U2 Manager: ISPs Strangling Music Industry

From Patrick Frater, Variety:

U2 manager Paul McGuinness launched a blistering attack on the world's Internet providers Wednesday, accusing them of strangling the music industry.

Speaking at the Music Matters confab in Hong Kong, McGuinness likened ISPs to "shoplifters" and accused them of "turning their heads" away from the music industry's troubles and "rigging the market."

"The recorded music industry is in a crisis, and there is crucial help available but not being provided by companies who should be providing that help -- not just because it is morally right, but because it is in their commercial interest," McGuinness said.

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Last.fm Loses Warner Music on Demand

From Peter Kafka, Silicon Alley Insider:

Warner Music Group (WMG) has pulled its catalog out of Last.fm's "on demand" free streaming service, which the CBS-owned service launched to great fanfare in January. Users can still hear Warner artists via the site's "radio" option, which doesn't allow you to select individual songs. But you can't order up individual songs from WMG artists.

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International Labels Push For Baidu Boycott Over Music Piracy

From Dow Jones:

Chinese and international record companies called Tuesday for an advertiser boycott of Baidu.com Inc., the country's leading search engine by search volume, over complaints of music piracy.

The statement was signed by record companies including Universal Music Group, EMI Group PLC, Sony BMG Entertainment, Warner Music Group Corp., and local Chinese companies.

The group of companies and associations has sent a letter to advertising companies asking them "to carefully consider whether they should continue to place advertisements on pirating media," the statement said.

Baidu's search engine provides links to thousands of sites that carry unlicensed copies of music. Record companies have filed a series of lawsuits against the site in
Chinese courts.

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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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Beijing Court Sides With Baidu in Music Piracy Case

From AFP:

BEIJING (AFP) — A Beijing appeals court has found top Chinese search engine Baidu.com not guilty of property rights infringement for posting links to websites offering illegal music downloads, state media said Monday.

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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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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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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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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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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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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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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.

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Related:

No Good Download Goes Unpunished

Nielson: DRM-Free Tracks Do Not Increase Overall Sales

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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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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