In an SEC filing yesterday, The Orchard released unaudited, pro forma financial statements related to its acquisition of some of TVT Records's assets (read EX-99.2). The Financial Accounting Standards Board requires that business combinations are to be allocated based on the purchase price. In this case, The Orchard purchased TVT assets for $5.5 million and offer the pro forma financial statements of the combined company for illustrative purposes.

TVT's liabilities as of March 31, 2008 totaled $23.7 million. Over $7.7 million of that was accrued royalties. In order to state the acquired assets at fair market value, TVT's liabilities were adjusted to $1 million.

On the income statement, TVT's revenues for the calendar year 2007 were $16.002 million. After operating expenses of $19.06 million, TVT's net loss from operations was $10.75 million. Its total loss (after interest expense) was $14.655 million.

Ouch.

In June, The Orchard acquired TVT Records' master recordings and physical distribution unit, among other assets (no publishing, though). A few weeks back, it hired Michael Bull, formerly with Caroline Distribution, to be the GM of TVT Distribution. With TVT Distribution (gotta rename that, seriously) The Orchard can build a roster of indie labels for physical distribution to add to its digital distribution business.

Posted by Glenn at 1:43 PM | Link
|Distribution||The Orchard|

A few weeks ago I was thinking to myself, When is a major going to get rid of its physical distribution and outsource most functions or partner with another company? An indication came sooner than I expected. Today it was announced that Warner Music Group will distribution and market physical product for EMI in Southeast Asia. The companies have had a similar arrangement for India, the Middle East and North Africa since 2005. I was wondering about North America, not smaller and developing markets, but I think such partnerships here are inevitable. A permanent reduction in distribution workforce would have considerable cost savings. Since the number of labels and the number of titles released are not growing, physical distribution needs to be rightsized.

It makes perfect sense. First the majors got out of the manufacturing business. There has been some consolidation of sales and marketing for indies and majors (as in the case with EMM and Caroline). As both physical sales and the number of music retail sites drop, the logical step is to partner with another company to reduce the cost of physical distribution. Even the New York Times is doing it.

Posted by Glenn at 10:45 AM | Link
|Distribution||EMI||Warner Music Group|

It's a month old, but last night I was looking over the 10-K of Entertainment Distribution Company, Inc. and noticed its mixed performance. The company was formed from the acquisition of Universal Music Group's manufacturing U.S. and central European CD and DVD manufacturing and distribution operations. EDCI is the exclusive manufacturer of CDs and DVDs for UMG in those markets as well as the UK. In the UK it counts Ministry of Sound, Union Square Music, Demon Music Group and Warner Music Group as its customers.

For the quarter ending March 31, revenue was basically constant at $83.1 million and the net loss of $6.2 million was almost dead on last year's loss. Europe did well for EDCI -- slightly lower prices but slightly higher revenue -- but CD sales to U.S. companies dropped 25.6%.

As for the outlook for 2008, the filing says this: "Overall, we expect the challenging operating environment to continue throughout the duration of 2008 and anticipate industry declines of approximately 10-12% on a world-wide basis for the full year."

Posted by Glenn at 4:53 PM | Link
|Distribution|

Entertainment distributor Handleman is going to get out of the music business. Getting out of music will result in downsizing the company by about 260 employees. Handleman is one of two, along with Anderson Merchandising, that supplies Wal-Mart with CDs. Handleman will sell its inventory and other music-related assets to Anderson.

In March, Handleman posted Q3 revenues of $346.9 million, down nearly 29%% from $485 million the year before.

Unlike the closing of other distributors, there should be little to no effect on sales in this case since there is only one account. By now, Handleman has provided to Anderson a file of new release and catalog orders to each Wal-Mart ship-to address (as detailed in this asset purchase agreement).

In an SEC filing, Handleman revealed that Anderson will buy a maximum of $21.5 million in inventory and will pay $3.6 million for the Handleman's Wal-Mart retail fixtures. (The money will be returned to shareholders instead of being invested elsewhere.) In addition, Handleman plans to identify 200 field full-time Handleman employees and 40 field part-time employees to which is may offer employment.

The news doesn't surprise me, but not for the typical "the music business is dead" reasons. As I wrote at the beginning of this year, changes in music and technology and wreaked havoc on the supply chain. It has been at the wholesale distributor level -- not at the record label level -- where some of the greatest changes have taken place. One-stop distributors like Handleman have a low-margin, high-volume business model that is built almost singularly upon one format, the compact disc. Record labels, while certainly struggling, have an advantage over distributors because they can sell music in multiple formats (CD, LP, download, ringtone, etc).

