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Some See Hope As Indy Music Stores Struggle

Cd_16Differentiation has always been the secret weapon of niche marketing and Indy music retailers are increasingly becoming niche players as the big box stores sell more and more music using the same methods that they use to sell toilet paper.

The Lowell, MA Sun recently published ta good series on the struggles of independent record stores. One of the last bastions of real music marketing and discovery, many independent music stores are struggling:

"Record stores, long romanticized as places where audiophiles gather to mine bins of music for hidden gems and flaunt their encyclopedic knowledge of a band or genre, are finding it difficult to survive in a world increasingly dominated by iTunes, Wal-Mart and Amazon.com -- not to mention CD burners and satellite radio."

A somewhat more optimistic view came from Coalition Of Independent Music Stores (CIMS) head Cims_31 Don VanCleave who wrote in last week's newsletter, "...our customers continue to buy good music and it feels like the distance between indie retail and the rest of the business is growing wider by the minute."

For several years now smart music store owners like many of the CIMS stores and Mike Dreese of Newburycomics_1 New England's Newbury Comics chain have been adding more and more lifestyle products, imports, and other hard to find and exclusive items.

It may be hard for those who still dream about gold records on the wall to admit, but a great deal of music is now a niche product and learning to market it as such may be the industry's only hope.

Labels Hiring "Callers" To Influence Video Chart Positions

Did you ever wonder how the major labels are spending the extra dollars they have left over now that their not handing it over the table to indy promo guys that "own" stations and under the table as "gifts" to radio programmers?  Well, here's part of the answer in a letter that irrepressible music industry commentator Bob Lefsetz received posted to his LefestzLetter list:

Hello --- hope you all had a very Happy Thanksgiving! This is Richard Sarbin, owner of Market Development Company in New York. Nice to meet you, if we haven't met by e-mail or by phone by now! We have a great opportunity that I want to immediately address with you.

We have been approached by a few major labels to suddenly handle their video request Mtv_13 campaigns for some top priority artists. Video requests mean making calls to request videos for major video shows like TRL (Total Request Live on MTV) and "106 & Park" (on BET).

This is a TERRIFIC opportunity --- but it means that we suddenly have to EXPAND the size of our request teams in a very short period of time! So we are on a mission to immediately find new and reliable people on our national staff to help us with these campaigns --- and I'm hoping you can be one of those who can jump on board and help!

The video request work is pretty easy and regular. It takes up 20 minutes/day of your time on weekdays and about 10 minutes/day on weekends. Total of 2 hours work a week. You get paid $30.00/week. All it involves is calling up a toll-free number (like 1-800-dialMTV) at your convenience during the day (you just plug in numbers on your phone, no talking to a person) and also going on-line (at your convenience, any time of day/night) and making some on-line requests. For the phones, you can use a land line or cell phone, doesn't matter

SO --- please, as soon as you can, e-mail back with a response --- whether you are interested in helping us with our new video request campaigns. One, you can put another $2000 in your pocket each year without taking up much time at all! Two, you will be helping Market Development Company in our goal to break new artists for our most important clients!

If you are interested, just e-mail back to RICHARDS@MARKETDEVCO.COM a YES, you are interested or a NO, you are not interested at this time. If you do respond with a YES, we will immediately get back to you and give you more details so you have good understanding of what the job entails.

A "YES" doesn't commit you to anything other than interest. Thanks. I look forward to hearing from you ASAP!

Best regards, Richard Sarbin

More Studies Show Young Not Learning To Pay For Music

Arrow_3A new Jupiter Research study warns that the European music industry is losing the crucial 15-24 music buying demographic.  Illegal downloads on P2P networks are three times the volume of downloads on paid services. Overall only 5 percent of internet consumers pay for downloads and 15 percent are share but do not pay. Among youth 15-24 the results are far worse with 34 percent favoring illegal downloads.  The study questions if the trend could be fueled by restricted credit card access the young; a gap which pre-paid cards from Napster and Apple are Ipodgirl_10 attempting fill. The report did point to a solid group of consumers willing to pay for music principally on iTunes.

Analyst Mark Mulligan warned that younger buyers "may never develop music purchasing behavior, predicting a serious long term problem for music companies. In the US a recent NPD study reported here ranked iTunes among the top 10 music retailers in the US though per user purchases and full album downloads continue to be low. Other research seems to buttress the Jupiter Research findings. BigChampagne for example has shown very strong increases in global file-sharing volume over the past few years.

