Wednesday Bits & Pieces: Is it Already the End of Digital Music or Just a New Beginning? More UMG-Sony Music Red Rover & more…
Which way is the river flowing?
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.
01.7.11Friday Bits & Pieces: Music Startups Hot at CES, Sony’s Music Unlimited & more…
Music services hot at CES
It’s 2011 and streaming music continues to be a hot topic. Spotify is still getting headlines, but questions now surround not when the service will be launching in the U.S., but if it will ever see life in the states. It appears that labels are continuing to ask for extremely high upfront payments from the startup, due to uncertainty in results from the service’s model. Spotify is betting on a high rate of conversion from free to paid accounts, while content owners remain skeptical. If the company doesn’t go public, is the answer to be acquired, and should Amazon be that buyer?… While the clock ticks on Spotify, not to mention Google Music and a streaming service from Apple, lower profile services that have already launched continue to made progress in the new digital music arena, with a number of key announcements coming out of this weeks Consumer Electronics Show in Las Vegas. MOG will be coming preinstalled on Verizon’s new 4G LTE phones, as well as being included in Toyota connected cars, along with Pandora… Slacker also announced new changes to its service this week, including a new on-demand subscription tier, that sees a third level of access for users, adding to the non-interactive internet radio service it already provides… Meanwhile Sony took the stage at CES to announced the launch of its new Music Unlimited service in America in the coming months. Already live in the UK, the service will be available to users via Bravia TVs, Blu-ray players, Vaio PCs and PlayStation 3 consoles… Elsewhere, in expected news, Lucian Grainge, who officially assumes his CEO seat at Universal Music Group, announced contract renewals for Universal/Republic rulers Monte and Avery Lipman this week – also re-upped with UMG was SRC Records founder and CEO Steve Rifkind… S&P Equity Research adds credence to the talk of a likely Warner Music Group acquisition of EMI, as they make their 2011 media predictions, stating [WMG] could finally be poised to make a successful bid for the recorded music operations of EMI Group… And sales data for music in 2010 comes in with news of continued decline for both physical and digital albums, while single tracks all but flatlined. Last year saw a 12.8% decline from the 2009 level in album sales, while single song sales were up by 1%. More stats including 2010 highest sellers are here…
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Happening: Pink Floyd Re-Ups with EMI & LimeWire Won’t Go Quietly
Trying to Put its Own Squeeze on Labels
A couple of 2010’s most-followed music industry stories have headlines rolling out in the first week of the new year… Continuing with checkmarks in the positive column for EMI, is the announcement of a new 5-year deal with Pink Floyd, which also effectively ends the legal dispute between the band and label. Last year the band took action against its longtime label over the a-la-carte digital sale of their songs and online royalty payment calculations. While keeping the iconic group on the roster is another coup for new group chief Roger Faxon, and a reversal in the trend of big-name acts exiting their longtime relationships with EMI in recent years, the move can be seen as primarily an effort to retain as much value as possible in the event of a sale by debt-embroiled owner Terra Firma, which most still believe is likely… LimeWire has been busy dealing with the fallout of a recent final defeat in its lengthy legal battles, and yesterday The Hollywood Reporter legal blog posted details about the latest turn in the ongoing saga. Ahead of a final looming trial, which will determine the damages owed by the file-sharing site, lawyers for LimeWire are now attempting to force third-party licensees, so far only Amazon.com it seems, to turn over documents, including contracts, royalty payments and internal company communications relating to agreements with the labels. The judge in the case has already ordered record companies to turn over their information about royalty payments relating to alleged infringed upon works. This isn’t sufficient according to LimeWire’s attorneys. So far Amazon has not complied with the request, and it’s unclear if other licensees like Apple have also received similar requests. What is clear however, is that LimeWire is not going down quietly, and will do its best to shed light on licensing agreements heretofore kept in the dark.
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Wednesday Bits & Pieces: eMusic Loses Big Indies, Warner Re-Ups with Spotify & UMG Looking to Get Lean
Indies On the Way Out
Last month digital music retailer eMusic announced that they would be adding a quarter-million more songs to its service in a new partnership with Universal Music Group, this following previous deals with Warner Music and Sony over the last year, a move which had some questioning whether the service was getting away from its ‘independent’ roots. While too early to tell the larger effects the new major label partnerships will have on customers, some big indie labels have decided they will no longer make their music available, including Domino Records, Merge and the Beggars Group of labels, which includes 4AD and Matador among others. No small exit, as those handful of labels are home to some of the most popular current and past independent acts including Animal Collective, Arcade Fire, Spoon, Bon Iver and many many others. A statement from Beggars Group made it clear that the split, at least for them, is directly in response to the arrival of the major labels to the service and new terms that they “have found impossible to accept, in our own interests, those of our artists, and ultimately those of their fans”… In the latest Warner Music earnings call, it was revealed that the company has renewed their existing deal with Spotify, which currently covers European markets. And while no update on a agreement covering the U.S., many still suspect that deals with multiple majors for the startup to launch its service in America are in motion. In reference to the continued gap between physical and digital music sales, CEO Edgar Bronfman Jr. made it clear that he (and presumably all the labels) are hopeful for digital increases with the launch of Google’s impending music service among others, like Spotify?… More talk of looming cutbacks at UMG persist after the CFO of parent company Vivendi made recent ominous comments about cost saving needs, including “A lot of fat can be taken out without hurting muscle and bones” – onlookers continue to keep an eye on Island Def Jam as one of Lucian Grainge’s prime targets for restructuring… Elsewhere, Amazon.com is getting into the movie business by launching Amazon Studios… Check Your Pulse songwriter Bonnie McKee talks to Billboard about launching her own recording project after a string of credits on some of 2010’s biggest songs… And inquiring minds want to know, which former major label head has been spotted moonlighting on lead guitar in a Neil Young cover band?
