Year Over Year Holiday Music Sales Off Over 20%

From Phil Gallo, Variety:

Overall music sales during the Christmas shopping season were down an astounding 21% from last year. From the week of Thanksgiving up through the day before Christmas Eve, 83.9 million albums were sold, a decrease of 21.38 million from 2006's 105.28 million.

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RIAA Brief: Washington Post Gets It Wrong

From La Shawn Barber:

According to the brief, the authorized copies Howell made became unauthorized copies once Howell put them in a shared folder, presumably the Kazaa shared folder. I mentioned in the previous post that a “consummated transfer” wasn’t necessary for a violation to have occurred, according to the RIAA. If you rip a CD and place the MP3s into a folder to which only you have access, the copies are authorized. If the files are in a shared folder, they’re “available” to third parties, which is a copyright violation.

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Amazon Download Service Adds Warner Music

From Reuters:

Online retailer Amazon.com Inc has signed on Warner Music Group to its music download service, which aims to compete with Apple Inc's industry-dominating iTunes online store.

Warner Music songs are available on the Amazon MP3 service, which lets users purchase the tunes and download them to many digital music players, including Apple's iPod, the companies said on Thursday. They will also offer exclusive tracks and special album bundles.

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Canada: New Levies Proposed for iPods and Memory Cards

Canada follows Spain with potential digital tax on various music players and storage devices

From CTV:

Consumers could potentially be hit by a new tax on electronic storage devices such as iPods and blank memory cards in 2008.

The federal Copyright Board has given its approval for a special levy on iPods and other digital players because they can be used to copy movies and music.

The proposed levies range in price including:

85 cents for rewritable CDs and MiniDisc
$2 for 1 GB removable electronic memory cards
$25 for a digital audio recorder between 1 and 10 GBs
$75 for digital audio recorder of more than 30 GBs

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XM Settles With Warner Over Inno

From Peter Kafka, Silicon Valley Insider:

XM has settled a lawsuit with Warner Music over a portable XM device that lets users record music directly from the satellite radio service. Execs there won't talk about the settlement, but we can tell you that deal requires XM to pay WMG a fee for each "Inno" player it sells. Last week Universal Music Group inked a similar pact, which means that the satellite company still has to come to terms with Sony-BMG and EMI Group before it can extract itself from court proceedings.

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Sony BMG Selling MP3s

From Peter Kafka, Silicon Valley Insider:

A confusing report from Billboard says that Sony BMG is going to start selling a limited amount of DRM-free MP3s, via artist-specific gift cards that can be redeemed online. That makes a bit of sense -- Sony has been a steadfast champion of keeping locks on its content, but will likely have to capitulate to the anti-DRM crowd sooner than later, and this is a reasonable baby step. The confusing part: Billboard says the gift cards will be redeemed at musicpass.com, a Sony-BMG online store that currently doesn't exist.

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Quick Links 12/21/07

France's SPPF Sues Limewire

Pre-Christmas CD Sales On The Up, Says BPI

Chinese Legalese Spells Mixed Results for Labels

Spanish Parliament Approves Digital Tax

From Howell Llewellyn, Billboard:

The Spanish music industry received a belated $46 million Christmas present on Thursday when Parliament approved a new digital tax in its last full session before the general elections on March 9.

The so-called "digital canon" will apply to MP3 and MP4 players, mobile phones with MP3 recording capacity, and USB memory cards, and is expected to come into effect Jan. 15. It will apply a small charge to digital gadgets capable of recording music, film, photocopies, or any other form of intellectual property.

The Spanish government estimates that of the €100-115 million ($144-166 million) of "canon" that will be collected per year, some €32 million ($46 million) will go to the music industry. The figure is 100% greater than the current music industry "canon" charged on blank CDs, DVDs, CD and DVD recorders, printers and Xerox machines.

Labels' body Promusicae president Antonio Guisasola says, "this is a victory for the music industry, it is justice in the making. The [intellectual property] law forces us to live with private copying [of music by consumers], but without being compensated for loss of income [through non-purchase of music]. Now this will change."

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Live Nation Launches Global Ticketing Business

From Yahoo Finance:

Live Nation (NYSE: LYV - News) announced today that it has entered into a long-term agreement with CTS Eventim which will enable Live Nation to launch its own ticketing business utilizing the most technologically advanced ticketing platform in the world. Live Nation will exclusively license the Eventim platform in North America, and Eventim will provide back office ticketing services in the UK and ticketing services across Europe. The new agreement will allow Live Nation to begin selling tickets on January 1st, 2009.

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French Labels Gets Tough On Piracy

From Aymeric Pichevin, Billboard:

French independent labels collecting society SPPF has warned it would no longer tolerate Internet firms using the music of its members without authorization.

In a statement issued Dec. 17, the organization stated, "For years, SPPF has been observing that online music services are launched prior to any negotiation to get right holders' authorizations."

This strategy, acknowledges SPPF director general Jérôme Roger, complements the groundbreaking agreement signed by French government, right holders and ISPs in November to prevent online piracy. "This agreement is designed to fight individual infringements," explains Roger. "Here we fight illicit reproduction from professional services."

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MPAA Wins Case Against TorrentSpy

From InfoWorld:

The Motion Picture Association of America (MPAA) has won a lawsuit against the operators of TorrentSpy.com, with the judge ruling in favor of the MPAA because the Web site operators tampered with evidence.

In a ruling that could have implications for the privacy of Web site users, Judge Florence-Marie Cooper of the U.S. District Court for the Central District of California, ruled that TorrentSpy has infringed MPAA copyrights in a default judgment against the operators of the site.

Cooper, in a ruling made public Monday, agreed with the MPAA that defendants Justin Bunnell, Forrest Parker, Wes Parker and Valence Media had destroyed evidence after another judge had ordered them to keep server logs, user IP (Internet Protocol) addresses and other information. TorrentSpy billed itself as a central location to find files distributed on BitTorrent P-to-P (peer-to-peer) networks.

The defendants' conduct was "obstreperous," Cooper wrote in her decision. "They have engaged in widespread and systematic efforts to destroy evidence and have provided false testimony under oath in a effort to hide evidence of such destruction," she wrote.

