April 25, 2008

A Chat With Merlin CEO Charles Caldas

Earlier this month, MySpace finalized deals with three of the four majors -- only EMI has yet to join -- to create MySpace Music. The majors will receive equity in the standalone company and will receive a share of its ad revenue.

Those deals have left many to ask what sort of deal will and should be given to indie labels. Wired, for example, put the issue to MySpace CEO Chris DeWolfe in a recent interview. On the topic of giving equity to indies, De Wolfe said MySpace is open to giving equity and a share of ad revenue to indies, but admitted the systems are not in place and pointed to practical issues of issuing equity to so many partners.

So I got in touch with Charles Caldas, CEO of Merlin, a global music new media licensing agency with over 11,000 label members.

Since MySpace Music is preparing for launch, I asked Caldas if Merlin had been in contact with them. "They're aware of who we are and what we do," he said, adding that talks are in the "early stages of conversation" and the two parties are exploring all aspects of a deal.

Wondering how an equity deal would work for indies, I threw out a scenario to Caldas. If, hypothetically, there were to be an equity deal with indies, what role would a group like Merlin play? "We would pass benefits back to members based on usage, for example. We can do as much or little as necessary on as broad or as narrow a scope as possible."

Aside from MySpace, Merlin is in talks with a number of other, unnamed services. In addition to looking at forward-thinking models, Merlin is looking back at past services that currently don't pay. Caldas said there will be a couple of announcements in the coming months about the deals Merlin is working on.

"We have to come up with new licensing models." he impressed upon me. "There are no philosophical barriers in place. Each service has to be looked at on its own merits."

More on Merlin:

January 2007 press release for Merlin's launch
January 2007 article on Merlin at The Register
August 2007 Hypebot interview with Merlin's Charles Caldas

February 21, 2008

TVT's Bankruptcy A Warning For Chart-Driven Indies

Word broke the other day that TVT filed for Chapter 11 bankruptcy protection. It may have surprised some people. After all, indies are taking away market share from the majors, right? They're enjoying the benefits of digital distribution. They don't have a reputation for high-salaries executives.

TVT's bankruptcy is not terribly surprising. Its top artists represent two of the genres that are lost in a transitioning market. First you have rappers like Lil' Jon who have traded album sales for ringtones and single downloads -- all the while diverting time toward consumer products and other revenue-generating schemes. Rap has lost crossover fans, too, and they won't return any time soon. Then you have radio-friendly rock bands like Default that have less of a place in today's marketplace than they did at the beginning of the decade. Rock radio is a shadow of its former self and has less of an impact on album sales. Such single-driven rock bands are having a harder time competing against strong touring acts and lifestyle bands (such as emo and indie). In both examples, artists are caught up in both cultural and technological shifts.

The successful indie label is one that has a strong brand and builds a lasting relation with consumers. It's easier to build a relationship when your roster is more focused. TVT's A&R has been a hodgepodge of mainstream genres and undersupported, destined-for-the-underground rock acts. (The label's legal battles couldn't have helped either.) It's not a bad time for indies -- it's a very good time, actually -- but the old rules don't work so well in a new marketplace.

June 25, 2007

Monday Business Links

• iTunes is now the third largest music retailer in the U.S. With 9.8% of the market, the leading music download store passed Amazon.com and ranked behind Wal-Mart (15.8%) and Best Buy (13.8%). Showing that not even market research experts have moved beyond the album format, NPD counted units sold, not total value of sales. To account for iTunes' single sales, NPD counts every 12 tracks as one album on CD. (AP)

• In order to reduce its exposure to the declining recorded music business, the German division of Sony BMG has created a joint venture with Microsoft, called Comedy.de, and has a long-term, exclusive contract with a television product to sell its comedy series on DVD. (Thomson Financial)

• BurnLounge, under fire from the FTC for its business model, announced it will simplify its business model and eliminate the network marketing element -- called a pyramid scheme by some critics -- and will provide greater benefits for its users. (Press release)

• Some orchestras are using younger, hipper musicians like Ben Folds and The Decemberists to lower the average age of their audience members. (New York Times)

• Rock band The Donnas have formed their own label and have a joint venture with Sony BMG's Redeye Distribution. (Update: I corrected myself after I saw that I typed RED Distribution. After I replaced it with Redeye, the correct distributor, I accidentally left in Sony BMG. My apologies.) In what looks like a fairly weak deal for a band with its own label, The Donnas' label will get a 50/50 split and co-ownership of the masters. A deal that gives Redeye that much of the revenue and some ownership of the recordings indicates the band is not assuming a great deal of the financial risk. Still, it's as artist-friendly as deals get these days and may be a model for others. (Billboard.biz)

June 4, 2007

Monday Business Links

• 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)

May 29, 2007

Tuesday Business Links

• 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)

May 12, 2007

Saturday Business Links

• Drag City Records is launching a world music label called Yaala Yaala Records. The first three releases will be from West African artists. (Pitchfork)

• The maker of a DRM software is threatening to sue companies such as Apple and Microsoft, claiming that its product is so effective that by not using it the companies are enabling their products to violate the Digital Millennium Copyright Act. (Computing)

• I've ignore the firestorm over offensive rap lyrics mainly because it's a hot political issue (for the next few weeks anyway) that may not have any financial ramifications. This AP article looks at the majors' silence over the issue and argues the reason for their silence is almost purely financial. They "fear cracking the door to censorship," wrote Marcus Franklin, or that they would take silence over protecting the lyrics, or that "they are leery of stepping into a racial minefield." (AP)

May 10, 2007

Thursday Business Links

• The Financial Times reported that Universal Music's acquisition of BMG's music publishing division will be approved the the European Commission in the coming days. (Variety)

• Trisha Yearwood has signed with indie Big Machine Records. The country singer was with MCA Nashville for 16 years. (Billboard.biz)

• Disney has launched a music and video download site called Disney Mix Central. Files are protected Windows Media and meant to go with the Disney Mix Stick MP3 player and the Disney Mix Max video/MP3 player. (Billboard.biz)

• Snocap launched Live @ Snocap, a private concert series recorded at the company's San Francisco office. (Press release)

May 4, 2007

Friday Business Links

• Country label 903 Music has "ran out of money" and shut its doors. (MusicRow.com)

• The Arctic Monkey's UK chart domination looks like it could have been made possible by an error by iTunes. The store accidentally put up for sale the individual tracks for the band's new album, Favourite Worst Nightmare, before the album itself was available. Fans acquired the album by simply downloading each track. The result was 17 tracks in the UK Top 200 singles chart. (NME.com)

• Flat-fee digital distributor TuneCore announced a strategic partnership with music retailer Guitar Center -- which is a TuneCore investor -- that will promote TuneCore to Guitar Center customers. (Press release)

• Keith Wozencroft, currently president of Capitol Music and Virgin Records UK, has entered into a partnership with EMI that will see him launch a joint-venture label with EMI UK and Ireland. (Billboard.biz)

• The NARM website has a PowerPoint presentation from Nielsen SoundScan that was given at the recent 2007 NARM conference. The slide show has a good amount of information on album and digital track sales for both 2006 and year-to-date 2007. Slide 17 had a statistic I had not seen: In 2006, there were 75,774 new albums released, up from 60,313 the year before. Another good tidbit: In 2006, there were 50% more digital-only albums released than the year prior -- but 95% of those digital albums sold fewer than 100 units each. Slide 47 has some info on ringtone sales, which Nielsen began tracking in September 2006.

• There's a rumor that Atlantic will split with Vice Records and decide which artists it wants to keep. (Hits)

April 14, 2007

Saturday Business Links

• The four major radio broadcasters -- CBS Radio, Citadel Broadcasting, Clear Channel Communications and Entercom Communications -- will pay a collective $12.5 million to close out allegations of payola. The broadcasters agree to adopt "rules of engagement" that include limits on gifts, regular personal training on payola restrictions and prohibition on stations and employees of exchanging airplay for cash or other gifts. (Variety)

• The Future of Music Coalition quickly issued a response to the payola settlement, calling it"a major - but tentative -- step toward once again opening the nation's airwaves to local music and voices." (Future of Music Coalition)

• BMI and Radio Music License Committee have extended by three years their previous ten-year performing right agreement for commercial radio stations. (Press release)

• Vagrant Records to launch Density, an imprint for heavier music. (Billboard.biz)

• Music attorney Steve Gordon examines the legal questions surrounding digital downloads as public performances. ASCAP is seeking a court ruling to declare downloads to be public performances, thus increasing the royalties paid by digital music services. Gordon called ASCAP's claim "tenuous" and pointed out that MaryBeth Peters, the Register of Copyrights, has indicated the office does not support such a proposition. (The Register)

• There's a report out of Australia that the music industry has been discussing new guidelines with ISPs. One proposal is a plan to cut off phone and Internet service to people who illegally download music. The impetus for the discussions could have been the country's weak first quarter. The Sunday Mail reported the value of first quarter 2007 sales were down more than 20% versus the same period in 2006. (The Sunday Mail)

April 5, 2007

Thursday Business Links

• Circuit City's record music sales continue to fall. This is from the company's earnings release that came out yesterday: "Comparable store sales of music software declined by double digits, and comparable store sales of video software declined by mid-single digits." (Press release)

• Best Buy released earnings for its fiscal fourth quarter. Declines in sales of CDs and DVDs partically offset double-digit gains in gaming hardware and video. (Press release)

• Sanctuary will drop new releases from its U.S. label but will continue to sell its catalog. (Billboard.biz)

• Sony BMG has a deal with Global Music International to distribute songs, ringtones and videos to mobile subscribers through China Unicom. (News.com)

• Zune's director of marketing said the company is looking at ways to push its subscription service. One possibility it has considered is a plan similar to those of mobile phones, where a person signs up for the subscription and gets the phone for free or at a discount. With a cheaper, flash-based model, that could be a good idea. (Computer World)

• I don't keep track of these things, but it's probably not every day that Amazon.com's top five CDs are by female artists. Last night the list was, from #1 to #5, Alison Krause, Amy Winehouse, Martina McBride, Lucinda Williams and Norah Jones. Joss Stone, at #9, was the sixth in the Top 10. The next female, Corrine Bailey Rae, was way down at #19.