Posted by Glenn at 2:42 PM | Link
|Distribution|

• Sony ATV Music Publishing has signed Jonathan Rotem, producer and co-writer of the Sean Kingston hit "Beautiful Girls" and Rihanna's "SOS." (Billboard.biz)

• Redeye Distribution inked deals with Daptone Records and the band Cake and its Upbeat Records imprint. (Billboard.biz)

• An interview with Rep. Howard Berman, chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property. He said there will soon be legislation regarding terrestrial radio's exemption from paying sound recording royalties. "Anybody who is transmitting radio digitally has to pay but over-the-air terrestrial is the one platform that is exempt. They have what I think of as an unfair competitive advantage. ... It is going to cost them a few cents on the dollar. There will be some rate determination. They are selling commercial advertising and are drawing customers and are economically exploiting for their programming the work of someone else. That is what compensation is for." (San Fernando Valley Business Journal)

• The race for convergence has companies fighting for each other's market share. Consumers are left scratching their heads. Said one analyst, "I pity the poor consumer. From a consumer perspective, it's very confusing to figure out where to go." (Herald Tribune)

• Pictures (legit?) of the next generations of the Microsoft Zune, one being a flash drive version with 4 GB and 8 GB of memory, the other a standard-sized Zune with 80 GB of memory. The design has been updated a bit but looks roughly the same as the first generation. (Gizmodo)

• It's the end of the line for Sony Atrac format. Connect download store on its way out and the new video Walkmans that will not support the format. Atrac is a good case study on a proprietary format that started with good intentions -- it was developed for Sony's Minidisc -- but ultimately helped slow Sony's growth in digital music. (Digital Noise)

Posted by Glenn at 10:48 AM | Link
|Distribution||Publishing||Radio||Sony BMG||Zune|

• Album sales dropped 5% last week and were 16% lower than the same week last year. For the year, album sales are down 14%. It was a slow week for new releases as Talib Kweli debuted at #2 with sales of only 60,000. High School Musical dropped 40% from its debut tally but still retained #1 with 367,000 scans. Digital track sales dropped 2% last week and were 40% higher than the same week last year. For the year, sales of digital tracks are up 48%.

• Nokia announced its new mobile music store, Ovi. The service, to go live later this year, will sell WMA files over the air and downloaded to PCs. Ovi will have access to existing third-party services like social networks. (paidContent)

• Luaka Bop has found a new, post-V2 home at Red Eye Distribution. (Pitchfork)

• eMusic has renewed agreements with some of its most popular labels: Beggars Group (4AD, XL and Rough Trade), Matador Records, Concord Music Group and ATO Records. (Playlist)

• Sony BMG's "Dave Matthews & Tim Reynolds: Live at Radio City," out September 4th, will be its first music Blu-ray release with support for Dolby TrueHD. (Afterdawn)

• Market research company iSuppli sees a slowing in digital (both downloads and subscriptions) growth through 2008, but expects a "small resurgence" due to greater broadband penetration. (iSuppli)

• Satellite news: XM is moving its Nashville studio to the Sommet Center (home of the Nashville Predators, owned by the City of Nashville and just around the corner from the current studio at the Country Music Hall of Fame), and Sirius is adding a Grateful Dead channel. (The Tennessean and Variety, respectively)

Posted by Glenn at 10:36 AM | Link
|Distribution||Mobile Music||Research||Sirius||XM||eMusic|

• A joint study by PricewaterhouseCoopers, the IFPI and Singapore-based Soundbuzz predicts the global music industry's physical product revenue will drop 61% by 2009. (BusinessWeek.com)

• Amp'd Mobile, a mobile carrier with a music and video slant, has filed for Chapter 11 bankruptcy. Universal Music Group is one of the companies that funded $360 million that started Amp'd. (Wall Street Journal)

• A few news items on online music service Slacker: The company released a desktop application that allows users to manage their entire music collections. (Update: OK, not so new. I thought there was a new update, but maybe not.) In addition, Slacker just got $40 million in second round funding.

• PIAS America has signed with Universal's Fontana Distribution after a short run with EMI's Caroline Distribution. (Billboard.biz)

• CMT.com's Chet Flippo bids country radio goodbye and welcomes custom country radio (he's a Sirius fan). "I'm sorry, my friends in country radio, but I have long since moved on. No more commercials, no more wacky stunts, no more same 20 songs." I mention this only because country is bound at the hip to terrestrial radio. When that goes, chaos will ensue. (CMT.com)

Posted by Glenn at 8:29 AM | Link
|Distribution||Indies||Online Stores/Services||Radio||Research|

• Navarre finalized the sale of its independent music distribution segment to Koch yesterday. Navarre received $6.5 million at closing and plans to collect $11 million from trade receivables that were not part of the transaction. The company plans to use the proceeds to pay down its credit facility. (Press release)

