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Music Marketing

Posted By Rick Goetz on July 6th, 2013

A blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.

 

Posts Tagged ‘EMI’

Tribeca Film Festival, Music Copyright and Super Bowl Advertising News, February 1, 2014

Posted By Julia Rogers on February 1st, 2014

Music and film company Genero and the Tribeca Film Center announced a collaborative music video contest. Also, a Canadian graduate student studied the effects of removing copyright protection on music sales. And a music industry professional analyzed how the Super Bowl influences the music industry.

 

On Stage

 

“Tribeca Interactive & Interlude:  A Music Film Challenge”

 

Genero, a company that connects musicians and filmmakers will be joining forces with the Tribeca Film Festival for a contest asking participants to make a music video for one of three newly-released songs:  “Heavy Seas of Love” by Damon Albarn; “Ticking Bomb” by Aloe Blacc; “Dead in the Water” by Ellie Goulding. According to The New York Times, one grand prize of $10,000, plus a trip to New York City during the film festival in April will be awarded for each song, and the videos will be used to promote the singles. Tribeca, Genero and all three musicians along with a panel of music industry professionals will choose the winners.

 

Competitors will have to learn to use the software suite Treehouse, made by interactive video company Interlude. This software was used to create the interactive video for Bob Dylan’s song “Like a Rolling Stone,” put out in November. The video let viewers alternate between 16 video channels, each of which featured a television show that was synced with the lyrics of the song. 

 

The “Tribeca Interactive & Interlude:  A Music Film Challenge” contest will begin on Tuesday, February 4 and run through March 27. Filmmakers start an account on the official contest website and download an entry form and the Treehouse software.

 

Jane Rosenthal, co-founder of the Tribeca Film Festival stated, “New technologies are unlocking a world of storytelling opportunities for filmmakers to captivate, engage and entertain audiences … We are always looking for ways to introduce new technology to the filmmaking community at the festival.”

 

Winning videos will be a part of the Tribeca Online Festival and appear throughout the 2014 Tribeca Film Festival venues and lounges at interactive kiosks. They will also be viewable on the contest website.

 

Could Loosening Copyright Protection Help the Music Industry?

 

Canadian graduate student Laurina Zhang recently conducted research suggesting that copyright protection may actually be a hindrance to sales in the digital-centric music industry, according to an article in Forbes

 

The beginning of the Digital Age and the appearance of file-sharing websites sparked a significant decrease in sales for the music industry. And major record labels like EMI, Sony, Universal and Warner declared that the revenue decline was caused by music piracy and sued thousands of illegal file sharers in hopes of recouping lost money. The industry also created digital rights management (DRM) technology embedded in online-purchased music files that prohibited copying. In 2007, EMI took away DRM technology from music files, allowing fans to share files freely with others.  

 

Many were shocked by EMI’s decision, believing the removal of DRM would negatively impact sales. File owners could share music files with friends and family and also upload them on file-sharing sites. However, because of the results of the experiment, in 2009, other labels decided to remove DRM as well.

 

The impact of the removal of copyright protection from these music files cannot be judged simply by looking at the numbers, because there was no control group to show how sales would have progressed if DRM had remained in place. PhD student Laurina Zhang at the University of Toronto decided to study what happened at EMI before the other three record companies removed DRM, since EMI abandoned file protection two years before they removed it, by running a “difference-in-differences” statistical model.

 

Zhang studied data collected from 5,864 albums released by 634 artists before 2007 – when EMI removed DRM. She looked at online and physical sales, then put it into a statistical model and figured out whether EMI’s album sales rose or decreased. The answer was crystal clear:  EMI experienced a significant uptick in sales, 10 percent or more.

 

To figure out why this sales boom happened, Zhang measured how lifting the DRM technology specifically influenced different types of albums, from best-selling (more than a million sold) albums, to niche records (less than 25,000 copies sold).  She found that taking away DRM allowed better search and sharing among music fans, which allowed people to hear music they may not have heard otherwise. The sales of best-selling albums were not affected, because people could hear this music on the radio and other places anyway. However, the sales of niche albums rose by more than 30 percent. Sharing enabled music discovery and rediscovery, and many fans ended up buying artists’ albums online through iTunes or Amazon.     

 

Zhang’s research provides insight into the truth behind intellectual property rights:  Copyright protection does not necessarily protect or stimulate sales. The research also shows that in the Digital Age, companies that provide specialty products and allow consumers to test out products before buying can provide a better user experience and potentially get more sales.

 

The Superbowl, Brand Alignment and the Music Industry

 

Eric Sheinkop, CEO of Music Dealers and co-author of Hit Brands:  How Music Builds Value for the World’s Smartest Brands wrote a guest post for Billboard.biz exploring how the alignment of music with brands and commercials during the Super Bowl and other major televised events can be beneficial to the music industry.

 

There will be 111 million viewers watching the Super Bowl on February 2, and companies will spend more than $4 million per 30-second spot. And as Sheinkop pointed out, “Given the value brands gain from their use of music, the Super Bowl offers the largest stage to leverage the power of music to create intrigue and discussion for a brand after the whistle has blown.”

 

And Super Bowl marketers are typically hoping viewers’ reaction is that the commercial is great and they want to hunt down the song used and find out information about the artist:  “It’s a chance to set the social mediasphere ablaze with inquirites about songs, artists, and ‘where can I find that?’” Successful Super Bowl advertisers will be able to gauge which type of music fits their brand and be able to create a real experience for viewers that goes beyond the commercial.