Barenaked Ladies Reject CDs & Downloads In Favor Of Unique USB Drive Only Release

From SeattlePI.com: "Rather than distribute via CD, DVD or download, the Barenaked Ladies are Barnaked_ladies_usb_1 making their newest selection of songs, videos and exclusive material available on a USB flash drive."

"Nettwerk Music Group is releasing "Barenaked on a Stick" beginning today, says the Hollywood Reporter. It plays on PCs, Macs and any other audio product with a USB port -- like some car stereos -- and costs $30."

"This 128 reusable drive contains 29 songs, including the band's 2004 "Barenaked for the Holidays" album, in MP3 format along with live tracks, in-concert spoken quips, album art, photos, videos and more."

Emusic Cross-Promotes With CompUSA

Emusicnewlogo_1In what may be a first of it's kind cross-promotion, indy download site eMusic has announced a promotional partnership with computer and electronics retailer CompUSA. Consumers will get 100 free eMusic downloads with the purchase of any item at CompUSA's 244 retail stores.  All songs in eMusic’s 900,000 track catalog are available to CompUSA customers under this promotion.

In addition, CompUSA will sell prepaid download cards for eMusic songs that allow customers to buy tracks on an a la carte basis—and own them forever—at a substantially lower price than other mainstream services.  Cards will be available for 15 songs priced at $7.50 ($.50 per song); 20 songs at $9.99 ($.50 per song); and 65 songs at $29.99 ($.46 per song).

eMusic may prove a smart promotional partner for a retailer like CompUSA that sells a variety of portable music devices because unlike most other download services eMusic's unprotected MP3s work on every portable music device that CompUSA sells.

V2 North America Added To Sheridan Square's Label Portfolio

In a long rumored move Sheridan Square Entertainment has acquired Richard Branson's V2 North America, according to the Hollywood Reporter. "...Sheridan Square has undertaken an aggressive V2_logo_2 campaign of acquiring independent music assets over the last two years," state the Hollywood Reporter. The company also owns Artemis Records, Artemis Classics, Vanguard Classics, Triloka Records, Tone-Cool Records, Ropeadope Records and Compendia Music Group...Sheridan Square also operates Musicrama, a New York-based indie distributor that is fulfilled by Koch Entertainment Distribution. V2's North American roster includes the White Stripes, Moby,and Ray Davies.

Some of these assets were rumored  to be bought at undervalued fire sale prices, but it's hard to imagine that was the case with V2 even thought the label has underperformed of late.  In an era where content and catalog can be re-monetized with new methods of distribution or re-imagined as new products like ringtones, it will be interesting to see if Sheridan Square has made a smart long term investment.


1) Is this a real problem or overblown media hype?

Well, at very least, more than 500,000 people's computers were affected. At worst, millionsDavid_pakman_1  were. So, I would consider that a real problem. This situation allows one to ask: "Is aggressive copy-protection worth it?"  Clearly, IP owners have the unilateral right to take steps to protect their content, provided those methods are within the bounds of the law.  (According to the Texas AG, this method appears not to have been.)  But is that always the best course of action?  In an industry whose sales are down more than 30% over the past four years, is it right to substantially limit consumer functionality protected by law in an attempt to stop piracy? 

2) Do you feel Sony BMG's response has been adequate? 

I think it has taken them a lot longer than it should have to realize the damage done to consumers by their efforts.  Now that they are realizing the extent of the damage and the problems with their approach, I think they are moving forward rapidly to right the wrongs.

3) If you we named the head of Sony BMG tomorrow what actions would you take to restore consumer and artist confidence?

Sonybmg_6I would reevaluate the whole "lock everything down" strategy.  I respect the need for content protections in the digital world.  But every one of the 50 CDs they shipped with copy protection STILL were available as unprotected MP3s on the file sharing networks.  All you need is one person to defeat the protection, and BANG!, those songs will be everywhere.  Given that is the case, why then inconvenience millions of consumers and prevent them from making legal copies in their home for personal use?  Better to focus on ADDING value to those consumers who buy your music rather than TAKING IT AWAY.

4) Is the controversy affecting the download sector in general and eMusic in particular?

