Digital Music News has some notes from a keynote with new MySpace Music president Courtney Holt at the EconMusic conference in LA. paidContent, host of the conference, also has a report.

Holt gave some indications where he's headed. He talked of improving the playlist features. That's important. MySpace Music's current playlist features are more odd and cumbersome than any of its competitors. He's also working on the brand. Since everybody already knows MySpace, building the brand will have to involve improving the product so users can make the distinction between MySpace and MySpace Music. Currently, MySpace Music is little more than a home page that links to artist pages.

To advertisers and sponsors, though, MySpace Music is something very different. Holt has said a few times that MySpace Music will integrate concerts and non-web properties into broad sponsorship deals (that are not beholden to MySpace's typical low CPMs).

And he spoke of the rich data MySpace Music obtains, and that artists can benefit from knowing he is listening to what and when, who is befriending artists, etc. That's good info to have, but I have no doubt most artists and many labels will do next to nothing with it. An ability to interpret and act on data is not a common trait within the music industry.

Previously on Coolfer: MySpace execs talk about content on the Charlie Rose Show.

Posted by Glenn at 2:47 PM | Link
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MySpace album exclusives are kind of a big deal (in some circles) but do most people care? The majority of people who have gone to Guns N' Roses' MySpace page for the exclusive streaming preview of Chinese Democracy aren't sticking around long. The number of streams falls as you get deeper into the album -- and it's a sharper drop than I would have guessed a big preview would get. Fatigued from those six-minute epics? One or two tracks enough to satisfy curiosity? Could be plenty of reasons. One is the first track on an artist's MySpace page tends to play as soon as the player is loaded.

Paul McCartney's latest project, The Firemen, has an exclusive album stream at its MySpace page. Not too many listens, and fewer people are sticking around to hear the end of the album.

Here are the two albums side by side. The Firemen streams have been normalized so each track's stream can be compared as if both lead-off tracks have an equal number of streams. The Guns N' Roses album has one more track than the Firemen album.

Posted by Glenn at 4:53 PM | Link
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Atlantic rapper T.I. has passed two million MySpace friends, his MySpace page has over 82.6 million views and his hit single "Whatever You Like" has over 27 million streams at MySpace. Right now all of the songs at his MySpace page are collectively getting well over one million streams per day and to date have streamed over 138 million times.

How does all that translate into cash?

First-week sales of the album Paper Trail were 568,000. The album will have a big second-week drop but should top one million units within a few weeks. First week sales of the song "Whatever You Like" totaled almost 335,000 units. That's 0.13 song purchases per MySpace stream, or $0.09 of download revenue per song stream. (I'm comparing U.S. sales to global MySpace statistics. Comparing numbers across territories like that isn't the best way to compare artist statistics, but it's the only way I can do it.)

Having a #1 song will influence traffic at an artist's MySpace page. At a penny per stream, T.I.'s MySpace page can bring in $15,000 per day if visitors listen to 1.5 million streams (which T.I. will easily exceed today). Those streams would generate even more revenue if the songs had an Amazon.com buy button (which they do not yet have). That's $105,000 in ad revenue for one week. Album sales, assuming a 15/85 digital/physical split, brought in (roughly) $5.42 million. First-week sales of "Whatever You Like" brought in $235,000 (I don't know a la carte sales from other tracks on the album, so I am ignoring them as well as ringtones). The total of the three is $5.76 million. That's $3.75 per MySpace friend (again, not including ringtones).

Robin Thicke released an album last week as well. Something Else sold 137,000 units. His MySpace page has 8.52 million visits to date and he has 279,000 friends. Even though Thicke's MySpace page has streamed 17 million songs, he doesn't currently have a #1 single as does T.I. Thicke's MySpace page has streamed his latest single only 130,000 times. The page is getting about 30,000 streams per day. That's only $300 per day at a penny per stream and $2,100 per week. Just to get in revenue from a single, let's say Thicke sold 50,000 units last week. That's $35,000 in revenue. With a 15/85 split on the album, that's revenue of $1.31 million. The total for the three is about $1.35 million. That's $4.82 per MySpace friend.

Let's compare to another debut last week, The Glass Passenger by emo band Jack's Mannequin. The album debuted with sales of 49,000 units. Relative to the band's number of MySpace friends, that's the same as T.I. but worse than Thicke. If friends of Jack's Mannequin had purchased the album at the same rate Robin Thicke friends bought his record, they would have sold about 104,000 units. The band's MySpace page had streamed over 14 million songs to date and is currently doing less than 100,000 streams per day. That's $1,000 per day at a penny per stream. With a 20/80 split on the album (a bit higher because it's rock) that's first-week revenue of about $467,600 without taking into account a la carte track purchases and ringtones. That's only $2.21 per MySpace friend.

