hypebot

Music 2.0 Week In Review: Napster, EMI, A Band With A Plan & More

> Napster finally switched to all mp3 with 6 million tracks from all 4 majors and many indies. Hypebot has an exclusive interview with Napster COO Christopher Allen. Later in the week the company reported a rise in quarterly revenue despite slow subscription growth.

> Can The Music Industry Save Itself? Part I - Intro, Part II - Off With Their Heads. More next week.

> Citi Bank set tough new goals for EMI.

> "A Band With A Plan" takes a fresh approach to the fan financing model.

> Music 1.0 Scorecoard: Major label stats.

> AOL added two new niche music sites.

> Beach Boy Brian Wilson returns to Capital EMI.

VIDEO: Napster's COO on pricing, piracy and the new mp3 store, Tom Wait's fake press conference

Zuneral Celebrates Death Of DRM

We'll post details as we receive them:

Friday's Music 2.0 Briefing: Chrysalis, Touring, Sony BMG's "Agency" & More

> Chrysalis struggles to get back on track after pulling an offer to sell. (FT)

> Touring acts are learning the power of online announcements, blogs, videos and even concerts. (AP)

> ArtistDirect reports a major drop in income and loss for the quarter. (SEC filing)

> Three Napster shareholders want seats on the board to implement their own turnaround plan. (AlleyInsider)

> I have to admit that I missed this story earlier this week. Sony BMG has been slowest major to roll out DRM free other than with Amazon and Napster. Now we know why.  The second largest major label group insists on selling mp3's using the agency or commission model. "Sony BMG is actually the seller and sets all retail prices on its content while Amazon acts as Sony BMG's agent and gets a commission on the sale," Billboard reports.

> "MT9, a new-generation digital-music file that allows people to tweak the mixes of each element in a particular piece of music." (Idolator)

NEXT WEEK ON HYPEBOT:

• More in our "Can The Music Industry Save Itself?" series
• A look at the innovations that are turning Nimbit into an artist services powerhouse
• Our take on Sony BMG's agency model

Have a great holiday weekend.

Music Publishing Fast Facts

• The Harry Fox Agency represents over 1.9 million songs from almost 35,000 music publishers for mechanical licensing within the U.S.
• Under American Copyright Law, mechanical licenses are required for music to be distributed through online music services.
• The current U.S. statutory mechanical rate is 9.1¢ for songs five minutes or less and 1.75¢ per minute for songs over five minutes.

Coalition of Independent Music Stores Charts for 5-21-08

IMS Top 20 Debuts for Tuesday, May 20, 2008
1 MUDHONEY LUCKY ONES
2 JENNINGS,MASON IN THE EVER
3 FLOBOTS FIGHT WITH TOOLS
4 ISLANDS ARM'S WAY
5 MUDHONEY SUPERFUZZ BIGMUFF
6 BONNIE PRINCE BILLY LIE DOWN IN THE LIGHT
7 MATES OF STATE RE-ARRANGE US
8 NATIONAL SKIN A NIGHT + THE VIRGINIA EP
9 BUN-B II TRILL
10 3 DOORS DOWN 3 DOORS DOWN

READ THE REST OF THE DEBUT 20, PLUS THE CIMS VINYL AND TOP 200 CHARTS AFTER THE JUMP

"Band With A Plan" Ups Fan Driven Ante

NY indie band Telling On Trixie has dubbed itself "A Band With A Plan" and launched abandwithaplan.com to raise $50,000 and involve fans in the decision making process as they record and release a new album and video.

A Band with a Plan differs from other recent crowd-sourcing models. "In some programs, one-third of the money raised goes to some company that devised the model, and there's nothing left for marketing, much less a video," says lead singer Derek Nicoletto. In this D.I.Y. effort every penny goes to finance the album and video. "And instead of just asking fans to donate, as some artists have done, we're inviting them to hop on board on our 'Little Engine that Could' and go with us on the ride."