We haven't seen any effect on eMusic's business as a result of this, except to say that customers appreciate, even more the fact that we sell music without restrictions in the universally compatible MP3 format.  There is an alternative, and only eMusic offers it.  In fact, we offer at least 14 of the 50 Sony artists whose CDs were shipped with this problem technology on eMusic - WITHOUT DRM and compatible with your iPod!

5) What lasting effect do you believe this will have on the music industry?

Hard to say, except that I am hopeful the major labels will consider the downsides of excessive measures to protect content.  Again, I don't argue with the need to do so, but when employed in this aggressive manner, where your best customers are LOSING something and the pirates still get what they way, seems to be a misguided policy.

BONUS QUESTION:  What are eMusic and parent company Dimensional working on that excites you the most. (Shameless hype is acceptable.)

Emusi_5eMusic is now the world's number TWO digital music service, selling more than 3M songs a month, and having sold more than 50M songs in the last 18 months. We are the best priced, most diverse, and richest service, super-serving customers who appreciate music beyond the commercial mainstream.  I am pretty excited about the advances we have made along the lines of music discovery and all of the great labels with whom we are fortunate enough to work.

Warner Music Settles NY Payola Suit

Warner Music has become the latest major label to settle with New York attorney general Eliot Warner_music_group_logo_6 Spitzer over payola charges. Warner will pay $5 million to charities and $50,000 in state legal fees. The label also agreed to discontinue questionable radio promotion practices many of which had already been .

Another payola era is over, but Indy labels all claim that it's as hard as ever to get corporate and consolidated radio execs to play their music.  Satellite radio and the internet continue to provide the only real outlets for many fans to hear Indy, innovative and niche music.

Courthouse_4 "Warner Music has illegally provided radio stations with financial benefits to obtain airplay and boost the chart position of its songs," the complaint reads. "Contrary to listener expectations that songs are selected for airplay based on their popularity and merit," the settlement reads, "Warner Music has obtained airplay for its songs through such deceptive and illegal practices as (a) bribing radio stations employees…to play its songs; (b) providing a stream of financial benefits to radio stations…on the condition that its records receive airplay; (c) using independent promoters as conduits for illegal payments to radio stations to obtain airplay; (d) purchasing spin programs and using syndicated programs to manipulate chart positions of its music, and (e) engaging in fraudulent call-in campaigns to increase airplay of its songs."

iTunes Outsold Tower, Sam Goody, & Borders Stores In Q3

A new NPD study ranked the top US music retailers using a methodology of 12 tracks equaling a full CD to better compare download services with traditional retailers.

Note: The numbers within parentheses denote retailer unit-sales position in Q3 2004

  1. Wal-Mart (1)
  2. Best Buy (2)
  3. Target (3)
  4. Amazon.com (4)
  5. FYE (10)
  6. Circuit City (Tied for 5)
  7. Apple\iTunes (14)
  8. Tower Records (Tied for 7)
  9. Sam Goody (Tied for 5)
  10. Borders (9)

Sony BMG's Troubles Grow As State Of Texas and CA Digital Rights Group File Lawsuits

Sonybmg_5Sony BMG's troubles deepened as both the State of Texas and the California based non-profit Electronic Frontier Foundation filed suit against the label over the Electronicff_1 recent rootkit copy protection debacle. 

Sony's anemic response and recall are also adding fuel to the fire; and the silence from other labels has been deafening.

Washington_post170w_2Read more about the lawsuits in The Washington Post.

Texas Attorney General Greg Abbott accused Sony BMG of surreptitiously installing spyware because XCP masks files that it installs. This "cloaking" component can leave computers vulnerable to viruses and other security problems, Abbott said, echoing the findings of computer security researchers.

"People buy these CDs to listen to music," Abbott said. "What they don't bargain for is the computer invasion that is unleashed by Sony BMG."

Sony Rootkit Numbers Aren't Pretty

OK...we're sick of talking about this too, but take a look at THE NUMBERS:   

  1. 4.7 million CDs Sory_logo_4
  2. 52 titles
  3. 568,000 computer servers infected (and perhaps as many as 350,000 more)
  4. 4662 signatures on a petition to boycott Sony
  5. Number of lawsuits from artists, managers, retailers, and consumers: TBA
  6. Cost to consumer confidence when purchasing music: PRICELESS

Now Sony's "response" requires consumers to mail back the CD to the company with a proof of purchase. When was the last time some pink haired record store clerk even gave you a receipt?.