• T.I.: 0.263 albums per MySpace friend, 0.026 MySpace friends/profile views
• Thicke: 0.491 albums per MySpace friend, 0.0327 MySpace friends/profile views
• Jack's Mannequin: 0.23 albums per MySpace friend

Posted by Glenn at 11:57 AM | Link
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Even though the music player takes much longer to load than did the previous version (thus ruining the one bright spot of any band's page) and the entire product is still half-baked and clumsy, at least MySpace Music is trying. The main page has a fresh rotation of highlighted artists, videos and playlists -- a stale front page would be a problem. The Transmissions page is a nice way to offer music and video or interviews and live performances. And I really liked the McDonald's-sponsored free MP3 today. After watching a brief ad, the MP3 can be saved or opened without clicking to another screen.

Out-of-the-mainstream artists are benefiting from the main page. Deerhoof got main page placement for the exclusive on the band's upcoming album. Deerhoof's page had 10,900 streams through 10pm CT one day last week. That was 1.5% of the band's total MySpace streams to date. Not bad. Jolie Holland got similar results from her main page placement: 11,732 streams. That's 2.1% of her total streams to date in one day.

Main page placement is no guarantee. It's nice to see a variety of artists, but not all visitors are taking advantage of the music discovery offered to them. Impressions will vary according to popularity. A recognized and more mainstream artist will get even more out of the main page. Christina Milan, for example, has over 44,000 streams today. Indie rappers Yo! Majesty has only 2,000 streams today.

Posted by Glenn at 3:10 PM | Link
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A bit slow. Cluttered. Somewhat confusing. Lack of focus. Really ugly McDonald's ad. Has a lot of potential.

None of the critiques matter much at this point. We're only at day one. The music is free. An ugly ad can be stomached for free music. But the entire experience needs to be improved. And I believe it will. News Corp & Friends are in this for the long haul.

The main page is fairly well curated. The opportunity to buy tracks is there (not all tracks, yet). I'm sure the site will work out bugs, make improvements, add features and add value for artists and labels.

A few more points:

• Even though track purchases are handled by Amazon.com, MySpace Music does not have the excellent shopping experience of Amazon.com's MP3 store. Making tracks available for purchase is only part of it. The key is how music is merchandised and presented to users. Since the end goal is to encourage purchases -- and not settle for song streams -- MySpace will need to work on its salesmanship. Right now it's very passive, like a typical widget.
• Users can add to their playlists audio tracks from MySpace videos posted at an artist's MySpace page. I like that.
• From a political point of view, it's bad that many indies have been left out at the time of the launch. From a practical point of view, it doesn't matter so much. Even the majors have not fully added their catalogs. There are tons of holes to be filled.

Plenty of commentary and first impressions have appeared online today: Idolator, Listening Post, PC World, paidContent and A VC.

Posted by Glenn at 3:42 PM | Link
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The wait is over. Now we can see what MySpace has put together. Without a CEO. With major labels given equity. With big ambitions and bigger expectations. So check it out tomorrow and get ready for the barrage of criticism (positive and negative) that will follow. If you don't have an account, or have been a Facebook user for so long that you forgot your login info, you're going to need to have an account to enjoy the site.

The press release went out not long ago. EMI is on board (read the company's press release in the post at Alley Insider) and MySpace Music will launch tomorrow (midnight Eastern/9pm Pacific tonight, according to a few articles). TechCrunch has quite a few high-quality screen shots (scroll down).

Time's Josh Quittner has heard from a source that labels are rushing to get up their content and some artists are not willing to include their albums on the service. Launching a service with an incomplete catalog is the norm these days, and other services have a few holes from artist holdouts. Neither should matter.

Today's press release has a bit more information on a tool called MyMusic, a "personal music management toolset." We knew the rest...playlists, unlimited streaming, the four majors plus The Orchard, download fulfillment by Amazon.com (hopefully with access to Amazon.com's daily MP3 specials), ringtone fulfillment through Jamster.

Here's the press release that announced the service and its four lead-off sponsors.

Posted by Glenn at 5:29 PM | Link
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The quest for a sustainable ad-supported music model hinges upon the ability to generate enough revenue to compensate rights holders. A frequent criticism of current models is the unrealistic economics. Paying labels a penny per stream, it is often argued, merits a $10 CPM rate while ad-supported services require something like $1 CPM.

Short of labels and publishers cutting their rates, the obvious solution is to seek out a different business model. Expenses too high? Bring in more revenue. Ad rates too low? Do something that will allow you to raise them.

