Social Networks: Effective Tool or Embarrasing Joke?

We Love This: Do we really want to spend our precious time in this business seeing who can amass the most phony phantom friends? Is this really what the music biz 2009 has come down to? Trent, we salute you once again for using at least a little common sense! Our question is: what took you so long?

Trent Reznor to Ditch Social Networks; Complains "Idiots Rule"

Authored by Mark Hefflinger on June 11, 2009 - 12:24pm.

Los Angeles - Nine Inch Nails frontman Trent Reznor, who abandoned the major label system and has been testing various online distribution models, has announced that he will be "tuning out" of social networking sites. After delving into social networks as a means of giving fans more access to his personal life, including a Twitter account where he spoke of his personal life, Reznor said he "will be tuning out of the social networking sites because at the end of the day it's now doing more harm than good in the bigger picture and the experiment seems to have yielded a result. Idiots rule.

Trent Reznor Says No More Social Networking
Bruce Houghton, Yesterday, 4:36 AM

"It's been an interesting experiment over the last couple of years or so. Faced with leaving the infrastructure of traditional record labels and figuring out what the right thing to do is in this new world - I found myself realizing that for me to have any concept of how to interact with the community and know what they might want / what they find appropriate, I need to immerse myself in that world and live it for a while.

The reason no record label knows how to market anything to new media is they don't live there...

They don't get it because they don't use it. What you've seen happen with the marketing and presentation of NIN over the last years is a direct result of living next to you, listening to you, consuming with you and interacting with you. Directly. There's no handlers or PR people here, it's me and my guys - that's it.

...I will be tuning out of the social networking sites because at the end of the day it's now doing more harm than good in the bigger picture and the experiment seems to have yielded a result. Idiots rule..." - Trent Reznor

Major Layoffs Coming To MySpace. Could Hit 25%

Layoff described by one source as ":massive" are coming to MySpace although there is no official word yet from the company. MySpace shed 5% of its staff a year ago and laid of as many as 45 more last month. But these cuts will go far deeper, according to TechCrunch and could hit several hundred. Management will inevitably blame a tough economy and plummeting ad revenue, but declining traffic is the real culprit.

Monthly unique visitors to MySpace have fallen from 64.6 million in June of 2008 to 56.8 million in May of 2009 while Facebook rose from 35.2 million to 113 million during the same period. New leadership has been brought in both at parent Fox Interactive and MySpace to turn the ship around with music as the cornerstone of the rebuilding process.

How To Blog, Party, Learn, Promote & Network

Like A Rockstar At SXSW 2009

Authored by Rohit Bhargava on March 13, 2009 - 11:28am.

As I write this, I'm on the plane headed to South By Southwest (SXSW) in Austin for my third year. One big question newbies and veterans of the show are likely thinking about is how to get the most out of their experience given the flood of events, people, conversations and opportunities that the show will have. I did a quick Twitter search for "#sxsw" yesterday afternoon and it had 100 new conversations using the keyword over just 60 seconds. Equated to meteorological terms, SXSW isn't a flood or a tornado - it's an ELE (Extinction Level Event). So, if you read one post about getting ready for the show (and staying alive through it) - perhaps this should be it. The show kicks off later tonight - so in between RSVPing to parties and twittering your gripes about airline delays, check out this super quick list of tips on how to get the most out of SXSW this year, separated into five key activities you might be doing:

HOW TO BLOG AT SXSW:

Forget live blogging everything people say. It's too much pressure and I guarantee there are way too many pro/experienced bloggers doing it better and more consistently than you in the crowd. Let them. Bring out insights and single gems in your blog posts. Focus on the big things that you learned or will take away from the show, and your blog posts will be much higher quality (and more useful for everyone). Be self sufficient. Set up your blackberry or iPhone so you can do mobile blog posts if you can't get on the Internet. Buy an extension cord to share outlets with people. Have a usb flash drive so you can use a different computer if you need to. Essentially, don't expect all the services to be available for you. Think like a road warrior.

HOW TO PARTY AT SXSW:

RSVP for everything you can Choose the 1 party each night that you absolutely can't miss. Go there first around the time it starts. Being fashionably late is an amateur move at SXSW because the lines get long. Go to the party where you know someone later (and use your connection to jump the line) Pay attention to the "flash mob" parties that spring up on Twitter. Skip the lines and go to those. Pepsi has a great tool to help you do that here. Broadcast your whereabouts as much as you can or are willing to - often people in your social network may find you through these updates, and you can meet people you never expected to.

HOW TO LEARN AT SXSW:

Plan an escape route. There are lots of conflicting great sessions at SXSW - so don't be afraid to get up and leave if a session isn't living up to what you thought it would be. Decide by Twitter. If you are conflicted between two sessions, wait 5 minutes into the sessions and see what people are saying about the sessions, and then pick one to go to. Trust the mob. Take good notes. In other words, don't write down everything - just the "aha moments" that come from the session. Those are all you'll really need afterwards anyway. In fact, doing that also makes live twitter an event particularly easy, because your tweets are far more useful and can serve as your notes after the session.

HOW TO PROMOTE YOUR BRAND/SELF AT SXSW:

Use the influencer model. One of the most effective things you can do at SXSW is to tell influential people about your product, service, or yourself. This is not about sucking up to anyone, but getting the right people to know about your product. Have something to give people. A business card is a good start, but somehow you need to stand out so that people will remember you and connect with you after the event. So get some stickers, handwrite a URL or Twitter name on the back of your business card, or make it a point to follow up with people that you meet as soon as you can. Create and tag content. This may be tough advice to follow because everyone is doing it, but there is an archival quality to having good photos, video and blog content come out of SXSW that you should use as much as you can. Add a special offer or exclusive promotion for SXSW attendees to WWW.SECRETSXSW.COM, a list that our team created to help manage the overwhelming amount of marketing at the show. After SXSW, it will be THE place people go to follow up on offers and marketing that they saw during the show.

HOW TO NETWORK AT SXSW:

Meet your rockstars. Everyone has someone that they admire who will be at SXSW. The nice thing is that it is definitely the kind of show where you can (and should) introduce yourself to your rockstars (the people you really want to meet). Film and interview instead of chitchat. If you meet someone interesting, think about asking them a few questions in an interview for your blog. Or grabbing a quick video with them on a flip cam (assuming you brought one with you, of course). The point is, as much as you can, go beyond idle chit chat. Above all else, my final tip to anyone making the show is to actually BE THERE. This means not Twittering during a conversation with someone, or focusing so much on getting your next blog post out that you don't actually take a moment to really learn something, or to actually get to know someone, or to truly enjoy your time at what is probably one of the most FUN shows you'll go to all year. Good luck - and hope to see you there. Follow me at @rohitbhargava on Twitter to try and say hello!

Ticketmaster: $1B Lost In 4Q

RYAN NAKASHIMA | March 19, 2009 04:42 PM EST

LOS ANGELES — Ticketmaster Entertainment Inc. lost $1.07 billion in the fourth quarter, as the ticket-selling company that hopes to merge with concert promoter Live Nation Inc. had to take a huge impairment charge to account for its falling share price. Ticketmaster said Thursday the loss amounted to $18.82 per share in the three months to Dec. 31. The $1.1 billion goodwill write-down reflected the decline in the company's stock price, which debuted at $20 when it spun off from IAC/InterActiveCorp in August. Shares closed Thursday down 3 cents at $4.09 before the earnings were announced. Excluding the charge, earnings fell 81 percent to $9.9 million, or 16 cents per share. Revenue grew 9 percent to $384 million, mainly due to acquisitions. Analysts surveyed by Thomson Reuters had expected, on average, earnings of 29 cents per share on revenue of $378 million. Last year was a year of transition for Ticketmaster Entertainment," said Irving Azoff, who became chief executive in October when Ticketmaster took a controlling interest in his talent management company, Front Line Management Group Inc.

"While I'm pleased that in the midst of an evolving music industry and a challenged consumer environment we were able to show substantial growth in free cash flow, we won't be satisfied until we transform the company," he said in a statement. Free cash flow increased to $49 million from negative $15 million in the same period a year ago. The number of tickets sold in the quarter decreased 9 percent to 35.1 million. And the gross value of the tickets sold fell 14 percent to $2.13 billion. The company said the economy was partly to blame. Ticketmaster also cited the loss of a contract with Live Nation, which launched its own ticketing platform in January, and fewer big-name tours than in the same period a year earlier.

Music stars call for more power

By Ian Youngs Music reporter, BBC News

Robbie Williams and members of Blur, Radiohead and Pink Floyd have launched a lobby group for rock and pop artists. The Featured Artists' Coalition hopes to give artists a greater voice in big decisions in the music industry, from digital deals to copyright law. Before its first meeting in London, Radiohead guitarist Ed O'Brien said it was "a defining time for the industry". A lot of the rights and revenue streams are being carved up, and we need a voice," he told BBC News. We need to be in there and we need to be discussing it, and I think all the major players want to hear what we have to say."

Changing landscape

The organisation has emerged at a time when artists are gaining power from the internet, which allows them to communicate with and sell directly to their fans.Radiohead have been pioneers in the online era after deciding to sell their last album from their own website in a pay-what-you-want offer before putting it out through a record company. O'Brien said the Featured Artists' Coalition (FAC) had come about after a shift in the balance of power between artists and labels. The reason we can do all this is becau se the internet and digital technology have changed the landscape in the music industry, which basically means people can now release their music without a middle man, without a record company," he said. O'Brien is on the committee's steering group alongside Blur drummer Dave Rowntree, Soul II Soul's Jazzie B, Billy Bragg, Marillion's Mark Kelly, hip-hop newcomer Master Shortie and pop star Kate Nash. Nash said artists needed "a seat at this negotiating table".

"There are a lot of deals and decisions being made on our behalf that we have no say in," she said. "The digital age has changed the industry so drastically and continues to change the world so drastically. That means there are more and more things coming up that decisions are being made on. "It's our work, it's our life's commitment that is going to be affected so I think it makes perfect sense that we're there, saying this is what we think." The FAC says artists are not routinely consulted in deals their labels and publishers strike with digital partners such as Nokia, MySpace and YouTube. YouTube is currently embroiled in a row with the Performing Rights Society over how much money is paid to songwriters for the streaming of music videos. Robbie Williams, who is believed to be preparing a new album, was the most high-profile star at the event on Wednesday. His next album will be his last under his current contract with EMI, after which he will be free to sign a new deal or release music in another way.
Contract advice

Pink Floyd drummer Nick Mason, KT Tunstall, Badly Drawn Boy, David Gray and Travis singer Fran Healy were also present, and were joined by dozens of up-and-coming artists whom the FAC is also designed to help. Billy Bragg said the FAC would provide training for young acts to advise them not to sign away the rights to their recordings to labels for the current 50-year duration of copyright. The FAC will actually go out and mentor and educate young artists not to sign 'life of copyright' deals," Bragg said. What we need is an industry where the next Billy Bragg can make a living like I have for the past 25 years." The body also hopes to have a voice in the current negotiations to extend the term of sound copyright, possibly to 70 years.

