Latest News from the Industry

“The Market Will Die If Grooveshark Continues…”

If you want to dismantle Grooveshark, then you’ll probably need to dismantle the DMCA as well. Or, you can try this: in Denmark, anti-piracy group RettighedsAlliancen is now demanding that ISPs block Grooveshark, and pushing that demand through the local court system. That closely follows a similar action against the Pirate Bay in the region, an approach also being adopted in the UK.

This is still a developing situation. Early this morning, Grooveshark SVP Paul Geller told Digital Music News that nothing has been received by the company. No paperwork, warnings, not even a phone call. ”We’ve received no communication from authorities in Denmark but continue to engage rights holders in the region,” Geller relayed.

The question is whether this will stand up in court. For starters, there are certainly differences between the Pirate Bay and Grooveshark. The Pirate Bay is completely rogue, while Grooveshark is ostensibly playing by the rules - whether you hate those rules or not. And, apparently DMCA-style protocols exist in Denmark as well, though the consortium has found those procedures ‘impossible’ given how quickly content reappears.

With that in mind, RettighedsAlliancen is now taking an entirely different approach, and demanding that content only exist if pre-existing licensing deals allow it. “When you want to offer music on the Danish market, one must have an agreement with rightholders to do so,” RettighedsAlliancen head Maria Fredenslund told Politken, as transcribed by Torrentfreak. ”Grooveshark does not and has been completely uncooperative.”

But there’s fresh urgency being applied, as Grooveshark is now being viewed as a serious threat to upstarts like Spotify, which just launched in the country. ”We are in a situation where the market will die if Grooveshark continues,” Fredenslund continued.

More as it develops.

Album Sales Are Actually Down In 2011…

Sure, album unit sales are up this year, but the only reason that’s happening is because prices are down. It’s simple economics, and now, someone had the balls to say it out loud. ”The lower pricing strategy is getting more music into the hands of consumers, though revenue from album sales remains lower than a year ago,” wrote BusinessWeek, citing details from an interview with BigChampagne CEO Eric Garland.

Year-to-date, total album sales in the US stand at 255 million albums, up 3.23 percent compared to the same point last year. In turn, 2010 was 13 percent slower than 2009, yet somehow major labels are lightly jogging a victory lap. ”We don’t want to claim victory. But the music industry may be at a turning point,” Vivendi CEO Jean-Bernard Levy stated in the same article.

Levy is dialing even deeper into the recording business with the purchase of EMI, so his commentary is unsurprising. But the deeper question is why major labels need to orchestrate this sort of charade. The cynical response is that overpaid label executives need any justification to keep the party going, and there are certainly nosebleed salaries throughout the big four-turning-three. Another reason is more wag-the-dog: tell enough reporters and consumers that sales are up, and eventually perception can blur into reality (or at least that’s the theory).

The broader question surrounds the broader portfolio of recording assets. Vinyl is gaining, yet those modest gains are getting drowned by sinking CDs. But assets like a-la-carte downloads, subscription revenues, and even ringtones are all part of the picture here, despite the breadwinning nature of the well-bundled album.

Since 1998, CD Baby Has Paid $200 Million In Artist Royalties…

The company just shared the impressive threshold with Digital Music News, while also pointing to a clientele of 250,000 artists. The $200 million royalty number is cumulative, though this is a quickly-ramping figure: CD Baby is now paying approximately $40 million per year, and expects to hit the quarter-billion-mark sometime next year. And this is money paid to artists, not top-line revenues.

Sounds ginormous, though the significance of the figure can be debated. After all, this a payout amassed over a period of more than a decade, and average artist take-homes are typically slim. But there’s something to be said for staying in this game: the music industry is where startups perish, yet CD Baby is now celebrating its Bar Mitzvah.

CD Baby president Brian Felsen is popping a slightly different champagne cork, one that celebrates a successful transition from a CD-based business to largely digital one. Warehousing and selling discs was its first service; MusicStore for Facebook one of its latest. ”CD Baby was there in the beginning of the internet music boom and has capitalized on every evolution in technology to become the model for the new music business economy,” Felsen relayed.

Unfortunately, history lessons don’t pay the bills, and in 2011, DIY digital is an incredibly crowded field. And, others could be quick to out-boast CD Baby in the coming days and weeks. That includes Tunecore, whose simple iTunes digital distribution platform has proven to be a game-changer. In April, the company pointed to an artist base of 600,000, and a yearly, top-line revenue rate of nearly $170,000 (artists generally get 70 percent on an iTunes download).

That’s a pissing match for later, though CD Baby is clearly roosted towards the top. In fact, out intel suggests that heavyweights like CD Baby, Tunecore, and ReverbNation are profitable, thanks to substantial scale. But it’s a tough perch: the DIY space has never been more cluttered, and that super-saturation screams for a shrink-down of some sort. In fact, insiders will tell you that there are plenty of companies “just hanging on,” and hoping for friendlier financial skies ahead.

We talked to CD Baby CEO Tony van Veen on this matter, who felt that consolidation was less of a near-term threat. ”I don’t feel any active push toward consolidation yet,” van Veen shared. ”There are a number of small players in the digital distribution space, and at some point some of them will start dropping out, which will create that opportunity for consolidation. However, the major players are stable, and I expect them to stay independent for the immediate future.”

Roundup

* Apple has now launched its much-anticipated iTunes Match, the beginning of potentially new chapter in cloud-based music. As expected, iCloud users can upload 25,000 songs (iTunes-purchased or otherwise) for $24.99 a year. Early reviews suggest a somewhat clunky start, however.

* While we’re on Apple, the company is now recalling first-generation nanos, based on overheating (and possibly mini-explosion) issues.

* Spotify expansions into Belgium, Austria, and Switzerland are imminent, according to paidContent.

* Mobile Backstage has just expanded its direct-to-fan platform to Android.

* eMusic is flexing its curatorial muscles again with Scenes, an iPad app that deep-dives into famous music scenes. Sounds fun; grab it here.

* And, more details are trickling ahead of Google Music’s planned Wednesday launch. That is, a second, after-party invitation urges invitees to “Experience the World of T-Mobile & Google,” suggesting a deeper partnership at launch.

* A small restructuring at Universal Music Publishing Group (UMPG). Among the shifts, Monti Olson is getting bumped to EVP and head of Pop & Rock Music and Creative. And David Kokakis moves to SVP, Head of Business & Legal Affairs and Business Development. Tom Sturges (EVP/head of Creative) and Robert Allen (SVP, head of Business & Legal Affairs) are both leaving.

Source: Digital Music News

By admin • News • 4