It appears MySpace hopes to give advertisers enough return on investment to merit a rate hike. Jeff Berman, president of sales and marketing at MySpace, told New Media Age that CPMs will increase upon the launch of MySpace Music. The article says speculation in the US is that rates could increase up to 300%. Ads are currently £2 ($3.70) in the UK.

Advertising executives quoted in the article understood the need for higher rates -- to pay for the unlimited streaming -- but were cautious in believing the return on investment will be adequate after initial tests. Said one executive, "MySpace would find it very hard to justify an increase in CPMs in the social media space as it's so over-supplied."

In theory, the service's free music streams could be used as a loss leader. Not a pure ad-supported service, MySpace will sell downloads, ringtones, concert tickets and other items. But subsisting on affiliate fees should not be the venture's goal.

Posted by Glenn at 12:15 PM | Link
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In an article at the New York Times, The Orchard's Greg Scholl gave his support of MySpace Music and said a record industry based on advertising "could well dwarf today’s $30 billion global recorded music industry." (There's potential there, sure, but who's going to figure out how to capture it? Potential has existed but remained elusive for pretty much the entire decade.)

"This is something we should have done earlier,” said Rio Caraeff, executive vice president for the digital division at Universal Music Group. “It’s kind of like a staging ground for us to experiment with new business models.”

The obvious problem here is that MySpace Music is not an experiment surrounded by the sort of mild optimism that one places on future, uncertain outcomes. This is the second-coming of iTunes, the sort of project that can usher in a changing of the guard when it falls through. On one hand I find it hard to believe this one project can be of such great importance to the record industry, but there aren't many actionable Plan Bs in the pantry if this doesn't work out.

"MySpace Music represents the first credible, large-scale initiative in this direction," said Scholl. It will be quite the learning experience, that's for sure.

Posted by Glenn at 1:53 PM | Link
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The Internet is abuzz due to MySpace Music's nearing launch. It was announced yesterday that four sponsors -- McDonald's, Sony Pictures, Toyota and State Farm -- will be on board as advertisers for the new music site. Even though MySpace Music is supposed to launch this week, EMI has not yet announced its participation and word is that publishers and many indies are not yet on officially board (as mentioned in an article today at the New York Post).

BusinessWeek.com put up a MySpace Music article on Friday. Fortune has an article today that focuses on Amazon.com's role in MySpace Music.

TechCrunch said yesterday that MySpace Music has been talking with private equity firms about raising $100 million on a $2 billion valuation. GigaOm has a post titled "Why MySpace Music Is Likely to Fail." I can't agree with its arguments (except the one that labels should allow many sites to flourish rather than put many eggs into few baskets). What MySpace Music is seeking to do is to become a broad music-based portal, one that could fit well with today's greater emphasis on items such as T-shirts and concert tickets. It won't be about just ad-supported streams or just MP3 sales.

Michael Nash, Warner Music Group's head of digital, told BusinessWeek, "We will be able to return to overall growth." That won't come just from MySpace Music, though. Many factors are needed in order for recorded music revenues to bottom out in the next three or so years. And, as has been the case over the last ten years, there are many unknown factors that could push its trajectory in one direction or another.

Is all this attention and expectation too much? Almost, but it's hard to downplay its significance. At this point, MySpace Music is so important because it represents a new era in cooperation between content owners and an Internet company. It represents a new era of openness -- free streams and DRM-free downloads. It represents the acknowledgment that a la carte downloads alone cannot return labels to revenue growth.

Posted by Glenn at 2:28 PM | Link
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Moconews.net has a couple of posts worth reading. One covers an interview by paidContent's Rafat Ali of John Faith, the GM and VP of MySpace Mobile at the Mobile Entertainment Live conference. About MySpace Music Faith said:

It’s launching in the next few weeks. It’s a free ad-supported streaming service, which let’s everyone become their own DJ. In the music space, we want to provide one on mobile, too, and we are aggressively looking into it....You still have a tight control on the distribution and revenue around that. We’ll be working with them to make a compelling MySpace mobile component in the future.

The other post covers a Mobile Entertainment Live panel with Michael Nash, Warner Music Group's EVP of Digital Strategy and Business Development, and Paul Smith, head of major label relations for Nokia. Plenty of commentary on Nokia's Comes With Music service, platitudes offered by both Nash and Smith for the others' companies and a few tidbits about new models. Said Nash, "There’s a philosophical shift that will be required that will be focused on this kind of access model." Very true.

Posted by Glenn at 12:30 PM | Link
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From The Deal's Tech Confidential:

An industry source with knowledge of the company's executive search tells me that one of MySpace Inc.'s top dogs -- either CEO Chris DeWolfe and COO Amit Kapur -- will be its official interim CEO as the new site is launched, presumably within a few weeks."