 

Spinal Tap To Unwig And Unplug On 30 City Tour

Christopher Guest, Michael McKean and Harry Shearer, the geniuses behind Spinal Tap and A Mighty Wind's The Folksmen, will embark on a 30 city tour entitled "Unwigged and Unplugged." Beginning in mid-April at the Center for the Performing Arts in Vancouver, British Columbia, the three comedians will leave the costumes at home and play acoustic versions of their cinematic triumphs throughout the United States. Even if they plan to leave the costumes at home, there's no way these three can be on stage together and not be funny. On May 26 (and possibly the 27th, the tour will bring them to the newly refurbished Beacon Theater just a few blocks north of Town Hall, the location for much of A Mighty Wind.

Universal Music Wins Royalty Dispute With Eminem Producers

Authored by Mark Hefflinger on March 6, 2009 - 12:39pm.

Los Angeles - Universal Music Group has emerged the winner of a lawsuit brought by producers of hip-hop artist Eminem's early recordings, over the amount of royalties owed from sales of digital song downloads and ringtones, Bloomberg reported. The case hinged on whether digitally distributing a song should be considered a "license" of the music to a third party like the iTunes Store, or treated in the same way as CDs and other media -- as physically distributed product. A jury denied FBT Productions' claim of $1.47 million in damages for underpaid royalties, but did award the company $159,000 on a claim that Universal had misallocated royalty payments. Licensing typically nets a higher royalty for the artist, in this case 50%, as opposed to the 40% that FBT Productions has been paid. "It's a big disappointment," FBT's Joel Martin told Bloomberg, adding that the company is likely to appeal the verdict.

The 2009 Music Industry: Ch-Ch-Ch Changes

It's grown commonplace to wax philosophic about the everchanging landscape in the music industry and try to gauge the effects of the downturn of the economy, the disinclination of music fans to pay for the music they enjoy so dearly and how this will affect Kanye West. Most likely, February of 2009 will be remembered for the clusterfucks surrounding the sale of tickets to the Phish reunion shows and Bruce Springsteen's summer tour. Live Nation's inability to handle the influx of traffic to their site angered hundreds of thousands and Ticketmaster's complicity in referring ticket buyers to their online don't-call-it-scalping site attracted the attention of the New Jersey Attorney General.

The whole Live Nation debacle was almost immediately followed by the announcement that the former Clear Channel entity will merge with Ticketmaster into a gigantic potential anti-trust violation. Pearl Jam fans will be quick to point out that this isn't the first time Congress has been asked to look into the monopoly issue with Ticketmaster and this time they seem to be taking the matter a bit more seriously than in the mid-Nineties. It's going to take many months before the merger and its debatable whether it will benefit, harm or have no effect on the ticket buying public. With disposable income becoming a scarce commodity, this is an issue that will surely garner a lot of attention.

Getting less attention is the first Eminem lawsuit in years that doesn't involve his wife. Slim Shady's dispute with his label, Universal Music Group, over the royalties owed from digital sales, most significantly iTunes. If the Live Nation/Ticketmaster merger has peaked the interest of music fans, the Eminem/Universal suit has musician's held rapt. The issue that will go the jury concerns whether the record label's deals with online services constitute a distribution agreement or a licensing agreement. If the agreement is considered a distribution deal, as the Universal contends, nothing changes; if considered a licensing deal, Eminem is entitled to substantial additional royalties, potentially a 50/50 split. If Eminem wins, we may be looking at a whole new world.

The Eminem case looms larger in light of the fact that record stores seem to be closing on a daily basis. On the heels of Virgin's closing of their megastore in Times Square, they have announced that they will be locking the doors of their Union Square store in New York City as well as their superstore in San Francisco. Unless you are looking for the new U2 or Springsteen album, the digital marketplace may soon be your only source for acquiring your music.

FRIDAY FEBRUARY 13, 2009: Our heartfelt condolences go out to our good friends Ronnie Spector, Jonathan Greenfield and their familes for the loss of Ronnie's sister and Ronnette Estelle Bennett. As a tribute to Estelle there is an abbreviated history of the Ronnettes below and an article on the PROPAGANDA page.

Estelle Bennett of the Ronettes

Estelle Bennett (L), Keith Richard (C) and iFn client Ronnie Spector (R)

Rock and Roll Hall of Fame Induction Ceremony 2008

The Ronettes

Veronica 'Ronnie' Bennet, her sister Estelle and Cousin Nedra Talley began their career as a dance act the Dolly sisters. By 1961 they had become the resident dance troup at the famed Peppermint Lounge, home of the twist craze, and having taken tuition in harmony singing, later secured a recording deal. The trio's first single, 'I Want A Boy', was credited to Ronnie And The Relatives, but when "Silhouettes' followed in 1962, the Ronettes appellation was in place. They recorded four singles for the Colpix/May group and appeared on disc jockey Murray The K's 'Live From The Brooklyn Fox' before a change telephone call resulted in their signing with producer Phil Spector.
Their first single on Spector's Philles label, the majestic 'Be My Baby' defined the girl group sound as Spector constructed a cavernous accompaniment around Ronnie's plaintive, nasal voice. The single reached the top 5 in the US and UK before being succeeded by the equally worthwile 'Baby I Love You', another top 20 entrant in both countries. The producer's infatuation with Ronnie (the couple were later married) resulted in some of his finest work being reserved for her and although ensuing singles, including 'The Best Part Of Breaking Up', 'Walking In The Rain' (both 1964) and 'Is This What I Get For Loving You' (1965), failed to emulate the Ronettes' early succes, they are among the finest pop singles of all time. The group's career was shelved during spector's mid-60's 'retirement', but they emerged in 1969 with 'You Came, You Saw, You conquered'. Credited to 'The Ronettes Featuring The Voice Of Veronica', this excelent single was nonetheless commercially moribund and Ronnie's aspirations were again sublimated. She separated from Spector in 1973 and joined Buddah Records, founding a new group with vocalist Denise Edwards and Chip Fields. Ronnie And The Ronettes made their debut that year with 'Lover, Lover', before changing their name to Ronnie Spector And The Ronettes for 'I Wish I Never Saw The Sunshine', an impassioned remake of a song recorded by the original line-up, but which remained unissued until 1976. The group's name was then dropped as it lead singer persued her solo ambitions.

FRIDAY, JANUARY 30, 2009: A show recorded in 1993 by The Invasion Group and indieFINANCIALnetwork client, Bill Hicks will finally see the day tonight in a special airing on The David Letterman Show. This is a MUST SEE and a Tivo from arguably the greatest comic who ever lived. The video is now posted below. Story follows, also there is a January UFO UPDATE posted here.

Jury Orders Jammie Thomas to Pay $1.9M for Sharing 24 Songs

Authored by Mark Hefflinger on June 18, 2009 - 12:42pm.

Duluth, Minn. - A jury has awarded the record labels that sued Jammie Thomas-Rasset for copyright infringement on a file-sharing network $1.92 million in damages, or $80,000 for each of the 24 songs she shared, the Recording Industry vs. The People blog reported. After three days of testimony this week, closing arguments were heard on Thursday before the jury began deliberations in the case.

"The nonsensical exorbitancy of the verdict actually enhances the constitutionality argument, demonstrating how open ended the statute is if the RIAA's wild eyed interpretation of it is allowed to survive," wrote attorney Ray Beckerman, who operates Recording Industry vs. The People.

Beckerman and others have argued that the $150,000 per song damages that may be claimed for copyright infringement are unconstitutionally high.

He noted that, in the current case, Thomas-Rasset was ordered to pay 228,571 times the actual damages, or retail value of the songs in question.

Thomas-Rasset was initially convicted and ordered to pay $220,000 in damages, but the judge later declared a mistrial after admitting he erred in giving jury instructions.

The verdict in the new trial marks the first conviction on copyright infringement charges for an accused file-swapper. The majority of those charged end up settling with the RIAA for $5,000 or less.

Indie labels talk survival at South by Southwest

By Todd Martens , March 20, 2009

Declining album sales, online piracy and rampant layoffs: The problems that have been afflicting corporate labels for the last decade are even worse in this niche industry, executives say.

Reporting from Austin, Texas -- The stark realities facing the independent music sector threatened to cast a pall over the hard-partying revelry as the South by Southwest music festival began its second full day Thursday.

Executives who gathered for the confab said they were grappling with the same sorts of fallout from the worsening economy and breakdown of traditional business models -- declining album sales, online piracy and rampant layoffs -- that have been afflicting their corporate counterparts for the last decade.

"Everything you've heard [about the troubles of major labels], it's probably worse," said Nan Warshaw, co-owner of Chicago's Bloodshot Records. Warshaw made her comments during a session titled "Indie Labels Keep the Faith," which became less about communal uplift and more about sharing horror stories and strategies for survival amid the cutthroat industry climate.

"The decline in indie retail has continued in a free-fall," Warshaw told the audience, which also heard from Rounder Records owner Ken Irwin, Barsuk Records' head Josh Rosenfeld and Portia Sabin, who oversees the Portland, Ore.-based independent record label Kill Rock Stars.

Warshaw said that getting albums into the stores that have survived is more difficult than ever, with most chains wanting assurances that a title will sell at least 5,000 units.

"If your record can't do that, there's no point," she said.

Fellow panel member Howard Greynolds, formerly of veteran Chicago label Touch and Go Records, said the disconnect between the labels' needs and those of retailers were becoming greater than ever and that the economics for independent labels had shifted.

While in the past indies could thrive by selling 20,000 to 30,000 copies of an album, "what has happened is that it is now 5,000 [sales] or less, or 50,000 or more," Greynolds said. "The middle is gone."

Increased digital downloading isn't making up for declining CD sales either. Greynolds said the margins from iTunes were too thin to "maintain a staff of 10."

Touch and Go recently cut 21 of its 23 staffers.

Yet there's no shortage of music available. Irwin said the number of official releases tops 8,500 annually, and a record-setting 1,900 bands are in Austin for SXSW.

A number of the remaining panels at the event will touch on other avenues to make money, such as licensing and so-called 360 deals.