Compatibility Fight Looms Between EMI And Apple

Just when you'd thought you'd heard enough about copy-protection and DRM, EMI and Apple/iTunes Itunes_10 seem ready to do battle.  EMI chief Alain Levy reportedly recently predicted that Apple would eventually embrace variable at its iTunes Music Store, even though Apple has not indicated that it will never happen.

The tension is also growing between the companies because EMI apparently has a compatibility agreement with Apple involving its Macrovision-based copy-protected disc that may have been a condition of it's original agreement to license music to iTunes. "Apple is nearly finished with the technical work necessary to enable consumers to transfer music from content-protected discs to their iPods," an EMI statement published in C|Net declared. Apple however shot back that "we have no idea why EMI made this statement".

EMI then told Digital Music News that the company was "testing a tweak in the system that will get Ipodgirl_9 the songs onto the iPod".  One can only guess that this means that EMI's plan would now resemble an earlier workaround by RealNetworks, which first revealed its "Harmony Technology" project in July of 2004.

It is only a matter of time before consumers rebel against companies that put up compatibility ; and variable pricing is inevitable as well as fair to consumers as well.  Apple could choose to be a leader on these issues, but it appears that this is not the Jobs way.  For all of his brilliance Jobs almost marginalized Apple computers with these kinds of policies and iTunes and the iPod may not be far behind if he continues.  It seems hard to imagine that happening when Apple is dominating the music market with well designed and excecuted music products, but we all can remember 8-Tracks, cassettes and Beta-max. A new and better mousetrap is almost always just around the corner.

Sony Debacle Has "Set Back Audio CD Protection By Years" As Artists Begin To Consider The Damage

Sony_logo_8Brian Bergstein the technical writer for The Associated Press has published a good overview piece on the Sony rootkit copy protection debacle which led to the recall of 4.7 million infected copies of 50 popular CD's  (click here for a complete list):

"...it's worth wondering whether the costs of XCP and its aftermath might even exceed Cd_many_3 whatever piracy losses the company would have suffered without it."

"That's not even accounting for the huge public relations backlash (and several lawsuits) that hit Sony BMG, the second-largest music label, half-owned by Sony Corp. and half by Bertelsmann AG."

"I think they've set back audio CD protection by years," said Richard M. Smith, an Internet privacy and security consultant. "Nobody will want to pull a `Sony' now."

Seldom mentioned is the devastating effect that this scandal will have on the Sony artists whose CD's are on the infected list.  Not only are their CD's being pulled from the shelves during their release launch and the crucial holiday buying season; but one also has to wonder how quickly pressing plants backlogged with holiday order will be able to re-manufacture and re-ship 4.7 million CD's.

Oakly_2One manager of an effected Sony artist stated privately that his act's twenty-something year old fans were saying that they were unlikely to purchase any more Sony BMG CD's because the couldn't trust the company any more. There have also been rumblings that some artists are considering using the debacle to sue to get out of their contracts with Sony.


Yes there was news in the digital music space this week beyond the fall out from the Sony rootkit debacle.  Here's the Digital Music News Week In Review beginning of course with...Sony:

Sony BMG grabbed most of the attention this week. In response to mounting bad publicity, the label initiated a full recall on all CDs that carry the XCP protection scheme. In addition, the company offered to exchange the copy-protected CDs with non-protected versions. XCP first gained attention for installing a rootkit onto user operating systems. The costly retail replacement process is now underway.

Meanwhile, Apple continued to face some pressure over its iPod nano screens, which may be Nano vulnerable to scratching. The company began inserting a protective sleeve with new nano shipments.

Virgin Digital revamped its download and subscription service in the US. The store offers a "no contract," $7.99 monthly fee, which is highly competitive with Yahoo Music Unlimited. Meanwhile Musicland debuted a music store of its own, which is powered by PassAlong Networks.

Cingular made yet another move into music. The company teamed with MobiTV and Music Choice to deliver a mobile radio solution. A late this week, Motorola indicated that it would be upgrading its ROKR devices, though Cingular has not officially expressed plans to carry it.

Snocap_logo_lr_3In the paid P2P space, SnoCap finalized a licensing agreement with Warner Music Group. The company has now finalized deals with all four majors.

In the enforcement area, international trade group IFPI announced a massive sweep of 2,100 suspect file-sharers. And British trade organization BPI also announced a round of its own. Meanwhile, college file-sharing application i2hub closed its doors, a response to RIAA legal pressure.

