Digital music firms pay heavy price for labels' support
A stark truth facing any aspiring digital music service these days is that working with record labels is going to carry a hefty price. The last 18 months have seen the major music labels accept new technological and business models -- such as dropping digital rights management and allowing ad-supported free music -- that have given rise to a new generation of digital music services. But the flip side of this willingness to experiment is a demand for higher upfront advances for licensing music and in some cases a substantial equity stake in the company.
Amazon.com beefs up Latin music store
Amazon relaunched its Latin music store Friday, with video content from top artists, more bilingual product descriptions and a selection that's grown by at least 10% in less than a year. The online retailer will also shortly introduce blogs by Latin artists on their product pages, as well as partner with them for video debuts and possible event sponsorships, music category manager Craig Pape says.
The company won't reveal how much its Latin music sales have grown over time, but says it increased its selection of Latin titles to 140,000 (not including individual digital tracks) after an analysis of its Latin category in mid-2007. Some of that increase was accomplished by re-directing international/world music titles to the Latin category, but the company says the Latin selection will grow another 15% in the coming year.
Social Net Imeem Buys Struggling Music Service Snocap
As had been rumored for a while, music-based social networking service Imeem has finally bought the assets of trouble digital music services firm Snocap. Terms of the deal were not disclosed. This deal bring in content identification technology and a digital registry for Imeem, besides the team. This will help Imeem offer commerce services to labels and artists. Imeem had previously been working with Snocap.
Snocap was founded by Napster founder Shawn Fanning, and had received about $10 million in funding from Morgenthaler Ventures, WaldenVC and other angels. The company laid off 60 percent of staff last October. It had changed tracks a few times: started an an music ID/registry for P2P distribution, and when the industry didn’t take off, move to a widget-based model to sell music through social networking sites and blogs. Meanwhile, Fanning has moved on, as he usually does after stirring the pot, and has launched Rupture, a virtual social community for online gamers.
Amazon Accelerates Its Move to Digital
“Digital is where the growth in music is, and other industries are likely to follow,” said Bill Rosenblatt, chief executive of GiantSteps Media Technology Strategies, a New York consulting firm. “Amazon needs to position itself to capture that.” Amazon does not release sales figures for its digital initiatives, so their initial success is difficult to gauge, although by all accounts the MP3 store has quickly become one of the top sellers of digital music.
The executives say they are happy with the service’s progress and are focusing on adding international music and expanding the service overseas. But they also say that most customers probably do not understand that songs bought in the MP3 format are more flexible and can be transferred to a greater number of devices.
Wal-Mart Reaffirms Commitment to MP3s; Standoff Continues
Wal-Mart recently reaffirmed its commitment to an MP3-only download store, with or without the participation of Warner Music Group and Sony BMG. On Friday, Digital Music News discovered that tracks from Warner and Sony BMG were unavailable on Wal-Mart Music Downloads, the result of a licensing impasse related to DRM-free content. The majors declined comment on the matter, though Wal-Mart used the opportunity to reaffirm its DRM-free agenda. "We'll continue to work with our music partners to further grow our MP3 selection, however, we don't publicly share details of our ongoing discussions with these partners," a Wal-Mart representative disclosed.
The rest involves a simple process of filling in the blanks. Sources noted that Wal-Mart is now mirroring the hardline, MP3-only stance assumed by Amazon last year, one that ultimately resulted in DRM-free licenses from all four major labels. In August, majors EMI and Universal Music licensed their catalogs DRM-free to Wal-Mart, though insiders continue to point to onerous requirements from both Warner and Sony BMG.
Music Community mTraks Raises $550k From Angels
mTraks, a music community and marketplace, has raised another $550,000 from unidentified angel investors. The San Diego-based company raised the same amount last year, for a total raise of $1.1 million. The site offers a platform for independent artists to establish a basic web presence and sell MP3s or full albums directly to fans. It claims to get 100,000 unique visitors per month and to feature music from over 5,500 independent labels. Funding will be used to build out the direct-to-consumer functionality of the site. As MySpace Music is getting into the transactions side of the equation, it’s definitely a direct competitor, although smaller sites like mTraks may seek to play up the indie side.