• EMI had agreed to give YouTube users access to its videos and music and use the content in their own user-generated content. EMI will use YouTube's management tools to track and monetize the content. EMI is the last of the four majors to come to an agreement with YouTube. (Press release)

• Ad-supported P2P (sort of) site SpiralFrog is set to launch by the end of the summer, according to company chairman and founder Joe Mohen. SpiralFrog has been in a period of upheaval with the exit of executives and directors. One bright spot: the company is currently in beta testing in Canada. (Billboard.biz)

• David at Digital Audio Insider went through his latest eMusic statement and blogged about the payout increase. His band's per-song payout rose 11.3% since eMusic recently increased its payout rates. (Digital Audio Insider)

• You don't hear about retailers seeing sales of iPods and related accessories, but Sharper Image reported sales of both were instrumental in the company's 21.5% drop in revenues for fiscal 2006. (10-K)

• Industry legend Alan McGee is reportedly winding down his Poptones record label because he thinks bands should release music themselves and developing new acts is not economically feasible. "New groups will have to develop themselves," he said. (Digital Spy)

• PaidContent has an audio interview with RealNetworks' Rob Glaser. (Download MP3 or stream at this page)

• Perhaps inspired by Al Gore, the IFPI posted a list of "ten inconvenient truths about the music industry today," which includes blasts against Pirate Bay, Allofmp3.com, organized crime, file sharers and ISPs that "facilitate the illegal swapping on copyright infringing music on a grand scale." (IFPI)

Posted by Glenn at 8:34 AM | Link
|Distribution||EMI||RealNetworks||eMusic|

• Justin Timberlake and Interscope Records announced a joint venture record label called Tennman Records. The label will be distributed by Interscope Geffen A&M. Ken Komisar, SVP of A&D at Sony BMG, will serve as president. (All Hip Hop)

• CD Wow has been ordered to pay £41 million ($81 million) over three years to the U.K. recording industry for selling parallel imports from Asia. (Billboard.biz)

• Digital distributor IODA announced a partnership with IMagine that will allow the company access to China, Hong Kong and other markets in the region.

• A profile of ArkivMusic.com, which offers many out-of-print classical albums on CD. The company is not worried about piracy. "You can't buy 100 discs on somebody else's credit card and then get rid of them on the street. It's a profitable niche to be in. It's a highly attractive demographic." (Philadelphia Inquirer)

• Dave Navarro's Panic Channel will self-release its next album to break free of record company "slavery" and a "failing corporate industry that is on its last legs and gasping for air." That sound about right for a band that failed at mainstream success the first time around. (andPop)

• As majors sign fewer artists in Canada, indie distributors are stepping up with more labels and more releases. Examples are Koch Records and Labwork Music, a joint venture between Sonic Distribution and EMI Canada. Collectively, Canadian indies account for 19.1% of sales, above all majors expect Universal Music Group. (Reuters)

• Once renegade music tab site MXTabs.com has announced some licensing deals with BMG Music Publishing, Peermusic, Famous Music, and Bug Music. The licenses cover both guitar and drum tabs. (Press release , via Digital Music News)

• This is not related to music or media, but Andrew Martin's great article on Coca-Cola's struggle to change reminded me of the recorded music industry. Coke is like a CD. Non-carbonated drinks are like digital downloads. The latter could hardly make up for drops in the former, but investment in the latter is crucial for the future. (New York Times)

Posted by Glenn at 9:08 AM | Link
|Digital Distribution||Distribution||Indies||Publishing||Sony BMG|

• Reuters reports that Warner Music Group is "likely" to offer an increased bid to top the $4.73 billion bid for rival EMI submitted by private equity firm Terra Firma. Could be worth it if Coldplay plans to release an album any time soon. (Reuters)

• At the urging of a House Judiciary Subcommittee, SoundExchange has offered small webcasters break in royalties. (Billboard.biz)

• In a lawsuit similar to Cheap Trick's complaint against Sony BMG, FBT Productions and Em2M have sued Aftermath Records and Interscope Records over digital royalties. The plaintiffs allege they have been underpaid and should have received half of net receipts from ringtones and downloads. (Billboard.biz)

• Defend Distribution has teamed up with former Caroline Distribution GM Rick Williams, who will act as a consultant, to expand its label roster and increase its label services. Good thing Defend now goes through Ryko. (CMJ.com)

• A profile of Sonos founder John MacFarlane. He's a big believer in the subscription model. "As broadband connectivity becomes ubiquitous, MacFarlane sees an inexorable shift to the music dial-tone model -- which is more conducive to a raft of innovations, such as social networking and recommendation engines, that are currently unfolding." (Business 2.0)

• An IFPI investigation has resulted in a shut down of a voucher system for Russian download site allofmp3.com run by a London-based agent. (PC Pro UK)

• Here's a video of the unboxing of a Halo 3 edition of a Zune portable media player. The player's design isn't much, but it shows the kinds of cross-promotions that Microsoft can utilize to help its Zune player get marketshare. (Zune Insider)

Posted by Glenn at 12:04 PM | Link
|Distribution||EMI WMG Merger Talk||Legal||Webcasting||Zune|

Update: It's a done deal. Here is the press release. Koch will acquire Navarre's music distribution business for $6.5 million, which will be paid for by cash reserves. Indie distribution is at an interesting time. ADA is dominating. The new Koch should be very powerful. Fontana is growing and adding labels. Caroline is trying to find its way. Smaller distributors are chugging along.

