There have been many past reports of Spotify launching in the U.S. “soon,” but is it really happening this time? After recent news that the service signed on Universal Music Group, the company’s European general manager told an audience in London this week that the “remaining deals” (Warner Music Group) are being signed right now. While there still hasn’t been any official or unofficial reports that a WMG is in the bag, those comments as well as a confirmed new funding round of $100 million from DST, Kleiner Perkins and Accel, lead many to believe a launch is really happening, and soon. Whether or not the timing lends credence to previous rumors of the labels stalling Spotify in order to let Apple to get their new iTunes Match service out of the gate, the landscape is now slightly altered after Amazon, Google and Apple have all unleashed new services… President and CEO of the National Music Publishers Association, David Israelite, is urging members to create a more streamlined solution for digital music companies to license rights, so as to not miss out on new opportunities. That might come in the form of new agencies which act in the interest of all publishers for sync and mechanical rights – the process of tracking down various writers, composers and publishers that have interests in a tracks, has proved to be time consuming and frustrating to new music services seeking rights… Elsewhere, I.R.S. Records is being relaunched as a frontline label by EMI Music in partnership with Crush Management… After an initial pop for Pandora when shares first started trading earlier this week, the price settled back down, and continues to fall… And congrats to Jon Pikus, who has been named the Creative Director for Imagem Music in the U.S., Pikus comes to Imagem after previous A&R positions at MySpace Records, Columbia Records and Interscope…
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Bits & Pieces: Spotify Closing Final Deals for U.S. + New Funding, NMPA Wants Piece of the Cloud & more…
Bits & Pieces: Apple Announcing iCloud, Gaga Weighs-In on Album Pricing, Bob Cavallo Stepping Down & more…
Apple has announced that Steve Jobs will participate in the company’s WWDC developers conference next week, and that his presentation will indeed include iCloud, Apple’s new cloud service offering. While music will only be a part of the new iCloud features, in music and tech circles the streaming-music component has been receiving a lot of attention recently with the reports of Apple securing licensing deals with three of the four major labels, leaving agreements with Universal Music and major music publishers as the final pieces to the puzzle. While unlikely, it’s possible that music could be left out of the presentation, or abbreviated, if the remaining deals aren’t reached in time, but a bigger question on industry minds is how much of a ‘game changer’ an iTunes cloud component will be. While exciting to those watching the space over the last few years, the reality is that at least initially, the offering may be less exciting when actually unveiled. The so-called ‘scan and match’ component is a fait-accompli at this point, but will the ability to access one’s music from the cloud be limited to music purchased from the iTunes store, and how will users be able to include past purchases if that’s the case? Given that Google was reportedly offering the labels as much as $100 million to get licenses in place for their music service, and still came to an impasse over piracy, it’s not hard to imagine that Apple’s new service will come with some sizable limitations. This again will leave those taking a wider view of the changing industry landscape to soon be reiterating the slow process of evolving, and that along the way there will be benchmarks, but not any one watershed moment… Amazon, who released their new Cloud Drive service without label deals in place, gave a two-day digital offering last week of Lady Gaga‘s new release for $0.99, which helped boost consumer recognition for the music service as well as make Born This Way the first million-plus selling debut in quite some time. While a variety of aspects to (and results of) the promotion have been debated, what might get the most attention is the artist’s own admission that she believes 99-cents is a worthy price and value for a digital album…. Elsewhere, Disney Music chairman Bob Cavallo has announced that he will retire in January of next year, with Ken Bunt tapped to takeover the reins upon Cavallo’s departure… And Coachella Festival founder Paul Tollett expounded upon the decision by Goldenvoice to offer back-to-back festival weekends in 2012, in an interview with Billboard, saying, “We feel that there will be even more that want to go, so we’re trying to create more room for them. The options would be to sell more tickets on one weekend or have two weekends, and [the latter] is the option we went with.” Event producers are attempting to offer identical lineups for both weekends.
