« March 23, 2008 - March 29, 2008 | Main | April 6, 2008 - April 12, 2008 »
It was a week of big announcements that signaled a shift in who will control Music 2.0. ![]()
> Hypebot named 5 Winners and 5 Losers as MySpace announced a new music store with three of the four major labels as partners.
> iTunes claims to have passed WalMart to become the #1 music retailer in the US
WalMart.com has stopped selling SonyBMG and WMG downloads.
> U2 cut a major deal with with concert giant Live Nation, but stopped short of the $150 million 360 deal Jay-Z is reportedly working on with the concert giant.
> EMI has grabbed a senior exec from Google to head its digital efforts.
> eMusic has added the Rolling Stones catalog from ABKCO.
> Music sales via video game Rock Band come close to the early days of iTunes
> Celebrity blogger Perez Hilton is boycotting SonyBMG. Who cares?
> UNIVERSAL INVESTING: The company is investing in digital distributor INgrooves and will start using some of its software. And Universal's Intersope joined a $25 million funding found for music social networker BuzzNet.
> Losses at The Orchard jumped even as revenues doubled. Next week, Hypebot will take an in depth look at the problems shaking up the digital distribution sector
> Danish telco TDC has begun offering free downloads with EMI, WMG and SonyBMG a part a million track catalog. 
> Napster had stronger earnings last quarter
> A 20 million song iPod may be in your future
> Universal also announced a new line of greener packaging for some of its re-releases.
> JOB CHANGES: Ian Rogers has left his gig as head of Yahoo Music for start up TopSpin and Ricall, an online music licensing marketplace, appointed former Sony ATV exec Ben Walter as head of Business Development.
As a service to the industry Hypebot publishes free job openings and internships. Email yours here and see more opportunities on our free music industry job board.
This is an unpaid internship, for college credit only, 3 days per week
(24 hours per week total) starting immediately and working through
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It's Alive! Media is a 2-person boutique entertainment publicity firm located in Hollywood CA focusing on music, but also specializing in books and alt-lifestyle projects. The intern we seek must have an appreciation for and knowledge of the current music scene, be highly...
The movement demanding ISP's to shut off P2P abusers is gathering momentum worldwide. But that doesn't mean that ISP owners are going to comply. The head of Britain's
3rd most popular ISP Talk Talk has said he won't go along with the request of British labels and trade group BPI.
"We are the conduit that gives users access to the internet. We do not control the internet, nor do we control what our users do on the internet." the ISP's Charles Dunston told the BBC. "I cannot foresee any circumstances in which we would voluntarily disconnect a customer's account on the basis of a third party alleging a wrongdoing."
WalMart.com has gone mp3 only without product from SonyBMG and WMG. EMI and Universal catalog has been available DRM-free on the site since late summer. According the the site:
Wal-Mart Music Downloads Now Available in MP3 Only
We are no longer offering songs in WMA format and are focusing on bringing you the very best that music downloads can offer in the most popular format MP3.
There must be dancing at Apple HQ as iTunes passes Wal-Mart to become the number one music retailer in the US.
Based on data from market research firm the NPD Group's MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions, iTunes became the largest music retailer in the US based on the amount of music sold during January and February 2008. Others will point to more private Soundscan data that still ranks Wal-Mart #1.
Things are looking up a bit at Napster. Revenue for the quarter will reach $31 million or $127 million for the fiscal year. The fiscal quarter generated positive cash flow marking the fourth consecutive quarter of positive cash flow. Napster' worldwide subscriber base increased to approximately 760,000 as of March 31, 2008.
But long term prospects for Napster remain mixed as the company continues to lag both in innovation and the move to DRM free. (press release)
HYPEBOT FEATURES:
> Bill Hein who just left as head of Caroline will be heading Live Nation Artist's new recorded music division. (Billboard)
> CD sales are an improper proxy to measure the purchase demand for music. (Seeking Alpha)
> From MySpace to Live Nation, a look at the changing face of the music industry. (Hollywood Reporter)
> SpiralFrog adds tracks from digital distributor BFM. (press release) BFM also just made a Limewire deal.
> An interesting look inside OurStage's first round funding of $13 million. "If you look at the music business, the real hit rate is even worse than it is for VCs--it's one in 20, one in 30," says OurStage Inc. founder and chief executive Ben Campbell. (TechConfidential) Read Hypebots recent 4QFor interview with Campell here.
