Vivendi announced its Q4 2008 earnings today (press release and PDF of earnings release). Universal Music Group posts a 0.2% drop in its 2008 revenue and a 7.8% decrease in its Q4 revenue (both in constant currency). Annual revenues for publishing, artist services and merchandise all increased due to acquisitions of BMG Music Publishing and Sanctuary in 2007. Those gains offset a 4.8% drop (in constant currency) in recorded music revenue in 2008.

UMG's 2008 revenue was €4.65 billion and EBITDA was €686 million, a 11.6% increase (in constant currency). Digital grew 31%. The press releases do not indicate what percent of total revenue is digital.

Those are very good numbers for UMG, all things considered. Fiscal 2009 will be more challenging as indicated by the slump in Q4 revenue. UMG's Q3 earnings did not take such a hit from the global economic turmoil. Q3 revenue increased 1.1% at constant currency, and the company's revenue through the first nine months of 2008 was up 3.5% at constant currency.

But UMG has set itself up for a good performance by keeping costs in check and integrating recently acquired assets. Those additions give it broader reach into not just publishing, which is more stable than recorded music, but also artist services (management) and merchandise. How those new facets to the 360-degrees model are integrated into the company will ultimately be the measure of UMG's diversification strategy.

Posted by Glenn at 7:15 AM | Link
|Earnings Releases||Universal Music Group|

Dell is offering the pre-loaded music bundles (announced a few weeks ago). Earlier today I browsed around the site and looked at the bundles and how they are integrated into the buying process.

The songs are all taken from Universal Music Group's catalog and have two sizes and price points: $25 for a 50-song bundle or $45 for a 100-song bundle. Each bundle has been created for average music fans and for maximum appeal. Since there are only six bundle themes, consumers aren't going to get bogged down in decisions.

The bundles have themes that describe the type of music and most can be purchased as a 50-song or 100-song set. "Sweatbands & Leotards" has uptempo rock, funk and disco. "Afternoon Delight" has an odd mix of songs that are supposed to "reinvigorate your afternoon." "The Classics" is a collection of classic music. "Blues Masters" has blues tracks ranging from BB King to Junior Parker. "The Freshman" is a 50-song collection from UMG's newer and/or more obscure artists (Nick Drake seems out of place here).

When buying a computer, the music (and video) bundles are offered after the sound card options and before the computer bag add-ons. The few options (six music bundles) is a manageable number that won't slow down the order process.

There are a couple key things to point out. First is the benefit of the bundle -- it's a win for both labels and consumers. Labels get greater incremental revenue, and consumers get a good amount of music for about half the price it would normally cost to download. While there are substitutes out there for $0.99 iTunes pricing that are competitive to the cost of these Dell bundles, the target consumer here -- the more casual, infrequent buyer -- is going to be less aware of them.

Second, these music bundles are part of a greater bundle -- the computer and its added components. Dell is very good at bundling goods and framing prices in order to maximize revenue. An additional $25 or $45 for a music bundle is small relative to the total cost of a computer. Pricing the goods as a bundle could result in greater sales than selling them goods separately. At least that's the goal.

Posted by Glenn at 3:19 PM | Link
|Universal Music Group|

When I talk to people about the future of selling music, I tend to bring up the importance of selling more music in new ways. If you give people more music than they actually need, and at a decent price, many will buy it. eMusic does it, but the majors haven't yet jointed the party.

One scenario I have laid out many times is getting music installed on your computer at the time of purchase. Make it easy to get a lot of music. Bulk purchases have a lot of potential if the right partners can be found. Even if the per-track price is lower than normal, the net impact will be very positive. In effect, it's time to capture the value in music gluttony. Selling a song at a time is getting the industry nowhere.

And that's exactly what Universal Music Group is going to do. Smart move. A step in the right direction.

Billboard's Antony Bruno has the article. He says playlists will have themes -- "No. 1 songs, Rock Titans, Blues Masters, etc." -- and will cost $50 for a 100-song playlist and $25 for a 50-song playlist. All files will be DRM-free.

Posted by Glenn at 3:15 PM | Link
|Universal Music Group|

Universal is the "is the next surprise for our investors," said the head of Universal Music Group's parent company. And he meant a good surprise.

Jean Bernard Lévy, the chief executive of Vivendi, gave the Financial Times an optimistic prediction for the fortunes of Universal Music Group and recorded music in general.

“I think [in] the music business, there is a strong likelihood that we are getting close to the lowest part of the cycle and we are extremely active in developing new business models, new sources of revenues.

"We are working with all the big names in the field of internet, in the field of telecom equipment companies, big media companies and this is a big opportunity."

He said Universal had emerged from the downside of the market as a clear leader of an industry that would soon be able to claim it had “reinvented a new era for the music business".

"I really believe we are at the turning point for the music industry and I didn’t say that two years ago."

Here's what Levy said in January of this year at Midem: "I think altogether today there is an exaggeration in the industry. Of course it is not doing that well, but look at us, we have flat revenues, a good two digit margins and it's not as dark as what many people describe." He even sounded fairly optimistic in October of last year.

Of course, in the last few years UMG has acquired not only additional publishing assets but management and merchandise interests. I sense his comments to the Financial Times were mostly about recorded music since it is the segment most associated with "the lowest part of the cycle."

These new business models are all racing against declining CD revenues. If they are successful, the combined growth of these new models have a chance to lead recorded music sales to a bottom and, not a moment too soon, an upward trajectory.

When I've modeled US recorded music sales, I see the bottom in 2010 or 2011 if some necessary -- and achievable -- outcomes take place. Ad-supported revenues need to really take off, subscriptions (as in bundled services like Comes With Music) needs to show very strong results by 2009, CD sales declines need to be in the very low double digits and digital downloads need to continue to grow at or above 20% per year (growth is good now, but it's been slipping). Mobile is a bigger question mark in my book. I'm more conservative there. I see ringtones being fairly flat and over-the-air downloads not playing much of a part in the market's growth. Subscriptions (such as Rhapsody and Napster) will lend little to no growth. Lots of 'ifs' there, but that is what is needed.

Unlike some optimism executives have offered over the years, Lévy's outlook is founded in actual progress rather than wishful thinking. Labels and publishers have been working toward new business models as if they recently found religion. They're not even close to being out of the woods yet, but I do agree with Lévy that their outlook today is better than it was two years ago.

Posted by Glenn at 6:13 PM | Link
|Universal Music Group|

Vivendi released its operating results for the first half of 2008 on Monday. Universal Music Group's EBITDA increased 17.7% to €259 million. Revenue for that period was €2,044 million, a 2.4% decrease.

Such a margin is far ahead of that of Warner Music Group (6% operating margin in its most recent quarter) and Sony BMG (-1% operating margin for its most recent quarter). Terra Firma does not release specifics on EMI's financial performance, but we can assume overhauling a struggling company takes more than a few years.

So why is UMG doing so well relative to the other majors? It has increased its market share, it acquired BMG Publishing and Sanctuary, and it regularly tops the charts in numerous countries. Rather than sit on its catalog, as EMI has hinted it may do, UMG aggressively goes after new acts. And the latter half of the year will see a strong release schedule, according to the release: The Killers, Fall Out Boy, Bon Jovi, Black Eyed Peas, Pussycat Dolls and Ne-Yo, among others.

There are, however, some underlying issues. UMG's revenue has been more or less flat in spite of continued acquisitions. Digital growth is tapering off, as it is at other music groups. Physical formats are under pressure and no new revenue stream -- not mobile, not ad-supported services -- is offering a clear path to revenue growth. Like everybody else, UMG is swimming against a current and trying to keep from going backwards. There is no silver bullet that will recapture lost revenues, but UMG is doing a very good job at muscling out one success at a time.

Posted by Glenn at 12:42 PM | Link
|Earnings Releases||Universal Music Group|

Universal Music Enterprises announced today the "Playlist Your Way," a digital-physical hybrid package with a greatest hits CD and a download card that can be redeemed for a podcast on the artist as well as the choice of six additional tracks and/or a full-length original studio album. Looks like the main point is to get CD buyers to test drive digital downloading. Another stated benefit is the podcast as a replacement for the more limited information that can be offered in a CD booklet. (More information, less practical.)

It's a throwback of a concept: Using a physical distribution system to promote digital downloading. Hey, whatever works. If that's how you reach potential customers, that how you reach them.

The press release does not give pricing information, but Amazon.com lists 16 "Playlist Your Way" CDs with an August 5 street date and a $10.99 list price. All 16 titles are already being sold as used items by third parties. They're going for less on eBay.

Strikes me as a crafty way of getting around retailers' requests for lower prices. A $10.99 price is a good one, but not as low as catalog prices could go. If additional digital content, which can be distributed in an affordable manner, can help labels hold the line on wholesale prices, this may turn out to be a profitable product. In any case, it will probably turn out better than that other physical-digital hybrid, the ringle.

Posted by Glenn at 10:14 AM | Link
|Universal Music Group|

Universal Music Group parent company Vivendi released its Q2 results today. (PDF of earnings release) First half revenues of €2,044 million were 4.9% improvement at constant currency and a 2.4% decline in actual currency. Digital revenues were up 33%, the same year-over-year improvement achieved in Q1. The company claimed growth in music publishing, merchandising and license income but offered no supporting numbers.

Q2 revenues were €1,011 million, a 3% gain at constant currency and a 5.3% decline in actual currency.

Not great but not bad all things considered. Revenue is only part of the story. Improved digital margins may be helping the overall but we weren't given any information. Unlike most Vivendi earnings releases, this one was void of anything but gross revenue numbers. No EBITA or operating profit numbers were given for any of its divisions.

Posted by Glenn at 11:14 PM | Link
|Earnings Releases||Universal Music Group|

• In an effort to improve margins, Universal Music Group will bring back deluxe editions of CD releases for the fourth quarter (at least in the UK). Standard versions will also be available. (Music Week)

• EMI has appointed Elio Leoni-Sceti as its new music unit chief executive. On Leoni-Sceti's resume are stints at consumer product companies Reckitt Benckiser and Proctor & Gamble. (AP)

• More executive changes at EMI. Billy Mann, EMI Music’s Chief Creative Officer is in for departing President, A&R Labels - International and President - EMEA, JF Cecillon. (Alley Insider)

• The Orchard "substantially completes" its acquisition of TVT Records' assets (which includes masters, artist contract and office lease but not publishing). (Press release)

• A campaign by McCann-Erickson for Universal Music Group will give MasterCard users free downloads at www.priceless.com. After giving away the first 100,000, each track will cost $0.80. Being a Mastercard user I went to the site to test it out. After jumping through too many hoops, I ended up an an Amplified.com page and just gave up after being asked to register again. The prize packages are cool, but the free download aspect is pretty weak. (Billboard.biz)

• In Australia, brick-and-mortar sales of #1 albums dropped 30% and #1 singles dropped 40% in the first half of 2008. Those figures are not for all albums or singles, just the #1 singles. (Herald Sun)

• I haven't posted an article about vinyl's popularity in a few weeks, so here's another one. The article says vinyl sales in Ireland were up 20% in the first half of 2008. That's puny compared to the 77% increase in the U.S. in the first half of the year. (Times Online)

• Live Nation has purchased a controlling interest in France's Main Square Festival. (AP)

• A profile of Soundtrax, which makes music download cards. (Duluth News Tribune)

Posted by Glenn at 9:20 AM | Link
|EMI||Universal Music Group|

Universal Music Group lost its lawsuit against an eBay vendor who sold promo CDs. I will link to a post by the EFF's Fred von Lohmann, one of the lawyers that represented the defendant. Here's an excerpt:

In an important victory for the first sale doctrine, a federal district court today ruled that selling "promo CDs" on eBay does not infringe copyright. The court threw out a lawsuit by Universal Music Group (UMG), which had argued that the "promotional use only" labels affixed to these CDs somehow conveyed eternal ownership on UMG, making it illegal to resell the CDs (or even throw them away). ...

In its ruling, the district court found that the initial recipients of "promo CDs" own them, notwithstanding "not for resale" labels. The court rejected the notion that these labels create a "license," concluding that the CDs are gifts. According to the opinion, "UMG gives the Promo CDs to music industry insiders, never to be returned. ... Nor does the licensing label require the recipient to provide UMG with any benefit to retain possession." (The court also found that federal postal laws relating to "unordered merchandise" establish that promo CDs are gifts to their recipients.)

Posted by Glenn at 2:38 PM | Link
|Legal||Universal Music Group|

Citing improved digital sales and the integration of BMG Music Publishing and Sanctuary, Vivendi announced Universal Music Group's Q1 2008 earnings today. (Read PDF of earnings release.) Revenue increased 0.6% to €1,033 million (6.8% at constant currency) and operating profit increased 94.7% % to €111 million (the increase was 111.1% at constant currency).
Vivendi cited improved margins relating to a shift to owned product and away from licensed product.

While Q1 was an improvement, revenues were below the €1,027 million recorded in Q1 2006, and operating income lagged behind the €141 million achieved in Q1 2006. Keep in mind that UMG has made a number of acquisitions in the last two years that have helped bolster falling top line numbers.

Digital sales increased 33% year over year. As a comparison, UMG's digital sales increased 51% in fiscal 2007 (and represented 14% of total revenues) and were up 54% year over year in 2007 Q1. The rate of growth is slowing considerably, which is very unfortunate since the rate of the CD's decline has been accelerating over the last two years.

Posted by Glenn at 7:48 PM | Link
|Earnings Releases||Universal Music Group|

A few specifics on Nokia's "Comes With Music" initiative came to light today. (Read this December 2007 press release for more info.) Comes with Music is a plan the mobile operator to allow subscribers access to a large catalog of music. Nokia would pay a fee for access to a music company's catalog of music. The fee would be absorbed by Nokia and presumably passed on (at least in part) to the consumer.

The Hollywood Reporter's Mark Halper says an unnamed, "well-informed mobile industry executive" put the per-handset amount at $35.

paidContent's James Quintana Pearce did a bit of digging and found a source that said the per-unit fee starts around $33.50 for the first 2.5 million units and scales down at higher volumes. The plan is said to include "a limited but relatively high number songs." The most interesting tidbit is the source's claim that Comes With Music is based on a download -- not a subscription -- model.

For those of you doing some quick math on the back of the nearest envelope, UMG had 28.8% of the global recorded market in 2007. Divide the market share into the per-unit fee of $33.50 and you get $116.32. That's what access to all music would cost if the other majors and all indies negotiated equivalent rates on a pro-rata basis.

Posted by Glenn at 9:41 PM | Link
|Comes With Music||Nokia||Universal Music Group|

The Times Online's Dan Sabbagh has an interesting take on today's record business. He contrasts the unique efforts of pop artist Shayan Italia, whose new video amassed 190,000 plays in the first 24 hours in was on YouTube, with the more traditional story of Duffy, a singer signed to Universal Music Group. Italia has, with the help of investors' £500,000 (sold in £12,000 blocks), achieved a only a modicum of success but did it without the help of a record label. Duffy, who went to UMG from Rough Trade, has achieved great success with her new album, Rockferry, in a far more traditional manner and with very few YouTube views and little online fanfare.

Rockferry shifted 180,000 CDs in its first week, worth rather more than 190,000 views on YouTube, without the help of a television programme talent contest or any internet nonsense. In fact, the album was marketed conventionally to entice the mainstream buyer.

Nevertheless, despite these simple facts, people get very excited about the death of the record company and about finding clever ways to ward off its demise. But it is easy to get distracted: these companies are really creative businesses, allying marketing muscle with nothing more complicated than good music.

Spending too much time banging on about a new business model while failing to discover new acts, hiring management with little credibility in the industry or simply not bidding for talent when necessary are sure ways to fail, as Guy Hands may find out if he is not careful.

After all, people who buy or steal music do not care about how the music business should reinvent itself. What they want to do is listen to songs they like.

He has a point. Most people -- not all but most -- do not care a great deal about how the business needs new models. They want music and will not get involved with policy issues and the nuts and bolts of business. And the drive for new models and different ways to monetize catalogs cannot take away from music companies' entire reason for being: to find and develop (and quickly drop some) new artists.

Sabbagh shares my view on the death of the record label, as in it's not going to happen. But then again, he writes media analysis. Were he a tech journalist I'm sure our opinions would differ.

"For all his talent," writes Sabbagh of Italia, "the big break is yet to come and there is not yet any return for the investors who are taking part in an exercise that is supposed to prove that the great rock'n'roll swindle is dead."

One more thing...Duffy's album sold 180,000 in its first week...in a country with one-third the population of the U.S. This country's top seller last week was an Alan Jackson new release with sales of only 119,000. Sheesh.

Posted by Glenn at 6:52 PM | Link
|Marketing||Universal Music Group|

Vivendi announced its 2007 earnings last week (download PDF of earnings release). Yeah, I'm a bit late on this one. EBITA dropped 16.1% (12.9% at constant currency). Digital sales increased 51% (at constant currency).

These slight revenue drops are par for today's course, but they don't tell the entire story. It's important to keep in mind that UMG and the other majors are acquiring quite a bit of revenue. It's one thing to grow revenue organically and another to buy revenue. The only organic growth, digital, isn't enough to offset losses related to CD sales. Music companies have always been active acquirers, though, so there's no reason to look for any red flags that aren't already visible -- M&A happens in both good and bad years.

UMG's 2007 revenue most likely includes partial-year revenue from two main acquisitions, BMG's music publishing (bid in late 2006, got E.U. approval in May 2007, had 2006 revenues of €362 million but divested some publishing assets to gain E.U. approval) and Sanctuary Music Group (acquired in July 2007 and good for about £150 million in annual revenue). In 2008, UMG will add to its top line the revenues of Univision's recorded music and publishing divisions.

Posted by Glenn at 2:24 PM | Link
|Earnings Releases||Universal Music Group|

Interesting post at MocoNews from the World Mobile Congress. Rob Wells, Universal Music Group SVP of Digital, talked about the goals of the company with an almost cinematic flair.

The start and endgame for Universal and, indeed, the industry worldwide, is providing consumers with blanket access through a celestial jukebox anytime, at home, in the car. This is the next step in the utopian future for music...

And this about temporal pricing:

If an artist has just delivered an album from studio, we could potentially deliver it to a limited number of users for a higher price. It’s something we’re quite keen to develop; for example, through our own B2C channels - artists websites.

