BusinessWeek.com has an article on brick-and-mortar retail's adjustment to falling CD sales. New York City's Other Music is a centerpiece of the article.

Filter through the requisite industry statistics and analyst quotes and you get to a few interesting things. First, the article claims its download store now account for a quarter of all Other Music sales. Second, Other Music hopes to have sponsors underwrite the in-store performances it records and streams from its website.

On a side note, the article comes with a slideshow of Other Music strategies for merchandising and selling music. Slide #7 shows the store's handwritten reviews that line its shelves. This has to be the most underused, overlooked weapon in physical retail. I'm such a sucker for a handwritten review. It's the closest you can get to a recommendation from an employee.

Posted by Glenn at 6:45 PM | Link
|Marketing||Online Stores/Services|

last.fm issued a press release saying its "free music boosts CD and download sales"...which makes you wonder how bad CD sales would be without all those free streaming services.

Yes, free music looks to improve music purchases, but be careful how you word the claim. Just being free won't do it. It's the type of free service that matters. (You have to dig into the press release to see co-founder Martin Stiksel relate the type of service to the sales.)

last.fm claims its sales of CDs and downloads through Amazon.com have increased 119% since its free-on-demand service was launched in January.

The bottom line here is people like on-demand streaming services more than non-interactive streaming services. Why? Because people aren't nearly as adventurous as is usually thought. They like running across new artists from time to time, but they'll take a sure thing over online radio's crap shoot any day of the week. They like familiarity with the occasional out-of-left-field discovery. Those early-adopter types that lust for fresh songs represent just a small slice of the bell curve.

If the music is not on-demand, people are going to run across their favorite songs less frequently. What are people more likely to buy: An unknown song that was picked by an algorithm or a song the user already likes enough to select personally? It's got to be the latter. There's a good portion of the 119% increase.

Part of the increase comes from a rise in last.fm subscribers. The company says existing users purchased 66% more music after the on-demand service launched.

Posted by Glenn at 3:25 PM | Link
|Online Stores/Services|

A good post over at Alley Insider pointed me to a USA Today article about the battle for bragging rights as runner-up to iTunes in digital music sales. Amazon.com says it is number two. eMusic says it is number two. The USA Today reporter called up four majors -- who have no relationship with eMusic outside of equity ownership of some indies -- and they all said Amazon.com.

eMusic's David Pakman pointed out the number of tracks it sells every month -- about 70 million. But labels get less for each eMusic track than they do for each Amazon.com download. In terms of total billing Amazon.com could very well be ahead of eMusic. What matters most to record labels -- and pretty much every other company that I can think of -- is total billing, not number of units sold. eMusic's revenue sharing model typically pays out in the $0.25 to $0.30 per track range (some payout info at this post). Amazon.com is probably getting around $0.65 to $0.70 per track. If number of units were so important, I'd exchange paper bills for pennies and walk around feeling like a king.

And if Amazon.com's entry and ditching DRM hasn't caused a noticeable spike in download sales, so what? There wasn't going to be an immediate reaction. Trends in music are long term. Download trends aren't like the stock market, which jumps every time the Fed chairman blows his nose. Consumers take time to adjust their shopping habits. I fully believe that selling only unprotected files will help sales in the long run -- new ideas, new stores and services, more entrepreneurship -- but not so much in the short run.

Posted by Glenn at 9:04 PM | Link
|DRM||Online Stores/Services|

A reader asked for some suggestions on tools and practices "for someone steadfastly NOT going to do live gigs" who wants to ignore the typical advice to give away MP3s and play lots of gigs. The good thing is there is no shortage of online tools for the stay-at-home musician, and it's something I was planning on writing about.

There is no shortage of new companies that offer services to independent musicians. In fact, the number of options may surprise you. Musicians should keep in mind two things. First, some of these companies may not be around in a few years. Second, the stay-at-home musician will be responsible for the legwork. These sites offer only the tools for online sales and promotion. Artists will need to find listeners and build a following using their own websites and/or social networking pages (MySpace, Facebook). Each company has different payouts (they're pretty similar) and different fine print, so do your homework.

Here are a few of the many companies:

A few weeks ago I took a look at Speakerheart, a new company that is an offshoot of PassAlong Networks. Speakerheart combines digital distribution services with online sales tools and does it all with an elegant, easy-to-understand interface. The 'Shelves' tool is Speakerheart's widget/storefront that can be placed on websites, MySpace pages, etc.

Nimbit offers distribution to major download stores and a customizable widget for your website or social networking page. Indie911 offers the Hooka to artists. Their Hooka is a widget that enables sales as well as hooka-to-hooka online chat. The company also offers digital distribution.

Here are two that lack distribution. Musicane is another that allows users to create a sale page or embed a widget (the company calls it a "viral media store"). INDISTR allows artists to create a page and sell through its site.

For distribution, stay-at-home musicians have TuneCore as the best option get their music to the main online stores and services.

CD Baby brings together physical and digital. The site acts as an online consignment store. Artists send their CDs to CD Baby and a unique artist page is created and hosted by CD Baby. The company also acts as a digital distributor to all the main players (digital tracks are taken from the artist's CD, so this is an option only if an artist wants to get CDs made).

For promotion, Garagaband.com is an option. It is a community-based site for listeners who seek new music. People rate the music they hear and Garageband lists the top-rated songs and artists.
Radio stations and podcasters give top-rated artists a good deal of exposure...though not all genres are going to work here.

AmieStreet is open to independent musicians and differentiates itself by using demand-side dynamic pricing to sell its music. Keep an eye on this one. Some major indies have signed up, and the company counts Amazon.com as one of its investors.