"Telling on Trixie fans tend to give us their opinion on everything from our clothes to our set list," according to Nicoletto. "So we thought - let's get their input from the beginning and give them an insider's view of the process. Depending on the level they select, they'll be our label, our sponsors, our A&R and sometimes, guest stars in our video and album."

How It Works

At the first, ten-dollar "Trixie" level, donors will receive digital downloads of Telling on Trixie's second album. At $25, fans get an advance copy of the new CD and become a "Green Room" member. Green Room membership allows fans into the secure areas of the website...

SpiralFrog Spawns FrogClub

SpiralFrog has launched SpiralFrogClub.com as well as started its first North American marketing campaign. SpiralFrog currently has 3.8 million unique monthly visitors and 1.1 million registered users

SpiralFrogClub.com is designed to showcases the service's benefits over illegal P2P.
The microsite allows users to sample and download free music from 12 genres. Users choose from virtual dancers that represent different playlists. The dancers can be personalized with hairstyles, accessories and upload pictures that become the dancer's face.
The site also includes a feature letting users pass along playlists and virtual dancers to friends.

Napster Revenues Up, Subscriptions Flat

The day after Napster launched its MP3 store to mixed reviews, the company's quarterly report showed net losses narrowing and net revenue up almost 6%. But Napster's core offering subscriptions, grew only fractionally during the quarter to 760,000 from 743,000 three months earlier.

"Napster concludes fiscal 2008 with annual revenue growth of 15%, positive cash flow throughout the fiscal year and a significant year over year improvement in bottom line results," said Chris Gorog, chairman and CEO.

Net revenue for the fourth quarter of fiscal 2008 was $30.8 million, up 6 percent from $29.1 million in the prior year quarter. Net loss for the fourth quarter of fiscal 2008 was...

Thursday's Music 2.0 Briefing: Ads On Zune, Jambase, Hot Ticket & More

HYPEBOT FEATURES:

• "Band With A Plan" Ups Fan Driven Ante
• SpiralFrog Spawns Frog Club
• Napster Revenues Ar Up But Subscriptions Remain Flat
• Video: An amusing Tom Waits "Press Conference"

> Zune to add an ad supported music option. (Listening Post) Not sure it will be a hit, but worth a shot. Its smart to make Zune as all purpose as possible.

> Live music site Jambase is now syndicating its concert listings to imeem, Fuzz.com, iConcertCal, Rhapsody and Zvents. (press release)

> Sony's Hot Ticket will stream concerts and events into movie theatres. (Billboard)

> Apple 3G iPhone launching June 9th. (Gizmodo) Steve Jobs is negotiating aggressively to add more music content and ringtones.

> Chinese search engine Zongshou has been fined for copyright infringement. (IFPI)

> Get your daily dose of rock wisdom @ RockDose.com

Video: Tom Waits "Press Conference"

In this video posted on his web site and YouTube, the reclusive Waits
announces his tour in his typical amusing and novel style:

Attn. Marketers: Blogs Matter

eMarketer via MediaFurturist

Can the Music Industry Save Itself? - Parts 1 & 2

OFF WITH THEIR HEADS & CUT THE FAT

PART 2 - As I wrote last week in The Top 10 Issues Facing Music 2.0*, the music industry is facing many challenges beyond falling sales.  The death of the album, the uncharted waters of new revenue sources and a fractured and shifting media landscape are but a few of the sharks ready to bloody the waters further.

What's a record label to do?  How can the major labels or the entrepreneurs that want to replace them change to compete in this new and still evolving environment? 

1. OFF WITH THEIR HEADS - The high salaries that top tier record executives receive for running failing companies must end. The few worth keeping need to lead by following Steve Jobs' example and base their own compensation on performance.

Replace the others with younger faces who embrace the new realities. If they care more about money than the chance to do great work; don't hire them. 

There are jobs for people from tech and other industries; just not at the top. Most should come from within the music industry, but not just from other record labels. Managers, agents, publishers, producers and artists all understand music and have something to contribute.  What a statement it would make to replace Lyor Cohen with Trent Reznor.

