Music News Bulletin - 20/10/08

Bertelsmann today launches its new BMG Rights Management business, promising tailor-made services for songwriters and performers who want support in “the creation, marketing and licensing, collection and accounting, as well as advance financing of their music repertoire”
"The new organisation launches with a selection of European music catalogues that the company retained from the former Sony BMG portfolio. These include works from more than 200 artists and the company is planning to expand on this, initially with further European acts.
Bertelsmann says that its “core competency” will be “advising songwriters and performers in building their repertoire, supporting them with marketing and licensing services, and providing transparent coverage of all their rights management needs”. It will also provide financing during the rights-building process." [MusicWeek] [BillBoard]

The Mechanical-Copyright Protection Society (MCPS) has announced new rates and blanket licensing deals for UK independent production companies using library music
"The Independent Production Company (IPC) licence provides access to over 300,000 pieces of music from 150 music libraries covering all genres and styles.
The efficient ‘one-stop-shop’ system means only one application is required for all music use to be covered." [MusicWeek]

Online music piracy fell by 10% in 2008, according to new findings from Entertainment Media Research
"The company’s latest Digital Music Survey attributes the fall to the changing attitudes of internet service providers to piracy –earlier this year ISPs agreed to send letters to customers it suspects are sharing files under pressure from the BPI. he survey, which polls 1,500 UK consumers, also point to the popularity of music videos on YouTube as a further sign for optimism among the music industry." [MusicWeek]

U.K. Government Aims For ‘Digital Britain’
"The U.K. government is to develop a "Digital Britain" action plan in an effort to ensure the U.K. will be at the forefront of innovation and investment in the digital and communications industries. The report will be led by the first minister for communications, technology and broadcasting, Stephen Carter. The government says the sector is worth £52 billion ($89.9 billion) a year to the economy." [BillBoard]

Bush Signs Controversial Anti-Piracy Law
"U.S. President George W. Bush signed into law on Monday a controversial bill that would stiffen penalties for movie and music piracy at the federal level. The law creates an intellectual property czar who will report directly to the president on how to better protect copyrights both domestically and internationally. The Justice Department had argued that the creation of this position would undermine its authority." [BillBoard]

EU Commission: Enterprise and Industry Monitor - 29/09/08

Press factsheet : Broadband Performance Index - Monitoring high-speed Internet access in the EU 29/09/08
In a short space of time, high-speed internet (broadband) has become fundamental to modern economies. It has changed the way we access the internet and how we use it. The European broadband market is developing rapidly and some European countries are world leaders. As the market grows, there is a need to assess the EU's readiness to further the development of broadband access. The new Broadband Performance Index (BPI) benchmarks the overall performance of the Member States on a range of factors, which include speeds, rural coverage, affordability, innovation and other socioeconomic dimensions. [Europa]

EU Commission: Information and Society 26/09/08

Telecoms Reform: Parliament vote paves way for Single Telecoms Market in Europe 24/09/08
Today the European Parliament in its plenary session voted on the European Commission's proposals of November 2007 to reform the EU Telecom rules, in place since 2003. The EU Telecoms Reform aims to create a Single EU Telecoms Market with improved rights for consumers and businesses by reinforcing competition and investment and boosting the take-up of cross-border services and wireless high-speed broadband for all. [Europa]

Broadband: Commission consults on regulatory strategy to promote high-speed Next Generation Access networks in Europe
The European Commission has launched a public consultation on the regulatory principles to be applied by EU Member States to Next Generation Access broadband networks (NGA). NGA optical fibre-based networks enable bitrates several times higher than those currently available on traditional copper wire networks. NGAs are required to deliver high-definition content (such as high definition television) and interactive applications. The objective of a common regulatory framework for NGA is to foster a consistent treatment of operators in the EU and thereby ensure the necessary regulatory predictability to invest. The Commission is consulting on the basis of a draft Recommendation, addressed to the regulators in the 27 EU Member States and suggesting definitions for harmonized categories of regulated services, access conditions, rates of return and appropriate risk premiums. The public consultation will be open until 14th November 2008. The Commission will then finalise the Recommendation in the light of comments received and formally adopt it in 2009. [Europa]

Realising the potential of Europe's single market in telecoms for consumers and business
Viviane Reding: Member of the European Commission responsible for Information Society and Media
CER breakfast seminar, Brussels, 16 September 2008 [Europa]