Finally, Snocap is still an option for a sales widget but the company is in a state of flux. It was recently acquired by imeem.com.

Continue reading "Tools For The Stay-At-Home Musician" »

Posted by Glenn at 2:06 PM | Link
|Online Stores/Services|

It's been a busy week for Yahoo. Layoffs. A Microsoft buyout offer. And now Yahoo has announced it will drop its music service and switch over to Rhapsody's subscription service. (This makes an acquisition by Microsoft all the more interesting since Rhapsody and the Zune Marketplace would become a sibling rivalry.)

This will be a good test for the subscription value proposition. Yahoo's huge user base creates an enormous potential market. How much of that potential can be tapped is still the big question. Digital music rental simply turns off consumers. If anything is going to work, I think Universal Music Group's Total Music stands the best chance.

Posted by Glenn at 1:50 AM | Link
|Online Stores/Services||Rhapsody|

The International Herald Tribune has a good look at how the record industry is trying to define, offer and monetize "free" music.

Qtrax, a free, ad-supported P2P service that will launch tomorrow (in the U.S., Canada and seven other countries) is a centerpiece of the article. Qtrax, which has signed up all four majors, claims its music will be portable for PC users by February 29 and for iPod users by April 15. PC users will get Qtrax tomorrow but Apple users will have to wait until March 19, according to Qtrax chief executive Allan Klepfisz. (Read more about Qtrax at this Silicon Alley Insider post.)

The most sensible quote from the article is from Jamendo CEO Laurent Krantz: "Free is complementary. Free is not the opposite of pay. We see there is no cannibalization with free."

Update: Universal Music Group and Warner Music Group both deny they have licensed their catalogs for use in Qtrax's service. "Over the weekend, QTrax officials were still trying to convince Warner and UMG to sign on. On Saturday Robin Kent, who handles marketing for the company, allowed that its paperwork with labels might not be up to date." (Silicon Alley Insider)

Posted by Glenn at 1:28 PM | Link
|Online Stores/Services||P2P|

• The Slacker music service has some news on the portable music player. Most interesting tidbit: music synced from the stations is stored in protected AAC format and is kept in "hidden" storage. (Engadget)

• China Telecom has announced a new digital music service that partners with eight music companies, including the four majors. IMUSIC will feature ringtones, online trial listening, downloads, news and membership services. (TMCNet)

• Professionals talked artist development at the Billboard Touring Conference & Awards. (Billboard.biz)

• Canadian country music manager/label owner Louis O'Reilly is moving to Nashville to start a new label. On Ramp Records has the backing of EMI Canada. (The Star Phoenix)

• Though you may have read about it by now, I have not mentioned EMI's lawsuit against MP3Tunes and Sideload, two services created by MP3.com founder Michael Robertson. While some RIAA victories have obviously shaped the course of digital music -- Grokster is a prime example of how entire business models were impacted -- services like Sideload haven't got enough judicial clarification to keep labels from suing upstarts. Wired has a good article on the subject with a lengthy email from Robertson himself. Definitely worth reading, if only to get a sense of what's driving the lawsuit. (Wired)

• Social.fm is the latest to offer a Facebook widget. (Press release)

• Houston's Cactus Records, closed for a year and a half, has reopened with a new owner and a new location. Like many successful small stores, Cactus puts an emphasis on local artists. (Houston Chronicle)

Posted by Glenn at 8:43 AM | Link
|Online Stores/Services|

Amazon.com's greatly anticipated music download store launched today. Here is a bullet list of things that first caught my eye:

• The title alone says it all: Amazon MP3. No association whatsoever with other, doomed file formats. Protected WMA would have been a huge non-starter for customers.

• There are so many titles listed and the catalog is so well presented, one may not notice the gaps represented by the missing Warner Music Group and Sony BMG titles. The relatively thin catalog is more evident if you notice there is only one new age album and just two opera albums listed in the "bestselling new and future releases" section.

• Who said variable pricing is a bad thing? On the left sidebar Amazon.com has put links to bargain albums: $4.99 and under, $5.00 to $5.99, $6.00 to $6.99, etc. Though I expected to find a lot of EPs mixed in with the albums, I was surprised to find legit catalog titles by Bon Jovi, John Coltrane and 50 Cent, as well as LCD Soundsystem's latest album (for a mere $5.99). Albums priced at $7.99 or less are showcased on the "New and Future Releases" page as well.

• Yes, they've got Radiohead...but full album downloads only (except for a couple of songs from compilations).

• Though prices for individual tracks vary, each of the Top 100 tracks has a price of $0.89. The first track priced at $0.99 is #149, Guns N' Roses' "Patience." Amazon's blog post claims one million of the site's two million downloads are priced at $0.89 and "most albums" are between $5.99 and $9.99.

• While prices are cheaper than iTunes, it can still pay to shop around. Two of the first albums I saw, Manu Chao's La Radiolina ($7.99) and Les Savy Fav's Let's Stay Friends ($8.99), are available at cheap-o subscription store eMusic for far lower prices and in the same MP3 format.

• How to push album sales: Let people know the difference between buying the album and buying each song individually. For example, the pitch at Devenda Banhart's Smokey Rolls Down Thunder Canyon page: "Album Savings: $6.85 compared to buying all songs." Well done.

• There are no customer reviews for the digital albums even though the album's CD page is filled with reviews.

• Lots of cross-selling. CD pages let the shopper know if the MP3 album is "Available To Download Now." For example, KT Tunstall's Drastic Fantastic costs $11.99 for the CD or $8.99 for the download. Download pages have links to the CD page.