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Wednesday Bits & Pieces: NMPA Blocks Longer iTunes Song-Samples, Eminem’s Royalty Victory & Amazon Buys Amie St
Amazon Buys Amie Street
Among the new features that were not announced last week at Steve Jobs‘ big keynote event, was the lengthening of song sample time in the iTunes store. It was rumored that Jobs would be revealing an extended sample time from 30 seconds to 60 or 90, presumably to further entice a potential buyer. While it appears that Apple had all the necessary agreements in place with the four major label groups, it had not made any such arrangement with the publishers. When the National Music Publishers Association (NMPA) caught wind of the new sample length, they notified Apple at the eleventh-hour of their legal objections, and the announcement was pulled according to CNET. Publishers don’t see any performance money from the iTunes store, and while the current 30-second sample clip is treated as “promotional,” a longer sample time would most likely result in publishers wanting to get paid… In more iTunes and publishing news, the Ninth Circuit court has ruled in favor of Eminem’s former production company FBT Productions, reversing a 2009 decision from the original lawsuit brought against Universal Music Group. The latest ruling declares that downloads through the iTunes store are in fact “licenses” and not “sales” – entitling the plaintiff to a significantly higher percentage of revenue. Though with such potential for precedent-setting in the ongoing debate over how downloads should be treated particularly for older artists with older contracts, most expect this case to remain in the legal system for awhile longer… And Amazon has purchased Amie Street, the online music store that it helped fund four years ago, and plans to shutter the service at the end of the month. Due to the unique nature of the digital retailer’s model, the service became mostly a haven for independent and unsigned artists, as negotiating with the larger labels proved difficult. While certainly a blow to many who use the service, it appears both sides are happy with the deal, and the Amie Street team will now focus on their new project, Songza, a Pandora-like music streaming service…
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Wednesday Bits & Pieces: Apple’s New iTunes, Sony’s iTunes Rival & Amazon Enters the Fray
As predicted Steve Jobs did not announce a new cloud-based version of iTunes this morning, however the rumored social features were announced in the form of Ping. In the words of Jobs, it’s “Facebook and Twitter meet iTunes,” … “But it’s not Facebook, it’s not Twitter,” adding “it’s a social network all about music.” There is also a new logo that replaces the CD, which Jobs remarked as fitting, as he expects that by next Spring Apple’s music sales will surpass all CD sales in the United States… The update to iTunes 10 will be available today and will include Ping. If you missed the action this morning, head HERE to watch the keynote… In what cannot be coincidental timing, this morning Sony Corp announced Sony Qriocity (“curiosity,” get it), which is the company’s new subscription-based music and video streaming service, the backbone of which will be the Playstation 3 console. It’s expected to launch in the UK before the end of the year… And not to be left out of the race to streaming dominance, Amazon is reportedly gearing up to launch a service similar to Netflix, which will allow unlimited access to movies and TV shows for a monthly fee.
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In Case You Missed It: Reading Recap
Apple Takes Top Tech Spot
Never far away from headlines, it’s being reported that Apple is now the world’s most valuable tech company. Valuations from Wall Street on Wednesday showed that the company has surpassed Microsoft and is only second to Exxon Mobil in America… Then there’s that pesky DOJ investigation into Apple’s possible anticompetitive practices, with particular focus on the recent allegations that the company pressured record labels to not participate in Amazon’s MP3 Daily Deal promotion, threatening loss of iTunes visibility for artists who did… The recent federal court ruling against file-sharing service Limewire has led the company down a well-trodden path, with plans to “legitimize” the music service, executives explain they are now seeking licenses from all the major record labels… New MySpace co-presidents faced a number of tough questions at TechCrunch Disrupt regarding huge drops in site traffic and the $10-million-a-month losses for MySpace Music… At the same conference Lady Gaga’s manager Troy Carter and Justin Bieber’s manager Scooter Braun discussed how the web is impacting the music industry and the importance of managing an artist’s online identity… Elsewhere, ‘psycho-acoustic simulation’ music service BlueBeat, who made headlines trying to sell digital Beatles songs last year, is back with a streaming iPhone app. More unlicensed music? Yup… And what exactly is a Shaved Bieber?
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In Case You Missed It: Reading Recap
Apple Sets Sights on Amazon Daily Deal Promotion
Unlike the recent hoopla over Abbey Road, no public outcry surrounding EMI’s recent sale of Olympic Sound Studios, birthplace of classic recordings from The Rolling Stones, Led Zeppelin, The Beatles, The Who and Queen… Apple is starting to flex its iTunes market share muscle with labels over their use of Amazon’s Daily Deal promotion that features deeply discounted albums for new artist releases… Music start ups MOG and Spotify to go toe-to-toe at SXSW, MOG to announce new mobile app… Time Magazine profiled soon to be Universal Music Group head Lucian Grainge…And Peter Gabriel’s The Filter has announced a new deal with video site Dailymotion…
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