2. CUT THE FAT - The days of lavish release parties may be over, but there are still  too many private jets, limos and executive perks. Cut them all out, now.  Fly coach. Stay at the Hampton Inn. Make a statement that your company is investing in your artists rather than ego and comfort.

Tell us how you think the labels can save themselves and *join the great discussion going on here.

NEXT:  3. BUILD LABEL BRANDS , 4. RELEASE MORE RECORDS

Video: Napster's COO On Pricing, Piracy & His New MP3 Store

Interviewer: Jay Baage of DMW

Wednesday's Music 2.0 Briefing: Napster, Agency 3.0, Nokia & More

HYPEBOT FEATURES:

• Can the Music Industry Save Itself? Part 2 - Off With Their Heads!
• Video: Napster's COO on Pricing, Piracy & His New MP3 Store. Read our interview with him here.
• Music marketers take note: Blog readership is growing.

> Napster's new MP3 store gets a bad review from ars

> William Morris is launching Agency 3.0 with Amp’d Founder Adderton. (PaidContent)

> Ticketmaster adds paperless ticketing and plans to roll it out worldwide. (Ticketmaster) See video of how it works after the jump below.

> Nokia has launched a music store in Sweden.

> "Rock's New Economy: Making Money When CDs Don't Sell" - Rolling Stone

> David Rose @ KnowTheMusicBiz.com tells me he was inspired by a recent popular post Help Wanted: Patrons & Champions to write Record Labels Are Not Venture Capitalists. Whatever the inspiration its a smart take on Music 2.0 artist and project finance.

WORTHY CLICK: Amazingtunes.com, a digital portal for unsigned artists calls itself a fair trade music company, with the site 70% of profits made from selling music online back to the artists and new label runs along a similar fair trade concept.

Napster Goes MP3 With 4 Majors & 6M Tracks

PLUS A FIRST LOOK & AN EXCLUSIVE INTERVIEW WITH NAPSTER COO CHRISTOPHER ALLEN

Napster this morning launched what it calls "the world’s largest and most comprehensive MP3 store" at www.napster.com/store. While beat to market by months by Amazon's mp3 store, Napster's move bests rivals Zune, Real and Yahoo who have yet to announce deals with the major labels to sell mp3's.

With product from all four major label groups, Napster claims it's "50% larger than any other MP3 store" and boasts the "largest library of independent music available anywhere". The Napster kitty does beat #2 Amazon, but by far less than 50%.  Napster boasts 6 million tracks and Amazon lists 5.2 million downloads in its offering.

Napster is, however, the first music subscription service featuring major label content to also offer its catalog in the MP3 format for download sales; and this  could prove to be a competitive combination is subscription gains more traction. 

FIRST LOOK: The design of Napster's store, which is open to non-subscribers is sparse. Track prices are mostly...

Interview: Napster COO Christoper Allen

"SUBSCRIPTION REMAINS OUR CORE REVENUE MODEL"

Marking the launch of Napster's new all MP3 download store, COO Christopher Allen answered a few questions exclusively for Hypebot.

HYPEBOT: What new services or points of differentiation will there be between Napster and competitors Rhapsody, Yahoo, Amazon and iTunes?

ALLEN: The breadth and depth of the catalog is a major differentiator. Consumers will finally have one destination to find all the music they love in mp3.  In addition, all the tracks will be sold in high audio quality 256kb bitrate, and will be accompanied by high resolution album art.

HYPEBOT: Subscription growth remains anemic across all services.  Does Napster remain committed to subscription?

ALLEN: Yes, subscription remains our core revenue model.  We believe that adding synergistic services such as our mp3 store will enhance the value of our subscription service.

HYPEBOT: What needs to change for subscription music to gain traction?

ALLEN: While several million people are currently enjoying unlimited on-demand access to streaming music services like Napster, there are several factors that will continue to help fuel this segment of the online music industry:

• IP-connected devices that access web-based services (the more access points for the consumer, the more valuable subscription becomes)
• Bundling of subscription music service with devices to give the user an integrated experience
• Ongoing consumer awareness and education around people paying for unlimited access (both online and via portable device) to music services

MORE: Napster MP3 details and a first look.