• The site lists upcoming MP3 albums and singles but unlike iTunes does not appear to allow for pre-orders.

• I haven't seen an attempt to sell MP3 players at any of the download pages.

Posted by Glenn at 10:09 AM | Link
|Online Stores/Services|

• Just a week after her terrible performance at at the MTV Music Video Awards, Britney Spears has reportedly been dropped by her management company, The Firm. A statement by the company says "current circumstances" have prevented it from properly doing its job. (NBC4.com)

• Digital store 7digital has at least two things iTunes does not have: Radiohead albums and the ability to sell to consumers in any country. (Listening Post)

• Here's a really good, lengthy article on the changing live music industry and how it is robust in an era of label sluggishness. "An expanding audience has allowed promoters to push up ticket prices, tempting more artists out on tour, creating demand for ever more elaborate shows and attracting investment in a new generation of venues to cater to concert-goers." (The Financial Times)

• Citing differences over amounts paid to the label, Epitaph has left eMusic. (Digital Music News)

• Larry Jenkins has been named the EVP of CBS Records. Jenkins is a former SVP of marketing & media for Columbia Records. (Variety)

• MC Hammer is preparing the launch of his new venture, a web site called DanceJam. The site, which has well known investors, is a mix between YouTube and "American Idol." (Don Dodge, via Techmeme)

Posted by Glenn at 10:24 AM | Link
|Live Music||Online Stores/Services|

• The New York Post has reported that Steve Bartels, an operations executive at Island Def Jam Music Group and president of Island Records, will also be the president of the label group. (New York Post)

• Prince, just weeks ago a leading light for the future of the music industry, has entered the muddy, new media-vs-old media fight. The artist is threatening to sue YouTube, eBay and The Pirate bay for failing to filter pirated versions of his content. (Epicenter)

• Ad-supported music download site SpiralFrog has finally launched. I recently reviewed the beta version of the site. Read that post here. Even though my post came before deals to include the catalogs of IODA and INgroove, the site still looks like a Universal Music Group exposition. (UMG is the only major to have signed on.)

• UMG's Fontana Distribution will distribute Amoeba Records, the label founded by legendary retailer Amoeba Music. (Press release)

• CrunchGear has a positive yet thin review of new music service Grooveshark. I have registered witht the P2P service but have not yet given it a whirl. Expect some comments within a week or so. (CrunchGear)

• Sony BMG has joined with Starwood Hotels & Resorts Worldwide to offer customized programming for Starwood hotels. Starwood believes it will offer exposure to Sony BMG artists. Sony BMG is excited to give each different hotel brand a different sound and feel. Of course, other than promotion a goal is the upsell (always an iffy proposition if you ask me). Starwood will sell $20 CDs with Sony BMG artists. (Reuters)

• 20 great music applications for Facebook. (Mashable)

Posted by Glenn at 9:45 AM | Link
|Online Stores/Services||Sony BMG|

• As part of the 100-day plan of new Yahoo CEO Jerry Yang, Yahoo Music is expected to be trimmed and its subscription music service could be retooled or shut down completely. (Reuters)

• Antitrust lawyers insist the new line of iPods indicate Apple is as anticompetitive as ever. Coughlin Stoia Geller Rudman & Robbins and other lawyers have a class-action lawsuit against Apple over its "anticompetitive products." The issue is the iPod's inability to play protected formats other than its proprietary FairPlay protected AAC format. A court date has not yet been set. (Wired)

• The Times Online profiles Rough Trade Records and looks at what the influential indie has done since it teamed up with Beggars Banquet. "We’ve got the first solo album from (the former Cocteau Twins vocalist) Elizabeth Fraser, new work from the Strokes and Belle and Sebastian; Antony (and the Johnsons) is making a new album, Green (Gartside) is working hard on a new Scritti Politti record and Sufjan is making a new record. Which state? He hasn’t revealed that yet.” (Times Online)

• Following LiveNation's entry into the Facebook widget scene, TicketLeap.com now has a widget that will allow Facebook users the ability to sell up to 5,000 tickets to their own events. TicketLeap.com caps each ticket price at $200. (Ticket News)

• Vodafone U.K. has unveiled its new music service. MusicStation, a collaboration with Omnifone, will allow users to download an unlimited number of songs from a catalog that includes all four majors. The service costs ₤2 ($4) per week. That's more than an annual subscription to either Rhapsody, Napster or Zune. (MarketWatch)

• Indie label firm PIAS Group has acquired a 50% stake in mobile marketing and distribution company Indie Mobile. PIAS looks at the deal as a tool to better serve its roster of over 400 labels. Five-year-old Indie Mobile offers such services as mobile licensing, content creation, retailing and marketing. (Billboard.biz)

• Try as I might, I just don't have much of an opinion on the ringle format. Billboard's Ed Christman calls ringtones a "phenomenon." Christman knows his stuff, but aren't ringtones stagnant? If ringtones weren't a stagnant format, would labels be putting them on physical discs and selling them in national retail chains like Wal-Mart and Target? No. But hey, leave no stone unturned. P.S. Somebody start a ringle Wikipedia page. The only current ringle page is for Ringle, Wisconsin. (Billboard)

Posted by Glenn at 10:22 AM | Link
|Mobile Music||Online Stores/Services|

• The FCC has set September 20 as the date for a media ownership hearing in Chicago. It will be held at Operation Push National Headquarters on East 50th Street, from 4-11 p.m. This will be the fifth of six such town hall meetings. Here is my post on the hearing I attended last year in Nashville. (Radio Ink)

• Brit retailer HMV has experienced positive sales growth over the last 18 weeks. Total sales rose 12.2% over the period while same store sales grew 5.8%. Strong sales of DVDs and video games -- not music sales -- were behind the increase. (Billboard.biz)

