• On December 4, Starbucks will sell its first first digital video card release, the John Lennon Video Album. The card, priced at $24.98, is purchased and activated at Starbucks. At iTunes, the owner of the card enters in the card's access code to download the video album. The John Lennon Video Album is being co-released by Capitol/EMI Music Marketing and iTunes. (Video Business)

• Classical label Deutsche Grammophon (Universal Music Group) will launch tomorrow a download site that offers almost 2,500 albums -- 600 of which are out of print on CD. All downloads will be 320 kbps, unprotected MP3 files. (Billboard.biz)

• Arbitron will delay the roll-out of its Portable People Meter electronic radio-ratings system in nine markets. (Wall Street Journal)

• Primary Wave has inked a deal to handle the marketing and administration of QED International's music rights. (Variety)

Posted by Glenn at 8:47 AM | Link
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• Starbucks' Hear Music has signed its first developing artist, Hilary McRae. Previous artist signings -- Paul McCartney, James Taylor, Joni Mitchell -- have come to Starbucks not only with built-in audiences but considerable legacies. Getting press attention for them has been easy. McRae and Hear Music will start from scratch. The success of McRae will tell us far more about Starbucks' ability to sell music than will its previous three signings. Clue #1 can be found at Google news: As of this morning, there is only one news story about this new artist signing. When the previous three signed the news was everywhere. Paul McCartney's high level of awareness, for example, surely played a huge part in his sales. How will Starbucks customers flock to an unknown artist? Let's wait and see. Update: The publicist pointed out it was premature at the time of this post to talk about Google news numbers. The press released was not serviced until after this post was published. Duly noted. I will mention, though, that Google News has only 14 press mentions a day and a half later.) (Billboard.biz)

• More on yesterday's news that Terra Firma is considering divesting EMI's distribution business: A spokesperson for the private equity firm confirms it is conducting a strategic review of EMI's operations and will make a decision by roughly February. As for those discussions with other firms about taking a stake in EMI's equity, the spokesperson said, "This is normal course of business - all major private equity deals are syndicated in this way." More thoughts at Silicon Alley Insider. My quick thoughts: Terra Firma should want extremely consolidated ownership so it can cut to cure and maximize its gains when it's time to cash in. But bringing in other investors right now isn't exactly a sign up distress. Selling off a distribution division would be par for the course and might force EMI to focus even harder on digital growth. (The Times Online)

• The Who are going to launch a $50-per-year subscription service that will allow users access to a message board, full length videos, audio (streams, and judging from the description some tethered tracks that can be uploaded to select portable devices), . The service will launch November 5 and is obviously for extremely serious fans only. (Harp, via Listening Post)

• MySpace will work with startup company Zazzle.com to enable musicians to allow musicians to create virtual stores for merchandise and allow fans to customize items such as T-shirts. Zazzle will use a widget to take consumers to a store that the artist has set up, and the company says merchandise will be manufactured and shipped within 24 hours of placing the order. The company is working with some merchandise licensees to obtain sublicenses for artists currently with contracts. (Wall Street Journal)

• What does a nine-year-old think about file-sharing? "Why would they put [music] on the internet and invent mp3 players if it was against the law?" (TorrentFreak, via Kottke)

• The F.C.C. has announced the panelists for Wednesday's media ownership hearing in D.C. They include Bob Edwards from N.P.R.'s "Morning Edition," the Rev. Jesse Jackson and Capital Broadcasting President/CEO Jim Goodman. (Radio Ink)

Posted by Glenn at 9:20 AM | Link
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Why is Concord Music Group, which has a joint venture with Starbucks' Hear Music, merging with a film production company based in Los Angeles (and owned by an Australian company)? Entertainment synergies, and maybe a little bit of elusive theatrical success for Starbucks.

CMG will merge with the film production unit of entertainment Australian company Village Roadshow. CMG will own a 60% controlling stake in the company. The new company, Village Roadshow Entertainment Group, will pay Roadshow up to $86 million for the stake in the company.

The merged companies will operate as separate entities and will look for cross-platform opportunities. Starbucks needs a few cross-platform winners. While it has has much success with music, it has thus far failed in its movie ventures.

Posted by Glenn at 8:06 PM | Link
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• 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
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• Album sales dropped 2% last week and were 9% lower than the same week last year. Year to date, album sales are down 14%. Sales of digital tracks rose 3% last year and were 52% higher than the same week last year. For the year, digital tracks are up 48%.

