Music GroupsArticle at Wall Street Journal.
The merger also requires approval from the Federal Communications Commission. While it is unlikely that the FCC will go against the Justice Department's ruling, it has the power to impose conditions that might make the controversial merger slightly more palatable to the groups lined up against it. A ruling from the FCC is expected in coming weeks.
This just in at Radio Ink: FCC Chairman Kevin Martin said today that the FCC is considering fines for satellite radio broadcasters XM and Sirius for rules violations regarding receiver standards and power levels of its terrestrial repeaters.
In other satellite radio news, today Martin told an audience the National Association of Broadcasters Radio Show that local stations should not be concerned about losing local advertising. The two satellite radio operators cannot have local content and must carry content on a national basis. "We don't have any prohibitions on where ad revenue can come from," he said, "but we do say because they are a national service ... they are not allowed to be on localized content."
• 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)
• Album sales were up 10% last week and were "only" 8% lower than the same week last year. For the year, album sales are down about 16%. Digital track sales rose 3% and were 43% higher year over year.
• Rolling Stone magazine has the first of a two-part series on the fall of the music industry, a situation for which "there's no hope in sight." It's a collection of previously told stories and publicly available sales statistics. As with many articles that attempt to describe labels' failed attempts over the years, the writers tell us that the industry's death blow was failing to work with the original Napster. I don't believe P2P is or ever was the cure-all it's made out to be. Assuming all or most P2P users would have or ever will pay a voluntary monthly fee is as pie-in-the-sky as it gets. (Rolling Stone)
• Quincy Jones is becoming a brand that will encompass digital media, how-to publishing, clothing and even (reportedly) shaving cream. The marketing push is being led by Jones' management team at The Firm. (Billboard.biz)
• Music and social networking continues to get more new ideas and more venture capital. One of the newest companies is Fuzz. The site allows bands to set up profiles and sell their music. (Fuzz, via CMJ)
• Seventy-two House members oppose a merger between satellite radio companies XM and Sirius. (Radio Ink)
• RealNetworks' Rob Glaser answers questions on the new Real Player 11, Real's file formats and the Rhapsody music service. (Rhapsody Blog, via paidContent)
• Australian rock band Airborne, dumped by Capital amidst the shake-up at EMI, just signed to Roadrunner. (The Age)
• Though it was just down the road from Vanderbilt, I was unable to attend the Leadership Music Digital Summit 2007 yesterday in Nashville. Paul Resnikoff from Digital Music News was there and has posts on the familiar themes that emerged and the conversation about lack of scarcity in the digital world.
• MusicRow.com covered Terry McBride's speech at the conference. "We must move to monetize the behavior of the consumer, not try to change it," he said in a common refrain. I'd love to hear his thoughts on Qtrax, which attempts to monetize a behavior by trying to change that behavior so it is in line with the only type of licensing agreements that will allow for such attempts to monetize a behavior... (MusicRow.com)
• A Chinese court has ordered Yahoo China to delete links to free web sites that offer music downloads. Beijing's No. 2 Intermediate Court ruled Yahoo should bear some -- but not all -- of the responsibility for the copyright infringement. Warner Music Group, through the IFPI, sued Yahoo China for copyright infringement in January of this year. (Reuters)
• The IFPI's statement on the Yahoo China ruling said "the ruling promises to improve the whole environment in which the local and international music industry does business in China." (IFPI)
• The iinovate blog has a podcast and video interview with Pandora founder and Chief Strategy Officer Tim Westergren. (iinovate)
• A Bank of America analyst said of XM and Sirius "stand-alone values and merger synergy values likely are lower than previously estimated." Based on market valuations, he believes regulatory approval of a merger is 35-40%, but " FCC contacts believe that the percentage is trending lower." (RadioInk)
• Other Music, perhaps the ultimate tastemaker New York music store, has launched its digital download store. Downloads are 320kbps non-variable rate MP3 files. Said the introduction page, "It is very important to us that in this new era, real record stores run by real music fans can still survive and thrive."
