Wharton Introduces Premium Reports

Wharton: The Knowledge@Wharton Newsletter is a free service of the Wharton School of the University of Pennsylvania that's always been chock full of useful information, but it's now also offering premium reports in addition to the usual free content - hoping the additional value will justify the modest price instituted to help cover costs....So, if you're interested, the latest report - Napster and After: Where the Online Music Industry Is Headed - traces the online music revolution from its beginning up through such innovations as the Grouper online network, podcasting and Dual Discs. The cost is only $10.00 and seems like a real bargain...

Music Industry Must Look In A Mirror

Forbes:  After the dust has somewhat settled a bit, DiCarlo's perspective refreshingly points out that the Grokster ruling fails to address the underlying issue of whether P2P services directly/indirectly impact music industry revenues. "The music industry is looking everywhere but in the mirror for its problems and the possible solutions but it must wake up to the fact that we are living in the digital age and align their business accordingly...That means that the old rules don't apply...The question is whether the music industry is creative and determined enough to implement these profound changes."

AOL Licenses Live 8 Concert Webcasts in China

Reuters: AOL is surely reaping in a good amount of money re-licensing Live 8 rights to othe rmedia companies. It ha snow licensed out China rights to Tencent Holdings, which plans to Webcast the concerts to an estimated 20 million viewers on its Website, for free a few days after the actual concerts take place around the world on July 2.
The Webcasts will be translated into Chinese, AOL said. Tencent IM is the most widely used IM in China...

HMV To Launch Music Download Service in Sept

GameIndustryBiz: And yes, we're quivering with excitement about the 500th me-too download site...The HMV Digital service, which is being set up in co-operation with Microsoft, will initially only offer Windows Media Audio files for download.
HMV has earmarked 10 million pounds in capital expenditure and marketing for the venture. Part of this investment will go towards funding a new piece of 'jukebox' software being developed by Microsoft.

Sony To Relaunch Connect Music Service; Will Work Cohesively

Cohesive is the keyword these days at the new, new Sony. It will relaunch its failed online music service, Sony Connect. Both the development of the Connect software and the Walkman hardware will be under the same management and the company will be focussing all its digital music efforts in one direction.
No more details yet, but Sony has indicated video downloads in the past...
WSJ: WSJ has the story on the Sony Connect disaster..fascinating read about the dysfunctional family.
Sony is pushing hard to roll out a fully revamped version of the Connect service, complete with jukebox software, a retooled Walkman and a video-download service in the fall. Connect is also working with the videogame and cellphone groups, in a stab at true cross-company cooperation. 
I would think they would integrate it with Sony PSP and not try and flog the dead Walkman horse...

Apple Shares Fall

Reuters: Apple shares fell sharply yesterday after SigmaTel cut its outlook - citing lower-than-expected sales and price cuts...However, I'm still not too clear why declining flash memory chips would make Wallstreet so nervous and lead to "lower customer orders", but Apple shares were down $1.09, or 2.9 percent, to $36.22 on Nasdaq in late afternoon trade after falling as low as $36.14...The drop probably had more to do with mobile phone and cellular service providers introducing phones (i.e. Verizon's announcement and Cingular's) that also work as music players...

EU-wide Online Music Licensing On The Horizon

Yahoo: Apparently, there are talks of a European Union initiative currently in the works (due in early July) to foster EU-wide licensing of online music use and royalty collection in the 25 member states.  This is obviously a monumental task, but will foster more commerce in the long run because currently, "anyone who wants to open an online store for music has to run it country by country by approaching the royalty collector in each member state. This complexity can put people off launching new online services because of the bureaucratic maze they must navigate."

Basically, a one-stop shop to buy a single license valid across the entire EU is a brilliant idea and one that hopefully will come to fruition. "Doing nothing is not an option, according to the study, as more and more people are buying and playing music in a digital format that makes national boundaries irrelevant...But the management of royalties collection has remained essentially national and can discourage businesses from introducing new services."

Coldplay Still On Top

Yahoo: British rock band Coldplay topped the U.S. pop album charts for a third consecutive week Wednesday, while overall sales fell despite the addition of four new titles to the top 10...Overall U.S. album sales were down 19% from the previous week at 10.2 million units, and down 19% from the same week last year. 2005 sales are lower than 2004 by 7.7% at 272 million units.

Creating A Pre-Release Online Buzz Through Podcasting

Mi2N: For many independent artists, there are several exciting alternative tools for expanding their audiences outside of FM radio, MTV and the major label system. Detroit Rock Band "The Transfer" has recently been using one to promote their new independent release Romantics & Addicts. The first single "Down With Everything" is now getting hundreds of plays on podcast and internet radio stations alike after being added to 25 podcast stations this week...Thanks to the digital revolution and Podcasting, the article points out that techno savvy bands have new opportunities to market their music even before the CD is finished being mixed or manufactured...In this case, the band started contacting podcast stations before the product was even ready...IMHO that's a smart move that I'm sure will become a required release strategy as the new medium grows steadily to reach critical mass...

"We couldn't get any airplay from terrestrial stations without a finished record or without using costly and timely promotional machines already in place, but we could send MP3s to internet stations and podcasters and they loved the song...We've had really credible results and personal response from the podcasters and the listeners equally."

New Trends In The Music Industry

kensei-news: Here's an interesting report about the decline of record sales revenues that many would like to blame on P2P. Are the RIAA's lawsuits really working to discourage file sharing? The truth is that only a very small percentage of the total number of copyright violators can be sued, because there are simply too many users (over 8 million simultaneous) and the process is too costly. So the small probability of being sued inhibits the effectiveness of lawsuits against file sharers. On the whole, the report makes a lot of sense so I've taken the liberty of quoting and paraphrasing a few of the key points below...

"A complete protection of the property rights of music is only possible at prohibitive costs. Hence, it is unlikely, that the worldwide record sales volumes of 1995 and 1996 can be fully recovered just by legal efforts, technological copy protection, moral appeals and licit supply of downloadable music."

--The development of different strategies appears warranted and alternate strategies should be pursued such as diversification. For example, expansion into the merchandise and concert business will help turn the music labels turned into music marketing companies... Lately, many labels have added merchandise production, concert promotion and artist management to their business, i.e. their buyers' scope has expanded.

--As the recorded music market has shrunk the merchandise and the concert segments have actually grown. The worldwide concert audience of US artists has grown US$ 32 Million to US$ 39 Million between the years 2001 and 2003 in spite of rising ticket prices. According to industry analysts, this growth is part of a positive trend in the concert industry.

--Unauthorized copies do not seem to be significantly correlated with licensing revenues...Intuition would suggest that the increased distribution and consumption of recorded music of a specific musician, no matter if authorized or unauthorized, augments the popularity of that specific artist. Increased popularity leads to increased sales of the artist's licensed goods.

--Concert revenues do not seem to be negatively, but rather positively correlated to unauthorized copying of recorded music.

--The concert and merchandise industry is not significantly threatened by any kind of unauthorized copies.

--Interdependencies between the marketing activities of record companies, concert promoters and licensing agencies are a reason to organize all of them in the same company, since the necessary conveyance of knowledge between them causes transaction costs.

"With the transformation of record companies into music marketing companies and sometimes their integration into media corporations (i.e., Bertelsmann Group), unauthorized copies and the subsequent loss of record sales revenues is not a major issue anymore, since a major part of the revenues generated by one artist often comes from different sources and growing markets, unaffected by unauthorized copies."