There are different definitions of "utopian future." UMG sees paid services as the future, as evidenced by its Total Music plan and Nokia's Comes With Music mobile service.. Others see the best route as unhindered P2P, which would certainly have more content and would be closer to a true celestial jukebox.

The pricing comment is worth taking a look at. Labels have yet to do a whole lot of direct-to-consumer stuff (other than merchandise) but that should change. Fan clubs and artist websites offer ways to deliver music and bring a sense of scarcity to digital downloads. If the iTunes and the Amazons of the world won't raise their prices for time-sensitive releases, artists and labels can go it alone.

Posted by Glenn at 2:37 PM | Link
|Comes With Music||Mobile Music||Total Music||Universal Music Group|

In general, I'm pretty tired of talent searches. There are so many of them. It's as if "American Idol" has spawned dozens -- if not hundreds -- of unimpressive and practically unseen copycats.

Though I wasn't aware of the "Crash The Super Bowl" promotion before I saw Kina Grannis's commercial during the first quarter, I'm intrigued by the joining of Interscope Records with Doritos that culminated in a very expensive ($5 million) Super Bowl ad. (The commercial also quietly tagged iTunes at the end. An EP with songs by the three finalists is already on sale at iTunes and Wal-Mart.com.) This article from yesterday's Boston Globe has information on the contest.

The singer-songwriter instantly got a fair amount of attention. Grannis received about 5,000 hits on her MySpace page between the second quarter and the end of the third quarter (at which point she was over 15,000 for the day). She was one of three finalists in the contest. As the winner, Grannis will receive $10,000 and a record deal with Interscope.

Will it work? "We have absolutely no idea," Interscope's Ted Mico told the Globe. "No one has ever done anything like this. We’ve had all kinds of online talent contests but nothing has even been done on this scale."

Will we see more promotions like this? Absolutely. Labels are increasingly using the Internet to scout talent, and they are piggy-backing on the advertising budgets of consumer product behemoths like, as in this case, Frito-Lay. If somebody else picks up the tab, a label can remove much of the risk and gain an incredible amount of awareness.

Posted by Glenn at 8:25 PM | Link
|Marketing||Universal Music Group|

Vivendi, parent company of Universal Music Group, released its earnings for fiscal 2007 today. (Download PDF of full press release here.)

UMG's revenues dipped 1.7% to €4.87 billion for the year and dropped 3.1% to €1.6 billion in Q4. Excluding revenue from acquisitions (BMG Music Publishing and Sanctuary) revenues were down 7.2% for the year 10.2% in Q4.

For the year, digital sales rose 51% to €676 million and represent 14% of total revenues. For Q4, digital sales rose 54% (at constant currency).

Nutshell: UMG increased its market share in a shrinking market and revenue was helped by acquisitions. The outlook for '08 is gloomy, but there a couple encouraging things that make the continued fall of the CD a slight bit less grim. One is the speed with which the company is now changing -- or at the very least trying to change -- adapt to current realities. The other is 2007's release schedule, which was pretty miserable. It would be hard for all labels to collectively put out fewer big name albums than they did last year...although it's not totally out of the question (especially if EMI vigorously prunes its label rosters).

Posted by Glenn at 6:42 PM | Link
|Earnings Releases||Universal Music Group|

There are now a few reports online about a keynote Q&A with Vivendi president at MIDEM conference in France. (Vivendi is the parent company of market-leading Universal Music Group.)

A report by Billboard.biz highlighted Levy's comments on the CD format. Wrote Lars Brandle, "Levy ... defied widespread gloomy predictions for the CD when he told delegates the physical format would continue to play an important role in the recorded music industry for years to come, alongside digital formats."

The Canadian Press adds this quote on the CD: "It's not the migration of one physical format to another, I think it's a transition into very diversified business models of which CDs will remain a part. I don't believe at this stage for the next few years we will see a complete showdown (elimination) of CDs."

A post at paidContent has quotes on both the CD and Vivendi's stance on DRM. "We are still testing (DRM-free models)," Levy said, "but our policy is still that we are strongly attached to DRM, especially for advertising-based models and subscription-based models."

Reuters' headline is "Vivendi Chief Says Music Industry Gloom is Overdone" and included this quote: "I think altogether today there is an exaggeration in the industry ... Of course it is not doing that well, but look at us, we have flat revenues, a good two digit margins and it's not as dark as what many people describe."

Posted by Glenn at 3:36 PM | Link
|Conferences||DRM||Universal Music Group|

Silicon Alley Insider and Digital Music News have posted about rumored upcoming layoffs at Sony BMG and Island Def Jam. Sony BMG, according to Silicon Alley Insider, will shed "40 to 70 mid-level execs" before the end of the year. Digital Music News has picked up chatter that cuts are imminent at Columbia Music Group as well as Island Def Jam ("particularly within A&R").

Posted by Glenn at 12:21 PM | Link
|Sony BMG||Universal Music Group|

Nothing brings commentary like Universal Music Group's Doug Morris talking about his company's failure to grasp changes in technology. In an interview with Wired's Seth Mnookin, Morris painted a picture of confusion at the onset of the digital age.

"There's no one in the record company that's a technologist. That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do? We didn't know who to hire. I wouldn't be able to recognize a good technology person — anyone with a good bullshit story would have gotten past me."

At the Huffington Post, Howie Klein, founder of Reprise Records, countered by recounting how his desires to sell DRM-free music by the track was rebuffed by executives:

"As we were realizing and taking advantage of the huge efficiency and power of this medium, we also clearly observed the beginnings of illegal music file trading and distribution by fans -- and the ramping up of the demand for music delivered over the internet.

We viewed this 'threat' as an opportunity. Not an opportunity to sue teenagers and/or their parents, but a new opportunity to let people purchase their music the same way they do at record stores. ...

We proposed to our corporate masters that we sell 'unprotected' MP3 singles at a reasonable price-- $1/$1.50. We wanted to experiment and see if this model would stick.

Why unprotected? Because we were already in a vastly successful business of selling unprotected digital files: CDs. If people wanted to get them on the internet -- they should be coming from us... that would be the future of the business: an evolution of the day's success. ...

Our proposal, after lots of corporate headscratching, hummimg and hawing, was denied."

Silicon Valley Insider actually showed some empathy:

"What music label boss did have a working crystal ball in 1999? And while we're waiting for your answer, another request: Please tell us -- which one gets it now? And one more: Say you run one of the major record labels today, so you still make the majority of your money selling compact discs. How do you transition to the digital future, where people buy songs for $1 (if you're lucky) instead of albums for $10?

This last one is most interesting to us, because we've been watching the music business shrivel for 10 years, and we're not sure what other route the major labels could have (realistically) followed."

While acknowledging its mistakes and its failure to follow up legislation and lawsuits with anything of substance, I agree with the "Who had a crystal ball in 1999?" argument. Nobody -- from the biggest to the smallest label, to the book to the movie industry -- would have welcomed Napster with open arms, dropped DRM and overhauled copyright law in a few short years. Not that the industry hasn't shot itself in the foot on occasion, but it was destined to have plenty of mistakes from which everybody could learn.

New York Magazine came in with the worst take: "We give this industry six months to live."

Posted by Glenn at 8:24 AM | Link
|Universal Music Group|

The last we heard about USB drives was HMV's plans to include the storage devices in its renovated retail stores. Today I saw an article that said Universal Music Group is going to release upcoming U.K. singles by Keane and Pussycat Dolls on USB memory sticks. Each USB drive would cost £4.99 ($10), a 67% premium over a comparable CD single.

These wouldn't be the first USB drives on the market -- Barenaked Ladies, for one example, has released music on 128MB drives -- but the larger labels have yet to actively pursue flash drives as a viable physical format.

Posted by Glenn at 1:32 PM | Link
|Universal Music Group|

• Album sales dropped 6% last week and were down 17% versus the same week last year. For the year, album sales are down 14%. Kid Rock's Rock 'N' Roll Jesus debuted at #1 with the modest sum of 172,000 units (zero digital). Sales of digital tracks were flat last week but were up 56% over the same week last year. For the year, digital tracks are up 47%. Soulja Boy Tell'Em's "Crank That (Soulja Boy)" remained the #1 digital track last week even though the album sank 64% last week and fell to #16.

• Jean-Bernard Levy, chief executive of Universal Music Group parent Vivendi, told Reuters UMG will retain its superstar artists. In the wake of the mega-deal between Madonna and Live Nation, Levy predicted artists "feel good" working with UMG and mentioned that UMG is already signing artists to 360-degree contracts. (Reuters)

• Lime Wire will sell DRM-free INgrooves tracks at its upcoming digital store. INgrooves' catalog has about 100,000 tracks. (Press release)

• In an email sent out to its affiliates this morning, Amazon.com said it will pay its affiliates a 20% commission on MP3 sales through the end of 2007, and 10% thereafter. In comparison, iTunes pay affiliates only 5%. That will obviously hurt margins on sales generated by affiliates, as Silicon Valley Insider points out, but what percent of total sales comes from affiliates? Honestly, I have no idea but I can't imagine it being too great. Affiliate programs use a break-even or loss-leader strategy to get incremental revenue and convert that to future business. Don't be concerned about Amazon.com's music margins. This is the price of building awareness and repeat customers. (Silicon Valley Insider)

• Groove Mobile has inked a licensing deal with Redeye Distribution to offer Redeye's catalog -- which includes Yep Roc, Arena Rock and TKO Records -- though Groove Mobile's mobile music service. Groove Mobile powers the Sprint music store in the U.S. and 3UK's mobile music store in the U.K. (Press release)

• Nettwerk Records has joined with Passalong Networks and Digonex Technologies to create a variable-priced MP3 pilot program. Using Digonex's pricing technology, the price of Nettwerk MP3s will be adjusted weekly based on demand. Albums will range from $3.30 to $9.99 while singles will have three price points: $0.33, $0.66 or $0.99. Tracks can be purchased at Passalong's StoreBlocks site. (Press release)

Posted by Glenn at 1:01 PM | Link
|Amazon||Mobile Music||Universal Music Group|

Universal Music Group's proposal for the Total Music service -- rally the other majors, get a hardware manufacturer to absorb the monthly fees -- has the Internet all abuzz. In a blog post, Jupiter's Mark Mulligan pointed to some potential trouble spots but gave a thumbs up to the idea of getting hardware manufacturers to absorb the service costs.

"The idea of working with device manufacturers to get revenue directly for music is not actually that crazy an idea. In fact, we’re working on a report which incorporates that exact theme. We’re still working on the numbers, but based on the scant (rumoured) details we have on Total Music, I think the approach we’re suggesting is more workable for all parties."

Can't wait to hear about that winning approach. Mulligan began the post by explaining how labels make for far better scouts and promoters than they do service operators (MusicNet and PressPlay are examples A and B). Very true. Over the last eight years or so, labels interests have not overlapped well with the needs of consumers Labels' unending desire to convert consumers to a DRM'd music service probably won't be met by a stampeding crush of consumer demand (and it probably won't help that somebody else has the domain). Billboard's Antony Bruno has been told the specifics of Total Music are still changing and the final product -- if it ever makes it to market -- could be very different than what was portrayed in recent articles.

For a different view, read Podcasting News' "Five Reasons Total Music Will Be A Total Failure."

Posted by Glenn at 3:39 PM | Link
|Universal Music Group|

• Finally, somebody other than a technology writer or music critic takes a good, long look at the music industry. (No offense meant, but those two camps tend to enter the discussion with a bias that prevents whatever objectivity could have existed to begin with.) I expect a balanced and thoughtful post from the writers of the New York Times' Freakonomics blog, and that's just what Stephen J. Dubner has given his readers. (Freakonomics, via Digital Audio Insider)

• An update from the hearings in Brussels: Vivendi chief executive Jean-Bernard Levy told reporters that Universal Music Group's contract with Apple is "indecent" and that its "contracts give too good a share to Apple." (Reuters)

• Clive Gardiner, a former BMG Music executive, has been named VP of Digital Content for upstart download store We7. The innovative site, with backers that include musician Peter Gabriel, offers ad-supported downloads with the audio advertisements embedded into the actual sound files. (Press release)

• Well lookie here...pitting one artist against another results in higher sales for both parties (something the British have long known). The "battle" between Kanye West and 50 Cent has Billboard.biz looking at the upcoming street date "battles." On October 2 we'll get a battle royale between Bruce Springsteen, Dashboard Confessional and Matchbox Twenty. A better three-way fight occurs on November 6 as Alicia Keys, Garth Brooks and Jay-Z will release new albums. (Billboard.biz)

• For a good overview of the secondary ticketing market, check out this article. Here's a fun fact I didn't know: Only six states still outlaw the reselling of tickets. (Tickets News)

• The WMA-based Virgin Digital will shut down next month. It never had a chance and was never on the radar. After a few years of download stores opening in numbers not seen since video arcades in the '80s and bagel shops in the '90s, it's high time the market thins out a bit and rids itself of the weakest players. Evolution is a natural and positive force in business. (PC World)

• Billboard.biz is currently streaming a video of an interview with SpiralFrog chairman Joe Mohen. He expects to have the other majors signed up "pretty quickly." When asked about the files' lack of compatibility with the iPod, Mohen spoke about a new generation of music-enabled, flash storage cell phones that will work with SpriralFrog. Another thing he mentioned was labels' fear that SpiralFrog would canniablize sales at places like iTunes. Mohen thinks he has convinced them that SpiralFrog that won't happen and the site will result in incremental revenue. I'm not sold on the business model, but the site is in its infancy and should improve over time. (Billboard.biz)

Posted by Glenn at 9:05 AM | Link
|Universal Music Group|

• Jean-Bernard Levy, chairman and CEO of Vivendi, the parent company of Universal Music Group, showed the same optimism that characterized the Goldman Sachs Communacopia speech by Warner Music Group chairmand and CEO, Edgar Bronfman, Jr. Levy said UMG is the only "healthy and stable" company in the music industry. He added that UMG has not yet decided whether it will it will make a permanent decision to sell music without DRM. The company is currently experimenting with DRM-free sales at some online stores. (Hollywood Reporter)

• WEA Corp, the distribution arm of Warner Music Group, inked a deal with Abandon Interactive Entertainment to market and distribute the video game "Freaky Creatures." The game -- and I'll quote here because this reads like stereo instructions -- is "one of the world's first player-customized, cross-platform, multi-player game universes for the tween demographic." (Press release)

• At the Popkomm festival in Germany, music industry execs discussed how the auto industry will become a valuable partner for the music industry as cars go online. "We will connect our cars with the Internet in the next three to four years," said a principal of a consulting group. "The iCar is not far away." (Billboard.biz)

• Music startup Slacker has inked deals with EMI, Warner Music Group and Universal Music Group. The well-funded company will eventually offer satellite radio and branded portable players. I tested the online radio a few times and, if this says anything about my level of interest, I have not returned since. (Digital Music News)

• Rapper Fat Joe's Terror Squad label has inked a deal with Caroline-distributed Imperial Entertainment. Terror Squad will soon release Fat Joe's eighth album, Elephant in the Room. Terror Squad and EMI-owned Caroline teamed up for his last album, Me Myself & I, which has sold 206,000 units since its release last November. (SoundSlam)

• A new survey from American Media Services finds that 63% of Americans listen to the radio every day, a figure that rises to 79% for adults between 25 and 34. Seventy two percent surveyed said they listen to as much or more radio than they did five years ago. Satellite subscribers held steady at 11%. "Many analysts seem to be enthralled with the technology of satellite radio, but the buying public isn't," said the AMS. (Radio Ink)

• In February, Universal Music Group will its Music Row offices in Nashville and heading downtown to a building adjacent to the Ryman Auditorium. The move is expected to save $200,000 a year. (Ashland City Times)

Posted by Glenn at 9:18 AM | Link
|Universal Music Group|

• 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|

• Album sales dropped 5% last week and were 19% lower than the same week last year. For the year, album sales are 14% lower than last year. High School Musical 2 topped the chart for the third straight week even though it dropped 43% to 210,000 units. Casting Crowns' Altar & The Door was the top debut with 129,000 scans. Sales of digital tracks dropped 7% last week and were 31% higher than the same week last year. Digital tracks are up 47% this year.

• New owner Universal Music Group has decided to close Sanctuary's UK recorded music division. Said Universal, "In consultation with senior management of the Sanctuary Group, it has been decided that its Sanctuary Records UK division will no longer continue as a stand alone, front-line record label." (BBC News)

• Groove Mobile received $6 million in funding from ORIX Venture Finance to aid its expansion. (Press release)

• Target has landed another exclusive: “Live From SNL! Music Performances From Saturday Night Live," a collection of musical performances from the last four seasons of the show. The CD will retail for $13.98 and have recordings of Maroon 5, Kelly Clarkson, Foo Fighters and others. (Billboard.biz)

• Congress will hold hearings on media stereotypes and the degradation of women. Rep. Bobby Rush, the chairman of the House Subcommittee on Commerce, Trade and Consumer Protection, will hold the hearing on September 25. On the witness list so far are Universal Music Group's Doug Morris, Warner Music Group's Edgar Bronfman, Philippe Dauman of Viacom and rapper Master P. The event is currently titled "From Imus to Industry: The Business of Stereotypes and Degradation." (Variety)

• He's back. Garth Brooks' "More Than A Memory" became the first song to ever debut at the top of the country singles chart. (Music Row)

• Reuters wonders about the 2007 album total. How much of this year's 14% deficit can the back-loaded release schedule make up? Eyes are on Tuesday releases by 50 Cent and Kanye West. (Reuters)

Posted by Glenn at 10:13 AM | Link
|Mobile Music||Universal Music Group|

Vivendi released its earnings for the first half of 2007 (read PDF of earnings release). Earnings before interest and income taxes (EBITA) and €2,596 million compared to €2,348 million for the first half of 2006, representing an increase of 10.6% (11.9% at constant currency). Wall Street has mixed feelings, though. While revenue and EBITDA were both up, earnings attributable to equity holders dropped almost 49% (due mainly to a 2006 gain from Vivendi's tax dispute settlement).