• EMI issued a trading update this morning ahead of its announcement of earnings for its fiscal year ended March 31st. Revenue is expected to decline 15% year over year. Digital revenue is expected to increase 59% and will account for 10% of total revenue. Music sales (at constant currency) are in line with guidance, its publishing division has improved operating margin and earnings before interest, depreciation and amortization is expected to be £174 million. Two bullet points stand out. One says EMI is considering the securitization of its publishing assets. The other said the company is suspending dividend payments until its restructuring program has concluded. (Press release)
• Some analyst say a possibly deal with Warner Music Group would be complicated if EMI issues securities backed by its publishing assets. (Reuters)
• Yesterday the RIAA revealed sales figures for 2005 (total revenue down 6.2%, CD sales down 13%) and tried to put a positive spin on the situation. "Today's music marketplace has challenges, but it also offers reason for hope and optimism," said Mitch Bainwol in a statement. "The appetite for music is as strong as ever." (Washington Post)
• EMI's first quarter UK market share pulled even with that of Sony BMG at 16.1%. Universal Music Group was the top dog with 32.8% and Warner Music Group was fourth (of the four majors) with 9.4%. (The Scotsman)
• Warner Bros signed underground legend Murs, the Living Legends member whose previous albums have come out on Def Jux and Record Collector. (SOHH)
• Sirius CEO Mel Karmazin and NAB Radio Board Vice Chairman Russ Withers spoke about a XM/Sirius merger before the US Senate Committee on Commerce, Science & Transportation. Karmazin talked about "more choice at lower prices" and Withers warned of the dangers of a monopoly. (Radio Ink)
• Positive comments by analyst Richard Greenfield at Pali Research coincided with Warner Music Group's stock increase of almost 3%. This quote, though very non-committal, is about as positive as it gets for a music company right now. "The key question becomes whether or not the weakness experienced in [the first quarter] will persist throughout the year, and if the industry improves, how much, relative to [the first quarter]," he wrote in a research report." What Mr. Greenfield is getting at is WMG's release schedule, which is all but certain to improve in the second quarter. Frankly, it would be sad if a stock moved because an analyst pointed out the natural ebbs and flows of a music company's release schedule. That should already be priced into the market cap. (New York Business)
• A report says Bertelsmann paid EMI up to $100 million to settle the Napster lawsuit. I'm not playing Mr. Righteous, here, but guess how much EMI artists will get? (Times Online)
• Rap duo Youngbloodz has sued Sony BMG for $50 million. If you guessed royalties, you guessed wisely. (Billboard.biz)
• Jake Paine of AllHipHop.com bemoans the end of underground (backpacker) hip hop...and just as Aesop Rock releases an exclusive track for Nike. (AllHipHop.com)
• Ben Fritz of Variety on the continued campaign -- Pakman and von Lohman are, quite naturally, quoted in the article -- to rid DRM from music. There are always a lot of articles on the subject, but this one has a good variety of viewpoints. That variety is the reason the debate continues and change is rare. eMusic's Pakman has a good proposal: Try ditching DRM on small scale and then measure the results. It's the "Give It A Shot and See If You Like It" pitch. "Our position has always been that they should give us some stuff from the back catalog that isn't selling on iTunes and see if we can create some upside," he said. "We're not asking for Jay-Z, but it doesn't seem that the Clash's second album needs DRM anymore." (Variety)
• The National Association of Broadcasters, writes the WaPost's Sam Diaz, is playing both sides on the XM-Sirius merger debate. On one hand, it says Clear Channel's collection of local radio stations is not in competition with satellite radio. On the other hand, it is trying to convince the FCC that competition with satellite radio should allow radio companies to own more local stations. (Washington Post)
• To cut is (probably not) to cure: EMI laid off an undisclosed number of employees in Canada. (Billboard.biz)
• The EU is looking at whether or not the Sony BMG merger has raised CD prices. A survey sent to record companies and trade group asks, "Have the majors shown a parallel behavior, in particular in terms of prices before the merger? Did the merger have an effect on such parallelism?" Honest answers please. (Bloomberg News)