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Microsoft, Nokia in Mobile DRM Deal

From Eric Sylvers, IHT:

Microsoft and Nokia, which both make operating systems for mobile phones and compete for control of that market, are coming together in a rare accord in an effort to take advantage of the expected explosion of the sale of mobile digital content in the coming years. Under the agreement to be announced Monday, Microsoft's PlayReady DRM technology - which helps content owners like music companies and service providers deliver digital content while restricting access - will be loaded directly on some Nokia phones beginning early next year.

The market for mobile content - music, games, graphics, video and adult material - will exceed $44 billion in 2011, up from $20 billion this year, the market researcher iSuppli estimates. But many consumers have balked from the beginning at the restrictions put on them with DRM. And some analysts argue that the technology has limited the growth of digital content sales.

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Rhapsody Streams Full-Songs (with Limitations) To Facebook

Seems a bit silly to limit full streams to Rhapsody subscribers, as registered imeem users can already do so for free - as well as embed tracks and playlists anywhere.

By Antony Bruno, Billboard:

Rhapsody has beta-launched a Facebook widget designed to extend full-song music streaming into the popular social network.

Existing Rhapsody subscribers will be able to play an unlimited number of full songs, while non-subscribers will be limited to the 25 free songs a month that are offered under the company’s ad-supported model.

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Universal Music Group (UMG) and XM Satellite Radio Reach Agreement on Pioneer Inno

From CNN Money:

Universal Music Group (UMG), the world's leading music company, and XM Satellite Radio, the nation's leading satellite radio company, today announced that they have resolved the lawsuit brought by UMG against XM over its Pioneer Inno, a portable satellite receiver with advanced recording functionality. The companies did not disclose terms of the deal.

As part of the agreement, UMG becomes the first music company to reach a multi-year deal covering all XM radios with advanced recording functionality, including both those currently available as well as future product releases. In addition, UMG will withdraw as a party to the complaint filed by the major record companies against XM in May, 2006.

"We are pleased to have resolved this situation in an amicable manner," stated Doug Morris, Chairman & CEO, Universal Music Group. "We pride ourselves on empowering new technology and expanding consumer choice. And XM is providing 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."

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Corporate Sponsorship: Levi's Jeans Record Company

From Sydney Morning Herald:

This year the Levi's jeans company started its own record label, Levity, to foster Australian and New Zealand music. Levi's pays the recording, distribution and marketing costs, and the acts agree to appear in the company's marketing.

The Sydney band Mercy Arms and the New Zealand group Cut Off Your Hands were the first to sign. They have released EPs and are to go on tour in the next few weeks, significant steps for two relatively unknown acts.

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Related: Red Bull to Enter Music Industry

New Slacker Radio Due Next Month

Hey, here's an idea: the FCC should license "broadcasters" across the country to transmit music via wireless "radio waves" to cheap "receivers." The service could be free to the listener subsidized via corporate advertising, and programming might include local news and information - multiple "stations" could even deliver tailored content to specific audiences. Automobiles might even be fitted with "radios" and inexpensive portable versions could be engineered to run for days on a single 9-volt battery...

From Charlotte Observer:

So a new kind of portable player, one for more passive and budget-minded users, is slated to arrive late next month. It's called the Slacker Personal Radio, and its name is meant to refer to people of any age who just want to sit back and listen instead of actively managing their music.

The new Slacker players will come in three models, ranging from $200 to $300, depending on capacity. But the music they play will be absolutely free, contained in preprogrammed Internet radio stations instead of individually selected songs and albums. The stations will be automatically refreshed with new tunes via a wireless connection built right into the device. You'll have to be near a hot spot for these updates. But you won't need a hot spot just to hear your music, because the songs are cached on the device. And you'll never have to plug it into a computer.

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New Model for Lossless Downloads

From Kevin Hunt, Chicago Tribune:

An agreement in October between Olive Media and MusicGiants envisions a vastly different consumption of digital music, where owners of media servers (like Olive's) download CD-quality music files (like MusicGiants') that are also freed from the restraints of Digital Rights Management.

Olive, a San Francisco company, started selling German-made music servers a couple of years ago but its partnership with MusicGiants arrives as a dramatic counterpoint to the iTunes formula. It's a niche now, maybe forever, because what's good for Apple is also good for the major music companies, who would rather sell low-quality, encrypted music files. It's called protecting their investment.

Unless, that is, people demand something better. For now, MusicGiants attracts fans of unencrypted, hi-res jazz (Concord Music Group), classical (Naxos), blues (Alligator) and indies (Razor & Tie). Pop, as in the most popular music in the United States, is a no-show other than the Paul McCartney-led downloads from the EMI catalog.

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HMV Tops List of 3-Year-High Shorted Equities on FTSE250

From Iain Dey, Telegraph:

Hedge funds are beginning to make big bets on a collapse in the share prices of Britain's mid-sized companies.

The latest data reveals that the level of "short" positions - bets on falling prices - is now at its highest for three years on stocks in the FTSE250.

Top of the list is HMV, the music retailer, which has seen 34 per cent of its shares in issue pass into the hands of short-sellers. Paragon, the struggling buy-to-let mortgage lender, is the next biggest short in the index with 21 per cent of its shares shorted.

Other big shorts include Debenhams, the department store group, Bradford & Bingley, the mortgage bank, CSR, the semi-conductor manufacturer and Johnston Press, the regional newspaper group.

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Canadian Man Receives $59,000 Cell Phone Bill for Downloads

From Jason Kobely, News 10:

CALGARY, Alberta (AP) -- Even a talkative teenager wielding an iPhone probably couldn't do this much damage. One Canadian man said his cell phone bill catapulted from around $147 a month to $59,000 in November.

But even he managed to top himself with a mind-boggling $83,000 bill for December.

The 22-year-old said he uses the phone to download movies and music onto a computer.

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iTunes Wi-Fi Music Store at Starbucks Suffers Glitches

From Glenn Fleishman, Macworld:

Starbucks and Apple launched their iTunes partnership Tuesday in Seattle and New York, but in at least one of its 600 debut locations, the program started with an off note. Some early glitches combined with a regrettable technology decision caused a few hiccups for what could be a promising service.