Some Companies Ready To Ban Music CD's At Work As Sony Rookit Fears Spread

Cd_15Those charged with guarding corporate computer security now increasingly view the music CD as a "major threat"  thanks to the Sony rootkit controversy.  Digital Music News reported that at a recent security industry gathering in Washington, DC, "attendees marveled at how technology has evolved something as innocuous as listening to records into a risk for corporate networks."

ComputerWe're already hearing reports of a few companies planning bans on listening to CD's at work - certainly not something that is easily monitored.  Business sending the message to employees that "music CD's aren't safe any more" will have a chilling effect on the public's comfort with CD's and music purchases in general.  Now would seem the perfect time for labels already reeling from declining sales to restore public confidence by renouncing the use of all CD-based Digital Rights Management (DRM), but so far that seems unlikely.

Calls For Sony Boycott Grow

As the Sony rootkit controversy continues to grow so do the voices calling for a Sony boycott.  One Sory_logo_1 Wired.com writer started the drum beat days ago and an online petition has grown to 4500 signatures.  The blogs are buzzing too, but nothing seems to capture the whole affair as this logo and blog .

See below for additional coverage.

Sony Comes Up Short With Consumers & Retailers In Rootkit Recall

Cd_many_2Despite claims to the contrary it appears that Sony BMG is continuing to fail to answer both consumer and retailer concerns during the current rootkit/copy protection debacle.

Sony_logo_7A quick search of the Sony Music and Sony sites failed to find any mention on the front page of the sites or any other easily accessible information on the the software, the recall or any attempted "fix".  Even a link ( http://www.sonybmg.com/xcp) for information provided in a special letter to Santa retailers seemed not to be functional as of this writing.  (Clicking on the link resulted in strange "404 NOT FOUND" message).  Only is a consumer turned detective and understood that Sony or the offending distributed label is in fact part of a combined Sony BMG could they find a link to help them with their rootkit problems or the recall.

Words need to become actions if Sony has any hope of countering the growing anger and distrust among both consumers and retailers just prior to the crucial holiday buying season.

Continue reading "Sony Comes Up Short With Consumers & Retailers In Rootkit Recall" »

Sony Finally Communicates With Music Reltailers On Rootkit Controversy



Just yesterday Sony finally issued a letter to music retailers explaining the rootkit controversy and re-call:

"Security concerns have been raised regarding the use of CDs containing this XCP software. It is important to note that the issues regarding these discs apply only when the CDs are played on computers, not on conventional, non-computer-based CD and/or DVD players. For consumers who wish to play these CDs on their computers, we have issued a software update that we believe addresses the security concerns. Shortly, we will provide a revised and secure uninstall procedure for the XCP software."

For a full text of the official Sony letter please click below. There's also more complete coverage of the controversy on Hypebot.

Continue reading "Sony Finally Communicates With Music Reltailers On Rootkit Controversy" »

More Than Half Million Servers Infected By Sony Rootkit

Planetsony_usa_1<-- Graphic depicts US computer computer servers infected by Sony's rootkit. European and Asian infections are depicted below.  Click on each graphic to enlarge.

More then half a million computer serves - the backbone of all computer networks - are in some way infected by Sony's rootkit copy protection study.  This according to an exhaustive study by computer analyst Dan Kaminsky whose conservative methodology eliminated another 350,000 possible server infections that he could not more completely verify.

On his Doxpara Research blog Kaminsky writes:

Planetsony_europeIt now appears that at least 568,200 nameservers have witnessed DNS Planetsony_asiaqueries related to the rootkit. How many hosts does this correspond to? Only Sony (and First4Internet) knows...unsurprisingly, they are not particularly communicative. But at that scale, it doesn't take much to make this a multi-million host, worm-scale Incident.

Sony BMG has responded slowly finally pulling the software, two weeks later offering to replace the Sonybmg_4  CD's and finally providing some fixes that have drawn additional criticism from computer experts.

What does this mega consumer confidence buster mean for a recording industry already reeling from declining sales and ill-advised P2P related lawsuits of average consumers?  It's certainly not good news particularly just as the industry hoped for a much needed holiday sales boost.

"Right here before the "make or break" time of the year the customer base is given a huge reason to be paranoid and choose another gift for their cousin." stated Coalition Of Independent Music Stores head Dan vanCleave in the groups weekly public newsletter. "I mean lets sue them all and then spy on them with software that we put on their hard drives. Or better yet, lets just destroy all of the hard drives and our problems will disappear like magic."

