hypebot

Music Sites Choosing Amazon Over iTunes

Revenue Hunt & Major Label Demands Drive Partnerships 

Yesterday Emmis announced a pact with iTunes for downloads from its radio station web sites. The deal is part of a growing trend as music and social networking sites search for ways to monetize traffic beyond advertising.

But iTunes is increasingly a second choice as Amazon appears poised to finalize a variety of partnerships. Universal mp3 compatibility is a factor, but so is the web retail giant's  extensive credit card database. Ease of use and trust dominate when purchasing online.

The major labels are also motivating some download store partnerships. If they are going to license a fledgling music discovery service or social network, the majors want to be certain that discovery can lead to purchase.

Napster and Rhapsody are barely a factor in these talks.  Their slow crawl towards DRM-free appear to have left them out of this race altogether

Top 10 Issues Facing Music 2.0

WHAT ISSUES NEED TO BE CONFRONTED?

Here, in no particular order, are what I believe to be the Top 10 issues shaping Music 2.0.  How they develop will determine what the music industry looks in 5 or 10 years. Ignore them at you peril.

1. THE DEATH OF THE ALBUM - Individual track downloads are killing the album market and the revenue that it once created. Can the album be saved? Should artists release in 1 to 3 track clusters?
2. MUSIC TAXES - Is "taxing" music at the device and/or ISP level the answer? Or are these taxes unfair and further erode consumer trust?
3. MUSIC AS A SERVICE - We used to call music "product".  Did the pendulum swing to far in that direction? Or is music a service - subscriptions, "Comes With Music", optional ISP licensing?
4. MOBILE - Will more and more music be bought an enjoyed via mobile devices? How does that effect the music?
5. NEW REVENUE SOURCES - From YouTube to imeem and We7 to Nokia, revenue is being generated everywhere. Who will be sending big checks to labels in 5 years and how will that revenue be distributed? 
6. NO ONE BUSINESS MODEL - It used to be that record labels made money selling records and bands made money live.  Is the future more varied: NIN, Radiohead, 360 deals, and partnerships with brands?
7. 1000 TRUE FANS - Whether you need a thousand, 10,000 or even 100,000 true fans, how do you find, service and monetize a fan base?
8. THE RISE OF THE MUSICAL MIDDLE CLASS - Do fractured media and short attention spans mean the superstar is dead? What new companies will rise to service and profit from a growing middle class of musicians with fewer fans but longer careers?
9. THE DEMOCRATIZATION OF MUSIC DISCOVERY - Once DJ's told us what to like. Now our friends do or we discover it ourselves and share the news.  How does that change how music is marketed?
10. THE POWER OF LIVE - Is performing more important than ever? You can't copy it and it's a great place to build community and sell stuff. Or is that a music 1.0 notion and Twitter the new barstool?

Is there a number 11?

EMI To Cut 1000 More Jobs

Yes, that's on top of the 2000 or so already scheduled. This would reduce the total number of employees to about 2000 from a recent total of 4500 according to the UK's Telegraph.

"...(Guy) Hands was looking to cut more jobs at the company because, even after the round of redundancies announced in January, the business will still have more employees generating less revenues than its competitors at Warner Music and Universal."

NO WAY FORWARD

Sadly these cuts may be needed or even justified.  But what's missing from Hand's strategy is a new way forward.  Where is the investment in A&R or new business models? If CD's are selling fewer per release; why not chase the long tale and release more of them? 

EMI's clock is ticking and thus far the Hands are on zero.

Tuesday's Music 2.0 Briefing: ADA, XM Sirius, Jeff Leeds & More

HYPEBOT FEATURES -

• Top 10 Issues Facing Music 2.0
• Music sites choosing to partner with Amazon over iTunes
• EMI to cut 1000 more jobs than planned
• From SanFran MusicTech Summit: Venture capitalists talk about investing in music. Digital Though Leaders have their say.