Commission consults on how to put Europe into the lead of the transition to Web 3.0
Europe could take the lead in the next generation of the Internet. The European Commission today outlined the main steps that Europe has to take to respond to the next wave of the Information Revolution that will intensify in the coming years due to trends such as social networking, the decisive shift to on-line business services, nomadic services based on GPS and mobile TV and the growth of smart tags. The report shows that Europe is well placed to exploit these trends because of its policies to support open and pro-competitive telecom networks as well as privacy and security. A public consultation has been launched today by the Commission on the policy and private sector responses to these opportunities. The Commission report also unveils a new Broadband Performance Index (BPI) that compares national performance on key measures such as broadband speed, price, competition and coverage. Sweden and the Netherlands top this European broadband league, which complements the more traditional broadband penetration index used so far by telecoms regulators. [Europa]

Social Networking Sites: Commissioner Reding stresses their economic and societal importance for Europe 26/09/08
Viviane Reding, Commissioner for Information Society and Media, will today give a speech on Social Networking. It will be the first public statement of the Commissioner on this subject. The speech will be given at today's Safer Internet Forum that takes place in Luxembourg and focuses on Safer Internet and children this year. Commissioner Reding will underline the importance of self-regulation and will also meet representatives of the social networking companies Myspace and Dailymotion. [Europa]

Putting Europe high on the global map of science and technology: Commission advocates new international strategy
Today, the European Commission called on governments to jointly develop a strategy for international cooperation in science and technology. It proposed a strategic framework for jointly strengthening science and technology cooperation with non-EU countries, notably in the field of Information and Communication Technologies where Europe is a strong exporter. The Commission's objective is to contribute to sustainable development worldwide while at the same time improving Europe’s competitiveness in science and technology. The Commission invites Member States to define together, rather than in isolation, priority research and technology areas where a coherent EU effort would have more impact. [Europa]

Social Networking in Europe: success and challenges
Viviane Reding, Member of the European Commission responsible for Information Society and Media
Safer Internet Forum, Luxembourg, 26 September 2008 [Europa]

Developments In The Internet 2007 (Notes)

• The Internet is rapidly maturing but there still remain differing strategies for both new and more established websites. However, the major developments point towards:

One Way Information Websites

• Point of information or service websites, intend to be first and only point of call or the main suppliers of content or exchange.
• In the past there have been races to be seen as the largest and most dominant in their category, such as in books (e.g. Amazon); MP3s (e.g. iTunes); electrical goods (e.g. Empire Direct) or news (e.g. Guardian Unlimited). These tend to be examples of one way portal where people enter the website to navigate to the data they want and read it, purchase it, download it or not.

Web 2.0: The Next Generation In Two Way Information Points

• The main races for market domination tend to be to update contemporary cultural outlets, in reference (e.g. Wikipedia) discussion (e.g. Blog); socialising and bands (e.g. Myspace); photography (e.g. Flikr); television (e.g. YouTube); music videos (Cmons) and animation (e.g. Newgrounds). These channels intend to replace existing media outlets, as can be seen be Newscorps purchasing of Myspace, MTV’s creation of Cmons and television channels’interest highlight the importance of these new mediums.
• These leaps are made possible as a result of new and more popular methods of sharing information, such as Wikis, Blogs and Podcasts. Often they are merely facilitating processes which have been possible for a long time. However, the need for multitasking, peoples time pressures and the benefits of standardisation of content within these sites has increased users appetites for Web 2.0 websites.
• These portals are investing heavily to encourage either free or subsidized usage as these companies recognise that if they become valued websites with customers constantly returning then they will have strong marketing potential. Like conventional newspapers and television services they intend for their main revenue streams to be from advertising.
• More established websites such as Amazon now have a significant market share, enabling them to hold a very large amount of data on different users and their preferences. This is now enabling these companies to hold greater influence beyond the mere distributor level. For example, Amazon has recently invested in a film project and is assisting with marketing and positioning of its product. If successful we should expect a raft of Internet companies expanding beyond their current influence.
• "It makes available to them computing capabilities that have been out of reach so far," he says. As such services are designed for home users, this makes them easy to adopt, and they work through web browsers or other freely downloadable software.
• Web 2.0 services allow collaboration, both between staff and with the outside world: "The idea is to reduce the amount of control over the information you are creating and encourage participation and contributions that will help you plan, design, build, test or distribute," says Drakos.”[1]
• “online services to create "mash-ups" of multiple data sources, although this may require some technical nous. Nikos Drakos says MashMap is a good example: it combines Google Maps with US cinema listings from Fandango.com, to display film times on a street map.”[2]

Search Engines

• Search engines initially existed as gateways to other content hand, usually edited by the companies directly, such as Yahoo. Newer technology such as meta tagging and a greater application of algorithms enabled more sophisticated automated systems, notably Google to emerge.
• Taking advantage of the ability to find users searches quickly and more accurately has given Google a significant foothold in the internet, with the term ‘Google it’ entering common language.