• The newly-created House Antitrust Task Force will hold a public hearing next week on the proposed merger between Sirius and XM. (The Wall Street Journal)
• Internet radio listening jumped 26% in 2006. AOL's radio network, at 15.25 hours per week, is the most listened to online radio network. (Radio Ink)
• The UK government responded to a petition to ban DRM. In short, it is not jumping on Norway's bandwagon. Excerpt: "DRM does not only act as a policeman through technical protection measures, it also enables content companies to offer the consumer unprecedented choice in terms of how they consume content, and the corresponding price they wish to pay." (Number-10.gov, via Tech Digest)
• The state of music retail in Columbia, Ohio. (The Other Paper)
• The state of music retail in Belfast, Ireland. "The demise of the independent sector has been rapid, brutal and in inverse proportion to the rise of downloading and the digital revolution." Actually, I think the demise has been in direct proportion to the rise of downloading and the digital revolution, but I get what they're saying. (Belfast Telegraph)
• EMI wrote Warner Music Group and highlighted its regulatory concerns over a possible acquisition. (Reuters)
• Andy Gershon lands at Epic Records -- as executive VP -- after departing V2. (Billboard.biz)
• Indie retail legend Reckless Records is expanding to a third Chicago location. (Chicago Reader, via Fifth Disc)
• Sirius CEO Mel Karmazin predicts a better than 50/50 chance of getting regulatory approval for a merger with XM. Analysts aren't so optimistic. I'm not either. (BusinessWeek.com)
• EMI is taking the entire 15th floor of a waterfront office building in Jersey City. (The Real Estate)
• Puretracks announced it is offering music in the MP3 format from labels such as Arts & Crafts and Beggars Banquet, which are already available DRM-free elsewhere. (CBC)
• XM and Sirius agree to merge. A "$13 Billion Merger of Equals" they say. (Press release)
• Tower Records founder Russ Solomon has signed a lease at the old Tower Records building on Broadway in Sacramento, CA, and will open a record store in April. (Sacramento Bee)
• Enders Analysis points to a major problem for CD sales that goes beyond consumer sentiment. "The total retailing space that will be lost in 2006 and 2007 is something of the order of 20%." (Times Online)
• Billboard's MarketWatch weekly sales report, which visually compares current sales to the previous two years. (MarketWatch PDF)
• With the DualDisc all but forgotten -- nice idea, bad execution -- let's start talking about Blu-ray. On March 20, Sony BMG will release "Destiny's Child: Live in Atlanta" on Blu-ray for a reasonable $19.95. (High-Def Digest)
• Jon Healey on the music industry, softening sales, the emergence of PlayLouder and the gradual acceptance of the blanket license. (Los Angeles Times)
• It's open letter season. Here's one from Macrovision's president and CEO. ""The solution is to accelerate the deployment of convenient DRM-protected distribution channels -- not to abandon them." (Top Tech News)
• 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)
Today a U.S. District Court judge ruled the major labels' lawsuit against XM Satellite Radio can proceed (read AP article).
Background: Atlantic Recording, BMG Music, Capitol Records and other music companies sued XM for allowing songs to be recorded and store on portable XM receivers. The labels argue they have licensed their content only for broadcast, and that the creation of a digital copy makes XM a distributor as well as a broadcaster.
The judge on the the justification for the lawsuit:
"The record companies sufficiently allege that serving as a music distributor to XM + MP3 users gives XM added commercial benefit as a satellite radio broadcaster."
The judge on XM's claim it is protected by the Audio Home Recording Act of 1992, which allows individuals to record music played on broadcast radio:
""It is manifestly apparent that the use of a radio-cassette player to record songs played over free radio does not threaten the market for copyrighted works as does the use of a recorder which stores songs from private radio broadcasts on a subscription fee basis."
Additional reading:
• The EFF's analysis of the lawsuit
• Washington Post: "A Music Player Only the RIAA Can't Love." A look at the Inno, the device at the heart of the lawsuit.
