hypebot

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".

Digital NARM - Day #1 Overview

As you might expect, yesterday’s panelists at Digital NARM expressed concerns about the present and future state of digital music. But despite these challenges, there seemed to be quite a bit of optimism for the industry’s future. Some of the key challenges discussed:   

Pricing -  Everyone on the “Digital Landscape” panel agreed that consumers are sensitive to price. David Pakman and Rob Wetstone of eMusic stated that music prices are facing downward pressure in both the online and mobile spaces as the prices of other entertainment like video games and DVDs declines. Greg Scholl of The Orchard was adamant that music is currently priced too high at $0.99/track, and that the industry will have to experiment to determine what the appropriate price point is.

 

Finding sustainable business models - Brad Duea (Napster) explained that the a-la-carte download model doesn’t provide much margin for sellers and isn’t economically attractive to many buyers. Simon Renshaw of  (Strategic Artist Management) and others suggested that subscription is the model of the future. However, Pat Rains (Patrick Rains & Associates) noted that we haven’t seen a subscription model yet that works financially for all parties.

Steve Jang spoke a bit about Imeem’s attempts to monetize attention and share ad revenue with artists and labels. But according to Duea, Napster’s...

Digital NARM - Panel Highlights And Commentary

Digital NARM Day 1: Facts, Figures and Food For Thought

A few tidbits from the first day's panels:

• According to Brad Duea, 40% of the songs that subscribers stream on Napster are by the top 100 artists… but those 100 artists only account for 10% of Napster’s download sales. Commentary: Does this mean people don’t like what they are hearing? Or that search is cannibalizing sales? Duea didn’t believe either was true… he believes subscription is simply a more attractive value proposition to customers than pay-per-download. What do you think?
• David Pakman claimed that 80% of the albums released sell less than 100 units. Commentary: Long tail, anyone?
• David Hyman reminded people that despite the popularity of social networking sites (including his own), there is a large segment of the population – mostly 21 and over.
  

Wednesday's Music 2.0 Briefing: Zune Updates, EMI Psychometrics, IRIS & More

HYPEBOT FEATURES -

• WMG is now selling mp3's via WalMart.com and Napter appears poised to finally jump on the DRM bandwagon.
• Peter Gabriel's servers were stolen pulling down several of his web sites.
• Ad supported Qtrax has inked a deal with Universal...for real this time.
• An overview of Day 1 at Digital NARM plus quick panel highlights.
• eMusic was forced to yank the Rolling Stones ABKCO catalog.

> Zune expands its Marketplace and adds more social networking functions. (press release) Check back with Hypebot later today (THURSDAY AM EST) we expect to break an exclusive Zune related story this afternoon (Wed.). I'm just giving Microsoft a bit of time to comment.

> New EMI hires are being forced to take psychometric tests - a favourite ploy of the boss, which typically includes general intelligence tests along with a paper to determine a candidate's abilities. (Telegraph UK)

> Indie distributor IRIS has signed new deals with Alleviated, Labrador, Definitive and +1 plus direct artist deals with She Wants Revenge, Lou Reed, Larry Heard, Claude Von Stroke, and Lawson Rollins. (Billboard)

> The winners of this year's Webby Awards have been announced.  Music winners is BBC Radio 1 Meet The DJ's and ResidentAdvisor.net, an EU music site with a heavy concert emphasis. Here's a full list of winners.

> Neil Young is releasing his entire catalog on Blu-Ray disc. (AP)

Some Small Hypebot Changes

EASIER COMMENTS -

We've turned off CAPTCHA which means that you don't have to type in those annoying little letters to get your comments posted.  Hopefully you guys will comment more (and thank-you; we get some great comments) and I can stay on top of the spam.

NOW ACCEPTING TRACK BACKS -

I turned them off for similar reasons. But to help build a larger community and arena for debate I've turned them back on. 

RSS -
It would be great if you thousands of RSS would click through to the site bit more.  As RSS  numbers have grown page views has fallen. I appreciate the convenience of full RSS feeds but its hurting my page ranks.  Should I care? No. Do I? Yes.

These are small experiments. Let me know what you think.

eMusic Yanks Rolling Stones ABKCO Catalog

Just week's after trumpeting the addition of early Rolling Stone's catalog titles to its subsription service, eMusic is being forced to take the titles down. From the eMusic forums:

" Before posting the ABKCO catalogue on eMusic at the beginning of April, we pursued every level of due diligence possible. We triple and quadruple-checked with every possible party at both ABKCO and Universal Music Group, which distributes the label, and the word was unanimous: let's do this...ABKCO and UMG were both incredibly impressed by both the treatment and the sales: the catalogue (even stuff beyond the Stones) generated a huge number of downloads."

"But this was not enough. Due to events outside of our control, we are being forced to remove the entire ABKCO catalogue from eMusic effective tomorrow morning. (May3) We hope to get them back at some point, but for now, we have no choice"

WMG Set To Broaden DRM-Free Offering

EXCLUSIVE: As Digital NARM opens in San Francisco today, sources are pointing towards Warner Music Group broadening its DRM-free mp3 offering beyond Amazon. Variable pricing appears to have been a major reason for the hold-up including demands by WMG, Sony BMG and Universal for higher prices for new and hit product.