> A Visa bill has passed the US House that may make it easier for foreign musicians to toru here. (NYTimes)
The devil is in the unrevealed and perhaps even un-negotiated details of the just announced MySpace Music joint venture with the major labels. But already some clear winners and looers are already emerging.
WINNERS:
MySpace - Users will stay on the site and viewing ads longer and music adds a new revenue stream.LOOSERS:
MySpace and the three major labels, SonyBMG, Universal, and WMG today announced the formation of a joint venture, MySpace Music. EMI is not yet part of the deal and financial terms of the partnership were not disclosed.
The new company will launch with 30 million monthly visitors and 5 million artists as well as the audio and video library of three of the world's four largest label groups. Existing franchises including Secret Shows, MySpaceLIVE!, Transmissions, and The List will all still have a place on the new MySpace Music.
Continue reading "MySpace Music Launches Without EMI - An In Depth Look" »
Ricall, the online music licensing marketplace, has appointed Ben Walter as Business Development Executive. Based in London, Walter will be responsible for helping strengthen this international profile. Prior to joining Ricall, Walter spent three years as Senior Marketing Executive at Sony ATV subsidiary Extreme Music and worked on synchronization licensing for broadcast and ad campaigns including Guinness, Sprite and 3 Mobile.
Earlier this year Ricall launched a partner network providing the company with a global footprint and includes North America, Germany, Austria, Switzerland, Spain, Australia, New Zealand, China, Hong Kong, Singapore, Thailand and Malaysia. In February, Ricall’s international footprint was enhanced with a global deal with EMI Music that an '07 deal with SonyBMG.
In a coup for eMusic, the DRM-free download service has the entire 28 album Rolling Stones ABKCO catalog available to its subscribers. The bulk of the material was first released between 1964 and 1969 and includes most of the bands hugely successful early input.
No official announcement has been made, but the albums are already available.
This guest post comes from Nabeel Hyatt of Conduit Labs who blogs at brinking.
If you care about music, and therefore whether that business will survive, there was some pretty amazing news from Rock Band this week that didn't get the attention it deserved. MTV mentioned that Rock Band had sold 6 million downloadable tracks in its first four months of sales. And while that roughly $10-20M in additional revenue is nothing that will alter parent company Viacom's stock, the finer numbers compare favorably to the early days of iPod.
First, let's keep in mind the state of the music business. People are pirating music like crazy, and consumers that were screaming about .99 cent DRM'd tracks six months ago are screaming about the high price of .89 cent non-DRM'd tracks today. If you want evidence at how much the music industry has changed in the last 24 months, just look at Rcrd Lbl, or the deals that Last.Fm and iMeem struck with the labels. The labels expect most of their money from those deals to come from a split of ad revenue. Which is to say they expect the incremental revenue of each track to hit zero pretty soon.
So on that backdrop, Rock Band is selling totally DRM'd tracks, locked to a single platform, at between $.99 and $2.99 each. And their attach rate considering all that is amazing. For comparison:
"After four years and three months, I’m leaving Yahoo! for another opportunity. I’ll be joining founders Peter Gotcher and Shamal Ranasinghe as the CEO at a still-mostly-stealth company called Topspin Media. Our mission is to help artists earn a living through software," Rogers wrote on his blog.
In recent months, Yahoo is has been cutting staff and fighting off a Microsoft buyout offer. The always forward thinking Rogers seems better suited to a more entrepreneurial and innovative environment than a stalled Yahoo! Music has become.