Universal Music Group EBITA was €220 million ($301.3 million), down €75 million. (It should be noted that UMG's first half 2006 earnings included €50 million recovery of expense related to a legal dispute with TVT.) At €163 million, EBITA in the second quarter was a 7.6% improvement over last year. Digital sales increased about 50%.

Posted by Glenn at 1:11 PM | Link
|Earnings Releases||Universal Music Group|

• LiveNation and Ticketmaster will not renew their relationship when the current contract expires at the end of the year. That will open the door for LiveNation to beef up its own ticketing operation (which recent acquisitions should allow it to do). Sources say the 14-15 million LiveNation event tickets purchased annually give Ticketmaster around $100 million in service fee revenues. (Billboard.biz)

• SoundExchange is allowing small webcasters -- defined as those with annual revenues of $1.25 million or less -- to pay 10-12% of revenue instead of the per-performance royalties set earlier this year. The deal includes a usage cap to "ensure that this subsidy is used only by webcasters of a certain size who are forming or strengthening their businesses." (Radio Ink)

• It's goes without saying, but at least somebody included it in an article. From Bloomberg News on Wal-Mart MP3 downloads from WMG and UMG: "Kevin Swint, Wal-Mart's manager of digital media, said the company is in talks with Sony BMG Music Entertainment and Warner Music Group Corp. as well as other record companies to offer their products in the same unprotected format." (Bloomberg)

• The second annual, five-day Next Big Nashville music festival, a showcase of Nashville's rich music scene, will run September 5-9. Local bands The Pink Spiders, De Novo Dahl, Ghostfinger, Wax Fang, Jeremy Lister, The Features and Freedy Johnston (he recently moved to town) are among the 130-plus bands that will play at ten venues. A five-day wristband will cost only $30. (Next Big Nashville)

• Little Big Town will give away its new single, "I'm With The Band," as a free download tomorrow at the band's website. The freebie will start at midnight E.T. and last 24 hours. (Country Weekly)

• Can you tell something about an artist's longevity from last.fm plays per listener? I would think so, and after compiling a long list of numbers, David of Digital Audio Insider thinks plays/listener, though a crude metric, shows quite a bit about long-term potential. "The Last.fm numbers don't look good for the long-term prospects of the Bravery and the Walkmen. Of all the acts in this analysis with Last.fm audiences of more than 100,000 listeners, these were the only two with less than 20 plays per listener. My suspicion is that bands that receive a fair amount of mp3 blog attention might have their ratios pulled down because there are a large number of Last.fm listeners who have only heard a single track or two via a music blog." (Digital Audio Insider)

• BusinessWeek's Ronald Grover writes about Universal Music Group's International Music Feed, a reaction to MTV's lack of video play. The potential is there, he writes, but the viewers aren't. "According to IMF, it gets an anemic 47,474 unique visitors a month to its Web site. And while it has 17 music channels on the online TV site Joost, and two channels on British cell-phone company Vodafone (VOD), it has just about no U.S. TV presence. ... It ain't MTV, that's for sure. But give Universal credit for trying." (BusinessWeek.com, via paidContent)

• The Rhapsody America joint venture is a case of one company having the brains and one company have the brawn. Will it bring mobile music into the mainstream? (Big Red Horseshoe)

Posted by Glenn at 10:46 AM | Link
|Rhapsody||SoundExchange||Ticketing||Universal Music Group|

• Universal Music Group will buy V2 Records from Morgan Stanley for $14 million (though reported price tags vary). The V2 roster includes Brit legend Paul Weller, the Stereophonics, Elbow and Bloc Party. The deal does not include V2 North America, which was sold to Sheridan Square for $15 million last year. The label merged with Artemis and had been demoted to a catalog-only label. (Reuters)

• The New York Post has an article on the collaboration between Epic Records and Koch Records. "Lacking a dedicated staff to market the songs specifically to hip-hop/ R&B radio stations and music video outlets like BET, Epic hired New York-based Koch, home to rappers including Jim Jones, UNK and DJ Khaled, to do it for them." (New York Post)

• Sanctuary Group chairman Robert Ayling, as well as James Wallace, Tina Sharp and John Preston, are no longer on the company's board of directors. (Billboard.biz)

• EMI has a deal with Arvato Mobile that will allow Arvato-powered carriers (T-Mobile, Swisscom, Mobilkom) to offer EMI videos to mobile phones or PCs. Content such as videotones, wallpapers and full-track downloads are also part of the deal. (Mobile Entertainment)

• A profile of new industry site The Daily Swarm. "We all saw that there was a ton of music-business information scattered around the Web, but there wasn't really one place that was bringing it all together." Side note: Coolfer will turn four years old this month. Thanks for reading. (Chicago Sun-Times)

• According to the BPI, UK music sales in France and Germany hit a four-year high last year. UK artists represented 23 of the top 100 albums in Germany. (BBC News)

• An interview with Guy Fletcher, head of music publisher MCS. "The internet is fast becoming a major platform for delivery of music in many different contexts. However, the advent of internet social networks, peer-to-peer file sharing, free downloading, etc. have created communication systems whose operators are generally unwilling to enter into licensing agreements with collection societies making it difficult, if not impossible for them to keep track of the online use of our copyrights." (The Telegraph)

• EMI's Blue Note Records is going to change its website to incorporate social networking and direct-to-consumer downloads. (The Register)

• Apple now offers iTunes widgets. (My iTunes, via Digital Music News)

Posted by Glenn at 9:12 AM | Link
|EMI||Mobile Music||Universal Music Group||iTunes|

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|

The Internets is all abuzz over Universal Music Group's decision to drop DRM from select retailers for a trial period of time. Below are some of the comments.

Some are of the opinion that DRM is disappearing because it is inherantly bad for consumers. In this specific case, DRM inhibits market growth (not because it's bad for consumers, but because it has been very good for Apple). I believe UMG is testing DRM-free not to hurt iTunes as much as to enable iTunes' competitors. The goal here is to open up the download market. Competition is good for consumers. A more competitive download landscape will be good for consumers and labels alike. A world beyond iTunes awaits, and UMG wants to get there. Maybe dropping DRM will achieve that goal. We'll have to wait and see.

From an unnamed source at Billboard.biz: "We want to have a robust digital marketplace where there’s healthy competition. We don’t have that now. Apple has a stranglehold on the whole thing, so much so that all the other online retailers are badly disadvantaged because you can’t buy music from their stores and play it on the iPod. We want to open up the market and create a more level playing field. We want to give other retailers a chance to compete."

Farhad Manjoo at Salon: "Nobody should be locked in to one store because of what device they use to play their songs. With EMI and now Universal coming around to this view, perhaps we might soon live in a such a sensible world."

James McQuivey of Forrester Research: "That's far too much power for anyone to have, especially someone who has not seen things eye to eye with the music labels in the past. So Universal, and I would expect others, have said, 'We need to get hands on this market. We need to stimulate growth in more than one place.'"

Jupiter's Michael Gartenberg: "Clearly the handwriting is on the wall for DRM-protected content. We are seeing more of the players fall as they recognize that it's just a hassle for the consumer and doesn't really help the piracy problem."

Paul Resnikoff at Digital Music News: "Sure, UMG can withhold exclusives, threaten Apple with shorter contract structures, and hand DRM-free tracks to competitors. But does it really matter to Apple? Not as long as paid downloads remain a fringe contributor to a bottom line dominated by high-priced iPods. Perhaps that reality is difficult to stomach, especially for such a massive company like Universal Music Group. And in its grandiose self-image, the mega-label is now aiming to level the playing field by giving DRM-free music to iTunes rivals. But just like EMI, Universal has overestimated the importance of DRM, and ignored a number of other, important ecommerce variables."

Posted by Glenn at 4:09 PM | Link
|DRM||Universal Music Group|

• Universal Music Group will offer DRM-free downloads through a select group of online retailers -- but not iTunes. From August 21 through January 2008, UMG will sell "thousands" of albums and tracks without copy protection at Rhapsody, Best Buy, Wal-Mart, PureTracks and the upcoming Amazon.com download store. In addition, UMG will sell the downloads direct to consumer at some artist and label sites, and use Google AdWords to drive purchases at gBox. (Billboard.biz)

• Listen to a WYNC interview with with QSR editor Sherri Daye Scott about how fast food chains are using music in their marketing efforts. (Podcast at QSR Magazine)

• Video sharing website Veoh has filed a preemptive lawsuit against Universal Music Group. The company has asked a judge to prevent UMG from suing it for copyright infringement. (paidContent)

• Yet another article on the resurgence of vinyl. At least this one has a video segment and a really great quote. From Criminal Records' Eric Levin, "Vinyl is just out of control. It's like somebody pushed the cool button again." Indie retailers are selling more vinyl because of a few reasons. First, it's a tangible product that sounds better than downloads. Second, whatever chain stores are left sell little or no vinyl. I've got to wonder, though, that if vinyl sales keep going up if a chain like Best Buy will start stocking vinyl and carrying turntables. If vinyl becomes too successful, it will look like too attractive a market not to enter. (Chicago Tribune)

• Digital Music Group Inc. reported a loss of $1.1 million on revenues of $3.2 million for Q2 2007. The company attributed almost $330,000 of the loss to expenses related to its merger with digital distributor The Orchard. The merger will be completed in Q4. Last year's loss was $589,000. (Sacramento Business Journal)

Posted by Glenn at 8:46 AM | Link
|DRM||Digital Distribution||Marketing||Universal Music Group|

• Universal Music Group has invested in Loud.com, a hip hop-slanted portal and networking site. (paidContent)

• GodTube.com is a new, Christian-oriented video site now in beta. (Billboard.biz)

• Music Row points out that country album sales are down 29.3% this year, a hit album by Taylor Swift notwithstanding. (After Carrie Underwood and Rascal Flatts had such a huge year, a drop was inevitable.) The end of the year, though, will have some big names: Kenny Chesney on September 11, Rascal Flatts on September 25, Brooks & Dunn on October 2 and Carrie Underwood on October 23, plus unconfirmed rumors of a Keith Urban greatest hits package. (Music Row)

• At the Marketing to Men 18-34 conference in New York, the big topic was branded entertainment, i.e., music with a ton of product placement. (Billboard.biz)

• Judging from the information in Rob Mitchum's article on concert first aid stations, indie rock shows are far safer than metal shows. Only one Pitchfork Festival attendee required transport to a hospital, while a mid-July Ozzfest concert saw "two people with stab wounds, numerous people with dislocated shoulders, facial trauma, sutured up a lot of faces, that kind of stuff, especially from mosh pits." Because of the age of attendees, classical music concerts actually have the highest mortality rate. The winner for highest rate of medical tent visits goes to gospel/Christian events. (Chicago Tribune)

• From 2003 to 2006, the percent of U.S. camera phone users who emailed/transmitted photos wireless dropped 22 points. Is there a parallel with over-the-air music? "People will download music OTA while it is a novelty then they will sideload all their MP3s to their music phone (sideloading is primary way to get music on a music phone). Just like people expect a camera on their phone they will expect an MP3 player, but the carrier will not see any revenue from the use of this feature." (Ad-Supported Music Central)

• Univision is facing another bribery lawsuit, this one brought by Los Angeles-based Platino Records. A previous lawsuit alleging the bribing of radio stations was brought by a former VP for Univision's Fonovisa Records. The company's equity partners are interested in selling some non-core assets, such as the music division, to help pay off debt. (Los Angeles Times)

• Long Gone John has put his label, Sympathy for the Record Industry, up for sale. John Reis (Swami Records) has put in a bid of 30 very expensive llamas. (LA Weekly)

• Localism works in music retail. In Fort Lauderdale, Radio-Active Records is within five miles of Borders, Target, Circuit City, Barnes & Noble and Best Buy, and yet it is growing. "Our biggest strategy is community involvement. It's why Virgin [Megastore] couldn't survive down here: They don't pay attention to what music locals are interested in. I go to the clubs, I see what people are dancing to, and I order that stuff in the store." (Broward Palm Beach)

Posted by Glenn at 8:06 AM | Link
|Brick-And-Mortor Retail||Marketing||Mobile Music||Universal Music Group|

• Album sales rose 4% last week but were 10% lower than the same week last year. For the year, album sales are down 14%. Digital track sales rose 1% last week and were 42% higher than the same week last year. For the year, digital tracks are up 48%. Last week, digital albums comprised about 11% of all albums sold.

• For the first time since 1997, consumers spent less time with media in 2006 than they did in the prior year. Veronis Suhler Stevenson, a private equity firm that specializes in media and communications, found that media usage per person declined 0.5% to 3,530 hours "due to changing consumer behaviors and digital media efficiencies." Part of the drop is explained by a shift toward digital alternatives for news and entertainment (online clips are shorter than broadcast shows). In addition, consumers are migrating toward consumer-supported platforms (like video games and cable TV) and away from ad-supported platforms (like broadcast TV and newspapers). (Radio Ink)

• Yowza. The first leg of The Police tour grossed $107 million. That number does not include Bonnaroo or last weekend's V Fest. (Billboard.biz)

• 1720 Entertainment inked an exclusive physical and digital distribution agreement with Koch Entertainment. (Music Row)

• The EFF is backing an eBay seller who has been sued by Universal Music Group for selling promo CDs. UMG, as do all labels that send out promos, claims the CD is for promotional use only and remains the property of UMG. With CD sales plunging, I assume labels are more worried than ever that sales of promo CDs are cannibalizing sales of new CDs. The practice of selling promo CDs -- and promo cassettes back in the day -- is very common, though, and has been for years. Rare is the used bin without some kind of promo CD. (EFF, via Digital Music News)

• MyLifeBrand, a social networking site, has partnered with Delicious Vinyl to create artist-specific communities. (Press release)

• The RIAA spent $685,000 lobbying the federal government in the first half of 2007. That might sound like a lot of money -- probably part of the reason it was reported in the first place -- but the insurance lobby spent $893 million last year, according to OpenSecrets.org. Check out the dollars spent by the Internet and telecom industries in 2006. eBay went in for almost $2 million and Cingular spent $4.7 million. Time Warner spent nearly $3.8 million in 2006. (AP)

• David at Digital Audio Insider has a post on sending out promo CDs, shipping costs and the value of online alternatives. "I don't -- in any way -- want to disparage the influence of college radio or the DJs and music directors ... But I'm starting to wonder if a blurb and a link on a well-read mp3 blog is more valuable to small indie band than modest airplay on a small- or mid-size college station. Ideally, you'd want both, but these new postal rates make me slightly less inclined to send out 400 copies of our next album to college radio." (Digital Audio Insider)

• Thank you to all who have donated during Coolfer's August pledge drive. We might just make the goal of 100 donations by the end of the month. Here's more information on what difference levels of donations will get you.

Posted by Glenn at 10:34 PM | Link
|Legal||RIAA||Universal Music Group|

• In an interim management statement released today, EMI said its first quarter revenues fell 5.1%. Its recorded music segment was down 13.4% while revenues in its publishing division increased 11.9%. Digital revenues increased by 26%. Physical revenues dropped 19.8%. (Press release)

• Music download site Amie Street, which incorporates dynamic pricing, has received funding from Amazon.com. Having such a high profile investor will help put Amie Street on the map. This is good news for the concept of dynamic pricing. For the greater recorded music industry to accept dynamic pricing -- or even to try it out -- would require the presence of a company like Amazon.com. And it would be nice to have more proof that Apple is either right or wrong when it comes to pricing digital music: Do consumers need one standard, simple price? (Digital Music News)

• Universal Music Group is said to be in the market for Chrysalis's music publishing. (This Is Money)

• John Wenzel of the Denver Post attributes the success of rock band The Fray to MySpace...even though airplay and exposure on "Grey's Anatomy," "Scrubs" and "One Tree Hill" is what drove people to the band's MySpace page. (Denver Post)

• The Times Online looks at the fundraising models of Sellaband.com and Slicethepie.com and theorizes that they could act as a scouting mechansim for majors. "If Sellaband and Slicethepie can unearth credible acts with such committed fans, the big bucks – and all their media buying power – may come calling." I think the touring circuit will continue to be a better place to find potential. (Times Online)

Posted by Glenn at 8:06 AM | Link
|EMI||Earnings Releases||Universal Music Group||Venture Capital|

I browsed through Vivendi's second quarter earnings release (read PDF) this morning. Things look good for Vivendi, but not so good for its Universal Music Group division.

Vivendi's second quarter revenues were up 6.4% to 5.2 million, while its first half revenues rose 7.4% to 10.22 million.

Universal Music Group's second quarter revenues dropped 0.8% in the second quarter while revenues sank 4.9% in the first half of 2007. The flat second quarter is practically a big win for a music company these days. Let's use the term "relatively optimistic," shall we?

Second quarter digital revenues rose 49% year over year and were up 51% at the year's midpoint.

Driven by the success of World of Warcraft, Vivendi Games' revenues was up 68.9% in the first half of the year. That's a good way for entertainment companies to have a balanced portfolio...have a games division to offset the lagging music division.

Additional reading:

• Vivendi's Q1 2007 earnings release. UMG's Q1 revenues were down 8.7 year over year. Digital sales were up 54% and represented 15.7% of revenues.
• Vivendi's 2006 earnings report. UMG's 2006 revenues were up 1.3%. Publishing grew 3.3%. Digital sales were up 84% and represented 9.6% of 2006 revenues.

Posted by Glenn at 12:51 PM | Link
|Earnings Releases||Universal Music Group|

• Album sales sank 5% last week and were 11% lower than the same week last year. For the year, album sales are down 15%. Digital track sales dropped 6% last week and were 44% higher than the same week last year. For the year, digital track sales are up 48%.

• According to research by Informa Telecoms & Media, Universal Music Group was tops in both physical and digital music in 2006. The company had 25.7% of the global market, up from 25.6% in 2005. Independents amounted to 27.5% of the total market. (Reuters)

• EMI Music Publishing and Universal Music Publishing have entered into a joint venture with music search engine One Llama and APM Music, which has "the world’s leading production music library." Try to get through the long-winded and wordy press release if you're feeling spry, but the bottom line here is that all parties are trying to facilitate and improve the process of finding the right music for a project. One Llamas is backed by illinoisVENTURES. (Press release)

• It's the year of the widget. ReverbNation has launched a Facebook widget called My Band that has a band's profile, picture, play statistics, songs (that can be shared) and tour schedule.