AOL Adds 2 New Music Sites

AOL Music is launching two new genre sites: The Boot and The Boom Box dedicated exclusively to country and urban (hip hop and R&B). These follow launches last year of Spinner for indie music and PopEater for fans of pop. AOL Music is the Web’s most trafficked music site, according to comScore Media Metrics and Nielsen Net Ratings.

All of these sites offer video and song premieres, news, photos, exclusive interviews, and original editorial features.  The sites will be monetized through ad packages sold by AOL’s Platform-A services.

Tuesday's Music 2.0 Briefing: iTunes Mobile, Napster, Steinway & Much More

Hypebot Features:

• Napster Goes All MP3 With Four Majors & 6M Tracks
• Exclusive Interview With Napster's COO
• AOL Music adds two more genre specific sites
• Brian Wilson returns to Capitol EMI for a new studio release
• Don't miss the incredible comments on Can The Music Industry Save Itself - Part 1 and join the discussion.

> Apple is in talks with labels to make more music and ringtones available via a new 3G iPhone expected to be announced in early June. The labels in return reportedly want variable pricing. (NY Times) Mobile downloads have helped boost sales in Asia. Why not here? But remember labels, the people want them as mp3's.

> Steinway Musical Instruments has acquired ArkivMusic, an online retailer of classical music recordings. ArkivMusic sells over 90,000 titles,including thousands of previously out-of-print recordings produced "on-demand" through its ArkivCD program. (press release) Niches are the wave of the future and classical is a huge niche.

> High end audio firm Bowers & Wilkin's has teamed with Peter Gabriels' Real Studio to create Music Club, a monthly subscription service featuring exclusive content.

> MP3's Go Mobile: AT&T is extending of its relationship with Napster, and beginning next month will offer subscribers access to over-the-air downloads of songs from the company's catalog of over five million tracks. UPDATE: Just got word from Napster that the AT&T OTA downloads are NOt MP3's.  To bad since the cell provider also has a deal with eMusic. (Half Life)

> Our Digital Music has a review of the new Napster MP3 store.

> Clear Channel expands its net streaming via a deal with Reciva. (FMQB)

 

Brian Wilson Returns To Capitol/EMI

They've lost Radiohead and maybe The Rolling Stones, but they found a Beach Boy.

Brian Wilson will return to Capitol Records/EMI, his original label home, for the release of  a new studio recording "That Lucky Old Sun" on CD, CD/DVD, limited edition vinyl and digitally on September 2 (September 1 internationally).

It may not be revolutionary, but its a smart move for EMI and a time when it needs to make smart moves. Wilson is a revered figure in rock and new releases could rejuvenate Beach Boys catalog sales which date back to the band's first hit in 1962 “Surfin’ Safari/409”.

Can The Music Industry Save Itself? - Introduction

INTRODUCTION AND A UK ACTION PLAN

Next: Off With Their Heads

Last week we listed the Top 10 Issues Facing Music 2.0  which started a debate both on Hypebot and other blogs. But what can the industry do to save itself?  We'll explore that question and give our suggestions this week on Hypebot including your ideas. To get the discussion started, here's a 5 point action plan from two UK firms, Leading Question and Music Ally, based on their research:

1. Music needs to be bundled with other products and entertainment packages: Value can be created from many other ways than consumers simply buying the occasional download. Music needs to move away from per unit sales and become more of a service than a product. It should be pre-loaded into devices, bundled with mobile tariffs, offered as part of TV/Entertainment/ISP packages.

2. Labels needs to experiment with new release schedules and formats: The old model of single and album releases has run its course. Labels needs to be more innovative if they are not to be freezed out altogether. Look at the likes of Radiohead, Nine Inch Nails and Prince and experiment with new and varied formats, new pricing models and release schedules, digital only releases and promotional partnerships with brands.

3. Free doesn’t mean no money: The music industry should not fear free. It needs to...