April 3, 2007

Tuesday Business Links

• Bob Morelli has been promoted to president of RED Distribution, Sony BMG's indie distribution arm. He was previous EVP and GM. (Variety)

• The European Commission has brought charges against Apple and record labels, alleging the companies are restricting sales of music in Europe. Different countries have different iTunes stores, which can lead to difference pricing. Apple says it wants a pan-European store but is limited by record labels' requirements. An EMI spokesperson said, "We do not believe we have breached European competition law, and we will be making that case strongly." I can't believe France would really want to share its iTunes with other, non-Johnny Hallyday-loving countries. (Billboard.biz)

• RealNetworks is raising the price for the streaming version of its Rhapsody subscription service, to $12.99 from $9.99. The company rationalized the price increase by pointing out the value-added enhancements it has added, and the constant price of Rhapsody since the service was unveiled. (Digital Music News)

• In a move to facilitate licensing, Sony BMG will partner with a leading online music database to make available its music catalog for advertisers. (The Guardian)

• The Electronic Frontier Foundation found something to complain about in yesterday's move by EMI to drop DRM on its digital downloads: "Unfortunately, the industry is still giving consumers a raw deal. EMI will be charging fans a 30% premium to avoid DRM ($1.29 instead of 99 cents per track, or 30 cents to upgrade an old download) -- effectively a surcharge to buy back your rights." It followed that with its usual proposal of a voluntary collective license for file sharers...pretty much a pipe dream at this point. One thing at a time, and I'd bet labels would first want to promote download store growth before sending a signal that they are supporting P2P. (EFF Deep Links)

April 2, 2007

Monday Business Links

• A private equity group abandoned its plans to bid on EMI. That equity group is led by former EMI exec Jim Fifield. (The Guardian)

• Sony BMG UK has launched a A&R blogs (using Six Apart's Vox) where users can post tracks and videos. Right now there are two such blogs, Columbiademos.co.uk and RCAdemos.co.uk. A good idea? Too early to say. If the labels wanted to have to sift through much more mediocre material, then yes, mission accomplished. (Hollywood Reporter)

• Rumors are circulating that Amazon.com is going to purchase eMusic. (Hypebot)

• Victory Records is following shifts in industry and creating an in-house touring division to book shows for Victory bands that do not yet have a proper booking agent. Labels are smart to offer this service to its acts; why let somebody else make money off your artists? If music is ever to be used as a loss leader -- which some people are pushing -- the line between label and booking agent will be completely blurred. (Billboard.biz)

• Online radio station WOXY launched a music blog titled The Futurist. Not that the world needs another indie rock-heavy music blog, but WOXY will post its own live studio recordings (Ted Leo, Cloud Cult and Land of Talk have been posted thus far). (The Futurist, via Largehearted Boy)

March 14, 2007

Wednesday Business Links

• Forrester analyst Josh Bernoff offers five points on Viacom's lawsuits against Google. #3 says that the Grokster decision will "embolden" Viacom. #4 gets to the most likely result, in my opinion: a settlement that includes some sort of copyright protection via fingerprinting or filtering. This isn't about money. (Groundswell Blog)

• The European Union's consumer chief backed away from her harsh statements on Apple's closed iPod/iTunes system. She simply wanted to start a debate about developing the nascent digital music market. Job well done. (Reuters)

• Willie Nelson has partnered with his manager and producer James Stroud to launch Pedernales Records. After Nelson's final Lost Highway album (due out March 20), he plans to record for the label. (Billboard.biz)

• Meet Slacker, a free web radio product that is supported by video ads. The company will also offer a portable radio device that works through unused commercial satellite radio signals and will support MP3, WMA, WMV and MPEG-4 files. (News.com)

• BurnLounge unveils new digital download software and BurnPages, a social networking service. (Press release)

• The Village Voice's Chris Parker has an article on payola settlements and an agreement by broadcasters to play more indie music. My thoughts: Last year, Spitzer's payola investigations were supposed to open the indie floodgates. This year, it took a pledge by broadcasters to get indie artists some airtime. In effect, the free market did not materialize and indies have received a subsidy instead. (Village Voice)

March 13, 2007

Tuesday Business Links

• Starbucks and Concord Music Group have formed a new record label, Hear Music, that will release titles for both internal and external distribution. Seems like odd timing given that company founder Howard Schultz has been worried about the chain's brand recently. (Billboard.biz)

• EMI has dismissed claims by UK download site Wippit that the Beatles catalog will soon be available online. (Irish Examiner)

• British retailer HMV issued a profit warning. The company plans to close unprofitable stores and refurbish others. Also in the mix is a social networking site, to be tied to its own website, for music and film fans. (BBC News)

• Sub Pop Records has founded a new label, Hardly Art. (Pitchfork)

• Warner Music Group looks to be hesitant to up its offer of 260p per share for EMI, an offer that is "subject to numerous assumptions and conditions." EMI doesn't want to give access to its books without a commitment of a higher offer. (Times Online)

• Primary Wave's first big Nirvana licensing deal after purchasing 50% of the catalog for $50 million? Inclusion on the Major League Baseball 2K7 video game for the track "Breed." (New York Post)

• Old news, but I'll mention it: Universal Music Group settled its lawsuit with online video site Bolt.com for a "multimillion payment for damages for past infringement." (Press release)

March 12, 2007

Monday Morning Links

• Warner Music Group is ready to go after EMI again, The Wall Street Journal reported. (AFX)

• Country group Lonestar has been dropped by Sony BMG's BNA Records. (CMT.com)

• European Union consumer chief Meglena Kuneva has criticized Apple's combination of iPod and iTunes. "Do you think it's fine that a CD plays in all CD players but that an iTunes song only plays in an iPod?" he asked. "I don't. Something has to change." (Reuters)

• Warner Music Group has added hip hop label Rhymesayers to its Independent Label Group. Rhymesayers was previously distributed by Navarre and will now go through WMG's ADA Distribution. (Billboard.biz)

• Congressman Mike Doyle spoke about mash-ups and mixtapes at last week's "Future of Radio" House Telecom and Internet sub-committee hearing...and name dropped one of his constituents, indie dance artist Girl Talk. Said Doyle, "I hope that everyone involved will take a step back and ask themselves if mash-ups and mixtapes are really different or if it's the same as Paul McCartney admitting that he nicked the Chuck Berry bass-riff and used it on the Beatle's hit 'I Saw Her Standing There.'" (The 463: Inside Tech Policy)

• Warner Bros' expensive mistake of 2006, Paris Hilton's debut album, fared so poorly that Hilton will reportedly be dropped in the coming weeks. (Digital Spy)

February 27, 2007

Tuesday Business Links

• XM narrowed its loss to $260 million on revenues of $257 million. Subscribers increased 29% for the year to 7.6 million. (Forbes.com)

• Guitar Center reported a fourth quarter net loss of $40 million (which included special items) on sales of $628.5 million. Sales were up 11.7% year over year. (Press release)

• Ministry of Sound has accused indie label trade associations Impala and AIM of "a complete departure from the stated constitutional aims of both companies." (Billboard.biz)

• Coming to a Jetta commercial near you... Universal Music Publishing Group inked a worldwide arrangement to administer Joy Division's catalog. The company says it will "aggressively promote" the post-punk band's song for sync licensing in film, television and advertising. (Billboard.biz)

• Kalefa Sanneh discovers that "rappers are learning to consider Koch a second home, or even a first one." This line ties in perfect with my posts about rap's continued sales decline: "As record sales keep sliding, the rise of Koch coincides with the lowering of rappers’ expectations." Good article. (New York Times)

• Watch out, Warner, Universal Music Group is stepping up the eco-pressure. The company is a sponsor of a Honda Formula One car that replaced its corporate logos with a picture of the earth. (Stuff.nz)

February 24, 2007

Ministry of Sound Quits Impala Over Support For Warner

A possible Warner Music Group acquisition of EMI hit a speed bump when Ministry of Sound, the UK's largest indie record label, quit indie trade group Impala over the group's pledge of support the acquisition. Last week, it was learned that Impala had traded its support for concessions to be made by WMG. MoS, which is not much of a name in the States but sells over four million albums a year and is a major brand in the Europe, was also angered that the Association of Independent Music also supports the acquisition.

Coverage:

The Times Online: AIM did not inform its members of the deal. One AIM board member said the deal "looked strange." AIM's decision to support WMG and EMI was reached by an eight-person committee after "heated debate."

The Scotsman: AIM says Impala's agreement is based on legally binding remedies. Said AIM chief executive Alison Wenham, "We welcome the public debate about the deleterious effect which unregulated mergers have had on our sector over many years, and which we believe this agreement moderates to some extent."

New York Post: According to a source, "up to a half dozen other independent labels" are considering quitting Impala as well.

February 15, 2007

Thursday Business Links

• Entertainment One Income Fund sold its investments -- which include Koch Entertainment Distribution -- to Marwyn Investment Management for approximately US $161 million. (Video Business)

• More Koch: The company announced the formation of Koch Records Jazz/Adult Division. Chuck Mitchell, former head of Verve Records, will head the new operation. (Jazz News)

• Warner Music Group announced a partnership with Norway-based mobile operator Telenor that originally covers nine of Telenor's mobile operators. (Press release)

• Nic Feldes has a good recap of EMI's current situation. (The Independent)

• Read the text of Edgar Bronfman's keynote at the 3GSM Conference in Barcelona. Here's a sample of the frank commentary: "Actually, it’s amazing that we’ve generated as much revenue as we have through mobile music, given how cumbersome the consumer experience can be." (Download PDF)

• Actor Heath Ledger has partnered with musician Ben Harper to start the new Masses Music Co record label. First singing: Australian Grace Woodruffe. (StarPulse)

January 29, 2007

Monday Morning Business Notes, Links

• EMI's restructuring has eliminated an "indefinite number of positions" at EMI Christian Music Group. Regional sales offices in Atlanta and Chicago have been closed. EMI CMG's will continue with its deal with Midas Records, which gives EMI CMG worldwide rights to to general market, Christian and digital distribution of Midas' Christian roster. One of the label's highly touted new acts is Rush of Fools. (Read article at Christian Post)

• Sanctuary Group reported an operating loss of £56.7 million ($111.7 million) for the year ending September 30, 2006. It included £8 million for refinancing and restructuring. Revenue was down to £133.2 million from £148.1 million. That was quite an improvement from the previous year's loss of £136 million. Rough Trade, which is partially owned by Sanctuary, posted a loss for the year. The company said it is considering selling off some assets. Management sees a return to profitability by "2008 or later." (Read article at The Guardian and the press release)

• According to co-founder Chad Hurley, YouTube will start sharing revenue with its users. This applies for videos for which the user owns the copyright. Sounds like a lot of police work to make this happen. (Read article at BBC, via paidContent)

• Must be a lot of paperwork involved: The University of South Carolina has hired a full-time employee to receive the RIAA's copyright complaints. (Read article at The Charlotte Observer)

January 24, 2007

Wednesday Business Notes, Links

• Live Nation has reorganized and Bruce Eskowitz has been promoted to CEO, North America. The company's concert promotion, venue operation and sponsorship and alliances divisions are now a single business unit. Among Eskowitz's roles will be the management and expansion of House of Blues. (Read article at Billboard.biz)

• Hip hop producer David "Disco D" Shayman commited suicide yesterday. He was 26. Disco D produced such songs as 50 Cent's "The Ski Mask Way" and Trick Daddy's "I Pop." He also composed the music for commercial and TV shows. (Read article at All Hip Hop)

• Mainly book-related, but could have far-reaching implications: A U.S. Court of Appeals upheld copyright law on orphaned works. The plaintiff in Kahle v. Gonzales argued that out-of-print and orphaned works should not be protected for the 67-year duration that is allowed for copyrighted material. (Read article at News.com)

• On April 3, Punk label Stiff Records will return with five out-of-print titles. One is Tracy Ullman's You Broke My Heart in Seventeen Places, which was released before she found greater fame through comedy and television. All five releases have been remastered and will contain bonus material. (Read post at Harp)

January 21, 2007

Snocap, Merlin Ink Deal

The recently formed Merlin, a coalition of indie labels gathered to secure licensing deals, signed a deal with Snocap that will allow Merlin's member labels to sell their songs at MySpace (read Reuters article). The artists will use Snocap's MyStore to sell downloads from their MySpace pages. The deal with launch in the "near future."

The article says the songs will be sold in MP3 format.

A couple thoughts on this. First, the importance of this deal is counter to the frequent claims that MySpace has peaked, or that it has no competitive advantage in the Web 2.0 space. In music ciricles, MySpace is incredibly important. It's at the top of the social networking heap, and it is adding innovations. Second, I hope Snocap reports these sales to Soundscan. Third, the MP3 side to the story is sure to get a lot of attention. Many Merline labels, though, already sell MP3s via eMusic. This development isn't as much about the format as it is distribution. For digital music to grow, points of purchase need to be user-friendly and nearly ubiquitous.