Billboard.biz has reported that Koch Entertainment's parent company, Entertainment One, is planning to acquire Navarre Entertainment Media. The new company's market share will be about 2.7%.

A combined company would be the country's second largest distributor, behind ADA. Koch currently distributes Putumayo, Artemis, Shanachie, Passport, SST, Kinkysweet and of course the Koch family of labels. Navarre sells Pinnacle Records, Suburban Home, Valley Entertainment, Naked Music and ZTT Records.

Posted by Glenn at 11:18 AM | Link
|Distribution|

• RealNetworks reported record revenue of $129.4 million in Q1 2007. Music revenue increased 18% year over year. Page six of the statements of operations shows the real story: Less $61 million from the company's anti-trust settlement with Microsoft, adjusted net income was flat at $10.4 million. In Q1 2006, only $40 million in settlement money hit the income statement. This Seattle P-I article says the company now boasts "24.6 million paid subscribers to its music and online radio services." If memory serves, Rhapsody had only 2.4 million a few months ago, so I'd like to see those subscriber numbers broken out. (Press release and PDF of statements of operations)

• Koch has launched a label services division to offer marketing services to labels. (Billboard.biz)

• Warner Music Group will try out a new physical format called MVI -- for Music Video Interactive -- that is a DVD with a variety of digital content. The upcoming Rush album Snakes & Arrows will be available in MVI, and releases by Linkin Park and The Flaming Lips are expected to be available in MVI as well. (Digital Music News)

•

• ARTISTdirect.com has a partnership in the UK with T-Mobile and will provide T-Mobile subscribers with exclusive media content like downloads, videos and photos. The deal could get ARTISTdirect "more than $1.0 million for a one-year period." (Press release)

•

Posted by Glenn at 2:20 PM | Link
|Distribution||RealNetworks||Warner Music Group|

• Conde Nast's recently launched Portfolio has an article on Larry Fink, CEO of BlackRock. The private equity firm is behind Octone Records, which will soon release Maroon 5's sophomore album. (Portfolio)

• Apple's April 12th newsletter confirmed that iTunes will begin to offer DRM-free, 256 Kbps files next month. (Apple eNews, via Digital Audio Insider)

• Artists signed to Atlantic Records UK will use ShoZu-enabled mobile phones to upload videos and photos to the Internet. The first act to use the service will be Funeral For A Friend, which will upload videos to its MySpace page. (Press release)

• The Caroline-to-Fontana migration continues as Eighteenth Street Lounge moves to Universal Music Group's indie distribution division. (Billboard.biz)

• A profile of CMT and its many digital initiatives: CMT.com, CMT Loaded (video on demand), content for mobile phones and a fan-compiled Wreckers video, among others. (The Tennessean)

• Hipsters were quick to digital music but still believe in the quality of vinyl. In Brooklyn, at least six vinyl shops have opened in the last few years. (New York Sun)

• How the "cumulative advantage" impacts the popularity of music. The phrase I tend to use is, "Popularity breeds popularity"...but I've never published research on the topic. (New York Times Magazine, via David Card)

Posted by Glenn at 9:45 AM | Link
|Brick-And-Mortor Retail||DRM||Distribution||Warner Music Group||iTunes|

I ran across this Freep article on Handleman, a leading music wholesaler that supplies CDs to mass merchants, and though it was noteworthy for two reasons. First, it shows the effects of falling CD sales. Second, it shows that Handleman is being very smart in its flexibility.

"Handleman Co. has kept the Kmarts of the world stocked with music for more than 50 years. But these days, the Troy-based music distributor is starting to deal in greeting cards, DVDs and video games, all to redefine itself in a quickly changing music industry, where CD sales are dropping and more people than ever are buying their music online.

As it adjusts, the company has cut jobs in the United States, hired people across the Atlantic and made acquisitions to offset falling music sales. ... For the first three months of the year, CD sales plummeted 20%. At the same time, digital album sales on the likes of iTunes and eMusic doubled, both in 2006 and the first quarter of 2007, SoundScan reports.

This is a problem for Handleman, a company that makes about 80% of its revenue by distributing and managing CD collections for big-box stores like Wal-Mart and Kmart."

