Music News Bulletin - 16/01/09

Talent retains value in publishing: Companies look to grow alternative revenue streams as mechanical income falls
Financial worries may have continued to impact the music industry over the past 12 months but, while record labels have dealt with their diminishing returns through reduced A&R budgets, the big publishers have remained aggressive when it comes to securing new artists. The year’s most sought-after deals – names such as White Lies, Glasvegas and Iglu & Hartly - managed to enter the higher regions of the six-figure price tag, while some of the big songwriter deals eclipsed even this.

As revenue from mechanical royalties continues to fall, however, the publishing sector is beginning to evaluate the validity of those artists worth their signature in new ways. Areas that in the past may have merely supplemented income from record sales can today create key revenue streams for artists and publishers and an artist’s potential in this area can make or break a deal." [MusicWeek]

Sony could post losses of a billion
"I lost a ten pound note the other week and found the whole experience quite stressful, so imagine what it must feel like to lose $1.1 billion. Well, that's the losses Sony Corp might post for the current financial year, ending 31 Mar, according to sources cited by Billboard.

Although some analysts reckon the mainstream entertainment industry will probably be hit less than most by the recession (despite the current turmoil in music retail) as consumers turn to relatively cheap music, film, games and telly to cheer themselves up (instead of more expensive luxury goods or premium pursuits) the economic downturn is already having a big negative impact on those who make and sell consumer electronics, as consumers put off buying that new TV or camcorder amid fears of mounting job insecurity. For an entertainment conglom like Sony, whose electronics business is key, this is not good news." [CMUDaily]

Global digital music sales grow as music industry develops new business models
"The music industry has transformed its business models, offering consumers an increasing range of new services with leading technology partners. Yet generating value in an environment where 95 per cent of music downloads are illegal and unpaid for is still the biggest challenge for music companies and their commercial partners.

The digital music business internationally saw a sixth year of expansion in 2008, growing by an estimated 25 per cent to US$3.7 billion in trade value. Digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined." [RecordOfTheDay]

EU Public Affairs Monitor - 09/01/09

Keeping the coins in a jar by the door; Musicians, including a player on 'Eleanor Rigby,' are trying to extend European royalty payments. January 5, 2009
“Patrick Halling is fighting to keep the few cents he earns every time the Beatles' "Eleanor Rigby" airs on the radio.

The Beatles song was released in 1966 and under European Union law will enter the public domain in 2016, meaning Halling's violin-led string background on the song will lose its copyright protection and the royalties will end.” [ContentAgenda]

Change? Obama Brings RIAA Attorney Into Administration
“Barack Obama is furiously assembling his administration, part of an urgent, pre-inaugural preparation. Obama has been praised for quick team-building, though critics have accused the change-candidate of drawing heavily from former Clinton staffers. That includes the most recent group of Justice Department picks, a group that includes former RIAA counsel Tom Perrelli.

Perrelli, co-chair of the entertainment and new media division at Jenner & Block, is being named to an associate attorney general post at Justice. The Perrelli background was highlighted Wednesday by Declan McCullagh of C|Net, who contrasted the Perrelli pick to the ideologies of Obama supporters like Lawrence Lessig and Google chief executive Eric Schmidt. Perrelli was involved in a range of RIAA suits, including those aimed at prying subscriber information from ISPs like Verizon and Charter Communications.” [DigitalMusicNews]

EU Public Affairs Monitor - 15/12/08

EIB gets an extra €30bn for infrastructure projects
"Funds will be directed primarily towards into new member states. The European Investment Bank (EIB) will spend an extra €30 billion on projects over the next two years following an agreement at last week's meeting of EU finance minister to increase the bank's capital.

The bank's reserves were increased from €67bn to €232bn to allow continued funding of current projects and financing of future projects. The immediate effect will be extra money during 2009-10 for the bank's main project areas." [EuropeanVoice]

US Sues Sony Music Over Children's Online Privacy
"Sony Music Entertainment was sued on Wednesday by the U.S. government, which claimed the music company violated federal rules aimed at protecting the online privacy of children. Sony Music improperly accepted registrations on its music Web sites from users who were under 13, without obtaining consent from their parents, according to the lawsuit filed in U.S. District Court in Manhattan." [BillBoard]

Canadian Copyright Board Raises Tax
"The Canadian Copyright Board has announced it will raise the tax on blank compact discs to 29¢ (US$0.23), a 38% increase. Previously the tariff on blank recordable CDs was 21¢ (US$0.1679).