• The Independent previews James Blunt's upcoming court battle over the authorship of six tracks from his hit album. (The Independent)

• Yesterday's Soundcheck program on WNYC found guests Timothy English, author of "Sounds Like Teen Spirit," and Robert Clarida, an attorney who specializes in copyright issues, talking about the lawsuit against Avril Lavigne and other moments in music copyright history. In my opinion, Lavigne's song "Boyfriend" bears little resemblance to The Rubinoos' "I Wanna Be Your Boyfriend." There's an obvious Stones riff ("Hey! You!") in the Rubinoos' song, though. Check out this YouTube video that lays "I Wanna Be Your Boyfriend" over the video for "Girlfriend." (Soundcheck)

• SESAC, the performance rights organization, and MySpace have reached a deal that will pay SESAC members for streams at the popular social networking site. The deal does not cover songs uploaded to an artist's MySpace page. (Press release)

• A Bear Stearns analyst predicts the FCC will approve a merger of XM and Sirius. "We believe the merger likely will be approved on merits. ... We underscore though, if political forces are more powerful than the merits of the deal, the outcome may be different. However, our sense is that the deal will be judged on merits and is therefore likely to pass." (Radio Ink)

Posted by Glenn at 8:26 AM | Link
|EMI||Music 2.0||Research||Universal Music Group|

• Private equity firm Terra Firma has extended its deadline for its offer for EMI again, this time for one week. (BBC News)

• Universal Music Group has extended to July 26th its offer to buy the Sanctuary Group. UMG has offered $87.7 million. Last month news broke that investment bank Crosby Capital Partners was preparing a bid for Sanctuary, but the firm has not yet made an official bid. (Billboard.biz)

• Microsoft has applied for a patent titled "Off-line Economies for Digital Media" that is system for paying a commission to Zune owners for sharing music. Owners would be paid only if the other user who received the song purchased it at the Zune Marketplace. (ZuneScene, via Engadet)

• Music retail legend Music Millennium in Portland, OR is going to close down one of its two stores after 30 years. The combination of declining music sales and increasing rents was too much for owner Terry Currier. Since last August, the store has lost $93,000. (The Oregonian)

• Michael Geist, professor Law and columnist, helped create a video that aims to show how the media's reporting of piracy has helped lead to movie piracy legislation and two government committees that seek tougher action on piracy. The movie addresses claims of music piracy made by the CRIA with statistics and info on Canada's music market. Not all of Geist's rebuttals actually rebut the often-made claims. Rather, they try to present a more balanced view. The video is almost nine minutes long, spend some time with it if you can. (Michael Geist)

• Inside Digital Media has an podcast interview with Jim Burger, an attorney who discusses the recent WIPO meeting and the issue of fair use of acquired media in home networks. (Inside Digital Media)

Posted by Glenn at 7:09 AM | Link
|Brick-And-Mortor Retail||EMI||Podcasts||Universal Music Group||Zune|

• Album sales dropped 1% last week and were down 3% versus the same week last year. For the year, album sales are down 15%. Digital track sales were dropped 2% last week and were 47% higher than the same week in 2006. For the year, digital track sales are up 48%.

• The Orchard is planning a merger with Digital Music Group. Said The Orchard's Greg Scholl, who will continue to lead the company, "This company has been uniquely designed entirely around the exploitation of digital music rights. We’ll have more songs for sale so we’ll be a bigger partner for the retailers we supply and we’ll have more leverage in the market." (New York Times, via Digital Music News)

• Universal Music Latino has launched Rebel Music Group, a joint venture with Jack Gonzalez of rap group Psycho Realm. (Press release)

• The Los Angeles Times has a good recap of the copyright infringement lawsuit involving Avril Lavigne's song "Girlfriend." (Los Angeles Times)

• The Copyright Tribunal of Australia has issued an increase of music licensing fees for recorded music. The dance music community has taken notice. "...the fees paid by venues that play recorded music will rise from its former flat rate of seven cents per patron per song, to a rate that can go as high as $3.07 per person depending on the scale of the event. Breaking it down, clubs will now pay a licence fee of $1.05 a person based on the club’s capacity, which means that a club that holds 1000 people for instance will pay $1100, even if the venue is only half filled for the evening." (Same Same)

• iDupe is an application that finds duplicate and dead tracks in your iTunes library. (The Mac Observer)

Posted by Glenn at 7:55 AM | Link
|Digital Distribution||Universal Music Group||iTunes|

Big news today about Universal Music Group and iTunes. Great reading. Quite funny, actually, especially, especially in tech blogs and websites. The impression one gets from the many articles on UMG's refusal to sign a long-term contract is that the company will -- at the drop of a hat -- pull its catalog from iTunes.

I'm amused by the rancorous, Doomsday predictions, for a few key reasons. First, companies often use tough negotiating tactics. Who said the business world was one of easily reached agreements? Tensions often rise...or don't you remember Wal-Mart's threats to drop labels' CDs if they weren't given a product with a far lower wholesale price?

Look, it's no big shock that the leadership of these two companies are acting this way. Apple is practically an unstoppable force. UMG is often an immovable object, and its the music company that has the market share to do things its peers sometimes wish they could do. UMG wants flexibility to make special deals with other retailers. Now it is making its voice heard.

The fact that UMG is on a month-to-month contract, rather than a long-term contract, does not necessarily portend a horrible outcome. I'm on a month-to-month lease -- and have a subletter to boot -- but I'm in good standing with my landlord. Think of it this way: In a time of great technological change, if you could go month-to-month with a mobile carrier and pass on two-year agreements, which would you choose? (In other words, are you looking forward to canceling your subscription and eating the penalty fee in order to switch carriers to get an iPhone?)

Forbes' Louis Hau nails this one. In his article "Why Universal Bit Apple Back," he predicts no noticeable change for consumers, and has an idea why UMG is being steadfast.

"A revolution it isn't. Vivendi's Universal Music will continue providing iTunes with access to its new releases and older catalog titles. Apple isn't about to drop the inventory of the world's largest music company from iTunes. And consumers won't notice any difference.

But it will give Universal some breathing room if, say, a big media company approaches them with a promising new way to distribute music digitally and wants to provide some oomph to its launch with exclusive, limited-time access to new releases from the label's hottest-selling artists.

That would be hard to do under the kind of deals that the major music companies have signed with iTunes. Now, Apple won't have automatic access to all of Universal's music. ...

So why has Universal rediscovered its backbone? Perhaps because they've caught Apple at a rare moment of vulnerability.

Apple just launched its much ballyhooed iPhone, and the device's close association with all things Apple, including the iPod and iTunes, means that its maker isn't likely to do anything to jeopardize either franchise, for example, flip the bird to Universal."

Posted by Glenn at 4:41 PM | Link
|Universal Music Group|

Last night the Wall Street Journal posted an article that said Universal Music Group will not renew its contract with iTunes. Instead of a long-term deal, UMG will have an "at will" agreement with iTunes, kind of like a month-to-month lease. The expectation is that UMG will work on a short-term contract with iTunes and will not pull its catalog. The WSJ's Ethan Smith and Nick Wingfield theorized that UMG could give UMG "more flexibility in its dealings with competitors to iTunes."

The New York Times' Jeff Leeds has an article similar take on the hold out. "By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple," and added the theory that UMG could "explore deals to sell its catalog exclusively through other channels." Another impetus for hard-line tactics is Unless UMG is going to drop DRM and sell its catalog through Amazon.com's upcoming download store or eMusic, any deal with an iTunes competitor would lock out the most prized group of digital consumers in the country: iPod owners.

Labels would like Apple to license its FairPlay technology so other download stores will be iPod-compatible. But we've seen Apple's opinion on how labels and competitors can become compatible with the iPod. Steve Jobs' solution would be for UMG to drop DRM, a strategy I doubt UMG will adopt in the near term.

Posted by Glenn at 6:44 AM | Link
|Universal Music Group||iTunes|

• Album sales were down 7% last week and were 5% lower than the same week last year. For the year, album sales are down 15%. That's a two-point improvement in just two months. Sales of digital tracks rose 2% for the week and were 44% higher than the same week last year. For the year, digital track sales are up 49%. Two months ago, digital tracks were up 52% for the year. Three months ago the number was 53%. One might find it odd that album sales are improving against last year's pace while digital track sales are worsening against last year's pace. I have two thoughts on that. First, it confirms the popular belief that last year's album release schedule was weak. Second, digital track sales' pace could be the result of slowing digital music player sales (see second-to-last news item below).

• Finally, somebody comes out and admits that the iPhone isn't going to impact the recorded music business (at least in the near term). AP's Alex Veiga is right when he wrote that sideloading still trumps the unfilled promise of ubiquitous, over-the-air download. That means the iPhone is a very expensive version of the iPod...which is already pretty ubiquitous. Forrester's Charles Golvin didn't have to go out on a limb when he said, "I imagine most of the people who'll buy the iPhone will be iPod users already." (AP)

• As part of Universal Music Publishing Group's acquisition of BMG Music Publishing, UMPG is combining its Nashville operations. Pat Higdon has been named EVP and GM of UMPG Nashville and will report to chairman and CEO David Renzer. (Nashville Business Journal)

• Vanessa Carlton has signed with Irv Gotti's The Inc. Her third album, already recorded, was produced by Stephan Jenkins (Third Eye Blind) and includes songs co-penned by Linda Perry. (Billboard.com)

• The Format is giving away for free its "Dog Problems EP" at the band's website. The freebie lasts until July 16th and is happening because the band owns its own publishing and master recordings. "We'd be doomed if we sat around and waited for things like radio play to come around," said singer Nate Reuss. The EP was released through The Vanity Label. (The Format, via Out The Other)

• Here's the next RIAA heart attack: Is Google better than LimeWire for sharing music? One person things so, and has shown how using the search tag "index.of" will lead Google to reveal directories and not actual web pages (view YouTube video). Those directories shows files that people have stores on servers but have not linked to web pages. His website, JimmyR.com, has instructional videos and tips on how to get audio from YouTube videos, how to put a Google MP3 search on your website, and it has its own Google search that simplifies searching for MP3s, albums, torrents, PDFs and ringtones. (Slyck)

• Sanctuary's radio promotion department is closing. (Billboard.biz)

• I missed this on Friday: Digital music player sales are down 20% this year. Analysts are giving two key reasons for the drop: Music-enabled mobile phones and a penetration rate that is approaching saturation. (AP)

• Edison Research says the Internet is approaching television as the "most essential" medium. Among those surveyed, 36% voted for television and 33% voted for Internet. "In almost every category we surveyed, the Internet has doubled or tripled where in consumer's minds it bleeds into all facets of their lives." (Internet News)

Posted by Glenn at 7:09 AM | Link
|Apple||P2P||Publishing||Universal Music Group|

• A PriceWatershouseCoopers report predicts a -0.4% compounded annual growth rate through the next five years. The report refers to the "typical" music business of recorded music, not the music publishing or other segments that are part of the entire picture. With music groups getting involved in other revenue streams, those figures will need to be adjusted in the coming years. (Billboard.biz)

• Rolling Stone continues its series on the new music industry, this time laying out five possible outcomes in the future of the business: ad-supported music, legal P2P, endless access points (only generalities were given), different revenue streams and consumers as retailers. Yeah, I know, I've heard it all before, too., but in the era of the 200-word article this is about as "think piece" as Rolling Stone gets. (Rolling Stone)

• Sonos digital home music systems are now available in more than 440 Best Buy stores. The national chain will offer in-store, interactive Sonos displays in all stores offering Sonos products. (The Independent)

• Universal Music Group has joined up with Delivery Agent Inc. to launch a custom online shop for Interscope recording artist Pussycat Dolls. Consumers will be find and purchase clothing products seen on the Pussycat Dolls. The stores will also sell exclusive, branded merch. Check out the "shopisodes," a cross between VH1's "Pop Up Video" and the Home Shopping Network. (Press release)

• Jupiter analyst David Card on Paul McCartney in an iPod commercial: "Boomers need to be more comfortable buying digital music, too, you know...almost 60% of paying downloaders in our survey base were under 35." (David Card's Jupiter Blog)

• Representative Henry Waxman has reportedly grown concerned over the possibility of sensitive personal and government information being inadvertently shared on P2P networks and has sent letters to Limewire and StreamCast Networks executives to inquire what steps they have taken to prevent such sharing. (Hollywood Reporter)

Posted by Glenn at 7:20 AM | Link
|P2P||Research||Universal Music Group|

• 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
|Brick-And-Mortor Retail||EMI||M&A||Starbucks||Universal Music Group|

• Universal Music Group is beefing up its digital initiatives. Dan Kruchkow and Ezra Doty were both promoted to SVP of Global Digital Initiatives. The two will oversee the growth of UMG's direct-to-consumer platform. (Press release)

• In an Elle magazine interview, Kelly Clarkson said she rejected $10 million from Clive Davis to walk away from five of the songs on her upcoming album My December for more radio-friendly songs. (Kings of A&R)

• According to figures released by the British Phonographic Industry yesterday, U.K. consumers are Europe's biggest mobile downloaders. MusicAlly estimates that U.K. consumers download 1.3 million mobile tracks per month. (BPI)

• In late July, BitTorrent will launch a self-publishing platform that will allows artists to upload their content to the BitTorrent ecommerce platform. Major labels will not be involved in the rollout because the company wants to wait until DRM issues are resolved. (Digital Music News)

• Attendance at this year's CMA Music Festival totaled a record 191,154 people. (MusicRow.com)

• Bad business model gets more money: Blog payola company PayPerPost got another $7 million in funding. (paidContent)

Posted by Glenn at 7:35 AM | Link
|Digital Music||Research||Universal Music Group|

Yesterday Paul Resnikoff over at Digital Music News wrote that sources had told him that Universal Music Group is in talks with Apple to offer DRM-free downloads at iTunes. One "well-placed" source within UMG said there could possibly be an announcement within two weeks.

Today, The Times has an article that claims UMG is "preparing to experiment with selling digital music without the existing levels of copy protection." Writer Dan Sabbagh did not quote a single person nor make reference to an unnamed source, and he reiterated that an announcement could happen within a few weeks. I have no idea where he got his information.

The only official statement is to the contrary. Today Pocket-lint quotes UMG SVP Peter LoFrumento as saying "the rumor is completely untrue." At least somebody went on the record, but his statement contradicts what sources have told Resnikoff.

Posted by Glenn at 9:36 AM | Link
|Universal Music Group|

• Private equity group Terra Firma has raised its bid for EMI to £3.7 billion from £2.4 billion.

• CBS will reportedly buy social music site Last.fm for $280 million. Said president and chief executive Leslie Moonves, "heir demographics play perfectly to CBS's goal to attract younger viewers and listeners across our businesses." (Reuters)

• CD swapping service Lala.com has launched a free streaming service. Word is that Lala.com will "probably" pay labels $0.01 per stream (looks unsubstantiated to me) and will break even if users buy one CD per month. (Listening Post Blog)

• Universal Music Group has promoted Rio Caraeff to EVP of eLabs and GM of Universal Music Mobile. Caraeff is responsible for the company's digital strategy and mobile operations. (Press release)

• Knitting Factory is offering a SMS text message ticketing system that will allow consumers to purchase tickets through their mobile phones. (Billboard.biz)

Posted by Glenn at 8:49 AM | Link
|Online Stores/Services||Universal Music Group|

• Vivendi, parent company of Universal Music Group, will reportedly launch a paid content portal to sell music, videos and mobile content. Given labels' past history with these sorts of endeavors, I don't think this will be successful. Entertainment groups fare better when they let others sell to consumers. I can see bands carving out some space for themselves with direct-to-consumer relationships, and niche-fulfilling indie labels can pull it off on a small scale, but not this. (Reuters)

• A Greenfield Online Fact of the Week survey showed that 64% of online respondents still get their music by purchasing CDs. (mi2n)

• Contrary to its initiatives elsewhere, EMI is reportedly selling protected MP3 files in Russia through Soundkey.ru. (WebPlanet)

• PayPlay.fm will start selling its 1.3 million-deep catalog in unprotected MP3 format by the end of this month. MP3 files will cost $0.88 while WMA files cost $0.77. You won't find many popular acts there, but a few searches revealed some local (to Nashville) names such as Justin Earle. (Listening Post)

• Muzak and DMX, a design firm, want to merge and then be acquired by a third company. The Department of Justice has a few questions about the transaction's effect on competition. (Bizjournals)

• Music-heavy social media site Buzznet laned $6 million in funding. (paidContent)

• A report says some (Don) "Ienner loyalists" have left Sony BMG recently, including SVP of marketing, Barbara Jones. (Digital Music News)

• The IFPI has pointed to research by Italy's Luigi Einaudi Foundation that shows how file-sharing reduces consumers' physical music purchases. While 30% of file sharers surveyed say they purchase fewer CDs, 6% say they purchase more. The press release does not mention any increase in digital purchases, which makes it look pretty one sided. If you can read Italian, view the report here (file is about 9MB). (Press release)

Posted by Glenn at 12:16 PM | Link
|DRM||EMI||Sony BMG||Universal Music Group|

Vivendi reported its 2007 Q1 earnings yesterday (read PDF of Vivendi's release or Reuters' article). Driven by its pay-TV and video game segments, the French company reported a profit of €1.3 billion. The story from its music division mirrored recent earnings results from other major music groups: It wasn't good.

Universal Music Group's revenue declined 8.7% to €1.027 million (4.2% on a constant currency basis). While sales were strong in the UK, weak sales in the US, Japan and France pulled down the division. Earnings before interest, taxes and amortization fell €84 to €57. (Last year's figure included an extraordinary item, the recovery of €50 from the company's lawsuit with TVT.) UMG said the downturn was "due in part to the timing of international and domestic releases in a difficult recorded music market and unfavorable currency movements."

Here's the ol' digital silver lining: Digital revenues were up 54% and accounted for €161 of revenues. Digital now accounts for 15.7% of UMG's revenues, up from 9.9% last year.

Posted by Glenn at 1:07 AM | Link
|Earnings Releases||Universal Music Group|

Today Bloomberg reported that Universal Music Group is "close to winning" the approval of the European Union in its purchase of BMG Music Publishing. The EU's decision will be made in the next few weeks.