• Ad-supported download site SpiralFrog has licensed the IODA catalog. That deal pushes SpiralFrog's catalog up about 1 million tracks to roughly 1.7 million (from 700,000). (Press release)

• Universal Music Group, which was preemptively sued by video site Veoh last month, has returned the favor by suing Veoh. The video site company, which counts Time Warner as an investor, has been blamed for "rampant infringement" and for following in the footsteps of "other recent mass infringers such as Napster." (Bloomberg)

• Some CD Baby stats posted by president Derek Sivers: 194,385 albums in stock; 170,379 (or 87%) have sold at least one copy; 129,014 digital albums offered; 123,168 (or 95%) of those digital albums have sold one or more units. Here's my favorite: 12% of CD Baby artists account for 90% of its sales. (CD Baby, via Digital Audio Insider)

• Jeff Leeds on how MTV is trying to remake its Music Video Awards as it's in a four-year ratings slump. "In shaking up its showcase event, the channel is not only aiming to reverse declines in the awards show's viewership, but also to generate buzz about several new efforts to connect with tech-savvy young viewers drawn to upstart brands like YouTube. ... MTV's own correspondents, as well as fans at the awards show, will snap candid camera-phone moments and post them on a new area of MTV's Web site called "You R Here." The most compelling photos or video recordings from Las Vegas may be presented during the channel's news segments." (International Herald Tribune)

• Eighteen Grateful Dead tracks will be available for download via the video game Harmonix video game Rock Band. Harmonix is a division of MTV Games. (The Escapist)

• Former FCC chaiman Mark Fowler supports a Sirius-XM merger. "If the two satellite radio companies, each only several years old, need to combine to be more effective competitors in an audio entertainment marketplace teeming with technological change and innovation, the government should not stand in the way." (Radio Ink)

Posted by Glenn at 9:25 AM | Link
|Brick-And-Mortor Retail||Online Stores/Services||Satellite Radio||Universal Music Group|

The SpiralFrog home page

The nice folks at SpiralFrog sent me an invitation to the beta, so for the last few days I have been playing around on the ad-supported music download site. SpiralFrog allows users to download protected WMA files at no cost. Since the files are WMA, SpiralFrog will not work with iTunes. Tracks may be transfered to compatible portable devices, but I have not yet dug up my old Sansa MP3 player so the files I download have not made it past my hard drive. Downloaded tracks go in a SpiralFrog folder (mine is in my standard "My Music" folder along with everything else) and can be played on any music player compatible with protected WMA (I used both WIndows Media Player and the Slacker player).

In a nutshell, I think SpiralFrog is an average product that misses its greater potential. With some tweaking I think it could carve out a nice little niche. SpiralFrog does nothing wrong per se -- it lives up to its goal of offering free music to users -- but it feels half-finished. While the site design is clean and simple, it is also bland. The site currently offers about 700,000 tracks, but SpiralFrog's shallow facade offers no hint of such depth. Navigation, layout and search functions are poor compared to those of other download sites. If price dictates user experience, then you definitely get what you pay for.

The music is not organized very well. Imagine walking into a store and seeing only a few items on display. There are more items, but they are in an adjacent warehouse, arranged alphabetically in immense stacks. That's what browsing around SpiralFrog felt like. The "artists" page reveals an alphabetized list of names with about 200 listings to a page. (I was annoyed with all the blank space on a typical page. Too much scrolling is required to browse around.) Users can jump to any letter in the alphabet -- good for a small, brick-and-mortar record store, bad for an online store with a huge catalog. The "new releases" page displays a similar lack of care.

The SpiralFrog artist page

Downloading songs, which requires the simple installation of a download manager, is an easy but time-consuming process. The download manager is so basic even a beginner will now how to use it. An album must be downloaded one song at a time, and download times are long. I timed a download of the 5:06-long "Rave Down" by Swervedriver at 88 seconds.

The SpiralFrog business model is built upon the assumption that users will view the site's ads. How much time will actually be spent on the site can vary dramatically. For example, a user does not have to view ads for every download. Songs are downloaded one at a time, but I did not spend time looking at the ads while downloading an album. After I clicked the "download next track" button, I toggled to another browser rather than spend 88 seconds (or whatever) looking at whatever ad was underneath the download manager. A few minutes later I would toggle back to SpiralFrog, select the next song on the album, and then toggle to another browser as the song downloaded. While downloading an entire album can take well over ten minutes, much of that time can be put to good use through multi-tasking.

Continue reading "Hands On With SpiralFrog" »

Posted by Glenn at 12:17 PM | Link
|Online Stores/Services|

• The New York Post's Brian Garrity reported today that Amazon.com's digital music store will launch in mid-September. " The service is expected to carry somewhere around 1 million tracks at launch, featuring music from Universal Music Group, EMI and a large number of independent labels. But it will be missing music from two notable sources, Sony BMG and Warner Music Group. ... Unlike Apple, which charges 99 cents for songs with DRM and $1.29 for unprotected tracks, Amazon is expected to have at least two prices for individual songs: 99 cents for new and popular MP3s, and 89 cents for music from emerging artists and back catalog tracks. Albums are expected to cost between $7.99 and $9.99." (New York Post)

• Bertelsmann AG has agreed to pay $130 million to publishers who are part of the lawsuit against the original Napster. (Billboard.biz)

• Country group Diamond Rio has signed with Warner Music Group's Word Records and will release a Christmas album on October 9. (Music Row)

• SpiralFrog, still chugging along to an eventual U.S. launch, inked a deal with Universal Music Canada and Universal Music Publishing. (Press release)

