LA Times writer Jon Healey had a piece the other day about social-online radio site Jango.com that doubles as a snapshot of webcasters' ongoing search for revenues that exceed the cost of the music they stream. (Healey's post at his Bit Player blog includes a Jango widget.)

Here's a section on the economics:

Just to cover royalties obligations, a music webcaster has to generate a little more than 2 cents per user per hour this year (assuming it plays 15 songs per hour). That number, which rises to 2.85 cents by 2010, seems minuscule, but webcasters say they raise only 1.5 cents to 2.5 cents per listener per hour on average. ...

Jango, by contrast, is counting on advertisers to view its site as a way to target their pitches to the right people. In particular, Kaufman said, there are two types that Jango plans to woo: brand advertisers (think beverage companies, carmakers and the like), which can segment Jango's audience according to the users' musical preferences, and the music industry, which can promote new releases and artists to people with matching tastes.

Posted by Glenn at 4:32 PM | Link
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• Album sales dropped 2% last week and were 9% lower than the same week last year. Year to date, album sales are down 14%. Sales of digital tracks rose 3% last year and were 52% higher than the same week last year. For the year, digital tracks are up 48%.

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

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

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

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

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

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

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

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

Posted by Glenn at 8:19 AM | Link
|EMI||Live Music||Publishing||Starbucks||Webcasting|

As much as I try to follow the struggle between SoundExchange and Internet radio companies, I just can't keep up with all the news. (Nor can I keep up with what is older news versus what is newer news. There sure is a big difference in lag times in online reporting on this issue.) Here are some places to go and and helpful links:

• Check in at Wired's Listening Station blog. Eliot Van Buskirk has been posting regularly and often has breaking news. He'll have the latest news.
• Click here for Google News searches for the keywords webcasters, Internet radio and SoundExchange.
• The EFF's Deep Links blog has regular news and opinion on the topic.
• Digital Music News has a Q&A on the royalties debate.

Posted by Glenn at 3:56 PM | Link
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Since I tend to skip opportunities to post about the webcasting royalties topic, here's a brief overview of where it stands.

• SoundExchange will not immediately start collecting royalties starting this Monday as planned. SoundExchange's executive director, Jon Simson, told Congress yesterday that SoundExchange will not enforce the new royalty rates while the new rates are still being worked out. (Listening Post)
• Before Congress intervened, a federal appeals court yesterday rejected webcasters' appeal for a delay to the installation of higher rates. Webcasters are pushing a bill that would roll back rates to a level lower than what is currently paid. (Hollywood Reporter)

When was the last time I listened to Internet radio? It's been months, and that was only for a brief amount of time. In the era of on-demand digital gluttony, a radio program seems antiquated. Like most other consumers -- especially the more wired ones -- I have many other options. My daily listening routine covers tethered downloads from the Zune Marketplace, downloads from eMusic and songs ripped from my CD collection. Sometimes I will go to MySpace to stream a band's songs. There's imeem, Purevolume, last.fm, Facebook widgets and a sea of music blogs.

That glut of options is the main reason I think a decrease in the number of webcasters -- if that is the fallout from a rate increase -- will not be a big shock to artists and labels, be they major label or indie. It could be a shock to the spirit and ideals of the music underground, but predictions of an economic fallout have been either exaggerated. If the value of Internet radio is the music discovery they allow (that's the argument I hear and read most often) then the other music discovery tools should be there to pick up the slack.

At this point, it looks as though webcasters have a reprieve and may be able to push through changes to the rate increases. That may save many small Internet radio stations, but I won't be listening either way.