The Apple-Starbucks iTunes offering will work for anyone with an iPhone running the recent 1.1.1 software update, iPod touch, or computer running a recent version of iTunes. When those users are in a Starbucks, they’re able to see what song is currently playing in the store, see recently played songs, and access the entire iTunes Wi-Fi Music Store—a subset of the iTunes Store.

It’s an intriguing notion in theory—who hasn’t wandered into a Starbucks, heard a catchy tune, and wondered who the artist is and how you could get your hands on a copy? In practice, however, things didn’t go smoothly on this first day. Here’s an account of my Starbucks-based iTunes Wi-Fi Store experience.

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PlayBOX to Acquire Leading UK Music & Entertainment Distributor, Delta Leisure Group

From CNN Money:

PlayBOX (US) Inc. (OTCBB: PYBX) is pleased to announce the signing of a letter of intent dated December 14, 2007 for the proposed acquisition of 100% of the issued capital of U.K based Delta Leisure Group Plc ("Delta") an established distributor of an extensive catalogue of major music CD's, DVD's and video's throughout the UK and Europe. Playbox is also pleased to announce the appointment of Mr Harry Maloney to its Board of Directors from December 14, 2007.

Delta, whose registered office is in Orpington, UK, holds 75% of the shares in Delta Music Limited. Delta Music Limited, has two subsidiaries: Delta Home Entertainment Ltd., and Delta Music Merchandising Ltd. Since its inception in 1993, the Delta group of companies (the "Group") has become one of the most recognized manufacturers and distributors of entertainment products in the UK with client distribution outlets including Universal, Asda, Tesco, Aldi, Sit-Up TV, TK Maxx, Toys-R-Us and Sainsbury's. In addition, Delta Music Limited was an early mover in the growing on-line digital download industry.

PlayBOX is a UK based technology company with over three years experience at offering online shop facilities to the music industry. We specifically target emerging artists and small-to-medium sized record labels who have not got the present knowledge or resource to set-up and manage their own online shop/distribution channel PlayBOX offers this to them pool services like hosting, streaming, e-commerce and digital rights management (DRM) together with the online experience and know-how to offer a cost-effective and professional platform on which to sell and promote their music products from.

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Robert Plant to Tour With Alison Krauss

Cayocosta

BBC News reported that Robert Plant will tour, but not with Led Zeppelin - instead, with country artist Alison Krauss beginning in the UK in May with US dates expected for the summer. Tickets for UK dates are already on sale.

Billboard Year-End 200 Features Many Albums From 2006

Cayocosta

Maura at Idolator posted an interesting article detailing that 8 of the top 10 albums for 2007 were actually released in 2006 and 2005, with a 7:3 ratio for the top 20. Positions of interest: #38 Long Road Out Of Eden, Eagles, #189 Back To Bedlam, James Blunt, #190 Neon Bible, Arcade Fire.

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The Temptations - Papa Was A Rolling Stone

A great Paul Riser arrangement.

Promoters Offer Whole Lotta Loot to Lure Led Zeppelin Back on Stage

From Times Online:

Led Zeppelin could earn well over £100 million if the hard-rock band went on tour next year in the wake of Monday’s triumphant reunion gig. The band are being pursued with offers from both Live Nation and AEG, the rival concert promoters, with each structuring bids in the form of a large upfront payment to lure the band to their venues.

One source said that “AEG put a bid in on the night” - although that could not be confirmed independently – but intense demand, as already seen for Monday’s gig, would probably make a Zeppelin reunion the most sought-after ticket in 2008. It is likely that the four-piece band would be able at least to match the estimated $212 million grossed by The Police for their reunion this year, according to figures compiled by Billboard, the industry magazine.

Typically, promoters and venue owners pay a high proportion of the box office gross to the artist. Industry insiders say that in the UK the proportion can be as high as 95 per cent. In America, the figure can reach as much 110 per cent – the proportion is higher than the box office gross because the venue owner will make money out of food and drink and at least some of the merchandising.

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Country Music Dominates U.S. Radio in 2007

From Reuters:

As of October, there were 2,054 country stations in the United States, which is up slightly from 2,049 a year earlier, according to M Street, which tracks such statistics. News/talk stations now total 2,026, an increase of 18 from a year ago. The number of news/talk stations has increased by nearly 500 in the past 10 years -- there were 1,567 in 1997. Country, by comparison, has lost more than 450 stations during the same time period.

Among current music-driven formats, country is tops, followed by contemporary Christian stations (920), Spanish (917), adult contemporary (666) and top 40 (495). Contemporary Christian stations are on the rise, up from 897 a year ago, as are Spanish-language stations, which tallied 819 at this time in 2006. AC is essentially flat, while top 40 is down 15 stations from a year ago.

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DRM-Free Won't Save The Music Business

From Peter Kafka, Silicon Valley Insider:

• We don't think most consumers are aware of any DRM restrictions, because almost everything they buy or own works on iTunes and iPods.


• We have yet to see any concrete numbers from either EMI or Universal Music Group about their DRM-free tracks sold at iTunes and Amazon's new mp3 store. We've been told, unofficially, that sales are "encouraging," but we think if they were truly impressive, we'd have seen the results already.


• The conventional wisdom is that if only consumers had legal opportunities to buy music online, they would do so instead of using P2P filesharing systems, or borrowing and ripping their friends' CDs etc. But there's no shortage of legal places to buy music online these days, and consumers are indeed buying songs: They bought 1 billion tracks at iTunes in the first half of this year, and we assume that rate increased this fall. But the industry's main problem remains unchanged: It used to sell discs at a wholesale price of $10; now it sells individual songs at a wholesale of about 70 cents. If the business is going to survive, it's going to have to figure out a way to do that profitably -- and dropping DRM isn't going to solve that problem.

Link

Related:

No Good Download Goes Unpunished

Nielson: DRM-Free Tracks Do Not Increase Overall Sales

360: Sony BMG Australia Buys Caplice Stake

From Christie Eliezer, Billboard:

Sony BMG Music Entertainment Australia has become the first major label Down Under to invest in artist management and touring. The firm has taken a 50% share in Sydney-based Caplice Management and is negotiating with a second artist management firm. It is also setting up a concert tour business.