Handleman purchased Reps LLC for $21 million and now restocks shelves and manages in-store displays for other products like batteries and razors. The company has British retailer Tesco as an account but will only track sales, not supply music.

Posted by Glenn at 11:07 AM | Link
|Distribution|

• Austin City Limits Studio Theater will be a $15 million, 2,000-seat venue that will be part of a larger, $225 million project in Austin, Texas. Forty nights a year it will be a soundstage for tapings of "Austin City Limits." Willie Nelson and his nephew Freddy Fletcher are co-partners with Stratus Properties Inc. (Read AP article)

• Fontana Distribution beefed up its roster by signing an exclusive distribution deal with Six Degrees Records, which celebrates its tenth anniversary in 2007. Next year the label plans to release albums by Bebel Gilberto, Ojos de Brujo, Spanish Harlem Orchestra and CéU. Six Degrees also announced a new digital only series of albums that will aim to break new artists. The series' first release will be the five-track Emerging Artists Sampler Vol. 1. It has songs by Rara Avis, DO (featuring Omar Sosa & Greg Landau), ZAMAN 8 and Hafez Modir, MNO, and Jef Stott.

• Sirius reports holiday sales are slower than expected and now expects 5.9 million to 6.1 million subscribers by the end of 2006, which would equal 2.6 million to 2.8 million new subscribers for the year. (Read article at MarketWatch)

• BusinessWeek's Olga Kharif on the new generation of software meant to help sites like YouTube identify prohibited content. MySpace is testing an automated take-down tool, and Google is expected to have a similar technology installed in YouTube by the end of the year. (Read article at BusinessWeek.com)

• Pontiac has a partnership with Virgin Megastore. The auto manufacturer is sponsoring Virgin Recommends at ten Megastores. In return, Virgin will act as musical expert to Pontiac. (Read article at Billboard.biz)

• EMI became the first major label to sign up with eListeningPost, a new viral marketing service that allows bands to send out secure versions of songs or videos to distribution lists. After a one-time set up fee, the service costs $9 per month. (Read press release)

• Reminder: The FCC will hold a public hearing on media ownership in Nashville, Tennessee on Monday, December 11 at 1pm. The event will be held at Belmont University's Massey Performing Arts Center.

• RIP Logan Whitehurst, drummer for The Velvet Teen, and Ronnie Lipin, famed music publicist and manager.

Posted by Glenn at 9:49 AM | Link
|Brick-And-Mortor Retail||Distribution||Satellite Radio||YouTube|

• A judge dismissed Hawthorne Heights' suit against Victory Records and called the band's claim to terminate its agreement "absurd." (Read Hits post at The Velvet Rope)

• Super distributor Handleman hired Robert E. Kirby to be its new president and CEO. (Read press release)

• Former Village Voice critic Robert Christgau has joined NPR's All Things Considered. Yesterday he reviewed the new album by The Hold Steady.

• Warner Music Group exec on Asia: "At Warner, we consider Asia to be the world's incubator not just for technology but for how people use technology." (Read article at Taipei Times)

Posted by Glenn at 12:54 PM | Link
|Distribution||Indies||Legal||Warner Music Group|

• A little back and forth about the health of Koch. Some say its about to go through major changes, others say it's in good health. (The Velvet Rope)

• Billboard's Brian Garrity created a timeline that tracks OK Go's last album, Oh No, from recording to pre-VMA buzz. It leaves out some recent items, though. There are two important items that are not in the article. First, the album sold over 8,200 last week, almost twice as much as the last week of sales mentioned in the article. Second, over half of last week's Oh No sales were in the digital format. That's incredible, and it was good enough for #9 on the Digital Album chart. That abnormally high digital share may point to a demand that Capitol is not fulfilling at bricks-and-mortar retail. (Billboard)

• Something for the RIAA's files: Sweden's Pirate Party released a manifesto (read here). Music attorney Chris Castle thinks "it's fair to say they cribbed it" from the Marxist manifesto and calls it "either an extraordinary example of political naivete, or the kind of brain rot that sets in when one makes a life of being "neutral." (Music•Technology•Policy)

• The Arab Strap are going to break up after ten years together. Ten Years of Tears, a compilation of b-sides, demos, remixes and new recordings that will be out in early 2007, will signal the end of the Scottish band's time together.