Posted by Glenn at 11:20 AM | Link
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• The House Small Business Committee Chairwoman doesn't want to get involved in the webcaster royalties issues. At a hearing yesterday she said, "I really don't think Congress would be the best type of vehicle to resolve this type of issue. July 15 is just around the corner, and I hope the two parties can come together and resolve this issue." She hinted that webcasters and SoundExchange could change the definition of a small webcaster, which would allow larger companies to pay lower rates. (BusinessWeek.com)

• As the U.K. division of Sony BMG announces it will not be part of the global plan for the upcoming Prince album comes news that Prince is planning to use the album as a free giveaway with copies of a The Mail on Sunday newspapers. As one would expect, music retailers are incensed. Price also plans to bundle a digital copy of the album with each ticket sold for an upcoming series of London concerts. In May, The Mail on Sunday drew the ire of Mike Oldfield when The Mail gave away copies of his classic album Tubular Bells (The Guardian)

• Much ado about nothing? Retuers has an article about music executives who are fretting that the iPhone will "too much clout to Apple Inc. in shaping the future of the fledgling mobile music market." Once again, maybe I'm missing something but the iPhone is an iPod with a phone attached. It sideloads music just as an iPod sideloads music. I agree with Groove Mobile CEO Adam Sexton: "I don't think the iPhone is going to be the game changer that people are predicting." It will change the mobile phone game, but until it introduces a drastically new way to purchase and experience music, it won't change the mobile music game. (Reuters)

• MySpace Music and Snocap have combined to co-sponsor a tent at this summer's Warped Tour. If those kids have either a credit card or a PayPal account, that will turn out to be a great promotion for Snocap. (Snocap)

• Just how few decent music DVDs are being released these days? A year ago, there was only one music DVD in the top 20 that had been out for 100 weeks or more. Last week, there were six releases in the top 20 that had been out for over 100 weeks.

• Jupiter analyst Mark Mulligan offers analysis of the BBC's online broadcast's from the annual Glastonbury music festival. "The online content include information on acts, photos of performances etc. All of which were great discovery tools. I personally ended up buying a dozen or so tracks from acts I’d seen for the first time. And now the BBC has updated the site to provide video and audio highlights." (Mark Mulligan's blog)

• In this review of Ash's Twilight of the Innocents, The Guardian is still talking about the death of the album. Dorian Lynskey hits the bullseye when pointing out that that the band, which has disavowed the album format for good, never was an album kind of band to begin with. "But whatever the logic (let's assume the resultant publicity was just a happy side-effect), Ash are prime candidates for this experiment. Like Slade, Madness or the Sugababes, they excel at sprints, not marathons. If you could only own one Ash album, it would have to be their impeccable singles collection, Intergalactic Sonic Sevens." (The Guardian)

Posted by Glenn at 7:12 AM | Link
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The scuffle over webcasting royalties is a topic I've followed but not posted much about. Here's a recap of some recent goings on:

• The proposed change in webcast royalties rates contains a minimum annual fee of $500 per streamed channel. Previously, that administrative fee was capped at $2,500. Now a webcaster with, say, ten radio channels will owe a minimum of $5,000. A webcaster such as Last.fm, with an incredible number of channels, will owe a significant amount of money. Webcasters are starting to make some noise about this provision.
• Last month, SoundExchange offered a compromise to small webcasters that would allow them to pay what SoundExchange called temporary, below-market rates.
• Radio Ink had an article today about a letter-writing campaign from a trio of webcasters -- CEOs of RealNetworks, Live365 and Pandora -- to every member of Congress.
• In yesterday's Los Angeles Times, attorney Jay Rosenthal and publisher Kurt Hanson debate webcasting. (Los Angeles Times)
• Jeff Leeds has an article about the changes in webcasting rates and the growth in online radio in today's New York Times.

Posted by Glenn at 7:54 AM | Link
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• Reuters reports that Warner Music Group is "likely" to offer an increased bid to top the $4.73 billion bid for rival EMI submitted by private equity firm Terra Firma. Could be worth it if Coldplay plans to release an album any time soon. (Reuters)

• At the urging of a House Judiciary Subcommittee, SoundExchange has offered small webcasters break in royalties. (Billboard.biz)

• In a lawsuit similar to Cheap Trick's complaint against Sony BMG, FBT Productions and Em2M have sued Aftermath Records and Interscope Records over digital royalties. The plaintiffs allege they have been underpaid and should have received half of net receipts from ringtones and downloads. (Billboard.biz)

• Defend Distribution has teamed up with former Caroline Distribution GM Rick Williams, who will act as a consultant, to expand its label roster and increase its label services. Good thing Defend now goes through Ryko. (CMJ.com)