It's a big Music 2.0 news day -
> Jay-Z is joining the Live Nation family with an expansive $150 million deal that includes tours and financing the performer and moguls new ventures. (NY Times)
> Digital takes over. Apple has surpassed Wal-Mart as the #1 retailer of music according to a memo sent to employess. (ars)
> MySpace music will launch in the the next few days with three of the four major labels. Universal is still a holdout. (LA Times)
> An extensive interview with EMI's new digital head Douglas Merrill. (PaidContent)
> Amazon debuts ordering via text message. (press release) Here's a first look. (ars)
> XM taps Quickplay for mobile Blackberry radio service. (press release)
Here are the latest CIMS Top 25 Debuts, Top 50 Vinyl and Top 200 via StreetPulse
CIMS Top 25 Debuts for April 1, 2008
1 R.E.M. ACCELERATE
2 BLACK KEYS ATTACK & RELEASE
3 MORRISON,VAN KEEP IT SIMPLE
4 SWORD GODS OF THE EARTH
5 SUN KIL MOON APRIL
6 MUSE H.A.A.R.P. TOUR-LIVE FROM WEMB
7 ROLLING STONES SHINE A LIGHT
8 MOBY LAST NIGHT
9 IN FLAMES SENSE OF PURPOSE
10 GREENE,JACKIE GIVING UP THE GHOST
Continue reading "Coalition of Independent Music Stores Charts 4/2/08" »
Can you imagine carrying virtually every song ever recorded around in your pocket? It's possible thanks to a new compression technology being developed at the University of
Rochester that digitally reproduces music in a file nearly 1,000 times smaller than a regular MP3.
"This is essentially a human-scale system of reproducing music," says Mark Bocko, professor of electrical and computer engineering and co-creator of the technology. "Humans can manipulate their tongue, breath, and fingers only so fast, so in theory we shouldn't really have to measure the music many thousands of times a second like we do on a CD. As a result, I think we may have found the absolute least amount of data needed to reproduce a piece of music."
An 80G iPod can currently hold about 20,000 songs. Multiply that by 1000 and the player could hold 20 million songs. Finding that many tracks may actually be the hard part. The World's Largest Record Collection only boasts 6 million songs and Amazon offers a mere 4,683,676 tracks for sale.
But bring on that ISP flat tax on music. I'm feeling up for the challenge.
EMI has named Google’s VP of Engineering and one of its most senior global executives, Douglas Merrill, to lead its growing digital music business. As President, Digital Business, EMI Music, He will lead a new global team responsible for all of EMI’s digital strategy and global technology. Merrill starts work April 28th based on
LA and will report directly to Guy
Hands.
Grabbing a senior staffer from one of tech's hottest companies is a coup for Hands as he works to reshape a struggling EMI. There has been talk in the last year of major labels courting executives from tech. But perhaps because of the challenges facing the music industry vs. the larger paydays offered by technology; few have made the leap.
Why Merrill? "I have two passions. One is creating platforms and tools that make it
easier for consumers to achieve their goals. The other is music," he states. "This
exciting new role at EMI is a unique opportunity for me to be able to
put those two passions to work together."
But Merrill faces challenges beyond his control. His innovations are only as successful as the artists driving them, and thus far EMI has not offered new A&R initiatives. And Merrill may find that he can put his Ph.D. in Psychology from Princeton to good use at EMI. Google's corporate culture is quite different than major label's or at investment firms like EMI owner Terra Firma or Charles Schwab where Merrill worked previously.
Continue reading "Google VP Merrill To Head EMI Digital. Major Challenges Ahead." »
FROM THE ARROGANT BLOGGER DEPT:
Popular celebrity blogger Perez Hilton is boycotting SonyBMG acts because the label is suing him over the use of song streams on his site. Sony BMG's Zomba and Jive labels, are suing Hilton for streaming several songs that turned out to be by Britney Spears.
"...These are some of our favorite musicians. It really, truly pains us not to talk about them. But, it is something we HAVE to do!
Why????
Because Zomba, which is owned by Sony BMG, is suing us and we had a lightbulb go off recently: we can't support any artist signed to Sony BMG.
Why should we help the company suing us make money???? Especially when their lawsuit is personal!
The only thing personal about this is the conversation Perez should be having with his shrink. Does Hilton really think that any of these acts are going to sell less music because he doesn't write about them? And when Whitney Houston finally gives birth to Justin Timberlake's love child; how long will his little SonyBMG news blackout last?
HYPEBOT FEATURES:
> CondeNast's Portfolio looks at the strong reaction to its recent article which r
evealed WMG's plan for an ISP tax on music. (Portfolio)
> Is an iTunes "digital booklet" worth $4? Digital Audio Insider notes that is the only difference between the $13.99 iTunes version of the new R.E.M. album and the $9.99 "bonus track" version on Amazon.com. (DigitalAudioInsider) It appears Amazon has dropped the price to $8.99 now. Despite the lower price Amazom still needs to start delivering digital booklets as well and without the higher price tag.