In addition to all the usual cost-savings and synergistic talk that goes along with this kind of acquisition, I imagine much of this news' impact is on the signal it sends to acquisition-minded Warner Music Group, which has been lovesick over EMI for some time.

Posted by Glenn at 4:45 PM | Link
|Publishing||Sony BMG||Universal Music Group|

Billboard has the latest rumor on Amazon.com's quest to get into the digital download game. Word on the street is that Universal Music Group, too timid to dive in head first, will do some tests before deciding to follow EMI's entry into DRM-free waters.

"Amazon, which is considered the best bet to challenge iTunes' supremacy in the digital world, is shooting to launch its MP3 digital download store in May, a target date it has yet to publicly acknowledge. (Amazon declines comment.) Meanwhile, sources familiar with the situation say Universal Music Group plans to test the sale of unprotected digital music files, including some of its classical music catalog conceivably including titles by Andrea Bocelli, at the new Amazon store and other outlets."

Take note of the last paragraph. Two indie labels are mentioned. One wants to set different prices for different levels of sound quality/file size (which is similar to EMI's current strategy). The other is going to sit on the sidelines in the opening rounds for fear of not getting a good financial deal. Contrary to popular opinion, not all indie labels are aching to get their music out at whatever price and then make up lost margin selling branded belt buckles or what have you.

Though Amazon.com's digital download strategy has been talked about for quite a while, the rumors feel more legitimate compared to some of the previous reports. Until just a few weeks ago, the rumor was that eMusic was a possible acquisition. All the way back in August of 2005, News.com had an article about Amazon.com's planned entry into the music download market (the article arose from a job posting at paidContent). In February of 2006, reports came out that Amazon.com was planning its own branded portable music player and subscription service. More recently, news of the company's interest in digital downloads popped up in December of 2006 (read article at The Register).

Posted by Glenn at 12:28 AM | Link
|Universal Music Group|

• Island Def Jam is going to bring back the Mercury imprint. Veteran exec David Massey will be the division's president. No word yet on any artists migrating to Mercury from Island or Def Jam. (Billboard.biz)

• Apple rumor of the week: the CEO of digital distributor INTENT MediaWorks said he has had meetings with Apple and believes the company will announce a music subscription service within six months. If that's the case, the subscription model would receive the one thing that would get it over the hump: Steve Jobs' blessing. (MacDailyNews)

• Not only does the Canadian government dish out grant money to musicians, it has just given Nettwerk Music Group CAN $650,000 "to continue working with Canadian artists to enrich Canada's musical experience." (Press release, via Digital Music News)

• I've laid off talking about the new Sansa Connect music player -- which connects to subscription services via WiFi -- but I'll point out this Computerworld review that showers praise all over the new product. "...the Sansa Connect dramatically increases what you can do with your media player and, for the first time, highlights the potential of subscription music services." (Playlist)

Posted by Glenn at 8:14 AM | Link
|Universal Music Group||iTunes|

• Universal Music Group promoted Larry Kenswil to the new position of EVP of business strategy. I don't know the guy, but I heard him speak at the Music 2.0 conference earlier this year. He came across as pragmatic and open-minded...good qualities for a strategist. (Billboard.biz)

• Babyface signed an exclusive worldwide deal with Universal Music Publishing Group. Sony/ATV will retain his back catalog. (Press release)

• Music entrepreneur and boy band magnate, Lou Perlman, is MIA and at the center of possibly Florida's biggest fraud case. The USA Today has a good recap of the whole thing. (USA Today)

• Jeff Jones is in and Neil Aspinall is out at the Beatles' Apple Corps Ltd. (Press release)

• Jody Rosen on how Akon became a star. In essence it's a good argument, but way overboard: "Between Akon and rapper Mims, the other breakout star of 2007, there's reason to suspect that we have arrived at a historical tipping point—the moment when the cell phone replaces the record as the central icon of popular music culture." That or the main driver of star talent over the last few years, "American Idol." No contest I say. (Slate)

Posted by Glenn at 9:57 AM | Link
|Publishing||Universal Music Group|

• Universal Music Group will become a strategic investor in Alliance TRACE Media, an international media platform centered on urban music and culture. UMG will give TRACE video and music rights, a weekly spot on UMG's International Music Feed and cross promotion and marketing support. (Press release)

• The Freep wonders if Bob Segar will leave Capitol Records for Starbucks' Hear Music. (The question is, Will he walk or be given his walking papers?) The article says Segar's office sent out a press release that mentioned, among other things, that no Capitol employees attended his March 17th show at Cobo or the platinum ceremony. (Detroit Free Press)

• Mercora launched M v2, the industry's first social music player and radio service for 3G mobile phones. (Press release)

• I think there has been some confusion about CD sales with all the articles that have been written in the last week. CD sales are not down 20%. They're down about 26% versus last year. The album as a format is down 20%. The difference is a strong but, given its small weighting, modest rise in digital album sales.

Posted by Glenn at 9:17 AM | Link
|Universal Music Group|

Jeff Leeds reported recently on a move by Universal Music Group's Suretone Records to put its videos -- free of charge - on popular file-sharing networks. Sort of. Suretone is just being a big tease.

"Unlike the song and music video files that major labels sell at services like iTunes, the video files will not be wrapped in protective software to limit copying, executives say. .... But the files will also be incomplete: users who download them will see perhaps half the video and be directed to watch the complete version at the label's own Web site, which will sell advertising to run alongside its videos."

There are two themes here. The first is the video's transformation from a promotional vehicle to a direct (and indirect in this case) revenue stream. Once given away for free -- in order to sell albums -- videos are now being asked to hold up sagging bottom lines. Suretune is trying to both promote (via seeding) and generate revenue (through advertising). The other theme is that of the label as a direct-to-consumer entity. Traditionally, labels have been at least one degree of separation from the consumer (iTunes and Target, for example, actually sell the music, and there may be a distributor between retailer and label). Recently, labels have pondered how to eliminate the middle man and connect directly with fans. Suretone's model is to both lure (for ad dollars) and entertain (for eventual music sales).

It's the luring aspect that bothers me. (Sorry to use a word with such negative connotations, but it's the proper word here.) Labels should resist the urge to adopt any marketing strategy that can result in additional consumer frustration. With RIAA lawsuits and DRM casting an increasingly black cloud on consumer sentiment, labels would be wise to play nice for the time being. If CD sales were up 20% rather than down 20%, I'd say, "Sure, tease the kids with incomplete videos. Times are good." But they're not good, are they?

Posted by Glenn at 5:51 PM | Link
|P2P||Universal Music Group|

• Interscope Geffen A&M Records has acquired Octone Records, home of Maroon 5. (Billboard.biz)

• Bennett Lincoff, former Director of Legal Affairs at ASCAP, posted a white paper on his website that outlines his plan to fix the music business. It hinges upon licenses not for consumers but for "responsible for the digital transmissions at issue" -- which would include music bloggers. (Musical Licensing White Paper PDF, via Wired's Listening Post)

• Warner Music Group's offer for EMI likely to be in cold, hard cash. (Reuters)

• An analyst at Hargreaves Lansdown Stockbrokers on a WMG acquisition of EMI: "A deal would be a no-brainer." (The Herald)

• And maybe it would be more of a no-brainer for regulators. "The industry is having a very bad time now, and regulators may take a more lenient approach," said an analyst at Panmure Gordon. I dunno. Regulators tend to be concerned with consumers and competition more than propping up the financial health of companies. The market would arguably be more competitive if private equity purchased EMI's recorded music business. (New York Times)

• For its 2007 event, SXSW posted a 3.1 GB BitTorrent with 739 MP3s from 739 artists. (Download)

Posted by Glenn at 7:50 AM | Link
|EMI||Universal Music Group|

ots of insight in this article at Billboard.biz that recounts a speech made by Universal Music Group president/COO Zach Horovitz at the Grammy Foundation's Entertainment Law Initiative luncheon. UMG's theme for the future: Lawsuits against social networking sites and deals similar to that with Microsoft.

Horovitz laid out five steps UMG is taking to compete with sources of free music.

• Empowering legitimate services to compete with illegal ones;
• Helping artists leverage their brands and share in new revenue streams;
• Adding value to consumers through new products and formats;
• Requiring compensation from businesses (i.e. Bolt.com, YouTube) that build a business in party by using UMG's content; and
• Finding opportunities on the Internet, in wireless networks, "and whatever new technological innovations are brought to UMG -- to get more music to more consumers, where they want it, how they want it, when they want it -- and to be paid to do so." (The quote is from the article and not a direct quote from Horowitz.)

I'd love to find out how the money from lawsuits and Zune taxes will be doled out to UMG artists. From what I can tell, lump sums from the Grokster settlement have been going straight to label's revenue accounts ($13 million for WMG in the fourth quarter) and no mention of payments have been made.

Posted by Glenn at 11:02 AM | Link
|Universal Music Group|

• Video site Bolt.com is nearing a settlement with Universal Music Group for "several million dollars." Additionally, Bolt.com will agree to pay UMG royalties in the future. The company is working on similar royalty agreements with other majors. (New York Times)

• SpiralFrog inked licensing deals with Click Record Productions and distributor Kudos Records Ltd. (International Business Times)

• More reaction to Jobs' open letter: SanDisk CEO Eli Harari calls for an end to proprietary formats. (Digital Music News)

• An article on some f.y.e. stores that have replaced former Tower locations. Different product mix, digital kiosk test and a partnership with Great American Country. (The Tennessean)

• How do you merge two companies and prevent a culture war? Capitol Music Group's sales staff will be comprised of the former Virgin Records staff. Capitol Records' sales staff was let go. (Billboard.biz)

• Plug Award winners include Band of Horses, Neko Case, Sufjan Stevens, J Dilla and Brooklyn Vegan. (Plug Awards)

Posted by Glenn at 7:58 AM | Link
|DRM||Legal||Online Stores/Services||Universal Music Group|

• As reported recently by the New York Post, Jermaine Dupri will be named president of Island Urban later today. (Billboard.biz)

• Even more changes at EMI. Chris Ancliff has been upped to General Counsel. He replaced Charles Ashcroft, who leaves for health reasons. (Variety)

• Helio announces a mobile download store, and all four majors are on board. Over-the-air downloads go for $1.99. Tracks downloaded to PC cost half that. (InformationWeek)

• Viacom is considering selling its music publishing division, Famous Music, the home of Eminem and Shakira. (Reuters)

• Warner Music Group and Last.fm, the music-centered social networking site, announced a partnership that will offer WMG's catalog over multiple services, one of which will be a premium, subscription-based interactive radio. Currently, Last.fm streams songs on a non-interactive basis. (Press release)

• Reggae label VP Records signed a digital and mobile distribution deal with Universal Music Group that excludes North America, Japan and the Caribbean. (Tropicalfete)

• British music retailer Music Zone has sold 67 of its 100 stores to competitor Fopp. (Scotsman)

Posted by Glenn at 7:12 AM | Link
|EMI||Publishing||Universal Music Group||Warner Music Group|

• EMI and AOL Europe will run an ad-supported music video streaming site. (NewMediaAge)

• Rumor: Microsoft is developing a Zune phone. (CrunchGear, via Billboard.biz)

• Just as Norah Jones hit the top of the charts, concerns about the company's debt burden caused Standard & Poor's to downgrade EM's long-term rating to BB- from BB. (Forbes.com)

• Expectations of a weak first quarter earnings -- which will be announced Thursday -- dropped Warner Music Group's stock 3.4% yesterday. (Reuters)

• Columbian music star Juanes, who already has a recording contract with Universal Music Group, has signed on with Universal Music Publishing. (Monsters & Critics)

• Sting on the digital revolution: "I genuinely do not believe that the digital download phenomenon is as big as the websites are suggesting, certainly not in the album market." (The Australian)

• Reminder: The 2007 Plug: Independent Music Awards, which celebrate independent artists, are this Saturday at New York City's Webster Hall. (PlugAwards.com)

Posted by Glenn at 8:20 AM | Link
|EMI||Universal Music Group||Warner Music Group||Zune|

Vivendi announced its full-year 2006 results yesterday (download PDF of full press release). Vivendi's total revenues were up 2.9%. Revenues were up 1.2% in the fourth quarter.

Universal Music Group's revenues rose 1.3% in 2006 but dropped 1.5% in the fourth quarter. The company attributed the growth to "strong digital sales growth, higher license income in the U.S. due in part to legal settlements and strong sales growth in the U.K. and Japan." Part of the legal settlements include revenue from the Kazaa settlement. Digital sales rose 84%. Vivendi does not offer information on operating income for its divisions, only total revenues.

In contrast to the music division's mediocre year, Vivendi Games -- its video game divison -- increased revenues by 25.4%.

Posted by Glenn at 11:31 AM | Link
|Earnings Releases||Universal Music Group|

• Today The New York Post reported that Jermaine Dupri, recently ousted as the head of Virgin Records' urban unit, "is in negotiations with Universal Music Group about joining its Island Def Jam label." Talks are focused on his role at the label but details have not yet been determined. (Read article at New York Post)

• Napster Mobile has launched on au/KDDI, Japan's second-largest mobile network with over 20 million subscribers. The service is already on Japan's i-Mode platform. Napster Mobile requires a $3-per-month access fee, and users buy credits that are redeemed for over-the-air song downloads and ringtones. (Read press release)

• Digital distributor IRIS Distribution has inked deals with dance/electronic labels Neurodisc, Scion and Subliminal Records. Artists added to the IRIS catalog include Erick Morillo, Bob Sinclair, Harry "Choo Choo" Romero and Spank Rock. (Read press release)

• Digital Music Group Inc. signed a three-year deal with Apple to sell its video content at iTunes. Two weeks ago, the company announced a distribution deal for nearly 200 hours of video content for content such as ""Hopalong Cassidy" and "My Favorite Martian." DMGI's shares rose more than 30% on the announcement. (Read article at Sacramento Business Journal)

• Apple's FairPlay DRM is illegal in Norway ruled the Consumer Ombudsman in Norway. (Read article at The Register)

Posted by Glenn at 8:45 AM | Link
|Digital Distribution||Napster||Online Stores/Services||Universal Music Group|

• The IFPI issued its 2007 Digital Music Report (download PDF). The 22-page report has 2006 statistics for downloads and mobile music, looks at emerging business models and indentifies ISPs as the "key to the problem" of Internet piracy. As seen in the headline of this Bloomberg article on the report, the IFPI is framing the industry's continued losses more as a piracy issue and less as a circumstance brought on partly by a la carte downloads, the unbundling of the album and the decline of the CD. (Read press release)

• Executive shuffle at Universal Music Nashville. Co-chairman James Stroud is out and co-chairman Luke Lewis has signed an extension. (Read article at Billboard.biz)

• Somewhat related: Country music, like some other American genres, doesn't travel well. The Tennessean's Ryan Underwood took a look at country music's poor international sales. "But executives on Music Row say the amount of foreign sales they see is miniscule and actually may be shrinking, due in part to illegal downloading as well as the lack of a ready-made network of country radio and TV outlets abroad." Canada, once 10% of Universal Music Group Nashville's sales, now accounts for 4 or 5%. (Read article at The Tennessean)

• All over the (Internet) news yesterday was Skype's upcoming, Internet-based television service. Called Joost (pronounced juiced), the service is now in beta and Skype has lined up a deal with the always-happy-to-license-content Warner Music. (Read article at Forbes.com)

Posted by Glenn at 7:24 AM | Link
|Research||Universal Music Group|

The Associated Press offers a profile of Universal Music Grou chief Doug Morris and his hardliner position concerning licensing. In contrast to most portrayals as a lone renegade, this one shows a more accurate scenario. Even though other label heads aren't acting so tough, they're more than happy to let Morris do their dirty work.

"Morris has already suggested, albeit guardedly, that his next target will be iPod-maker and No. 1 online music retailer Apple Inc. With Apple's licensing deal to sell Universal music on iTunes set to expire in May, Morris said, 'there might be other ways to get paid.' Speculation in the industry is that he'll seek a slice of iPod sales. Apple declined comment. Universal's upcoming negotiations with Apple could set the tone for the rest of the recording industry.

But Morris says he doesn't know if he's prepared to pull Universal's music from iTunes to get a cut of iPod sales. 'I wouldn't want to draw a line in the sand,' he said. Last fall, Morris threatened not to license Universal music to Microsoft just days before it was scheduled to launch its own online music store and its Zune digital music player. In response, the software company coughed up a royalty of just over a dollar for every Zune sold and paid a licensing fee for the right to sell Universal music. Microsoft extended the same terms to other labels, a move that led Edgar Bronfman Jr., chairman and CEO of Warner Music Group, to tell Wall Street analysts that it took a strong stand by the industry leader to make the deal happen."

A licensing fee for the right to sell a label's music? Kind of like personal seat licenses created by professional football teams to extract even more money for their fans.