Across the hall from the indie panel was a discussion on making money via songwriting and publishing, with authors Jeffrey and Todd Brabec offering copies of their how-to book, "Music, Money and Success," for sale.

Another discussion on placing music in film and television featured Nic Harcourt (former KCRW music director) and Alexandra Patsavas, whose Chop Shop fronted the soundtrack to last year's vampire movie "Twilight" and places music in the CW's teen drama "Gossip Girl."

Greynolds said that a song in a commercial can translate into $1 millionin sales. Bloodshot's Warshaw quickly brought the discussion back to reality: "But that's one in a million."

Report: Youth Prefer Tinny Sizzle of MP3s to Uncompressed Music

Authored by Mark Hefflinger on March 6, 2009 - 1:44pm.

London - A music professor at Stanford University has found over the course of an eight-year survey of his students that they have come to prefer the tinny sizzle sound of MP3s over the uncompressed sound from a vinyl record and other formats, the Times Online reported. "I found not only that MP3s were not thought of as low quality, but over time there was a rise in preference for MP3s," Berger told Times Online. The effect seems to be the opposite with older generations, who prefer the "warmth" and crackle of vinyl recordings. "Some people prefer that needle noise -- the noise of little dust particles that create noise in the grooves. I think there's a sense of warmth and comfort in that.

Ronettes star Bennett dies at 67

Ronnie Bennett (l) is devastated about losing her sister Estelle (r)

Estelle Bennett, former singer with The Ronettes - who are best known for their 1963 hit Be My Baby - has died aged 67. The singing trio helped epitomise the famed wall of sound technique that was created by producer Phil Spector. Bennett was found dead at her home in New Jersey. It is not yet clear what the cause of death was. Bennett's brother-in-law, Jonathan Greenfield, said his wife could not believe it. "Estelle was Ronnie's sidekick," he said.

Royalties row

"She was very much into fashion and worked with Ronnie on the whole look and style of the Ronettes," he added. The Ronettes were inducted into the US Rock and Roll Hall of Fame in 2007. Its website hails the group as "the premier act of the girl group era". At the time, the Rolling Stones' Keith Richards said: "They could sing all their way right through a wall of sound. They didn't need anything. They touched my heart right there and then and they touch it still." The two sisters and their cousin Nedra Talley signed with Spector's Philles Records in 1963. Their recording of Be My Baby went to number two in the US that year. Their other hits included Walkin' in the Rain and Baby I Love You. Ronnie Bennett married Spector in 1968 but after their divorce six years later, the group launched a lawsuit against the producer. They claimed he had cheated them out of royalties and ordered Spector to pay $2.6m. However New York State's highest court threw out that ruling on appeal in 2002. In addition to her sister, Bennett is survived by a daughter, Toyin Hunter and three grandsons.

Peter Gabriel Pulls Out of Oscars

Gabriel is nominated for his first Oscar for the animated film Wall-E

Peter Gabriel has pulled out of the Oscar ceremony after learning his performance as a best song nominee would be limited to just 65 seconds. The singer, co-nominated for Down To Earth from Wall-E, said he had hoped to perform the song in its entirety. The three shortlisted songs will be performed as part of a medley. "It's a bit unfortunate," said Gabriel in a video on his website, adding that he was "an old fart" who could afford to "make a little protest". The Academy had no comment.

Ceremony revamp

In a change to previous years, producers - eager to bolster viewing figures for the Oscar ceremony later this month - have chosen to cut back on song performances. But the British singer, nominated alongside American composer Thomas Newman, said songwriters "deserve a place in the ceremony as well". The songwriters are a very small part of the filmmaking process, but we still work bloody hard," he said.

Gabriel, 59, in the running for his first Oscar, said he hoped the Soweto Gospel Choir would perform in his place but added that he will still attend the ceremony on 22 February.
World music

"I'm an old fart and it's not going to do me any harm to make a protest. But the ceremony should be fun and I'm looking forward to it." Down To Earth is nominated alongside two songs from Slumdog Millionaire by Bollywood songwriter AR Rahman. t lost out to Bruce Springsteen's track from The Wrestler at the Golden Globes last month. Peter Gabriel, a former member of Genesis, had a string of hit albums in the 1980s. More recently, he has become well-known for his promotion of world music and his involvement in the charity, Womad.

 

Report: Web Radio Music Listening Up 37.6% in 2008

Authored by Mark Hefflinger on February 10, 2009 - 12:22pm.

Marina, Calif. - Listening to Web radio music stations increased by 37.6% in 2008, to 6.67 billion hours, and in-stream audio sold against ad-supported cumulative listening hours was up 46% to $74 million, according to a report from AccuStream iMedia Research.

AOL's (NYSE: TWX) Shoutcast platform accounted for 52.5% of total time spent listening in 2008, and its cumulative music hours grew 47% from 2007.

Behind Shoutcast, ad-supported Clear Channel radio station sites drew 7.8% of total time spent listening, and a 16.5% share of the total ad-supported music listening market.

Total ad-supported music hours as a percentage of total online listening has declined each year since 2005, registering 44.2% in 2008. AccuStream projected that this trend will continue.

"Online music programmers are passionate about radio, and adapting their businesses to an inspired yet challenging marketplace," said AccuStream research director Paul A. Palumbo.

"In 2009 their focus is on running lean, efficient operations, capping international streams while pitching local, regional and national avails."

If Sirius XM Died, No One Would Miss It
Chris Dannen Today, 6:50 PM

Sirius XM [SIRI] is preparing to file for bankruptcy as early as Tuesday, due to a $175 million debt maturing this weekend that the company can't pay. If satellite radio as we knew it disappeared, would it really matter?

Granted, "preparing" to file for bankruptcy doesn't necessarily mean that the company will have to do it, according to the Washington Post; it's just a procedural necessity in case talks for more funding fall through. And even if Sirius XM does file, it probably wouldn't mean an interruption of service for radio subscribers according to Chris Murray, senior counsel for the Consumers Union.

But getting through next week as a solvent company will mean that SIRI's CEO Mel Karmazin will have to find a heaven-sent investor who may not exist. The company is experiencing a virtual standstill in subscriber growth, and it is operating at a loss, making it unattractive to banks; it's also already highly leveraged with $3.3 billion in debt maturing before 2014, meaning any financing terms Karmazin could get would be highway robbery.

A glimmer of hope lies in a potential deal with Charlie Ergen, CEO of Dish Network [DISH]. His company already owns $300 million in Sirius XM bonds, and a satellite radio business could be complementary to the Dish Network's TV offerings. The AP also reported that Liberty Media Inc., that is affiliated with DirecTV [DTV], may also be involved in talks with Sirius XM.

But serious regulatory issues over buying the nation's only satellite radio company would abound because of antitrust laws. The Sirius XM merger itself took nearly 18 months and involved a host of strict stipulations that could hamstring a potential buyer. It's rumored that Ergen and Dish Network might want to dismantle Sirius XM radio and use its valuable frequency for a new high-speed Internet service the company is building, but that would involve disenfranchising 19 million satellite radio subscribers--another move that the FCC would stonewall.

Which options are left? There's structured bankruptcy, like the kind that Mitt Romney suggested for American automakers in his November op-ed in The New York Times. A managed bankruptcy deal with federal regulators would give Sirius XM the flexibility to re-make its business model in a sustainable way; a new round of bonds or leniency from investors will simply keep the radio provider on its same failed track. As Anya Kamenetz noted in her Tuesday post, radio listeners just aren't responding to the Sirius XM model. And why should they, with Internet radio and iPods at their disposal?

The company could also use bankruptcy to find a way to divorce itself from the health of the auto industry; right now it gets the lion's share of its new subscribers from new cars sold with built-in satellite radios, when it really should have a viable sales model of its own. It also needs to find a way to bring down its astronomical operating costs by re-negotiating with its star players, or by finding new, cheap talent that won't come at a premium. Is Howard Stern really worth a $100 million contract when the company is on the verge of failure over just $175 million in maturing bonds?

All that would require new management and new vision, that may be better provided by a deal with Dish Network. Dish has the resources to execute a rebirth. What if Dish dismantled Sirius XM as it currently exists, and re-introduced it as a high-speed broadband service that could carry music as well as Internet access? Would anyone miss having plain old commercial-free radio when XM could be so much more?

Backward-compatible, the hybrid service could still allow all of Sirius XM's subscribers to get commercial-free radio on their existing radios. But buyers of new Sirius XM receivers could have access to in-car Web, giving aftermarket sales of satellite head units real appeal they currently lack. Sirius XM portable radios, which currently aren't selling next to iPods and Zunes, would become Web-enabled multimedia devices that could have Apple [AAPL] and Microsoft [MSFT] seriously worried. Dish Network could also give AT&T [ATT] and Verizon [VZ] a run for their money by selling USB dongle modems for PCs, and building out a TV-based Internet service that could enable consumers to buy digital media over their TVs.

Would it take work? Yes. Would it be disruptive? You bet. Let's hope something drastic happens at Sirius XM--consumers deserve more than the company can presently offer.

N.Y. Times: DirecTV Owner in Talks with Sirius XM

Authored by Mark Hefflinger on February 12, 2009 - 8:47am.

Washington - Just five days before the company's $175 million debt payment comes due, Sirius XM (NASD: SIRI) has entered talks with Liberty Media (NASD: LCAPB) that the satellite radio provider hopes could keep it out of bankruptcy, The New York Times reported. The talks could set up a situation in which Liberty, the majority owner of DirecTV, wages battle with fellow satellite TV firm EchoStar (NASD: SATS), the owner of Dish Network, for control of Sirius XM.

Echostar in recent weeks has been accumulating the company's debt, including most of the $175 million due on Tuesday and part of another $400 million due in December.

The Times said that it's unclear how advanced the talks are between Liberty and Sirius XM, with some analysts suggesting that Liberty may be simply trying to drive up rival Echostar's price for the company.

Sirius XM Reportedly Preparing for Chapter 11 Filing

Authored by Mark Hefflinger on February 11, 2009 - 8:19am.

Washington - Unlikely to find a way to repay its looming debts, satellite radio provider Sirius XM (NASD: SIRI) has hired advisors to help it prepare for a possible bankruptcy filing, The New York Times reported. The company currently is saddled with about $3.25 billion in debt, owing $175 million of it at end of this month, as well as another $400 million in December.

Citing people familiar with the situation, The Times reported that Sirius XM has hired Joseph Bondi of Alvarez & Marsal and Mark Thompson of Simpson, Thacher & Bartlett to help it through a possible Chapter 11 filing, which could come in mere days.