Last week saw reports that Apple has signed licensing agreements with EMI Music and Sony Music for its imminent cloud-music service, leaving Universal Music Group the sole holdout, though word seems to be that a deal is on the cusp. While many of those watching are predicting an announcement of the new service at Apple’s annual WWDC event in June, the other remaining issue is having deals in place with the major music publishing companies, which right now they don’t appear to have. According to a report on CNET, despite Apple’s previous stepping out with increased iTunes song-sample lengths without the approval of publishers that created a contentious situation, there isn’t much keeping the two sides apart on a cloud-streaming agreement… Most are already hailing Apple as the fait-accompli winner of the cloud music ‘wars’, though Amazon made a big wave this week by offering Lady Gaga‘s new album Born This Way at a deeply discounted price, a move that the WSJ paints as an offensive on the iTunes digital music dominance, though Amazon is still a long way from making a dent in iTunes stranglehold. According to the article’s sources, Born This Way sold between 250,000 – 350,000 across both online marketplaces in its first day… Over the weekend news surfaced that Access Industries and Len Blavatnik‘s offer for Warner Music was not the highest, a group including Sony Corp., Guggenheim Partners and Ron Perelman offered 3% more at $8.50 a share, though the deal would have been contingent on Sony board and partner approval. How this will effect the multiple shareholder lawsuits Warner is currently facing is yet to be seen… Speaking at e-G8 in Paris this week, Sean Parker made comments, as MediaMemo notes, that may explain his interest in the recent bidding on Warner Music, and could also portend future involvement in bidding on recorded music companies, an excerpt: I think that there is a pretty dramatic change in the way music is monetized that is on the cusp of happening. Back catalogues of record labels are going to become extremely valuable…If you believe this transformation is occurring, if you believe the broken distribution systems are on the verge of being fixed, those recordings are dramatically undervalued… And speaking of labels for sale, Forbes has a profile of EMI group CEO Roger Faxon, framing him as the key in the label’s recent turnaround, including major digital breakthroughs with Beatles and Pink Floyd catalogs, though his future at the company may depend solely on who the new owners will be… And is Facebook Music launching soon and on the back of Spotify?
The news of Apple inking a cloud-music deal with EMI Music was first reported late yesterday on CNET, and according to the industry sources the report is based on, the company is close to reaching similar agreements with both Sony Music and Universal Music Group – a deal with Warner Music was reported to have been reached last month. By now having licensing agreements with two of the four major label groups, the implications are numerous, but mainly it’s that Apple will likely once again be the driving force behind the latest shift in the digital music arena, and that Amazon and Google jumped too soon by releasing services without label deals in place… While lately the tech and music industries have been hot on the cloud-music future and closely watching developments unfold, it remains to be seen how much consumer demand there is, and on a large scale, what are people willing to pay. A new survey from Nielsen that targeted people with ‘connected devices’ (smartphones, iPads, etc), asked how much they would be willing to pay for a monthly subscription for various types of content (music, TV, movies, news, etc), and the average seems to come in right around $10/month. That falls in line with some current services that are available, and isn’t a bad number, but of course that is all in theory, and an important point to keep in mind is that an overwhelming majority of people still do not use smartphones or other high-priced ‘connected’ devices… Some attention has also turned to Apple’s patent-pending pre-buffering technology that is supposed to make its streaming experience better than other current services, though as Evolver.fm points out, Pandora and Spotify have been using similar technology for some time already… And in related news, which is receiving less excitment than the Apple-EMI deal, is that EMI Music has now also reached an agreement with digital music subscription service eMusic.
