Monday, July 16, 2007

snapshot 7/16/07

HMV bears the brunt of the downturn
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/07/15/ccrecord315.xml
HMV, which owns 220 music stores in the UK, has been at the sharp end of the changes that have swept through the music retail sector. Increased competition from supermarkets and the internet has led to a string of profit warnings, and the company's share price has more than halved to 116p since 2005. The stores will include so-called refreshment hubs where shoppers can browse the internet. HMV is also considering introducing a manufacture on-demand service, allowing shoppers to burn their own CDs in store.


FairUse4WM v1.3 Fix 2 promises Vista, Zune DRM stripping
http://www.engadget.com/2007/07/15/fairuse4wm-v1-3-fix-2-promises-vista-zune-drm-stripping/
After months of eager anticipation, it looks like either Viodentia has finally come out of hiding, or s/he's passed the torch on to another -- but either way it looks like MS DRM IBX components up to version 11.0.6000.6324 are good to go with the latest version of FairUse4WM, v1.3 Fix 2. We haven't yet confirmed ourselves, but feel free to tell us whether you got a sweet taste of DRM freedom without having to continue using XP and Windows Media Player 10 with that subscription music service.


Apple to Start Record Label with Jay-Z and Beyonce?
http://www.macrumors.com/2007/07/15/apple-to-start-record-label-with-jay-z-and-beyonce/
At the time, Jay-Z was reportedly shopping this new "super label" around with the major record labels "and to Apple - who [was] very interested in doing business".

Now, Moli.com is claiming that "an inside industry source" says that its a done deal.
[Jay-Z and Beyonce] will move to Apple to run a new music division. It sounds rather incredible: [Jay-Z's] already got a pretty good job, running Def Jam, and [Steve] Jobs may be too smart to get into the tanking recording business (as others have said). Of course, if it is true, my guess is this would be a new, revamped record biz, one based on digital distribution, not boring old physical products.


Net radio "compromise" hinged on DRM adoption
http://arstechnica.com/news.ars/post/20070715-net-radio-compromise-hinged-on-drm-adoption.html
As we reported Friday, the looming royalty crunch on Internet radio that would have begun today (July 15) was narrowly averted last week by a temporary reprieve from SoundExchange. Now it appears that a lasting compromise is indeed possible, but such a compromise will likely mean mandatory DRM (Digital Rights Management) for Internet radio.

A source at a major MP3-based Internet radio station who did not want to be named told Ars Technica that this is not the first time that SoundExchange has expressed interest in seeing streaming media locked down with DRM, but this is the first time it has been laid down on the table as absolutely necessary to any compromise that would deviate from the royalty agreement already approved by the Copyright Board.


FAST FOWARD: A drumroll for free music
http://www.contentagenda.com/articleXml/LN641382047.html?nid=3038
Last year, fans acquired more than half their music from unpaid sources, according to The NPD Group, a research company in Port Washington. So why keep charging for it? More and more musicians are letting albums and songs serve as advertisements for their concerts and merchandise - that's the stuff fans will have to pay for.

Already countless artists, from the unknown to the very famous, are distributing their music free of charge. One popular summer tour this year is giving away tickets instead of selling them. And in another interesting shift, some in the industry are shelving the idea of copy-protection software, a tacit admission that it's impossible to stop everyone from copying music for free.

One thing is clear: The old model of purchasing a disc in a store is fading away. Whether music will soon be truly free is still a question. "If we define 'free' as a service that doesn't require me to reach into my wallet," said Garland of Big Champagne, "I think more and more music is going to be distributed into your home and your car and into your ears for free."