This report is in line with various reports over the week about MySpace Music's search for and inability to nab (or disinterest in nabbing) numerous candidates. And there have been reports that the MySpace Music staff has requested that a CEO not be brought in while they are preparing for launch.

As for the launch date, mid-September is the rumored time but there has been no substantive report or official news release.

Posted by Glenn at 2:57 PM | Link
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In The Deal's post about MySpace Music's search for a CEO, the important part was near the bottom:

Whoever takes the helm at MySpace Music will be beholden to many masters, including MySpace's own executives, the label chiefs and, not least, News Corp. [NWS] chairman and CEO Rupert Murdoch, whose company acquired MySpace in 2005 for $580 million. The new CEO will also inherit a troubled legacy. MySpace has previously tried to sell music via artists' pages through a 2006 partnership with Snocap Inc., but the idea failed to catch on with consumers. Meanwhile, its MySpace Records initiative, launched in 2005 in tandem with Universal Music, also hasn't panned out as the company hoped.

What MySpace Music needs is not an entrepreneur, but a proven leader and diplomat who can deal with the various heads of state with interests in the company's performance. The entrepreneurial aspect of the company ended when ownership interests were sold to content owners. Do you think it MySpace Music will as much sneeze without asking for permission, even if technically it is a standalone business? Some of the names on the CEO short list do not strike me as the types to run this sort of company. They think differently. They have experience building new companies. They have entrepreneurial mindsets. They are comfortable being outsiders.

The thrust of the post was about the implications in hiring a CEO before launch.

A source with knowledge of the situation says the company's technology team has warned MySpace CEO Chris DeWolfe and chief operating officer Amit Kapur not to bring in a CEO with the new music service, a joint venture with three of the four major music labels, so close to launch for fear that a new executive would demand changes that would threaten the development team's timeline.

The source describes the technology team's push to launch MySpace Music in September as "all-consuming and desperate," adding that any further delays could jeopardize the venture's relationships with content partners.

Posted by Glenn at 2:16 PM | Link
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Both Silicon Alley Insider and paidContent have details from today's MySpace conference call that announced MySpace Music. Take your pick.

Here's what we know: The site will take shape over the next few (three to four) months; will add community features from recommendation engine; MySpace is hiring executive management and wants to make this a standalone company; will feature a mobile service with Jamba; will offer tickets and merchandise; will sell ringtones.

What we don't know: Track pricing; equity stakes of the three majors involved; revenue sharing details;

The two posts have a slight inconsistency regarding DRM. Alley Insider has the following to say about DRM, which paraphrases the call: "Everything DRM free on site? Don't know. But think that's the direction we're going." paidContent has this: "Downloads will be DRM-free."

Posted by Glenn at 1:17 PM | Link
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Nothing to add here, I'll just link to the Reuters aricle that says MySpace's music joint venture will launch be unveiled within five days with three of the majors on board. "It will offer music streaming, MP3 downloads, concert tickets, ringtones and merchandise," said the source.

Update: Billboard.biz says it could go live as early as Thursday but Friday is more likely. "While the announcement is imminent, the service likely won’t go live for several months," it says.

Posted by Glenn at 6:28 PM | Link
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JupiterResearch analyst David Card on the MySpace vs. Facebook debate. In terms of music, it's not much of a race.

As of this minute, Coldplay has 392,819 friends on MySpace and 43,156 fans on Facebook. MySpace's Coldplay page has four songs on it; Facebook's one. MySpace's are embeddable on your page; Facebook's are not, yet. MySpace supports for-pay downloads (they're priced absurdly high, but that's not MySpace's fault); Facebook does not.

One main reason I visit so many bands' MySpace pages is because it always turns up at or near the top of a Google search. For Coldplay, the band's MySpace page is the third result in a Google search (after the band's own page and its Wikipedia page). The band's Facebook page isn't on the first five pages of search results.

A few weeks ago I wanted to see a band's -- any band's -- Facebook page, so I looked at that of Death Cab For Cutie. Today it has 21,104 fans. I like that it has fan photos, but there's not much else there. Very bland. Death Cab's MySpace page has 511,840 friends, tour dates and a stream of the band's new single (that plays as soon as the page is loaded). And tons of other stuff. The various pictures and banners make up a pretty ugly collage, but it's very effective.

Any time I read about a new band, I go first to its MySpace page. Everything I want is right there: The band's hometown, streams of its songs, upcoming tour dates and what, if any, label it's on. I don't have a MySpace page. I do have a Facebook page, but I don't want to befriend bands (I'm friends with about two or three) and have their mail clog my inbox and their messages fill my feed.