Caplice Management, set up in 1995 by managing director David Caplice, looks after Sony BMG acts Human Nature, David Campbell, Dean Geyer, Damien Leith and the Young Divas, plus Warner Music act singer Katie Noonan and TV presenters Craig Low and Toni Pearen.

In 2002, Caplice Management and Sony BMG set up a joint-venture pop and R&B record label called Random Records, to which Paulini and Tammin Sursok are signed.

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2007 U.S. Social Network Advertising 960M

Extrapolating; Facebook and MySpace combined are projected to generate only 2.8B in worldwide advertising revenue in 2011, of which a 50% revenue share with major labels would provide a total 1.4B in gross income to subsidize an industry-wide free-music initiative. The recorded music industry is currently projected to generate in the area of 30B in global sales for 2007.

From Peter Kafka, Silicon Valley Insider:

A reminder, via eMarketer, that hype aside, advertising spend on online social networks is still relatively modest: About $960 million in the U.S. this year, (and merely another $300 million in the rest of the world) -- less than 5% of the total U.S. market.

Keep in mind that most of those dollars are from guaranteed deals from Google and Microsoft, who have multiyear pacts with MySpace and Facebook, respectively -- and by all accounts, both GOOG and MSFT made those commitments for strategic reasons, not financial ones.

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From eMarketer:

• MySpace and Facebook together receive more than 70% of all ad spending.


• 50% of all online adults and 84% of online teens will use social networking each month in the U.S. by 2011.


• Worldwide social network ad spending to top $4 billion in 2011.

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Geffen Staff Reductions Begin

Reports indicate Geffen folded into Interscope.

From Digital Music News:

Geffen Records has now triggered a significant staff reduction, an expected development. Just last week, an inside source to Digital Music News projected layoffs in the 8-10 person range, though estimates varied on Thursday. Elsewhere, Billboard pointed to a total headcount reduction of roughly 15 across both Geffen and Interscope Records, and the layoffs of publicists Jim Merlis and Jycorri Robinson.

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2007 Concert Dollars, Attendance Down 10.2%, 19.2% Respectively

Unless you're a major headliner, the make up your lost record sales revenue with touring argument appears to have just lost its credibility.

From Ray Waddell, Billboard:

Overall, North American concert dollars and attendance are down double digits this year, after a record year in 2006 with the Rolling Stones, Madonna, U2, Barbra Streisand and other big ticket tours on the road. North American gross concert dollars for 2007 are down 10.2% to $2.6 billion, and concert attendance is down 19.2% to 51 million.

"Yes, a 19.2% decrease in attendance is very disturbing, since it reflects that the consumers are not really supporting breaking and mid-level talent," AEG Live president/ CEO Randy Phillips says. "If this trend continues, who will be the headliners of tomorrow?"

Related: Live Nation struggles with stock price

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Tech Companies and Public Interest Groups Form Coalition to Expand Broadband Access

From Kevin Bogardus, The Hill:

Tech giants and public interest watchdogs joined forces Wednesday in a new coalition to support new portable wireless devices that will utilize underused parts of the spectrum for Internet service.

The Wireless Innovation Alliance (WIA) is a new group comprised of IT companies like Google and Hewlett-Packard as well as watchdog groups such as Free Press and the U.S. Public Interest Research Group. They have teamed up as the Federal Communications Commission (FCC) considers rules for devices designed to provide broadband access using “white spaces” — unused parts of the spectrum that typically would be occupied by television frequencies.

“All government is doing is setting the road signs,” said Rep. Jay Inslee (D-Wash.), speaking at the press conference announcing the alliance. “But the private sector can’t move ahead until the road signs are established.”

IT companies such as Microsoft — a WIA member whose headquarters reach into Inslee’s district — are developing the devices with the promise they will provide superior broadband access. The white spaces occupy prime real estate on the spectrum, and the enhanced access could spur more innovation and broaden Internet availability to more Americans.

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Eagles "Long Road Out of Eden" Triple Platinum

From Digital Music News:

The Eagles have now gone triple-platinum on their latest release, Long Road Out of Eden, according to figures released by the RIAA. That is a significant accomplishment for the group, and a validation of a Wal-Mart exclusive distribution strategy. "The album surpassed our expectations in sales from the very first week," said Gary Severson, senior vice president of Entertainment at Wal-Mart. The album was released on October 30th, and scored sales of 711,000 during its debut week.

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Led Zeppelin Reunion: Band's Albums Sales up 500%

From NME:

Sales of Led Zeppelin’s back catalogue have increased by 500% since the band announced then played their reunion show at the O2 Arena, which took place on Monday.

Music retailer HMV also revealed that sales of ‘Mothership’, Led Zeppelin’s recent compilation album, rose by 50% overnight following the gig, and was the biggest selling album in HMV stores in the UK yesterday.

Link

Quick Links 12/12/07

BNA Records Shake-Up

MOG, Rhapsody Link For Streaming

Iron Maiden: 360 Deal With EMI

Eleven Seven Strikes iLike Deal, Facebook

Gewecke New President, Digital Distribution, Warner Bros. Home Entertainment

SpiralFrog Ups Catalog

Orchard Hires David Hazan To Lead Brand Entertainment Group

Broadcast Radio Streams Surging Past Internet Radio

From Radio Online:

JP Morgan's Internet Radio Scorecard for October shows traffic at web sites of traditional terrestrial operators has reached new highs with a record 28 million unique listeners. And it doesn't stop there. Growth this month pushed unique visitors to broadcast radio web sites out of their recent range of 60-62 million. At this pace, JP Morgan says they could continue to post sequential and year over year growth in 2008.

Link

P2P User Base: Near Maxed Out?

Over one-third of PCs have LimeWire installed, however data show year-over-year growth increased by only a paltry 2.3%, indicating a potential cresting of the number of P2P users may be near.

From Digital Music News:

More than one-third of all PCs worldwide now have LimeWire installed, according to data jointly released by Digital Music News and media tracking specialist BigChampagne. The discovery is part of a steady ascent for LimeWire, easily the front-running P2P application and the target of a multi-year RIAA lawsuit. For the third quarter of this year, LimeWire was found on 36.4% of all PCs, a figure gleaned from a global canvass of roughly 1.66 million desktops.