It also has been in talks with debt-holder EchoStar, which may be looking to negotiate for a controlling stake in the company.

The news sent shares of Sirius XM, which began the day at $0.11, down by nearly half by midday. They had traded close to the $4 mark a little over a year ago.

Justice Dept. to Investigate Live Nation-Ticketmaster Merger

Authored by Mark Hefflinger on February 11, 2009 - 12:52pm.

Washington - The U.S. Justice Department on Wednesday announced its intention to investigate the proposed $2.5 billion merger of concert promoter Live Nation (NYSE: LYV) and Ticketmaster Entertainment (NASD: TKTM), the Associated Press reports. The Justice Department previously investigated Ticketmaster during the '90s for its predominant position in the market for live event ticketing.

"This is both a horizontal and a vertical merger," Marc Shildkraut, a former assistant director of the FTC's Bureau of Competition, told Wired.com.

"Horizontal means they're competitors to each other [due to Live Nation's recent entry into the ticketing market, two years of development] and vertical means they are in adjacent spaces in the market."

"The Justice Department in particular did not have much enthusiasm for challenging vertical mergers during the Bush administration," Shildkraut added. "

But Christine Varney, who is slated to be the next assistant attorney general for antitrust, was at the FTC in the late '90s, and was very interested in cases where she thought vertical mergers could have an anti-competitive effect."

SoundExchange Offers New Royalties Settlement to Webcasters

Authored by Mark Hefflinger on February 9, 2009 - 1:00pm.

Washington - SoundExchange, the entity set up by the major labels to collect and distribute digital music royalties, has proposed a new settlement offer to smaller webcasters in advance of a Feb. 15 deadline under last year's Webcaster Settlement Act, Billboard reported.

Under the proposal, which would run through 2015 and be retroactive from 2006, "microcasters" -- generating less than $5,000 in annual revenue -- would pay a minimum annual payment of $500 and a $100 "proxy fee."

Webcasters earning less than $50,000 annually would pay a minimum of $2,000, and those making more than $50,000 would pay a minimum of $5,000.

In addition, webcasters would pay licensing fees based on their monthly aggregate tuning hours.

The "small" webcaster rate would be void if a webcaster exceeds 5 million aggregate tuning hours a month, or generates annual revenues of more than $1.35 million a year.

"We're disappointed with the offer," Rusty Hodge, founder of Web radio firm SomaFM, told Billboard.

"It effectively is worse that the previous [one]. Basically SoundExchange has done nothing to compromise with webcasters at all."

EchoStar Accumulating Sirius XM's Debt; Vying for Control

Authored by Mark Hefflinger on February 6, 2009 - 9:41am.

Washington - EchoStar, the Colorado-based satellite TV firm that owns DISH Network, has been accumulating the debt of satellite radio provider Sirius XM since late summer, and may soon be able to take control of the company, The Wall Street Journal reported.

The paper reported that Echostar has purchased about $400 million of the company's debt -- including $175 million set to expire on Feb. 17 -- from various hedge funds.

The two companies reportedly have been in talks about the situation for several weeks.

"Industry officials and consultants see the latest EchoStar moves as a way to differentiate Dish from cable-television rivals by getting into wireless and mobile-video services," The Journal reported.

Should Sirius XM be unable to pay back its loans and file for bankruptcy, EchoStar potentially could takeover control of the company through a settlement with the banks.

Sirius XM is headquartered in New York, but has major operations in DC, the former home of XM Satellite Radio.

Warner Music: Digital Now 19% of Total Revenues

Authored by Mark Hefflinger on February 5, 2009 - 7:55am.

New York - Warner Music Group (NYSE: WMG) now generates 19% of its total revenues from digital music, and reported $171 million in digital revenue for its fiscal quarter ended Dec. 31 -- a 20% increase from the same period a year ago.

In the U.S., digital generated $99 million during the quarter, accounting for an even larger 31.4% of total recorded music income.

Overall, the company reported a net profit of $23 million for the quarter, compared with a net loss of $16 million a year ago, while revenue was off 11.2% to $878 million.

"Though facing difficult economic conditions and tough prior-year comparisons, we executed on our strategy and remain confident in achieving our long-term goals," said Edgar Bronfman, Jr., Warner Music Group's chairman and CEO.

"We continue to develop new music business solutions and maintain our digital leadership position, while managing costs, gaining share and delivering strong returns on A&R investments."

 

Bruce Springsteen Blasts Deceptive Ticketmaster Practices

Authored by Mark Hefflinger on February 6, 2009 - 5:59am.

Washington - Bruce Springsteen this week blasted Ticketmaster (NASD: TKTM) for redirecting fans trying to purchase tickets for his upcoming tour -- including his May 18 show at the Verizon Center -- to its TicketsNow site, which sells seats above face value. "They did this even when other seats remained available at face value," wrote Springsteen in an open letter to fans. "We condemn this practice... We perceive this as a pure conflict of interest."

The New Jersey Attorney General's Office said that it is investigating after receiving more than 250 complaints, and Irving Azoff, the CEO of Ticketmaster Entertainment, issued a public apology.

"If any fans inadvertently purchased tickets in the resale marketplace believing in error they were purchasing from the initial on-sale, we will refund the difference between the actual purchase price and the face price of the ticket," Azoff said in a statement.

Springsteen said that the "abuse" of fans by Ticketmaster "has made us as furious as it has made many of you," vowing to "make sure" the practices are curtailed on future tours.

 

WSJ: Live Nation, Ticketmaster in Advanced Merger Talks

Authored by Mark Hefflinger on February 4, 2009 - 10:17am.

Los Angeles - Concert giant Ticketmaster (NASD: TKTM) is close to a negotiating an merger deal with concert promoter Live Nation (NYSE: LYV) -- which is preparing to launch its own rival ticketing service -- the Wall Street Journal reported, citing people familiar with the matter. While the companies' respective boards have not yet approved the deal, it is expected to not include an exchange of cash, and could be announced as early as next week. The Journal noted that the deal may very well raise antitrust concerns at the Federal Trade Commission (FTC), given the companies' positions in the music business.

Live Nation, itself a spin-off of the concert promotion unit of Clear Channel several years ago, recently began signing lucrative "360 deals" with artists such as Madonna and Jay-Z, which include recording and merchandising rights.

Meanwhile, Ticketmaster in October bought a majority stake in talent agency Front Line Management Group, headed by industry veteran Irving Azoff.

If the deal is consummated, the combined company is expected to be called Live Nation Ticketmaster. The Journal noted that who would lead the company has been a sticking point in negotiations.

 

Bono writes New York Times column

Bono is well known for campaigning against poverty in Africa

U2 frontman Bono will write an opinion column for The New York Times, the paper has announced. The 48-year-old singer's first column, for which he will also record a podcast, will appear on Sunday. He said it would be "an honour" but warned that he had "never been great with the full stops or commas". Times page editor Andrew Rosenthal said Bono was "an extraordinary man who thinks deeply about his art and the major issues confronting the world." The paper said Bono's column would cover a diverse range of topics. The singer is well known for campaigning against debt for the world's poorest countries and for the improvement of trade relations between Africa and the rest of the world. Last year, he received an honorary degree at Japan's Keio University for his work in the fight against poverty and Aids in Africa.

Report: U.K. Music Sales Dip 3.2% in 2008

Authored by Mark Hefflinger on January 7, 2009 - 1:10pm.

London - U.K. recorded music sales were down 3.2% in 2008 to 138.1 million units, a fall that was cushioned by a 0.9% sales rise in the fourth quarter, Billboard reported, citing data from the Official Charts Co. and record label trade group BPI.

Digital album sales climbed 65% to 10.3 million units, representing 7.7% of the total album market.

More than 115 million singles were sold in the U.K. last year, a rise of 33%. Only 4.8 million of these were physical singles; that market was down 43.5% from 2007.

"A strong release schedule and a digital retail market that continues to diversify and grow helped the business confront the challenges of unlawful P2P and disruption to retail supply to deliver what are, in context, encouraging sales figures in 2008," said BPI CEO Geoff Taylor.

"The challenge for music companies in 2009 is to ensure that artist investment continues to remain profitable, as the way consumers discover and enjoy music continues to go through a period of unprecedented change."

Report: Overall U.S. Music Sales Up in '08; Albums Down 8.5%

Authored by Mark Hefflinger on January 5, 2009 - 9:47am.

White Plains, N.Y. - While overall U.S. music unit sales, which includes songs, albums, vinyl, music videos and ringtones, climbed 10.5% to 1.5 billion in 2008, total album sales -- including 10-song digital track groupings -- fell 8.5% to 428.4 million, according to a report from Nielsen SoundScan. Sales of physical albums like CDs fell 20%, to 362.6 million, and are off by 45% since 2000. Meanwhile, digital album sales were up 32% in 2008, to 65.8 million units, and digital track sales grew 27% to reach a record 1.07 billion.

The top-selling digital album of the year was Coldplay's "Viva La Vida" (617,000 units), while the top digital track was Leona Lewis' "Bleeding Love" (3.4 million units).

The final week of 2008 was also the best week ever for music sales, which saw consumers make 65 million music purchases.

Nielsen's report also noted that more vinyl albums were sold in 2008 (1.88 million) than in any other year since its SoundScan service launched in 1991, and that two of every three vinyl albums were purchased at independent music stores.

The top-selling vinyl album of the year was Radiohead's "In Rainbows," followed by The Beatles' "Abbey Road."

ITunes embraces 3-tier pricing, will remove anti-copy software

Paul Sakuma / Associated Press By Dawn C. Chmielewski , January 7, 2009

Apple executive Phil Schiller explains at the Macworld Conference & Expo that song downloads from iTunes will cost 69 cents, 99 cents and $1.29 starting in April.

Apple bows to a long-standing demand of the music industry but claims victories of its own. Reporting from San Francisco -- With the lure of every song for 99 cents, Apple Inc.'s iTunes upended the retail establishment to become the nation's top music seller in less than six years.

But the digital media powerhouse said Tuesday it would follow one of the oldest tenets of capitalism: The more someone wants something, the more you can charge for it.

Apple finally bowed to a long-standing recording industry demand and agreed to sell music downloads at three prices -- 69 cents, 99 cents and $1.29. Starting in April, iTunes customers may pay the top price for a hot new track such as Beyonce's "Single Ladies" and barely half that for a long-forgotten song from Air Supply.

The Cupertino, Calif., company claimed some victories of its own Tuesday. Freeing 10 million songs from their digital handcuffs, Apple said it had persuaded the major labels to drop their insistence on copy protections that restrict the number and type of devices that can play songs bought through iTunes.