Posted by Glenn at 8:55 PM | Link
|Digital Music||Distribution||OK Go||P2P|

• Hits predicts a nifty first-week tally for Beyonce's B'day...possibly up to 650,000. Audioslave is on track for a good week but way behind at 130,000. (Hits)

• Today's licensing news: The Orchard has signed a deal that makes its catalog available on the yet-to-be-released, legit P2P service QTRAX. (Press Release)

• Hip hop label Swishahouse boasts about its upcoming plans, which include new albums by Paul Wall, Mike Jones and Lil Keke. (Rap News Network)

• Handleman Company lost $5.9 million on sales of $240.4 million in the first quarter ending July 29th. Music revenues were down 15.7% against the same period last year. "There were very few new releases by top recording artists and those that were released substantially underperformed the new releases in the year ago period," said Chairman and CEO Stephen Strome. (Press Release)

• You could see this coming: Impala, the indie label trade group that got the Sony BMG merger annulled, is threatening to target Universal Music Group's recent acquisition of BMG Music Publishing. (The Guardian)

• The SEC is investigating XM's estimates on subscriber counts and cost of signing up new customers. (Radio Ink)

Posted by Glenn at 7:40 AM | Link
|Digital Distribution||Distribution||Indies||Universal Music Group||XM|

• Rock band Keane (Interscope) has postponed its fall North American tour while its singer undergoes rehab. (Billboard.com)

• A vote for "flexible and variable pricing" from the chairman of Viacom and CBS, Sumner Redstone. (Digital Music News)

• RED Distribution has added two labels: Uprising, formerly with Koch, and I Surrender. (Billboard.biz)

• Since YouTube is always in the music press lately, here's one for you: Sony Corp placed its bet on the future of the Internet by purchasing Grouper, a website that hosts user-generated videos, for $65 million. Question: Will the company find a way to fold that into its overall strategy that could benefit its hardware and media divisions? (NY Times, via 12F)

• You don't know what you're missing, Los Angeles: In the spring survey, country music extended its streak as king of the top Arbitron markets. Spanish formats had the biggest gain. (Radio Ink)

• Something for you long tail nuts: A transcript of a Bandwidth Conference panel featuring "The Long Tail" author Chris Anderson and folks from Yahoo! Music and Rhapsody. (37signals, via Digital Audio Insider)

• Something for you Leslie Gore nuts: Digital Rights Agency has inked a deal with K-tel International to digitally distribute its songs worldwide. (Press Release)

• Worth reading: A thread on Ryko's recent conference in New Orleans and ADA's turnkey digital distribution solution the company will implement. (The Velvet Rope)

Posted by Glenn at 9:08 AM | Link
|Digital Distribution||Distribution||Long Tail||Radio||Universal Music Group|

• Entertainment lawyer Chris Castle has as thorough post on the RIAA's lawsuit against XM over its Inno receiver/player. He thinks the Consumer Electronics Association believes that if Pioneer, which manufactures the Inno, pays the Audio Home Recording Act levy then that qualifies as a kind of content license. "Sorry guys," he writes, "but that is an absurd position." It's a long post but absolutely worth reading in its entirity. A little blog mention can't do it justice. (Music•Technology•Policy)

• The Guillemots' Through The Windowpane (Fantastic Plastic) has a Metacritic average score of 79 through five reviews. Stylus gave it an A rating ("one of the most creative, musical and genuinely moving records to come from these shores in an age") while The Guardian , from the band's home turf, gave it a mediocre three out of five stars ("A microcosm of a debut that, frustratingly, juggles promise and excess.") (Metacritic)

• Folks at The Velvet Rope are thinking Ryko Distribution will get folded into ADA. Makes sense. Given its parent company, Warner Music Group, is on the cost efficiencies warpath, there seems to be too much overlap to not combine to two distributors. (The Velvet Rope)

Posted by Glenn at 10:00 PM | Link
|Distribution||Legal||RIAA||Satellite Radio|

Who will be the first band so independently sell a million units through the Internet? The Chicago Sun-Times' Jim DeRogatis thinks it could be Radiohead, the superstar band that has been public in its distaste for re-signing with EMI or any other major music group.

"In recent interviews, its members have indicated that they're seriously considering whether they need to re-up with Capitol/EMI or any other label. Among what they see as the cons of self-releasing their music are their fondness for old-school vinyl LPs and their worry that some (mostly likely very small) number of their fans may not have Internet access. ...

The musicians also wonder if such a plan would distract them from their craft, making them businessmen instead of artists. But face it: A group like Radiohead is already a sizable enterprise, with a dozen or more people -- roadies, managers, sound technicians and publicists -- in its employ."

Running a website, argues DeRogatis, is much easier than the coordinating a tour or setting up a private recording studio. Why not just put it on the website and let people buy it?

If only it were that easy, but it's a lot easier to cut out the record label than it is to cut out the retailers. Would a million people give Radiohead their credit card information for only one purchase? Probably not. Why not use iTunes and other online stores, which is where people go to buy music online? Part of selling music is getting the music to those places -- online and physical -- where people shop.

Jim's right, the first DIY digital platinum award could very well go to Radiohead. It would be a global million, though, which doesn't seem impossible since the band would take credit card orders from customers around the world. The UK alone could do a big chunk...if it's done right. Sure, it's possible.