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RIAA Brief Misinterpreted

From Nick Mokey, Digital Trends News:

A widely misinterpreted RIAA brief has caused a major stir, but does not say that making copies of CDs for private use is illegal.

A brief filed by the Recording Industry Association of American in the case of Capitol v. Howell set blogs alight this week with cries of unfairness, by those who believed the RIAA was claiming that even private copies of paid-for CDs were illegal. As it turns out, that’s not the full story. A careful examination of the brief shows that the RIAA is taking the same stance it has always taken: sharing music is illegal.

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Piracy Hits Adult Film Industry

From Emilie Branstetter, Tech.Blorge:

We’ve seen the music industry almost decimated by it, DVD and game manufactures try to block it, and networks try to find a way to profit from it. Online sharing has affected many and outraged more, but now we are seeing an unsuspecting candidate come up to the block for battle; the pornography industry.

With the success of internet file share site YouTube, there has been numerous copycat sites emulating the famous "Tube". According to MSNBC, one of the largest adult entertainment companies, Vivid Video, is now copying Viacom’s case against Google’s YouTube.

PornoTube, the site that Vivid Videos is placing the claim against, is being accused of building its user base and advertising up using Vivid’s material. Since PornoTube is a user based service depending on submissions, law states that Vivid must ask for the material to be taken down in a timely manner which they are stating is not happening.

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Live Nation Struggles with its Stock Price

From Brian Thompson and Alfred Branch, Jr., Ticket News:

From Oct. 9 to Dec. 7, Live Nation’s stock has fallen about 43 percent, as the company grapples with defining its role as it prepares for life without Ticketmaster.

With $3.7 billion in operation revenue but only a 4% margin, Live Nation is looking to expand beyond the concert business. Most of the company’s current profit is earned mainly through concessions sales, parking fees, and a percentage of the fees charged by Ticketmaster for the sale of tickets to their events. And as such, Live Nation is Ticketmaster’s largest client.

As part of its plan to hasten its move beyond concerts, Live Nation created the Artist Nation division and signed a $120 million deal with Madonna that encompasses albums, tours, merchandising and licensing. The deal was signed in mid-October and the stock price has been sliding ever since. Perhaps cognizant of how an extravagant event would be perceived, a couple of the company’s venues scaled back their Christmas party plans this year making them BYOB affairs, according to industry message boards.

Link

Retro Tech Channels Old-school Cool

From Jim Kavanagh, CNN:

According to the Recording Industry Association of America, vinyl LP sales grew slightly as a percentage of music sales from 2000 to 2006 even as overall music sales dropped to $12 billion from $14 billion.

And it's not just the classics. Such hip-hop heavyweights as Jay-Z, Linkin Park and Nas are pushing out new vinyl at a record clip, so to speak.

Independent labels producing punk, metal and other "outsider" music prefer the vinyl format as a kind of rebellion, said Dave Ignizio, owner of Square Records. Fans of those genres defiantly tell the world, "We're just still gonna buy records, I don't care what everyone else is doing."

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Moody's: Fender Musical Changed to Negative on Kaman Music Buy

From CNN Money:

Moody's Investors Service has revised Fender Musical Instrument Corp's rating outlook to negative, following the company's proposal of a 117 mln usd debt financed acquisition of US-based Kaman Music Corp, a unit of Kaman Corp. (NASDAQ:KAMN)

The negative outlook principally reflects Moody's concern that consumer spending will continue to soften in the near-term and that Fender may be precluded from significantly delevering as they have done in the past, Moody's said.

Link

Intel Getting Into Music Business

From Kamau High, Adweek:

The computer chip maker for the first time has commissioned a commercial artist to not only write a song about one of its products but also shoot a music video. Working with independent Woo Agency, Intel hired Sean Kingston, who sang the summer hit "Beautiful Girls," to pen the song "Gotta Move Faster" and shoot the subsequent video.

Link

Related: Want a Record Deal? Talk to General Motors

UMG Imeem Details Emerging

From Saul Hansell, New York Times:

It is still unclear how many sites will be able to make enough money from advertising to pay what the labels want. Imeem has given Universal some stock and a large upfront cash payment. The Financial Times reported that the payment was $20 million, although Imeem has disputed that figure.

The record labels have given Imeem a break on their normal fee of one cent every time a song is played. But in return they have asked for a share of the advertising, not just on the pages related to music, but on the whole site. So I’m not entirely sure how this model will work on a site that is simpler to use than Imeem and thus has fewer pages on which ads can be sold.

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New Services Challenge iTunes

From Peter Burrows, BusinessWeek:

There's no doubt that Apple (AAPL), with its elegant 99¢-per-download formula, is the dominant force in digital music. But it's next to impossible to find an industry expert who thinks that Apple's current approach will remain the only game in town forever. Now there are signs rivals will help shape the future of digital music as well.

Some of the most immediate pressure is coming from Amazon.com (AMZN), which launched its Amazon MP3 store on Sept. 25. The store offers a few things Apple doesn't. First, there's pricing. Amazon MP3 sells 1.8 million of its 2.5 million-plus tracks, including 100 of the most popular, for 89¢, rather than 99¢. Also, it sells music only in the basic MP3 format, without any antipiracy "digital rights management" (DRM) software.

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Quick Links 12/11/07

Napster CFO Quits

EMI COO Hanson Out

Mark Williams A&R Interscope Out

Question Marks Surround Fate of Geffen Records

Snocap For Sale

Imeem Deal Vindicates Music Industry

Cayocosta

Ironically, last month's Shmoo turns out to be this week's shark, as Doug Morris (having held out until Universal was the last in line) reportedly negotiated a royalty for each stream originating from imeem, in addition to a standard share of advertising revenue.

Correction: WSJ got it wrong, UMG will receive streaming payments only in the event that ad revenue falls short of the contractual amount.

This move also goes a long way towards silencing industry critics who after having had a field day two weeks ago chastising the majors for being technology ignorant on the heels of the Morris interview, find themselves with much less basis to do so today; as well, proponents of file-sharing are now short one "obstinate industry" justification.

So far, bloggers have indeed had little to say about this new development, yet the few that have spoken up are attempting to spin the deal as equivalent to the legalization of file-sharing - even though downloading is not facilitated by the service (of course, there are ways to capture streams, but there's little incentive for anyone to do so in this case) and the content owners and artists are actually paid under this system.