• A profile of Sonos founder John MacFarlane. He's a big believer in the subscription model. "As broadband connectivity becomes ubiquitous, MacFarlane sees an inexorable shift to the music dial-tone model -- which is more conducive to a raft of innovations, such as social networking and recommendation engines, that are currently unfolding." (Business 2.0)

• An IFPI investigation has resulted in a shut down of a voucher system for Russian download site allofmp3.com run by a London-based agent. (PC Pro UK)

• Here's a video of the unboxing of a Halo 3 edition of a Zune portable media player. The player's design isn't much, but it shows the kinds of cross-promotions that Microsoft can utilize to help its Zune player get marketshare. (Zune Insider)

Posted by Glenn at 12:04 PM | Link
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• A panel of judges rejected webcasters' requests to reconsider a ruling that increased the royalties they must pay to labels and artists. The one victory for webcasters was the decision to allow royalties to continue to be based on average listener hours. (Billboard.biz)

• Google CEO Eric Schmidt says YouTube is close to incorporating a filtering system, called Claim Your Content. (paidContent)

• Texas officials are planning a $1.5 billion development for the film, TV and music industry in Austin. The first stage of the Villa Muse development will be several sound stages. Negotiations are underway for a 70,000-capacity amphitheater. (AP)

• Sony/ATV acquired the publishing catalog of Leiber and Stoller, which includes such songs as "Jailhouse Rock," "Hound Dog," "On Broadway" and "Yakety Yak." (Billboard.biz)

• Starbucks is teaming up with Razor & Tie to release a a two-CD compilation of performances from the 1967 Monterey International Pop Festival. The release will be available at U.S. and Canada Starbucks and will have a normal, wider distribution. (antiMusic)

• NY Times on shopping via text messaging. I think that would be a great way to buy all sorts of music. A band could put a text code on stage (or around the venue) during its performance. Concertgoers' credit cards would be billed and they'd save their pocket money for the bar. (NY Times, via Julie Ask)

Posted by Glenn at 8:45 AM | Link
|Live Music||Publishing||Webcasting|

On March 2, the Copyright Royalty Board ruled to increase the rates webcasters pay to musicians and record labels (read Los Angeles Times article and a PDF of the ruling). Since that day, the online world has protested. (The level to which people are having a cow can be seen in this not-too-unbiased Wikipedia page on the Copyright Royalty Board, created on March 7.) Since I was on vacation when this all went down, I have yet to properly dig into the topic. So here's a primer on issues and a reading list in case you want to do a little catching up yourself.

The nitty gritty: Rates will increase from $0.0008 per song per user to $.0008 in 2006 (set retroactively), $.0011 in 2007, $.0014 in 2008, $.0018 in 2009 and $.0019 in 2010. The rates were proposed by SoundExhange, the entity created by the RIAA to collect royalties on behalf of artists and record labels. Critics contend that thousands of webcasters would be forced to cease operations. SoundExchange argues that the increase is fair and points to growth in related ad revenues (which it contends rose to $500 million last year from $30 million in 2003). "We believe internet radio broadcasters are our partners and it is our strong desire to see a thriving online radio marketplace," SoundExchange said in a statement.

Smaller webcasters -- tax-exempt non-profits -- will not be subject to the increase but must pay a $500 minimum fee for up to 159,140 aggregate tuning hours (total hours of programming) per month.

The protest may have got some results. Today, the Copyright Royalty Board announced it would rehear on the decision.

Recent articles:

• Digital Media Association joines webcaster rate challenge. (Billboard.biz)
• Future of Music Coalition issued statement against "one size fits all" rates and processes that it believes will harm small and noncommercial webcasters. (Future of Music)
• NPR filed a challenge to the federal copyright board in protesting the webcaster rate increases. (News.com)
• About SoundExhange (SoundExchange.com)
• Summary of the determination of the librarian of congress on rates and terms for webcasting and ephemeral recordings. (Copyright.gov)

Posted by Glenn at 8:47 PM | Link
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