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The Online Music Store Wars Heat Up
September 1, 2006
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"I don't believe every download is a lost sale. Treating your audience like thieves is absurd. Anyone who chooses to listen to our music becomes a collaborator."
-- Jeff Tweedy, WILCO's lead singer/songwriter.Well the big news this week (other than the revelation that Jon Benet Ramsey confessed killer/wack-job John Mark Karr had absolutely nothing to do with her murder, something it seems everybody knew except the mainstream media ) was the announcement by Universal Music, the world's largest music company, they are backing a start-up, Spiral Frog, that will allow consumers to download songs for free! ( See the article below 'Universal Backs Free Music Rival To iTunes' )
The new store/website ( planned to launch in December ) will rely on advertising for its revenues, obviously a very different business model from that of Apple Computer's popular iTunes music store which sells songs for 99 cents. But of course there's a catch. You didn't think it was going to be just that simple did you? You know the song, now sing along, "Nothing From Nothing Gets Nothing"
Here's some of the facts (what's being reported thus far) about the new service. First: people downloading tracks won't actually own the tracks they download, they magically expire and disappear from one's hard drive in six months; Second: the tracks (at this time) cannot be burned to CDs; Third: users will have to sit through ads placed on the site while they download; Fourth: users are required to go to the company's Web site each month to validate their music, or else it expires and magically disappears from the hard drive; Fifth (and maybe most important, at this time it's planned that the tracks will not be importable into iTunes libraries, which of course means they can't be loaded into the fifty million iPods already out there.
The new concept and service is sure to capture a lot of users who will be thrilled to download the latest flavor-of-the-month tracks, don't care whether they'll be able to keep them for more than six months (and with so much disposable pabulum out there, who would want to?), and are probably downloading songs for free on illegal P2P sites anyway. While doing anything that might get people away from illegal file-sharing is a good thing, some questions immediately come to mind. If the concept works and millions start downloading songs for free, won't it further devalue music as a commodity in the marketplace? What is the concept convinces consumers they simply never need pay for music again?
And what about the artists? How will royalties be calculated with this new model? How will artists feel about participating in such a model when it threatens generating significant revenues from strong catalog titles? Apple has created the world's largest online music store with iTunes, and they've sold over a billion songs. My guess is the artists receiving checks from Apple for songs sold on iTunes (and on other online stores) aren't going to settle for any less than they are currently getting.
I also don't envision fifty plus million people putting down their iPods. At best, iPod/iTunes users might be convinced to download songs they don't want to own for free from the new service, and still pay for the ones they want to keep.
If Universal makes the site work for the artists, the music consumers, the advertisers, my hat is off to them. It's a bold move in very treacherous and uncertain times for the industry. But with millions of people still downloading illegally, bold moves are needed.
Beatles Free To Sue EMI
The Beatles have been given the go-ahead to sue music companies EMI and Capitol Records, claiming they used fraudulent schemes in a bid to "pocket millions of dollars" due to the band in royalties.
The group wants at least $25m (£13.2m) in damages in the suit for fraud and breach of contract, which also seeks to reclaim rights to all the Liverpool band's master recordings. Last week a judge New York State Supreme Court, Justice Karla Moskowitz, denied EMI's request for the claim to be thrown out.
The plaintiffs are Sir Paul McCartney, Ringo Starr, John Lennon's widow Yoko Ono, the estate of the late George Harrison and the Beatles' company Apple Corps. The lawsuit, filed in December, claims EMI and affiliate Capitol wrongly classified copies of Beatles recordings as destroyed or damaged "scrap" but then secretly sold them.
It also alleges that the number of units sold was under-reported, and that the firms classified some recordings as "promotional" and therefore
non-royalty bearing, but then sold the material.
Read more about it by clicking here.
Microsoft's Zune Aims To Be Social Butterfly
Microsoft's forthcoming Zune player is shooting to be the life of the party, allowing users to create mobile social networks and stream music to nearby friends or strangers, according to a government regulatory filing.
Zune owners can act as their own DJ, sending streaming music content to up to four other devices, according to documents filed with the Federal Communications Commission . With the device's wireless networking abilities turned on, people can send and receive photos, as well as "promotional copies of songs, albums and playlists," according to the filing, made public last week.
Read more about it by clicking here.
Newly Found Hendrix Song, IBM Patents To Be Auctioned
The copyright and an original reel-to-reel recording of a never-before-released Jimi Hendrix song will be made available in an intellectual property auction in New York City this fall, along with patents from 3Com, IBM, Cree and others.
"Station Break" was recorded in 1966, early in Hendrix's career. How early? He didn't even spell his name Jimi at the time. The song was co-composed with Jerry Simon. The winning bidder will be able to license the recording and remaster it. The Hendrix family estate is objecting to the sale.
