snapshot 7/2/08

BurnLounge Promoter Settles FTC Complaint
A promoter of a digital music service accused by the U.S. Federal Trade Commission of running an illegal pyramid scheme has settled the agency's complaints and will pay a fine of US$20,000, the FTC announced Tuesday. The FTC announcement comes a year after BurnLounge said it had reached an agreement with the agency to stop the "network marketing" portion of its business that was targeted by the FTC. The FTC's settlement announced Tuesday is with Scott Elliott of Forney, Texas, one of four individuals who was named in the FTC's June 2007 complaint against BurnLounge.


Digital Won’t Halt Music Downfall, Radiohead Go Free Again
The growing importance of online and mobile won’t stop music spending’s decline over the next few years, according to an eMarketer survey of published forecasts. The research aggregator says online/mobile’s share of worldwide music spending will grow from just 15.4 percent last year to 25.5 percent in 2008, 39.4 percent in 2009 and 48.5 percent in 2010, before digital becomes the dominant medium on 56.6 percent in 2011. Still, overall spending will fall from $29.2 million to $26.2 million over that same period.


Breaking: RealNetworks Acquires Listen.com
RealNetworks has acquired the critically-acclaimed online music service Listen.com (with its Rhapsody music service) in a cash and stock transaction valued at approximately $36 million. The acquisition follows RealNetworks’ strategic investment in Listen.com announced in February. Following the close of the acquisition in Q2 or Q3 of this year, RealNetworks expects Listen.com to incur operating losses of approximately one million to two million dollars per quarter in 2003, and decreasing thereafter.

As part of the agreement, Listen.com’s management team will be joining RealNetworks. CEO Sean Ryan will continue to lead the Listen.com team as VP of music services as part of the RealOne division. Rob Reid, founder of Listen.com, will join RealNetworks as VP of strategic development. Listen.com will remain in San Francisco and will continue to operate music services for its customers and distribution partners.

The key phrase here is “distribution partners”: in a short time, Listen.com has gained some big ground, both in terms of the number of paying subscribers as well as critical acclaim. It was the first music service to have streaming/downloadable music from all the five major labels. For Real, that means the ability to tap into those consumers and perhaps upsell its own services, and potential partnerships with Listen.com’s network of more than 15 companies, including Time Warner Cable’s Road Runner high-speed ISP, Charter Communications, Verizon Online, Sprint, Cablevision Systems Corporation’s Optimum Online, Gateway, Lycos, RCN Corporation, and Sony’s Musiclub.


For music sites, album release partnerships are a newish PR strategy
The likes of iTunes, iLike, and Imeem might be making troubled record labels' lives a bit more complicated. But on a brighter note for the music industry, they've also created digital music's ultimate publicity stunt.

But these "digital release" announcements, where an artist that already has a decent fan base teams up with a digital music service, are growing more and more popular. R.E.M. debuted its most recent album, Accelerate, as an ad-supported stream on iLike in February; and in May, Imeem debuted Anywhere I Lay My Head, the album by actress Scarlett Johansson.


Netflix box' to carry more than just Netflix
Roku's vice president of consumer products, Tim Twerdahl, said Wednesday that, yes, more content partners are coming, but, no, he's not saying who just yet. That makes the $99 price tag look that much more attractive.