• Lenders could be jittery over Terra Firma's buyout of EMI. "It is understood that Citigroup, which is financing the acquisition of EMI by Guy Hands’s Terra Firma, has not given its approval to extend a key deadline for shareholders to vote on the deal." (Times Online)

• Joni Mitchell signed to Starbucks' Hear Music label, which will release her album Shine on September 25. I expect the media blitz surrounding her move to Hear Music will be beneficial to sales of the album, just as it was for Paul McCartney. The label's third of fourth gray-haired signing, though, should expect less attention. (Billboard.biz)

• I forgot to post this yesterday: The U.K. government does not want to extend copyright on sound recordings to 70 years from 50 years. The government followed the recommendation of Andrew Gowers given late last year. The BPI and other trade groups reacted by pledging to continue its campaign for the longer copyright. (Inquirer and Hollywood Reporter)

• XM president and CEO Hugh Panero will leave the company next month. COO Nate Davis will take over as interim CEO. In the event Sirius merges with XM, Sirius CEO Mel Karmazin will take over the reins of the combined company. (Radio Ink)

• The lineup for the Vegoose music festival was announced yesterday. It's an odd mish-mash of old (Public Enemy, Cypress Hill) and new (Ghostland Observatory, Battles). Rage Against the Machine, Daft Punk, Queens of the Stone Age and Muse headline. (Pollstar)

• Universal Music Publishing Group has signed Ric Ocasek to an exclusive publishing administration deal. Under the deal, UMPG will have world-wide administration and sync rights to Ocasek's catalog of hits. (Press release)

• CinemaNow, an online distributor of online movies, signed licensing agreements with Sanctuary, EMI and Sony BMG to offer music videos and concert performances. CinemaNow and WatchMusicHere.com will offer more than 6,000 videos. Music video downloads will be priced at $1.99 and concerts and long-form videos will go for $9.95 to $14.95, or $2.99 to $3.99 for rental in the WMV format. (Press release)

• Lee Gomes has an article on the industry's drive to expand royalties for music. "Most lay people surveying this terrain quickly conclude that it would be more efficient to have everyone involved in music creation, be they record labels or songwriters, aligned on one side and negotiating together, with the same occurring across the table with music users, be they radio stations or Web broadcasters. But there is little chance of that happening. The legal, financial and institutional interests all diverge." (Wall Street Journal)

Posted by Glenn at 8:19 AM | Link
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• If you want to bid on EMI, you have until this Thursday to put in a bid. (Reuters)

• An interview with Barnes & Noble Borders chief executive George Jones, who has aggressive digital strategies that include in-store downloading. "There are tons of people 35 and older who don't own an MP3 player, or if they have one, they don't know how to operate it. These are people who just won't take the time to learn how to do it. I'm like that myself. I love music, but I don't download music onto my iPod. We think there is a place for a retailer to offer a comfortable environment that offers guidance and the opportunity to discover products that provide knowledge and entertainment. We'll show you. Bring in your MP3 player and let us know what you want. We'll download it for you." He speaks a bit more about music later. Check it out. (Wall Street Journal)

• Starting Wednesday, Starbucks will offer exclusive EPs in a branded section of the iTunes music store. Rissi Palmer, Alice Russell and WinterKids will receive airplay in Starbucks locations as well as placement at the iTunes page. (Digital Music News)

• S-Curve Records will be re-launched by founder and CEO Steve Greenberg. To fit with the times, the label will branch out to publishing and artist management. Greenberg stepped down as Columbia Records' president in June of last year. (Billboard.biz)

• Microsoft's Zune portable media player will be on show at Live Nation venues around the country. Zune Spots, held in converted freight containers, will allow concert goers to try the Zune device. Consumers can also win a trip to see a band at a Live Nation venue through the Zune Zoom Away competition. If you're looking for a signal about Microsoft's commitment to the Zune's development, I think a series of converted freight containers is a good place to start. (Press release)

• Sony BMG and Dada have launched a joint venture called Dada Entertainment. The venture will offer "direct-to-consumer entertainment services with integrated mobile and web offerings." I wish I had an example of what that means exactly. (Press release)

• Nominees for the Mercury Prize were announced this morning. On the list are Jamie T, Arctic Monkeys, Bat for Lashes, Klaxons, Fionn Regan, Amy Winehouse, The View, Dizzee Rascal, Maps and Basuiat Strings. (XFM)

Posted by Glenn at 7:24 AM | Link
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• Investment bank Crosby Capital Partners is preparing a counterbid for Sanctuary Music Group. Last week Sanctuary accepted a takeover bid from Universal Music Group. (The Guardian)

• In a victory over rival format HD DVD, Blockbuster said it will favor Blu-Ray DH discs. (Reuters)

• Paul McCartney's new album sold 161,000 copies in its first week of release. Over 60% of those sales came from "non-traditional" stores, which includes download stores (iTunes, eMusic), online CD sellers (Amazon.com) and non-traditional brick-and-mortar retail (Starbucks). Since digital accounted for only 10% of sales, the bulk -- roughly 81,000 units -- of the non-traditional number can be attributed to Starbucks sales. (Pop Machine Blog, via Digital Audio Insider)

• How much did ousted EMI Music chief Alain Levy get on his way out the door? £4.6 million (US$9.09 million). (The Guardian)

• David Ring has been named EVP of business development and business affairs for Universal Music Group's eLabs, the division that handles the company's online and mobile sales as well as new media opportunities. (Variety)

• A profile on Belgian label Crammed Discs, home of Bebel Gilberto, Cibelle, Kocani Orkestar and Konono No. 1. (AP)

Posted by Glenn at 7:54 AM | Link
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• Starbucks and Concord Music Group have formed a new record label, Hear Music, that will release titles for both internal and external distribution. Seems like odd timing given that company founder Howard Schultz has been worried about the chain's brand recently. (Billboard.biz)