With WMG dropping demands that most download stores would not agree to, plus mp3's from EMI and the indies, a tipping point should be near that forces Sony BMG (who are rumored to be close to following WMG's lead) and Universal (whose offering is unpredictably selective) to follow.

A Perfect Time For Digital NARM

EXCLUSIVE COVERAGE

Digital NARM - "the only music industry event solely focused on selling digital entertainment" - which begins today in San Francisco and runs through Thursday - couldn't come at a better time.

The online music world has seen a flurry of developments in the past few months. Much of the recent activity does not seem to bode well for the current digital-music-as-product business model. According to a recent study, the majority of music consumed in the U.S. is not paid. Digital distributors are struggling. From major labels pushing for an ISP tax, to their investments in Music 2.0 businesses, to Trent Reznor's experiments in giving away downloads and focusing primarily on selling physical products, rights holders appear to be rapidly losing faith in the ability of digital sales to generate much revenue.

But fortunately a significant percentage of consumers...

WMG To Test Variable Pricing

WMG will soon begin experimenting with variable download pricing.  Few details have been shared, but the trial will be powered by Digonex and technology already in use by Nettwerk, Naxos and PassAlong.

Using Digonex’s patented DigitalOnlineExchange, a dynamic commerce engine that suggests changes to prices based upon behavioral principles, consumers can actively help set prices for select digital albums from WMG’s artists as part of the program.  DOE will work with digital retailers to continuously identify the ‘sweet spot’ where prices follow perceived market value and generate the maximum economic return while providing fair prices for consumers.

Universal/Buzznet Buys AbsolutePunk

Absolutepunk.net, arguably the most popular niche music site on the net, has been bought by Buzznet.  This follows recent acquisitions of Stereogum and Idolator as well as a major investment in Buzznet by Universal.

Responding to concerns that Universal can exercise control over AbsolutePunk editorial, AP.net founder Jason Tate  he claims that he remains totally in control:

"UMG doesn’t own Buzznet, they’ve made an investment in the company – those are 2 different things."

"UMG will not have any influence or input into anything AP.net is doing editorially – our editorial will stay true to how it’s always been – we cover what we want to cover and what the readers want to see. Period."

A List Of TVT's Unsecured Creditors

Does bankrupt indie label TVT owe you money?

If so, you're in good company.  House of Blues is left holding a $230 bar tab and EMI Publishing is looking for more than $25K. Use the scroll bar on the right to view the full list.

TVT list of unsecured creditors - Upload a doc

Read this doc on Scribd: TVT list of unsecured creditors

Tuesday's Music 2.0 Briefing: Whole Foods Sings, eMusic Puts On Jacket & Much More

HYPEBOT FEATURES:

• WMG appears set to offer DRM-free product to more download stores.
• WMG also will be experimenting with variable pricing.
• A complete list of the lucky folks that TVT owes money to.
• A preview of Digital NARM.  Watch for exclusive live coverage all week on Hypebot.
• Universal/Buzznet has bought AbsolutePunk.net
• EMI and SonyBMG are using Amazon's on-demand CD pressing system to re-release out of print titles.
• NIN gives away its latest album free.

> Whole Foods is jumping into the music game supporting select new releases. (AdAge, Idolator) The chain has been selling CD's since 2005.

> eMusic has added the entire My Morning Jacket catalog. (eMusic)

> Universal Music Group has signed a broad agreement to use Gotuit's intellectual property and metadata services. Under the license, UMG intends to develop new personalized music discovery systems via satellite radio, HD and over the net. (press release)

> Digimarc will license its patents to Media Sciences International (MSI) which provides digital watermarking services to the music industry. MSI offers forensic tracking services for the secure distribution and tracking of promo and pre-release content. (press release)

> WORTHY CLICK: Get your daily dose of rock wisdom at RockDose.com.

Out Of Print CD's Get New Life Via Amazon On Demand

THE CD LIVES AND THE LONG TAIL GROWS

Amazon has made deals with Sony BMG, EMI and other labels to bring  hundreds of out-of-print albums to CD using their CreateSpace “Disc on Demand” system. Titles include the “Hatari Soundtrack” by Henry Mancini, “Earthquake Weather” by Joe Strummer and “Motorcade of Generosity” by Cake as well as albums from Blue Note such as “Telepathy” by Bill Stewart, “Foreign Intrigue” by Tony Williams and “Carryin’ On” by Grant Green. The new CDs will be manufactured on-demand and shipped when customers place an order.

In addition to reviving out-of-print music titles...

Nine Inch Nails Does It Right Again

He's giving his new release away free in a variety of high quality formats. From NIN.com.

as a thank you to our fans for your continued support, we are giving away the new nine inch nails album one hundred percent free, exclusively via nin.com.

the music is available in a variety of formats including...