> ADA Prez Andy Allen is coming back from sabbatical to helm all things indie at WMG (Billboard)

> Last.fm is powering a web radio service for Lollapooza. (Last.fm)

> Clear Channel may offer Pandora personalized streams. (DMW)

> XM posts wider 1st Quarter loss. (press release) Sirius posted slightly narrower losses. (The Street) Personally, I don't want this merger, but let's get it done one way or the other.

> Is Hip Hop over? "Hip Hop Is No Longer Cooler Than Me" (Salon)

> The New York Times has cut respected music industry reporter Jeff Leeds. (Deadline Hollywood)

> Revelation Theory and The Cab have both signed global co-publishing deals with EMI.

> A time line of the brilliant NIN run up to their Year Zero album release.  Music marketers: Read it and learn. (Wikipedia)

We're proud of the fact that we print free listings of available jobs; so why wouldn't we want to help out someone we've always enjoyed working with who is looking for a gig. Ex-Nimbit and OurStage marketing guru Scott Feldman writes:

Brilliant, talented, and extremely modest marketing guy with years of experience in the industry is in search of solid opportunities.  Got a spot to fill?  Need someone who knows everyone?   Click here for more info.  You won't regret it ...

(I agree.)

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Venture Capital Talks Music @ MusicTech Summit

Late Last week in San Francisco, the MusicTech Summit sought to bring together music and the tech industry. This panel asked what VC's think about the digital music business. From the panelists:

• Most music 2.0 companies can't generate a high enough rate of return to satisfy venture funds. However, that doesn't mean they can't be viable, profitable businesses. Entrepreneurs in the digital music space are more likely to find funding from angel investors or in some cases smaller VC funds.
• Funds are typically hesitant to invest in music 2.0 companies because 1) there is no money in selling music, and 2) if the company hasn't properly licensed music from l

MusicTech Summit: Digital Thought Leaders

Late Last week in San Francisco the MusicTech Summit sought to bring together music and the tech industry. The "Digital Thought Leaders" panelists discussed challenges in the digital music space including:

Balancing the rights of content owners and consumer interests -

• Tim Westegren, founder of Pandora, stressed that protecting artists' intellectual property is very important. He believes content owners and Web 2.0 companies both need to compromise to find viable business models that are fair to artists and also something customers want to use.
• Michael Petricone (Consumer Electronics Association) noted that patents are easier to get and the penalties for violating them are higher than they have ever been before. He stated that IP is important, but it needs to be tolerant enough to allow for technical innovation.

Simplifying the user experience -

• All of the panelists agreed that the current digital music retail environment is too fragmented and complicated from the customer's perspective.
• Aza Raskin (Mozilla, Songza) described the need for "continuity of experience" across

Nate "Danja" Hill Dominates SESAC Awards

Songwriter/producer Nate “Danja” Hills took home top honors as Songwriter of the Year at SESAC’s 12th annual New York Music Awards last week in NYC. Hill had an impressive array of hits in the last year by Nelly Furtado, Justin Timberlake, Timbaland and 50 Cent.  Hills also won Song of the Year award for his smash hit, “Say It Right,” as recorded by Nelly Furtado.

See a full list of winners after the jump.

UMG Ramps Up Bravado Merch.

As part of an ongoing effort to diversify beyond recorded music sales, UMG has promoted Tom Bennett to global Chief Executive Officer of Bravado, its global merchandising division. Bennett had been the North American CEO.

Bravado develops and markets licensed merchandise world-wide...

Coldplay vs. Radiohead vs. NIN

DOES FREE MUSIC = MORE POPULAR?

How does "free music" effect a band's popularity?  An analysis by Hitwise (via DMW) showed that Radiohead's release was much more popular than either Coldplay's or either of the Nine Inch Nails releases, as measured by US Internet visits.  Radiohead also did a much better job of sustaining interest.

Why did Radiohead rule the net since Coldplay is a more popular band by most other measures? Was it because they were Radiohead was the first major band to go free?  Or was Coldplay's single song limited-time offering just not enough to grow and sustain fan interest?