Looking back at the series of events that took place over the last two weeks: Morris appears to have played possum in the Wired interview, UMG then truncated streaming on MySpace, and today imeem gets the last piece of the content puzzle. Imeem now has industry-wide unrestricted content to compete directly with MySpace - and four powerful partners.

However, the question remains: how well can imeem monetize music? YouTube, if any indication, has been criticized for not adequately monetizing video; yet on the other hand, from Barron's:

"Greenfield writes that MySpace is now generating “in excess of $30 million” a month in revenue, with about $24 million in domestic revenue and $6 million internationally. He adds that monthly revenues should more than double over the next 12 months, and “at very high incremental revenue margins.” So in 12 months, he’s saying, MySpace should be doing more than $60 million a month in revenue, for an annual run rate in the neighborhood of $750 million a year. Not too shabby."

(Unfortunately, parent company News Corp. has not disclosed bottom-line revenue.)

For streaming to really take off, it must be accessible from any location and device (that's going to take a while) and for this reason, the advertising model may not become standardized, for phones and players won't accommodate the delivery of ads very well - if at all; unless the ads are in audio, which would ruin the experience. Therefore, it doesn't appear a stretch to imagine a subscription platform eventually emerging - perhaps on several services.

In any event, at least this is the first streaming service that appears to offer complete catalogs from all 4 majors - which is of course, a prerequisite to any comprehensive solution - and this alone should suffice to sign up a ton of folks. Moreover, moving beyond the download to pure streams potentially solves the problems of DRM, RIAA lawsuits, and piracy.

It's indeterminable at this time how artists might be compensated by labels; however imeem entered an agreement with SNOCAP earlier this year indicating that at least some royalties will be paid to artists by the service itself.

In closing; Universal Music Group, Sony BMG, Warner Music Group, EMI, and imeem have taken a big collective step today.

Major Copyright Bill Boosts Penalties, Creates New Agency

It might be safe to say that industry capitulation is a long shot at this point.

From Declan McCullagh, CNET News:

Top Democrats and Republicans in the U.S. House of Representatives on Wednesday introduced a sweeping 69-page bill that ratchets up civil penalties for copyright infringement, boosts criminal enforcement, and even creates a new federal agency charged with bringing about a national and international copyright crackdown.

"By providing additional resources for enforcement of intellectual property, we ensure that innovation and creativity will continue to prosper in our society," Judiciary Committee Chairman John Conyers (D-Mich) said in a statement.

The legislation, called the Prioritizing Resources and Organization for Intellectual Property Act, or PRO IP Act, is throughly bipartisan. The top Republican, Lamar Smith of Texas, on the Judiciary committee is a sponsor. So is Howard Berman (D-Calif.), the chair of the subcommittee that writes copyright law, and Adam Schiff (D-Calif.) and Bob Goodlatte (R-Va.).

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IFPI Wants EU-Wide ISP Piracy Controls

Another indicator that momentum appears to be building both in the U.S. and abroad for ISP intervention.

From Alexandra Osorio, Digital Music News:

If music fans are always stealing online, then why not simply block illegal destinations and yank offending accounts? The idea seems like heresy to most - including ISPs - though major content holders are pushing for more stringent controls. Just recently, label trade group IFPI advocated strict, ISP-based controls in a memo to European lawmakers leaked by the Electronic Frontier Foundation (EFF).

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Global 360: Warner Buys Finland's HMC

From Lars Brandle, Billboard:

Warner Music Nordic has acquired the multi-faceted Helsinki Music Company, a Finnish firm with operations in recorded music, merchandising, music publishing and touring.

With immediate effect, HMC becomes a wholly-owned division of Warner Music Finland. Financial details were not disclosed.

The deal, unveiled today, follows the appointments of HMC founders Niko Nordström and Asko Kallonen as GM and A&R director of Warner Music Finland, respectively, in October. At that time, Warner Music Nordic president Jonas Siljemark claimed the two executive appointments ushered-in the company's shift toward a 360-degree business model.

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Generation L Innovates the Wisdom of Mobs

Chris Castle talks about the symbioses of the mob mentality and the tech sector with regard to music piracy.

From Music-Technology-Policy Blog:

So when the mob decides to take away copyright, it’s not only the case that they can do it because they are huge in number and their anonymity is—interestingly—defended by the Electronic Frontier Foundation, the hardware manufacturers and others in the anti-copyright crowd whose funding is harder to determine.

It’s also the case that the mob--call them Lessig's mob--in fact believes they are morally right to do so, that the ability of the mob to rise up and violate property laws en masse is not only defendable but is in fact transcendently correct.

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Imeem Lands UMG, Now Streaming All Four Major's Content

By providing free (advertising subsidized), on-demand, full-length streams of all four major record companies' content, imeem sets the precedent for potential subscription services offering higher bitrate audio and ubiquitous access.



From BusinessWire:

Universal Music Group (UMG) and imeem today announced an agreement that will provide the imeem community with on-demand, interactive streaming of Universal’s extensive digital music and video catalog. With this announcement, imeem is the first social networking company to offer full-length, streaming access to the entire music and video catalogs of all four major music companies on an advertising-supported basis.

Beginning today, imeem’s audience of over 19 million users can listen to and express themselves with music and video from UMG’s digital catalog, which includes many of the world's top-selling artists such as Kanye West, Amy Winehouse, Fall Out Boy, 50 Cent, Black Eyed Peas, The Pussycat Dolls, Gwen Stefani, The Killers, Snow Patrol, Maroon 5 and Nelly, among many others.

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50 Cent: Piracy Hurting My Label, Artists, Music

Cayocosta

50 Cent gave an interview shortly before a performance in Oslo, Norway recently from which the following statement regarding music piracy got a lot of play on P2P blogs:

“What is important for the music industry to understand is that this really doesn't hurt the artists.”

However, the rest of what 50 Cent had to say in the interview actually contradicted that statement:

When asked “How are G-Unit Records doing in these times of file-sharing?" his answer was, “Not so good. The advances in technology impacts everyone, and we all must adapt. Most of all hip-hop, a style of music dependent upon a youthful audience. This market consists of individuals embracing innovations faster than the fans of classical and jazz music.”