Want to know if you should show up for the opening band? Listen to some songs at its MySpace page. Need to look up some tour dates? Go to the band's MySpace page. There are no annoying flash intros, no additional clicks needed to get what you want to go. Easy is good.

Posted by Glenn at 2:47 PM | Link
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A post at paidContent says News Corp is working on a music portal as a joint venture with music content providers (as in the four majors). The site would be similar to Hulu, News Corp's video site that is a joint venture with NBC Universal. (In my experiences with Hulu's private beta, I've found it to be a wonderful product. Hopefully a music venture would be just as good.)

Wrote Staci D. Kramer, "MySpace would be a distributer but, like Hulu, the idea would be a mixed portal-distribution experience. Music would be DRM-free and ad supported. No label has signed yet but a source familiar with the situation said that could change in a matter of weeks." Kramer added that no labels have yet signed on but may soon.

MySpace has dabbled in music distribution. Next month, MySpace will offer at no charge the new album by punk legends Pennywise. This new project is obviously on a much larger scale than the Pennywise one-off. I'm guessing the portal would offer limited artists and albums, and it will (at least initially) skew to the emo side of the spectrum.

Posted by Glenn at 5:02 PM | Link
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• Another entry into the alternative distribution model game: MySpace will allow users to download an upcoming album by punk group Pennywise by adding as a friend mobile music distributor Textango. Free music on the Internet...no, it's not that unique. What is unique about this is the level of the band involved, the involvement of MySpace and the fact that the album can be downloaded rather than streamed. The difference between streams, which MySpace has plenty of, and downloads is all the difference in the world. (AdWeek)

• Sony BMG finalized an on-demand video licensing deal with Yahoo. The deal includes the ability for users to put Sony BMG music in their user-generated audiovisual content. (Press release)

• Video game "Guitar Hero III," developed by MTV Networks-owned Harmonix Music Systems, had sales of 1.4 million in its first week of release. (Billboard.biz)

• Nokia has inked a deal with EMI U.K. to offer to its Nokia Music Store subscribers Kylie Minogue's new album five days before its general release. The album will cost £8 or 80 pence per track. (Mobile Today)

• Haier has launched the Ibiza Rhapsody, a Linux-based, WiFi-enabled portable music player that integrates the Rhapsody music service. The device costs $330 and has 30GB of storage space. (Engadget)

• JupiterResearch put the five-year outlook of the U.S. digital music market at $3.4 billion per year and says "on-demand subscription services will appeal primarily to niche audiences among music aficionados" for the foreseeable future. Not a big surprise there. The typical American just don't see much value in subscription services. (Digital Music News)

Posted by Glenn at 11:23 AM | Link
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• The House Small Business Committee Chairwoman doesn't want to get involved in the webcaster royalties issues. At a hearing yesterday she said, "I really don't think Congress would be the best type of vehicle to resolve this type of issue. July 15 is just around the corner, and I hope the two parties can come together and resolve this issue." She hinted that webcasters and SoundExchange could change the definition of a small webcaster, which would allow larger companies to pay lower rates. (BusinessWeek.com)

• As the U.K. division of Sony BMG announces it will not be part of the global plan for the upcoming Prince album comes news that Prince is planning to use the album as a free giveaway with copies of a The Mail on Sunday newspapers. As one would expect, music retailers are incensed. Price also plans to bundle a digital copy of the album with each ticket sold for an upcoming series of London concerts. In May, The Mail on Sunday drew the ire of Mike Oldfield when The Mail gave away copies of his classic album Tubular Bells (The Guardian)

• Much ado about nothing? Retuers has an article about music executives who are fretting that the iPhone will "too much clout to Apple Inc. in shaping the future of the fledgling mobile music market." Once again, maybe I'm missing something but the iPhone is an iPod with a phone attached. It sideloads music just as an iPod sideloads music. I agree with Groove Mobile CEO Adam Sexton: "I don't think the iPhone is going to be the game changer that people are predicting." It will change the mobile phone game, but until it introduces a drastically new way to purchase and experience music, it won't change the mobile music game. (Reuters)

• MySpace Music and Snocap have combined to co-sponsor a tent at this summer's Warped Tour. If those kids have either a credit card or a PayPal account, that will turn out to be a great promotion for Snocap. (Snocap)

• Just how few decent music DVDs are being released these days? A year ago, there was only one music DVD in the top 20 that had been out for 100 weeks or more. Last week, there were six releases in the top 20 that had been out for over 100 weeks.