Posted by Glenn at 5:02 PM | Link
|Digital Music||Distribution|

• Sony BMG has created a new unit, called the Commercial Music Group, to find new opportunities for its catalog and classic recordings. (Hollywood Reporter)

• HIts has additional info: The group will be headed be veteran John Ingrassia, formerly an executive vice president at Columbia Records Group. CMG will include Legacy Recordings; the Strategic Marketing Group; the Custom Marketing Group, Television; and Sony BMG Masterworks. (HIts)

• Vivendi, the parent company of Universal Music Group, is selling its stake in a utlity company. It's believed the move, which will result in about $1.91 billion, will give it more resources in its pursuit of the music publishing assets of BMG and Warner Music. (Financial Times)

• Castle Harlan, Inc. has completed its acquisition of Baker & Taylor, a leading wholesale distributor of books, videos and games. (Charlotte Business Journal)

• Related: Rumors that Baker & Taylor laid off some members of its sales staff yesterday. (The Velvet Rope)

• Physical album sales for the year are down 4.2% while digital album sales are up 126%. Digital tracks are up 77%. Taking all three into account, sales of recorded music are up 0.1% through the first half of 2006. (Hollywood Reporter)

Posted by Glenn at 11:01 AM | Link
|Distribution||Sony BMG||Universal Music Group|

• In the event it purchases EMI, Warner Music Group would be willing to offer a job to EMI chairman Eric Nicolo -- but not Alain Levy. (The Telegraph)

• The NY Post handicaps the songs of the summer. At 2-to-1, Nelly Furtado's "Promiscuous" is the favorite. (NY Post, via Stereogum)

• A profile of Angelica's Record Distributors, one of the bigger wholesalers of Spanish-language music in the country. (Tri-State Online)

Posted by Glenn at 7:04 AM | Link
|Distribution||EMI WMG Merger Talk|

• EMI is reportedly prepared to no longer insist that Warner Music Group sell its music publishing ahead of any EMI acquisition of WMG, which says either music publishing company should be sold only if required by regulators. (This Is Money)

• Yahoo China has run into the ire of the major music companies. The company will be sued by the majors within a few weeks, says the chairman of the International Federation for the Phonographic Industry. The industry's complain is that Yahoo provides links to illegally copied music. Yahoo is China's second-largest search engine. Baidu, the market leader, was sued last year. (Bloomberg.com)

• No details have been given oh exactly how this came to being, but eMusic has discovered 19 Sun Records tracks that have never been released. The found songs are by artists such as Charlie Rich, James Cotton, Ike Turner and Bill Justis. The songs will be added to the deep Sun catalog that is already available at eMusic. (Press release)

• Handleman, one of the country's leading wholesale music and movie distributors, partly blames a lack of hit albums for its current financial woes. It expects to go through a round of cost-cutting measures that will include closing a distribution center, lowering customer returns and reducing overhead. Employee pensions and health benefits may also be on the cutting board. (The Freep, via Kings of A&R)

• The Chicago Sun-Times' Bobby Reed on black country artists. Mentioned is a former Miss America and aspiring country star, Ericka Dunlap. (Chicago Sun-Times)

Posted by Glenn at 9:26 AM | Link
|Distribution||EMI WMG Merger Talk||Piracy||eMusic|

Alternative Distribution Alliance (ADA), the indie label distribution arm of Warner Music Group, announced this morning that it is launching a UK distributor. ADA UK will be headed by Susan Rush, the former General Manager of Pinnacle Records.

The press release did not name any labels that will be distributed by ADA UK, but an article by Billboard's Ed Christman has some additional information. ADA UK has signed Earache Records, and in addition has released or will release albums on Because Music, Ed Banger, Ear Candy, Black Lab Music and 679 Recordings.

In the US, ADA distributes Domino, Sub Pop, Matador, Fueled By Ramen, Downtown Recordings, Epitaph, Touch and Go, Beggars Music Group and others.

ADA has had a phenomenal 12 months or so with successful albums by The Postal Service, Arctic Monkeys, Panic At The Disco! and Gnarls Barkley.