Following the announcement last Friday morning that Len Blavatnik‘s Access Industries was the winning bidder in the Warner Music Group auction, late rumors bubbled that rival bidder the Gores brothers were considering an after-the-buzzer increased offer. While it would be possible, though it could create a hefty fine if the Blavatnik deal was broken, most have written it off as billionaire posturing, and expect the deal to finalize as announced. Other fallout from the Access deal seems to include the possiblity of legal action from shareholders, concerned that their best interests were not represented in the accepted bid, with Dallas-based Kendall Law Group leading the charge… Meanwhile, Google is reportedly set to reveal their long-awaited music service today at its I/O presentation in San Francisco, in a ‘beta’ version, which has the company moving ahead without licensing deals in place with the four majors. Very similar to Amazon, Google Music for now will act as a basic ‘locker’ service, allowing users to upload music to a central server (cloud), and then stream music from Android devices. The main difference from Amazon is that Google doesn’t sell music, and most don’t expect any partnership with an outside digital music service to be part of the announcement. And while just as with Amazon, Google is expected to continue its negotiations with the labels in order to release a more robust service in the future, most are already crowning Apple as the winner in the so-called ‘cloud wars’ even though the company has yet to release any specific details. Apple, who is rumored to have already completed at least one licensing deal with the four major music companies, will surely complete deals with all four before stepping out, and the technology for the service is also said to be in place. Will June see an iCloud announcement?… Elsewhere, CKX, parent company of American Idol producer 19 Entertainment, has been sold to private equity firm Apollo Global Management. CKX also has interests in Elvis Presley‘s Graceland and the image and name of Muhammad Ali. The deal is said to be valued at around $509 million… And composer Hans Zimmer has signed with William Morris Endeavor. The move is part of a string of defections from the Gorfaine-Schwartz Agency (GSA) that has also included David Newman and David Holmes. Amos Newman, formerly of GSA, is said to have been behind the moves after being recently brought into WME to start up a new division focused on moving touring clients into film, TV and videogames, as well as expanding the business of composers beyond traditional platforms.
[UPDATE: TechCrunch has a preview of the new Google Music Beta, which was unveiled this morning as expected.]
Bits & Pieces: Warner Closes Final Round – Will the Victor Go the EMI Spoils Too?, Radio Staff Grows at Q Prime & more…
The final round in the Warner Music auction closed yesterday, with two primary bidders said to be vying for the company, one being Len Blavatnik’s Access Industries and the other, a coalition of brothers Tom and Alec Gores, whose respective company’s are Platinum Equity and Gores Group – both suitors reportedly tendered bids around $3billion for the entirety of WMG. Attention has begun to drift to the looming sale of EMI by owner Citigroup, and the belief de-jour is that whomever ends up nabbing Warner Music, will also be aggressive in securing EMI as well. The result would likely be a cut and paste job between the various components of the two music groups. In another twist, The Telegraph reported yesterday that KKR-backed BMG Rights Management and Universal Music Group may be teaming up in an attempt to acquire either or both EMI and Warners, having put together a plan to carve up catalogues in an effort to avoid regulatory hurdles… Elsewhere, according to FMQB, Q Prime is expanding its promotion team, with an emphasis on bolstering the undertakings of its premier management operation, with a roster including Cage the Elephant, The Black Keys, Silversun Pickups, Snow Patrol, Muse and many others. Q Prime’s Mom + Pop Records, who has releases from Sleigh Bells, Metric, Freelance Whales among others, should also benefit from the increased staff. The additions include Trina Schaefer (formerly of Island Def Jam), Erin Gellert (formerly of Epic Records), Devin Rosevear, Chris Frank (formerly of Universal Motown) and Michael Fang (formerly of Red)… Meanwhile, the news of a nearly 25 million additional user accounts being compromised in the recent PlayStation Network breach (77 million were initially reported) smacks of the Sony BMG rootkit blunder (and ensuing lawsuits), and it can’t be good news for Sony Corp. CEO Howard Stringer, whose term has recently begun to be put in question more frequently… And for an interesting read about some of what labels are said to be demanding from cloud music, or locker, services (efforts from Amazon, Apple, Google and Spotify being the most widely discussed), check out the guest post from MP3.com and MP3Tunes founder Michael Robertson on TechCrunch.
[UPDATE - Bloomberg first reported yesterday that a last minute joint-offer for Warners was submitted by Sony/ATV Music Publishing and Ronald Perelman and Guggenheim Partners LLC. A winning bidder is expected to be announced on Friday.]
