snapshot 2/7/08

Major labels 'face DoJ antitrust probe'
Two major labels have been served notice of a fresh antitrust investigation, a music business newsletter reports today. MusicAlly's daily Bulletin suggests that the as-yet-unlaunched TotalMusic service, currently backed by Universal and Somy BMG, has prompted notices from the US Department of Justice. The report suggests all four major labels have been contacted.

TotalMusic, described by Rick Rubin back here, is reported to be a low-cost, multi-platform subscription service to be offered to consumers through ISPs and device manufacturers. The plan has few of the restrictions traditionally attached to subscription services, with the service provider or hardware manufacturer subsidising some or all of the mooted $5 monthly fee.


Amazon.com and Universal Music Enterprises Team Up for Unique Valentine's Day Promotion Featuring Musical E-Cards with Classic Original Recordings, Photo Puzzles, and More!
The first e-cards featuring original versions of hit songs are offered in Amazon.com's Music store just in time for Valentine's Day. These e-cards are not only free but they have a creative twist available only a few places online -- classic original music. Along with the choice of one of 12 classic original recordings by popular artists, the card can be personalized with a photo puzzle that when put together unlocks a secret written message from the sender. The free musical e-cards are also offered without the photo puzzle element. Customers can go to http://www.amazon.com/musicgifts through Valentine's day, February 14.


Music websites are fighting to be free
Social music sites Imeem and Last.fm — which offer on-demand, ad-supported free music — have grown rapidly to 20 million monthly users each. Their success has the music industry seriously exploring the viability of ad-supported, free music as the next big business model for online music.

Last.fm says it will launch a subscription service later this year. While ad-supported on-demand online music is clearly striking a chord, the category is so new that few analysts have factored in its growth. For now, JupiterResearch projects a $3.5 billion digital music industry by 2012, from nearly $2 billion in 2008.


Apple sued over iTunes Allowance features
Restricted Spending Solutions has filed a patent suit against Apple over the iTunes Allowance function on its web-based iTunes store. The feature allows members and friends to create accounts for automatically transferring chosen dollar amounts via a credit card to a recipient's iTunes Store account for use by the recipient. RSS cites its own patent, which describes a computer-based method for allocating funds in pre-established accounts for use by customers by creating a customer account file containing a record of funds deposited and limiting how the funds may be spend on audio and video entertainment.


Study: Blogging about music may triple its sales
A study by NYU Stern business school professor Vasant Dhar and partner Elaine Chang shows correlational evidence that blog posts increase online sales of recorded music. The study observed 108 albums over a course of eight weeks, and concluded that the amount of blogs about a certain album can actually predict how well it will sell. It also suspected that the amount of MySpace friends a particular band has acts as a "badge of popularity," actually generating more interest through that number alone.

Dhar and Chang found that of blogs, social networks, consumer reviews, online media and mainstream media, it was the blogs that had the most significant effect on sales. When more than 40 "legitimate" blog posts are made, sales of independent albums were three times higher than average, and five times higher if they were major label releases. They also found if blog chatter exceeds 250 posts, sales were six times higher than the average, regardless of being major label releases or not.