The tariff is collected on behalf of the Canadian Private Copying Collective, an organization formed in 1999 and created to collect money that compensates musicians and stakeholders for having their music copied by individuals. The decision leaves the rate for audio cassettes at 24¢
The board says there were two reasons for the increase.

“First, increased mechanical licence royalties, coupled with the elimination of container deductions and free goods allowances in the calculation of the performers' and makers' remuneration, greatly add to our estimation of the total remuneration per prerecorded CD," the board said in a report. "Second, the use of compression technology raises from 15 to 18.4 the average number of tracks copied on a blank CD used to copy music."" [BillBoard]

Music News Bulletin - 25/11/08

Anderson downgrades Long Tail to Chocolate Teapot status: Metaphor swallows Man 21st November 2008
""The end came quickly," as authors of morbid weepies like to say. On Monday WiReD magazine editor Chris Anderson effectively admitted game over for his "Long Tail", the idea he's been dragging so lucratively around the conference circuit for the past four years. In as many words, he downgraded it from "the future of business" to something that's, er, not very helpful for your business at all.

"I'll end by conceding a point: It's hard to make money in the Tail," Anderson wrote. "The revenues are disproportionately in the Head. Perhaps that will never change."

As befits a quasi-religious cult, the straw that broke the Long Tail's back wasn't empirical evidence, but the Word of God. The Google God, to be precise - Eric Schmidt. Will Page's exhaustive analysis of tens of millions of music transactions from a giant digital music store had already prompted a last ditch stand. But it was remarks by Schmidt, however, interviewed by McKinsey, that prompted the downgrade. Schmidt said they make most of the money in the top 10 per cent of advertising inventory." [TheRegister]

Artist Royalty Program (Slight Return) November 7th, 2008
"This is a blog post I wrote for the Last.fm blog, head over there if you want to join the discussion:

With the Artist Royalty Program we wanted to solve a crucial problem. Since we started in 2002 we had licensed music from various ‘content owners’ (major and indie labels as well as digital music distribution companies), and we also paid money to collections societies all over the world. But there were certain artists and labels losing out: those who do not have access to all the above, or chose not to be part of this traditional music industry network." [HeutePopMorgen]

The Long Fail: the cost of digital distribution November 25th, 2008
This is a my recent contribution to the Music Think Tank where you can join the discussion:

Digital distribution as well as promotion has undoubtedly been the best thing that could have happened to music fans as well as musicians. Even bigger content owners are finally seeing the opportunities (instead of the threats) that come with the technical change of delivering ‘media’ over the last ten years. It is now easier than ever for artists to connect to their fans and delivering the music to them, gatekeepers have been eliminated and (in theory) artists can reach out to millions of music fans out there through the internet. So far, so good.

Everyone who works in music knows that there are various new challenges that have developed through new digital delivery methods and those challenges can make it difficult to monetize digital music. I won’t be going into the issue of file sharing (there are enough people out there who have something to say about that) but I want to explore a common misunderstanding about digital media: “digital distribution is free” (or at least very cheap). It is not at the moment." [HeutePopMorgen]

Music News Bulletin - 07/08/08

Warner Music Complains That Rock Band And Guitar Hero Need To Pay More For Music Aug 7th 2008
And here they go again. Despite the fact that the games Guitar Hero and Rock Band have breathed new life into various musical acts and helped pump up sales of certain artists, the recording industry is starting to complain. It seems unable to recognize how something that promotes its music or makes that music more valuable is beneficial -- instead freaking out that it's somehow being ripped off. Proving, once again, that they overvalue content and undervalue the service that makes that content valuable, Warner Music's Edgar Bronfman is bitching and complaining that Rock Band and Guitar Hero aren't paying enough for music. [TechDirt]