> Red Bull Records steps closer to reality. (FMQB)
> PirateBay tells the IFPI and labels suing the, to "go screw themselves". (ars) If this defense has legal merit in Sweden; I'm moving there.
> Mobile operator 3UK and SonyBMG have launched ad supported videos. (press release)
> PassAlong Networks has added Syntax Distribution’s music catalog to its StoreBlocks library. Syntax is the most recent in a string of indie labels offering mp3's via PassAlong including Wind-up, Razor & Tie and Curb. (press release) I don't understand why more entrepeneurs aren't using Storeblocks to niche download stores.
> The recording and film industries have combined piracy efforts in Mexico. (IFPI)
> WORTHY CLICK: Hypster.com , a music discovery site, crossed the 300,000 registered user mark yesterday.
The Orchard posted a 99% jump over previous year revenue in the 4th quarter of 2007, but losses also grew from $1.4M to $2.4M as gross profit margins fell 34% to 25%. The merger with publicly traded Digital Music Group factored into all results.
For 4Q 2007, Orchard revenues were $9.9 million, compared to $4.9 million for 4Q 2006, an increase of 99%. These results for 2007 reflect $1.1 million of revenues from Digital Music Group from the 11/17 merger through December 31, 2007. The historical results for 2006 reflect the stand-alone results of The Orchard.
The net loss for the fourth quarter of 2007 was $2.4 million, or $0.53 per share based on 4.6 million weighted average shares outstanding, compared with a net loss of $1.4 million, or $1.18 per share based on 1.2 million weighted average shares outstanding for the fourth quarter of 2006.
Continue reading "Orchard Losses Jump Even As Revenue Doubles" »
Universal Music Group Distribution, the sales and marketing division of Universal Music Group has entered into a strategic alliance with digital distributor INgrooves. As part of this venture, Universal Music Group has made a strategic investment in INgrooves. The move comes just days after Universal's investment in music based social networker Buzznet.
The lure seems to have been INgrooves' proprietary software platform ONE Digital, and both the UMGD and its indie arm Fontana will utilize INgrooves' menu of services which include digital retail sales and marketing, sales reporting, film and video distribution, and mobile.
INgrooves has had some success recently as the digital distributor of Dolly Parton's 'Backwoods Barbie' which debuted as the #1 country album on iTunes as well as artists like Tracy Lawrence, Thievery Corporation, Los Tigres del Norte and more. But with downward price pressure on all digital distributors from labels increasingly questioning their value in a tight marketplace, you can expect more consolidation in the sector.
The insert in more than 20 Universal Music Group titles being introduced as a part of Wal-Mart's "Earth Month" promotion contain a paper insert imbeded with wildflower seeds. Its all part of a growing movement to green the music industry with environmentally friendly packaging and messages.
The albums will be sold in the new REPAK CD package, an all paperboard option containing third-party certified, renewable recycled paper. The REPAK's design features a recessed cavity to hold the disc in place, eliminating the need for a plastic hub or tray and is part of Shorewood Packaging's "greenchoice" program. The new packaging will replace the jewel box version of each title. Those albums (see list below) will also include the wildflower insert offering three free digital downloads from the UMG catalog.
Continue reading "Universal Goes Green With Greenchoice Packaging" »
UPDATE: UNION DEMANDS PORTABILITY
Denmark's largest phone company TDC has begun offering free downloads to its customers. EMI, WMG and SonyBMG and many Danish labels are part of the launch of the million track catalog. TDC claims to be the first telco in the world to provide such a service. Nokia and others are still in talks with the major labels about providing similar services.
"The catch is that the format is WMA and DRM is everywhere," Danish music industry observer Rasmus Ardahl tells Hypebot. "The music is licensed each month and if you change your subscription to another internet or mobile phone provider you loose all the music. Furthermore it can't be transferred to iPods or any other MP3-devices."
"TDC is doing this to capture customers. They were very open about that part," he continues. "The DRM is a result of TDC wanting to boost mp3 on mobile tech, and the labels still being afraid; even EMI and all the indies."
UPDATE From Rasmus Ardahl: "The IT Political union wants the Danish governing body for antitrust to look into it the problem that people can collect large collections of music they will then loose if moving to another service."