Posted by Glenn at 11:11 AM | Link
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• Philly's music writers are as mean-spririted as their sports fans. ADA Distribution's annual conference will be held in Philly this weekend. Check out the grief their "indies only" showcase at the Trocadero is getting from a local music writer: The line-up -- Band of Horses, Yo La Tengo, The Stills, Matt Pond PA and Todd Barry -- "is reason enough to ignore the corporate ogre." (Philadelphia Weekly)

• Louis Armstrong memoribilia will be on display at the Godwin Ternbach Museum at Queens College in New York City from June 20th through August 20th. (Downbeat)

• Two new books explore the myths and music of the Laurel Canyon scene of the late '60s through the mid-'70s. (LA Weekly)

• This is news to me: Mark Ibold (ex-Pavement) is Sonic Youth's new bassist/guitarist. (Modestmicah)

Posted by Glenn at 5:35 PM | Link
|Books||Distribution|

• Neil Levine has been hired by Caroline Distribution to "establish a unit that will offer a full slate of promotion, marketing and digital services for the independent urban music market." He brings with him Penalty Records, a label he founded that was most recently distributed by Rykodisc. Previously Levine was the worldwide general manager for the Rykodisc label group, and he was formerly in charge of TVT's urban division. (EMI Press Release)

• High School Musical star Vanessa Anne Hudgens has signed a recording deal with Hollywood Records. Her album is scheduled for a September 26th release. (Hits Rumor Mill)

• The Orchard has signed a deal to distribute and market the music of MU-YAP, the Turkish performing rights organization for phonogram producers. MU-YAP represents 85 labels and has digitized 72,000 songs (with another 40,000 expected to be ready within a year). (PR Newswire)

• Barbara Streisand will take out take Il Divo on the road for her 20-city tour. (Billboard.com)

• The Ataris have been let out of their contract with Columbia Records. "We, like so many of the great people who have recently left Columbia, are not interested in remaining on a label that is in the process of being dismantled," said Kris Roe. (Aversion)

Posted by Glenn at 9:03 AM | Link
|Distribution|

Koch Distribution, already a force in independent hip hop, announced the addition of three hip hop labels yesterday: Damon Dash Music Group, Kedar Entertainment and Big Oomp.

Two of the labels are run by names well known within hip hop circles. Damon Dash Music Group is headed by Damon Dash, who along with Jay-Z co-founded Roc-A-Fella Records in 1996.

Kedar Entertainment, a business group founded by former CEO of Motown/Uniersal, Kedar Massenburg, has a label as well as artist management, publishing, consulting and film & television. The three artists currently on the label roster are Algebra, Lil Rok Playaz and Samson.

Big Oomp is an Atlanta-based label with a roster that features Baby D, Intoxicated, Loko and DJ Jelly.

Posted by Glenn at 10:27 AM | Link
|Distribution|

The CD Baby/Super D partnership that was in the news in April got an official press release yesterday to announce the pair's distribution deal.

CD Baby's catalog of over 130,000 albums has been added to Super D's database of over 415,000 titles. This opens up Super D's account base of over 2,400 physical retailers to CD Baby's independent artists.

One thing stands out from the press release: No returns. Here's the sentence (Coolfer's emphasis): "Even better than a typical distribution deal, artists get paid their full retail price just a week after the sale, with no returns, and are given the full info of the purchasing store." Coolfer's not sure what that means, since CD Baby has a money-back guarantee that offers its Internet customers two weeks to return the product. As a rule of thumb, one of the best way to lower your sales is to not allow returns.

CD Baby's website has an info page about the partnership that explains it to artists in very plain language. It explains that each time the retailer orders a CD Baby title, it is shipped to Super D that same day, and Super D sends to the account the following day. One has to wonder what the impact of that delay will be. The CD Baby order effectively creates a one-day backorder. Stores buy from one-stops to quickly fill orders and out of habit will expect the title to be in stock and ship that day. It may seem like a small detail, but one-stops like Super D are in business to fill orders quickly, and accounts will have to wait an extra day to get product.

Posted by Glenn at 7:41 PM | Link
|Distribution|

Newsweek covers something that usually gets little attention: distribution. In this case the distributor is Alternative Distribution Alliance (ADA) and the article, "Edgar and the Indies" by Johnnie L. Roberts, is the latest to sing the praises of Warner Music Group.

"ADA is a part of a multipronged strategy to revitalize Warner Music, which, like the rest of the industry, fell on hard times in recent years as sales of high-priced CDs softened and Internet piracy accelerated. Through ADA, Warner Music wants to dominate indie music, the industry's fastest-growing segment, by signing deals with scores of small local and regional labels and getting retailers to stock the distinctive music of the fiercely independent acts. Warner Music and ADA don't own the labels, and merely earn a fee for distributing their records. Yet when Warner's market share is calculated, ADA's overall sales are counted as if the acts belonged to Warner."

Surprisingly, Roberts didn't mention two things. First, there is no mention of digital music. The word digital doesn't appear in the article at all. Indies have a high share of digital shares than they do CD sales, and with all the talk of WMG's digital prowess I'm always suprised when an article doesn't bring it up. Also, not a mention was made of ADA's deal with label-less Clap Your Hands Say Yeah. The article was centered on the Arctic Monkeys, who are signed to recent ADA addition Domino.

Posted by Glenn at 1:03 PM | Link
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