• Jupiter analyst Mark Mulligan offers analysis of the BBC's online broadcast's from the annual Glastonbury music festival. "The online content include information on acts, photos of performances etc. All of which were great discovery tools. I personally ended up buying a dozen or so tracks from acts I’d seen for the first time. And now the BBC has updated the site to provide video and audio highlights." (Mark Mulligan's blog)

• In this review of Ash's Twilight of the Innocents, The Guardian is still talking about the death of the album. Dorian Lynskey hits the bullseye when pointing out that that the band, which has disavowed the album format for good, never was an album kind of band to begin with. "But whatever the logic (let's assume the resultant publicity was just a happy side-effect), Ash are prime candidates for this experiment. Like Slade, Madness or the Sugababes, they excel at sprints, not marathons. If you could only own one Ash album, it would have to be their impeccable singles collection, Intergalactic Sonic Sevens." (The Guardian)

Posted by Glenn at 7:12 AM | Link
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• The Sunday Times reported that Warner Music Group may pursue a merger with EMI by making a direct appeal to its shareholders. The report claimed WMG execs were "astonished" that EMI had moved to drop DRM from downloads while it was a bid target. (Forbes.com)

• Merril Lynch analyst Jessica Reif Cohen warned of more declines this year (no kidding). "With digital growth naturally decelerating over time and the decline in physical sales accelerating, an imminent return to growth for the industry no longer appears likely." She kept a "neutral" on Warner Music Group. If you recall, Reif Cohen caused Merril Lynch to drop out of WMG's IPO and lose millions in underwriting fees after she told the firm it was overvaluing the shares. (Hollywood Reporter)

• It's high time for indie culture to go mainstream: Top indie labels will create a series of compilations, similar to the Now That's What I Call Music series, and partner with MTV2. Distribution will be aimed at mass merchants like Wal-Mart. Vice will release the first volume. Sub Pop and Matador are considering future editions. Said the always quotable Adam Shore of Vice, "We don't really expect indie-rock stores to support this record. It's for the casual fan." (Entertainment Weekly, via Hypebot)

• Sony BMG announced it will release two music titles on Blu-ray this summer: Bruce Springsteen and the E-Sreet Band: Live in Dublin, and Chris Botti Live with Orchestra and Guests. (High-Def Digest)

• Warner Music Group will offer videos through Joost. (Press release)

• Some feedback on download sales at MySpace. In a nutshell, they're quite low thus far. "People don't go to MySpace to buy," one source said. "I just don't think people are going to MySpace to buy stuff," said another. Obviously Snocap and Hooka have to get people to register and become familiar with the process. (Digital Music News)

• A profile of Dennis Mudd, CEO and co-founder of digital music company Slacker. (USA Today)

Posted by Glenn at 8:35 AM | Link
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The Washington Post's Josh du Lac has an article on MySpace phenom Tila Tequila, her refusal to sign with a major label and her development as a brand. I'm quoted in the article saying, more or less, MySpace friends are cheap but music sales are harder to come by. That will be the lesson in The Great Tila Tequila Experiment of 2007.

Let me put Tequila's DIY experiment thus far into perspective. The two versions (clean and explicit) of her "I Love You" digital single have sold a total of about 5,200 units in two weeks of release. (Her MySpace page, du Lac reported, has generated over 40 million track plays. The single is distributed by INgrooves.) That wasn't even good enough for the Top 200 digital track chart. Last week, the 200th best selling digital track was Queen's "Bohemian Rhapsody" with one week sales of 5,600. The death of Boston's singer propelled "More Than A Feeling" well past both Tequila and Queen.

Tequila and her manager, Simon Renshaw, are more concerned with her brand than just music sales. Said her manager, "I didn't get involved in helping Tila on the basis of thinking we've found this great new musical diamond; I think of Tila as a cultural phenomenon."

But here's where the balance of risk and reward comes into play. Majors surely wanted some of Tequila's merchandise business to offset the high level of risk. It's a revenue stream any MySpace star should want to protect. Tequila, probably more concerned about her brand than getting a hit single, and hopefully aware that music success is a long shot, needs her merchandise business.

Posted by Glenn at 12:49 PM | Link
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• MySpace artist Tila Tequila removed her Hoooka widget after MySpace told her it violated her user agreement, which brought to the nation's attention the competition between third-party widgets at social networking sites. (New York Times)

• More Tequila: Her "modest" iTunes sales are a blow to her MySpace-based business model. (Digital Music News)

• Jersey City, New Jersey police made a drug bust at Block Royal Records yesterday. Twenty-three people were arrested and two pounds of cocaine and heroin were confiscated. (NJ.com)

• Douglas Lichtman, a lawyer on Viacom's legal team that has sued Google, has an opinion piece in today's Los Angeles Times. "Providers of a new technology will often be tempted to attract a customer base by allowing copyright infringement. ... To counteract this, the law must demand reasonable precautions both at the design and operational stages of a technology." (Los Angeles Times)