• The Australia Recording Industry Association is pushing for Australian ISPs to cut the service of repeat copyright infringers. (Ars Technica)

• Portland's Musicfest NW has added national acts (Cat Power, Clipse, Grizzly Bear), will be broadcast by KEXP, and will have one of the first showings of the Kurt Cobain biopic "About a Son." The festival runs September 9-12 and wristbands cost $40. (Oregon Live)

• September will be a big month for new albums: Kenny Chesney, Kanye West, 50 Cent, James Blunt, KT Tunstall, Babyface, Barry Manilow (more cover songs), Rascal Flatts, Foo Fighters, Melissa Etheridge, Iron & Wine and Steve Earle. (Variety)

• Darren Dean, an executive at record label Ruff Ryders, has been indicted on drug and weapons charges. (Newsday)

Posted by Glenn at 12:28 PM | Link
|A&R||Online Stores/Services|

You may have heard or read commentary about a favorite way to launch a Music 2.0 site: Start without the proper licensing deals, attract users, and then hope for the best. If all goes well, the company will either be acquired, receive a cash infusion or start generating enough revenue to punch it into second gear. It's pretty much assumed to be fact, though the executives of those companies tend not to actually admit it.

If YouTube did it, why can't others? That's the rationale behind Deezer.com, a French website that offers free music streams. The site has the desire to operate legally, says co-founder Jonathan Benassaya, "but it takes time to put all the agreements in place." Deezer.com is actually the follow-up to Blogmuzik.net, a first incarnation that shut down after pressure from the industry. Now Deezer.com has a deal with SACEM, a French collecting organization for authors and songwriters. Now Deezer.com is in talks with record labels. Why is the wagon still ahead of the horse?

"Asked if Deezer.com should have waited until the agreements were in place to launch the service, Benassaya countered that YouTube launched its service before it signed deals with content owners to distribute their video. He also said that Deezer.com has been operating since April and that only now has Universal raised its objection."

Deezer.com has signed up 300,000 registered users -- most of the in France -- in the last few months, according to the article.

Posted by Glenn at 12:17 PM | Link
|Online Stores/Services|

• The Rick Rubin era at Columbia Records is upon us. Kyambo Joshua, formerly the SVP of A&R at Warner Music Group, has been named president of the urban department. Joshua recruited Chicago producer Dion Wilson to head urban's A&R department. (Billboard.biz)

• "So far, the RIAA is batting 1.000 when it comes to the 'making available' argument." (Ars Technica)

• CD Baby is now selling MP3 album downloads at its website. Each album download is priced the same as the CD and comes in a zip file with album art and liner notes. (Digital Audio Insider, via Listening Post)

• Verizon Wireless customers will get the chance to buy exclusive Bob Marley ringtones. Twenty-eight ringtones, all from songs from the greatest hits album Legend, are available for on Get It Now-capable phones. (Press release)

• How good is Starbucks at selling music? Almost half of the 511,000 units sold of Paul McCartney's Memory Almost Full has come from Starbucks stores. The chain can also help develop new artists. The article offers Ceu as an example, and it's a good example. The Brazilian singer's Six Degrees album has scanned 77,000 units. Just over 64,000 of those are CDs (83%) and about 56,000 of those come from non-traditional retailers (which covers Startbucks as well as online retailers like Amazon.com). (Financial Times)

• The always interviewable David Pakman of eMusic talks with the Hollywood Reporter. "The number of people in our focus and demographic is at least 5-10 million right now. ... (But a current study of baby boomers who retailers don’t really cater to) shows that 33% of boomers spend $50 on music a year. That’s 25 million people, and they are becoming increasingly tech savvy. If you are focused on selling music to a teen audience, that market is shrinking. For 2007 so far, people 25 and younger represents only 27% of music sales. We’re focused on the other 73%." (Hollywood Reporter)

• Ecast has signed an agreement with The Orchard to offer the latter's catalog to Ecast's multitude of broadband-connected, touchscreen jukeboxes. (Press release)

• Groan. MTV will produce a series of hourlong shows called "Celebrity Rap Superstars" in which B-list celebrities will receive mentoring and tutoring in an eight-week series of rap showdowns. Isn't it enough seeing them play during the NBA All-Star weekend? (Variety)

Posted by Glenn at 8:47 AM | Link
|Digital Distribution||Online Stores/Services||RIAA||Ringtones||Sony BMG||Starbucks|

Ad-supported P2P online music service SpiralFrog filed an ammended Form 10 on Monday and included results for the quarter ended June 30, 2006. In the most recent quarter, SpiralFrog lost over $2.6 million on revenues of $3.1 million. In the previous quarter, SpiralFrog lost $1.48 million. Also in the quarter, the company borrowed $5 million and improved its weak cash position.

I noticed a few things in the filing that I didn't see in the amendment filed three months earlier (although they were there). Here's some info about the Canadian beta trial, and about the song renewal process.

"We currently have over 2,000 members taking part in these previews and have received very constructive feedback about the site’s viability. In the first month, the average member has downloaded 16 songs and viewed 15 pages per visit. In May 2007, we went 'live' on our website in Canada. ...

In order to be able to keep downloading songs and playing songs previously downloaded, users are required to renew their membership at least every 30 days. In order to renew, users must enter their user name, email address, randomly generated code and answer a few questions about the user and his or her habits. Once the membership is renewed, the digital rights management, or DRM, program updates the license. Any songs on the user’s computer will automatically be updated, and the user must sync their portable music devices to their computer to update their song licenses."