January 20, 2007

Saturday Business Notes, Links

• EMI has filed a $100 million lawsuit against ringtone provider Infospace. The suit alleges Infospace and its subsidiaries have miscalculated royalties, sold restricted songs and sold in territories for which they are not licensed. EMI's auditor ran the numbers and found that Infospace had underpaid royalties results from third-party sales at Verizon and US Cellular web sites. The final straw was probably when Infospace touched a restricted, Beatles-related song, John Lennon's "Imagine." (Read article at Hollywood Reporter)

• Spiral Frog, which is almost set to launch its ad-supported P2P business, just sacked CEO Robin Kent. Could this delay yet again the service's launch? (Read post at The Key blog, via paidContent)

• News from MIDEM: The launch of Merlin, the world's first globa new media rights licensing agency. Founded by member groups like Beggars Banquet, K7, Tommy Boy and Naive, Merlin is meant to facilitate licensing to the new generation of websites like YouTube and MySpace. (Read article at Billboard.biz)

• Digital distributor The Orchard inked a deal with digital jukebox company TouchTunes Music. Its The Orchard's first licensing deal with a digital-downloading jukebox company. Basically, that really cool digital jukebox just got better. (Read press release)

• SoundScan International has added over-the-air full-track digital download sales from a number of mobile operators in Europe -- Vodafone in Spain and Ireland, 3 Mobile in Denmark and Sweden, TDC in Denmark and from Telenor in Norway. (Read press release)

January 15, 2007

V2 Records Staff Cut

Sheridan Square has cut the staff at V2 Records and will transform the label to a catalog seller. President Andy Gershon and his staff was let go. The reorganized company will be headed by COO Michael Olsen in its Nashville office. V2 will not sell any frontline titles other than gospel. It will primarily work its catalog, which includes The White Stripes and Moby

Bad news for recently signed artists like The Mooney Suzuki, who had an album due out soon and was surely looking for some redemption after their Columbia Records experiment failed.

January 11, 2007

Thursday Morning Business Notes, Links

• Sony BMG is merging the sales of its physical and digital distribution. The combined sales force will be headed by Thomas Hesse, president of the brand new Global Digital Business & U.S. Sales unit. This is more than one of those syngergistic, money-saving moves. This is a combination of entirely different cultures. The music folks and the computer folks. A good, inevitable move. (Read article at Billboard.biz)

• Richard Bengloff has been named the permanent president of the American Association of Independent Music (A2IM). Bengloff was the VP of Finance and Administration and CFO at WYNC/New York Public Radio. Peter Gordon was the interim president. (Read article at FMQB)

• Word on the street at CES was the Microsoft plans to stop development of its PlaysForSure DRM technology, something Microsoft denied it would do when the Zune was announced. Napster CTO Wiliam Pence is on the record as saying he believes Microsoft will continue to support PlaysForSure. (Read article at PC Pro)

• Wonder what impact a Sony PSP campaign can have on a developing artist's awareness and single and album and sales? Not much so far (at least for sales). Kenna's "Out of Control" has sold 1,138 units in a digital-only release. The album, Make Sure They See My Face, will be released in April. You may remember Kenna from Malcolm Gladwell's book "Blink," which looked at the contrast between industry expectations and poor sales of his first album. (Read post at The Tripwire)

Hypy's second wave may just be getting started in the Bay Area. The Federation's It's Whateva (Reprise) is scheduled for an early 2007 release, and Thizz Entertainment may have got major distribution. (Read article at East Bay Express)

January 10, 2007

Wednesday Morning Business Notes, Links

• Warner Music announced a deal to offer exclusive Warner Music-branded channels on MobiTV's mobile and broadband platforms. As an example, the press release mentions original video programming directed by Warner artist Link Park. (Read press release)

• I can't decide whether or not this announcement means much. MOD Systems has agreements to sell digital content from the four majors in its in-store kiosks. Music can either be burned to a CD (not that there's much of a demand for that) or transferred to portable players or mobile phones. It's great that labels are licensing content to companies with new ideas, but the press release points to the usual problem: The MOD System 3.0 platform supports Windows Media DRM. There are just so many question marks surrounding in-store kiosks. Luckily, some national chains, such as Trans World, want to give them a shot. (Read press release)

• A report that Microsoft will meet soon with music industry executives and review limitations placed on inter-device Zune transfers. (Read post at Houston Chronicle's TechBlog)

• Rough Trade will license its titles to World's Fair for U.S. release. Billboard's Todd Martens reports that although EMI's Caroline Distribution handles World's Fair releases, no distribution arrangement is yet decided for Rough Trade releases. Coming up from the label: a solo album from Jarvis Cocker (Pulp) and an album from BrakesBrakesBrakes (formerly known just as The Brakes). (Read article at Billboard.biz)

• Trustkill Records has inked a distribution deal with Universal Music Group's Fontana Distribution. Trustkill will use Fontana to access "emerging opportunities across a variety of retail and new media platforms." (Read article at Blabbermouth)

January 5, 2007

Friday Morning Business Notes, Links

Hits reported that the parent company of Koch Entertainment could be acquired outright by a minority owner. The company, shipping company Clarke, has spent more than $2 million on due diligence. An acquisition would likely lead to cost cutting, which means fewer employees and less manpower to work releases. (Read post at Hits Rumor Mill)

• Much like when a politician you've never heard of announces he's bowing out of a presidential run, Virgin Digital U.S. announced it is shutting down operations. What few customers it had are being referred to Napster. This is a very good sign for the digital space. Competitive forces have begun to weed out all but the most innovative, well-funded and aggressive mainstream digital retailers. At the same time, boutique digital stores are popping up everywhere. Consumers will be better served. (Read article at Billboard.biz)

The New York Post's Cindy Adams reported Jive Records is less than thrilled about five new songs Britney Spears recorded in New York recently. Wrote Adams, " Talk inside the company is that either it's redone, or they need to drop it - and her." (Read article at New York Post)

• BusinessWeek.com covers the fight against DRM. There's lawsuit against Apple, and a lawsuit against the four major music groups. "We are focused on interoperability," said RIAA President Cary Sherman, even though Apple and Microsoft are not. Nothing new there, but the article is decent for its thoroughness. (Read article at BusinessWeek.com)

December 29, 2006

Friday Morning Business Notes, Links

Digital Music Group Inc's chief operating officer, Anders Brown, and VP of business development, Richard Rees, are resigning. Brown will "pursue opportunities closer to his home and family in Seattle" and Rees will join an Austin-based investment firm. Though the first nine months of 2006, DMGI had a loss of $1,852,105 on revenue of $2,774,396. (Read press release)

• A profile of Allen Butler, the former president and CEO of Sony Music Nashville and now the head of Hedgewood International-funded indie Montage Music Group. Music Row independents have had a good year. Currently, five out of the Top 15 country songs are from indies. (Read article at The Tennessean)

• Billboard's Dan Ouellette calls 2006 "unadventurous for mainstream jazz." Hard to argue with that. A 2005 Michael Buble album was the top mainstream jazz album of 2006, while Diana Krall had three in the Top 21 albums and Chris Botti had three in the Top 22. (Read article at Hollywood Reporter)

• A change by the Official Charts Company will allow album tracks, older songs and digital-only releases to count toward the UK Top 75 listing. The new chart will present a better picture of overall purchases, and it eliminates the distinction between new single and old standard. The result could be a charting by songs heard in commercials or television shows. Just as likely will be examples of safe and familiar purchasing -- expect to see a lot of Pink Floyd and Coldplay. (Read article at The Guardian)

• An interview with RoyaltyShare chairman and chief executive Bob Kohn. RoyaltyShare is an online royalties processing and accounting service. "If (labels) [drop DRM] today, you will see a tremendous increase in digital download sales, because then you will finally see some good competition to iTunes." (Read article at Forbes.com)

December 20, 2006

Wednesday Business Notes, Links

• Sony BMG settled its rootkit lawsuits brought by attorneys general in California and Texas. The company will pay $1.5 million in penalties, which really is a light slap on the wrist compared to expenses related to the various class action lawsuits around the country. (Read article at PC World)

• Changes at Blue Note Records, and oddly enough for this time of year there are no layoffs. Meg Harkins was named VP of Marketing at Blue Note. Josh Zieman is in as VP of Marketing for the Manhattan group of labels (Manhattan, Back Porch, Higher Octave and Real World). Two received internal promotions. Saul Shapiro was upped to SVP of Sales at the Blue Note Label Group, and J.R. Rich was upped to senior VP of publicity for Blue Note. (Read article at Variety)

• The RIAA has dropped its case against Patricia Santangelo and will instead focus on her children. (Read post at Fox News)

• A federal court in Australia upheld a ruling that the operator of www.mp3s4free.net and the ISP hosting the site are guilty of authorizing copyright infringement because the site provided links to other sites at which people could illegally download music. (Read article at Smarthouse)

• EMI is consolidating its operations in Los Angeles. The company signed a ten-year lease for 1800 Highland. The 50,000 square foot office space will house staffs from EMI Music Marketing, EMI Televisa, Caroline Distribution and the west coast office of Virgin Records. (Read press release)

• The Associated Press profiles Koch Records and the financial benefits it offers rappers with an established audience. A good quote came from Miss Info of New York radio station Hot 97. On the financial aspects of signing with Koch she said, "It's like, do I want to look like I have money or do I actually want to have money? (Koch) is not like a graveyard, but more like a retirement pension." Layzie Bone of Bone Thugs-N-Harmony has a good strategy: Sign with Interscope for the group albums, which will lead to better sales for his more profitable solo albums on Koch. Last year, Koch Records's rap revenue was $40 million. Rap accounts for 80% of the label's revenues. (Read AP article)

• Music recommendation is fast becoming a hot investment. Ticketmaster bought music discovery site iLike.com for $13.3 million and will introduce it to its millions of customers. iLike.com, which was formerly Garageband.com, helps users organize, share and discover music. (Read article at Red Herring)

December 15, 2006

Friday Business Notes

• CBS Corp. is relaunching CBS Records. Ed Christman reports the label will start with three artists and have eight by the end of the year. The three artists currently signed to the label are Senor Happy, Will Dailey and P.J. Olsson. Jack Sussman, EVP of specials, music and live events for CBS Entertainment, will oversee the operation. Its strategy will be to promote its artists through CBS television programming. Digital downloads will be sold at cbsrecords.com and iTunes and other online stores, and CDs will be printed if digital sales are strong enough to merit it. (Read article at Billboard.biz)

• Axl Rose has left manager Merck Mercuriadis. One main reason given by Rose is the oft-delayed album Chinese Democracy will not be out by the end of the year. (Read article at Hits)

• Standard & Poor's on EMI: "EMI's announcement ending buyout talks removes the group's financial risk profile from the immediate threat posed by a potentially highly leveraged bid, against debt protection metrics that are already stretched for the ratings. Nevertheless, we are concerned that EMI's top management--but not necessarily its divisional management--might continue to focus on takeover activity." (Read article at Reuters)

• RIP Ahmet Ertegun, co-founder of Atlantic Records. (Read article at Los Angeles Times, read interview at Slate)

December 7, 2006

Thursday Morning Business Notes, Links

Hits reports that EMI executives are "being summoned back to London and staffers being told to cut back dramatically on expenditures of all kinds." As goes the ol' rule of thumb, when you're told to ration paper clips, something is afoot. In addition, whatever is going on has caused talks with Jermaine Dupri to come to a halt. (Read article at Hits)

• Yesterday PassAlong Networks announced the beta of freedomMP3, a technology that "establishes rules-based systems to allow consumers to conveniently transfer the music to any of their other PCs and play the songs on portable digital music players, including iPods and MP3-enabled cell phones." freedomMP3 works on PCs running Windows 2000 or higher. (Read press release)

• The awaited Andrew Gowers review on U.K. copyright terms was unveiled yesterday. His recommendation, which was leaked last week, is that "the European Commission does not change the status quo and retains the 50 year term of copyright protection for sound recordings and related performers' rights." (Read article at Billboard.biz)

• Gracenote has hit for the cycle -- deals with the five major publishers and some major indies -- by inking deals with Warner/Chappel and EMI. The deals add the lyrics of those companies to the Gracenote Lyric catalog. It expects to have the first publicly-available lyric service in early 2007. Online music stores, mobiles providers, search engines and consumer electronics manufacturers will have legal access to the catalog of lyrics. (Read press release)

• Qtrax nears and Brilliant hires another exec, Rick Riccobono as Executive Vice President Digital Rights Management. (Read press release)

• Virgin Records puts on a concert for tweeners at Whyville.com. (Read article at Clickz.com)

• A profile of record label Stones Throw, home to Peanut Butter Wolf, Madlib, Aloe Blacc and many others. (Read article at LA Weekly)

