snapshot 5/8/08

Warner Music Group 2Q loss widens on increased expenses
Warner Music Group Corp., whose artists include R.E.M., Madonna and Green Day, said Thursday that higher costs and a shift to digital music resulted in a wider second-quarter loss and it suspended dividends. Shares tumbled more than 20 percent, or $1.87, to $7.18 in morning trading.

For the period ended March 31, the New York-based recording company reported a loss of $37 million, or 25 cents per share, compared with a loss of $27 million, or 19 cents per share, a year earlier. Losses from continuing operations totaled 23 cents per share in the latest period. Revenue grew 2 percent to $800 from $784 million a year earlier.


Microsoft Sends Indie Labels Bonus Checks
Microsoft recently sent substantial one time bonuses to some digital distributors and independent labels. The checks appear to be the company's answer to criticism of payments as high as $1 per player extracted by Universal and other major labels granting permission for Zune's music sharing functionality. In an email sent earlier this week to label and artist partners obtained by Hypebot, The Orchard wrote that Microsoft "made a corporate decision to demonstrate their commitment to the independent sector in a manner we all appreciate: rather than simple lip service, they wrote a check". The digital distributor plans to share the revenue with content providers in a "Zune Bonus".


Warner Music, Wal-Mart Work It Out... MP3s Online
Warner Music Group has now licensed MP3s to Wal-Mart's online music store, according to information confirmed Wednesday. During a presentation at the annual gathering of the National Association of Recording Merchandisers (NARM) in San Francisco, Warner Music Group executive vice president of Digital Strategy and Business Development Michael Nash announced the shift. "I'm pleased to announce today that we have just started a very important partnership with respect to MP3 download sales on Wal-Mart," Nash said.

On Wal-Mart's store, MP3s can now be purchased from a variety of high-profile, Warner Music Group artists, including Metallica (Elektra) and Missy Elliott (Atlantic). The move ends a logjam between the parties, one that rendered Warner content unavailable.

Just recently, Wal-Mart shifted exclusively to MP3s, and removed any DRM-protected content. That mirrors a successful, MP3-or-nothing stance by Amazon, a move that eventually resulted in DRM-free licenses from all four majors. The recent licensing development leaves Sony BMG as the only major that has not licensed MP3s to the Wal-Mart Music Store.


Desmond Tutu Venture Emerges... Free Music For All
A music startup involving Archbishop Desmond Tutu has now emerged, complete with an open access ethos. SOS Records, at welovefreemusic.com, currently offers content from a limited group of artists. Early names include Naomi Striemer, Mario Winans, and Idrissa Diop, though artists are being encouraged to upload their content to the destination.

Then, fans vote on which artists should ultimately be signed and recorded by SOS. SOS eventually plans to offer a fresh, free MP3 every day, and the broader model includes paid, physical product. Backing the concept is Steven Nowack, a former hedge fund manager.


An Alternative Approach to Marketing Rock Bands via Techdirt
The New York Times has an interesting profile of Fueled by Ramen, a record label that has managed to thrive at a time a lot of other labels are struggling.