• BusinessWeek.com: "Copyrights And Wrongs." I disagree with the main thrust of the article. This lawsuit isn't "part of the futile effort by entertainment companies to control how customers use their products." Different uses of content require different licenses. Broadcasting and distributing are different activities with different values to the end user.
• True to its word, Warner Music Group declared another dividend. This was announced on December 29 and was $0.13 per share, or $19.4 million in total. WMG has said it plans to pay quarterly dividends in an amount not exceeding $80 million per year. (Read press release)
• The on-again, on-again talks of a merger of Sirius and XM was the perfect satellite radio article for January 1st. The story rolls over from 2006 and everybody is still waiting for the two to tie the knot. The New York Times' Eric A. Taub took a look at the two companies and their longing for each other. And why shouldn't they want to hook up? Each is much like the other. One analyst said, "Customers cannot tell the difference between the two services." The other message of the article was the two companies' similar cost structures. "Clearly, a merger makes sense from an investor’s point of view to reduce costs, and to have a better return," said the CFO for Sirius. (Read article at New York Times)
• Maybe it's possible to gauge the health of the P2P market by the number of P2P companies willing to advertise at a P2P-friendly, anti-RIAA website. P2Pnet.net founder Jon Newton wrote the site "is one the verge of going offline" as income as dropped 80% through 2006. In case you haven't read the site -- and I would not recommend it -- P2Pnet.net covers the file-sharing market with little objectivity and much passion. (Read article at P2Pnet.net)
• Radio giant Entercom Communications, which owns 105 radio stations around the country, will pay $4.5 million to end Eliot Spizter's payola probe. The company will pay $3.5 million to fund music education and appreciation programs, and pay $750,000 to the state of New York. Among the reforms Entercom agreed to are refusal of payments and other inducements from record labels in exchange for radio play, banning payments from independent promoters, and the hiring of an internal compliance officer to monitor promotion practices. (Read AP article and Spitzer press release)
• Hot 97 has partnered with Amp'D Mobile. The NYC station will be streamed exclusively to Amp'D Mobile customers, while Hot 97 listeners can purchased Amp'D Mobile phones at www.hot97.com. (Read article at Radio Ink)
• An interview with Mel Karmazin, CEO of Sirius Satellite Radio. On the possibility of a merger with XM: "Who knows? Obviously, consolidation has, in my opinion, been successful in the media business. ... I certainly think there would be advantages if the two companies merge, with cost-savings and the like, but our business plan doesn't contemplate that. There's no reason to believe that XM has any interest in selling themselves." (Read article at The Hollywood Reporter)
• Beyonce will record a Spanish version of "Beautfil Liar" with Shakira. The track will be included on a new edition of B'Day along with three other Spanish-language tracks. As Shakira knows, tossing a new song on an old album and then calling it a new version of the same album is a really good way to improve sales. (Watch interview at Univision, via Billboard.biz)
• Embattled Russian music site AllOfMP3.com issued a brief response to a lawsuit brought by major music companies. The company called the lawsuits "imprudent" and bruskly noted they were filed in New York while the company "operates legally" in Russia. Music groups allege massive copyright infringement. The Russian government has pledged to address U.S. complaints against the download site, and Visa and Mastercard now refuse transactions at the site. (Read press release)
• Sony Urban will be folded in Columbia, and Lisa Ellis was named Executive Vice President, Sony Music Label Group. Hits has the full text of an email accouncement from Howard Stringer. (Read article at Hits or this one at Billboard.biz)
• Phil Quartararo, EVP of EMI Music North America, is leaving to start his own strategic marketing company. (Read article at Variety)
• Sevendust and its label, 7Bros, have partnered with Warner Music Group's Asylum Records. Alpha is slotted for a March 6, 2007 release date. Asylum, along with Cordless and East West, is part of WMG's Independent Label Group. Much ado has been made about WMG's digital gains, but one of the real successes has been Atlantic's deals with a few indies. Downtown and Eleven Seven each had a big year, thanks to Gnarls Barkley and Buckcherry, respectively. And Cordless looks to be establishing its identity. (Read article at IGN.com)
• Snocap hired two execs, Bruce Taylor and Karin Visnick. Taylor will be the VP of marketing while Visnick will be VP of Product Management. (Read press release)
• A bold prediction: XM Satellite Radio Chairman Gary Parsons said regulations would have no reason to think a merger with Sirius would harm compeition. "We are operating in a much larger marketplace than satellite radio ... The competition is predominantly terrestrial radio," he said. (Read article at MarketWatch)
• It's that time of the year: The Hollywood Reporter laid off eight employees, including music editor Chris Morris. The publication is owned by VNU. (Read post at Variety)
• Want to hear "Thinking About You," the Norah Jones track that Yahoo! Music will sell in MP3 format? Click for your choice of WM, RA or Quicktime and prepare to get mellow.