December 4, 2006

Monday Morning Business Notes, Links

• Warer Music Group's Edgar Bronfman on mobile music: "I do think that frankly, at least as important as finding the right retail price point for consumers, is for the telephone companies and handset manufacturers to create a seamless, easy user interface. Until that happens, frankly I don't think we can tap the dramatic potential that exists ... I think that's coming, and coming rapidly, but it can never be too soon." Such is the record label's lament. It can license music but somebody else has to sell the music. (Read Reuters article)

• EMI inked a deal with BT Group that will make its videos available on the upcoming BT Vision, a digital TV service that carries no mandatory subscription fees are charges customers for what they watch. BT Vision will carry digital radio with branded channels by Mojo, Kerrang!, Q, Virgin Radio and others. (Read article at Reuters UK)

• The Chicago Symphony Orchestra announced last week that it is launching its own record label. CSO Sound's first offering will be a recording of Mahler’s Symphony No. 3 and will be available as a CD and digital download. The CSO plans about two CDs per year and an additional three to four digital-only releases. (Read article at Playbill)

• The HD Radio Alliance will increase to $250 million its advertising commitment to broadcasters. Campaigns support retail, receiver and automotive partners. Over 1,000 U.S. stations currently broadcast in HD. (Read article at Radio Ink)

• Brooklyn metal screamer Purple Pam signed with Universal. Her song "Take Me Away" is on the soundtrack to the Universal movie "Disorder." (Read her MySpace blog post about the signing, via a thread at the Velvet Rope)

• Scott Weiland (Stone Temple Pilots, Velvet Revolver) has started a record label, Softdrive Records. It will be distribute by RED Distribution. (Read Billboard article)

November 26, 2006

Rough Trade Reports Disappointing Sales, Sanctuary Looks To Sell Its Stake

Sanctuary Group announced on November 23 that Rough Trade Records, the UK home of The Strokes, Jarvis Cocker and Sufjan Stevens, will have disappointing annual sales. In the announcement at its website, the troubled British music company -- which houses recorded music, artist management, music publishing, music licensing and merchandising under one roof -- indicated it is considering selling its 49% stake in Rough Trade. Rough Trade is "likely to record a loss before tax of approximately £2.8 million" for the year ended September 30, 2006.

What a year or so its been for Sanctuary. It has had accoutning problems. Iron Maiden did not renew its management agreewith with the company. The company's acquisition of Matthew Knowles' production and management company didn't work out and in July Sanctuary sold back Knowle's agency for £2.7 million. In May, Sanctuary fired co-founder and chief executive Andy Taylor due to his handling of accounting problems that affected the company's 2005 results.

November 4, 2006

Saturday Business Notes, Links

• Kohlberg Kravis Roberts, with financing from JP Morgan and Citigroup, offered $50.8 billion for Vivendi, parent company of Universal Music Group. It didn't amount to anything, though, reportedly because of tax issues. A deal with the buy-out company would have annulled the tax benefits granted by the French government. (Read article at Financial Times)

• Vivendi is seeking permissiion from the European Union to purchase BMG Music Publishing. A combination of BMG and Vivendi's Universal Music Publishing would have a market share of 22%, larger than current #1 EMI. (Read article at Reuters)

• Tower Records is trying to unload founder Russ Solomon's contract, which pays him $400,000 per year. (Read article at the Sacramento Bee)

• XL Recordings has created a new imprint, Abeano Music. The new London-based label is already working with three bands: To My Boy, I Was A Cub Scout and Blood Red Shoes. (Read article at Billboard.biz)

• Iron Maiden manager has left Sanctuary and has taken Iron Maiden with him. (Read article at Dot Music)

• No big loss: Microsoft will stop selling downloads at its MSN Music Store. Millions ask, "Microsoft has a download store?" Microsoft's Zune Marketplace arrives November 14th, the same day MSN drops its downloads. (Read post at ZDNet)

• Billboard's article on Goldfrapp's "long string of licensing coups" reads more like a label press release. The British duo's music has been licensed by Verizon, Diet Coke, "The OC" and "Grey's Anatomy." The latest deal puts Goldfrapp's music in Target's holiday campaign. Licensing does drive album sales, but the sales of Goldfrapp's latest album, Supernatural (Mute Records), shows a different story. Since its March 2007 release, the album has sold 62,000 units. Slightly more than the group's previos two, yes, but nothing that shows licensing is responsible for a big uptick in album sales. (It could be the result of the upstream to EMM from Caroline.) However, there has been noticeable increases in downloads of the songs "Ooh La La" and "Strict Macine." (Read article at Reuters)

October 31, 2006

Tuesday Morning Business Links, Notes

• Universal Music Group took the lead in cutting CD wholesale prices, and it's doing the same (in Europe) with digital albums. Catalog titles, though, not new releases. The initial group will consist of 1,500 titles by such artists as Bob Marley, R.E.M. and Stevie Wonder. Prices are dropping to £6.99 from £9.99. Some UMG catalog titles are already sub-$9.99 at U.S. iTunes, though they are not part of an organized program as in this case. (Read article at Reuters)

• EMI Music Publishing is really getting into joint ventures. (See link yesterday about joint ventures on Broadway musicals.) Billboard reported EMI Group has offered a joint venture to Marty Bandier, who resigned as chairman of EMI Music Publishing yesterday. "Bandier said he would have an equity stake, according to the source. The venture would be under the EMI Group umbrella, but separate from EMI Music Publishing." If a joint venture beats a licensing fee, it can certainly beat a salary. (Read article at Billboard.biz)

• Found in an article about record label Thrill Jockey and its almost reluctant forays into digital music: Thrill Jockey is about to launch a new download store that will also host tracks by Rune Grammofon, Touch, Smalltown Supersound, Mosz, and Morr Music. The site will sell albums only, for $10 each. Read the article for a look at the other side of the industry, those labels that would prefer to stick to physical product but are being forced into digital sales. (Note: A late-night blogging session produced a fantastic typo. The original post referenced Touch & Go. The article is about Thrill Jockey. Thanks for reader Sam for pointing out the error.) (Read article at Chicago Reader)

• They may not have a ton of street cred, but the big portals can sure help make a career. Yahoo! Music will produce a music program that will be sponsored by Nissan. The show, titled "Nissan Live Sets on Yahoo! Music," will be broadcast on both the Internet and a high definition TV channel to be named later. Christina Aguilera and Incubus will be the first guests. (Read bits and pieces of an article at press release)

Sonific announced a widget for Typepad that will allow users to post free music players on their blogs. Sonific pulls from a catalog of over independent 50,000 songs. Unlike Snocap's Linx widget, which can be placed on blogs and MySpace pages, the Sonific widget does not allow for purchases. (Read press release)

• MySpace has licensed technology from Gracenote to block unauthorized uploads of copyrighted music. Wrote Louis Hau at Forbes.com: "Perhaps the most curious aspect of the MySpace-Gracenote pact is that it took so long for the News Corp. unit to put a serious filtering system in place. ... Frustration over MySpace's failure to implement a satisfactory filtering system prompted Universal Music Chairman Doug Morris to lash out at the site during an investor conference in September." (Read article at Forbes.com or press release)

• Not mentioned yesterday: Garth Brooks' five-CD, Wal-Mart exclusive CD set is out this week. Given that fact, the retail giant certainly had good timing when it declared Brooks has sold 20 million CDs in the first year of his exclusive arrangement with Wal-Mart. Oh please, Wal-Mart, become a Soundscan reporter. (Read post at Hits Rumor Mill)

October 24, 2006

Tuesday Morning Business Links, Notes

• Country star Keith Urban has pulled out of next month's Country Music Association awards. Last week Urban checked himself into rehab. His next album, Love, Pain & the whole crazy thing (Capitol Nashville), will be released November 7th. (Read AP article at Washington Post)

• John Legend has started his own record label, Home School Records. His first signing was British artist Estelle, followed by Vaughn Anthony. (Read article at Springfield News-Sun)

SoBe Entertainment has inked a deal with Fontana Distribution. SoBe is putting out Undiscovered, the debut album by Brooke Hogan (daughter of Hulk Hogan). Fontana must be happy to have an album with a track produced by Scott Storch and featuring Paul Wall. Watch "About Us" at YouTube.

• The media ownership rule review continues. The National Association of Broadcasters told the FCC that "stations must be allowed to form efficient and financially sustainable ownership structures" in order to offer "free, over-the-air service to local communities." In a nutshell, the NAB wants less restrictive ownership regulations if it is going to follow the FCC's goals for localism and diversity. (Read article at Radio Ink)

• The Spanish government approved Universal Music Spain's purchase of Vale Music, the country's largest independent label. The label, which makes dance music compilations, has an 11% market share. A month-old article said the court set a condition on the acquisition: Vale and Universal "have to do away with previous no-competition pacts." (Read article highlights at Billboard.biz)

• Coincidence of the year: The week after Tower starts to liquidate, the iPod turned five years old. Wrote tech journalist Arik Hesseldahl: "The iPod soon worked with Windows PCs, and by 2003 the iTunes Music Store debuted and revolutionized how music was sold. If you doubt that statement, go visit your local Tower Records store -- if it's still open." (Read article at BusinessWeek.com)

• EMI South Africa star Leba Mathosa died in a car crash near Johannesburg. (Read article at Times Online)

October 20, 2006

Friday Business Notes, Links

• 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)

October 14, 2006

Saturday Business Notes, Links

• "This has been a bad year for independents," said John Phillips of Select-O-Hits. The Memphis-based distributor is owed over $500,000 by Tower. Unlike the majors, indies are unsecured credits and are unlikely to get anything from Tower's liquidation. "That could shut some doors," said one consultant. (Read article at Sacramento Bee)

• Big promotions changes at Columbia and Epic Records. Ken Lane is out at Columbia. Lee Leipsner is in. (Read article at Billboard.biz)

Caroline Distribution will close its Los Angeles sales office in December. Three employees will be moved to an EMI office, the others will be laid off. Three sales reps from the Los Angeles office were laid off on Thursday.

• Some have likened Burnlounge to a Ponzi scheme. That term is not used in this interview. (Read article at Digital Media Wire)

October 13, 2006

Friday Business Notes, Links

• The IFPI reports global music sales were down 6% in the first half of 2006. Digital sales were up 106% and now account for 11% of total recorded music sales. In the U.S., digital accounted for 18% of recorded music sales. Countries such as Japan and Italy have very high mobile shares (85% and 76%, respectively). In the U.S., online sales account for 64% of digital sales. (Read press release)

• Goldman Sachs lowered its EMI target price. It forecasts a drop of 6.5% for the first half of 2006 and flat sales for the year. (Read article at newratings.com)

• Navarre Corporation announced the effect of the Tower Records bankrupcy on its earnings. The company plans to take an after-tax charge of $0.03 per share for the quarter ended September 30th. Multiplied by the 29,951,497 shares outstanding at the end of June, that charge will be just shy of $900,000. (Read press release)

• The Tower.com website was purchased by Norton LLC, owner of music memoribilia site Wolfgang's Vault. (Read post at FMBQ)

• Columbia Records has asked veteran Steve Ralbovsky to be senior VP of A&R for its Canvasback Music. (Read article at Hits)

• A story on the Froncysyllte Male Voice Choir, which signed to Universal Music after being heard at a wedding by Daniel Glatman, the former manager of boy band Blue. (Read article at The Independent)

October 10, 2006

Tuesday Morning Business Links, Notes

• If Terry McBride was involved this news would be everywhere: Jazz legend Sonny Rollins has struck a deal with Universal Classics and Jazz International to distribute his next album, Sonny Please (which will get a digital release this November and a CD release in January 2007). His label, Doxy, will use the partnership to release items from Rollins' archive of live recordings. Sonny, Please is already available at Rollins' website. (Read article at All About Jazz)

• Music group Mama has given up its attempt to acquire inancially troubled Sanctuary Group. (Read article at The Guardian)

• U2 moves labels -- to Mercury from Island -- but stays in the Universal Music Group family. (Read article at Reuters)

• The real reason Tower went under? The post at The Velvet Rope suggests its because the Northridge, CA store has in stock 13 copies of Mariah Carey's Glitter. (Read threat at The Velvet Rope)

October 2, 2006

Poking At Barenaked Ladies' Gross Revenues

Maybe you've noticed some coverage about the money Barenaked Ladies have made since ditching major labels. They've grossed $978,127.99 says this press release. In the U.S., Barenaked Are We (though the band's own Desperation Records) has sold 36,735 in its first two weeks of release (first-week sales were 8,008 in Canada). At a $12 wholesale cost less a distribution fee, and figuring in a lower wholesale cost for the digital downloads, let's generously say that's about $450,000 in North American gross revenues.