Posted by Glenn at 10:20 AM | Link
|Universal Music Group|

• Vivendi's chief executive, Jean-Bernard Lévy, underscored his company's focus on media over telecom. "In telecoms, the opportunities are rare, and there are no real cross-border advantages." He said the company will seek future growth from Universal Music Group, Vivendi games (online gaming), and programming created by Canal Plus. (Read article at International Herald Tribune)

• The Equal Employment Opportunity Commission has found that Sony BMG discriminated against black employees when it "overwhelmingly" targeted black employees in a series of 2004, post-merger layoffs at a Manhattan office. Later this week, a lawyer for one of the former employees will file a suit against Sony BMG. (Read article at New York Post)

• The Los Angeles Times' Randy Lewis combined concert grosses an album sales to arrive at the Ultimate Top Ten. They are, in order, The Rolling Stones, Tim McGraw & Faith Hill, Rascal Flatts, Kenny Chesney, Madonna, Barbra Streisand, Celine Dionne, Red Hot Chili Peppers, Bon Jovi, Nickelback (Read article at Los Angeles Times)

• Toshiba has partnered with MTV's URGE digital music service. Nothing of substance is mentioned in the press release, though. No details of the partnership. No info on collaborative branding efforts. Nothing. (Read press release)

• Shane Allen, formerly a national director of promotion at Universal South, has been hired as VP of radio strategies and field marketing at Capitol Nashville. (Read article at Billboard.biz)

Posted by Glenn at 7:30 AM | Link
|Legal||Sony BMG||Touring||Universal Music Group|

• Nielsen Soundscan announced a slew of top tens lists for 2006 (through December 10). The top album of 2006 was the High School Musical soundtrack with 3,480,000 units sold, followed by Rascal Flatts' Me and My Gang (3,060,000) and Carrie Underwood's Some Hearts (2,460,000). The top digital download of the year is Daniel Powter's "Bad Day," which sold 1,880,000 units. Gnarls Barkley's "Crazy" was second with 1,525,000 and Sean Paul's "Temperature" was third with 1,460,000. (Read press release)

• French musician Johnny Hallyday lost his final legal battle against Universal Music Group over control of his catalog. France's highest court denied Hallyday ownership of his master tapes recorded between 1961 and 2004. The music industry looked to the case as possibly setting a precedent that would allow artists more rights. (Read article at Reuters)

• A group of record labels have filed suit in New York against Russian music download site AllOfMP3.com. The move comes after Mastercard and Visa have refused to accept transactions from the controversial site. Earlier this year, the IFPI filed suit against AllOfMP3.com in Britain. Among the labels filing suit are Arista Records, Capitol Records and UMG Recordings. (Read AP article)

• The Dutch government will exclude digital music players from copyright levys. Such levys are imposed to compensate artists and labels for personal copying of music. Electronics manufacturers oppose such levys, saying consumers who buy music should not have to pay again to transfer it to a device. Music industry executives tend to challenge the idea that all consumers have actually paid the first levy -- by purchasing the music -- in the first place. (Read AP article)

Posted by Glenn at 8:26 AM | Link
|Legal||Online Stores/Services||Universal Music Group|

• EMI will buy out shares of Toshiba-EMI, a Japanese joint venture EMI has with Toshiba Corp. The company was created as Toshiba Music Industries Co. in 1960 and changed its name to Toshiba-EMI Ltd. in 1973. (Read article at Reuters UK)

• As mentioned yesterday, Verve Music Group downsized. It was be under the Universal Music Enterprises umbrella. Variety's Phil Gallo reported that Verve GM Nate Herr will be in charge of day-to-day chores. Staffs at Verve's sub-labels, such as Verve Forecast, will not get pink slips, he wrote. What really stood out in the article is the section of Forbes.com in which is was placed: Tech. The URL places it in the digital entertainment section of the website. Verve, tech? CDs must not be newsworthy. (Read article at Forbes.com)

• Changes at Warner/Chappel: CEO Richard Blackstone will become an advisor to Warner Music Group chief Edgar Bronfman, Jr. and assist with the company's global expansion strategy. David Johnson, EVP and general counsel at WMG, will replace Blackstone. (Read article at Reuters)

• The Rolling Stones' "A Bigger Bang" tour, with $437 million in gross receipts, was the top tour of 2006. Madonna's Confessions tour was second at $197 million. (Read article at Billboard.biz)

• Devine Entertainment Corporation signed a deal Sony BMG to distribute its "Marsalis on Music" DVD series. (Read press release)

• The Who's Pete Townshend will give the keynote address at the 2007 SXSW conference in Austin, Texas. SXSW will run from March 9-18. Music runs from March 14-18. Townshend's speech is set for March 14 at 6:30pm. (Read article at Retuers,
SXSW blog post)

• An article on brick-and-mortar music retail in the Twin Cities. Independent retailers say CD sales are down about 10% this year. (Read article at StarTribune.com)

• Seen yesterday on the History Channel: during a show, an announcement in the bottom right corner that read, "Now available at iTunes." Now that's good advertising.

Posted by Glenn at 7:50 AM | Link
|EMI||Sony BMG||Universal Music Group|

• Impala, the Independent Music Comapnies Assocation, released a statement on the European Union investigation into Universal Music Group's purchase of BMG Publishing. "Our only request is for a level playing field and market access -- exactly what competition rules are intended to guarantee. In other words, give European music space on the market, let the consumer decide and give European citizens a Europe to be proud of." (Read press release)

• Universal South has hired Fletcher Foster to be its SVP and GM. Foster, previously the marketing chief of Captol Nashville, will start early next month. (Read article at The Tennessean)

• Performing rights organization BMI and Spiral Frog, an ad-supported P2P network, have completed a licensing agreement. Spiral Frog is set to debut in early 2007. It requires users to watch advertisements in return for free -- though rights-protected -- music files. Former BMI president and CEO Frances W. Preston is on Spiral Frog's board of directors, as is Jason Berman, former president of the RIAA and chairman of the IFPI. (Read press release)

• Jason Mraz, who is signed to Atlantic Records, has released a digital-only release through digital distributor Musicane. Selections For Friends, to be priced at $12.95, is a 13-track collection of live recordings. Consumers can purchase the album directly from www.jasonmraz.com. (Via Digital Music News. A week-old press release is here.)

• Artists manager Peter Jenner told The Register CD prices would increase as a result of a blanket license that enables legal file-sharing. The physical market, he figures, will dry up and prices will rise accordingly. I think that's an accurate assessment, though Jenner must know there are powerful retail forces that will fight higher wholesale prices. Prices won't jump wildly, though. Labels are still bullish on the CD format and will stay behind it. The Register sees the CD's longevity; audio quality is one reason for its resilience. (Read article at The Register)

Posted by Glenn at 7:45 AM | Link
|Digital Distribution||P2P||Publishing||Universal Music Group|

• Harry Fox Agency is withdrawing its proposed license for MusicNet that grants it the right to stream music online. The basis for the withdrawel is MusicNet's lack of proposal for a new rate in the pending Copyright Royalty Board proceeding. Billboard's Susan Butler outlines a worse case scenario: "Although not stated expressly in the letter, the failure to seal a licensing deal could lead to copyright infringement suits by publishers against digital services not covered by any license." Harry Fox Agency is America's largest agency for mechanical licensing, collection, and distribution agency on behalf of music publishers. (Read article at Billboard.biz)

• Fourteen layoffs at Verve Music Group today, according to a tipster.

• Robert Christgau's "Consumer Guide" is back...at MSN.

Posted by Glenn at 3:29 PM | Link
|Music Criticism/Writing||Universal Music Group|

Yesterday a tipster told Coolfer that there big changes at Verve: reorgination, top execs out, label being moved under another division. So far the changes haven't hit The Velvet Rope newswire, but Digital Music News named names: Chief Ron Goldstein will be replaced by Bruce Resnikoff. "Verve is expected to continue its stand-alone structure," says the post, which differs from the news I got.

Know anything? Drop me a line.

Update from an anonymous tipster: "The department heads are meeting today and monday and there are layoffs expected in the next two weeks."

Second update: Gee whiz. I guess I wasn't used to having access to all of Billboard's content. Ed Christman had an article yesterday about the changes at Verve. Ron Goldstein out, Bruce Resnikoff in, and a statement by Universal Music Group that stated Verve will now be part of Universal Music Enterprises. "This will further enhance the label's ability to reach its consumers by taking advantage of UMe's's successful non-traditional approach to marketing, publicizing and distributing music," it states. Verve will still be an autonomous label that will sign its own artists, reported Christman.

Posted by Glenn at 10:03 AM | Link
|Universal Music Group|

• Changes at EMI. The Blue Note Label Group was named the jazz repertoire center for EMI Music worldwide, a function previously centered in London and partly handled by EMI Classics Centre. Josh Lerman was named VP of International and will be responsible for marketing jazz on a global basis for all labels under Blue Note. (Read article at All About Jazz)

• Universal Music Group is replacing defective copies of Kiss Alive! 1975-2000 sold at Best Buy that did not contain two bonus tracks. (Read article at Blabbermouth)

• An article on gospel, which is selling well in 2006. (Read Boston Globe article)

• UMG's Fontana India label, though Fontana Distribution, will release digital versions of over 400 previously unreleased titles from its catalog of Indian music. (Read article at Glamsham)

Posted by Glenn at 6:41 PM | Link
|EMI||Universal Music Group|

• Borders filed its 10Q report yesterday. Bad news for record labels. Comparable stores sales in the music category were down 17.8% for the 13 weeks ending October 28, 2006. Total sales were up 1.8% over the same period last year. Net loss improved to $39.1 million over $14.1 million last year. (Go to Borders SEC filings page)

• This is a week old but I just saw it: Iceland cut its Value Added Tax on recorded music to 7% from 24.5%. Who's next? (Read IFPI press release)

• A patent application is the smoking gun for speculation that Apple is moving to launch a mobile phone. (Read Financial Times article)

• There's some music- and entertainment-related issues in this debate between Dave Winer and Robert Scroble over whether Microsoft is an innovator or is playing catch-up. (Read article at Wall Street Journal)

• A Disney executive said YouTube needs a more efficient procedure for taking down infringing content. (Read Reuters article)

• Universal Music Group's Doug Morris was such a fountain of information and opinion at the Reuters Media Summit. Here's another UMG tidbit: Mariah Carey is slated to release two albums in 2007. (Read post at SOHH)

• Musicnotes sold its 2,000,000th sheet music download. It hit the 1,000,000 mark 15 months ago and sold its first in 1999. (Read press release)

Posted by Glenn at 10:43 AM | Link
|Apple||Brick-And-Mortor Retail||Universal Music Group||YouTube||Zune|

OIn Tuesday, Universal Music Group's Doug Morris told the Reuters Media Summit "it would be a nice idea" to seek an concession from Apple like it did from Microsoft and its Zune. "We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way."

Not exactly fighting words from Mr. Morris. Compare that statement to his tongue lashing at YouTube and MySpace In September: "We believe these new businesses are copyright infringers and owe us tens of millions of dollars."

Like I wrote last week, UMG had Microsoft stuck between a rock and a hard place, and the cost of not having UMG's catalog for the rollout was greater than a small per-unit fee. But UMG has little to no leverage with Apple. The "or else" UMG would have to give to Apple would be a threat to pull its catalog, which would draw the ire of UMG artists and Vivendi shareholders if it came to pass.

Let's pretend UMG gets some kind of concession. If not a per-iPod fee, what concessions could UMG get? Maybe better margin. Maybe better placement of UMG titles. Maybe some kind of partnership. Probably not cold, hard cash.

Posted by Glenn at 12:29 PM | Link
|Apple||Universal Music Group|

• EMI shareholders are "close to revolting," a source told the NY Post. "The only time the stock appears to move is when deal rumors surface." And those synergies that make a merger with Warner Music Group so attractive? One "music industry exec" says EMI has more fat to trim. "The restructuring they have gone through have been incremental because management is carrying them out. EMI's costs are still bloated and it doesn't have to be that way. Private equity cuts costs with a whole different mind-set." (Read article at New York Post)

• So who is going after EMI? Two dailies have named different private equity groups. (Read article at Hits)

• EMI is offering the upcoming Lily Allen single, "Littlest Things," in the MP3 format. The list of major label experimentations with MP3 is a short one. Only Jessica Simpson and Jesse McCartney come to mind; both were sold at Yahoo Music. Labels have been far less shy about giving away MP3s for promotional purposes. This kind of experimentation is good and necessary. There's not such thing as a swift sea change in the entertainment business, so guinea pigs and always needed. (Lily Allen store, via Hypebot)

• UMG's Doug Morris interviewed by Reuters. On ad-based models: "Whatever brings in enough money to protect our artists and protect the creative people are going to support." On lawsuits: "The idea of the lawsuit was to put an element of risk into a person like me who was jimmying the phones when I was 18 years old." (Read article at Reuters)

• The European Union will take a closer look at Universal Music Group's purchase of Bertelsmann's music publishing unit. (Read Billboard.biz article)

• An Ipsos survey found American consumers are well aware of over-the-air download options but few have compatible phones. A solid 71% know OTA options exist, 14% have phones that can handle such downloads and a mere 4% (and rising) have shelled out for an OTA download. (Read at Ipsos, via Digital Music News)

• Talk in Australia about sagging music sales. "Digital ain't filling the void," said one industry veteran. "If people are sitting back waiting for iTunes to fix it, they're in strife," said another. (Read aritlc at The Age)

• eMusic's change in subscription prices are changing -- for the better -- the per-track price received by at least one artist. (Read post at Digital Audio Insider)

Posted by Glenn at 8:14 AM | Link
|EMI||Universal Music Group||eMusic|

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

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

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

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

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

• Vivendi received approval to acquire BMG Music Publishing from Bertelsmann. The combine music publishing company is bigger than current leader EMI Music Publishing. (Read article at Billboard.biz)

• IRIS Distribution and Sonific created a partnership that will add tens of thousands of master recordings to Sonific's catalog of songs available for use with Sonific's SongSpots widget. SongSpot can be placed on a blog or website and will stream music from Sonific's catalog. (Read press release)

• Research and Markets has released the second volume to its "Ringtones: Past, Present and Future" report. Among the reports conclusions: labels are in "an explosive growth phase," "the outlook for pure-play mobile content aggregators is bleak" and covertones, or ringtones comprised of cover versions of popular songs, "are here to stay as a viable component of the market." (Read press release)

• Apple scored a deal with six airlines to place iPod docks in passenger seats. One key component: Each seat must have its own video display, which rules out most of the planes I encounter. Expect to see the new system used mid-2007 by Air France, Delta, Continental, Emirates, KLM and United. (Read post at Digital Music News)

• The FCC announced a public hearing on media ownership that will be held in Nashville on December 11th. (Read article at Radio Ink, download PDF of press release)

Posted by Glenn at 12:14 PM | Link
|Apple||Digital Distribution||Publishing||Radio||Ringtones||Universal Music Group|

• EMI is expected to report a 55% drop in pretax profit for the first half of the year. News like is sure to fuel to the chatter about an eventual merger between EMI and Warner Music Group. (Read Dow Jones article)

• The deal-making continues: EMI Music Publishing has inked a deal with the (editor's opinion: utterly unwatchable) Current TV network that will put its music in approximately one-third of its programming. (Read article at Billboard.biz)

• Joel Klaimon was named new Senior Vice President of Promotion/Artist Development at Universal Republic. (Read article at Hits)

• Sean Ryan, former chief executive of Listen.com, laments the "label tax" imposed by Universal Music Group on sales of Zune hardware. The technologist's favorite term, "slippery slope," makes an apperance. For a change, its use actually has merit. He wrote, "I think we're running out of high margin drivers for anyone but the labels, who continue to drive alternative revenue sources." Yes. As soon as the drivers realized they are the drivers, the negotiations changed. (Read op-ed at Forbes.com)

• Prince has opened a nightclub called 321 at the Rio hotel-casino in Las Vegas and is currently doing two shows a week. (Read New York Times article)

Posted by Glenn at 9:18 AM | Link
|EMI||Publishing||Universal Music Group|

• SoundExchange, the performance rights organizaion that collects digital royalties, released the results of a study it funded that was done by Dr. Yoram Wind, a marketing professor at the Wharton School of Business. Its finding: "Music is key to survival of satellite radio." In terms of dollars and cents, the study found subscribers would be willing to pay only $6.15 per month for a satellite service without music, as opposed to the current $12.99 per month. The study's point is clear by the end of the press release. SoundExchange wants at least ten percent of satellite radio revenues. CRB, XM and Sirius, it says, have proposed a rate of less than one percent of their total revenues for the next six years. (Read press release)

• Bids for Clear Channel Communications are reportedly due in the coming days. The country's largest radio company is considering plans to be taken off the market and has hired Goldman Sachs to help look at its options. (Read Reuters article)

• An article on All Angels, the "world's first female classical supergroup." Universal signed the group -- made up of four teenage girls -- to a £1 million, five-album deal. Their debut album comes out next week in the UK. (Read article at The Scotsman)

• Warner Bros. Nashville will sign the winner of "Nashville Star 5." The lastest season of the country "American Idol" starts January 11th. (Read article at Reality TV Magazine)

• Hypebot interviews a Tarek Al-Hamdouni of J Records to find out about the label's online marketing efforts. Read parts one and two.

• RIP Gerald Levert. (Read AP article)

Posted by Glenn at 5:11 PM | Link
|A&R||SoundExchange||Universal Music Group||Warner Music Group|

• Based on first-day sales, Hits predicts a big week for Keith Urban. Love, Pain & the whole crazy thing (Capitol Nashville) could sell in the area of 350,000. Sony's Now 23 is expected to do abou the same. (Read article at Hits)

• Hidden Beach Records has inked a distribution agreement with Universal Music Group Distribution. The first album of the new agreement will be by TribalJazz, a jazz group led by Doors founder John Densmore. (If you have time, go to the band's MySpace page and listen to its version of The Doors' "Riders On The Storm.") Jill Scott, who was the label's first hit, will release a new album in 2007. (Read press release)

• Mark Wright, currently an executive VP of A&R, will take over as president of Universal South Records. He replaces the label's founders, Tim Dubois and Tony Brown. (Read article at Variety)

• The String Cheese Incident, a touring workhorse and its own in-house cottage industry, posted a message on its website that said the band "has no plans - beyond summer of 2007" and added it "would like to extend a heartfelt than you to our friends and fans for all your support." (Read article at Pollstar)

• One last Tower Records eulogy: Stories from Tower's Sunset Strip store, where employees were "mini-celebrities" in the '70s and Elton John was allowed to shop alone an hour before the store opened. (Read at Sacramento Bee)

• In honor of the new NBA season, I'd like to give you the first-week Soundscan total for My World (Tru Warier, through Lightyear) by Sacramento King forward Ron Artest: 250. Oh my. To be charitable, I'll add in the 91 street date violations. Let's call it 341. Here's an interesting note from Artest's website: "Ron originally had an offer from (Kings owners) the Maloof's record label, however the NBA informed the Maloofs that if they signed Ron to their label they would be fined 2.5 million dollars and would have a first round draft pick taken away as well."

Posted by Glenn at 8:42 AM | Link
|Tower||Universal Music Group|

The phrase repeated near and far is "the music industry's model is broken." It turns out the changes that are most directly and immediately affecting bottom lines are the ones like the deal Universal Music Group has with Microsoft. UMG, Reuters reported yesterday, will receive a payment for every Zune sold. UMG, and other labels, are interested in two things: Weakening Apple's digital music domination and receiving money from hardware sales.