Note: Thanks to Brian from SpiralFrog for correcting my original entry. I had written that SpiralFrog is an ad-supported P2P service. He reminded me that SpiralFrog is a music service and not a P2P service as is Qtrax and Limewire.

Posted by Glenn at 11:07 AM | Link
|Online Stores/Services|

• Album sales were up 5% last week and were 12% lower than the same week last year. For the year, album sales are down 14%. Digital track sales were up 2% last week and were 45% higher than the same week last year For the year, digital tracks are up 48%. High School Musical (Disney) was the only album over 100,000 scans last week. It debuted big with sales of 615,000 (10% digital).

• French ISP Neuf Cegetel will introduce a music subscription service in a partnership with Universal Music Group. Subscribers will get unlimited access to UMG music of only one genre; eight additional genres will cost Euros 4.99. Tracks will contain DRM protection and expire when the consumer's subscription expires. (Mark Mulligan's blog)

• The Rolling Stones catalog will be released in MP3 format first at London-based 7digital. Twenty-four albums will be available at 320 kbps rate. For the first four weeks they will be specially priced at £5.49 ($11.00) each and then will rise to the normal £7.99 ($16.00) rate. (Billboard.biz)

• gBox, which is part of Universal Music Group's MP3 plans, has officially launched. The gBox Gifting Widget allows users to customize a wishlish within a widget that can be placed on blogs, social networks and personal websites. gBox also has a deal with digital distributor IODA. (Press release and a previous Coolfer post)

• Sony BMG chairman Andy Lack is on the board of directors of Building B, which just secured $17.5 million in funding. Building B offers a wireless set-top box and service that competes with Slingbox and Apple TV. (Red Herring)

• PassAlong Networks launched an upgrade to StoreBlocks, its digital music incentive platform. New features include a new marketing platform for incentive marketing firms. StoreBlocks now has 2.1 million songs in the MP3 format. (Press release)

• The worst take on Wal-Mart's MP3 downloads comes from The Motley Fool. "Watch out, Apple," wrote Rick Aristotle Munarriz. If Wal-Mart becomes anything remotely close to a digital force, it will be due to a leveraging of its brand and physical retail strength. Wal-Mart's download store offers such a tepid user experience that it would take free or near-free downloads to steal iTunes shoppers. Side note: Apple closed up 5.35% yesterday. (Motley Fool)

• Not that it will impact sales much, but Pitchfork gave This Is Next, ADA's mass merchant-aimed indie rock collection a 0.0 rating. Matt LeMay called it "predictably lazy and disjointed," "totally dispensible," "a silly and ill-advised compendium of material freely available to anyone with the initiative to seek it out." But the review was a not a critique on the music as much as it was a (weak and uninformed) critique on ADA's marketing strategy. (Pitchfork)

• Universal Music Group's "legal" mixtape, Lethal Squad Mixtapes: Dose #1, has flop written all over it. Take away the cred and you take away the sales -- even with a $5 sticker price. (SOHH)

Posted by Glenn at 7:01 AM | Link
|Digital Music||Online Stores/Services||Sony BMG|

• The New York Post's Brian Garrity has an article today on some staffing possibilities at EMI. The company, he reported, is considering a role for Terra Firma managing director Stephen Alexander, and looking for an executive to run day-to-day operations and may look outside of the music industry. (New York Post)

• Social video site Bolt.com has ceased operations. A goodbye letter is at the site. "Please be advised that the operations of Bolt, Inc. and Bolt.com have ceased. Net Revolution, Inc. and Bolt, Inc. have executed an Assignment for the Benefit of Creditors effective as of August 14, 2007." UMG sued Grouper in October 2006 and later settled for $10 million in March 2007. (Bolt.com)

• PassAlong Networks has spun off its Speakerheart platform. PassAlong co-founders Jozef Nuyens and Brad Edmonson will head the new company. Speakerheart allows indie musicians to publish, promote and sell their music online. (Press release)

• Classic. The migration from the majors to indie Koch continues. Foxy Brown has ended her relationship with Def Jam and will move to Koch. The deal includes her own imprint, Black Rose Entertainment. An argument could b made that Brown had worn out her welcome at Def Jam, but the writing is on the wall. If you're not selling many albums, and you're a rapper, why not shoot for a lower breakeven point? (Billboard.biz, which could not be a slower website.)

• A Russian court found the head of allofMP3.com not guilty of copyright infringement. Said the judge, "The prosecution did not succeed in presenting persuasive evidence of his involvement in infringing copyright law." In response to the defense's argument that allofMP3.com had paid part of its income to ROMS, a Russian collection organization, the judge said, "Everybody who uses soundtracks has to pay a certain amount of their income to the rights holders and this company has done that. MediaServices (the owner of allofMP3.com) has paid a certain amount of money to ROMS." (Reuters)

• The Guardian asks, "Can Universal turn the tide against Apple's iTunes?" I put in a "yes" vote, but UMG does not want to hurt iTunes as much as it wants to grow the overall pie. Everybody knows iTunes is going to be the dominant force in digital music retail for many years to come. (The Guardian)

• Clear Channel restated earnings for the period 2002 through 2006. Revenues dropped 9% for each of those years. The basis for the restatement was a reclassification of the company's television business and radio stations to discontinued operations. Clear Channel announced its plans to sell 448 radio stations in November 2006. By June 30, 2007, the company had sold 26 stations and had definitive agreements to sell 374 more stations. (AP and 8-K filing)

• How much would terrestrial radio stations owe to sound recording owners if they had to pay such royalties? MusicFIRST believes about 3% of revenues would be an "equitable" rate. To put some fear into people, the National Association of Broadcasters threw out a far scarier figure of 10-35% of revenues. (Listening Post)

• Here's an interview with Ministry of Sound head of digital sales, Jim Haysom. MOS has a number of ways to push its video content. Notably, it has achieved click-through rates from 5-9% from its pre-roll video ads and banners. The typical European banner ad gets a click-through rate of just 0.19%. (E-Consultancy)

Posted by Glenn at 10:19 AM | Link
|EMI||Online Stores/Services|

Here's the press release and a blurb that describes the P2P service's upcoming download store:

"Initially the store will be a stand-alone website, also accessible from links in the file-sharing software. Subsequent releases will enable users to browse and purchase music directly from within the LimeWire program.