Bits & Pieces: BMG Sets Sights on WMG & EMI Publishing Assets, MySpace + Vevo & Twenty First Republic
Outside of the explosive announcement from Amazon this week that left a music-cloud hanging over the industry, other developments include the news of KKR-backed BMG Rights Management being back in the bidding action for Warner Music Group, after recent reports of the JV being on the outs in the sale. CEO Hartwig Masuch denied such rumors, saying “I can state that we are in the second round of bidding and are on very friendly terms with the main shareholders,” while executives at BMG RM’s other backer Bertelsmann claimed this week that the company is “ready to invest into the right business, at right price, and at the right time,” with the right business apparently being publishing, as Warner/Chappell and EMI Publishing are key in their sights. More reporting can be found at The Guardian, The Telegraph and Music Week… As News Corp. continues to look for a way to unload struggling MySpace, word that the parent company is in talks with online video hub Vevo began to surface. The accuracy of such claims continues to be debated, while a piece in the WSJ yesterday points out that the complex ownership anatomy of both companies might make a deal difficult. For now it seems an unlikely scenario… And a new partnership that links Universal Republic Records, Universal-owned Twenty First Artists and producer management firm Worlds End, forming Twenty First Republic, was announced yesterday. Primaries in the deal include Uni/Republic executives Monte and Avery Lipman, Twenty First Artists CEO Colin Lester and Sandy Roberton, CEO of Worlds End.
Plenty of talk today centers around Amazon diving into the digital music cloud-storage arena, by unveiling a new service today known as their Cloud Drive and Cloud Player. The basic concept for the most part is the same as what has been discussed by multiple companies for some time now as a new digital-music “locker” type of feature, which allows users to store their content online, in this case Amazon’s own storage servers, with the ability to access it from multiple devices and locations. To catch up on the central concept, Amazon created a nice little cartoon that explains how it works, watch it here… What has most folks chattering however, is that while Amazon is not the first to offer a service like this, it took the step ahead of Apple and Google, and reportedly without any additional licenses in place with the record companies. A rep from Sony was the first to comment publicly, saying that they were “disappointed” with Amazon’s move… This act first, ask later tactic is one that many digital music services have taken in recent years – many times ultimately surrendering to labels at a high-cost or shutting down completely, but none of them had the stature of Amazon. Furthermore according to comments from the company, they don’t believe they need any additional licenses for the current Cloud service, and would only engage in negotiations with labels if and when it is necessary to introduce more new cloud features, whatever those might be. Amazon is letting their customers decide – after all, user comments and feedback were the genesis of developing the new service, according to a Q&A with Billboard published today. Another interesting twist is that the new feature runs on the Android platform – how that will effect, or play into, Google’s own plans for a music service remain to be seen. The service is not currently available for Apple devices like the iPhone or iPad, and no information released indicates whether or not that will change.
Wednesday Bits & Pieces: Is it Already the End of Digital Music or Just a New Beginning? More UMG-Sony Music Red Rover & more…
Over the weekend The New York Times published what has become an annual gloom and doom report regarding the state of music sales, using the International Federation of the Phonographic Industry‘s report as the guidepost. In addition to the continued slump in physical, the recap for 2010 concentrated on the plateauing of digital sales and “not a lot of progress” in digital after a decade. However as Evolver.fm points out, the piece focused heavily on the slowing at marketplaces like iTunes and Amazon, while paying less attention to revenue generated from newer services like Pandora, Spotify, YouTube, etc – which is not the same as digital sales. The IFPI’s report contains various points of optimism, like in the growth of mobile access to subscription services due to new technology and compatibility improvements, as well as the significant expansion in the customers of new “freemium” services… Elsewhere, a Financial Times piece this week adds to the growing reports of Doug Morris seeking an early exit from his contract with Universal Music Group owner Vivendi, although it’s still unclear if he will get released in time for a presumed takeover for Sony Music CEO Rolf Schmidt-Holtz, whose contract is up at the end of March. More red rover continues between UMG and Sony, as Lucian Grainge taps former Sony A&R executive Larry Jackson as EVP of the IGA family of labels…. Meanwhile Guy Hands reportedly will get a last chance to hang on to EMI Music, as Citigroup asks the Terra Firma boss to make an offer to keep control of the music company, which is thought to be valued around £1.6 billion.