One Stop Shops

• “Through a single Internet site, users will be able to conduct various transactions, regardless of whether the actual functions are the responsibility of other ministries, local government, law enforcement or even the private sector (such as car makers, dealers, financial institutions or insurance companies). With this extensive collaboration in place, the piloted system is targeted to go live in December 2005.” (ACC P41)
• “The flagship electronic service Directgov (www.directgov.gov.uk) should help boost adoption of services significantly, by aggregating users and services in a single location with a user interface designed around the customer’s needs. Current examples of cross-government topics on Directgov (with more in the pipeline) include money, caring for someone, learning, employment, home and community, health and well-being, travel and transport, and Britons living abroad. Directgov also has links to the home pages of all county, district and unitary authorities in the United Kingdom within a dedicated area, and most of the local authorities are linked back. Directgov on digital TV gives access to local authority sites as well.” (ACC P95)
• “The eGU successfully launched Directgov in 2004 and it is being well received by customers. Eighty percent of users state that Directgov gives convenient access to public services and information, and nearly twice as many respondents rated Directgov as “good” overall, compared to its predecessor, UK online. Even without any significant marketing yet, Directgov is regularly receiving 150,000 unique users per week. Plans to promote the product should increase eGovernment adoption further by aggregating more users and services in a single location.” (ACC P95)
• “It soon became clear that the "network effects" of the internet led to a greater, rather than a lesser degree of concentration online, despite the openness of the internet's formal structure.

Blurring The Lines Between Websites

• This advantage has been built up upon using advertising techniques such as promoting websites who pay to be promoted when certain words and phrases are included in searches or webs content. This method has made Google the largest advertiser on the Internet (then Yahoo and Microsoft).
• Google is confident that although its first mover advantage with search based technology will decline that its creep into other areas of the Internet with its other products will counteract this.
• There is heavy competition between the major three search engines to form partnerships with other major websites, particularly the larger social websites such as MySpace and YouTube. An integrated platform that combines both qualities seamlessly should be the most profitable vehicles, enabling low cost but high quality content and high levels of personal choice for users in return for greater information and targeted advertising.

Demand From Consumers

• “Citizens today are more informed and have higher expectations than ever before. Many governments are responding to these pressures by investing in improving how they interact with citizens, businesses and other government agencies. They are adopting and implementing many of the services delivery and customer relationship management capabilities commonly found in leading-edge customer service organisations…. Citizens’ willingness to embrace a new generation of services outpaces governments’ ability to deliver them. Citizens want more from government, in terms of cross-governmental collaboration and outreach. In fact, most are willing to make available a wide range of personal data.” (Accenture 2005)

Filling A Niche

• There is a lot of movement at the moment finding a niche covering contemporary culture on the Internet as sites such as MySpace, YouTube and Flikr are starting to reach critical market share points where it will become increasingly difficult to compete on a large scale, as these more established platforms will become more difficult to budge with better services (and more costly).
• Therefore there is the choice between taking a highly niche role with less profit or updating an existing model that hasn’t already been developed enough on the Internet.
• Preferably this product or service should be complementary with existing websites but also offer something not currently offered sufficiently.

Advertising

Britain leads the shift to internet advertising

• “The internet has had a greater impact on advertising in Britain than elsewhere, according to Sir Martin Sorrell, chief executive of WPP, the world's second largest advertising and marketing company. WPP's media planning and buying arm, GroupM, recently forecast that by November the internet would account for 14% of advertising spending in Britain, overtaking the share for national newspapers.”[3]

Gates to open online ad conference

· “After a slow start and the setback of the dotcom collapse on 2000, internet advertising has grown explosively as a combination of cheaper technology, growing broadband penetration and better content drives consumers and advertisers online.

· Last year it overtook radio advertising in terms of overall share, reaching a level of nearly 4% in the UK - the IAB says it is on track to overtake the market size of outdoor by the end of 2007.

· Last year spending on ad searches, pop-ups and other forms of online advertising rocketed 62% year-on-year to hit £653.3m in 2004, from £407.8m in 2003.”[4]

Internet ad spending surges again

• Advertising spend by US companies on the internet hit $3bn (£1.75bn) in the three months to September - the highest quarterly figure since records began.
• Internet advertising revenues hit a record $3.1bn in the third quarter of 2005, nearly 35% up on the $2.3bn spent by advertisers in the same period last year, according to the latest report from the Interactive Advertising Bureau.
• The figures, compiled by PricewaterhouseCoopers, show that US online ad spending has almost doubled in the last two years from just $1.75bn in the third quarter of 2003, as advertisers move more of their budgets online.”[5]
• "The continued strength in internet advertising reflects in part the medium's unique ability to collapse the business cycle for advertising, marketing and branding, making it more attractive for traditional advertisers. The high percentage growth in revenues is more significant given the larger revenue base,"[6]
• “"[Internet advertising] continues to prove itself as the most cost-effective medium in driving sales and changing consumer attitudes, providing a powerful competitive edge for these marketers."
• Though the IAB only breaks out what sort of internet advertising is growing the fastest, search-based ads - where companies bid to have their ads placed against particular search results - have been the quickest-growing element of online advertising for some time.”[7]