The first partners in the new digital channel are IRIS Distribution and Nettwerk Productions. These companies have signed deals with Lime Wire to provide music from their extensive catalogs."

Last month, Slyck had an interview with LimeWire that discussed its plans for a DRM-free music store and its strategy of preserving its core user base so users to not scatter to other services.

"We're building an online store to sell authorized media downloads. It will beta this fall and open in time for the holiday season. The LimeWire Store will be available from within the LimeWire program and on the Web. Search and download for the store will be centralized, not peer-to-peer. There won't be any DRM. ...

Our plan with the LimeWire Store is to add to the LimeWire experience--we're not going to take anything away. We think purchase links should appear alongside Gnutella search results, similar to how Google keeps sponsored links separate. We believe a significant number of users will choose to purchase content if the presentation is convenient and unobtrusive, the price is right, and the product isn't hindered by DRM."

LimeWire was the target of an August 2006 lawsuit by the RIAA. The company countersued a month later and described the RIAA as "a much larger conspiracy to destroy all innovation that content owners cannot control and that disrupts their historical business models."

Posted by Glenn at 10:27 AM | Link
|Online Stores/Services|

A partner in a new Universal Music Group initiative is gBox, which you might not have heard of before last week. The AP has a profile of the Cupertino-based startup. gBox was mentioned in the UMG press release that announced its upcoming experiment of offering DRM-free downloads. The experiment will run from August 2007 to January 2008.

People who follow a Googe AdWord text link from the results of a search for a UMG artist will be taken to gBox. Once there, they'll have the option of a DRM'd or DRM-free download for $0.99. (No information is given on album prices.)

"Under the program, gBox will get referrals through ads that Universal will buy through search leader Google Inc., gBox Chief Executive Tammy Artim said Friday.

Google will get standard advertising fees rather than a cut of sales under the arrangement. The ads, which would appear when Google users search for specific terms such as the name of an artist, will direct users to gBox.

The arrangement with Universal and gBox is separate from Google's music search service, which directs users to online music stores when they search for specific albums or artists. The company says it does not get paid for such referrals, and it does not restrict links to a single retailer.

Google, which has said it has no plans to create a music store of its own, described the new arrangement as strictly an advertising relationship.

Songs at gBox cost 99 cents each. For the Universal songs that are part of the test, gBox will offer an MP3 version free of copy-protection technology known as digital-rights management. A DRM-enabled version will be available at the same price."

gBox is currently optimized only for Internet Explorer 6.0. If you're able to, go check out the site. There's not much there -- there are only two Coldplay songs, for example, and both are available in WMA format -- but it's worth it to browse around a bit. The available file formats was the first thing I looked into after I registered. Here's what that page says:

"iPod®/iTunes® gBox supports Apple’s AAC/Fairplay format for iPod/iTunes. Download music for your iPod in Apple’s AAC/FairPlay format and load it into your iTunes library like any other imported music file. Just synch with your iPod and you’re done. It’s that easy.

PlaysForSure Windows Media®
Download your music in the Windows Media WMA format for your MP3 player and other devices. WMA is compatible with any PlaysForSure device.

Computer Crashed?
Lost all your gBox music files with no backup? Don’t worry! Just redeliver a backup copy from your gBox account.

Multiple Downloads in Multiple Formats
Do you have multiple devices? Perhaps an iPod and a MP3 player?
gBox lets you download protected music in your choice of iPod/iTunes or WMA formats. It’s that simple. The total number of allowable downloads may vary based on record label restrictions for different songs."

Posted by Glenn at 10:47 AM | Link
|Online Stores/Services||Universal Music Group|

• BusinessWeek.com's Olga Kharif has a good overview of the recorded music industry's attempt to get terrestrial radio to pay royalties. "Aside from the occasional royalty scuffle across those decades, the music industry has always been happy to let radio stations play songs for free, treating it as a necessary marketing expense for the songs and albums they wanted listeners to buy. ... But with more music lovers consuming their passion over the Internet and through satellite broadcasters XM Satellite Radio (XMSR) and Sirius Satellite Radio (SIRI), the free exposure offered by FM and AM radio is no longer quite so valuable." (BusinessWeek.com)

• iTunes is sale pricing albums at $5.99 to $6.99 under the "Next Big Thing" banner. (Digital Music News)

• The Economist has an article on the new approaches of old music companies. "Record labels have come up with a remedy: the '360° contract'. Instead of settling for a cut of CD sales, they increasingly offer artists broader contracts that encompass live music, merchandise and endorsement deals. Such deals, also known as multiple-rights or all-rights contracts, are particularly important in regions with rampant CD piracy, such as Africa, Asia and Latin America." (The Economist)

• U.K. marketing firm MAMA Group has put it a bid to acquire six London concert venues from Mean Fiddler. (Billboard.biz)

• AllofMP3.com and MP3Sparks.com are out of business, but now there's word that customers of those two download stores can purchased music at Alltunes.com. (Slashdot)