Live Nation, AdBrite Launch eFan Finder

ONLINE TRACKING FOR CONCERT AD CAMPAIGNS

Live Nation  and AdBrite have launched eFan Finder, a new proprietary service that helps local Live Nation concert promoters, artist managers and agents track and view the performance of Live Nation's online advertising campaigns.

Research shows that more than a third of live music fans find out about concerts on the web, while traditional concert industry marketing devotes only a small fraction of advertising dollars online.  With Live Nation eFan Finder, Live Nation's local marketers are able to easily create and place tailored ad campaigns for the company's concerts, utilizing geo-targeting...

Monday's Music 2.0 Briefing: Project Playlist, Q Prime Records & Much More

HYPEBOT FEATURES -

• Coldplay vs. Radiohead vs. NIN - Does free music help make a band more popular?
• Live Nation and AdBrite launch eFan Finder to track and report the concert promoter's ad activity across thousands of web sites
• Make sure you didn't miss anything important last week with our Music 2.0 Week In Review
• Hypebot and our parent company, the booking agency Skyline Music are looking for Summer and Fall interns that can be located anywhere<

> Project Playlist, which is being sued by the major labels, says it will shut down if it can't make licensing deals. It's also solicited the help of some heavy hitters including ex-RIAA head Jay Berman. (cNet) Project Playlist enables users to create playlists by linking to content hosted across the net and courts must decide if that's covered by the Digital Millenium Copyright Act.

> Sire Records president Michael Goldstein is exiting the label to start a new one for management giant Q Prime. (FMQB) Why such an old school chose for a new label?

> After less than a year, Michael Bloom has left the Rhapsody America. the joint venture joint with MTV where he had served as GM. (Billboard) He appears headed back to MTV. Does this spell early trouble for the service? Will it go DRM-free soon?

> Bertlesmann AG, half of Sony BMG, reported smaller quarterly losses thanks in part to an end to old Napster payouts. (FMQB)

> Madonna has named Stub Hub her official ticket scalper...I mean re-seller. (WSJ)

> A look at the $50 million joint venture between Rhino and the Frank Sinatra estate. (FT)

RockDose.com is celebrating the 29th Anniversary of The Machine - America's Top Pink Floyd Tribute with a week of Floyd quotes and videos

Interns Wanted - Hypebot & Skyline Agency

SUMMER & FALL INTERNSHIPS AVAILABLE

Virtual internships - location is not a problem - are available at Hypbebot.com and our parent company, booking agency Skyline Music. These are unpaid positions with flexible hours. An internship can be created to suite your needs, but generally fall into these categories:

HYPEBOT - These internships include research within the music and tech industries and writing articles for Hypebot.com, our sister consumer blogs OurDigitalMusic.com and RockDose.com and other music blogs in development

SKYLINE MUSIC - If being an agent for live talent interests you, you can get first hand experience working with this team of agents and their diverse roster.

MUSIC MARKETING 2.0 - Explore the changing world of music promotion on behalf of select Skyline Music artists including online media, social networks, street teams and more.

Music 2.0 Week In Review: Zune Bonus Checks, WMG Rumbles, Digital NARM & More

> Last week Microsoft sent a one time "Zune Bonus" to indie labels and digital distributors. (Hypebot broke the story and we're working on a follow up. Email me and let me know if your label or distribution co. got a check from Zune.)

> Warner Music Group losses widened

• WMG is ready to offer mp3's to more outlets. Last week Walmart.com became the first
• WMG is also set to test variable pricing

> FROM DIGITAL NARM:

• Day 1: Overview, Panel Highlights.
• Day 2: Piracy & Consumption
• Is DRM Dead? Some Don't Think So
• Random Quotes

> A hip hop Who's Who filled TVT's list of unsecured creditors

> eMusic was forced to yank Rolling Stones ABKCO catalog

> Ad supported Qtrax finally scored Universal, its first major label

> 12,000 indie labels have signed up with Merlin for global digital rights collection

SHORT HITS: Buzznet bought AbsolutePunk.net, NIN release a free album, Sony/BMG, EMI using Amazon on demand pressing to re-release old titles, UK's Assoc. Of Independent Music issues a "Digital Copyright Manifesto", MySpace enabled profile and content sharing with other sites.