A stark truth facing any aspiring digital music service these days is that working with record labels is going to carry a hefty price. The last 18 months have seen the major music labels accept new technological and business models -- such as dropping digital rights management and allowing ad-supported free music -- that have given rise to a new generation of digital music services. But the flip side of this willingness to experiment is a demand for higher upfront advances for licensing music and in some cases a substantial equity stake in the company.
Amazon.com beefs up Latin music store
Amazon relaunched its Latin music store Friday, with video content from top artists, more bilingual product descriptions and a selection that's grown by at least 10% in less than a year. The online retailer will also shortly introduce blogs by Latin artists on their product pages, as well as partner with them for video debuts and possible event sponsorships, music category manager Craig Pape says.
The company won't reveal how much its Latin music sales have grown over time, but says it increased its selection of Latin titles to 140,000 (not including individual digital tracks) after an analysis of its Latin category in mid-2007. Some of that increase was accomplished by re-directing international/world music titles to the Latin category, but the company says the Latin selection will grow another 15% in the coming year.
Social Net Imeem Buys Struggling Music Service Snocap
As had been rumored for a while, music-based social networking service Imeem has finally bought the assets of trouble digital music services firm Snocap. Terms of the deal were not disclosed. This deal bring in content identification technology and a digital registry for Imeem, besides the team. This will help Imeem offer commerce services to labels and artists. Imeem had previously been working with Snocap.
Snocap was founded by Napster founder Shawn Fanning, and had received about $10 million in funding from Morgenthaler Ventures, WaldenVC and other angels. The company laid off 60 percent of staff last October. It had changed tracks a few times: started an an music ID/registry for P2P distribution, and when the industry didn’t take off, move to a widget-based model to sell music through social networking sites and blogs. Meanwhile, Fanning has moved on, as he usually does after stirring the pot, and has launched Rupture, a virtual social community for online gamers.
Amazon Accelerates Its Move to Digital
“Digital is where the growth in music is, and other industries are likely to follow,” said Bill Rosenblatt, chief executive of GiantSteps Media Technology Strategies, a New York consulting firm. “Amazon needs to position itself to capture that.” Amazon does not release sales figures for its digital initiatives, so their initial success is difficult to gauge, although by all accounts the MP3 store has quickly become one of the top sellers of digital music.
The executives say they are happy with the service’s progress and are focusing on adding international music and expanding the service overseas. But they also say that most customers probably do not understand that songs bought in the MP3 format are more flexible and can be transferred to a greater number of devices.
Wal-Mart Reaffirms Commitment to MP3s; Standoff Continues
Wal-Mart recently reaffirmed its commitment to an MP3-only download store, with or without the participation of Warner Music Group and Sony BMG. On Friday, Digital Music News discovered that tracks from Warner and Sony BMG were unavailable on Wal-Mart Music Downloads, the result of a licensing impasse related to DRM-free content. The majors declined comment on the matter, though Wal-Mart used the opportunity to reaffirm its DRM-free agenda. "We'll continue to work with our music partners to further grow our MP3 selection, however, we don't publicly share details of our ongoing discussions with these partners," a Wal-Mart representative disclosed.
The rest involves a simple process of filling in the blanks. Sources noted that Wal-Mart is now mirroring the hardline, MP3-only stance assumed by Amazon last year, one that ultimately resulted in DRM-free licenses from all four major labels. In August, majors EMI and Universal Music licensed their catalogs DRM-free to Wal-Mart, though insiders continue to point to onerous requirements from both Warner and Sony BMG.
Music Community mTraks Raises $550k From Angels
mTraks, a music community and marketplace, has raised another $550,000 from unidentified angel investors. The San Diego-based company raised the same amount last year, for a total raise of $1.1 million. The site offers a platform for independent artists to establish a basic web presence and sell MP3s or full albums directly to fans. It claims to get 100,000 unique visitors per month and to feature music from over 5,500 independent labels. Funding will be used to build out the direct-to-consumer functionality of the site. As MySpace Music is getting into the transactions side of the equation, it’s definitely a direct competitor, although smaller sites like mTraks may seek to play up the indie side.
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