"(UMG's Doug) Morris said the deal could set a precedent in negotiations with other device manufacturers, including mobile phone makers, who are increasingly seeing music as important to the future of their businesses. Microsoft, which has already had early talks with other labels about the fee, said it is keen to work closely with artists in the development of Zune.."

The New York Times' Jeff Leeds has more:

"The company is expected to receive more than $1 for each $250 device, according to executives who were briefed on the pact. Under the deal, Universal, the world’s largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week. The pact comes after weeks of tense talks and averts a standoff that might have crippled Microsoft’s attempt to compete against the iPod."

Posted by Glenn at 6:36 AM | Link
|Universal Music Group||Zune|

Vivendi reported its third quarter results yesterday (read PDF of the press release). Company sales rose a mere 0.3% (3.6% at constant currency) pulled downward in part by Universal Music Group's 2.1% drop in revenues. (Take out the Napster settlement and UMG revenues dropped 5.3% It's a good thing labels sue. The proceeds pad their bottom lines.)

For the first nine months of 2006, UMG revenues are up 2.7%. That would look decent given the current climate of the music industry, but the success of another Vivendi business segment is very telling. Vivendi Games' revenue rose 15.2% last quarter and is up 20.7% for the year.

Digital sales were up 88% from last year and now represent 11.5 of total UMG revenues. There is sure to be numerous headlines that say something to the effect of, "Digital sales buoy Universal Music Group's slumping album sales." That's a poor way of thinking about UMG's performance. Digital sales -- think a la carte -- are partly responsible for labels' problems. Consumers have been given the facts, and they're increasingly voting against the album. Cherry picking isn't good for labels' bottom line. Also, think of digital's small impact. It's share is just over 11%, and the other 89% of UMG is dropping quickly. Mobile numbers, which weren't given separately, are the wild card here. Mobile sales are needed to make up for the album-to-single exodus.

From Marketwatch: "Merrill Lynch on Tuesday separately cut its rating on Vivendi to neutral from buy after a 13% rise in Vivendi shares since September."

Posted by Glenn at 9:11 AM | Link
|Universal Music Group|

Financial Times has a story about Warner Music punked Universal Music Group by signing a licensing deal with YouTube days before UMG filed an infringement lawsuit against YouTube. Had the lawsuit been filed, YouTube may not have been acquired by Google.

"Fortunately for YouTube, another music company came to the rescue. Warner Music, led by its young digital chief, Alex Zubillaga, swept in days before the suit was to be filed and clinched a deal with YouTube to distribute its music videos on the site in exchange for a licensing fee and a share of advertising. In so doing, Warner upstaged a rival, and appears to have given YouTube breathing room to become legitimate."

Don't look now, but WMG may have helped shape the near future of online media. Since WMG is signing a deal with everybody, its effectively marking its territory and encouraging its competitors to join in the deal-making. At the same time, this maneuvering shows how the majors differ in their digital strategies.

Not all media companies are lining up to sign with YouTube. Bob Wright, chairman of NBC Universal, underscored the importance of copyright to the company's future. Viacom has an agreement with Google but not with YouTube, and last week the media company ordered YouTube to pull clips of Jon Stewart.

Posted by Glenn at 7:54 AM | Link
|Universal Music Group||Warner Music Group||YouTube|

The New York Times asks today, "Is Vivendi in play?" After a failed bid for the corporate giant, there are reports that investors and board members favor breaking up the company.

"Up until the talks with K.K.R., executives at Vivendi had seemed to be against any sale or breakup of the company. But people involved in the recent talks said it was Vivendi that invited K.K.R. to make a friendly offer, opening the possibility that the company could welcome discussions with other suitors."

The article quotes from a Morgan Stanley analyst's report that tells investors Vivendi's linkages between telecom and media are "not of such a scale as to justify the business being retained as a single group." In that case, an equity firm could buy Vivendi and sell off its various units. Later in the article, that opinion is balanced by noting that the company's chief executive considers its units to be "different and complementary."

Vivendi owns Universal Music Group, the world's largest. It recently purchased Bertelsmann's music publishing business. The company also owns Canal Plus and French mobile operator SFR.

Posted by Glenn at 6:28 AM | Link
|Universal Music Group|

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

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

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

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

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

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

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

Posted by Glenn at 10:30 AM | Link
|A&R||Indies||Licensing||Publishing||Universal Music Group|

• Later this month, eMusic will lower the number of downloads for each of its subscription packages. The $10 plan will drop to 30 from 40. The $15 plan goes to 50 from 65. Existing customers are not subject to the change. The new prices will take effect November 21th. Given eMusic's revenue-sharing model, artists and labels like it when the denominator decreases. Consumers end up paying more per download -- but it's still a great value. (Read article at The Register, via Digital Music News)

• Unavision Communications Inc. has acquired the remaining 50% of Mexico-based Disa Records and Edminosa Publishing. Disa will remain with Universal Music Group. Edminosa will fall under Univision Music Publishing. (Read press release)

• Ludacris announced a development deal with The N Network that will make the rapper executive producer of a television series called "Halls of Fame." (Read article at SOHH.com)

• A rumor that Steve Greenberg may be looking to relaunch S-Curve Records. (Read post at Hits Rumor Mill)

• NPR has a story on Mitch Koulouris, a former Tower Records manager who started Digital Music Group. (Listen to interview at NPR.com)

• The Department of Justice dropped its investigation into Entercom purchases after the company agreed to sell three stations in the Rochester area. Post-sale, Entercom will have about 40% of the Rochester market's radio ad revenue. Before the sale of the three stations, the company would have had over 57% of the market. (Read article at FMBQ)

• A clarification on a post about Snocap's recent deal to put music on MySpace pages. Snocap's publicist informs me this is separate from the Linx web development toolkit. The Snocap MySpace store, I'm told, is an HTML widget that plugs the storefront into existing websites.

Posted by Glenn at 9:03 AM | Link
|Legal||Mobile Music||Radio||Universal Music Group||XM||eMusic|

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Posted by Glenn at 9:14 AM | Link
|EMI||Indies||Radio||Universal Music Group|

Yesterday the Wall Street Journal ran an article on the alliance betweeen Jay-Z and Coca-Cola that puts promotional material in pirated tracks that are passed around P2P networks.

"By inserting promotional material into the decoy files, and then planting those files prominently on file-sharing sites, record labels and other marketers can turn what is now an antipiracy tool into an advertising medium. 'The concept here is making the peer-to-peer networks work for us,' says Jay-Z's attorney, Michael Guido. 'While peer-to-peer users are stealing the intellectual property, they are also the active music audience,' and "this technology allows us to market back to them.'"

This may have people scratching their heads and wondering how labels -- and sponsors -- can use piracy with one hand while they're fighting piracy with the other. Look no further than labels' embrace of -- nay, reliance upon -- (technically illegal) mixtapes to promote their hip hop artists.

It's not just Universal, which did a similar piracy campaign with Ne-Yo. Virgin Records acknowledged it is in talks with MediaDefender "about marketing options. "It's an opportunity that will hopefully lead to a better experience for the artists, the labels and the consumers," said Jason Flom.

Posted by Glenn at 10:13 AM | Link
|EMI||P2P||Piracy||Universal Music Group|

Here's a topic that has been all over the news since yesterday afternoon. Universal Music Group has sued video sharing sites Grouper and Bolt. (Read article at Reuters and Financial Times).

Coolfer believes media should treat different companies that free streams and those that offer free downloads. (Streams complement label offerings. Downloads are a substitute.) With YouTube, it looked like three of the four music majors agreed. But with lawsuits against Bolt and Grouper, the distinction is less clear. Grouper allows downloads. Bolt allows only streams (as far as I can tell).

So what do the lawsuits against Bolt and Grouper have in common? The need to let the issue work itself out in the courts, to provide the industry a roadmap to follow in the future, to bring some clarity to an important issue.

At least one person saw it coming. Mark Cuban, who was wrong about YouTube, was dead on about the effects of YouTube's acquisition on its imitators. On October 11th he wrote at his blog:

"Rather than suing Gootube, the media companies will first sue several of the imitators and competitors that have no money whatsoever. They wont sue those companies to get money, they will sue a bunch of those companies to build precedent. In particular, they will sue to get clarification on the DMCA Safe Harbor laws."

Which is exactly what the Wall Street Journal said today:

"The suits...mark the first time a major media company has tried to use the courts to narrowly interpret 'safe harbor' protections provided by the Digital Millennium Copyright Act of 1998 so it would exclude video-sharing sites. ... At issue in the Universal Music lawsuits and several other cases filed in recent months is whether video-sharing sites are eligible for the safe-harbor protections based on the nature of their activities."

Does it look like UMG has different rules for different companies? Sure, but that's always the case when one is a market leader and others are expendable.

Posted by Glenn at 1:02 PM | Link
|Universal Music Group|

• Another 8,000 lawsuits were filed against file-sharers in 17 countries. Will it stop file-sharing? Not by a longshot. Will the trade groups stop suing file-sharers? Not a chance. Talk against piracy is cheap. Trade groups know they have to act. (Read Reuters article at CNNMoney)

• A judge dismissed Entercom Communications' motion for dismissel in a payola lawsuit. This lawsuit was Eliot Spitzer's first against a radio company. It now moves to the discovery phase. (Read article at Billboard.biz)

• Universal Music Group moved 250,000 units of 3,000 digital tracks that were released from the company's archives. The press is really eating this up. What if they did the math? I'll rephrase: Universal Music Group sold an average of 8.33 units each of a group of digital songs it released from its archives. Doesn't sound so spectular does it? And that was over seven months. That's just over one download per track per month. On an aggreggate level it's fine, but individual royalty checks won't change much. I've said it before: The Long Tail wil benefit aggreggators, not individuals. (Read article at News.com)

• Used CD 2.0 website Lala.com is currently selling all its CDs at wholesale cost. (Yes, Lala.com does sell brand new CDs in addition to facilitating the trading of used CDs.) It's been a while since Coolfer wrote about Lala.com. A revisit post is forthcoming.

Posted by Glenn at 7:36 AM | Link
|Legal||Long Tail||Payola||Universal Music Group|

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

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

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

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

Posted by Glenn at 9:59 AM | Link
|Indies||Tower||Universal Music Group|

• Universal Music Group and Sony BMG signed ad revenue-sharing deals with YouTube. (CBS Corp inked a deal as well.) The article mentions the "new YouTube technology" that will allow companies to find restricted content and remove it, or leave the ad and share ad revenue generated from views of that video. Sony BMG said it will allow users to include some of the music group's catalog songs in their videos...which implies new releases will be forbidden. (Read article at MSN Money)

• More video deals: Sony BMG and Warner Music Group inked an ad revenue-sharing deal with Google. In the near future, the companies' audio-video content will be accessed through Google's Ad-Sense network. (Read article at Forbes.com)

• Brit music magazine NME is working on a greater presence in the U.S. through a US-oriented website (it figures it would be too expensive to launch a print magazine), an American news service and club nights to really hammer the point home (one done in LA, one coming up in NYC). (Read post at paidContent)

• It's not music, but it'll sell: EMI is going to release a limited editiion DVD of Steve (The Crocodile Hunter) Irwin's memorial tribute service. (Read press release)

• A Piper Jaffray survey reveals 79% of U.S. teens own an iPod, up two points in six months. Interest in music-playing mobile phones increased to 74% from 70%. (Read post at Digital Music News)

Posted by Glenn at 9:43 AM | Link
|Research||Sony BMG||Universal Music Group||Warner Music Group||YouTube|

Back in July, Sony BMG released the Jessica Simpson single "A Public Affair" in the unprotected MP3 format. The story clogged up Google News for days. Granted, the track retailed for $2 -- it was customized to include the name of the purchaser -- but it was seen by all as a victory against DRM. And let's face it: Nobody other than the RIAA's Cary Sherman and Mitch Bainwol like DRM (at least publicly).

Hollywood Records has made waves with its commerciall release an MP3 (many give away promotional MP3s). Yahoo! Music scored an impressive MP3 version of the entire Jesse McCartney album, Right Where You Want Me. The album is priced the same for both the MP3 and WMA versions.

In the ultimate if-you-can't-fight-them-join-them statement, Hollywood senior VP of marketing Ken Bunt said, "Piracy happens regardless of what we do. So we're going to see how Jesse's album goes (as an MP3) and then decide on others going forward."

The report card on Jessica Simpson's full-length: In three weeks, A Public Affair started out at 100,000 in its first week, dropped 41% in its second week, and dropped another 55% in its third week. Should Sony BMG executives worry about MP3s hurting sales of A Public Affair? No, no need for worry. Unprotected MP3s floating around the Internet aren't ruining sales of the album. The reason the album has dropped so far since its release is the single peaked at only #38 on the Hot 100 chart.

Posted by Glenn at 2:16 PM | Link
|Digital Music||Universal Music Group|

Last week Universal Music Group's Doug Morris threatened to sic a cadre of lawyers on YouTube. Some people took him seriously. They shouldn't have. Morris was just negotiating.

Yesterday, AFX reported Universal Music Group spokesman Peter LoFrumento confirmed Monday that Universal ... is also negotiating with YouTube to strike a distribution deal."

The article also says Sony BMG is in negotiations with YouTube. I wonder which of them will get a sync in the next Diet Coke and Mentos video.

The Wall Street Journal writes today on the YouTube's transition to a copyright abider: "YouTube's agreement with Warner hinges on a digital system YouTube is developing to identify automatically copyrighted music or other audio, and related video its users upload. The system relies partly on what's known as 'fingerprinting' -- comparing audio uploaded to the site to unique attributes of copyrighted content it already knows."

Posted by Glenn at 2:30 PM | Link
|Universal Music Group|

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

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

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

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

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

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

Posted by Glenn at 7:29 AM | Link
|Digital Distribution||Indies||Tower||Universal Music Group|

• Universal Music Group and MTV are expected to announce today an agreement that will give MTV a blanket license to use UMG songs and videos in mobile programming. A digital executive at UMG points to exclusive, mobile-only content that he hopes will build awareness for the medium. (LA Times)

• Warner Music Group's Asylum Records signed a marketing and distribution deal with Atlanta-based hip hop label Aphilliates Music Group. Asylum acts as an incubator for WMG and has a good track record with albums by Mike Jones, Bun B, D4L and Cam'Ron. (NewYorkBusiness.com)

• Retailers, find a pen and some paper and start that letter to your Congressman: Transworld stores will be the exclusive retailer of Daryl Hall & John Oates’ Home for Christmas, out October 3rd. (Hits Rumor Mill)

• eMusic, the independent-minded music download service, has officially launched its European service to all 25 member countries of the European Union. (Reuters)

Posted by Glenn at 7:14 AM | Link
|Brick-And-Mortor Retail||Mobile Music||Universal Music Group||Warner Music Group||eMusic|

Vivendi reported earnings for the first half of 2006 on Wednesday. Universal Music Group's revenues were up 5.3% ande earnings (EBITA) were up 22.4% against the same period last year. Don't get too excited about the earnings, though. That big earnings increase came from "the recovery of a previously expensed cash deposit of EUR50 million recovered in the TVT lawsuit," not any incredible improvement in operations performance.

Posted by Glenn at 11:20 AM | Link
|Universal Music Group|

• After Universal Music Group and Fuse failed to reach an agreement on compensation, UMG sent the cable music network a directive to remove all its videos from programming until the two reach common ground. (Hits Rumor Mill)

• A profile on the legendary London record shop Rough Trade, which turns 30 this year. (The Independent)

• Beggars drone rockers Serena-Maneesh will have its music pre-loaded on Microsoft's Zune media player (Zune Insider)

• It didn't score BMG Music Publishing, but EMI Music Publishing did sign a deal with Beyonce. She was previously with Windswept Publishing. (Billboard.biz)

• Clear Channel's board of directors approved the repurchase of $1 billion in company stock. (Radio Ink)

Posted by Glenn at 8:18 AM | Link
|Brick-And-Mortor Retail||EMI||Universal Music Group|

• Hits predicts a nifty first-week tally for Beyonce's B'day...possibly up to 650,000. Audioslave is on track for a good week but way behind at 130,000. (Hits)

• Today's licensing news: The Orchard has signed a deal that makes its catalog available on the yet-to-be-released, legit P2P service QTRAX. (Press Release)

• Hip hop label Swishahouse boasts about its upcoming plans, which include new albums by Paul Wall, Mike Jones and Lil Keke. (Rap News Network)

• Handleman Company lost $5.9 million on sales of $240.4 million in the first quarter ending July 29th. Music revenues were down 15.7% against the same period last year. "There were very few new releases by top recording artists and those that were released substantially underperformed the new releases in the year ago period," said Chairman and CEO Stephen Strome. (Press Release)

• You could see this coming: Impala, the indie label trade group that got the Sony BMG merger annulled, is threatening to target Universal Music Group's recent acquisition of BMG Music Publishing. (The Guardian)

• The SEC is investigating XM's estimates on subscriber counts and cost of signing up new customers. (Radio Ink)

Posted by Glenn at 7:40 AM | Link
|Digital Distribution||Distribution||Indies||Universal Music Group||XM|

• We all forgot about this, didn't we? Bertelsmann settled the lawsuit brought by Vivendi, parent company of Universal Music Group, over P2P service Napster. UMG gets $60 million and Bertelsmann admits no liability. (Reuters)

• EMI Music Publishing has inked a deal to license its music to Spiral Frog, the free, ad-supported music service that made waves last week when it signed a similar deal with Universal Music Group. (The Guardian)

• A very interesting article on former Capitol country artist Tim Murphy, California lottery winner Dennis Sanfilippo, Sanfilippo's Big 7 Recods and a belated chance at the country singles chart. (San Jose Mercury News)

• Here's a clever promotion: ATO Records is giving college students DropCards with purchases at college bookstores that can be used to download ATO artists. (Press Release)

• The Wall Street Journal covered the new program from Naxos and eMusic at Borders stores. CD-sized boxes are purchased at Borders. Inside is not a CD but an access code to download the album at eMusic. And here I though digital music would bring an end to returns and breakage. (Digital Audio Insider)

• Today's digital distribution signing: Nareos has signed an agreement with The Orchard to sell the distributor's catalog on Nareos' online store, MyPeerBox. (Press Release)

• An interview with Magnatune founder John Buckman. Magnatune is an e-label with a unique business model (with, among other features, a 50/50 split with its artists and a very liberal attitude about seeding the market with free MP3s). (OS News)

Posted by Glenn at 8:26 AM | Link
|Brick-And-Mortor Retail||Digital Distribution||EMI||Marketing||Universal Music Group|

The Associated Press reported this afternoon that Universal Music Group has reached a deal to acquire BMG Music Publishing for $2.05 billion.