Apparently not realizing that piracy-catalyzed 360 deals are actually recouped directly out of the artist's pocket, he went on to offer the following when addressing the issue of lost recorded-music sales revenue, “The concerts are crowded and the industry must understand that they have to manage all the 360 degrees around an artist. They, (the industry), have to maximize their income from concerts and merchandise. It is the only way they can get their marketing money back.”

Further expounding on the negative effects of piracy, he offered, “The main problem is that the artists are not getting as much help developing as before file-sharing. They are now learning to peddle ringtones, not records. They don’t understand the value of a perfect piece of art.”

Radio's Decreasing Role in Driving Sales

From Marsha Lederman, Globe and Mail:

Music-biz movers and shakers met in Vancouver this week to explore the star-making power of everything from online radio and prime-time TV to music videos, iTunes and Facebook.

Once upon a time, knowing what songs were dominating the music charts was easy: You turned on the radio.

Instantly, you'd be rewarded with a spin of a hit record - by the Beatles, the Bee Gees, U2 (depending on your era). Even if you touched that dial, chances were you'd encounter the same songs on a different station.

These days, it's not that simple. The choice of new music offerings can be overwhelming, coming at listeners via video games, iTunes, television shows, music videos, social-networking sites, online radio, satellite radio and, yes, old school, terrestrial radio - where the hit-driven Top 40 format is making somewhat of a comeback, according to some industry watchers.

With the unprecedented choice comes unprecedented fragmentation. The new multiplatform universe may mean the end of multiplatinum records. "Pretty clearly the days of selling 10 million albums are done," says Nic Harcourt, music director of the influential Los Angeles radio station KCRW and host of Sounds Eclectic. "There's probably less than 10 records that sold two million [copies] this year. I think it's a different world."

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John Lennon - Instant Karma

Kylie Minogue - 2 Hearts

After listening to band after band on MySpace, Amie Street and countless other new music sites, hearing this simple (yet not so simple to do right) track has somewhat restored my faith in humanity's ability to craft a pop tune. Written and produced by unsigned London-based electro/pop outfit Kish Mauve, the vocals blend a bit of Bowie and Little Richard over underpinnings suggestive of Lennon's Instant Karma - it might have been even better had it received a total Spector treatment.

Warner/Chappell, Radiohead in Licensing Breakthrough

Have to admit, Radiohead is keeping their name in the news every week - nice job. However, what might this news mean for the future ASCAP, BMI, SESAC and Harry Fox?

From Lars Brandle, Billboard:

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.

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Sony BMG: Columbia Staff Cut Today

From Velvet Rope:

The axe is falling...

Columbia: Lianna Franam, Nichol Carlson, Gary Fisher, Stephanie Gayle, CeCe McClendon, Maggie Wang, Tom Muzquiz, Julie Stillman. Fran DeFeo no longer head of publicity.

I'm sure that's not all.

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Biting the Hand That Feeds

Cayocosta

Seems Josh Homme picked up a bad case of anti-label-itis from his close contact with Trent Reznor, and expressed as much through a meandering rant in a recent Antiquiet interview. Likewise, Reznor took a shot at the Grammys on his site yesterday:

While the music industry is doing everything they possibly can to go out of business, can we all make sure to rid ourselves of the Grammys, too? Out of touch old men jacking each other off. ENOUGH! Have a nice day.

I'm sorry, but didn't both of these guys make their bones through the support of the same industry they now collectively seek to browbeat into oblivion with wishful-thinking populist rhetoric?

I mean, aren't both Homme and Reznor taking a risk here in that their efforts might be construed as no more than taking advantage of the current anti-industry climate (by stoking the fires of the free-music constituency) in an effort to further their own popularity - ironically at the expense of those future artists that will find it much harder to earn a living under the continually deteriorating market conditions they are in fact proselytizing?

Unfortunately, after having basked in the green glow of the capitalist machine for years, these guys have apparently just come to the realization that art and commerce don't go together - right, and I suppose that the premise of Rage Against The Machine was not rendered oxymoronic the moment they signed to Epic.

In any event, there's nothing stopping anyone from circumventing the label system - now that the Internet has broken their monopolies over distribution and promotion. So, gentlemen; please kill the self-righteous rhetorical hypocrisy and let things take their natural course.

YouTube No Longer Top Site for Music Video?

From Chris Salmon, Guardian:

This time last year, MySpace was the undisputed champion of social networking sites. Now, chances are you and your friends have taken your virtual banter to Facebook. Even the web's mightiest sites can tumble from grace when something better comes along.

Which brings us to Joost. When details of the on-demand web TV site were announced in January, tech bloggers began labelling it "the YouTube killer". Created by the founders of Skype and Kazaa, Joost was to use ad funding to provide full-screen, full-length video content at broadcast quality, for free. The player was finally made available to download from joost.com in October. Since then, music has established itself as one of the site's main draws. Browse its Music and Music Entertainment sections - the difference between the two isn't clear - and you'll find several dozen channels dedicated to bands, labels and genres, from tango to trance.

Update: I downloaded Joost and while it is a nice package, the selection of music in no way compares to what can be found on YouTube.

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Sales Malaise Spreads to the Hot 100

From Chris Molanphy, Idolator:

If you, current pop act, are not an Oprah-anointed permhead with a name rhyming with "Lohan," you are not having a fun week: A mid-holiday-season malaise has settled over the Billboard charts. That's clear from the current results on the Hot 100, where Alicia Keys holds on to the top spot for a third week even as her sales fall considerably.

Incumbency Has Its Privileges: Every song in the Top 10 of the Hot 100 sold fewer copies at iTunes and other buck-a-song sites last week than the week before. Digital sales for Keys' smash--just nominated today for a Best R&B Song Grammy but, weirdly, no pop Grammys--fall 35% (the biggest drop in the song's chart life), and "No One" relinquishes the title of top seller to Flo Rida's "Low" featuring T-Pain, whose sales only shrink by 5%.

With radio deeply entrenched in holiday playlist patterns--even stations that don't play Christmas music aren't adding many new records right now--expect the top of the chart to stay sleepy through the end of the year.