• American Scientist has a review of Chris Anderson's "The Long Tail." Classic first line: "If a book about the demise of the best seller becomes a best seller, does that undermine the book's credibility?" After reviewer Brian Hayes ran through some of Anderson's examples, he came in with some feedback. "Unfortunately, quantitative evidence supporting this proposition is hard to come by," he wrote. In the end, Hayes was disappointed by the lack of "forensic economics" but thinks "Anderson may well be right about the waning influence of the hit parade and the greater scope for ideas without mass-market appeal." (Read article at American Scientist)
• Austin City Limits Studio Theater will be a $15 million, 2,000-seat venue that will be part of a larger, $225 million project in Austin, Texas. Forty nights a year it will be a soundstage for tapings of "Austin City Limits." Willie Nelson and his nephew Freddy Fletcher are co-partners with Stratus Properties Inc. (Read AP article)
• Fontana Distribution beefed up its roster by signing an exclusive distribution deal with Six Degrees Records, which celebrates its tenth anniversary in 2007. Next year the label plans to release albums by Bebel Gilberto, Ojos de Brujo, Spanish Harlem Orchestra and CéU. Six Degrees also announced a new digital only series of albums that will aim to break new artists. The series' first release will be the five-track Emerging Artists Sampler Vol. 1. It has songs by Rara Avis, DO (featuring Omar Sosa & Greg Landau), ZAMAN 8 and Hafez Modir, MNO, and Jef Stott.
• Sirius reports holiday sales are slower than expected and now expects 5.9 million to 6.1 million subscribers by the end of 2006, which would equal 2.6 million to 2.8 million new subscribers for the year. (Read article at MarketWatch)
• BusinessWeek's Olga Kharif on the new generation of software meant to help sites like YouTube identify prohibited content. MySpace is testing an automated take-down tool, and Google is expected to have a similar technology installed in YouTube by the end of the year. (Read article at BusinessWeek.com)
• Pontiac has a partnership with Virgin Megastore. The auto manufacturer is sponsoring Virgin Recommends at ten Megastores. In return, Virgin will act as musical expert to Pontiac. (Read article at Billboard.biz)
• EMI became the first major label to sign up with eListeningPost, a new viral marketing service that allows bands to send out secure versions of songs or videos to distribution lists. After a one-time set up fee, the service costs $9 per month. (Read press release)
• Reminder: The FCC will hold a public hearing on media ownership in Nashville, Tennessee on Monday, December 11 at 1pm. The event will be held at Belmont University's Massey Performing Arts Center.
• RIP Logan Whitehurst, drummer for The Velvet Teen, and Ronnie Lipin, famed music publicist and manager.
• Bad news for The Beatles, good news for suporters of free culture: the UK will not extend copyright on sound recordings to 95 years from the current period of 50 years. The Beatles' earliest recordings are from 1963, which means in 2013 they will become part of the public domain. (Read article at BBC News)
• Warner Music Group will announce earnings on Friday. Wall Street expects less than a penny a share for the quarter. Should be interesting. WMG hasn't been tearing up the charts in the latter half of 2006. TI has sold well, and James Blunt is still hanging around. Digital revenues were flat last quarter, so I'm curious to see where they'll be this time. At the very least, WMG will be back in the news. Its competitors have been making all the noise lately, and Edgar Bronfman looks to have put his personal publicity campaign on hold.
