MusicNet Promotes Two Vice Presidents

Press Release: MusicNet announced yesterday that it has promoted Paul Greenberg to the position of Senior Vice President of Business Development and Partner Relations, and John Jones to the position of Senior Vice President of Programming, Artist and Label Relations.  Both executives, who have been with the Company for several years and previously held the title of Vice President, will report directly to Alan McGlade, MusicNet’s President and CEO...According to McGlade, "Building a global distribution network of such world renowned brands as AOL, Yahoo!, Virgin and HMV and an unrivaled catalog of more than 1.5 million tracks was something that we aspired to do and have achieved in a relatively short period of time due to their expertise, dedication and passion for building a digital music marketplace."

HP to Offer Branded iPod Shuffle

BetaNews: Hewlett-Packard has recently announced that it will sell its own branded iPod Shuffle. Just like the regular Apple version, the HP Shuffle is compact, lightweight and about the size of a pack of gum. The petite MP3 player comes in signature white and has an attached lanyard so it can be worn around the neck...The unit is available in North America via the company's online store as well as through RadioShack, Sears and Wal-Mart. Pricing will be identical to Apple's, with the 512MB Shuffle retailing for $99 USD holding approximately 120 songs and the 1GB for $129 USD...
itreview: "HP's Shuffle works seamlessly with the AutoFill feature of iTunes, which automatically selects songs from a user's music library to fill up the shuffle with just one click. Users can recharge the device and transfer music from their PC at the same time by plugging the HP directly into the computer's USB port." In addition, the player also works as a portable USB flash drive so you can back up data...

Virgin Launches Greek Digital Music Service

Press Release: Virgin Megastores Hellas and Loudeye announced this week the launch of a new Virgin Greece digital music service powered by Loudeye offering a-la-carte downloads...

The service operates on an interesting 'pay-as-you-go' model and will also be supported by a Pre-Paid Card system - allowing customers to purchase music - not just by credit card - but with prepaid cards too, available in amounts of 5, 15, or 30 Euros.

Richard Branson, Chairman of the Virgin Group, said, "Music fans are driving the demand for digital music and now the technology is there, the industry is behind it and with the introduction of our service, prices are affordable for all."

Sonos Expands Into Europe

ecoustics: Yesterday, Sonos announced that the company has begun shipping the award-winning Sonos Digital Music System to European digital music lovers. Dealers in the UK and Holland will begin receiving units this week and retailers in other European countries will receive product in the coming months. 

Sonos takes all of the music on a PC, Mac or hard drive and allows the consumer to enjoy that music throughout the entire home - up to 32 rooms and the system is perfect for people tired of listening to music only on their computer or with headphones.

“The digital music wave is breaking across Europe as demonstrated by the Apple iPod® phenomenon,” said Ingvar Meijers, Director of Sales Europe and MEA, Sonos, Inc.  “Sonos is here to help European digital music lovers enjoy their growing collections all over their homes and control it all from the palm of their hands.”

MusicNet Partners With MusicGremlin

PressRelease: MusicNet announced today that it has entered into a partnership with MusicGremlin - the leading developer of direct-to-device music distribution technology and services. Under the deal, MusicGremlin hopes to provide consumers with an intuitive musical discovery experience combined with the most comprehensive digital music library of over 1.5 million tracks. MusicNet will power MusicGremlin’s music store and this relationship marks the first time that MusicNet is working with a partner focused on portable consumer devices...

The idea behind the technology is to basically eliminate the PC as the center of music enjoyment and to offer the first true mobile music subscription/download service. And the concept is "label-friendly" as anything can be loaded into the player, but only songs approved for sharing can get out. “We are pleased to expand our distribution network with such an innovative partner and play a role in MusicGremlin’s vision for changing the way that consumers will be able to discover and experience digital music on the go,” said Alan McGlade, CEO of MusicNet. MusicGremlin’s technology transforms MP3-style players into a “record store in your pocket.”

With MusicGremlin-enabled devices (1st generation devices expected to hit the streets in Q3-4 2005), customers can discover, manage and purchase digital music directly from their players—wirelessly and without a personal computer. MusicGremlin’s music store will rent music through a monthly subscription service and through 'a la carte' downloads offering permanent ownership. Compatible device owners will also be able to communicate with and even legally share music wirelessly with other users - creating a new mobile community of music enthusiasts that will no doubt become popular...helping record companies turn MP3 players into viral marketing tools by offering special deals, access to pre-release tracks and other interactive promotions to get consumers interested in buying more of their music.

MusicGremlin differentiates itself by combining portable device software and secure digital content distribution, which allows users to discover, purchase, manage, control and legally share their digital music collections directly from their digital audio players and its patent-pending technology allows these same devices to access the MusicGremlin Music Store and download tracks directly to MusicGremlin-compatible consumer electronics devices. Content owners will love it because it provides an end-to-end system, providing a secure and exciting new distribution channel and consumers will love not being tied down to a PC or laptop or worrying about the hassle of software installations and format incompatibilities...

--Related Story: I Tune, You Tune

News from Muze

About 2 weeks ago, Enterprise Partners Venture Capital acquired Muze, a privately held company based out of NYC and I recently had the chance to talk briefly with Paul Zullo, co-founder, President and CEO about the merger and the seismic shifts ocurring in the industry. (Zullo co-founded Muze in 1990 and manages the day-to-day operations as well as overseeing the company's current and future business strategy.)