Posted by Glenn at 9:11 AM | Link
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• MySpace is testing an Audio Magic content filter to block unauthorized videos. (Question: What about homemade videos with copyrighted music playing in the background? Looks like they'll skate through.) Universal Music Group, NBC/Universal and Fox are taking part in the test. (InformationWeek)

• A Goldman Sachs analyst believes XM and Sirius should work together to lower marketing and promotion costs, but not worry about merging for another three to four years. In that time, possible synergies would be able to be realized and regulatory uncertainties may have passed. (Forbes.com)

• The White Stripes are reportedly going to sign with Warner Bros Records. (Billboard.biz)

• Warner Music Group is going full steam ahead with its corporate social responsibility agenda. By the end of March of 2007, all standard CD and DVD products in the U.S. wil use "ecologically-enhanced paper packaging." The company's Grammy party was carbon neutral. A distribution deal with Righteous Babe would fit the strategy, but I won't hold my breath. (Press release)

• Singshot.com, an online kaoroke site that is run by a former Rhapsody exec and has licensed over 3,000 songs, was purchased by Electronic Arts. (Forbes.com)

• Michael Robertson, founder of MP3.com and MP3Tunes, issued his own open letter that challenged Steve Jobs to sell music in open formats, open up the iPod to other software and make an iTunes for Linux. (MichaelRobertson.com, via Wired's Listening Post blog)

Posted by Glenn at 9:34 AM | Link
|A&R||MySpace||Satellite Radio||Sirius||Warner Music Group||XM|

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.

Posted by Glenn at 12:40 PM | Link
|Indies||MySpace||Snocap|

Bambi Francisco has a great article at MarketWatch called "Copyright Irony" that perfectly captures the corporate dilemma created by the MySpace's copyright infringement. Peter Chernin is the president and chief operating officer of News Corp., the parent company of MySpace. Francisco takes us back to February of 2002 and testimoney Chernin made before the Senate Commerce, Science and Transportation committee:

""The wholesale disregard of copyrights would be devastating to employment and job creation in the U.S., and to any chance of making the Internet a boon to us all."

Read his full testimony here (PDF).

Chernin is, as the EFF's Fred von Lohman said in the article, "a copyright hardliner and the father of the 'broadcast flag.'" Francisco's argument is that News Corp. will settle with Universal Music Group rather than (a) try to ammend the Digital Millennium Copyright Act or (b) put Chernin's "high principles" on the witness stand.

More on Chernin: Senator Patrick Lehay called "wrong-headed" the suggestion by Chernin and other executives that the federal government create an agency to handle digital rights management systems.

Posted by Glenn at 8:17 AM | Link
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Universal Music Group said today it filed a lawsuit against social networking site MySpace for infringing the copyrights of its artists. At the heart of the lawsuit is the frequency with which MySpace users upload videos to their personal pages. From the Reuters article:

"The lawsuit accuses MySpace of allowing users to upload videos illegally and taking part in the infringement by re-formatting the videos to be played back or sent to others. It follows several months of talks on music rights with News Corp.'s MySpace, which broke down late on Thursday, a source familiar with the discussions said."

MySpace called the lawsuit "meritless" and claimed its procedure for removing illegal downloads
puts it in compliance with the Digital Millennium Copyright Act.

In recent weeks, UMG has used its muscle on a few occasions: it inked a licensing deal (plus equity) with YouTube, and worked out a deal with Microsoft that gives its a $1 fee for every Zune that is sold. Now the company has resigned the issue to litigation. Copyright owners are increasingly eager to license their content, but negotiations are bound to reach an impass on occasion. And while the company is sure to take legal shelter behind the DMCA, MySpace has put in place anti-piracy measures that are meant to filter out copyrighted material. (Read this article about a MySpace technology that allows rights holders to flag unauthorized content.) How much anti-piracy effort is enough? The courts will decide if a settlement is not reached.

Posted by Glenn at 6:10 PM | Link
|MySpace||Universal Music Group|

Snocap announced yesterday new licensing deals that will allows a slew of labels and aritsts to sell music at place like MySpace pages, artist websites and blogs. The company's Digital Registry will now include the catalogs of The Orchard, CD Baby, Epitaph, Koch Records, Redeye Distribution, Virtual Label, Zebralution, Memphis Industries, Metropolitan Hybrid, Pravda, Sound Choice and Toucan Cove.

Snocap's press release mentions its "easy-to-use web-based interface" that will allow labels "to clear and manage their licensing rights across multiple retail destinations." Though not mentioned by name, one can assume it refers to Snocap's Linx widget, which allows users to download songs and pay for purchase with PayPal.

