Music Performance Fund in Peril

From Mike Boehm, Los Angeles Times

For 60 years, the Music Performance Fund, an unsung charity financed by a small fraction of record company sales, has paid the piper -- and just about every other kind of musician -- by helping to bankroll thousands of free concerts annually all over North America.

Now, though, the popularity of music downloads and file-sharing via the Internet has eaten away at record company revenues. And as the industry has dwindled, so has the performance fund's ability to underwrite pro bono shows.

"'Dwindled' is an easy way of saying it's gone to pot," said John Hall, the trustee who has managed the Music Performance Fund for most of the last 18 years.

At its peak in the early 1980s, Hall said, the fund got more than $20 million a year from record companies. Last year, the figure was $3.4 million. In 1984, the fund helped pay musicians' salaries for 55,000 free performances. Last year, there were 9,060. The organization's staff is down from 36 to eight.

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New Music Model for Suckers

Cayocosta

Where once ten or twelve bucks bought as many tunes, thanks to new 'models' we now have the $300 elite collection and/or multi-thousand dollar package including a personal appearance. Offers that unfortunately bilk those most loyal fans while allowing everyone else a free ride - on their generosity.

Why Advertising Supported Free-Music Ain't Gonna Happen

Cayocosta

Lots of hype and bluster about ad supported free-music solutions lately. Well, it ain't gonna happen, and here's why:

Two ways to offer ad subsidized music: streaming and downloads.

The problem with downloads is that once the track is downloaded, the ad is no longer attached; unless the ad is audio and embedded in the tune - which would kill the idea.

Which brings us to DRM. DRM protected tracks with proprietary players would allow ads to be served while tracks are played. But again, limiting the use of tracks to certain players would kill the concept.

Streaming on dedicated players that serve ads is not a bad idea, but limited in application as a live internet connection is required to stream in real time. Thus, ad-supported streaming is DOA.

Remember, the industry is competing with free, unfettered mp3 downloading and listening (albeit illegally).

Beyond all this is the amount paid to the content providers.

For downloads, Amazon and Apple are charging .80 to .99 per track and netting back 70 cents or so to the labels. There is no way ads can generate anywhere near as much.

Now, why would the industry accept mere cents on the dollar when they are already receiving 70 cents per track for paid downloads?

Why then would the industry voluntarily kill the remaining CD business and developing paid download business - for a fraction of the music's market value?

Then there's the precedent. Should the industry allow music to be free - subsidized via anything else - it would be nearly impossible to return (if so desired) to charging for downloads.

Hence, for free-music subsidized via advertising to work, the industry would:

1.) have to accept much less than the market value of music.
2.) hasten the decline of its remaining CD business.
3.) render obsolete its burgeoning paid download business.
4.) have to accept sharing fractional revenue with third parties (portals).
5.) once and for all, establish that recorded music no longer has any intrinsic value in the marketplace.

Humbug.

In the interim however, should a tech player offer millions of dollars for the rights to stream (no downloads) content under an ad supported platform (imeem, for example), the labels will rightly take the money and run.

Unlimited Music Comes to UK Mobiles

From Jonathan Richards, Times Online:

Omnifone, the UK-based digital music company, has announced a service which will allow mobile users to download an unlimited number of songs to their phone as part of their monthly plan - and keep them even if they change their contract.

The service, called Music Station Max, will be rolled out in the UK in the first half of the year, and will initially be available on LG phones, though deals with other manufacturers would follow, the company said.

As part of the service, subscribers will be able to download an unlimited number of songs directly to their phone via the 3G network, and then 'sideload' them onto their computer, where they can create playlists and share proferences with friends using Omnifone's software.

If the user chooses to change his or her contract, they can either continue subscribing to an 'unlimited download' service for a monthly fee - similar to the Napster model, or leave the service, in which case a number of the downloaded songs will remain on their phone. The company has not said how many.

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Amazon MP3 Store Adds Sony BMG DRM-Free

From Ed Christman, Billboard:

Sony BMG Music Entertainment is joining Amazon's MP3 party, and will allow its music to be sold via the unprotected format on the digital download store. The move comes on the heels of Sony BMG's announcement that it will sell album specific digital download gift cards that will be redeemed in the MP3 format.

While the latter announcement was limited in scope to 37 albums, the Amazon agreement represents a broad acceptance of the MP3 format by Sony BMG, which up until now, had been the major deemed the most resistant to abandon the concept of music protected by digital rights management software.

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Sony BMG To Debut MP3 Album Cards

From Ed Christman, Billboard:

Sony BMG Music Entertainment will roll out its Platinum MusicPass series of digital album cards beginning Jan. 15 at Best Buy, Target and Fred's, with Trans World and Winn-Dixie coming to the party by the end of January.

In Canada, participating retailers include Best Buy, CD Plus, Shoppers Drug Mart, and Wal-Mart with HMV coming on board sometime during the first quarter.

The digital album gift cards, which retail for $12.99, will be artist-specific and feature album artwork, and will come with bonus material. The card will contain a scratch-off that will reveal a PIN number that can be redeemed for a download at MusicPass.com.

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WMG Acquires Insound.com

From Ed Christman, Billboard:

The Alternative Distribution Alliance, an independent distributor owned by the Warner Music Group, has acquired Insound.com, the only indie music lifestyle store, sources confirm.

ADA apparently will use the Insound digital sales infrastructure as a back-end to allow its labels and indie accounts to open their own online download stores.

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Trent Reznor: Saul Williams' Sales "Disheartening"

From Trent Reznor:

I have to assume the people knowing about this project must either be primarily Saul or NIN fans, as there was very little media coverage outside our direct influence. If that assumption is correct - that most of the people that chose to download Saul's record came from his or my own fan-base - 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.

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Sony BMG to Drop DRM

From Catherine Holahan, BusinessWeek:

In a move that would mark the end of a digital music era, Sony BMG Music Entertainment is finalizing plans to sell songs without the copyright protection software that has long restricted the use of music downloaded from the Internet, BusinessWeek.com has learned. Sony BMG, a joint venture of Sony and Bertelsmann, will make at least part of its collection available without so-called digital rights management, or DRM, software some time in the first quarter, according to people familiar with the matter.

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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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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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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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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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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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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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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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