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Wachovia Analyst Calls Radio A 'No Growth Medium'

From Radio Online:

In a research paper entitled "Broadcast: Reevaluating The Landscape," Wachovia broadcast analyst Marci Ryvicker calls the radio industry a "no-growth medium," while revising long-term growth estimates for broadcast companies. The primary culprit: the reallocation of ad dollars to new media from traditional media.

"We previously believed that radio would some day show some top line growth, but after 24 consecutive months of revising our estimates downward, we now believe that 0% is a more realistic (and potentially the best case) scenario long term," wrote Ryvicker.

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New Satellite Royalty Rates Fail to Reflect Full Value of Music

From Broadcast Newsroom:

While Dramatically Increasing Royalty Rate for Music on Satellite Radio, Copyright Royalty Board Still Sets Rates Below True Value

WASHINGTON, Dec. 4 /PRNewswire-USNewswire/ -- SoundExchange today expressed mixed reaction to the royalty rates announced by the Copyright Royalty Board (CRB) to be paid by satellite radio operators, XM and Sirius, to the artists and record labels whose music is the core of the satellite radio business. The decision dramatically increased the royalty rate paid by XM and Sirius, thereby validating the overwhelming evidence presented by SoundExchange regarding the critical importance of music to satellite programming.

The CRB also rejected virtually all of the evidence submitted by XM and Sirius. However, the congressionally-mandated standards that the CRB followed ultimately led it to set rates at half the value it determined artists and record labels would have received in the marketplace. "This result once again highlights the inequity of a rate standard that forces creators of music to subsidize certain music services with below market rates," said John Simson, Executive Director, SoundExchange, a non-profit organization that collects and distributes royalties from various digital music services on behalf of artists and record labels. "We are glad that the decision affirmed the importance of music to XM and Sirius, but disappointed that the rate standard led to a lack of full and fair compensation because of the business circumstances created by XM and Sirius," added Simson.

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Manics Accuse Radiohead of 'Ruining Music'

Radiohead perceived as selling out industry for PR stunt by peers.

From World Entertainment News

Welsh rockers Manic Street Preachers have slammed Radiohead for ruining the music industry.

Radiohead stunned the record business last month by releasing In Rainbows as a digital download and allowing customers to choose their own price - but bassist Nicky Wire insists the move further damaged the current fragile state of the industry.

He says, "Fair play to Radiohead for doing something different. It's certainly great for publicity but I think it kind of demeans music.

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Apple to Buy Warner Music Group?

Might Apple buy a controlling interest, or more, in WMG and/or the other major record companies?

From Peter Kafka, Silicon Alley Insider

Apple (AAPL) has spent the past few years minting money via iPod sales, and is now doing the same with the iPhone. That's allowed the company to accumulate a $15 billion cash hoard -- more than IBM, HPQ, INTC or GOOG, Fortune points out.

Fortune points that Apple could easily swallow Netflix (NFLX), Tivo and Circuity City (CC) and have plenty of cash left. But let's think bigger: $15 billion can go along way. For instance, Steve could purchase Warner Music Group (WMG) and the other three big music labels, or at least a controlling stake in all of them.

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EMI Strikes Deal For BoxOffice365 On-Demand Video Site

From Lars Brandle, Billboard

EMI Music U.K. will make DRM-free audio and video content available through British Internet Broadcasting Co.'s (BiBC) downloadable virtual store, the music major said today.

Works from EMI artists including Coldplay, The Spice Girls, Queen, Kylie, Pink Floyd and KT Tunstall will be made available to customers of BoxOffice365, BiBC's on-demand audio and video download service.

"EMI is always looking for innovative and exciting ways of monetising its content," said Graeme Rogan, head of digital sales, EMI Music U.K., in a statement.

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Stars Are Aligning for Subscription Music

From Peter Burrows, BusinessWeek:

For years, Steve Jobs has insisted that people want to own their music. And thanks in part to the iPod's near-monopoly, selling songs for 99 cents a pop has become the prevailing business model. Meanwhile, subscription services—renting access to millions of songs for a monthly fee—have gone almost nowhere.

Now, changing consumer behavior is giving subscription advocates new hope. Members of the Facebook Generation are bombarded with music recommendations every day, and don't necessarily want to pay a buck to check each one out. And since people are used to getting e-mail, appointments, and news feeds streamed to smartphones and other devices, many industry watchers assume they'll want the same for music. "If I can access whatever I want whenever I want," says Ted Cohen, who led EMI's digital music efforts and now runs an entertainment consultancy called TAG Strategic, "why do I need to own it?"

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Music Intelligence Solutions Announces $7 Million Funding Round

Funds to Accelerate Expansion of Web 2.0 Platform for Music Discovery and Mobile Music Applications for Consumers

SAN FRANCISCO, CA--(Marketwire - December 5, 2007) - Music Intelligence Solutions, Inc., a global leader in the field of digital music and media discovery, today announced that it has completed a $7 Million funding round. This financing round is led by angel investors with ties to global private equity and hedge fund management.

Music Intelligence Solutions' expansion has been highlighted by the continued success of its bundled music discovery solution -- Music Intelligence Universe™, and market potential prediction solution -- Hit Song Science™, which is currently deployed at Orange Wireless as part of the 'Enjoy your Music' and 'New Talents' programs in Spain. The project with Orange Wireless enhances the mobile music experience for consumers by leveraging the unique ability of the patented software to predict the market potential of new music for artists while also enabling music discovery in a targeted manner across multiple genres and languages for wireless users.

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DOJ: $222,000 File Sharing Fine Not Excessive

From FMQB:

Jammie Thomas, the Minnesota woman who lost her court battle against the Recording Industry Association of America (RIAA) over file sharing, has also lost her appeal in the case. The U.S. Department of Justice determined that the $222,000 in damages that were awarded to the RIAA - $9,250 for each of the 24 songs shared - is constitutional and is not excessive.

"Although defendant claims that plaintiffs' damages are 70 cents per infringing copy, it is unknown how many other users - potentially millions - committed subsequent acts of infringement with the illegal copies of works that the defendant infringed," Acting Assistant Attorney General Jeffrey Bucholtz wrote. "It is impossible to calculate the damages caused by a single infringement, particularly for infringement that occurs over the Internet."

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