More New Acts Worth Watching From Crazed Hits

• Jimmy Robbins - recent Universal Motown signing
• Attaboy - mainstream piano pop/rock
• Low Level Flight - rock from Canada with strong airplay & video featured on MuchMusic

More @ www.crazedhits.com

"Steve Jobs...Does Not Give A Shit About Music"

"Steve Jobs - quote me – does not give a shit about music. Because what he's done is bifurcated the music business. No longer is the test of an artist's work the embodiment of an album, what is considered as consumable are single songs, and that's because of the Apple platform. He's a genius, the only thing he cares about is selling his platform."

- Steve Nowack, former hedge fund manager and founder of free music label SOS via Listening Post

Is DRM Dead? Some Don't Think So.

Even as many celebrate the death of DRM, some industry leaders seem to believe DRM is poised for a comeback.  From this week's Digital NARM:

"I made a list of the 22 ways to sell music, and 20 of them still require DRM. Any form of subscription service or limited play-per-view or advertising offer still requires DRM...I think there will be a movement towards subscription services and they will eventually mean the return of DRM."- David Hughes, Head of RIAA Technology Unit (via cNet)

"Until piracy is stopped, debating new business music models is like arguing who gets what deck chair on the Titanic." - Rick Carnes, Songwriters Guild. When presented with the analogy of bottled water competing with free: "The reason people buy bottled water is because they are scared of the tap water."

These experts want to make people so afraid of free music that they'll pay for it; then lock it up so tight they can't do anything with it.  In the digital age, however, consumers want what they want when they want it.  Until the music industry starts giving consumers that freedom; fans will always find a way to fight back.

Last.FM Adds Video Interviews

Last.fm has launched of Presents, a series of exclusive video interviews with artists including Moby, Santogold and Spoon. This marks the first time that the site has ventured into original video programming,

Moby discusses his musical inspirations and Santogold shares a story of writing her first song at the age of nine.Other interviews include Neon Neon with Gruff Rhys (Super Furry Animals) and Josh Radin. More interviews will be added in the coming week.

AIM Issues Digital Copyright Manifesto

UK trade group, the Association For Independent Music (AIM) has published "Copyright In the Digital Age," calling for a copyright infrastructure better suited to fit current and future conditions. According to AIM:

• Digital is fundamentally a format shift which has changed the entire value chain - creation, production, distribution and consumption.
• Governments need to acknowledge this and support the growth of the creative industry through copyright law written to handle an evolving digital age.
• New monetization methods are needed for new usages and models of consumption.
• Some businesses which "depend greatly on facilitating consumers access to, and ability to copy and share" music as well as consumers "enjoy their respective benefits while copyright owners cannot claim a fair share of this value chain".

For AIM and much of the UK music industry, those profiting from music but paying less than they should extend beyond online services to include device manufacturers like Apple, as well as, ISP's. And while it is a detailed call to action, the 24 page manifesto offers little in the way of specific solutions.

The position paper can be downloaded here. Read it and tell us what you think.

MySpace Goes Viral

PROFILE SHARING VIA YAHOO, TWITTER & MORE

In a move that has broad implications for how music marketers use the service, MySpace has launched a Data Availability initiative which enables users to share their public profile data on select websites.  Yahoo, Twitter, Photobucket and eBay are early adopters.

Users will have control over what information is shared and dynamically update it across other selected sites. MySpace will be rolling out a centralized location within the site that allows users to manage how their content and data is made available to third party sites they have chosen to engage with.

Content which can be shared includes publicly available basic profile information, MySpace photos, MySpaceTV videos, and friend networks. Integration of the Data Availability project will roll to MySpace users and participating Websites in the coming weeks.

