music_news 91 posts

AllofMP3.com welcomes the decision of record labels to voluntarily dismiss their $1,65 trln lawsuit against the site.

On May 23 Sony BMG Music Entertainment, Warner Music Group Corp., Vivendi SA and EMI Group Plc. decided to drop their copyright case filed in federal court in Manhattan (Bloomberg.com).

Some time ago the AllofMP3.com services had to be suspended due to litigation.

There’ll be more updates on the development of the situation.

Maddona announced that she ends her 25 year long relationship with the Warner recording company. Instead she intends to sign a 10 year contract with Live Nation Inc. a concert touring company. This new $120m deal will include touring, merchandise and releasing of 3 new albums.

"The paradigm in the music business has shifted and as an artist and a businesswoman, I have to move with that shift," Madonna said in a statement. "For the first time in my career, the way that my music can reach fans is unlimited ... Who knows how my albums will be distributed in the future?"

However, Warner will publish one more album by Madonna within a year and will retain all the recording and publishing rights to such hits as Like a Virgin, Vogue and Music. The rights to Material Girl though are under question.


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The Pirate Bay has grabbed the IFPI.com domen and is going to turn into a web-site of some International Federation of Pirate Interests. According to Brokep, one of the administrators of the Pirate Bay this will be the new international federation they’re starting “in order to get the word of piracy spread.”

Another IFPI (the International Federation of Phonographic Industries) still spread quite another word from www.ifpi.org and admits that www.ifpi.com belonged to them when they missed the renewal of registration and it slipped into the hands of unknown person.

The Phonographic Industries IFPI plans to complain and return the domen. However, the Pirate Bay got hold of IFPI.com in an absolutely legal way.“It’s not a hack, someone just gave us the domain name. We have no idea how they got it, but it’s ours and we’re keeping it.”

Read more:
Anti-Piracy Organization Domain IFPI.com Now Owned by The Pirate Bay, Torrentfreak.com

Radiohead released their new album In rainbows on-line for free with no labels involved.
The album is available for download from their site Radiohead.com. When you are supposed to make a payment for the download this line comes up "it’s up to you". Each fan can pay anything, even 0. However, buying the actual CD will cost you 40 pounds.

No labels are involved in the release."Radiohead's contract with EMI/Capitol expired after its last record, Hail to the Thief, was released in 2003; shortly before the band started writing new songs, singer Thom Yorke told TIME, "I like the people at our record company, but the time is at hand when you have to ask why anyone needs one. And, yes, it probably would give us some perverse pleasure to say 'F___ you' to this decaying business model."(

Stephen J. Dubner co-author of the Freakonomics book expresses his view as well as asks several experts about the present and future of the music industry.

Koleman Strumpf, professor of business economics at the University of Kansas Business School whose papers include "The Effect of File Sharing on Record Sales" on the present downturn: "there is surprisingly little evidence to support the claim that file sharing has significantly hurt record sales." Instead several other factors are suggested:
- "industry has failed to find genres that capture the interests of consumers;
- much of the reduction in sales is the direct result of industry cost-cutting. The major record labels have cut large numbers of staff and severed ties with many artists;
- recorded music has had trouble competing against other products that vie for consumers’ entertainment spending;
- he rise of paid digital downloads made popular by iTunes".

Fredric Dannen, author of Hit... read more

Last week there was news that Virgin Megastores might be opened in Russia. A Russian gambling holding Ritzio was negotiating with the company.

This Monday Virgin announced that the UK and Irland Virgin Megastores business was sold to a management buy-out team. The chain will undergo rebranding and the stores will be renamed “Zavvi”.

Read more:
Ritzio plays Virgin, Kommersant (In Russian)
Ritzio Owners Plan Virgin Megastores, The Moscow Times
Branson sells Virgin Megastores, The Guardian

The compact disc has turned 25 on August 17. The technology was jointly developed by Philips and Sony and the first CD was manufactured in Germany on August 17, 1982. Since then 200 billion CD have been sold worldwide.

In the beginning it was mostly classical music sold on CDs as manufacturers believed that classical music lovers were more likely to pay the high price for the CDs and CD players. The first pop CD on sale was ABBA’s The Visitors.

By 1988 CDs outsold records. Now some reports predict that this format in turn will be overtaken by digital distribution on global scale by 2011.