"We are actually selling three lots pertaining to Hendrix: the reel-to-reel recording of 'Station Break'; the master recording rights to 33 songs recorded by Hendrix in conjunction with Curtis Knight; and the rights, title and interest in the entire Jimi Hendrix music catalog as claimed by the estate of Michael Frank Jeffery," wrote Wendy Chou, a representative for Ocean Tomo.
Read more about it by clicking here.
MTV--Will Digital Kill The Video Star?
Twenty-five years after it aired its first music video, MTV is no longer the upstart challenger to the big media status quo. MTV programming, which first aired in August 1981, now appears in some 442 million households in 167 territories worldwide, including 88 million households in the United States, according to MTV Networks.
The cable phenomenon is itself a media giant, now targeted by digital-age challengers. Internet destinations like MySpace.com, YouTube and even Yahoo vie for a piece of MTV's once-defining content music videos--and compete to become the top purveyor of cool, youth-driven pop culture upon which MTV built its empire.
Like the other mature media giants, MTV's greatest challenge is to determine exactly what it needs to be in this new media era.
Read more about it by clicking here.
AOL Unveils Web-based Music Store
AOL on Tuesday unveiled a revamped music product with a Web-based store and subscription service offering audio and video streaming, programmed radio and downloads that can be transferred to compatible digital media players.
The online division of Time Warner said AOL Music Now, part of its AOL Music service, is open to any online visitor and features more than 2.5 million songs and videos.
AOL had, until recently, been a service available only to its Internet access subscribers. But this month its parent announced a change in strategy to open up AOL to more users with features such as free e-mail.
Read more about it by clicking here.
OldTube, NewTube
In signing up Paris Hilton, the socialite and media personality, YouTube has made a smart move. YouTube runs a fast-growing website that lets the public share video clips; Ms Hilton is a specialist in home video. Their deal, to promote Ms Hilton's debut music album, and Sony's $65m purchase of Grouper, another video-sharing site, shows how quickly online content sharing is entering the mainstream. Its growth has implications for media companies both old and new.
A generational shift is under way in the consumption of media. Hours spent watching television and reading newspapers are in decline, particularly among the young; hours spent surfing the internet are rising in proportion. Ms Hilton, whose output spans movies, television, music and books such as Confessions of an Heiress, carries on oblivious. For the internet may be a new form of media but, equally, it may just be a better way to distribute the same content. Web surfers still read written words, watch moving images and listen to music. In fact, now that they can do so at work, they have probably increased consumption all round.
Read more about it by clicking here.
Universal Backs Free Music Rival To iTunes
Universal Music, the world's largest music company, is backing a start-up that will allow consumers to download songs for free. It will rely on
advertising for its revenues, offering a different business model from that of Apple Computer's popular iTunes music store.
The move reflects music companies' willingness to experiment as they try to capture some profit from the boom in digital distribution still dominated by illegal file-sharing networks. The service, SpiralFrog, represents a departure from Apple's 99 cents-a-song business model and other legaldownload services which charge a subscription fee by being completely free. It is due to start up in December.
Read more about it by clicking here.
Or by clicking here.
RIAA Copyright Education Is Contradictory, Critics Say
Personal Note: I've written commentary frequently criticizing the RIAA over the past four years. It's been my opinion that the association wastes far too much time, money, and resources suing individuals for downloading when all the evidence shows absolutely no decrease in the number of individuals online file-sharing. Instead of seeking real solutions to industry problems (and if any of you know of anything real the association has contributed to benefit the industry it allegedly serves, by all means please let me know), the RIAA continues to waste yet more time, money, and resources on projects like the one reported below. It's good to know there are groups fighting back and also critical of the RIAA's attempts to do something meaningful.
The music industry's educational video about copyright law is full of baloney, according to several trade and public interest groups.
The Consumer Electronics Association and Public Knowledge are among the groups to issue a joint statement condemning some statements on the Recording Industry Association of America's video, which the RIAA has plans to distribute to the nation's universities.
The RIAA's video, a copy of which can be found on its Web site, suggests that students should be skeptical of free content and that it's always illegal to make a copy of a song, even if it's just to introduce a friend to a new band, said Robert Schwartz, general counsel for the Home Recording Rights Coalition, one of the groups opposed to the video.
"The RIAA seems to be making up the rules instead of citing any consistent interpretation or precedent as to the law," said Robert Schwartz, general counsel for the Home Recording Rights Coalition, one of the groups opposed to the video.
Read more about it by clicking here.
MP3tunes Throws Music Locker Doors Open
Michael Robertson, one of Silicon Valley's most prolific company creators, continues to plug along with so-called music lockers.