Prior to our discussion, I was under the impression that the company was simply a meta-data powerhouse somewhat similar to Gracenote, but in reality it offers so much more than media recognition and its databases are the most comprehensive, accurate and up-to-date in the industry. For example, Muze has been publishing album credits for over a decade and it has people on staff to hand type in the information because believe it or not - there is no standard yet for submitting CD booklet info that consumers crave. (I might have missed his point, but why wouldn't PDF's or plain text work?) In 1987, the company started developing the Muze Music database, and since 1991 many of the world's top retailers (i.e., Best Buy, Yahoo!, Tower Records, Apple iTunes, Yahoo, AOL, Buy.com, J&R.com, FYE, Barnes & Noble, Virgin Music) have been relying on its content to help them sell more entertainment products.

In addition to its core database of millions of music, books, videos and games, Muze also offers comprehensive, thematic storefronts that provide retailers an inexpensive and simple way to offer a virtually limitless warehouse of music, books, videos and games - without increased inventory. With a choice between Music, Games, Film and Book databases, Zullo said that most clients actually license multiple databases, but when it comes to actually selling physical products the company's focus is to outsource and facilitate.

While Muze is the backbone of online commerce for major players in the entertainment retail business, Zullo said his company is not out of reach for smaller independent labels and in fact, treats them just like the larger ones. (Most recently Muze has partnered with Rounder Records Group to preview Tracy Bonham's  forthcoming CD, “blink the brightest” and staged an exclusive preview of Aimee Mann’s new album “The Forgotten Arm.”) He feels that full free pre-release previews such as these are working to drive demand of physical CD sales and digital downloads and that piracy of the live streams, while technically possible for some, will not be a huge problem for the artists or the company. In other words - the exposure is worth the risk...

One of the industry complaints that I shared with him was that many digital music services and software packages lack a comprehensive category list of the various musical genres for the consumer who is searching and for the content providers who encode the music.  If there could be some pseudo standard that was accepted, perhaps future search results could be even more accurate.  While he agreed the lists could be more inclusive, he also pointed out that there is just so much natural variance within some genres like "rock" that will never lend itself to being nicely packaged into multiple sub-categories.  True, but since music in general is organic and always evolving and we now have real time analytics via the internet - I still think better lists could easily be achieved and adopted to everyone's benefit.

Although Muze's core markets are in the US, UK ad Japan, Zullo said he wasn't in too much of a hurry to expand outward just yet as he wants to fully serve these marketplaces and improve the core markets.  However if and when that time comes, he indicated that translating the company's massive databases into other languages was not really a hinderance for future growth...

NuTech Digital Announces Distribution Agreement With WEA

TMCnet: Earlier this week NuTech Digital announced an exclusive distribution agreement with WEA Corporation, Warner Music Group's U.S. sales and retail marketing company. WEA will distribute NuTech Digital's previously unreleased audio CD and music DVD titles representing classical, urban and R&B genres. Commenting on the agreement, NuTech's CEO Lee Kasper stated, "This agreement with WEA allows for further market penetration of certain of our products, through an industry leader, thereby giving opportunity to increase our revenues, with a simultaneous reduction in cost to our operations, which should help our overall profit margins in our bottom line. It will also allow us to focus more acutely in the area of our main business goal, and that is production of High Definition Concert DVD's."

MusicNet Appoints New Director

Press Release: MusicNet announced yesterday that it has appointed Blair Schooff to the position of Director of Partner and Label Relations. Schooff joins MusicNet from AOL Music UK, where he held the position of executive director and was instrumental in launching AOL Radio and Sessions. Prior to the stint at AOL, Schooff was head of business development, new media for BMG Europe, where he was responsible for online and mobile licensing, clearing BMG catalogue for digital use, and helping create new artist contracts that addressed digital rights...

Warner Music Group's Share Price Disappointing On First Day of Trading

Yahoo:  Warner Music Group (trading under the symbol WMG) hit a sour note with investors yesterday on the first day of trading on the New York Stock Exchange. The IPO for 32.6 million shares were priced Tuesday night at $17 a share after it became clear the market felt the higher price was not justified, which was well below the low end of its expected range of $22 a share. Many feel that the market is just overreacting amidst concerns about the real impact that online music will have on the future of the recorded music business...Shares initially fell to $15.75 but ended at $16.40, making the company's market capitalization $2.35 billion, compared with the $2.6 billion Edgar Bronfman Jr. and private equity investors paid for the company nearly a year ago. The timing of the highly publicized dispute with rap-metal band Linkin Park probably didn't help the situation as the total amount raised in the IPO yesterday was $554.2 million (which was about $100 million less than what was expected)...

Fulcrum Global Partners analyst Richard Greenfield said, "When the vast majority of your sales are physical CD sales and the market is moving away from physical sales, your revenue model and how you alter your cost structure to adapt to that new revenue model are unknown." Year-to-date U.S. music sales fell 7.6 percent for the week ending May 8 from a year ago, according to Nielsen Soundscan, although Warner Music is outpacing the industry, falling only 2.6 percent in that time frame.

Related:
--Warner Music Stock Falls in 1st Trading Day

Independent Online Distribution Alliance Hits Fortune Breakout List

Fortune Magazine: Fortune Magazine has listed IODA (Independent Online Distribution Alliance) on its list of 25 breakout companies for 2005.

It's easy now to see why IODA is thriving. Unlike a traditional record store, digital music services essentially have infinite shelf space, and their customers love to explore the weirder corners of their libraries. Rhapsody and Napster, which offer subscription services, say that less than 50% of the songs that customers groove to each month come from major-label catalogs. When a big-name artist like Eminem puts out a record, one of its cuts will quickly become the services' most downloaded song, but that will still account for just a tiny fraction of what subscribers are actually listening to.