Friday's Music 2.0 Briefing: REAL Action, Live Nation, EchoNest & More

HYPEBOT FEATURES:

• Is DRM dead? Some in the music industry think its poised for a comeback.
• UK trade group AIM has issued a Digital Copyright Manifesto.
• MySpace goes viral in partnership with Yahoo, Twitter and others.
• Microsoft sends indie labels an unexpected "Zune Bonus" check
• DIGITAL NARM coverage: Day 1, Day 2

> RealNetworks shared first quarter financial reporting a decline in profit as operating expenses increased. Revenues for the quarter rose 14% in large part because of a $61M payment on an antitrust settlement from Microsoft.

• Real also announced plans to spin off and perhaps IPO its games division. (paidcontent)

> Live Nation reports a $35 million first quarter loss to Wall Street. (Billboard, press release pdf)

> Last.fm who signed a deal to power AOL Radio in the US last year is now doing the same in the U.K. France and Germany.

> This year's class of music and music industry students are set to join an "industry in turmoil." (Financial Times)

Echonest has launched "Recommend", an API that helps music services personalize their websites to each visitor's unique music taste.  Any music website - bloggers, social networks, Internet radio or retailers - can access the Recommend API in both free and paid versions. (press release)

Microsoft Sends Indie Labels Bonus Checks

Microsoft recently sent substantial one time bonuses to some digital distributors and independent labels.  The checks appear to be the company's answer to criticism of payments as high as $1 per player extracted by Universal and other major labels granting permission for Zune's music sharing functionality.

In an email sent earlier this week to label and artist partners obtained by Hypebot, The Orchard wrote that Microsoft "made a corporate decision to demonstrate their commitment to the independent sector in a manner we all appreciate: rather than simple lip service, they wrote a check". The digital distributor plans to share the revenue with content providers in a "Zune Bonus".

IODA CEO Kevin Arnold confirmed that they too had received a bonus from Microsoft and would be sharing it with labels. "It's their money, after all."  Arnold called the check "a smart move by Zune at a time when concerns are being expressed over treatment of the indie community."  The equity position offered to major labels by MySpace Music and cash advances by some new music services have led to concerns that the indie sector was not receiving its fair share.

MICROSOFT COMMENTS

Exactly which distributors and labels received checks from Microsoft remains unclear as does how the payments were calculated.  A company spokesperson would only say, "Zune remains committed to supporting artists and working with the industry to develop new models and experiences around digital music and entertainment.  We don’t comment on the financial details of our relationships with our content partners."

FULL TEXT OF THE ORCHARD LETTER AFTER THE JUMP.

WMG Loss Widens, Cancels Dividends

Warner Music Group representatives had a difficult time sounding optimistic this morning as the reported quarterly earnings:

• A loss of $28 million or $.23 per diluted share increased from a loss of $.19 in the prior year quarter
• "In an effort to increase its financial flexibility" WMG has suspended its previous policy of paying a regular quarterly dividend.
• Digital revenue was $164 million, or 21% of total revenue, up 16% sequentially from $141 million in the first quarter of fiscal 2008 and up 48% from $111 million in the prior-year quarter.
• Total revenue of $800 million marked a decline of nearly 4% on a constant-currency basis

MORE: Silicon Alley Insiders asks if WMG will have trouble servicing its large debt, WMG press release.

Digital NARM Day 2 Panels - Piracy & Consumption

Much of the discussion on yesterday’s first panel “Digital Copyright Crossfire” focused on how the industry should respond to unauthorized file-sharing. The panelists offered many of the typical arguments - ISP policing, litigation, and new business models that can compete with free music.

On one side, Cary Sherman (RIAA) and Rick Carnes (Songwriters Guild) seemed to suggest that if illegal downloading were curbed sufficiently, file-sharers could be converted into paying customers. But Jonathan Potter (DiMA) and Michael Petricone (CEA) argued that the music business is now consumer-driven and monetizing these customers depends on offering innovative, valuable alternatives.