Indy CD Stores Hurting From Rootkit Controversy & Sales Downturn

In this week's newsletter Coalition of Independant Music Stores head Dan VanCleave states that, Cims_30"stores are staying that it is sucking out there right now. It seems a little while ago everything was rocking then somebody flipped the big switch and it started getting tough to do any business. Most everyone is feeling that a good holiday selling period will get them at least even with last year but right now it is depressing. I guess if you turn on the news there ain't much irrational exuberance going on these days. That has to have a spillover effect."

Arrow_2"So, to add insult to injury, we are having to reassure customers that all of our CDs are safe. Good lord could this copy protection mess be any more in everyone's face? Store owners are telling me it is THE national business story that all of the local papers are running..."

"...right here before the "make or break" time of the year the customer base is given a huge reason to be paranoid and choose another gift for their cousin. I mean lets sue them all and then spy on them with software that we put on their hard drives. Or better yet, lets just destroy all of the hard drives and our problems will disappear like magic. Good God."

Click below to read the entire letter and the CIMS Top 200 Indy Chart.

Continue reading "Indy CD Stores Hurting From Rootkit Controversy & Sales Downturn" »

WEA Angers Some With Marketing Of Charity CD

Music marketing can really backfire when someone tries to make a connection between and artist and events that simply isn't valid. Commentator Bob Lefsetz certainly thinks WEA did just that when Wea_3touting UK artist James Blunt as part of a US hurricane relief benefit CD. "In case you missed it, in last Sunday's New York and Los Angeles "Times", there were FULL PAGE ads for (the CD) "Sound Response". The ad was split into three parts. In the middle there was a picture of a flooded New Orleans. On the bottom, there were the details of the record. And a notation that 100% of the revenue would be donated to the Red Cross. And, in the top third, in a giant white space, was the quote from James Blunt."

"I have always believed that music can help bring people together. It's crucial now that we all unite to help our friends in the Gulf Coast put their lives back together." - James Blunt

"Makes me wanna puke," continues Lefsetz. "These pricks don't care about charity. They just care about lining their own pockets. It's these duplicitous fucks who cry that people are stealing the music. Even though they won't sell it to them in a way they want to consume it. It's these assholes who are shoving crap product down our throats in every medium known to man..."

OUCH! But Bob is 100% correct. Charity is about charity; not self-interest. Not until the labels are once again staffed by people who actually care about the music and the fans will they stop making these blunders. (Let's not forget RIAA lawsuits, rootkits, and so much more...)

Sony Finally Offers Rootkit CD Exchanges

SonybmgUPDATED: View the official SonyBMG consumer response here.

"Ultimately, the experience of consumers is our primary concern, and our goal is to help bring our artists’ music to as broad an audience as possible.  Going forward, we will continue to identify new ways to meet demands for flexibility in how you and other consumers listen to music."  

It may be a case of too little too late but Sony BMG has finally responded to the rootkit controversy by offering exchanges to affected customers. Apparently customers will soon be able to swap their protected CDs for a non-protected version. The rootkit software controversy affects 20 titles and over 2 million customers. The exchange offer follows an earlier pledge by Sony to halt production of the copy-protected discs entirely. Affected discs have the address http://cp.sonybmg.com/xcp/ printed on the back.

But despite these efforts the controversy is growing as Various security firms have stated that on Cd_14 the uninstall package that Sony has offered to remove the rootkit actually exposes users to even more potential viruses. And SunnComm, an anti-piracy firm that supplies an alternate protection system for Sony is also under careful scrutiny with several possible issues concerning consumers and  computer experts.

Stay tuned as the major labels continue to walk into the arena of public opinion and and commit a slow form of suicide...

Digital Only Label INgrooves Uses Smart "Exclusives" To Launch Project

According to Digital Music News, "...straight-to-internet could become a very viable distribution Digital_music_news_1 method in music. Most recently, San Francisco-based digital record label INgrooves has skipped the physical disc entirely on a John Digweed project, focusing instead on some high-profile, online Aolmusic_5positioning. Digweed recently cut an AOL-branded album, called AOL Music DJ Sessions: Mixed by John Digweed, and started offered a stream of the album exclusively on AOL Music on Monday. Now, the album is being positioned as a downloadable exclusive on the iTunes Music Store. Finally, in December, the project will be available across a wider range of online music stores, including the recently-launched AOL Music Now."