Read more:
Compact disc hits 25th birthday, BBC News
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The Universal Music Group made an announcement that it would offer a wide selection of music on-line without DRM protection.

It will be an experiment within a set timeframe (from August till January). The services selling the songs will include Google, Wal-Mart, Best Buy Digital Music Store, Rhapsody, Amazon.com and others but not the iTunes store. Also DRM-free music will be available through the artists’ web-sites.

The music will not have DRM but it will have watermarks which help to identify where tracks come from in case they come up in P2P networks.

Read more:
Chart-topping hits mark open-MP3 test by Universal Music Group, UMG press-release
Google's Role And Other Details Of Universal DRM Free... read more

A survey by Entertainment Media Research revealed that illegal downloading has reached its highest level ever and the number of people concerned about being prosecuted is falling. (The Guardian).

Out of 1700 people who participated in the survey 43% claimed they’re illegally downloading tracks (last year it was 36%). Only 33% are concerned about the risk of prosecution compared to 42% in 2006.

The report suggests that price is the key factor for such situation and that the industry has to consider differential pricing.

The music industry association BPI replied that: “future success was not just down to new business models but also better protection against piracy, particularly from internet service providers.” "Industry cannot do it alone," said a spokesman. "ISPs as gatekeepers, and government as legislators, must also play an active role in tackling copyright theft if the UK is to thrive as a knowledge... read more

According to the annual Global Entertainment and Media Outlook report issued by PricewaterhouseCoopers last week digital distribution of music will overtake physical sales on global scale by 2011. In Asia Pacific this will happen as soon as 2009, than in U.S. in 2010.

According to the report global spending on music will reach $40.4 billion by 2011 (that’s 12% up from $36.1 billion spent in 2006).

Spending in the U.S. will continue to fall till 2009, but will start to recover that year reaching $11.3 billion in 2011 (However, still less than $11.5 billion spent in 2006).

Music to mobiles and Internet purchases will grow more than 3 times to $6.56 billion in 2011. Conversely, market for CDs will half from last year's $9.65 to $4.5 billion by 2011.
”Album downloads, in the U.S. in 2011, will hit 135 million units while 2 billion single tracks will be purchased on the Internet that year, the report noted. That's a 37.9% increase for albums and a 32.8% increase for singles from 2006.” (Variety.com)

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DRM and its shortcomings analyzed in an article in Forbes.

The original purpose of the DRM technology was to “to convert the digital ecosystem into a legitimate marketplace, which simultaneously offers security and safeguards for owners of content, as well as appeal and flexibility for consumers.” However, DRM has failed in certain ways:

--“DRM is unable to protect content fully. The scale of file sharing in "dark nets" continues to eclipse sales of protected music and video content. Meanwhile, the "walled gardens" constructed by DRM remain permeable to hacking.

--It also serves to frustrate fair uses of content. As such, it arguably provides an incentive for consumers to search for free and open content elsewhere.

--DRM has fragmented the marketplace into "autistic" ecologies of software and hardware, which are unable to speak to one another. Debates surrounding the interoperability of digital music are illustrative.

--DRM has functioned as a mechanism of market control. By controlling... read more

This week the Warner Music Group, the forth-largest label has started to sell digital downloads without DRM protection.

The company opted not to work with the iTunes store for this project, although it’s been announced that downloads are iPod compatible and are priced similarly as at iTunes: around 99 cents per song.

To prevent downloads unprotected by DRM being leaked to the file sharing networks, files are downloaded straight to portable MP3 players without being stored on a PC.

The Warner Music Group is the second label sell DRM free downloads after EMI did the same last month.


Read more:
Lala Launches Free iPod Music Service, Reuters
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The European Commission has approved the acquisition of BMG music publishing business by Universal.

This deal got the approval after Universal proposed a plan to prevent excess market power consolidation. The EU Commissioner’s concern was that the copyright for using music online (for example, sell in a Internet music store) would be held by an entity close to a monopoly. In some countries the new venture would own publishing rights to more than a half of chart hits. While traditional publishing rights are still administered via independent fee collecting societies, copyright for digital downloads is managed by chosen entities controlled by the labels. If so the online stores could face unfair prices after the Universal-BMG merger.

To prevent this Universal has promised to sell off some part of its catalogue. So it doesn’t become too big. Such measure had satisfied the European Commission and won the approval for the deal. So now the No. 3 and No. 4 music catalogues can be merged into one.