Posted by Glenn at 8:30 AM | Link
|Digital Distribution||MySpace|

• 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)

Posted by Glenn at 8:26 AM | Link
|EMI||Indies||MySpace||Online Stores/Services||Publishing||Universal Music Group||Wal Mart|

• 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)

Posted by Glenn at 10:30 AM | Link
|Indies||MySpace||Warner Music Group||YouTube|

• NPD Group research reveals hip hop accounted for 23% of all ringtone sales in July. Roc was 17%, pop was 11% and alternative was 8%. Women downloaded 53% of all ringtones. (Hits Rumor Mill)

• The Internet is about democratization, but wireless has the starpower: Beyonce's music and fashion line will be the object of a mobile game being developed by Starwave Mobile. (Press Release)

• Add the Barenaked Ladies to the list of artists selling their music on their MySpace page. At the $0.89 per track price point, the band is actually taking in less than Snocap gets per sale; Snocap takes $0.45 per track and splits it with MySpace. (Barenaked Ladies at MySpace, via Digital Music News)

• This CNNMoney.com article says demand for MP3 players at Best Buy is cooling off. The retailers is shifting toward flatscreen televisions to compensate. (CNNMoney.com)

Posted by Glenn at 7:27 AM | Link
|Mobile Music||MySpace||Research||Snocap|

The Wall Street Journal has reported that Snocap, the digital services company founded by Napster creator Shawn Fanning, has partnered with social networking site MySpace. Though the nature of the deal isn't clear, sources told the WSJ that MySpace could get a minority position in Snocap.

More details were given in the LA Times' article about the Snocap/MySpace deal. The download store will be called MyStore and will be out later this year. (A side note: www.mystore.com has been registered by "leading domain name attorney" Ari Goldberger.) Fans will be able to sell bands' music to other fans. Also, some economics of the deal were given. The two companies "will split the processing fee of about 45 cents per track," which implies the artist should set a track's price well above $0.45.

Jupiter Research's David Card has doubts about MyStore's ability to make much money. "I believe in a 'long tail,'" he said, "but I have yet to find a media company make a living delivering only the long tail without delivering any of the hits."

Coolfer had previously posted on Snocap's Linx, the widget that enables download sales on MySpace.

Continue reading "MySpace Forms Partnership With Snocap" »

Posted by Glenn at 7:36 PM | Link
|Digital Music||MySpace||Snocap|

paidContent has some notes on the recent Music Alley gathering in London that had a few panels that talked about digital media and music.

eMusic's David Pakman compared iTunes and eMusic. Apple gets very few downloads from each iPod owner (1 billion songs divided by 50 million iPods over three years). eMusic, he said, pays out an average of $5.62 per subscriber per month, or "2,858% more than Apple" according to his math.

It was Ted Cohen, though, and not Pakman who predicted a great rise for subscription services. Cohen thinks it will dominate the market while Pakman thinks subscriptions will be a niche player.

There was some talk of MySpace, of course. MySpace VP for European marketing and content Jamie Kantrowitz played down the controversies surrounding the site's use of music and the fact that it doesn't compensate labels or artists for audio streams. MySpace hasn't run into serious trouble, he says, because artists choose to upload their music (Beggars Group's Martin Mills agreed) and said, "MySpace is only 2.5 years old and down the line there may be other revenue models."

Posted by Glenn at 1:14 PM | Link
|Digital Music||MySpace||eMusic||iTunes|

• "Sources report an undisclosed number of layoffs at the Island Def Jam offices, the most prominent being veteran Sr. VP Sales Mitch Imber." (Hits Rumor Mill)

• Hypebot continues its series of posts on MySpace with its eighth, a piece on how age restrictions could impact marketing through the social networking site. Also read parts five, six and seven.

• RIP Claydes Charles Smith, co-founder of the group Kool & the Gang. (CNN)

Posted by Glenn at 5:25 PM | Link
|MySpace||Universal Music Group|

• 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)

Posted by Glenn at 8:57 AM | Link
|Indies||MySpace|

The blog Chartreuse asked Coolfer to guest blog about music and new media. To narrow the focus a bit, Coolfer decided to contribute a post about MySpace and how embedded the social networking site is within the music community.

Think MySpace is overrated and destined to be overcome by next month's next big thing? I don't. Here's a paragraph in which I talk about how MySpace has changed how I preview music:

Ten years ago I would often go to a concert without ever hearing the music of the opening band. Five years ago I would check to see if the opening band had a website, and if so hope that the band posted some audio. Now I know the band will have a MySpace page. Everybody does. One click and I can hear the band's music and find out some basic information. I never again have to go to a concert not knowing if I'll like the opening band. And if I do like the opening band, keeping track of them will be made easy.

Read the entire post here.

Posted by Glenn at 8:04 PM | Link
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