Clearly, there is disagreement about what drives piracy and what to do it about it. The “Data, Trends & Analysis” panel offered findings on the nature of file-sharing, purchasing and music consumption:

Eric Garland (BigChampagne) said a large portion of P2P users also purchase music legitimately. However, when those people stop their P2P activity and only acquire music by...

Overheard At Digital NARM Day 2

Facts, Figures and Food For Thought

Jen Wu (M:Metrics) reported that 78% of the music on music phones in the U.S. is sideloaded, and only 18% is downloaded on-deck. Wu has also observed an increase in music sharing between mobile users. She views this type of personal sharing/recommendation as a huge opportunity for the industry.

Douglas Merrill (EMI Music) believes that the future of digital music lies in monetizing targeted ads… but in order to target ads effectively, we must understand music customer behavior better...

 

Crazed Hits' Unsigned Acts Worth Watching

• Adelitas Way - mainstream rock, repped by Larry Rudolph
• Katie Lawhorne - 12 year old country singer
• Digital Summer - Phoenix-based alt rock band

More @ www.crazedhits.com

Thursday's Music 2.0 Briefing: Free Label Launch, Net Radio Jumps, Neil Young & More

HYPEBOT FEATURES:

• Microsoft Zune has sent indies unexpected bonus checks
• WMG has dropped its stock dividend as it reports mounting losses
• Coverage from Digital NARM Day 2: A Panel Round-Up and some quotable quotes.

> Backed by a former hedge fund manager, SOS Records has launched at WeLoveFreeMusic.com with a business model that gives it away free on the net but sells physical version. Interesting concept but cheesy presentation on the site...and haven't the majors been in the free online but still try to sell CD's business for a few years now without realizing it?

> A new study from Arbitron and Edison Media Research found that at work radio listeners have jumped from 12% to 20%. (FMQB)

> TorrentSpy, a torrent tracker that lost a copyright infringement suit from the Motion Picture Association of America has been ordered by a federal judge to pay $110 million in damages. (DMW)

> Today, Laurence Trifon will be covering The SanFran MusicTech Summit for Hypebot. The one day event brings together developers in the Music/Technology Space along with the musicians, businesses and organizations who work with them "at the convergence of culture and commerce".

> MusicIP adds a board member, former Microsoft corporate vice president, Lindsay Sparks. Scott Lehr has also joined the company as vice president of sales, strategy & business development. (press release)

> Video of Neil Young on the release of his archives on Blu-Ray disc and the state of the music industry. (OurDigitalMusic)

WalMart Adds WMG MP3's. Napster Next?

The Warner Music Group family of labels has widened its full catalog mp3 offering to include WalMart.com.  Previously Amazon was the only North American based download provider with the catalog.

Hypebot reported yesterday that WMG was about to broaden its DRM-free program to include other sites. Last month WalMart drop all tracks from WMG, Universal and Sony BMG and took its digital store DRM-free.  EMI and a limited number of indies provided content until this morning when WMG effectively doubled WalMart.com's catalog.

As it does at brick and morter, WalMart is...

Peter Gabriel's Server Stolen

Music and music 2.o impresario Peter Gabriel didn't just have the servers that host several of his ventures hacked; he had them stolen. From his web site:

The majority of Real World, Peter Gabriel and WOMAD web services are currently off-line. Our servers were stolen from our ISP's data centre on Sunday night - Monday morning. We are working to restore normal service as soon as possible.

We7, partially owned by Gabriel, was unaffected.

Qtrax Inks Universal...It's Real This Time

Months after a flashy announcement at MIDEM that Qtrax had deals with all four major labels, they have finally inked Universal.  Details of the deal were not announced, but given UMG's recent negotiations it's likely that ad supported P2P Qtrax paid a hefty price for North American access to the world's largest label group.

Unlike the first million dollar party announcement in Cannes, yesterday's news came via a quiet release from Universal that said only, "Qtrax will now have access to the most extensive digital music catalogue of chart-topping artists in the world".