It also received permission to sell downloads directly to the iPhone 3G via AT&T's high-speed cellular network.

But Apple's concession on pricing marks a victory for the music companies, which are desperate to stimulate digital download purchases as CD sales plummet. Consumers bought a record 1.07 billion music downloads last year, according to research firm Nielsen SoundScan, but those gains failed to offset the nearly 20% drop in traditional album sales.

"Variable pricing is all about trying to get the most that you can without losing customers," said Sucharita Mulpuru, a retail analyst with Forrester Research.

The trio of music announcements came near the end of the keynote speech by Apple Senior Vice President Philip Schiller at the Macworld Conference & Expo in San Francisco. It was the first time in 11 years that the keynote was presented by someone other than Apple Chief Executive Steve Jobs, who revealed Monday that he was recovering from a hormone imbalance that has caused him to lose weight.

When Apple launched iTunes in 2003 with the 99-cents-fits-all price, it was hailed as a breakthrough for simplicity. At the time, many online music services offered complicated terms that sometimes involved monthly fees and a limited number of downloads.

The iPod digital music player also boosted the profile of iTunes, which surpassed Wal-Mart, Target and other traditional music sellers by last year, according to research firm NPD Group.

But the growth of digital downloads has slowed from the frenzied pace of its early years, and the music industry has begun to explore fresh approaches to spur online buying.

"The one thing that the industry has done badly is trading-up consumers," said Russ Crupnick, senior industry analyst for NPD. "You get somebody to buy $25 or $30 worth of songs each year, when that consumer used to be a $100 consumer in the CD world. We've done a bad job of getting them to buy more and more."

In a bid to spark sales, Apple introduced its Genius service in September, which examines an iTunes customer's music library and recommends other purchases. Music executives say tiered pricing opens the door to more experimentation with digital "bundles."

For example, Kanye West's single "Heartless" might be packaged with a discounted track from the "808s & Heartbreak" album, or a cellphone ring tone.

"Americans love a deal -- and music consumers especially," Crupnick said. "If you could take variable pricing and see the evolution of that into bundling and trading consumers up to buy more, that to me has potential."

Apple's Schiller drew applause from the Macworld crowd when he announced that iTunes would offer music that's free of the so-called digital rights management software the labels had insisted on to try to stem piracy.

In February 2007, Jobs threw down the gauntlet. In a letter to the music industry, he argued that digital rights management frustrated paying customers by limiting the number of devices on which they could play legally downloaded songs. For example, songs purchased through iTunes wouldn't easily play on Microsoft Corp.'s Zune device.

EMI was the first of the major labels to offer DRM-free songs, which also featured better sound quality, on iTunes in May 2007. Apple charged $1.29.

But Schiller said Tuesday that Apple had begun selling 8 million DRM-free songs at no extra cost and that the remaining 2 million in its catalog would be stripped of software locks by April. Consumers who wish to convert their existing music library will pay a fee of 30 cents a track or 30% of an album's purchase price.

"We believe this strategy will drive additional iTunes traffic, as it removes one significant barrier [DRM] from many consumers and makes iTunes more accessible," Gene Munster, a senior analyst with Piper Jaffray, wrote in a research report.

Also at Macworld, Schiller unveiled a thin, 17-inch MacBook Pro laptop computer featuring a new type of built-in battery that he said would deliver up to eight hours of use on a single charge and could be recharged up to 1,000 times. It will cost $2,800 when it reaches stores this month.

Apple also updated much of its software. The latest version of iPhoto scans for individual faces so computer users can label photos of friends or family, then have the computer find and bring together all images of a subject into a single file.

Music industry drops effort to sue song swappers (AP)

LOS ANGELES - The group representing the U.S. recording industry said Friday it has abandoned its policy of suing people for sharing songs protected by copyright and will work with Internet service providers to cut abusers' access if they ignore repeated warnings.

The move ends a controversial program that saw the Recording Industry Association of America sue about 35,000 people since 2003 for swapping songs online. Because of high legal costs for defenders, virtually all of those hit with lawsuits settled, on average for around $3,500. The association's legal costs, in the meantime, exceeded the settlement money it brought in.

The association said Friday that it stopped sending out new lawsuits and warnings in August, and then agreed with several leading U.S. Internet service providers, without naming which ones, to notify alleged illegal file-sharers and cut off service if they failed to stop.

It credited the lawsuit campaign with raising awareness of piracy and keeping the number of illegal file-sharers in check while the legal market for digital music took off. With two weeks left in the year, legitimate sales of digital music tracks soared for the first time past the 1 billion mark, up 28 percent over all of last year, according to Nielsen Soundscan.

"We're at a point where there's a sense of comfort that we can replace one form of deterrent with another form of deterrent," said RIAA Chairman and Chief Executive Mitch Bainwol. "Filing lawsuits as a strategy to deal with a big problem was not our first choice five years ago."

The new notification program is also more efficient, he said, having sent out more notices in the few months since it started than in the five years of the lawsuit campaign.

"It's much easier to send notices than it is to file lawsuits," Bainwol said.

The decision to scrap the legal attack was first reported in The Wall Street Journal.

The group says it will still continue to litigate outstanding cases, most of which are in the pre-lawsuit warning stage, but some of which are before the courts.

The decision to press on with existing cases drew the ire of Harvard Law professor Charles Nesson, who is defending a Boston University graduate student targeted in one of the music industry's lawsuits.

"If it's a bad idea, it's a bad idea," said Nesson. He is challenging the constitutionality of the suits, which, based on the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999, can impose damages of $150,000 per infringement, far in excess of the actual damage caused.

Nesson's client, Joel Tenenbaum, faces the possibility of more than $1 million in damages for allegedly downloading seven songs illegally, which Nesson called "cruel and unusual punishment." The case is set to go to trial in district court in Massachusetts on Jan. 22.

Brian Toder, a lawyer with Chestnut & Cambronne in Minneapolis, who defended single mother Jammie Thomas in a copyright suit filed by the RIAA, said he is also set to retry the case March 9 after a judge threw out a $222,000 decision against her.

"I think it's a good thing that they've ended this campaign of going after people," Toder said.

"But they need to change how people spend money on records," he said. "People like to share music. The Internet makes it so easy. They have to do something to change this business model of theirs."

Digital Downloads Break A Billion In 2008
December 18, 2008 - Digital and Mobile By Ayala Ben-Yehuda, L.A.

Over a billion digital full tracks have been sold in 2008, up 28% over 2007, according to Nielsen SoundScan figures released today.

Through Dec. 14, 1,001,000,000 digital tracks were sold in the United
States. Nielsen SoundScan projects the year will end with 1,040,000,000
tracks sold.

Seventeen percent of digital track sales this year have come from the top
200-selling tracks.

Leona Lewis' "Bleeding Love" was the highest-selling digital track in 2008, with 3.3 million sold.

 

Report: YouTube Making "Tens of Millions" for Universal Music

Authored by Mark Hefflinger on December 19, 2008 - 11:54am.

San Francisco - Major record label Universal Music Group is generating "tens of millions of dollars" from Google's YouTube, the company told CNET News.com this week. "(YouTube) is not like radio, where it's just promotional," Rio Caraeff, executive vice president of the label's eLabs digital division, told News.com. "It's a revenue stream, a commercial business. It's growing tremendously. It's up almost 80 percent for us year-over-year in the U.S. in terms of our revenue from this category."

While Caraeff declined to give specific details on Universal's YouTube revenue, a source close to the label told News.com that the label will likely book nearly $100 million in revenue from video streaming this year -- which includes placements on other sites like MySpace and MTV.

"It's really coming to fruition I think in part due to YouTube's recent focus on monetization, and really trying to drive revenue around premium content more so than they have in the history of their short existence," Caraeff added.

"They have finally turned their spotlight on 'How do we turn this into a business?' And that's benefiting the entire ecosystem of content owners as well."

Universal Music is also working with YouTube on "a variety of new concepts and new businesses," Caraeff told News.com.

Online Song Playlist-sharing Service Mixwit Shuts Down

Authored by Mark Hefflinger on December 18, 2008 - 2:01pm.

Los Angeles - Mixwit, a site that let users create and share song playlists, has announced that it will shut its service down before the end of the year. "We've put a year of work into Mixwit so this choice wasn't taken lightly. I won't go into the details of our situation but state simply that we boldly marched into in a position best described as 'between rock and a hard place.'"

Like Muxtape, a similar service that recently shut down after being targeted by the Recording Industry Association of America (RIAA), Mixwit allowed users to create online streaming mixtapes that aggregated streams from a variety of websites.

The team behind the service said it plans to "return early next year with a new company and new toys."

 

Major Label EMI Launches Music Service at EMI.com

Authored by Mark Hefflinger on December 17, 2008 - 11:47am

London - Major record label EMI Music on Wednesday launched its own digital music service at EMI.com, offering artist bios and photos, streaming songs and music videos on-demand, playlist creation and music recommendations. London-based EMI said it plans to add the ability to create widgets and purchase music, "in ways that will enable the company to test different values of increasing consumers' music experience."

The site currently offers only 30-second song samples in the U.S., while Britons are able to stream full-length tracks.

"EMI.com is designed to be a learning lab. It will help us gain even more knowledge about consumers' preferences and choices. Those insights will be invaluable to our artists, helping them respond to fans in a more relevant way," said Alex Haar, vice president of Digital Special Projects at EMI Music.

"This is the beginning of a longer term experiment. In the coming months, we will continue to add content and features to the site."

People's Music Store Lets Anyone Sell Music
By Eliot Van Buskirk December 12, 2008

Have you ever wanted to be a snarky record store clerk like the ones in High Fidelity, recommending the choicest cuts to a grateful and adoring public? People's Music Store lets you set up your own online storefront to sell up to 50 DRM-free albums from a decent range of high-quality electronica, rock and other music. The store won't earn you money, but it could earn you respect, plus ability to download free music from other people's stores. People's Music Store was founded by Ged Day, who launched Bleep.com for Warp Records -- "the first" DRM free 320 Kbps MP3s store, back in 2004. He told us via e-mail that he had been kicking around the idea of having music fans create their own storefronts since for nearly four years. "After about a year of operating [Bleep], we were under pressure (from Warp) to expand the service into genres other than Electronica. This presented a very interesting challenge as the strength of Bleep was that we were experts in Electronica and knew how to filter out all the good stuff (from the not-so-good)," wrote Day. To expand our catalog to include other genres whilst maintaining this level of expertise was a tricky proposition. We would need to hire experts for every new genre we stocked," he added. "In my opinion, we had another option and that was to tap into our customer base and their expertise. Let them do the expert filtering, selecting the best products and writing the corresponding reviews for us. At the time this was a pretty abstract idea and Warp were not able to even consider this as an option -- and in their defense, I can see why they saw this as a very big and scary idea. But it was an idea I refused to let go of, and eventually I felt compelled to see if this would be possible through another route, leaving Bleep and Warp after eight years in November 2006 to pursue this dream."