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

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

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

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

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

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

Posted by Glenn at 9:17 AM | Link
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• The New York Times had an article yesterday about the "Starbucks aesthetic." The article is not about just music, but the company's music retail power is part of the story. For those lucky few tiltes that are sold at Starbucks, sales immediately jump. What does Starbucks look for in an album? "We do our best with a new artist when there’s sort of an NPR buzz going on around him, the stars-in-the-making," said the manager of compilations and music programming. (Read article at Amherst Times)

• KNGY in San Francisco, which targets the gay and lesbian community, just turned two years old. Said owner Joe Bayliss, "We're No. 1 with men 25-54. We beat KGO, KNBR, KFOG." He's talking about San Francisco county; the station's signal does not reach all nine Bay Area counties. (Read article at San Francisco Chronicle)

• Not content to sift through MySpace pages looking for talent, EMI's Parlophone label has set up a digital drop box called A&R Tools where aspiring artists can upload their music and press kit. (Read article at New Media Age)

Posted by Glenn at 7:56 AM | Link
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• UK ring tone sales are down for the first time in six years. Said the director of Universal Music UK's new media division: "You can put it down to price, piracy and the Crazy Frog effect." The latter refers to how sick and tired people became from hearing "Crazy Frog" so much last year. (Read article at The Guardian)

• Two icons of the new music era have teamed up: Starbucks and iTunes. The music-selling coffee chain will get a branded section in the iTunes music store, and iTunes gets "significant signage" inside Starbucks locations. Looks like a win-win for these two superbly branded companies. (Read article at Billboard.biz)

• Digital gearheads all over the www. are talking Sony BMG's claim that 20% of its revenues come from digital. Could this have been a misstatement or a misquote? Last I heard, the company was sitting at closer to 10%. Sony BMG has 22% of the digital album market, but that doesn't mean digital equates to 22% of the company's share. Given the fact that Warner Music Group's last 10Q reported its digital revenues account for 11% of its total revenues, 20% for Sony BMG seems high. If you know the answer and have any insight, send me an email. (Read post at Wired's Listening Post blog)

• Downloadpunk.com launched a new feature called UploadPunk that allows bands, labels and aggregators to upload content and track sales. (Read article at Punknews.org)

• People are always shocked that vinyl still sells. Here's the 1,034th article this year that reacts in amazement to vinyl's continued strong sales. (Read article at The Telegraph)

• Well, how nice to see common sense in an article about digital music. The Chicago Tribune asks "Who needs record labels?" as long as bands can sell music at MySpace. The answers are given by indie bands and David Kusek, the vice president at Berklee College of Music. MySpace, they acknowledge, will help increase exposure of previously unknown bands, but signing with a label -- along with a good publicist and manager -- is still the best way for a band to succeed. (Read article at The Chicago Tribune)

Posted by Glenn at 8:14 AM | Link
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Starbucks recently announced it was phasing out its Hear Music media bars. The Seattle Post-Intelligencer reports on the chain's next step: digital media kiosks made by Seattle startup MOD.

The kiosks will offer 1.6 million songs, will allow people to purchase songs with a Starbucks gift card and can wirelessly download songs to some portable devices. "In our system, we envision creating many different types of endpoints -- either on a device directly or a cell phone," said chief executive Mark Phillips.

The article doesn't mention the file format of songs sold by the kiosks, but the product page for Endpoints at the MOD website makes mention of "flexible digital rights management schemes."

Posted by Glenn at 12:11 PM | Link
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On to Plan B. Consumers didn't take to the concept, so Starbucks is pulling out CD-burning kiosks from most of its Austin and Seattle stores. The chain, already a power in CD sales, had high hopes for its Hear Music media bars, but customers weren't responding.

Experts blame the iPod. Coolfer blames -- if there has to be blame put on somebody or something -- Starbucks for not giving consumers what they want. People don't want the CD to be a middleman unless it's a proper CD with packaging, not a CD-R. When kiosks can upload files directly to a customer's media player, then Starbucks will have a better chance of success with its Media Bars.

Back in December Coolfer posted about a report that business looked weak in the Media Bars, and quoted from a BusinessWeek article that called it "a sign that Starbucks is misreading its customers. The city is full of tech-savvy music downloaders who carry iPods, not portable CD players."

Follow the hardware, Starbucks, and you'll be fine.

Posted by Glenn at 10:56 AM | Link
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Starbucks is continuing its plunge into music and entertainment. The LA Times' Lorenza Munoz reports that the coffee chain will have William Morris Agency to help it locate film, music and book opportunities to sell in its stores.

The mixture of its core business with entertainment is part of the company's effort to create a good customer experience. Digital Music News quotes Starbucks president Ken Lombard in the MusEXPO keynote address as saying the company is "continuing to figure out how to create a world-class experience for our customers." Though the company isn't going to become a music company, Lombard did talk about how music plays into Starbucks' overall mission. "We are connecting with customers that no longer have a music experience," he said, referring to the "disenfranchised consumer." That's good news for record labels....since there seems to be no shortage of disenfranchised music consumers.

Posted by Glenn at 12:28 PM | Link
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