Suffice to say, if the gross was $978,127.99, BNL aren't making the majority of its money from album sales. Could revenues from USB flash drive sales, ring tones and individual tracks amount to much? Are territories outside of the U.S. making up that difference? A press release claims these non-album revenue streams amount to 30% of total revenues. If so, it still doesn't add up.

Not to spoil everybody's digital euphoria -- because that's all I see in the media, people acting like the band just pocketed a cool million off the Internet -- but 84% of Barenaked Are We's U.S. album revenues came from good ol' fashioned CD sales. In this instance, Warner Music Group's WEA Distribution is doing distribution. You can be certain the first check WEA cuts for this record isn't going to represent the full wholesale amount of units shipped and/or scanned.

Of course, gross revenues are one thing. Net revenues are the main thing. One can safely assume BNL didn't overspend on marketing the record (the 68% second-week drop in sales hints at a light budget), but the costs involved in pushing a record before street date are not insignificant.

September 30, 2006

Friday Morning Business Links, Notes

• Martin Bandier, chairman and co-chief executive of EMI Music Publishing, is in talks with Warner Music Group about a position with the company and is looking at other opportunities outside of EMI. (Read article at Financial Times)

• SoundExchange's list of unpaid artists has received a lot of attention over the last week. Most articles and blog posts have ridiculed the company. Here's a much more balanced article. (Read article at LA Times)

• Tower Digital is giving away a free digital track with purchase of TV On The Radio's Interscope debut, Return To Cookie Mountain. "Dirtywhirl" was recorded live at the band's Celebrate Brooklyn concert last summer. Tower talked up its digital store by saying it would leverage its physical presence and online CD store. In this case, only the online CD store is leveraged. There's no evidence that brick-and-mortar customers can get the free download. (See more at TowerRecords.com)

• UK record labels and songwriters reached a deal over royalties from online digital sales and ringtones. Songwriters will receive eight percent of revenues from each download. (Read article at Ars Technica)

• It's in the music business, not the real estate business: EMI sold the famous Capitol Records building in Los Angeles and signed a long-term lease to remain in the building. (Read article at Retuers)

• A profile on Seattle-based Light In The Attic Records. (Read article at The Stranger)

September 29, 2006

Friday Miscellany

• A report that indie label Palm Pictures laid off most of its remaining staff today. Only a few accountants and a few of the marketing staff remain. About 50 employees have been laid off over the last month. (Read post at DubMC)

BitTorrent currently offers a short documentary by Death Cab For Cutie, and it will soon have content from Fall Out Boy. Legitimate content. The Cardigan's latest video is currently available as well. (Read article at MTV.com)

• MTV2 and Asylum Records will partner for a series of soundtracks based on the network's "My Block" series. The first album will be My Block - Chicago and will have tracks by Common, Lupe Fiasco and Shawna. It will be out October 10th. This is a solid move for Asylum, which is part of Warner Music Group's Independent Label Group (along with Cordless and East West). The re-launched label has been successful developing new hip hop artists within the WMG system. (Read article at Billboard.biz)

September 28, 2006

Thursday Morning Business Notes, Links

• A fascinating article about the nebulous OCD International, marketing company World's Fair and a Dr Octogon album that only loosely meets the definition of an album. Long story short: OCD cobbled together The Return of Dr. Octagon with throwaway Kool Keith tracks and the help of three producers. The album's original producer, Fanatik J, fought the release of the album. Keith signed with OCD "without fully understanding what he was doing." (Read article at East Bay Express)

• Best Buy didn't report last week's sales to SoundScan. Near-chaos ensues while statisticians rework the data. The numbers will be reprocessed tomorrow evening. (Read article at FMBQ, via Hypebot)

The Wall Street Journal reports today on a tiff about videos, the revenue stream that has been a greater focus in the last year. Universal Music Group pulled its videos from cable channel Fuse, and Warner Music Group pulled its videos from Yahoo. In the Fuse case, the argument is over the value of payments to UMG. In the Yahoo case, WMG felt the Internet company was not going enough to promote its videos.

• Moses Avalon takes a long look at the MySpace user agreement. (Read article at MusicDish)

September 25, 2006

Monday Morning Industry Notes, Links

• UK record labels are asked their government for tax breaks to encourage investment in new artists. Seventeen percent of annual revenues are spent on "R&D," claims the BPI, more than the aerospace, defense and automotive industries. (Read article at The Independent)

• Last week, K-Tel Entertainment, Inc. reported an ammended 10-Q report to the SEC. The notes explained that the former CFO of its UK subsidiary was discovered to have missappropriated $924,000 from the subsidiary and another $344,000 from a customer. Almost $1.5 million was been recovered from the "former employee." The results of the misappropriations were overstated product and SG&A costs in 2003 and 2004. (View ammended 10K at SEC.gov)

• Rap legend Kurtis Blow is teaming up with Holy Hip-Hop and EMI Gospel to launch a Christian hip hop label, Music Ministry Recordings. (Read article at UPI)

• Black Eyed Peas' will.i.am has joined Musicane as the digital services company's head of marketing. (Read post at Digital Music News)

• A profile on Louisville-based Resonant Vibes, a digital download store that specializes in electronic and dance music. (Read article at The Courier-Journal)

• RIP Raymond Burrell, former bass player for Bad Company. (Read press release)

September 15, 2006

Friday Morning Business Notes, Links

• EMI could have a problem with its upcoming Robbie Williams album. A song titled "The '90s" reportedly makes accusations against Williams' former manager, Nigel Martin Smith. The album may be delayed while EMI deals with Smith's lawyers. (Metro)

• Analysts are turning positive about XM Satellite Radio. (Radio and Records)

• A profile on the fine folks at Yep Roc Records. (The Charlotte Observer)

• More drama with Victory Records and Hawthorne Heights. Victory has filed a countersuit and warns majors labels the band has two more albums on its deal. (PR Inside)

September 14, 2006

Thursday Morning Business Links, Notes

• Universal Music Group CEO Doug Morris practically threw down the gauntlet in commenting about user-generated content sites such as MySpace and YouTube. Reuters obtained transcripts of the speech at a Merrill Lynch conference. "The poster child for (user-generated media) sites are MySpace and YouTube," he said. "We believe these new businesses are copyright infringers and owe us tens of millions of dollars." How UMG deals with the perceived problem, Morris said, will soon be revealed. I can't wait. (Yahoo! News)

• Gartner analyst Mike McGuire on Morris's comments: "This is probably a negotiating ploy. Nobody really wants MySpace or YouTube to disappear. The music industry needs them too badly. They're just figuring out how to get paid." Exactly. (LA Times)

• The Orchard has added four more labels to its roster. Dim Mak Records, Norton Records, CornerstoneRAS/Park The Van and Surfdog Records have chosen to company to handle their digital distribution and marketing. (Press Release)

• This just noticed: On page 42 of this court transcription dated August 22nd, a lawyer representing Tower's ten main vendors (and all the majors) testifies that according to their math Tower owes them over $82.7 million. (PDF of Court Transcript)

Output Recordings (visit the hyperlink for the digital tombstone), owned by DJ/producer Trevor Jackson, has folded. (Pitchfork)

• The European Commission laid out its plans to overhaul copyrights and increase intellectual property rights. The aim is to spur innovation and ease the burden and confusion now placed on tech companies because of levies placed on their products. (Billboard.biz)

September 7, 2006

Thursday Morning Business Links, Notes

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)

September 5, 2006

EMI's Fat Joe Strategy: A Hybrid

090506_FatJoe.jpgMissing from the news a few days ago about Fat Joe's deal with Virgin was the hybrid strategy EMI will undertake to promote and distribute the rapper's Me, Myself & I album. According to the press release, Virgin will handle distribution (i.e. get the billing) while promotion will be handled by Imperial Records, the new urban incubator of EMI-owned Caroline Distribution. Imperial/Caroline may get get an exclusive on some 12" singles. The second single from the album will be the Scott Storch-produced "Make It Rain" featuring Lil' Wayne.

Imperial's GM and Senior VP, Neil Levine, was hired as Caroline's VP of Sales and given the to the urban development label. Levine founded Penalty Recordings, which was formerly distributed by Ryko.

September 3, 2006

Monday Morning Business Notes, Links

• Newsweek's Joshua Alston writes about a wave of R&B musicians who "who have grown tired of the creative restriction and unpredictable politics at major labels and made the jump to smaller labels" like Stones Throw, Astralwerks and Anti. Nice article, but there's a problem: Most of the artists mentioned -- Dudley Perkins, Georgia Ann Muldrew, Aloe Blacc, Jamie Lidell -- have never been on a major. The thrust of the article rings loud and clear, though. Majors, he argues, can't nuture these creative "indie soul" artists. Nor should they. Leave the niches to the indies. They'll do more with them. (Newsweek)

• A profile of legendary music man Jac Holzman, who heads up Warner Music Group's e-label, Cordless Recordings. (International Herald Tribune)

• John Connolly, president of the American Federal of Television and Radio Artists, spoke against media consolidation at a FCC Town Hall Meeting late last week. (Bilboard.biz)

• More than a quarter of all UK music sales come from supermarkets, up from 15% just fiive years ago. With this trend comes the usual warnings on behalf of independent retail and small labels. (This Is Money)

August 10, 2006

Thursday Morning Business Links, Notes

• Chris Morris of The Hollywood Reporter on Tower Records' deep financial problems and its impact on music retail and the experience of its customers. This jumped out: "One confidential source familiar with Tower's balance sheet put the company's debt to Warner Music Group's distributor WEA Corp. at $20 million. The same source said that one sizable independent distributor was owed $2 million." (The Hollywood Reporter)

• CD Baby has ended its business relationship with the Tower Records. (Digital Audio Insider)

• First day sales: Hits predicts Port of Miami by Rick Ross will debut at #1 with sales upward of 200,000. (Hits Rumor Mill)

• This may not amount to a whole lot: EMI Music Publishing has struck a deal with Qtrax that licenses its music catalog for an ad-supported P2P service. (Press Release)

• Top digital album last week? None other than Five for Fighting's Two Lights (Columbia), which sold 15% of its overall total in the digital format. The album debuted at #8 on the album chart. G. Love's Lemonade (Universal) is #39 on the album chart but #3 on the digital album chart.

• A current iTunes promotion, found via Billboard.biz (which requires registation, so no hyperlink will be given) is giving away select digital singles with the purchase of a video. For example, Anti-Flag's "The Press Corpse" single can be purchased for $0.99, or the video for "The Kill (Bury Me)" and the single can be purchased for $1.99. No indication is given as to how long the promotion will last or if more such promotions can be expected.

• Congrats, Kemado Records: Diamond Nights' "The Girl's Attractive" will be used in a worldwide Jaguar advertising campaign. (View the commercial here.) Also, "Destination Diamonds" will be the theme song for the upcoming MTV program "Little Talent Show." The songs are on the album Popsicle.

August 8, 2006

Hawthorne Heights Sues Victory Records

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What a fascinating turn of events. In March of this year Victory Records was chest-thumping all the way to a a #3 and controversial debut on the album chart with Hawthorne Heights' album If Only You Were Lonely. Now, as reported by Billboard.com, Hawthorne Heights has sued Victory Records and label head Tony Brummel, claiming Brummel and Victory of "taking advantage" of the band and "severely damaging the band's reputation and relationship with its fans."