His most recent music company, MP3tunes, began offering the lockers for free last week in an apparent attempt to draw interest from consumers. Music lockers enable a customer to store music on a company's servers and later retrieve songs by having them streamed to any PC or Web-enabled device.
The service, called Oboe Free, allows a customer to store up to 1,000 songs--about the same capacity as Apple Computer's 4-gigabyte Nano digital music player. Serious music fans can upgrade to one of MP3tunes' two premium services for even more storage. For $19.95, MP3tunes offers twice the song capacity as Oboe Free, and for $39.95 a customer receives unlimited storage.
However, the public has yet to show much interest in music lockers or subscription services. Apple's iPod and iTunes reign supreme in digital music, and everybody else trails far behind.
Read more about it by clicking here.
Would People Pay $100 For A First Run Movie On An HD Disc?
In looking at mainstream consumers, you can dissect the experience and, more importantly, the cost of going to the movies in a theater. In a big city, the cost for a family of four to go out to the movies can easily be $100. Tickets are $10 each, popcorn is greasy and expensive. The price of one small soda could buy you four gallons of the same drink at the supermarket.
So that begs the question: what if the studios released a limited number of their best films on an HD disc (Blu-ray or HD DVD or both) the day the movie hits theaters and charged a pretty penny for them - would people buy or even rent them? It would be a perfect opportunity for the studios to get their ICT (image constraint token) forced on to users, so it would be mandatory that any first-run disc had to be played through a player that was connected digitally and therefore copy-protected. At the same time, it could open studios to consumers with large disposable incomes who simply do not go to the movie theater. Consumers would win, too, considering the added convenience, ease of use and lack of time commitment. At the same time, people wouldn't stop going to the movies. The huge screen experience for some films is pretty hard to recreate, even with the biggest of plasma TVs...
Hollywood might want to consider creative ways to get not just their fraction of the movie ticket price but to get the entire evening's budget, because sometimes staying home and watching a movie is just better than going to the movies.
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES' NEWS ITEMS
ITEM#1: "She pees in her diaper, she sleeps, she wakes up every couple of hours. This is what babies do, okay? There's nothing abnormal about her." -- Leah Remini ( how many of you even know who she is?) to 'E! News', with her insider's view of Suri Cruise's daily regime. Obviously, making comments about Suri is evidently the only way Leah gets any press.
ITEM#2: Danny Bonaduce, who played that cute little red-headed kid in The Partridge Family, guesting on the season premiere of 'CSI,' playing an aging rocker who gets brutally murdered. Since Danny's career is basically dead anyway, the role should not be a stretch.
ITEM#3: Kevin Federline also guesting on an upcoming 'CSI' episode scheduled to air in October. Let's hope his character gets murdered as well. (If we had to actually watch him try and act for more than a few minutes, it would be torture)
ITEM#4: Kanye West complaining that his video for "Touch the Sky" wasn't nominated for an MTV Video Music award Of The Year, even though "Gold Digger" earned three nominations. According to Kanye, "Touch the Sky" was "one of the most memorable videos of the year." Obviously, the general public didn't think so Kanye, so shut up and go back to counting your millions.
ITEM#5: Village People cop Victor Willis going back to rehab after entering a no contest plea to drug possession charges. If you were in The Village people, you'd have done drugs too.
ITEM#6: - Donald Trump firing his Apprentice sidekick Carolyn Kepcher. Does anybody still watch the show?
CONGRATS TO
Barry Manilow on his Emmy for Outstanding Individual Performance in a Variety or Music Program, for his 'Music & Passion' TV Special.
CONGRATS 2
Mariah Carey winning six BMI awards, including Songwriter of the Year and Song of the Year for "We Belong Together." Apparently, the "we" refers to Mariah and her awards, given that 'The Emancipation of Mimi' has now racked up 25 industry honors, including three Grammys.
HICKS NIX ON SALES OF OLD TUNES
Last week a judge temporarily barred producer William Smith from selling songs he recorded with Taylor Hicks in the days before he was named American Idol winner Season 5, after the gray-haired crooner sued. Taylor Hicks settled with Smith this week and took control of the songs Smith was selling.
FOR A GOOD CAUSE
Eminem teaming with Nike to design a limited run of Air Max sneakers that will be auctioned off, with the proceeds going to benefit young people through the Marshall Mathers Foundation and NineMillion.org.
TOUGH TIMES IN THE REAL ESTATE MARKET, BRITNEY
According to The Wall Street Journal, Britney Spears sold her Manhattan residence for $4 million, which is $1 million more than she paid for it, but $2 million less than her asking price.