Online advertisers change tactics

• “Overlays cannot be blocked in the same way, because they are actually built in to the web page you are looking at. It is just a case of finding the close button, if there is one.”[8]

Search Advertising:

• “But the largest area of online advertising does not involve fancy graphics or comic ideas - it is simply a case of paying a search engine to associate your product with search keywords.
• "It's the dirty secret of online advertising," said Mr Phillips. "This is the stuff that really works, and the reason it works is because if you search for something on Yahoo! or Google then you actively want it, and these are the people you want to be putting your advertising in front of."
• "Unfortunately, writing a cheque to a search engine is not terribly creative; this is not why advertising agencies have creative departments.
• "So it does not really get talked about a great deal, but it really works and you can measure it works as well."
• However, search advertising is becoming an overcrowded area, and ad agencies are looking for ways to get their clients turning up in the natural search results.
• "Marketers can pay to be in the right hand side of the Google page. That's paid advertising, also known as pay-for-click," said Fadi Shuman of Pod1 Media Solutions, a web development company.
• "However, the ideal place to be is in the centre of the search results, and the way to achieve that is through search engine optimisation. To optimise your site so it's as highly visible to search engines as possible requires a number of different skills - editing content, adding links, etc."”[9]

Social marketing

• Search advertising is where most online ad money is spent, something which has helped Google negotiate a $900m (£470m) deal to become search engine of choice for social-networking site MySpace.
• This will give advertisers access to that hard-to-crack youth market, which seems to be a law unto itself.
• Users of MySpace typically ignore traditional adverts and meet to discuss the latest trends and fads, creating their own hype, something that has been credited with launching pop group the Arctic Monkeys without any other publicity.
• "When it comes to online advertising you cannot underestimate the power of social networks," said Fadi Shuman.
• "Millions and millions of users are building communities within communities on these networks. They're global, they're unstoppable, and they're big, big money to marketers if they know how to communicate with them."
• The web is by far the fastest growing advertising medium, but with so many web pages out there, the chance of us happening upon a particular brand or website is pretty small.
• Advertisers are hoping that search, and social networking, will help point us towards their carefully crafted ads.”[10]

Search ads drive up online spending

• “The rising popularity of search-based advertising helped push up US online advertising spending by 26% in the first six months of the year.
• Advertisers spent a record $5.8bn (£3.3bn) online in the six months to June, up from the $4.6bn they spent in the same period a year before, according to preliminary findings by the Internet Advertising Bureau and PricewaterhouseCoopers.
• The growth in online spending was spearheaded by search-based campaigns - where advertisers bid to have their results displayed against keyword searches - the research said.
• Though search ads made up 40% of online revenues - the same as during the first half of 2004 - the amount spent by advertisers rocketed by 27% to $2.3bn.
• Display advertising accounted for 20% of turnover or $1.15bn, while classifieds made up 18% or $1.04bn.
• David Silverman, a partner at PwC, said as increasing numbers of people spent more time online, so advertisers were upping their internet spending.
• "The consistent growth in overall revenues shows marketers may be shifting more of their total advertising budgets to online," he said.
• "This is a natural development as research shows more consumers are spending a larger percentage of their media time online, while the flow of advertising dollars follows."[11]

Search goes on for way to tackle Google

• “Google, which makes a whopping 98% of its revenues from search adverts, has profit margins of more than 60%. Yahoo!, which makes use of its position as the web's most visited portal to sell display advertising while also trying to increase its share of search revenues, has margins of just over 40%.”[12]

Notes taken by Jonathan McHugh in March 2007

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[1] Web 2.0: just kids' stuff? The Guardian 26/05/06

[2] Web 2.0: just kids' stuff? The Guardian 26/05/06

[3] Britain leads the shift to internet advertising The Guardian 19/08/06

[4] Gates to open online ad conference The Guardian 26/09/06

[5] Internet ad spending surges again The Guardian 22/11/05

[6] Peter Petrusky, PWC Internet ad spending surges again The Guardian 22/11/05

[7] Internet ad spending surges again The Guardian 22/11/05

[8] Online advertisers change tactics BBC 06

[9] Online advertisers change tactics BBC 06

[10] Online advertisers change tactics BBC 06

[11] Search ads drive up online spending The Guardian 27/09/06

[12] Search goes on for way to tackle Google The Guardian 21/07/06