• Virgin wishes it had a revenue sharing deal with this band: the Rolling Stones eased the pain by grossing $437 million in ticket sales since the fall of 2005. That was tops in the industry. (Read article at Billboard.com)
• Mel Karmazin, CEO of Sirius Satellite Radio, is up for a merger with competitor XM Satellite Radio and does not think regulators would get in the way. His prediction for future revenues: "By 2010 we will have $3 billion in revenue and $1 billion in free cash flow." (Read article at SmartMoney, via paidContent)
• Norteño singer Valentin Elizalde was shot to death in the border town of Reynosa, Mexico. Reports indicate it was a gang-related attack. (Read article at Los Angeles Times)
• Robert Hilburn has a good and lengthy article on Jimmy Iovine. (Read article at Los Angeles Times)
• It's working down under: The Australian music market rose 5.6% in the first half of 2006. (Billboard.biz)
• Microsoft has released a patch to to prevent FairPlay4WM from stripping the DRM from tracks protected by Windows Media 10 and 11. (ZDNet)
• An analyst at Banc of America Securities advises, "We continue to recommend the XMSR/SIRI pair." (Radio Ink)
• AOL Music has expanded to include a la carte downloads, and videos as a part of the subscription service. Unfortunately it requires Internet Explorer for downloading and syncing. (macnn)
• A judge determines the Beatles may move ahead with their decades-old lawsuit agsinst EMI. (Bloomberg)
• Nonesuch has donated $1 million to Habitat for Humanit to aid Gulf Coast hurricane victims. The money comes from sales of Our New Orleans, a benefit released last December. (Press Release)
• There's a problem with this article on Universal's licensing deal with ad-based P2P site Spiral Frog: It assumes lawsuits and experimentation with different business models are mutually exclusive events. That's poor logic. Don't expect the RIAA's lawyers to lighten up. If anything, such licensing deals deepens the line they've been drawing in the sand for years. (Forbes.com)
• Between the two of them, XM and Sirius have 11.7 million subscribers and lost almost $1.5 billion last year. There are calls from around the financial world for the two companies to merge and get on the road to profitability. (The Hollywood Reporter)
• Mastodon drummer Bränn Dailor comments on the leaking of his band's Atlantic Records debut by an English journalist. (UltimateGuitar.com)
• If you have noticed, children's music is big, big business. Braincandy, a Seattle-based company that produces DVDs and CDs, has signed a distribution deal with Warner Music Group's Rhino Entertainment. The agreement calls for Rhino to be the exclusive supplier to large retailers like Wal-Mart and Target. (Press Release)
• Absolutely meaningless: iMesh boasts over its re-release of P2P application BearShare, which is now a legal, filtered P2P service that offers a subscription service as well as a la carte downloads. The service's licensed tracks are in PlaysForSure format. (Digital Music News)
• This is sure to get a big reaction on the www.: YouTube is in talks with labels to post thousands of videos online to be viewed for free. Lables will insist on getting paid, naturally. (Reuters)
• The Hollywood Reporter tallies the poor performance of satellite radio stocks and looks at their implications. (The Hollywood Reporter)
• The Microsoft Zune is rumored to come pre-loaded with the music of Hot Chip, 30 Seconds to Mars and Cansai de Ser Sexy. (Zune Insider, via Hypebot)
• Former EMI digital exec Ted Cohen, who recently left to form a consultancy group, has been named to the board of directors of Blue Frog Mobile, Inc. (Press Release)
• Digital Music Group signed long-term distribution and digital rights deals with Reggae Nation and Copasetic Records. It also signed a digital rights deal with Invisible Records. (Sacramento Business Journal)
• Regulators in Iceland will meet later this month to ponder legal action over the iPod's lack of interoperability with competing music stores. It's largely symbolic. (BusinessWeek)