New Borders Wants To Load Your iPod
http://online.wsj.com/article_email/SB118454693702167201-lMyQjAxMDE3ODE0NjUxNDY2Wj.html
Mr. Jones, 56 years old, says even more changes are ahead as Borders tries to keep pace with Barnes & Noble Inc., Amazon.com and the big-box discounters. First, I don't like turning our customers over to a major competitor. When somebody goes to borders.com and ends up at Amazon, Amazon gets the data and forms the relationship with the customer. Also, and this is a big point, we need connectivity with our stores. Our relationship with Amazon limits that connectivity. Also, our rewards program can't be part of it.

There are tons of people 35 and older who don't own an MP3 player, or if they have one, they don't know how to operate it. These are people who just won't take the time to learn how to do it. I'm like that myself. I love music, but I don't download music onto my iPod. We think there is a place for a retailer to offer a comfortable environment that offers guidance and the opportunity to discover products that provide knowledge and entertainment. We'll show you. Bring in your MP3 player and let us know what you want. We'll download it for you.


The Demise of the MiddleTail, 2004 to 2007
http://www.coolfer.com/blog/archives/2007/07/the_demise_of_t_2.php
To see the demise of the middle tail, one can look at the unit sales for the 200th best-selling album over the last three years. At this time in 2004, the 200th album was selling a bit over or a bit under 6,000 units. Two years ago, the 200th album was doing well over 5,000 units on a consistent basis. One year ago, a typical 200th album was doing about 4,500. This year, the 200th album often sells fewer than 4,000 units.

The downward-sloping trend line tells the story. A three-year decrease of 6,600 to 4,350 represents a compounded annual rate of decline of just over 13%. (I took those numbers from the trend line on the graph.) In other words, the middle tail's rate of decline looks to be higher than that of total album sales. (Total album sales are down 15% this year and dropped 5% and 9% in 2006 and 2005, respectively.)


Jamendo Gets Cash for Creative Commons Music
http://www.techcrunch.com/2007/07/16/jamendo-gets-cash-for-creative-commons-music/\
Luxembourg-based Jamendo (launched in 2005) is grass roots site, following the DRM free music trend by helping artists distribute their music under the Creative Commons license. They just closed their series A round of funding from Mangrove Capital Partners today for an undisclosed sum. You may not have heard of Jamendo because their growth has been focused in areas like the Continental and Central European markets. However, Jamendo intends to put the money toward growing in North America, Brazil, India and Russia.

Artists can upload their tracks to the service and pick what type of creative commons license they want to list their music under. Listeners can create profiles, review music, post videos, and play the tracks in Jamendo’s player. Tracks can be put into easily shared playlists or downloaded from the site.


A Variable Pricing Success Story
http://www.coolfer.com/blog/archives/2007/07/a_variable_pric.php
friend tipped me off to Sara Bareilles, who recently got into iTunes' top ten titles with her debut, Little Voice. The Wall Street Journal's Jamin Brophy-Warren noticed Bareilles as well and uses her as a case study for the benefits of variable pricing.

Little Voice sold 14,000 units at iTunes in its first week of release. "Ms. Bareilles says the lower price was probably responsible for her strong digital showing," wrote Brophy-Warren, "which accounted for around 80% of her total sales." The album was part of iTunes "Next Big Thing" series of bargain-priced albums.

What Brophy-Warren surprisingly failed to mention in the article is that Bareilles' track "Love Song" was the free iTunes "single of the week" at the end of June. It was no doubt the combination of the free single and the low album price that helped push Bareilles to the top of the iTunes chart. A low album price alone would not have done it.


CDN Space Getting More Crowded
http://techdirt.com/articles/20070713/081706.shtml
CDNs), like Akamai. It was a darling during the dot-com boom and Wall Street is in love with it once again. Success, of course, breeds competition. Smaller rival Limelight Networks recently went public with much success, and now Korean Firm CDNetworks says it will soon enter the US market (via Data Center Knowledge). This is great news for content firms, which should benefit from price competition in the space. The question for Akamai is whether its product can be more than a commodity. If any company can do what it can with enough infrastructure investment, then ultimately competition will just come down to price, which is the last thing it wants to see.

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