"For AOL Music, the Digweed offering follows exclusives with top deejays...(and) raise the credibility and profile of AOL Music, which is perpetually jockeying with rivals like Yahoo Music. For INgrooves, the effort combines various branding and positioning exclusives, and is part of a bigger learning curve on digital-only releases..".  Now that's smart and cost-effective co-branding.

Virgin Offers More For Less With Red Pass Music Subscription Service

VirginredpassIt appears that once again Richard Branson and his Virgin Group has raised the bar by offering a lot more for a little less.Ever the innovator Virgin is launching a low priced yet feature filled music subscription and download service dubbed Red Pass. Virgin is currently offering a free trial of the download service which will is then priced at a highly competitive $7.99 per month.

Powered by MusicNet and Microsoft's "Play For Sure" WMA based technology, subscribers choose from more than 2 million tracks with CD ripping and burning provisions and 60 professionally programmed Internet radio stations. 

Other unique features include a button that automatically fills any compatible portable player, laptop computer or mobile phone with a personalized selection of music; user rankings, reviews and commentary, 60,000 custom and frequently updated playlists, expert advice to questions about music and related technology, and a "Fan Ring" network that offers targeted info. And if a subscription lapses downloaded music can be restored when the account is reactivated. Purchased tracks will be replaced free if a user's computer crashes or is lost or stolen within a year.

Sony Boycott Voices Grow Louder As Company Gives Weak Response To Rootkit Controversy

Cd_13 Sony_logo_3Even as Sony has said they will stop producing the controversial rootkit copy-protected CD's angry voices against the company are growing louder.

Under the headline "BOYCOTT SONY" Wired.com reporter Dan Goodin writes, "Friday's announcement was inadequate to say the least. Sony, which has yet to say how many CDs carrying the XCP software remain on store shelves, stopped short of issuing a recall, a necessary step if consumers are ever to trust Sony with their computers again. And it still owes customers who have loaded the XCP software onto their machines an easy way to get rid of it...Add to these failures the utter lack of contrition shown by the label and its executives and you get what's effectively an unforgivable combination...All of which goes to show that a mealy-mouthed apology is worse than no apology at all."

The blog BoycottSony.us declares, "...there’s still plenty of work to be done if we are to achieve our goal of being treated like the music lovers we are rather than the criminals that Sony’s DRM Sonybmg_20 assumes us to be...For starters, there’s Sony’s other DRM. Remember, the XCP protected discs were deployed by Sony BMG...Sony has its own set of labels, including big ones like Columbia and Epic, as well as smaller labels distributed through Sony like ATO (home of My Morning Jacket and Mike Doughty). And those releases have a different DRM scheme—the Suncomm scheme.."

As of this morning more than 3500 people had signed an online anti-Sony petition, and over the weekend Microsoft and other companies providing anti-virus services began to add ways to block or remove Sony's software from infected PC's.

If Sony has any desire to regain consumer confidence they must immediately:

1) Issue an official list of infected CD's and offer a free recall program to replace them.

2) Provide instructions as to how to remove the offending software.

3) Pledge not to use invasive copy protection schemes in the future.

Anything less will only lead to greater distrust from consumers who are already offended by RIAA lawsuits, onerous pricing schemes, and a general belief that major labels rip-off rather than serve their favorite artists.

Sony BMG "Temporarily" Stops Pressing CD's "Protected" By Rootkit

Sony BMG has bowed to growing consumer outrage and will "temporarily" stop the manufacture of CD's containing a copy protection software that invades the users computer and some say leaves PC's more vulnerable to hackers. “We also intend to re-examine all aspects of our content protection initiative to be sure that it continues to meet our goals of security and ease of consumer use,” the company said in a statement.

But is it too little too late?

One has to wonder why the millions of young consumers who have migrated to free file sharing services to get the music they crave would ever return to purchasing when CD prices are often higher than DVD's, downloads are incompatible with some devices and not completely portable, and record labels that sue fellow music lovers and are even willing to infect consumer's computers with hidden software.

Read more Hypebot coverage below and an in depth analysis from EWeek.com here.