This sounds peachy keen, but I was trepidacious because some of it sounds familiar. The most notorious "build your own storefront" music store was BurnLounge, which went offline in June after drawing negative attention from the FTC during the previous year for allegedly running a pyramid-type scheme that defrauded storefront owners. Good riddance; BurnLounge storefront owners used to drive me nuts, showing up to online music hangouts urging me to shop at their stores. Day assured me that People's Music Store is a completely different animal, not only due to its cred-laden genesis as part of Warp/Bleep, but because it never charges storefront owners a single cent. And because storefront owners only have respect and free music to gain, they have no incentive to barrage people with spam. "It's free to create a store, and there are no ongoing or hidden costs to owning a store -- it's completely free. You simply recommend the music you love (from our licensed catalogue of music) and when someone visits your store and buys some music based on your recommendation, you are rewarded in the form of points equivalent to 10% of the retail price. These points can then be redeemed to buy music for yourself in a way that 'feels like free.'

Ultimately, he sees the system as monetizing a peer to peer type framework, paying out real money to artists and labels while giving away music to its active members. "I think the incentive of the reward will also address the 'peer to peer' issue, by enabling 'peers' to advocate legitimacy themselves," wrote Day. "As is standard for music download services (Bleep, iTunes, etc.), artists and labels are paid a full cash royalty for all sales. Our standard split is 60/40 in favor of the supplier and this applies whether the customer paid using cash or points."
Like Bleep, People's Music Store has an electronica focus, although other genres are represented as well, as Day had hoped. Labels that have licensed music to the service include Warp Records, Ninja Tune, kranky, Domino Records, Big Dada, Touch and many more. Popular artists on the site include Aphex Twin, Squarepusher, Boards of Canada, Autechre, Amon Tobin, Mogwai, Various Stars of the Lid and Oasis.

Techdirt's Mike Masnick On Why a Music Tax Is a Mistake
By Evan Hansen December 11, 2008 | 3:08:51 PM

Techdirt founder Mike Masnick has followed the twists and turns of the digital music debate for more than a decade, offering some of the most prescient and lucid information and arguments on the topic anywhere. Today he tackles growing calls for a voluntary music-licensing scheme, pushed most recently by Warner Music Group to universities, that would basically allow file sharing by having ISPs impose a surcharge on all users to be paid out to copyright holders. (A version of this has been done before with blank media like tape cassettes in some markets, including Canada, but this would be a massive expansion of the idea.) Mike's take is not the final word on the matter, but it should be required reading for anyone interested in understanding where music is today and where it is headed. It is reproduced with permission below in its entirety. As he ably argues, the future of music is often confused with the future of the music business — but they are not the same thing at all. In fact, the interests of the music business, defined primarily as the major recording labels, is arguably one of the biggest impediments to moving music itself forward.

Why a Music Tax is a Bad Idea
by Mike Masnick

We already had a post discussing how we find it troubling that Warner Music has not been more open. in discussing its proposed "voluntary license" plan. It was a neat little rhetorical trick by Warner to claim that we weren't being fair in slamming the proposal so early, when the company itself had kept the plans secret all along. Would they have preferred until they rolled out the "completed" plan for us to point out its problems. Either way, while we discussed why it was a bad plan in our original post, some are not convinced it's a bad plan. Matt Asay, over at News.com gives his qualified support for the plan, while Nate Anderson at Ars Technica pretty much takes Warner's party line that we're being unfair in criticizing this idea before it's had a chance to air out. Of course, Anderson conveniently skips the fact that Warner wasn't letting the plan air out. These discussions were being held without important stakeholders, where key problems with the plan would not get discussed. Besides, given how many times the major record labels have come up with new great plans that actually made life worse for consumers, I would think the industry has to earn the right to be given the benefit of the doubt. We've been fooled too many times.

Anderson also mischaracterizes our position greatly — first claiming that we're only kicking the plan because of our "knee-jerk churlishness" and need "to jackboot the music industry in the proverbial groin every time it comes up with a new idea." That makes for nice prose, but pretty much ignores any substance behind our position. In fact, Anderson seems to claim the only reason we dislike the plan is because we called it a "tax" insisting that was the "sum total" of our analysis. This, of course, is untrue — and Anderson and his co-authors at Ars Technica are well aware of the more than a decade we've put into analyzing music industry business models, including cheering on good models (and even cheering on the big record labels when they do something right). Why Anderson and Ars Technica chose to misrepresent all of that (while throwing in some unwarranted insults), I do not know, but I'll take the blame, and suggest that perhaps we did not explain our position clearly.
So, I'll try again.

Why a "Voluntary License" Is a Bad Idea

Yes, the industry gets upset when anyone calls this a "tax" so I'll use the "voluntary license" term, even though tax is much more accurate. A true voluntary license wouldn't require everyone having a certain provider to opt-in, but that's exactly what this plan would require. In fact, as the slides indicate, eventually it would basically require all ISPs to "opt-in" forcing all of their members to "opt-in." Suddenly, everyone has to pay. That's not a voluntary license. It's a tax. However, even if we step back and pretend it's really a voluntary license, and even if we grant the premise that all record labels sign up for this plan, you've still created a mess that doesn't help anyone. First, you have to set up a huge bureaucracy to manage this process — and it is quite a process. You need someone to monitor everything that's happening online to determine whose music is actually being shared and played. You have to somehow create methods to accurately determine — from the biggest to the smallest — who actually deserves payment. And, if you don't think that process won't be gamed, you apparently just got on the internet in the last year. As soon as there's the ability to get paid out just because more people are sharing your music, just watch the games that folks take to make sure they get a larger cut. The system will punish honest artists, and reward the scammers.

Next, you have to set up another bureaucracy in charge of managing all of this money, and figuring out how to dole it out (while keeping a cut for itself). Even if this operation is, as planned, a "non-profit" — don't think it will be cheap. You're talking about a huge operation that is tasked with determining how much money every musician in the world is owed, and then trying to get that money to them. Given the recording industry's history with not being able to "find" some big name musicians, just take a guess how well this will work here? Instead, there's a better than even chance that eventually, the big record labels will note that it's "easier" and "more efficient" for this "third party" bureaucracy to just send a big check to the labels each month, and let them dole out the money to their artists (after taking a cut, of course). And, of course, there's the whole question of what the rules will be for determining how much each artist will make. Over the summer, we had a look at the sausage making process for compulsory licensing, and it's not pretty. Basically, you get backroom deals combined with senile "copyright board" judges who don't understand the marketplace or technology making final determinations on exactly how much every action is worth. We've already got too many different compulsory licenses to count. All this will really be doing is adding yet another one to the list. It doesn't simplify things — it complicates them even more. The recording industry, of course, loves that complication. It lets them come in and "handle" things, which most of the time means twisting the rules to its advantage.

Yes, the EFF and Public Knowledge favors some form of "voluntary license," and Warner Music and Griffin are quick to play that up, as if their plan has won some kind of public approval. But the reality is quite different. Someone from Public Knowledge was quick to show up in our comments (where Warner Music still fears to tread, for some reason) to point out that they have not endorsed this plan, but are open to discussions on it. The EFF has also been cautious, noting in the past that it does not support a license that is called voluntary, but is really compulsory. In the end, though, I simply disagree with the EFF on the benefits of any sort of licensing plan. Fred von Lohmann once explained his support to me as such: "A voluntary licensing plan basically gets the issue off of consumers, and lets everyone else fight it out in court." That sounds nice, but ignores the unintended consequences. The big record labels have shown over and over again that they can twist the process to their advantage. So while it may be true that consumers won't be getting sued any more, it doesn't mean they won't get screwed. The plans will weigh heavily to the advantage of the established recording industry with its leverage in the space. It's a really, really sad situation that we should feel like rewarding the industry for its decade of actively fighting against progress by saying "well, phew, as long as you agree to stop suing, here's as huge chunk of money."

Have you noticed a pattern here? What you're doing is setting up a big, centrally planned and operated bureau of music, that officially determines the business model of the recording industry, figures out who gets paid, collects the money and pays some money out. The same record industry that has fought so hard against any innovation remains in charge and will have tremendous sway in setting the "rules." The plan leaves no room for creativity. It leaves no room for innovation. It's basically picking the only business model and encoding it in stone. Oh, and did we mention it's only for music? Next we'll have to create another huge bureaucracy and "license" for movies. And for television. And, what about non-television, non-movie video content? Surely the Star Wars kid deserves his cut? And, newspapers? Can't forget the newspapers. After all, they need the money, so we might as well add a license for news. And, if that's going to happen, then certainly us bloggers should get our cut as well. Everyone, line right up! This is a bad plan that will create a nightmare bureaucracy while making people pay a lot more, without doing much to actually reward musicians. And, worst of all, it's totally unnecessary.

So What's the Alternative?

But then, as people will be quick to note: what's the alternative? If we don't do this, then how will musicians get paid? This, of course, is a logic fallacy that assumes incorrectly that musicians only make money from the direct sale of music. Musicians that are already embracing business models based on a solid understanding of information economics are discovering they can do quite well (almost always better than under the old model). And, yes, this applies to both big and small musicians.

The basics are pretty straightforward, and if you're new here, you should follow the links to understand them more thoroughly. But musicians get to use their already-created content, which are effectively infinite due to its digital nature, to grow the market for all of the scarcities that surround them. This can include physical goods, but the bigger money is in non-tangible scarce goods that simply can't be copied: access to the musicians, seats at a concert, the ability to create new music and many other opportunities that have the side benefit of more closely tying fans to the musician. And this doesn't need to be complicated. You could set the whole thing up as a subscription fan club with different levels providing different scarce benefits — and everyone wins. The simple fact is that these business models are already working for many, many musicians. Hardly a day goes by where someone doesn't show us yet another example of musicians creatively coming up with new and unique business models that embrace these economic principles, and which allow them to make even more money than they did in the past. And, yes, there's still room for the record labels if they want to act as true partners, helping musicians implement these business models and enabling musicians to better connect with their true fans.