• RIP Duke Jordan, bebop pianist. (JazzTimes)
• Entertainment lawyer Chris Castle has as thorough post on the RIAA's lawsuit against XM over its Inno receiver/player. He thinks the Consumer Electronics Association believes that if Pioneer, which manufactures the Inno, pays the Audio Home Recording Act levy then that qualifies as a kind of content license. "Sorry guys," he writes, "but that is an absurd position." It's a long post but absolutely worth reading in its entirity. A little blog mention can't do it justice. (Music•Technology•Policy)
• The Guillemots' Through The Windowpane (Fantastic Plastic) has a Metacritic average score of 79 through five reviews. Stylus gave it an A rating ("one of the most creative, musical and genuinely moving records to come from these shores in an age") while The Guardian , from the band's home turf, gave it a mediocre three out of five stars ("A microcosm of a debut that, frustratingly, juggles promise and excess.") (Metacritic)
• Folks at The Velvet Rope are thinking Ryko Distribution will get folded into ADA. Makes sense. Given its parent company, Warner Music Group, is on the cost efficiencies warpath, there seems to be too much overlap to not combine to two distributors. (The Velvet Rope)
• EMI is said to be seeking private equity backing to bid for Bertelsmann's music publishing division, a move would that would leave EMI with the resources to bid for Warner Music Group. (Reuters)
• Another reason not to put major labels on a deathwatch: Universal Music is getting into the TV production business. The company announced its Globe Productions division will produce reality-based TV shows that will use artists on its labels' roster. (The Guardian)
• British company UBC Media announces a download service that allows digital radio listeners to instantly buy a song as it is broadcast. (Reuters)
• Digital Music Group has acquired Chancellor Records. The deal encompasses over 2,000 songs from the label that had hits by Frank Valli and Fabian. The acquisition fits with Digital Music Group's stategy of selling oldies and out-of-print songs at music download stores. (DMN Newswire)
• Rumors of layoffs at Island Def Jam. (The Velvet Rope)
• An article on Tune Town in Tewksbury, Massachusetts, and the record store's difficulties as music sales have fallen since 2000. (Lowell Sun)
For a good recap of the developments in the RIAA's lawsuit against XM, and the public relations campaign XM has undertaken as a result, read Carlos Bergfield's article at BusinessWeek Online titled "XM vs. The Industry -- And Congress."
Here's the heart of the matter:
"What the recording industry doesn't like is the fact that subscribers can go back to a block of recorded programming and chop it up into different songs with the help of the players, which label songs individually. The PERFORM Act would make this illegal, but the RIAA says XM is already breaking the law."
XM is attempting to motivate its subscribers, which is far cheaper than defending itself in court. Gadgetall has an email that XM sent out to its subscribers. An excerpt:
"They don’t get it. These devices are clearly legal. Consumers have enjoyed the right to tape off the air for their personal use for decades, from reel-to-reel and the cassette to the VCR and TiVo. ... Satellite radio subscribers like you are law-abiding music consumers; a portion of your subscriber fee pays royalties directly to artists. Instead of going after pirates who don’t pay a cent, the record labels are attacking the radios used for the enjoyment of music by consumers like you."
XM pays royalties directly to artists? That's a funny, feel-good PR thing to say. (I guess consumers don't need to know how artists get paid for radio airplay.) Anyway, the issue here is whether or not the XM portable device's creation of a digital file requires an additional license. Does anybody expect the RIAA to sit this one out because the songs can't be transfered off the device or because the sound quality is relatively poor? Me neither. Let's see how this one plays out.
