demand service. Why own 100 records when you can have anything you want, whenever you want? There’s a company called Sound Cloud looking at sharing music on a global scale. But you could take things even further. Right now an MP3’s tags can tell you basic information about a track like its name or artist. But what if you could encode more than that? You could break each track down into its individual loops and elements, and each of these elements and loops would be encoded with information about what influenced them or who made them. Then you could start to build a way of tracing how a track came to be. It would work like a genetic code so that in ten years’ time you could trace a track’s family tree, looking at where it came from and the software or machines that created it.

So are you saying we should get rid of ownership of music?

I’d like to get to a place where I don’t even have to carry a computer or a mechanical storage device for music. I don’t care if I have some physical object that contains these non physical assets, I’d like all my music stored somewhere and to be able bring that list down whenever I need it. So imagine if you had this cloud where all these songs were stored and encoded and you could pluck them down in real time during a performance? But what if you want to get deeper and you want to have just the high hats from a track and map them over the sound from another song playing. This kind of interactivity is where I want to get to. Getting down to the molecular level of songs. That would be amazing.

Amie Street- Awesome New Music Model

2007-11-16T05:20:00.001-08:00

Today I came across a new startup called Amie Street that may have found the right way to help people discover and market price music from new or little known bands. The founders, Elliott Breece, Elias Roman and Joshua Boltuch, are three Providence, RI college students (pictured left to right in photo below).
This is a very alpha site and there are a few bugs (I can only get the flash player to work on Firefox on a PC, no luck with IE or Firefox on Mac), and the interface could use some help with flow. But the core business model is killer, something I haven’t seen before.
Artists can upload their music to Amie Street for promotion and sale. Users form social networks with friends, listen to, and purchase music. All songs are DRM-free in MP3. Songs appear to be at 192kpbs quality level, although it may just be whatever the artist uploads.
All songs are free to start. Prices fluctuate over time based on demand for the song - currently the highest priced song, “Against the Wall” by Danny Ross, is $0.36. 273 songs have been uploaded so far. This demand based pricing model seems like a good way to sell music.
http://www.techcrunch.com/2006/07/23/amie-street-awesome-new-music-model/

Social streaming: music's new model?

2007-11-16T05:20:00.000-08:00

The music industry loses billions each year on pirated music, so labels are constantly looking for new ways to hold on to their business -- even offering music for free.
Soon, you'll be able to hear the entire music catalogs of labels like Warner and EMI for free, without commercial interruptions, on a social networking site called Cyloop.com.
Cyloop.com, headed by Argentina-born Demian Bellumio, began life as ElHood.com, a social network website geared toward Hispanic musicians. The company changed its name to Cyloop in August with goals to expand globally, including English-language offerings. On Monday, Cyloop.com announced it had signed deals with heavyweights like Warner and The Orchard, which distributes the music of about 6,000 independent labels.
Members can stream as much music as they want and create playlists to save and share with other members. The catch: You have to be logged in to Cyloop.com to play the music. And, forget about downloading the songs to your computer.
The partnership is a new chapter in the evolution of the music industry, as labels are experimenting with new technologies to make up for money lost on in-store album sales and from illegal downloads.
''We want Cyloop to not only be a site, but be a platform that powers the music labels,'' Bellumio said.
Bellumio, 31, said he expects to close a deal with Sony and Universal before the end of the year.
Cyloop allows users to create custom playlists based on the music the site features, and it allows artists to upload and promote their own music.
Cyloop is home to many independent Latin artists; English-speaking artists include Wilco and comedian George Lopez. With a staff of about 70, the company builds profile pages for artists and expects to have 100,000 artist profiles by the end of the year.
Unlike other sites such as MySpace.com, Cyloop users cannot create their own content. That makes Cyloop more attractive to advertisers, who don't want their ads next to potentially risqué content, Bellumio said.
The site is supported by on-screen advertisements, but there are no audio commercials interrupting the music. Billboard now sells the ads for Cyloop in the United States. The record labels split the ad revenue with the site, a new business model for the labels, Bellumio said. Major sponsors include Microsoft and Ford Motor.
Monday's announcement included the news that Cyloop.com will now run the music channel of Terra.es, Spain's leading Internet portal. With roughly 17 million unique visitors a month, according to Bellumio, Terra's traffic can bring a nice boost in advertising revenue to the 1-year-old site.
Bellumio wouldn't reveal Cyloop's traffic numbers but said the target is at least 5 million registered users by next year. As of now, 40 percent of Cyloop's traffic is from the United States.
Music downloads and subscriptions are a $1 billion industry, with subscriptions making up $200 million of that, said David Card, an analyst with JupiterResearch. The biggest successes in the digital music business, he says, ``are the 99-cent singles that you can play on your iPod.''
But downloading isn't growing fast enough to keep up with declining CD sales. Global piracy of recorded music has cost the United States $12.5 billion in economic output and 71,060 jobs annually, according to an August report by the Institute for Policy Innovation.
''If you are a record label or publisher, you need to tap into multiple revenue streams,'' said Card.
But Card said it is too early to guess if this new model will save the industry or match the revenue from digital downloads. And he is skeptical about Cyloop's plans to profit off advertisements.
''Right now no one is spending any money on digital audio ads,'' Card said. ``There's no guarantee that anyone will see those ads whatsoever.''
Bellumio, a former vice president of corporate finance for Terremark, said he doesn't expect the company to be profitable until next year. The company has so far raised more than $11 million in venture capital financing.
The next step for Cyloop is to explore how to get involved in the mobile phone market, Bellumio said. It already started filming webisodes in its new video studio overlooking Washington Avenue in Miami Beach.
He said he plans to use the studio for filming music videos and eventually create a live-audience Latin music show, similar to MTV's TRL.
For artists themselves, social networking sites have become critical to promoting themselves, even if they don't make any money.
Jason Calleiro, 27, who toured the United States and Canada for years with the band Glasseater , said he depended on online message boards for marketing and communicating with fans.
His new Miami-based social networking site, OurScene.com, which launches in a few weeks, will offer artists the chance not only to give away free music downloads, but also to communicate tour dates with fans and sell merchandise -- the real moneymaking paths.
''I definitely think the industry needs to rethink ways of getting income,'' Calleiro said.

http://www.miamiherald.com/news/breaking_dade/story/305499.html

When Pigs Fly - The Death of Oink

2007-11-16T05:02:00.000-08:00

Demon Baby with a lengthy, impassioned opinion piece on the suicidal tendencies of the record industry. "If I filled my shiny new 160gb iPod up legally, buying each track online at the 99 cents price that the industry has determined, it would cost me about $32,226. How does that make sense?"

http://www.demonbaby.com/blog/2007/10/when-pigs-fly-death-of-oink-birth-of.html