One aspect of the complaint is that Brummel's battle with Ne-Yo, which was undertaken in the name of Hawthorne Heights, resulted in the band being labeled as racist. That should be much more difficult to litigate than its claims of "egregiously fraudulent accounting practices." The band's debt to Victory, according to Billboard.com, is over $1 million even though the label has generated over $10 million dollars in sales of Hawthorne Heights music, videos and merchandise. (If Only You Were Lonely has sold 396,000 to date. Nearly one third of that came in the first week.)

The complaint specifies alleged fraudulent royalty statements such as a failure to pay mechanical royalties for digital downloads, ringtones and foreign sales and licensing. Hawthorne Heights also alleges Victory failed to pay public performance royalties, charged the band 100% of coop advertising rather than the agreed-upon 50% and improperly accounted for mechanical royalties.

For all the fun allegations, read a PDF of the complaint, found via a thread at The Velvet Rope.

August 4, 2006

Friday Miscellany

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Death From Above 1979 officially calls it quits. Download an MP3 of "Romantic Rights" and pay tribute in your own special way. (The Tripwire)

• Nemesisboy rants about getting another cease and desist notice from Geffen about a Pink Spiders video he made and posted at YouTube (and posts the notice in its entirity.) "All I was trying to do was help the boys out, but I got f*cked by the machine because supposesedly they're really touchy about anyone promoting bands that they have spent in excess of 2 million on but have yet to turn a profit?" Does this seem out of touch and heavy-handed? Yes, absolutely. Is this within Geffen's legal right? Yes again. (Nemesisboy)

• Sub Pop is the first record label in the U.S. to achieve Green-e certification because the company has purchased Green Tags (renewable energy credits) to account for all its energy needs. (Spin.com)

• Kami Knake's podcast, Bands Under the Radar, has Warner Bros artists, she is the new media coordinator for the label and the podcast is hosted on the label's server. But...Knake claims, "My podcast has nothing to do with WBR." Street cred is a tough thing to come by. (Podcasting News)

• Audioslave has released the artwork to its upcoming album on Google Earth -- look at approximately 42' longitude and -137' latitude. (Press Release)

August 1, 2006

Tuesday Morning Business Notes, Links

• Singer-songwriter Joseph Arthur will launch his new label, Lonely Astronaut, on September 19th with the release of his album Nuclear Daydream. Lonely Astronaut will be distributed by Sony-owned RED. (Paste)

• The LiveNation shopping spree continues. The live event company, which recently bought House of Blues, purchased a majority stake in Musictoday. The Charlottesville, VA-based company is an online portal for fans and a offers artists a slew of services, such as list management, digital downloads and wholesale fulfillment. (Billboard.biz)

• Geffen Records has partnered with DIC Entertainment to create a brand for teens and pre-teens (a.k.a. "tweens") called SPG. And I quote: "The cornerstone of the SPG brand is a multi-talented, multi-ethnic entertainment group, Slumber Party Girls, featuring a triple threat of five talented teens who sing, dance and act, and were chosen from more than 1,000 who auditioned." The group will be featured on AOL and CBS. Ron Fair, Chairman, Geffen Records, & President, A&M/Interscope Records, is co-producer of a 26-episode dance competition the group will host. No word is given on an eventual album release. (Press Release)

• Online Latin download store Musica360.com has launched a hip hop blog by Glock Deniro. (Glock DeNiro The Godfather)

• Sections of France's copyright law that aimed to open up the iPod/iTunes walled garden has been declared unconstitutional. The law will create a DRM licensing authority, which sounds like a recipe for a horrible mess. At some point the market is going to work out the interoperability problem, and it won't be a moment too soon. (News.com)

• Posts will be sparse for another day or so as Coolfer is in the process of moving to Nashville.

July 24, 2006

Monday Morning Business Notes, Links

MAMA Group, a UK company that owns music and media businesses, has made an offer for Sanctuary Music Group. (MarketWatch)

• Blue Note Records is releasing ringtones taken from the of the label's classic songs and artists. (All About Jazz)

• ADA's distribution deal with Ultra Records has finally been announced. Ultra will be leaving Caroline Distribution at the end of August. Ultra owner Patrick Moxey gave some details on the new deal. "Our new arrangement will also include Ultra's partnering with WMG's Rhino on brand new remix packages of WMG catalogue artists and other initiatives including DRTV." (Press Release)

• GoDigital and Share Media Licensing have a partnership that will seed P2P networks with Weed files of music by Master P and Lil' Romeo. Weed, created by SML and based on the Windows Media format, allows a song to be listened to up to three times before requiring that it be purchased for further listens. (Press Release)

• Basketball player Ron Artest talks to SoundSlam.com about his upcoming album, My World, and the first single, "Get Lo," which features Mike Jones and Nature. He will be Fat Joe's opening act on an 11-day European tour. (SoundSlam)

• Download store Musica360.com has launched a PR company called Ms. Media PR, which company COO Jenny Garcia calls "a natural progression of the philosophies that led us to create Musica360 in the first place." (mi2n.com)

• Country indie label Playback Records is being revived. (Press Release)

• A look at Nashville's successful pop scene: Mat Kearny, Josh Hoge and Landon Pigg have or will release major label albums this year. Sixpence None the Richer's Leigh Nash is going solo. (Tennessean.com)

July 19, 2006

Wednesday Morning Business Notes, Links

• The quest for cost efficiencies continues: EMI will restructure EMI Jazz and Classics into the Blue Note Label Group. Part of the change is to bring in the Narada Label Group and move it to New York from Milwaukee. Narada's move will result in some layoffs and some executive shuffling. (Billboard.biz)

• Japan's recorded music market, the world's third largest, saw a 3% rise in production. Keep in mind that the figure is for production (not sales) from the Recording Industry Assocation of Japan's member companies. (Billboard.biz)

• The Ameican Association of Independent Music sent the FCC a proposal for a set of guidelines for equal access to the airwaves and transparency between labels and radio programmers. Such lofty goals. (Billboard Radio Monitor)

• A profile on religious hip hop and the entreprenuers and industry behind it. (Newsday)

Ill Nino has been dropped by Roadrunner. Read the band's post about the split at its MySpace page. (Kings of A&R)

July 18, 2006

Tuesday Morning Business Links, Notes

• Ted Cohen, who left EMI in last month, has joined the board of directors at LyricFind, a company that offers legal online song lyrics to digital music services. (Press Release)

Equity Music Group, the label co-founded by country star Clint Black, has signed a two-year extension with Navarre. Other than Black, the roster includes Little Big Town (whose last album went gold for the label), Carolina Rain, Mark Wills and Laura Bryna. (Yahoo! Finance)

• The Arbirtron ratings are in, and the top radio station in New York City is adult contemporary Lite FM (WLTW), followed by SBS Latin WSKQ and top 40 WHTZ. (Billboard Radio Monitor)

VerveLife, a firm that creates digital promotions for brands, has formed a partnership with IODA that will allow VerveLife to use IODA's catalog for its digital campaigns. The two companies are currently working on download music programs for Nestle, Purina nd Powerbar. (eMediaWire)

• "American Idol" finalist Kellie Pickler has signed a record deal with Sony BMG country label BNA and Simon Fuller's 19 Recordings. (AP)

• The next album by cult favorite Sparklehorse will be released by Astralwerks on September 26th. Danger Mouse, Tom Waits, Stephen Drodz and Christian Fennesz make appearances.

July 13, 2006

Thursday Morning Business Links, Notes

• This just in: A European Union Court has annulled the European Commission's decision that allowed for the merger of Sony and BMG. The Commission will re-examine the case. From the court's decision: "The Commission did not demonstrate to the requisite legal standard either the non-existence of a collective dominant position before the concentration or the absence of a risk that such a position would be created as a result of the concentration." (Billboard.biz)

• The commission's decision burst a bubble for investors: EMI's share fell more than 8% after the court's decision due to worries that it could prevent a merger of EMI and Warner Music Group. (Irish Examiner)

• WMG shares fell more than 12% in early trading. (Reuters)

• The prognosticators at Hits are saying Now 22 could do 400,000 in its first week. That will be miles ahead of Pimp C and Thom Yorke, who are looking at the 100,000 range. (Hits Rumor Mill)

• Bad news for Digital Music Group: co-founder Peter Koulouris resigned to "pursue new opportunities." (Sacramento Business Journal)

• The payola settlements from Eilot Spitzer's investigations are making their way out of New York state's music funds. Almost 100 New York City programs have received millions of dollars. Two, Brooklyn Academy of Music and Carnegie Hall, received $750,000 each. (NewYorkBusiness.com)

• A profile on new Kansas City indie labels Wheatfield Group, Drama Club Records, Minnow Records, Curb Appeal Records, OxBlood Records and Range Life Records. Wheatfield is distributed in the U.S. by Fontana. (Kansas City Star)

July 7, 2006

Friday Morning Business Notes, Links

• EMI will not pay as high as $5.6 billion for Warner Music Group, a source tells Reuters, saying EMI "clearly believes $38 is a completely unrealistic valuation for a company that was trading at $21 in March." (Reuters)

• Next week a Euroean court will decide on a challenge by Impala, an association of independent record companies, against the Sony BMG merger. Impala challenged the merger in November of 2004, saying it created a "market imbalance." (Reuters)

• Troubled music group Sanctuary sold MW Entertainment, an artist management company, back to its founder, Mathew Knowles for $5 million. (The Guardian)

• Free isn't a good enough carrot for college students when it comes to online music services such as Napster and Ruckus. Adoption rates have been low, but the RIAA's Cary Sherman is on the record as being happy with the results so far. (Wall Street Journal)

• Parlophone, an EMI label, is setting up a multi-pronged digital campaign for the release of Lily Allen's debut album. (Brand Republic)

June 28, 2006

Wednesday Morning Business Notes, Links

• Virgin France was fined for offering illegal Madonna downloads. The download site had ignored an exclusive given to a competitor by downloading Madonna's "Hung Up" single and re-selling it on its own site. Virginmega is to pay a fine of 600,000 euros. (BBC News)

• A profile on Downtown Records, which has the press-adored Gnarls Barkley on its roster. (BusinessWeek Online)

• Hispanics listen to the radio more than the average American -- 22 hours and 15 minutes per week versus an average of 19 hours per week -- but time spent listening is dropping. In the last 12 months, Hispanics' weekly time spent listening has dropped 15 minutes, reflecting changes seen in other listeners. That drop is due to men's listening habits only as women's time spent listening has remained constant at 24 hours and 30 minutes. (Billboard Radio Monitor)

• Jamie Foxx, Mary J. Blige, Chris Brown and T.I. were winners at last night's BET Awards in Los Angeles. (AP)

• Three men were arrested for allegedly writing a computer virus that used Sony BMG's infamous rootkit as an entry point into victims' computers. (Technology Review)

June 21, 2006

Wednesday Morning Business Notes, Links

• Allen Butler, the former Sony Music Nashville president and CEO, will head up new country label Montage Music Nashville. (Billboard Radio Monitor)

Independiente has received a $49 million round of funding from Ingenious Music VCT. The label's first release with the new cash will be a Danger Mouse-produced album by Martina Topley–Bird. (A&R Worldwide)

• MySpace continues to enmesh itself with the entertainment business. Former Sony Music Entertainment and AOL Europe chief David Fischer has been hired as MySpace's managing director for the UK and Europe. (BrandRepublic)

• The upcoming Kelis album, on Jive, has been bumped to August 22nd. (Billboard.com)

June 12, 2006

Indies Finding Success In Country Music

When the talk comes around to how indies can succeed in the current music market, the assumption is often that they will use digital distribution to play David to the majors' marketing Goliath. But an article at The Tennessean shows how independent country labels are placing artists high up on the charts. Historically country music has a smaller share of digital sales than it does CD sales, but these labels -- Equity Music Group, Broken Bow and Dualtone, among others -- are getting airplay and getting prime opening slots on national tours, important ingredients to success.