• Mo Ostin, formerly Warner Bros Records chairman, may return to the label as a consultant. (Hollywood Reporter)
• A profile on Mike Dungan, president and CEO of Capitol Nashville. (AP)
• Finally, a hint of interoperability: Sirius and XM are pushing for a device that will work on both satellite radio networks. The two companies are developing a joint venture, Interoperable Technologies. (Digital Music News)
• "Kill Your Idols," a documentary about three decades of New York's underground rock scene (Sonic Youth, Yeah Yeah Yeahs) will be distributed by Palm Pictures. (Reuters)
• A study says Sirius has pulled even with XM, and the reason is Howard Stern. (Billboard Radio Monitor)
• Cingular and Warner Music announced their answer tones yesterday, which will replace with a song the ringing sound usually heard when a call is going unanswered. (UPI)
• The questionable legaltiy of Russian download sites have become such a talking point they've reached the "paper of record." (NY Times)
• Mute has signed British band ¡Forward, Russia! Music bloggers around the country are probably doing cartwheels.
• Engadget's Peter Rojas gives the new Sansa e260 a very positive review ("the e260 gets a lot more right than it gets wrong") and says he'd take it over the iPod Nano. (Engadget)
• Starbucks will offer an exclusive Diana Ross collection comprised of songs recorded in the '70s but never released. (Digital Music News)
• Sirius reported a net loss of $458 million in the first quarter -- more than double the loss in the previous year. (NY Daily News)
• More Sirius: Sirius CEO says recent deal with majors for the S50 portable device could be a one-time deal. (Billboard Radio Monitor)
• The skeptics on the potential of Napster's new free service could fill up Madison Square Garden...and those are just the analysts who do this for a living. (BusinessWeek.com)
• The Features claims it was released by Universal because it refused to "cover song for a large corporation to be used in a commercial" and include it on its next record. (Entertainmentwise.com)
Wondering what the hullabaloo is about in the Senate hearings on "Parity, Platforms and Protection: The Future of the Music Industry in the Digital Radio Revolution"? The music industry seems worried that it isn't being properly compensated -- so what's new? -- and wants to settle the tab. Red Herring summed it up well:
"The hearings struggled to define what constitutes music performance versus music distribution in a rapidly changing market."
What's at stake here is additional revenue that would be paid to labels for the digital copies of songs broadcast on satellite radio (stations already pay for performance rights, which covers only the broadcast). Warner Music Group's digital guru, Edgar Bronfman, Jr., thinks it's not fair to allow satellite radio "to turn performances into distributions without paying distribution licenses."
And then there's the PERFORM Act, which stands for Platform Equality and Remedies for Rights Holders in Music Act of 2006. At a post at the Public Knowledge blog, Gigi Sohn quotes copyright lawyer Bob Schwartz's take on the the PERFORM Act:
"The PERFORM Act is the latest 'sky is falling' bill pushed by the recording industry. This bill would prevent satellite radio subscribers from recording and listening to programming that they have paid for, unless they pay an additional license 'tax' to the record labels on a song-by-song basis (which, in addition to cost, would severely limit the repertory that could be offered to the public)."
Public Knowledge's page on the hearings is a great resource for information relating to the PPP bill.
View of PDF of the PERFORM Act here.
• Meet Vernon Irvin, an executive at media security company VeriSign who has worked with Jamster, which VeriSign purchased in 2004 for $270 million, to bring ringtone's into the big leagues. In 2005 Jamster made nearly $600 million. Highly recommended reading. (SOHH.com)
• Citing an increased subscriber base and its deal with EMI, UBS analyst Lucas Binder is optimistic about Sirius Satellite Radio ahead of the company's first quarter results. (Forbes.com)
• Music and fashion...together forever. Lyric Jeans and Warner/Chappel Music have signed an agreement that will give Lyric Jeans non-exclusive access to approved songs from the music publisher's catalogs. (Investors.com)
• Toby Keith handed out exclusives to four different retailers for the release of his latest album, White Trash With Money. Wal-Mart got a special two-pack CD/DVD, Best Buy got a bonus DVD, Target got access to pre-release tickets and Circuit City got a free koozie with purchase. I don't mind saying I had to Google the word koozie to find out what it is. (In-Store Marketing Institute)
• One in three college students downloads music illegally, according to a study. Nearly three-quarters believe the practice helps up-and-coming musicians. Coolfer's estimate: About 0.4% actually download up-and-coming musicians. (TheDartmouth.com)
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