HYPEBOT FEATURES:
> The last major to drop copy protection, Sony BMG is now ironically the subject of an intellectual property lawsuit. A French report says that PointDev seized some of Sonys assets and revealed that pirated software appeared on four of their servers. Analysts say it was not the work of an isolated employee. (ZeroPaid)
> EMI is scaling back on its operations in Asia and looking for a partner. (Times UK)
> RealNetworks has launched two services that will extend the reach of its managed Ringback Tone (RBT) services suite. The Multi-Service RBT Platform will enable service providers to offer bundled personalization services to subscribers, while the Multi-Tenant RBT Service will make Real's technology more accessible to smaller carriers. Both services are expected to be generally available in the third quarter 2008.
> "A ruling in a long-running copyright infringement case brings good news for the RIAA, as a judge supports the group's argument that merely offering a song for distribution is enough to infringe the distribution right under the Copyright Act. The EFF tells Ars that the ruling will 'grease the wheels' of the RIAA's litigation machine." (ars)
> Razz, a SF based creator of mashup tech for web and mobile, has received $1.87 million of a $2.5 million second round of financing. (PEHub)
> The HD Radio Alliance is launching a new ad campaign. (FMQB)
SpiralFrog has signed a deal with music publisher Warner/Chappell Music to a
dd their catalog to the free ad-supported download site's growing offerings.
Signing rights from music publishers is a critical element in SpiralFrog’s push to make ad-supported music downloading available. Licensing sound recordings and music videos requires more than just obtaining rights from the recording artists and record labels. The writers and composers of the songs themselves must also be compensated and music publishers license these underlying compositions.
Live Nation has
reached "an agreement in principle" for a 12 year global relationship with U2, who will join the company's Live Nation Artists roster. U2 and Live Nation Artists will
collaborate on touring, merchandising, and the band's website, U2.com. U2's longstanding relationship with Universal Music for recording and publishing is not affected by the deal.
By leaving out recording and publishing, U2 utilizes the concert giant's strengths without joining it in uncharted waters as Madonna did with her recent full 360 Live Nation deal.
In expanding the scope of its activities beyond touring, Live Nation Artists hopes to expand an artist's other revenue streams. The company already services more than a thousand artists with an array of services
including global touring, merchandise and licensing (via LN owned Signatures Network,
Anthill, and TRUNK, Ltd.), sponsorship and strategic alliances, recorded music,
studios, media rights, digital rights, fan club/websites (UltraStar,
Musictoday), and marketing and creative services (Tour Design). All the services are designed to strengthen and monetize the artist to fan connection.
"We've been dating for over 20 years now, it's about time we tied the knot," said U2's Bono. "With regards to U2.com..."
Continue reading "U2 Cuts Live Nation Deal. Stops Short Of 360." »
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UPDATED:
Venture capitalists have been very active in the online music space in
recent months and now record labels are jumping into the fray. This week music-focused social networker Buzznet grabbed a third round of $25 million
in funding including several million dollars from Universal's Interscope, according to PaidContent. Exactly what the label hopes to gain form the deal remains unclear.
The funding will in part be used for acquisitions. Just a few months ago BuzzNet bought popular indie music blog Stereogum. The deal was facilitated after the blog's early investors Bob Pittman and Jason Hirschhorn of SlingMedia traded their equity stakes for stock in BuzzNet.
UPDATE:
Buzznet is already using some of its new funding to buy music social network application provider Qloud. (Mashable) Other acquisitions appear to be in the offing. The Daily Swarm has a letter from Buzznet to a music blogger offering to talk about a deal.
HYPEBOT FEATURES:
> Brand sponsorships of music tours and festivals is expected to top $1 billion in 2008. (BrandWeek)
> Users will be able to buy music while playing the new Grand Theft Auto 4 via a new Amazon deal. Songs will be transferable to iPods, etc. (ars)
> SoundExchange will audit Last.fm. The royalty collector has often been critical of the custom radio site in the past. (pdf of public notice, analysis via DMW)
> Buzznet is using some of its new funding to buy music social network application provider Qloud. (Mashable) Other acquisitions appear to be in the offing. The Daily Swarm has a letter from Buzznet to a music blogger offering to talk about a deal.
> A look at the South Korean music market and the branding efforts of local music powerhouse JYP. (Business Spectator)