• 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|

• The New York Post reported former EMI exec Jim Fifield is still working on a deal to buy the company despite his backer, Corvus Capital, pulling out. Fifield, the article said, wants to run the recorded music division and sell the music publishing division to record exec Charles Koppelman and private equity firm GTCR Golder Rauner. (New York Post)

• IFPI scare tactics are working. Ars Technica finds that some sellers of allofmp3.com gift certificates are getting out of the business after one London-based seller was arrested. (Ars Technica, via Billboard.biz)

• Ad-supported online music service Ruckus, the most miserable music service I have ever seen, has landed $10 million in funding. Well...it obviously needs it. (Reuters)

• Downloads are hurting the venerable CD single in the UK. Supermarket chain ASDA, one of the top music sellers in Britain, is going to stop selling CD singles. (Related: Handleman UK and ASDA have terminated their music supply agreement.) At the same time, indie stores are seeing a resurgance in the 7" vinyl single. Said one indie retailer, "We find customers like to have a more aesthetically pleasing physical product as a collectable item, rather than a throw away mass-produced CD single." (Manchester Evening News)

Posted by Glenn at 12:33 PM | Link
|EMI||Online Stores/Services||Venture Capital||Warner Music Group|

• Analysts point to France's bid for digital interoperability as a possible gateway to further growth. This factoid sticks out: A European study found that consumers are prepared to pay twice as much for a song that can be moved freely between devices. (News.com)

• Sticking with the same topic, the NY Times quotes a London-based analyst as saying Apple could pull out of France altogether if the country passes legislation requiring the iPod to play music from competing services. "My gut feeling is that Apple will simply pull out of France if these amendments get through. Weighed against breaking their business model for all markets, it doesn't make sense for Apple to continue operating with the iPod and iTunes in France." (NY Times)

• The latest on Microsoft's iPod killer: it will combine video games, music and video, and it may not be out until 2007. (A&R Interactive)

• Hypebot lists a group of Web 2.0 companies that are putting together music software/applications, such as Bebop Mercora and Odeo. (Hypebot)

• ECast, a digital jukebox company, raised $5.2 million in funding. (paidContent

• Groove Mobile, a mobile music technology provider that powers Spring's over-the-air download service, ha raised $8.5 million in a second round of financing. (Digital Music News)

• Lifehacker readers suggest where to find new music online. eMusic was mentioned most often. (Lifehacker)

• Archos unveiled a new 4 B 104. It has a $149 price tag, works with Microsoft's battery-draining PlaysForSure and is a bit thicker than an iPod Nano. (Engadget)

Posted by Glenn at 1:28 PM | Link
|Digital Music||Online Stores/Services||Portable Music Players||Venture Capital||iTunes|

Sean Donnerwood's assessment, at his blog Shark Jumping, of the Digital Music Group's S-1 filing (the paperwork submitted to the SEC when a company plans on going public) is witty and insightful. But I really love it for its uses of the concepts "long tail" and "bubble," and for raising the topic of irrational exuburance in digital music. As Coolfer detailed the other day, there's a lot of investment in music right now, and much is in digital music.

DMG, he explains, is a 20-month-old shell company that owns the digital rights to a catalog of music. Such a company hopes to leverage the scale of digital distribution to capture value that is impossible and/or inefficient with physical distribution and physical retail. Its competition, he estimates, the other small content owners, do more business than DMG and have annual revenues of $20 million between the four of them. It's a business of small margins and high volume, and he's not sure how much volume is out there.

"So we're left with a 7 month old company with 10 employees (reduced from 15 three months ago), $224K in revenue for the 1st 6 months of 2005, a 9% gross margin (sounds like Loudeye as we discussed in an earlier post), and a brutally competitive sector with multiple larger players where all of the leverage is held by the music services such as iTunes, which currently accounts for 80% of DMG's revenue. The idea that this company is going to go public is clearly ridiculous and dredges up bad memories of MusicMaker from the last bubble."

More on the mysterious company with doubtful potential after the click...

Continue reading "A Digital Music Bubble?" »

Posted by Glenn at 12:22 PM | Link
|Digital Music||Venture Capital|