HONEY, WE MIGHT NOT BE GOING TO THE STREISAND CONCERT AFTER ALL
Ticketmaster invalidating more than 1,000 tickets to Barbra Streisand's upcoming tour after discovering they had been purchased online with stolen credit card info and then resold.
'THE BOSS' SEZ ALL IS STATUS QUO
Bruce Springsteen denying "ugly rumors" (mostly started in the NEW YORK POST 'Page Six' gossip section) that his marriage of 18 years to wife Patty Scialfa is on the rocks. "Our commitment to one another remains as strong as the day we were married," the singer states on his Website.
THE SERGEANT IS STILL TOP RANK
The Beatles' 'Sgt. Pepper's Lonely Hearts Club Band' topping a BBC survey of best number one albums of all time, beating out Michael Jackson's 'Thriller' by 201 votes. U2's The Joshua Tree was third.
REMEMBER WHEN THEY USED TO ACTUALLY PLAY MUSIC VIDEOS?
Trade magazine Variety reports that VH1 is continuing to create and program new reality shows, awarding Andrew Dice Clay and Tom Sizemore their own (separate) series in which the fallen B-star celebs try, on some level, try to make amends with the public.
COMING SOON!
- Beyoncé, B'Day (9/5)
- Audioslave, Revelations (9/5)
- John Mayer, Continuum (9/5)
- Justin Timberlake, FutureSex/LoveSounds (9/12)
2006 Industry Conferences
Date Name Location CMJ October 31 - November 4 New York
Quotes of the week
"Nick Lachey's solo album is called 'What's Left of Me'. What's left of him? Half of Jessica's fortune, that's what."
-- Dane Cook"I'm proud of the work we did there, but it's not a good time in the history of that show. It's hard to watch. It sort of became a joke."
-- Meredith Viera talking about her former show,'The View' to TIME magazine this week."He might be off the Paramount lot, but you can bet if the right project comes along, they'll listen and be in on the bidding. This is a business and nobody cuts off their chances at grabbing the brass ring when it comes around. Cruise's films grossed almost a billion dollars worldwide over the past two years, so everybody will want a piece of anything he does if it looks good on paper."
-- Anonymous Hollywood Studio-exec, commenting this week on The Paramount/Tom Cruise deal split."My audience loves to see Britney (Spears) get her head cut off."
-- Alice Cooper"As long as it's not Joan Rivers."
-- Joan Collins, backstage at the Emmys, when asked by her publicist if she wanted to talk to one of the waiting media outlets."I don't go hunting for celebrity babies. I have 116 other things to do, thank you, Billy. You need another job. I mean, you have potential as a human being. This may not be right for you. Seriously, can you focus on other things?"
-- Jeremy Piven (who won a well-deserved Emmy for his portrayal of agent Ari Gold on HBO's 'Entourage'), slamming Emmys pre-show host Billy Bush for asking if he has ever seen Jennifer Garner's daughter or "baby Suri.""I want to work with Pharrell, Timbaland, Snoop, Kanye, Eminem and just see what happens. It may be a disaster, it could be fantastic, but you don't know until you try."
-- Elton John on wanting to blend his hit songs with hip-hop beats, to Rolling Stone.
The B-Side - 'Blips'
YOU KNOW THE OLD SAYING "COPS ALWAYS HAVE THE BEST DOPE"? MAYBE IT'S TRUE: Like all good reporters, the News Tribune's Janna Goerdt in Duluth has learned to keep her ears and eyes open for whatever might be encountered on an assignment.
Goerdt accompanied law enforcement officials Saturday as they searched for people illegally using all-terrain vehicles in Duluth and she also uncovered a dozen marijuana plants growing in western Duluth. The pot wasn't growing off an ATV trail. And she didn't find it in the woods. Goerdt found the marijuana growing in a planter near the front door of the West Duluth police substation.
During law enforcement's briefing on how they were going to conduct the ATV sting Saturday, Goerdt heard two members of a rival news team talking about "something interesting" in front of the police station at 5315 Grand Ave. Eavesdropping like a good reporter, Goerdt filed the comment away in her memory bank and accompanied law enforcement on the ATV crackdown.
When that assignment was over, Goerdt returned to the police station and took a walk around the building. She found the marijuana plants. She plucked one of the leaves and brought it back to the newspaper. "I needed some evidence," she said. "I didn't know if anyone would believe me. I didn't think it was a big deal. I just thought it was rather amusing.".
Kasper immediately traveled to the West Duluth police substation to inform neighborhood supervising police Lt. John Beyer of the pot growing in the front-yard planter.
"The only thing I can say is somebody has a sense of humor," Beyer said. "Now they'll read about it in the paper and say, 'Yeah, that was me.' "
For a day at least, Goerdt is known around here as "Janna The Snitch." She said she can live with it.
(Source)
Box Office
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