Of course, that involves some work. It involves a real change in how business is done. It may not be as easy as a plan that lets the record labels sit back and collect large sums of money with promises to distribute it, but it can be a lot more profitable for everyone in the long run. It's more efficient. It allows true competition to take place in the marketplace, rather than letting the market set the winning model. It lets people share music without worry of a lawsuit (in fact, if the business model is implemented correctly, it gets musicians to encourage more file sharing as it helps build up a larger audience for those scarce goods). Without having to fund those huge bureaucracies, there's also much more money that can go to the actual artists as well. Plus, fans feel better knowing that their money actually is supporting the artists, rather than a central bureaucracy. But the important point is that this plan is working today for many different players in the music world, including some smarter labels and (most importantly) the fans. The only ones it's not working for are the big record labels who have refused to recognize the opportunities — and the bands that rely on those labels for guidance. We shouldn't be setting up a system to reward those folks, just as everyone else is figuring out how to succeed.

Let The Market Work

Jim Griffin and Warner Music have been working behind closed doors, trying to craft the perfect business model that preserves their business. During that same period, a large number of folks have been out here, actually involved in an open conversation about business models that are working today. We've seen artist after artist learn (on purpose or accidentally) how to embrace these concepts and how to succeed beyond anything they ever saw in the past. Let's not kill that off with a plan worked out in the backrooms that will almost definitely have significant unintended consequences. Let's let the market work its magic transparently. Griffin's complaint about our post (delivered via Warner Music) was that it was unfair of us to criticize a plan so early in the planning stages. We made no such complaint here when we first laid out these discussions so many years ago. We encouraged people to criticize and discuss the plans — and for people to test them out. That resulted in more discussions and more experiments and adjustments and we're seeing the end result of that now — with many, many success stories. Griffin's plan allows for no such experimentation. It's an all or nothing plan, and if you accept it as currently laid out, you're going all in when half the rules of the game are being established without the players' knowledge. That's a bad, bad bet.

If Jim Griffin wants us to hold back on criticizing his plan, why can't he and Warner hold back on implementing their plan that effectively blocks out the market forces that are already succeeding?

 

Three Major Record Labels Join the 'Choruss'
By Eliot Van Buskirk December 08, 2008

U.S. universities are getting a glimpse at a plan that would build a small music-royalty fee into the tuition payments they receive from students. If successful, the model — proposed by digital music strategist Jim Griffin on behalf of Warner Music Group — could be expanded to make ISPs the collector of such micropayments, eliminating some of the most irksome and contentious issues dividing the music industry and its customers. An industry source told Wired.com that the independent nonprofit organization that would collect funds from universities and ISPs and disburse them to copyright holders will be called Choruss and that three of the four major labels have signed on, with Universal the remaining holdout. A simple whois lookup revealed that Griffin's OneHouse Digital registered the Choruss.com domain in August. Nonprofit technology advocate Educause is shopping a version of the unlimited music plan on behalf of Warner and the other major labels to several high-profile American universities including Cornell, Columbia and the University of Chicago (see slideshow). Although talks are in the early stages, they could lead to ISP-level music licenses offered to the general public.

According to slides in the presentation, which was created by of Mark Luker of Educause on behalf of Warner Music Group and refers universities to Griffin, the program's goal is to allow university students to "access and use music any way they want to" while "generat[ing] fair returns to content owners." In return for a university paying fees to Choruss, its students would be able to continue downloading as they have been — bit torrent, Limewire and so on — without fear of legal reprisal. Unlike previous plans that require the use of onerous digital rights management, this one would allow students to download music in the unprotected formats they prefer, using the hardware, software and networks of their choice. Choruss, an independent organization that would not afford Warner preferential treatment despite its role in the organization's creation, according to our source, would distribute the funds to all relevant copyright holders including indie bands and labels. The major labels have been slow to embrace digital music distribution in a way that makes sense to most music fans. Even though they all do business through iTunes and other digital vendors, they still require per-unit payments for downloads and heavy DRM for subscriptions. Many experts believe the original Napster represented a major opportunity for the labels to monetize file sharing in a manner similar to the way performance royalties are collected from restaurants or radio stations and avoid further alienating their customers by hauling them into court.

The proposed unlimited music service, as late in coming as it is, could make more sense to both labels and fans than the current system of download-and-sue, and it would allow for edge-of-network licenses for mashups, playlists and so on, with no DRM. As long as the system is priced fairly — and from what we've heard, the monthly per-student price would be south of $5 per month — it could provide a blueprint for larger ISP-level music sharing licensing. At this point, universities are still assessing the plan. "Cornell is participating with the other universities in discussions to try to understand the Warner Music Group proposal," a university spokesman told Wired.com. Techdirt's source said the slideshow was shown at Columbia, Cornell, MIT, Penn State, Stanford, University of California at Berkeley, University of Chicago, University of Colorado, University of Michigan, University of Washington and University of Virginia.

Watchdog organization the Electronic Freedom Foundation supports the plan, lending it more credence, and Warner confirmed that it is seeking alternatives to the litigation-based approach at the schools' behest. "Of course, we are actively engaged with universities and other parties to seek a constructive resolution to a complex issue — how to assure artists appropriate compensation while enabling the widespread dissemination of their work among fans," a Warner Music Group spokesman responded to the presentation's publication on Techdirt. Therefore, we are undertaking an effort to develop new voluntary business models that seek something other than — and we believe, better than — a litigation-based approach. This is exactly the type of solution that several universities and their associations have been asking for." A Wired.com poll showed that approximately 70 percent of readers would pay $10/month for legal access to all of the music on the internet, and we understand that Choruss would call for a significantly lower fees than that. Its detractors might be underestimating the consumer appeal of an inexpensive, unlimited and unrestricted music network.

UK Copyright law 'could be extended'

BBC December 11, 2008

Andy Burnham says he wants what is best for the artists "We must ensure that any extension delivers maximum benefit to performers and musicians. That's the test of any model as we go forward "
Andy Burnham

Culture minister Andy Burnham has said the government has changed its mind on allowing performers to make money from their music for 70 years. Performers currently lose the copyright to their recordings after 50 years. "It's only right that someone who created or contributed to something of real value gets to benefit for the full course of their life," he said. Sir Cliff Richard and Roger Daltrey were among those who have campaigned for copyright to be extended.

'Encourages innovation'

Sir Cliff's earliest hits will go out of copyright on 1 January next year, while The Beatles' catalogue will start to enter the public domain in 2013. Sir Paul McCartney and U2 have also spoken out in favour of extending the copyright.
Under current laws, the copyright is about to expire on Sir Cliff's earliest hits, like his 1958 breakthrough song, Move It. In July, the European Union proposed artists should receive money for the rest of their lives. Mr Burnham said the government had been considering extending the law to match more closely a performer's expected lifetime.
Speaking to the UK Music Creators' Conference in London, Mr Burnham said: "There is a moral case for performers benefiting from their work throughout their entire lifetime.
"

We must ensure that any extension delivers maximum benefit to performers and musicians. That's the test of any model as we go forward. Geoff Taylor, the chief executive of the British Phonographic Industry, said he was "delighted" the government was considering the extension. He said: "Copyright stimulates investment in musical talent and encourages innovation. Thousands of recording artists, hundreds of music companies and all British music fans will benefit from a fairer copyright term." However, intellectual property solicitor Gregor Grant, of law law firm Marks & Clerk, said: "Any victory will be felt by big-name artists who tend to benefit the most from royalty fees.
"For the contribution they make to UK music, they are already more than adequately protected. The real innovation - the creation of musical content and lyrics - is already protected for the lifetime of the composer and a further 70 years."

 

Social Music Discovery Service Last.fm Lays Off 20%

Authored by Mark Hefflinger on December 11, 2008 - 12:42pm.

London - Last.fm, the social music discovery service acquired by CBS (NYSE: CBS) for $280 million last May, is laying off about 20% of its 95-person staff as part of a cost-cutting initiative at CBS Interactive, PaidContent reports.

"CBS Interactive continues its integration process, which now calls for the further combination of several portions of the division into unified groups oriented around similar content," a CBS spokesperson told PaidContent.

"This important move allows us to better align our premium content for our audiences and our advertisers, and also results in reduction in certain areas that are now duplicated in the new organisation structure."

CBS Interactive is also planning to merge its CBSNews.com and CNET newsrooms, according to reports today.

Report: YouTube Hits Record 100M U.S. Viewers in October

Authored by Mark Hefflinger on December 10, 2008 - 11:33am.

Reston, Va. - Google's (NASD: GOOG) YouTube attracted 100 million U.S. online video viewers in October, a month in which U.S. Internet users viewed 13.5 billion videos -- an increase of 45% from the previous year, according to a report from comScore Video Metrix.

Google's sites served nearly 5.4 billion videos to U.S. viewers in October, accounting for 40% of all videos viewed.

Fox Interactive Media, which includes MySpace, was second with 520 million videos (3.8%), while NBCU-News Corp.'s Hulu site was sixth, serving 235 million videos (1.7%).

A total of more than 147 million American Internet users -- or 77% of the total U.S. Internet audience -- watched an average of 92 videos per viewer in October.

 

NPR Cuts 7% of Workforce, Two Radio Programs

Authored by Mark Hefflinger on December 10, 2008 - 11:19am.

Washington - National Public Radio (NPR) announced on Wednesday that it will cut 7% of its workforce and cut expenses, citing "an uncertain economy and a sharp decline in current and projected revenues from corporate underwriting."

A total of 64 employees were laid off, and 21 open positions will not be filled across NPR's reporting, editorial and production areas; station services; digital media; research; communications and administrative support departments.

A significant number of the personnel cuts resulted from the cancellation of two programs -- "Day to Day" and "News & Notes" -- which will remain on-air through March 20.

NPR said the cuts come as it has hit near-record audience levels of 26.4 million weekly on-air listeners and 8 million unique monthly visitors to NPR.org.

Indie Label "Team Love" Offers Multiple Albums for Free Download

Authored by Mark Hefflinger on December 9, 2008 - 12:29pm.

New York - Independent record label Team Love, co-founded by Bright Eyes frontman Conor Oberst, on Tuesday launched the Team Love Library, a rotating online archive of the label's existing releases and exclusive content that will be available for free download in the MP3 format.

"When Team Love started we had the simple and possibly self-defeating notion that posting all our albums on the website as free downloads would be a good detour around the wreckage of the music industry and a way to avoid getting bogged down in the number one topic of discussion and distraction: piracy, illegal downloads, P2P networks and so on," reads a note on Team-Love.com.

"Five years later and the debate still drones in the background, and while some bands have adopted a mutated version of the 'free download' (pay what you wish, etc), we've decided to reshape out policy in a different direction and introduce the Team Love Library."