Said Mike Kraski, formerly of Sony Nashville and now a co-founder of Equity, "Now, as they consolidate, all these factors like indies getting acceptance at country radio, distribution opening up, then stir in Eliot Spitzer's payola investigation into the mix, and you've got this 'perfect-storm' opportunity for indie labels."

April 29, 2006

WaPo on Pitchfork

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Much was been written on Pitchfork, but the article by the Washington Post's J. Freedom DuLac about the hugely influential music site, "Giving Indie Acts A Plug, or Pulling It," is the best Coolfer has read. What DuLac has done is capture the business and cultural impact of Pitchfork and add the personality of founder and editor-in-chief Ryan Schreiber.

DuLac spent time with Schreiber at this year's SXSW to witness a day in the life of the country's leading indie music trendsetter. To his interview DuLac intersperses stories of people touched by Pitchfork's hand: Merge Records, which benefitted from a near-perfect review of an album by The Arcade Fire; a product manager for Chicago's Reckless Records, who tracks the sites reviews to help manage inventory; and artists who taken hits to their careers after ruthless Pitchfork reviews. That review was for a solo album by Travis Morrison of the Dismemberment Plan.

"The album was branded with a dreaded 0.0 rating (Liz Phair and Sonic Youth are among the other artists who've suffered that indignity), and Morrison's bandwagon quickly emptied: College radio programmers cooled to his new project, a record store in Texas initially refused to stock the CD, and fans suddenly decided they probably shouldn't like Morrison anymore, either."

Think back to the guest-blogged Coolfer post about Pitchfork and its sometimes negative influence, "Stick a Fork In It." This industry insider decried Pitchfork's ability to harm a budding band's career. Most people queried felt it was better to get no review if was mediocre or worse.

Such is the potential danger of a powerful voice like Pitchfork -- and really no other single magazine or website to challenge it. Even when Pitchfork does good like when it helped jumpstart the career of Clap Your Hands Say Yeah it can do some bad. DuLac writes of being unable to get inside a club because of the mass of people waiting to see Clap Your Hands. Schreiber is "agitated" by the long line and tells DuLac the band got "too much too soon." Of course, Schreiber helped create that long line and gave the band too much too soon.

April 26, 2006

Wednesday Miscellany

• How about a long article on Primal Scream? The veteran band has a new album. Rio City Blues, coming out in June. (The Guardian) View a clip of the single "Country Girl" here.

• Add two more albums to the list of 6/6/06 releases: Movie Monster by Sound Team (Capitol) and Leaving Songs by Tindersticks singer Stuart Staples (Beggars Banquet). Leaving Songs is a collection of tracks recorded in Nashville and produced by Staples himself. It includes a bonus disc -- Lucky Dog Recordings - '03-'04, previously unavailable domestically.

• In case you haven't been completely inundated by Gnarls Barkley just yet, there's more from the UK chart-topping duo at this e-card.

• Coolfer -- and a handful of other bloggers -- have posted about LA band The Little Ones. Great indie pop. Worth a listen. The blog Rewriteable Content is having a contest for The Little Ones and is giving away three limited edition posters of the album art by artist Jesse LeDoux (The Shins, Elliot Smith).

April 20, 2006

The Buzz on Gnarls Barkley

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Every now and then journalists and Internet commentators will latch onto a band. Currently that band is Gnarls Barkley (producer Danger Mouse and singer Cee-lo). The source of the buzz is not surprising -- Danger Mouse was a cause celeb a few years back when EMI didn't take lightly that he had taken Beatles samples without permission. It's not just Coolfer who notices the Internet lovefest. Hip hop blogger Byron Crawford wrote:

"Like most projects having to do with Grey Album producer Danger Mouse, this new Gnarls Barkley album is highly anticipated...on the Internet. Also, it may or may not be really popular in the UK. From what I understand, the first single 'Crazy' was the first song ever to hit #1 in that country having only been released in online music stores. But then I remember reading similar shit about Las Ketchup and whatever that Axel F ringtone bullshit was, so I'm not sure what to think."

The other day I had a conversation with a friend about Gnarls' sale potential in the states in light of the hit UK single. "Do you think American radio will play 'Crazy'?" he asked. "No," I replied without hesitation. In some markets, such as New York, the cross-Atlantic buzz is all that's needed for a record to sell well. New Yorkers look to England for its music trends. The big cities of the country will catch on to the UK Gnarls Barkley buzz -- standards like LA, San Francisco, Seattle, Chicago and Boston -- but the rest of the country doens't pay too much attention to what's going on over there.

Continue reading "The Buzz on Gnarls Barkley" »

April 17, 2006

The Brummel-Jobs Email Exchange

Tony Brummel has offered a good deal of entertainment and raised important points this year. A thread at The Velvet Rope has an exchange between Brummel, the owner of Victory Records, and Apple's Steve Jobs.

Brummel, who has been vocal about his refusal to sell his label's music at iTunes, reached out to Jobs in an effort to see the two companies "working together in a proactive and revolutionary way" and expressed disappointment at the ways iTunes' people responded with a "pompous, uneducated and condescending demeanor."

Jobs asked what Brummel wants, Brummel responded with a loose plan for a mutually exclusive, anti-corporate relationship that would be a "great headline/story" and a "great PR campaign." Jobs was succinct in shooting down Brummel's ideas.

And that's when Brummel let fly.

The entire email exchange after the jump...

Continue reading "The Brummel-Jobs Email Exchange" »

April 13, 2006

Thursday Miscellany

• That report that DRM was the bane of your MP3 player's battery life? Might not be so true after all. Another test had far better results, though it was only with one Sansa e260 and not a representative sample of players. (Engadget)

• Coolfer will probably link to it tomorrow, but if you go to Stereogum now and check out the beautiful new video for Boards of Canada's "Dayvan Cowboy" you'll also find an MP3 link to a (not new) song by Warp's newest signing, Grizzley Bear. (Stereogum)

April 11, 2006

Tuesday Business Notes, Links

• Downtown Records has a deal with Atlantic Records to market Downtown releases. First up is Eagles of Death Metal's Death By Sexy, which will be released through ADA Distribution today. Next month Downtown/Atlantic will put out two anticipated albums: St Elsewhere by Gnarls Barkley (Danger Mouse and Cee-Lo) and Bang Bang Rock & Roll by Art Brut. Downtown also has a deal with Vice Recordings to help sell its initial releases. (MarketWire)

• Quango, the worldly dance label, has inked a deal with Fontana Distribution. Fontana will get its current releases as well as 17 catalog titles from its early Island Records days (Bomb the Bass, City of Industry soundtrack). (Hits Rumor Mill)

• Universal Music Publishing has signed Chris Brown, who penned the hit "Run It" and so far no other big hits, to an exclusive, worldwide publishing deal.

• Eve is now with Swizz Beatz's Full Surface label, which is now part of Interscope. (Billboard.com)

• Joe Escalante: member of the Vandals, founder of Kung Fu Records and, now, radio talk show host. Escalante, a graduate of Loyola Marymouth Law School, hosts a weekly show on Indie 103.1 and gives legal advice to musicians. The station is in Los Angeles but because people are listening on the Internet, Escalante gets calls from across the country. Great article. (Washington Post)

• CD manufacturer Disc Makers says business is good, though it doesn't go after contracts from big labels any longer. Independent musicians are now its bread and butter. (AP)

March 20, 2006

Uh-Oh. The Yanks Aren't Warming Up.

After all those government dollars spent trying to breaking British music in the States is was obvious they'd be watching how their newly crowned kings, the Arctic Monkeys, are being embraced over here.

As the BBC reported yesterday, they ain't. "US reluctant to heed Monkeys hype" goes the headline. The article collects all the bad things said about the band from these articles:

Oakland Tribune: "THAT'S IT? ... None of the tunes were memorable and the hooks weren't strong enough to catch a goldfish. The performance was sloppy in spots and there were some technical difficulties. I'd like to believe that it was an off-night for the band, but I have no evidence to support that hypothesis."
Variety: They "have a long way to go. ... But with so many quick to compare the Arctic Monkeys to the Stones, Kinks, Who and other classic British bands, it's worth remembering that one thing that set those bands apart from the Pretty Things, Steve Harley and Cockney Rebel and nameless other acts who arrived in the States on a wave of press hype was that they were as brilliant onstage as in the studio."
The Hollywood Reporter: The show was "not the messianic exercise it was impossibly built up to be" - but still "felt like the real thing."
• The Miami Herald on the band's SNL performances: "The teen rockers revealed a lack of seasoning."

(In all fairness, the Monkey's SNL performance wasn't as ridiculed as that by emo stars Fall Out Boy, which has sold over two million albums in this country.)

Back at home, The Telegraph sees it differently. "America goes ape for the Monkeys," announces the headline. Down in the article it calls the band's 55-minute set "pretty much the one they've perfected over the past few months."

If the live act has perfected, the band is truly in trouble. Coolfer caught the Monkey's first NYC show and thought it was great, but also felt they have a long, long way to go and do have the potential to get there.

March 10, 2006

Another Email, But No Victory

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A day prior to the Victory email that encouraged its street team to tamper with a competitor's CDs in retail stores, a missive was sent to rally the troops by Victory act Hawthorne Heights. It's a sometimes humorous rant that pits major labels against indie labels, and its delivered with the kind of fire-and-brimstone fervor often seen in Victory boss Tony Brummel. It's us against them, the band insists, indies against majors, genuine versus manufactured success, rock versus non-rock.

"You might ask, how has ROCK been put on the backburner? A current example is an artist that we are up against called Ne-Yo. Many people are saying that Ne-Yo is going to outsell us because Ne-Yo has had a tremendous amount of over the top, mainstream media coverage. His album will be in stores tomorrow. Radio has played his single 160,000 times. Our single has been played 3,800 times. We know that does not seem possible but it is the truth. Ne-Yo is on a major label. Hawthorne Heights is on an independent label. ROCK music needs to win tomorrow."

The entire email after the jump. (Thanks to the Leafblower for forwarding the email.)

Continue reading "Another Email, But No Victory" »

March 8, 2006

Getting Arctic Monkeyed To Death

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It's not often the Wall Street Journel covers independent music, so when it does Coolfer takes notice. Yesterday the WSJ had an article titled "London's Calling But U.S. Fans Aren't Picking Up." (No hyperlink, Coolfer subscribes to the paper edition.) Even though the British government has been taking steps to help its artists break in the United States, sales are only a fraction of their potential -- if potential is measured by UK success and incessant hype that comes from the bands' homeland.

The focal point of the Ethan Smith's article is the Arctic Monkeys, whose debut album sold 10% in the States what it sold in its first week of release at home. (To further put that into perspective, the U.S. has a population nearly five times that of the U.K.)

Why the difficulty winning over us Yanks? Smith has some thoughts.

"Arctic Monkeys faces a problem that has dogged a string of promosing rock bands in recent years--especially those from England. One after another, British acts awash in homeland success like Franz Ferdinand, Kaiser Chiefs and the Darkness have hit American shores riding a global wave of hype, thanks largely to the Internet. But in most cases, the rabid critical enthusiasm in the States is followed by indifference from radio programmers, modest sales and a slow fade from view--in time to make way for the next Next Big Thing from across the pond."

The modest success to date of the Arctic Monkeys in America says two things to Coolfer. One, labels need to strike while the iron is hot. Buzz, especially when gained through the Internet, is often fleeting. The longer the wait for an official release, the lower sales will be. (Conversely, rushing an album's release presents its own set of problems, so the trick is to find and/or manipulate that sweet spot where public excitement overlaps with label readiness.) Smith points to this problem and says some fans may have downloaded the tracks while waiting for the domestic release. Coolfer believes it's more an issue of withering attention spans -- the band's songs were downloaded in the UK before the album was released, so the downloading argument doesn't hold water.