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IFPI and top music executives have raised the issue of the music industry crisis in Germany during a meeting with the German Chancellor Angela Merkel last week.

Since 2000 the German music market has shrunk 50%. According to IFPI’s press release the rescue measures proposed to the Chancellor include:
- Introduce an obligation on ISPs to terminate service to subscribers abusing the service to make infringing content available;
- Permit CD burning only from own legally purchased original and prohibiting copying by third parties;
- Improve the German draft law implementing the EU Enforcement Directive to ensure proper tools to fight piracy;
- Ensure that the EU plays an active role in the WTO case against China on Intellectual Property enforcement and market access
- Urge the Czech government to clean up the huge pirate markets on the Czech-German border;
- Support an improvement in... read more

Are audio cassettes still around? Actually there’s still 500 million of them in UK only and 100'000 were sold in 2006.

An article by BBC asks the question what people can do with cassettes nowadays. Apart form listening to (if you still have the right player) BBC proposes several options from converting them to MP3 and recycling to making bird scaring installations.

The readers continue the list of options, proposing at times quite exotic uses such as turning the tape into "tell-tales" which are attached to the sales in sailing races to see the wind direction.


Read more:
10 uses for audio cassettes, BBC News

Warner reported its second quarter financial results this week. The label had a “net loss of $27 million, or 19 cents a share, compared with a loss of $7 million, or 5 cents a share, a year earlier,» according to Reuters.

This news follows the announcement that Warner Music Group was about to lay off 400 of its staff.

Among the reasons for the revenue decline the label marks out piracy, “changing consumption patterns in the shift from physical sales to new forms of digital music".

Nevertheless, Warner expects the situation to improve when the company implements its restructuring plan and boosts digital distribution of its music. “…we'll start to see benefits of that over a couple quarters after that, so certainly early fiscal 2008,” said their statement.


Read more:
Warner Music posts wider loss, Reuters

Warner Music Group is planning to lay off 400 employees as part of a restructuring campaign and “place further emphasis on digital strategy and distribution, sources say” (The Billboard).

In January earlier this year EMI made quite a similar move and announced that it would lay off 900 of its staff (along with a few top executives). This was a sign that the label was not doing very well as later few attempts to sell its catalogue and the label itself followed. Finally, EMI ended up releasing its music in DRM-free format. The latest offer to buy the label for $6 billion was rumored to happen. (read more

Microsoft has hinted last week that it plans to start selling DRM-free music from EMI and others.

"We've been saying for a while that we are aware that consumers want to have unprotected content," said marketing director for the Microsoft MP3 player Jason Reindorp.

The company sees the EMI’s decision to offer unprotected music as an opportunity to gain a bigger market share as "It potentially makes the competition more on a device-to-device or service-to-service basis. It will force the various services to really innovate." Microsoft hasn’t yet given any exact dates when DRM-free tracks will be available from its store.

Read more:
Microsoft sees DRM-free music in Zune's future, CNET News

On April 02 EMI announced that its catalogue would be available for downloading without DRM. iTunes “ a true pioneer” will be the first on-line store to offer CD quality downloads without DRM which could be played on any device. According to EMI’s CEO this move reflects the current “consumer demand”. A track will cost about $1.29 in the highest quality. Also customers will be able to upgrade the files they already have downloaded to a DRM free mode for a mere $0.30.

According to the corporate press release announcing this historic decision “new premium downloads [will be offered] for retail on a global basis, making all of its digital repertoire available at a much higher sound quality than existing downloads and free of digital rights management (DRM) restrictions.” EMI believes “that offering consumers the opportunity to... read more

Patrick Faucher, CEO of Nimbit* gives his thoughts on the transition that music industry is undergoing (CNET News.com).

Starting from the times when the music business became a stagnant pond “mucked up with greed, laziness, contempt and excess” he proceeds to the changes delivered by the Internet. “The industry has become decentralized. Major labels no longer have the market muscle or control over the distribution channels as they once did. Technology and consumer choice have caused a shift from the traditional music business model of major labels throwing copious amounts of money behind a few big hits to that of a vast collection of individual artists creating pockets of more moderate success among passionate fan bases.”

Because of the new technologies and marketing opportunities both the artists and the labels cannot continue to do business the old way.

“There... read more