At Least 19 Sony BMG Titles Including Trey Anastasio And Our Lady Peace "Protected" By Controversial Rootkit Software

Cd_12News that some Sony-BMG music CDs install secret rootkit software on their owners' computers has angered many music fans and is the talk of the net.  Further fanning the flames is Sony's refusal to publicly list which CDs contain the software and to provide a way for music fans to delete it.

Now, the Electronic Frontier Foundation (EFF) has confirmed that the stealth program is deployed on at least 19 CDs listed below:

  • Trey Anastasio, Shine (Columbia)
  • Celine Dion, On ne Change Pas (Epic)
  • Neil Diamond, 12 Songs (Columbia)
  • Our Lady Peace, Healthy in Paranoid Times (Columbia)
  • Chris Botti, To Love Again (Columbia)
  • Van Zant, Get Right with the Man (Columbia)
  • Switchfoot, Nothing is Sound (Columbia)
  • The Coral, The Invisible Invasion (Columbia)
  • Acceptance, Phantoms (Columbia)
  • Susie Suh, Susie Suh (Epic)
  • Amerie, Touch (Columbia)
  • Life of Agony, Broken Valley (Epic)
  • Horace Silver Quintet, Silver's Blue (Epic Legacy)
  • Gerry Mulligan, Jeru (Columbia Legacy)
  • Dexter Gordon, Manhattan Symphonie (Columbia Legacy)
  • The Bad Plus, Suspicious Activity (Columbia)
  • The Dead 60s, The Dead 60s (Epic)
  • Dion, The Essential Dion (Columbia Legacy)
  • Natasha Bedingfield, Unwritten (Epic)

If you have listened to a CD with the XCP software on your Windows PC, your computer is likely Cd_many_1 already infected. The software, created by First 4 Internet and known as XCP2  attempts to "protects" the music from illegal copying. But it alos appears to block a number of legal uses-like listening to songs on your iPod. The software also reportedly slows down your computer and makes it more susceptible to crashes and third-party attacks. And since the program is designed to hide itself, users may have trouble diagnosing the problem.

"Entertainment companies often complain that fans refuse to respect their intellectual property rights. Yet tools like this refuse to respect our own personal property rights," said EFF staff attorney Jason Schultz. "Sony's tactics here are hypocritical, in addition to being a security threat."

For more tips on keeping your computer uninfected click here.


  • Grokster finally settled with the RIAA this week, and agreed to shut down access and Groktop_1 development on its application. The company pointed to work on an upcoming, paid service, and will be forced to pay a $50 million fine if it does not comply with the terms of its settlement. Meanwhile, a Mashboxx acquisition of Grokster appears done...
  • The controversy over the Sony BMG rootkit installation kept growing this week, and now includes lawsuits in both the United States and Italy. Virus protection firms are also taking steps to stop the rootkit installations amidst growing consumer concern.
  • Warner Music opened a new digital label called Cordless Records. The label, which will be headed by Jac Holzman, will focus on smaller, more frequent digital releases.
  • File-sharing levels remained fairly steady during the most recent month, though year-over-year increases have been large.
  • In the paid music store space, Napster upgraded its service with a recommendation engine Napsterbunny_11 and higher audio fidelity. And several outlets started offering tracks from John Lennon...
  • Madonna started an absolute blitz ahead of her album release...with Network Live to distribute an album release party across XM Satellite Radio, AOL Music, and various mobile outlets. Madonna is also being positioned on MySpace and MTV.com.
  • In the mobile music realm, Motorola unveiled plans to launch another iTunes-enabled phone, this time as part of its RAZR lineup.

Excerpted from Digital Music News

70% Of Ringtone Sales To Younger Women

Cell_photo_8In a trend that marketers of female-friendly music and products should note, a recent study by Telephia showed that women purchased about 70 percent of ringtones in the recent third quarter and that gender breakdown seems to be a trend. It should come as no surprise that younger buyers 18-34 were the most active ringtone purchasers although Telephia did not supply information for buyers under the age of 18. The study also covered master ringtones, voicetones, and ringbacks, as well as more traditional tones.

In related stats Telephia indicated that nine-percent of mobile subscribers are now purchasing ringtones, a modest number that offers a large opportunity for future growth. Top ringtones last quarter were "Hollaback Girl" by Gwen Stefani, "Don't Cha" by The Pussycat Dolls, "Let Me Hold You" by Bow Wow & Omarion, "Just A Lil' Bit" by 50 Cent and "We Belong Together" by Mariah Carey.