Continue reading "Getting Arctic Monkeyed To Death" »

March 6, 2006

Victory Claims Email Was A Joke

Last week an email surfaced from Victory Records' street team director that encouraged kids to purposely misplace the CDs by Def Jam artist Ne-Yo while performing stock checks on the new Hawthorne Heights CD in stores around the country. President Tony Brummel is on the record as saying the email from street team director Abby Valentine was "a joke." Here's what he told Billboard's Todd Martens:

"It was absolutely a joke. We need people in stores buying every record possible by artists of all genres. No one associated with us is doing anything at retail that they shouldn't be. You will not find Victory's music on iTunes, and that is because we believe in retail, which we prove day in and day out."

A very nice, by-the-book denial, but it's just not believable. The instructions laid out in Valentine's email are simply too plausible in the competitive world of street marketing. And Victory is a competitive label that wants a #1 record. What do its current cable TV spots say? Down with corporate rock, support real music.

Martens quotes a legal expert about possible repurcussions. "If true, these are outlandish, illegitimate sales tactics that will likely lead to legal liability for Victory Records if the recipients read it and follow the instructions,"

March 3, 2006

Victory at All Costs

Often the secret weapon in album sales is the hard work of street teams, those armies of dedicated fans who pass out flyers, bombard chat rooms and do a lot of priceless dirty work.

This being the music business, yes, some of it is dirty. A post at the Velvet Rope gives an examples. It's from Victory Records to the Hawthorne Heights street team, and it captures the label's desire to get Hawthorne Heights' new album to the top of the album chart. Here's a clip in which street teamers are encourages (wink wink) to obscure the CDs of Hawthorne Height's prime competition, Ne-Yo.

"As for Ne-yo, the name of the game is to decrease the chances of a sale here. If you were to pick up handful of Ne-yo CDs, as if you were about to buy them, but then changed your mind and didn't bother to put them back in the same place, that would work. Even though this record will be heavily stocked and you might not be able to move all the stock, just relocating a handful creates issues: Even though the store will appear to be out of stock, the computer will see it as in stock and not re-order the title once it sells down and then Ne-Yo will lose a few sales later in the week."

Is the email legitimate? Coolfer would guess yes. Nothing in the email is very outlandish, frankly. These are the kinds of things labels do to get an advantage. As for the person who wrote it, it could be Abby Valentine, director of street promotion. Here's an article about Abby and Victory's street team.

The entire email is posted after the jump.

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February 26, 2006

The Times On Toronto's Communal Music Scene

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Toronto's indie music collectives are the focus of a NY Times Magazine article by Alissa Quart titled, "Guided by (Many, Many) Voices." For followers of Broken Social Scene, the article's focal point, the lengthy piece is a must-read. But there are other aspects of the piece that will be of interest to those in the music industry, and even to those who appreciate a communal, anti-corporate approach to business. Labels such as Constellation and Arts & Crafts are shown as ideal-minded businesses that reject the trappings and ethics of major labels. Says Arts & Crafts' Jeffrey Remedios, who had worked at a major prior to founding the label, "I named it Arts & Crafts as I was trying to show that we mixed art and commerce, and that commerce was going to hold up its end of the promise. I had witnessed the machine. I wanted to rebel well." Author Michael Barclay calls it a distinctively Canadian approach. "It's textbook Canadian identity politics — the expression of individual will through community."

Though much of the article is about the economics of communal music-making, what's missing from the article was any mention of the government support Canadian artists and labels receive. How has Broken Social Scene's "art-nerd vows" for its communal model been subsidized and made possible by the Foundation to Assist Canadian Talent on Record (FACTOR)? Money for touring, videos, marketing and recording are often provided by FACTOR. Quart missed the opportunity to ask how -- if at all -- grant money helps shape the socialist business model and attitudes that were the focal point of the article. Coolfer's best, completely non-judgemental guess: It's easier to be anti-corporate when you're on the dole. (For example, many of the bands in the article -- such as Feist, Broken Social Scene, Metric and Stars -- received international tour grants in September of 2005.) Perhaps American politicians would feel differently about how they support music if they saw the success of Toronto's vibrant, creative music scene?

(Image of Broken Social Scene by Simon Law, via Flickr)

February 24, 2006

Studio Distribution Closes Its Doors

Coolfer heard reports from various sources throughout the day that Studio Distribution has closed its doors. A thread at the Velvet Rope has similar confirmations.

Studio was a distributor of mainly dance but also hip hop and reggae/world titles, mainly music with a connection to urban and club life. Two of its main labels, !K7 and Global Underground, had recently left. Those two labels helped Studio become a prominant player when dance music took off in the States in the late '90s. Now, Studio's demise mirrors dance music in the country: It ain't what it used to be.

Also, there was widespread industry discussion about how well its deal with Navarre was working out, and its thought that Studio ended up getting hurt by Navarre's financial situation. The two companies entered into a distribution agreement in August of 2002 and renewed it for five years in February of 2004.

February 22, 2006

Test Icicles: Done

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Test Icicles, a bratty trio from London that come to the public through Domino Recordings, will break up after five upcoming UK shows. Their debut full-length, For Screening Purposes Only, was just released domestically on January 24th.

A statement in the Pitchfork article doesn't explicitly say the band is over. Rather it gives a non-committal statement of indefinite hiatus that recalls how Pavement called it quits. "There are currently no plans to make another album or tour beyond this," it concludes. (Given the band's obtuse sense of humor, Coolfer wouldn't be surprised if this is all a prank.)

Some of the headlines of news reports read like the band wrote them: "Test Icicles Goes Balls Up" (CMJ), "Nuts! Test Icicles Disband" (Spin), "Test Icicles Have Meltdown" (MP3.com).

Let's eulogize the band by watching videos for the songs "Catch It," "Dancing on Pegs," and "Circle Square Triangle." And/or stream the new album at Rhapsody.

February 21, 2006

YouTube Teams with Matador Records for Promotion

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With all the buzz surrounding video site YouTube -- with no shortage of talk coming from Coolfer -- it was only a matter of time before the video sharing site teamed up with a band and/or label for a promotion. MySpace's courting of labels and bands has helped it become the power in online social networking. Now YouTube has teamed up with a label is what should be the first of many music-related promotions.

First up is a promotion for Matador band Pretty Girls Make Graves that asks contestants to create a video for the song "Nocturnal House." The winner gets $1,000 and a trip to New York to meet the band and see them in concert.

Contest submissions are already rolling in. View the list of videos here. This one was recorded by a group of Marines at their barracks and has the explanation, "This is what we do when Marines get bored."

January 31, 2006

Tuesday Morning Miscellany

• It's an increasingly digital world: Warner Music Group made a deal with Skype, the Internet calling service. Skype customers will be able to download master ringtones from an online retail store.

• Just two years ago the 22/20s were the object of the majors' desires and were being hailed as the next great rock band. One EP and one album later, the powerful, bluesy trio has split up. Says the band's MySpace page, "For the benefit of anyone who missed the first announcement or anyone new to this site,22-20s have split up.The split was amicable and mutual." This passage from an album review at The Guardian proved to be telling: "Though not responsible for the frenzy the record companies whipped themselves into as they fought to sign the first British blues band capable of taking on the ubiquitous US sound, their impeccable influences and talent sealed their fate." Too impeccable maybe?

Koch Records has announced it will release Second Sign, the new mix album by DJ Carl Cox. The album will be out on April 4th. Cox will perform at the Ultra Music Festival as well as Coachella.

Hip Hop Galaxy has some info on the upcoming Mobb Deep album. Blood Money will be out on March 21st and will have cameos from members of G Unit. One track, "Nightmares," was produced by Dr Dre.

Francis Davis of the Village Voice writes about some of 2005's best jazz albums by living artists.

January 28, 2006

Record Label Supports File Sharer, Parts of the Internet Abuzz

Yesterday Nettwerk Music Group rose in opposition of the music industry's policies and announced it would support the defense of a man faced with a lawsuit for sharing copyrighted music. A Chicago law office will represent David Greubel, who was sued for having 600 "suspected music files" on his family's computer. In the press release, CEO Terry McBride states, "Suing music fans is not the solution, it's the problem."

When word spread the Internet lit up with conversation. Given the unpopular nature of the lawsuits against file sharers, the mood was one of delight and encouragement. Geek site Slashdot.org had the news early on Friday and the comments section filled up furiously. Boing Boing, a technologist-friendly blog, posted the news a few hours later. Of course the idealogues at p2pnet.net carried the news. "The vast majority of ex-consumers are just not willing to pay $1 and up for a lossy, low-fi digital file," they said.

The news was overlooked by most industry outlets as well as the mainstream press. It was carried by MTV.com, InformationWeek.com, Canada.com, Ars Technica, Digital Copyright Canada and Punknews.org, along with a few others. Only one music industry-related news source, FMBQ, carried the story. Nothing in the New York Times, Los Angeles Times or Washington Post, and nothing carried by AP or UPI.

More thoughts after the jump.

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January 6, 2006

Layoffs at Sony BMG, Ryko

Over at Sit Up Stand Down blog, word of layoffs at Sony BMG hit this afternoon. "No notice, no clue it was coming. Kind of a creative way of saying Happy New Years folks!"

The reported tally is as follows: the entire west coast creative department, over six people from the East Coast Columbia online department, one "big shot" A&R weasel, three Columbia East Coast product managers and serveral marketing services people.

In A&R, word is that Matt Pinfield, Mitch Cohen and Ken Komisar were let go. (Can you confirm or deny? Leave a comment or drop me an emai.)

One employee of Columbia Online, who blogs at Fashionably Late, was actually outblogged about it by Brooklyn Vegan. News travels fast.

Comments left at a Velvet Rope post about the firings:

• "Columbia online got all but eradicated and there are more axes dropping as I type."
• "Shit hit the fan at distribution. Will owned labels be next?"

Wait...that's it? The Velvet Rope used to have good gossip. Now it's a graveyard.

There was also some chatter about layoffs at Ryko Distribution today. Coolfer was told at least one regional sales rep was let go, and there's word of more but few details so far.

Update: Billboard.biz reports that Sony BMG laid off 42 people and Sony Music Label Group laid off 19.

January 4, 2006

Arctic Monkeys Album To Arrive in February

010506_ArcticMonkeys.jpgFor those who haven't downloaded enough of the band's songs already, Domino has a February 21st date for the release of the Arctic Monkeys' Whatever People Say I Am. As the Billboard.com article notes, five songs are already available at iTunes.

The young U.K. quartet was the buzz band of 2005 and gained much attention for its #1 single on the U.K. singles chart on the strength of street buzz and file sharing. Their rise was trumpeted as the signal of a new era, one in which a band could utilize the Internet to succeed without the help of a major label's machinations. Two exceptions -- the Arctic Monkeys and Clap Your Hands Say Yeah -- does not make a rule, though, and we can all expect Domino to be in for a long, tough slog in trying to break the band in the States. It would be a lot tougher a task if the band weren't legitimately good. They're not just a bunch of hype.

Unfamiliar with the band? Need downloads? Try this post at the band's official forum for the links.

November 3, 2005

Kweli's Next Album To Be Released on Koch

110505_Talib.jpgWarner Music Group won't be releasing any thoughtful, progressive hip hop this month. (It's busy preparing Biggie's Duets album.) Talib Kweli's upcoming album, Right About Now..., will not be coming out through Warner as had been previously announced. The album, due out November 22nd, will be released through a deal struck between Kweli's label, Blacksmith Music, and Koch.

Right About Now... has 12 tracks and guests Mos Def, Jean Grae, Planet Asia and Phil the Agony.

Back in August it was reported that Kweli had ended his relationship with Geffen and had signed a deal with Warner Music Group. From a post at SOHH:

"During a recent episode of "Rap City," the BK emcee revealed that he had inked a label deal for his Blacksmith Records. He added that he intended to sign underground standouts MF Doom and Jean Grae and that he hoped to sign Rakim to his roster. A source at Warner Music Group confirmed to SOHH.com that Kweli had a deal with the company."