Posted by Glenn at 4:37 PM | Link
|Publishing||Universal Music Group|

• Given the broader changes in consumption, this isn't a surprise: Almost all the radio formats showing a gain in the spring are adult-oriented. Country is the format share leader by a two-to-one margin. (Radio and Records)

• BusinessWeek.com on the increasingly competitive world of online ticket resellers. (BusinessWeek.com, via Brooklyn Vegan)

• Universal Music Group has licensed its catalog to upstart, ad-supported download site SpiralFrog. According to the company's website, the service will debut this December. (Digital Music News)

• After a successful tenure on the mixtape scene, Brooklyn rapper Papoose finally has a deal. Jive signed him for a reported $1.5 million. (MTV.com)

• Remember, there's no such thing as bad publicity: Warner Music Group was given a Golden Broom Award for being one of the worst places for janitors to work. (Backstage.com)

Posted by Glenn at 8:26 AM | Link
|A&R||Radio||Universal Music Group||Warner Music Group|

• Rock band Keane (Interscope) has postponed its fall North American tour while its singer undergoes rehab. (Billboard.com)

• A vote for "flexible and variable pricing" from the chairman of Viacom and CBS, Sumner Redstone. (Digital Music News)

• RED Distribution has added two labels: Uprising, formerly with Koch, and I Surrender. (Billboard.biz)

• Since YouTube is always in the music press lately, here's one for you: Sony Corp placed its bet on the future of the Internet by purchasing Grouper, a website that hosts user-generated videos, for $65 million. Question: Will the company find a way to fold that into its overall strategy that could benefit its hardware and media divisions? (NY Times, via 12F)

• You don't know what you're missing, Los Angeles: In the spring survey, country music extended its streak as king of the top Arbitron markets. Spanish formats had the biggest gain. (Radio Ink)

• Something for you long tail nuts: A transcript of a Bandwidth Conference panel featuring "The Long Tail" author Chris Anderson and folks from Yahoo! Music and Rhapsody. (37signals, via Digital Audio Insider)

• Something for you Leslie Gore nuts: Digital Rights Agency has inked a deal with K-tel International to digitally distribute its songs worldwide. (Press Release)

• Worth reading: A thread on Ryko's recent conference in New Orleans and ADA's turnkey digital distribution solution the company will implement. (The Velvet Rope)

Posted by Glenn at 9:08 AM | Link
|Digital Distribution||Distribution||Long Tail||Radio||Universal Music Group|

• Jeff Leeds has details on an expected profit-sharing deal between rap mogul Irv Gotti and Universal Music Group's Universal/Motown. "Under the three-year deal Universal will commit roughly $10 million to Mr. Lorenzo in an advance against future profits and payments to cover overhead ... The deal also includes a provision that could allow Mr. Lorenzo to buy ownership of Murder Inc.’s master recordings. ... While the new structure means he will have to share more of the profits than if he owned the label himself, he said he was content to be back in business without a legal cloud overhead" (NY Times)

• Sansa just announced a new MP3 player, the e280, that has an 8 GB, flash-based capacity for only $250. Meanwhile, use of the phrase "iPod killer" soars. (Engadget)

• Entercom has purchased 15 radio stations from CBS Radio and one from Radio One. The deal requires the company to sell off two stations (in Rochester) to meet FCC regulations. The company now has stations in 22 markets. (Press Release)

• The Darkness say that contrary to rumors, they were not dropped from Atlantic. The label has "taken up their option with the band" and will release a new album in early 2007. (Yahoo! News)

• RIP Joseph Hill of reggae group Culture, who died Sunday in Berlin, Germany while on tour. (SunStKitts.com)

• RIP Dave Nives, Koch Records VP of Production and Catalog. (Hits Rumor Mill)

Posted by Glenn at 7:39 AM | Link
|Portable Music Players||Radio||Universal Music Group|

• Charles Duhigg profiles Geffen chairman Ron Fair and looks into the age-old question: Is a suit or a musician the better executive? (LA Times)

• This marks the dawn of a new era: The music of Andrew Lloyd Webber will be sold as ringtones thanks to a deal between Universal Music and Lloyd Webber's Really Useful Group. (Times Online)

• Lousiana four-piece Mute Math has ended its lawsuit against its label, Warner Bros. The band's own label, Teleprompt, signed a "new and improved" deal with Warner Bros. The group's next album will be out September 26th. (SoulShine)

• Album sales are down 5% through July. If digital tracks are taken into account (total downloads divided by ten equals an album sale) then album sales are down only 0.9%. Of course, that means nothing to companies like Tower, but it helps some people sleep at night.

• A profile on Summit, NJ-based music chain Scotti's. Its secret to competing with the mass merchants? Lots of vinyl. (NewJersey.com)

• The 21st century jukebox: Rowe's digital NiteStar jukebox with capacity for 300 albums and artwork. (Pollstar)

Posted by Glenn at 9:17 AM | Link
|Brick-And-Mortor Retail||Ringtones||Universal Music Group||Warner Music Group|

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

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

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

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

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

Posted by Glenn at 4:40 PM | Link
|Indies||Universal Music Group||Warner Music Group|

• Bertelsmann closes in on a buyer for BMG Music Publishing. It should have a short list of potential buyers by the end of August. (Billboard Radio Monitor)

• France president Jacques Chirac signed an interoperability law that aims to force Apple to make its iTunes/iPod duo compitable with competitors' hardware and online music stores. Next, let's see if other countries follow France's lead, and let's see if other companies can use interoperability to make inroads into the dominance of the Apple brand. (MacNewsWorld)

• Forty-eight symphonies and their managers have signed an agreement that covers the recordings of live performances. The deal replaces up-front fees to musicians with a revenue-sharing system. Orchestras also retain ownership of the live recordings, which will be licensed out to labels. (NY Times)

• News about Fontana Distribution: Ken Gullic has been upped to SVP of Sales and Marketing, and the distributor has landed Ipecac Recordings, which decided to leave Caroline Distribution. (Hits Rumor Mill)

• P2P start up Skyrider landed $2 million in funding. One of the three projects planned by the company is a keyword search technology that allows advertisers to capitalize on the millions of daily P2P keyword searches. (Press release, via Digital Music News)

• Musicane has introduced Musicane Groups "to enable effective administration of online sales by record labels and video distributors." The first label to take advantage of Content Manager is Koch Records. (Press Release)

• RIP Elisabeth Schwarzkopf, the legendary soprano. (Playbill)

Posted by Glenn at 10:07 AM | Link
|Apple||P2P||Sony BMG||Universal Music Group|

• Painful: Tower has been put on credit hold by all its major distributors. (Hits Rumor Mill)

• Barney Wragg, formerly SVP at Universal Music Group's eLabs, has been appointed EMI's worldwide head of digital. (Macworld UK)

• The RIAA decided to drop a lawsuit against a file trader (here called a "massive setback") because the defendent's unprotected WiFi network may have been used to download the files in question. (Bit-Tech.net)

• Surprisingly, I didn't read about this at Stereogum: Lindsday Lohan was dropped by her UK label, Island Records. Said an insider to The Sun, "A single was a huge flop over here because Lindsay couldn’t be bothered to get off her bum and promote it." (The Bosh)

• Universal Music Enterprises acquired 11 early Elvis Costello albums and plans to reissue them through box sets, reissues, deluxe editions and the usual ways labels milk their investments. The albums were previously reissued and expanded by Rykodisc, so UME says its reissues will be "definitive reissues." (Billboard.com)

• Here are two albums that have been in dire need of digital remastering: Rhino will reissue the first two Pretenders albums on October 3rd. Finally! (Billboard.com)

• Apple's European iTunes music stores have sold 200 million tracks since launching two years ago. (Playlist)

Posted by Glenn at 1:11 PM | Link
|Brick-And-Mortor Retail||EMI||RIAA||Universal Music Group|

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

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

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

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

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

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

Posted by Glenn at 9:04 AM | Link
|Indies||Touring||Universal Music Group|

Vivendi, the parent company of Universal Music Group, announced its earnings for the first half of 2006. (Download a PDF of the seven-page press release.)

Universal Music Group's revenues (on page two) were up 2.2% for the second quarter and were up 5.3% for the first half of 2006. Credit was given to increased digital sales, higher license income and strong performances from Jack Johnson, Ne-Yo, NOW 21, Rihanna, Nelly Furtado, Keane and Andrea Bocelli.

Digital sales accounted for 10.1% of total revenues for the first half of 2006 and 10.3% of total revenues in the second quarter.

Posted by Glenn at 3:21 PM | Link
|Earnings Releases||Universal Music Group|

• Subpar album or subpar record label? The Yeah Yeah Yeah's Karen O has encouraged fans to complain to its UK label, Polydor, due to the label being "lazy" with the band's latest album, Show Your Bones. "You should start a petition and send it to our label and let them know our songs sound pop," she said. "They don't get it, which is kinda lazy. The decline of record labels that is going on all over the place doesn't surprise me." In the U.S. the album has scanned just under 180,000 units since its March 7th, 2006 release. (Virgin.net)

• A poll at Inside Digital Media asks if major labels would make more money selling music in the MP3 format instead of using DRM. The yes vote came in at 76% versus only 24% that thought DRM would result in greater revenues. (Inside Digital Media)

• Why more bands don't make the trip down to South Florida. (Sun-Sentinel)

• Market shares for new releases at the year's halfway point. (Hits)

• RIP Bill Miller, Frank Sinatra's pianist for over 40 years. (Reuters)

Posted by Glenn at 11:12 AM | Link
|Universal Music Group|

• Sony BMG has created a new unit, called the Commercial Music Group, to find new opportunities for its catalog and classic recordings. (Hollywood Reporter)

• HIts has additional info: The group will be headed be veteran John Ingrassia, formerly an executive vice president at Columbia Records Group. CMG will include Legacy Recordings; the Strategic Marketing Group; the Custom Marketing Group, Television; and Sony BMG Masterworks. (HIts)

• Vivendi, the parent company of Universal Music Group, is selling its stake in a utlity company. It's believed the move, which will result in about $1.91 billion, will give it more resources in its pursuit of the music publishing assets of BMG and Warner Music. (Financial Times)

• Castle Harlan, Inc. has completed its acquisition of Baker & Taylor, a leading wholesale distributor of books, videos and games. (Charlotte Business Journal)

• Related: Rumors that Baker & Taylor laid off some members of its sales staff yesterday. (The Velvet Rope)

• Physical album sales for the year are down 4.2% while digital album sales are up 126%. Digital tracks are up 77%. Taking all three into account, sales of recorded music are up 0.1% through the first half of 2006. (Hollywood Reporter)

Posted by Glenn at 11:01 AM | Link
|Distribution||Sony BMG||Universal Music Group|

In an effort to boost CD sales, Universal Music Group International has unveiled a three-tiered CD packaging and pricing scheme. The announcement covers CDs sold in Europe only. Those in the technology/digital field may scratch their heads, but the CD is still a very viable format that deserves at least some of the attention given to the development of digital business models.

Starting September 18th, CDs sold in traditional jewel cases will be upgraded to a standard "super jewel box" packaging, which differs from the usual jewel box in that the edges are rounder, hinges are stronger and it has a locking clasp. The top of the line will be the "deluxe" version, a CD plus a limited-edition bonus CD or DVD. Some albums released over a year ago will be released in a "basic" format and packaged in a slide-pack jewel case, which will be a no-frills cardboard sleeve. (Searches for pictures of a CD slide pack returned only this description from a few online CD stores: "The CD Slide Pack is a New Form of No-frills CD Packaging featuring an Outer Slipcase with the Original Cover Artwork, and an Inner 'slider' Including a CD.")

UMGI chairman/CEO said this comes at "no extra cost to the fans," which will certainly be the case if consumers are given an option. Since the DualDisc has been rolled out some titles have not been made available in a less expensive, CD-only format. Giving consumers more choice is wonderful -- as long as they actually have a choice.

Continue reading "Universal Music Group International To Offer Three-Tiered CD Pricing" »

Posted by Glenn at 2:38 PM | Link
|Marketing||Universal Music Group|

• Universal Music Group is interested in two music publishers. Sources told The FInancial Times the company has had talks with EMI about buying Warner Music's music publishing in the event the former buys the latter. UMG is also prepared to bid for BMG Music Publishing, for which Bertelsmann is currently seeking a buyer. (Financial Times)

• A Bridge Ratings surveys shows how MP3s, podcasts, Internet radio and satellite radio have lessened time spent listening to terrestrial radio. (Bridge Ratings, via Digital Music News)

• An Ipsos Insight report says one in five Americans over the age of 12 owns a portable music player. One in 20 owns more than one. (Ipsos Insight)

• The Record Exchange will close its five remaining stores in North Carolina and Virginia. (The Charlotte Observer)

• RIP Johnny Jenkins, guitarist who played with Otis Reading. (Hollywood Reporter)

Posted by Glenn at 8:39 AM | Link
|Brick-And-Mortor Retail||Research||Universal Music Group|

• ASCAP honored songwriters last night at its Rhythm & Soul Awards last night. 50 Cent and Jermaine Dupri shared the songwriter of the year honor. (Hollywood Reporter)

• The Internatinal Music Feed, a pop music brand that's part of the Universal Music Group, has signed a deal with Verizon to offer video and channels of programming to Verizon's fiber-optic TV services. (Yahoo! Finance)

• An article on the Miles Davis estate with some noteable news. A remix album is due this fall, and Don Cheadle is set to play the jazz legend in an upcoming biopic. Also, Sony Legacy "plans to release more Davis recordings this year," claims the article. (AP)

• PricewaterhouseCoopers is optimistic on global digital music, especially in Asia, and predicts new technologies in the U.S. will offset physical declines. (Digital Music News)

• The Supreme Court declined to hear TVT's appeal in its case against Island Def Jam. A circuit court voided TVT's $132 million jury verdict over a dispite regarding Ja Rule and Irv Gotti. (Billboard.com)

• One Stop Digital Music is a new digital distributor that will seek to take music directly from recording studios. (PRWeb)

• Jill Sinclair, who set up ZTT Records with her husband, producer Trevor Horn, was accidentally shot by an air rifle and is in critical condition. (The Independent)

Posted by Glenn at 9:19 AM | Link
|Digital Music||Sony BMG||Universal Music Group|

• 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)

Posted by Glenn at 9:20 AM | Link
|EMI WMG Merger Talk||Firings||Satellite Radio||Universal Music Group|

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

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

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

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

• It's the new radio: The soundtrack to the Madden NFL 07 video game was revealed today. Artists include Anti-Flag, Cartel, The Rapture, Riverboat Gamblers, Keane, Spank Rock, Wolfmother, upcoming Virgin act Red Jumpsuit Apparatus and Suretone/Geffen trio The Pink Spiders. (BusinessWire)

• Universal Music Group announced yesterday that it has bought Vale Music, Spain's largest independent record company. (Hollywood Reporter)

• Sandi Thom, the British singer-songwriter who attracted attention for fluffing up (some say fraudulenty) her webcast-to-riches story, will get a September 12th street date in the U.S. via Columbia Records. (PR Newswire)

• Sony BMG Nashville dropped John Randell and Jessi Alexander. (Billboard Radio Monitor)

• Another axe: Island/Def Jam dropped Fefe Dobson. (Fefe Dobson MySpace page, via The Velvet Rope)

• As Fred Bronson points out in his Chart Beat column, Taylor Hicks' #1 single, "Do I Make You Proud," is the fifth number one for an "American Idol" contestant and the 15th to make the Hot 100. Also of note is the length of stays atop the chart this year: no song has remained at number one for more than five weeks in 2006. (Billboard.com)

Posted by Glenn at 9:07 AM | Link
|Sony BMG||Universal Music Group|

• Remember that NY Times article last month about the Pussycat Dolls, their toy line and the rise of alternative revenue streams being pursued by labels? Hasbro is passing on a line of dolls based on the Pussycat Dolls because it feels the group and its label, Interscope, are going after a much older target audience than what it had anticipated during the original disccusions. (NY Daily News)

• Kenny Chesney won Entertainer of the Year at the Academy of Country Music Awards. Keith Urban and Sara Evans won male and female vocalist awards, and Carrie Underwood's single "Jesus, Take the Wheel" won best single. (VOA)

• DreamMusician.com will offer digital downloads of tracks stripped of certain music parts (i.e. without keyboards, drums or guitar). The files will be in WMA format and will cost $2 apiece. Universal Music Group has licensed 50 tracks, and DreamMusician.com claims it will have 10,000 tracks by the end of the year. (AP)

• RIP Henry Copeland, music promoter who helped launch the careers of the Average White Band, the Police and REM. (BBC)

Posted by Glenn at 9:24 AM | Link
|Universal Music Group|

Vivendi, Universal Music Group's parent company, announced first quarter numbers yesterday and rejected a shareholder's proposal to break up the company.

Universal Music Group improved its operating income by 136%, improving to $115 million from $48 last year, the best earnings growth of the company's business units. (This year's number includes a $64 million sum from a successful appeal against TVT Records.) Revenues rose 8.4% -- 2.8% at constant currency.

Read PDF of earnings press release here.

Posted by Glenn at 11:18 AM | Link
|Earnings Releases||Universal Music Group|

The Assurance of Discontinuance document (download PDF) that's part of the Universal Music Group payola settlement offers entertaining reading if you have the time to flip through the PDF's 87 pages.

Here are some highlights from the subpoenad emails.

• Page 9: Here's a conversation about getting spins for New Found Glory. Nice to see somebody doesn't mind getting his/her "hands dirty" to get the band some airplay. That's dedication.

• Page 19: This email is basically an invoice for six weeks of spins for DMX's "Where The Hood At" on stations throughout the East:

• Page 31: Spins for promotions involving Ashlee Simpson and Rooney:

• Page 75: Somebody was working hard to get some adequate return on investment for "Crazy" by Bad Boy girl group Dream.