Current selections available for download include full albums from Tilly & the Wall, Jenny Lewis with the Watson Twins, McCarthy Trenching and Capgun Coup; future monthly offerings are also expected to include "unreleased songs, live or remixed versions of TL favorites."

"Anything you take from the library is yours to keep," the label added. "You will not be notified if you fail to return something on time, and you will not lose your library privileges if you share selections with friends."

Scandinavia's TeliaSonera Debuts Unlimited Music Service

Authored by Mark Hefflinger on December 9, 2008 - 2:11pm.

Stockholm, Sweden - Scandinavian telco TeliaSonera has launched an unlimited music download service that will eventually be available to 13.3 million subscribers in six countries. The service offers over 3 million songs from EMI, Universal Music, Warner Music and others, costs about $12.11 per month, and permits mobile and PC downloads. Telia Musik will launch first in Sweden before being offered in Norway, Finland, Denmark, Estonia and Lithuania.

 

Sony to Cut 8,000 Jobs; 5% of Total Workforce

Authored by Mark Hefflinger on December 9, 2008 - 10:55am.

Tokyo - Sony (NYSE: SNE) announced on Tuesday that it will cut 8,000 jobs, or about 5% of its global electronics workforce, as part of a plan to reduce costs by $1.1 billion annually amid the economic downturn, the Associated Press reported. The company will also cut an additional 8,000 seasonal and part-time employees; reduce spending on semiconductors and other investments; cease production at various plants; and further outsource production to lower-cost areas.

"These initiatives are in response to the sudden and rapid changes in the global economic environment," the company said in a statement.

Sony last made a major round of layoffs in 2005, when current CEO Howard Stringer took over and cut some 10,000 jobs.

 

RealNetworks Laying Off 130 Employees; 7.5% of Workforce

Authored by Mark Hefflinger on December 5, 2008 - 11:27am.

Seattle - Media delivery technology firm RealNetworks (NASD: RNWK) announced on its blog this week that it is laying off 7.5% of its global workforce, or about 130 employees, "as part of a budgeting process that is intended to bring expenses in line with current and prospective economic realities. While our business has not been affected as much as many others, we aren't immune to what's going on in the broader economy," wrote Bill Hankes, vice president of corporate communications at RealNetworks.

In an internal memo, posted by All Things D, chairman and CEO Rob Glaser noted that one third of those affected will be departing the company's Seattle headquarters, while the remaining two thirds will be cut from the company's U.S. and international operations, respectively.

The company said that laid off employees will remain on the payroll through the end of the year, in addition to being offered a cash severance package based on their length of service.

RealNetworks also maintained that, despite the restructuring, it expects to report record revenue for the year.

UK Music Distributor Pinnacle goes into Administration

Sean Michaels guardian.co.uk, Thursday 4 December 2008 11.39 GMT

One of the largest independent distributors of music in the UK has suffered the same fate as Entertainment UK, with the loss of 94 jobs

The downturn in the British economy claimed another casualty this week, with music distributor Pinnacle Entertainment suffering the same fate as Entertainment UK. Scarcely eight days after Woolworth's entered administration – bringing one of the country's largest distributors with it – Pinnacle finds itself in the same dire predicament.

The Association of Independent Music (AIM) announced an emergency meeting, to take place on December 4, so that labels could receive more information and support. "We will do everything we can to help the labels to minimise their exposure and manage all necessary legal and financial matters as quickly and as cost effectively as possible," AIM CEO Alison Wenham said in a statement.

The problem is this: without the distributors delivering CDs to retailers, how will anyone buy them?

Pinnacle distributed DVDs, software, and releases from more than 400 record labels, including work by artists such as the Strokes, Tom Waits, Black Sabbath, Morrissey and the Libertines. Amazon and HMV are among the retailers who relied on their services.

Pinnacle was one of the largest independent distributors in the UK, with a 4.3% share of the UK music market as of 2007, according to the BPI.

Though the distributor's website, like something out of a 2001 web "How To" guide, remains festooned with animated Santas and twinkling Christmas lights, 94 employees were made redundant yesterday. Accountancy firm BDO Stoy Hayward was appointed as administrator for the company.

In a statement, BDO Stoy Hayward's Matthew Tait blamed the bankruptcy on the "sudden and steep" downturn in the economy.

Music Stars Unite to Seek Control

By Ian Youngs Music reporter, BBC News

Robbie Williams is currently working on a new album

UK pop and rock stars are taking action to try to gain ownership and control of their work from record labels.

Robbie Williams, Radiohead, Kaiser Chiefs and The Verve are among the acts who have signed up to a new pressure group, the Featured Artists' Coalition. It wants artists to keep the rights to the music they create and to have a greater say in how their songs are sold - and a bigger slice of the takings. It is a sign of a shift in power in the music industry in the digital age.

In the last 12 months, big names have seen their options multiply after a string of stars shunned traditional record contracts and found new ways of releasing music. At the same time, many acts have felt they have been ignored when their record labels and music publishers have struck new digital deals. A spokesperson from the BPI - the body that represents the UK's recorded music business - said it was "looking forward" to working with the coalition.
"The UK music business is a complex community that binds performers, songwriters, promoters, managers, agents, record labels, publishers, distributors, manufactures and retailers.

"No one part of the business can function without the other. This is a business under huge external pressure, and we are stronger united. "The creators themselves - featured artists, session musicians and songwriters lie right at the heart of this business, and we look forward to working closely with FAC in the future."
The Featured Artists' Coalition's main demands include allowing musicians to keep the copyright to their own music, which could then be leased to record companies.

Musicians enter into rights fight

At the moment, record labels normally own the rights to the music their artists make. The coalition also wants its members to be consulted more fully on how their music is used, the ways it is sold and who gets the money. "Record and technology companies are signing agreements to deliver music to fans in new ways," its charter says. "Artists are not involved in these negotiations and their interests are likely to be overlooked. Artists should receive fair compensation as part of these new deals." Radiohead famously released their last album, In Rainbows, through their own website, illustrating how established acts could thrive without a record deal. Talking about the coalition, Radiohead guitarist Ed O'Brien said: "For us, this is a no-brainer of an issue and we believe that all artists and musicians should be signing up to this too."

Other artists, from McFly to Madonna, have left major labels to release their music through newspapers or live music companies. Pop singer Kate Nash, who signed a major label deal after building up her fanbase online, is among the other artists on board. "There are going to be people who don't care about your rights and whether you can keep your integrity - they're just going to want to make money out of you," she told BBC News. "I'm the only one who sees my album as this baby that I need to protect, something that's precious." Jools Holland, Travis, Bryan Ferry, David Gilmour and Klaxons have also joined the group. The coalition is also intending to speak up for artists' rights in high-profile issues in the music industry. It wants changes to copyright law and for the rights of performers to be brought in line with those of songwriters. When a song is played in a TV advert, on US radio or in a film, its authors are paid but the performers are not, the body said.

Analysis: Webcaster Settlement Act - What Does It Mean?

Authored by David Oxenford on October 3, 2008 - 7:36am

Both the House and the Senate have now approved the Webcaster Settlement Act of 2008, which will become law when it is signed by the President. Just what does this bill do? It does not announce a settlement of the contentious Internet Radio royalty dispute, about which we have extensively written here. It does not change the standard for judging Internet radio royalties, as had been proposed in the Internet Radio Equality Act, introduced last year and now seemingly dead in the waning days of this Congress, and in the Perform Act, about which we wrote here (the IREA and the Perform Act proposed different standards – the first more favorable to webcasters and the second more favorable to SoundExchange). These issues will seemingly be left to be disputed in a future Congress. Instead, the Webcaster Settlement Act seems to only adopt a simplified process for the approval of settlements that may be reached by the parties on or before February 15, 2009 – a settlement process that had been previously used in the Small Webcaster Settlement Act (the language of which this bill amends).

What is the significance of these new settlement processes? Under current law, any settlement between any group of webcasters and SoundExchange could only be binding on the entire universe of sound recording copyright holders if that settlement was approved by the Copyright Royalty Board. If an agreement is not binding on all copyright holders, then the reason for the statutory royalty - being able to pay one entity and get access to all the music in the world - would not be met. The current procedures for approving settlements seem to contemplate such settlements only before a decision on royalties is reached by the CRB. While some have speculated that the Court of Appeals that is currently considering the CRB appeal could remand the case to the CRB to effectuate a settlement and force the CRB to address it, that is by no means certain. For instance, the large webcasters, through their organization DiMA, reached a settlement with SoundExchange to cap minimum fees at $50,000 per webcaster. In their briefs filed with the Court of Appeals, both DiMA and SoundExchange have asked the Court to remand that aspect of the case to the CRB for adoption – yet that request has been opposed by the Department of Justice acting on behalf of the CRB. Thus, voluntary settlements may not be easy to obtain.

In 2002, faced with a similar issue when the RIAA and a group of small webcasters with which I worked tried to reach a deal, Congress stepped in and passed the Small Webcaster Settlement Act. SWSA allowed a settlement to bypass what was then the Copyright Arbitration Royalty Panel (the "CARP") and go into effect simply upon submission of the settlement to the Library of Congress by a set deadline, and the Copyright Office publishing it in the Federal Register. The Webcasting Settlement Act adopts that same system. If any group reaches a settlement with SoundExchange by February 15, 2009, they need only submit it to the CRB, which will then publish it in the Federal Register, and it will become effective and binding on all copyright holders as part of the statutory royalty. Unlike pre-hearing settlements, no notice and public comment is necessary on this settlement.

The bill allows for settlements to be entered into for an 11 year period, starting with the end of 2005 when the last set of rates expired. This would allow the settlement to displace the CRB decision from last year, and eliminate the need for a CRB proceeding for the next 5 years (the current CRB decision is to run through the end of 2010).

But such a settlement must be reached by February 15 ( the date was December 15 in the original draft of the bill, but it seems to have been changed in later versions). Why wouldn't the period be unlimited? Already, there was some unease with the adoption of this bill by broadcasters - as they have argued that they have not been involved in any settlement discussions with SoundExchange in a long period of time. While that seems to have dissipated, perhaps others would object to an unlimited ability of copyright holders and webcasters to reach a deal without any opportunity to comment on a deal. Yet why not? If a group of webcasters and SoundExchange want to enter into a deal that would be available to any similarly situated webcaster, why do you need notice and comment? If other webcasters don't like the deal, they can call for a CRB proceeding at the next opportunity to determine a rate for that objecting group.

In any event, the Webcaster Settlement Act makes it easy for settlements to go into effect - now we need to see if the hard part - actually entering into those settlements - will occur.

 

 

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