• Nashville might be looking at country's 29.6% slide in album sales at 2007's midpoint. That drop is certainly larger than the overall album drop of 15%, but it was bound to happen in a year that followed smashes by Rascal Flatts and Carrie Underwood. MusicRow.com has a graph that compares the big country debuts of 2007 with the first-week sales of those artists' previous releases. (Music Row)

• Lala.com's online streaming service, which debuted to much fanfare a few weeks ago, is down for the count. Said Lala's John Kuch, "Many of our unique, forward-looking features have generated significant consumer excitement but have also generated an overwhelming load on our systems. To avoid falling short of consumer expectations, we're holding off on upgrading and returning some aspects of our offering until we can provide a fuller catalog that meets the demand of consumers and includes music from a broader cross section of the industry." (Ars Technica)

• Any implications on selling music online? Jupiter Research says social networking sites have little impact on where people shop online. (Silicon.com)

• iLike.com has a fun "name that tune" game called Challenge. I played once, got 17 out of 20 and made the rank of Music Intern. My advice is not to rush the songs you're not sure about. (iLike Challenge)

Posted by Glenn at 7:46 AM | Link
|Online Stores/Services||RIAA||iTunes|

• After a three-month delay, the European Union is going to restart its investigation into the Sony BMG merger. That will put date of decision at the second week in October. Regardless of the outcome, a thorough investigation is expected to offer signals that other companies will use for their mergers and acquisitions. (Times Online)

• The Harry Fox Agency and Ingrooves have inked a deal that will see HFA using INgrooves' proprietary software platform for licensing and payment processing. (Billboard.biz)

• BurnLounge has no plans to give refunds to its paid members but will waive all renewal and monthly fees for existing members through the end of 2007. (Hypebot)

• British website Slice the Pie is the latest to provide a fan-based financing tool for unsigned bands. Bands move through stages called The Scout Room, Showcase and Financing, the latter being the stage at which a band that has secured 1,000 £15 offers will release an album. (Get Reading)

• A former Columbia Nashville SVP of promotion has launched Nine North Records, a country label that aspires to break new artists through "innovative independent partnerships." We'll be aligned with several highly experienced professionals who can bring sales, marketing, public relations, digital and artist development skills to the mix on an a la carte basis. This business format will allow us to work with acts from the ground up and with less of a safety net." (MusicRow.com)

• Fortune's Dennis Hau on the economics behind Burgendy Records' contracts with older artists. "Burgundy usually limits itself to one-album contracts with its artists, sometimes with options to release more music. And because it has a full-time staff of only about two dozen employees, it expects to put out no more than two or three albums a year." It takes 24 people to sell about 150,000 units per year? Amazing. (Fortune)

• The Guardian has a very smart take on the move, by bands like Ash, toward releasing just singles instead of albums. "...the looming death of what is still known as the album should cause no little alarm. Doesn't the obligation to attempt a grand artistic statement serve as a reliable litmus test? ... Songs may powerfully denote passing moments, but you surely need more to truly soundtrack your time." (The Guardian)

• Groove Mobile wants to expands its direct-to-consumer trial to more labels and carriers, and has a deal with Vodaphone UK for lower data charges. "Services like this need to be cross-carrier - there's no point in promoting track downloads at a concert, for example, if only a quarter of the people there can take part." (Mobile Entertainment)

• While I try to appreciate both sides of every argument, I can't agree with Ann Power's take on the Clive Davis/Kelly Clarkson dust-up. What separates Powers' belief in artistic development and my belief in a balance between art and commerce is the fact that Clarkson won a singing contest, not a singing-and-songwriting contest. (Los Angeles Times)

• Jupiter Research's Joe Laszlo has a report on over-the-air music purchasing and says that there are obstacles in infrastructure, business models and carriers' ability to take advantage of impulse purchases (which goes for pretty much every digital music store or service). "Approximately 20 percent of online consumers are impulse music purchasers. This segment, already reasonably engaged in mobile music activities, represents the best target for becoming regular users of OTA music stores or services. Tying into key purchase motivators, such as radio play and friends' recommendations, can help drive OTA impulse music purchases more broadly." (David Card's Jupiter Blog)

• Universal Music Group's catalog division has a website, ilovethatsong.com, that currently has a Flash-based puzzle game in which you complete puzzles of UMG catalog titles. Each album's puzzle pages has a link to purchase at iTunes for $7.99 -- or less if you already own one of the album's songs. (Unscramble the Covers)

Posted by Glenn at 6:57 AM | Link
|Mobile Music||Online Stores/Services||Research||Sony BMG|

• 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)

Posted by Glenn at 8:03 AM | Link
|Indies||Online Stores/Services||Sony BMG||iTunes|

• Sony's Connect music and video stores are shutting down and remaining employees will support Playstation, eBooks and Sony Reader. (paidContent)

• Univision Music has been targeted in a payola lawsuit. A former EVP at Univision subsidiary Fonovisa claims he was fired after refusing to take part in payola practices that had him paying more than 50 program directors. (Billboard.biz)

• Following up a post from a few days ago, the new NaxosDirect website will offer digital downloads in the near future -- "as early as July" wrote Mark Berry. When I wrote about the new site, I called it a "throwback" because it sells only CDs. Berry quickly did some checking and got the word out about the impending digital offering. (The Naxos Blog)

• Starbucks is going to sell a Sonic Youth cover song compilation with tracks by Jeff Tweedy, Beck, Marc Jacobs, Portia de Rossi and Michelle Williams, and a new song by Sonic Youth. (Pitchfork)

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Posted by Glenn at 7:57 PM | Link
|Online Stores/Services||Payola|