 

Sheinkop also noted, there seems to be a connection between last week’s Grammy winners and the music used in Super Bowl ads:  “The Grammys and the Super Bowl are not just mega events close in airdate, there is a symbiotic relationship between Grammy winners, the Super Bowl halftime show, and the music selected for commercials during the game … By analyzing the use of music in 2013’s Super Bowl ads, we can develop some pretty good predictions about the role music will play in 2014’s Super Bowl commercials.”

 

The music that has already been released in the first month of 2014 offers further insight. Indie bands and artists have experienced an incredible boom in the past couple years, and independent music won 50% of 2014 Grammys, confirming an indie music-focused trend. In 2013, 13% of Super Bowl ads featured music by independent artists.

 

There is also a connection between the halftime show performer and Grammy Award winners. Pepsi, in its second year of halftime show sponsorship typically showcases mega artists. Sheinkop said, “As it turns out, those performers are coming off the heels of a Grammy victory a week prior, as is the case this year with Bruno Mars, winner in the ‘Best Pop Vocal’ category. The same connection can be made to last year’s halftime show featuring Beyoncé, who had just won the Grammy for Best Traditional R&B Performance for ‘Love On Top,’ and Cee-Lo Green, who performed with Madonna the year before that.”

 

Successful marketers have often looked for popular artists to support their ad campaigns, which means a lot of Grammy winners get major placements during the year after they win. However, “What’s interesting and different about the Super Bowl is that brands don’t have time to react to the Grammy wins. They’ve already placed their bet as to which artists will win. It’s a big bet and when a brand guesses right, the value to their consumers, and therefore their business, is tangible … The trend of leveraging the best will surely continue. We speculate that before the last whistle of the game is blown, we’ll see a commercial containing a cut by Macklemore & Ryan Lewis, or perhaps a licensed use of ‘Royals’ by Lorde.”

 

Sheinkop added, “Having the foresight to pick a popular artist or good song is one thing, but one of the most powerful ways for a brand to create authentic, long-term consumer engagement is by leveraging music in such a way that it creates value for the brand way beyond the 30-second ad.”

EMI, Universal, Spotify and Production Music Libraries News, September 29, 2012

Posted By Julia Rogers on September 29th, 2012

The need for artists, music entrepreneurs and executives to adapt to technology was highlighted last week as the head of the new EMI/Universal discussed the company’s area of focus going forward. And industry analyst Mark Mulligan followed up the previous week’s keynote speech about whether or not streaming services have hit their ceiling with more stats supporting why Spotify must change its business model in order to grow. Also, the chairman of the Production Music Association (PMA) talked about how the landscape for film and TV music has changed in the past few years and how music supervisors are choosing artists and tracks to use in their various projects.

 

 

Are Smartphones and Tablets the Future?

 

The chairman of the new EMI/Universal conglomerate Lucian Grainge announced the company would be focusing heavily on developing strategies for smartphones and tablets in order to expand its reach to Brazil, India and Egypt, according to a report in Financial Mail.

 

The EMI deal was finally cleared by the European Commission on Friday, contingent upon it getting rid of some of its assets. Grainge stated that the rapid expansion of Google’s Android platform for touchscreen phones as well as increased sales of the iPad and other tablets provides an opportunity to vastly increase the sale of digital music.

 

According to Grainge, “The trends that we are seeing alongside the spread of the latest technology, from tablet computers to the Android phones, make emerging markets increasingly attractive for digital music – and that’s paid-for digital music or digital music with revenues attached …”

 

Universal/EMI will be looking at countries like India, Brazil, Turkey and Egypt, which have been shown to be full of music fans that want to hear music from local and international artists:  “Content is at the heart of it – the most important part.”

 

Grainge pointed to The Beatles – whose catalog is part of EMI’s assets – as proof that bands and artists can continue to make money off their recordings throughout the world “forever.”

 

Grainge is tasked with getting rid of approximately 30 percent of EMI’s revenues to meet the demands of the EC. He plans to hire an executive to oversee this process, which will mostly unloading parts of the Parlophone label catalog. EMI’s current chief executive, Roger Faxon left the company on Friday, with more layoffs to follow.

 

Mark Mulligan:  “Losing Free Customers is a Good Thing for Spotify”

 

Top music industry analyst Mark Mulligan was met with some skepticism from the music business in recent weeks when he questioned the actual growth potential of companies like Spotify, Rdio, Mog and Rhapsody as part of his speech at the Future Music Forum in Barcelona. As a rebuttal, he gave further context to Spotify metrics in an entry on his own Music Industry Blog on September 24.

 

Mulligan said, numbers show that Spotify had to acquire about 1.8 million users per month just to keep 400,000 of them. Estimate are based on the fact that Spotify reported 32.8 million registered users at the end of 2011, 10 million of which were active. And in March, 2011, Spotify reported 1 million paying subscribers – 15% of active users – putting their active users at 6.7 million. Spotify announced 10 million registered users in September 2010.    

 

Mulligan admitted that there are likely “monthly and seasonal variations” in these figures, causing the exact numbers to be different each month, and that many of the 1.4 million new monthly users that lapse may pick up the service again later in the year. But regardless, if 2011 is any indication, Spotify has to sign up quite a bit of new users than it keeps.

 

Mulligan also pointed out that this customer loss is actually not a sign of an ailing business model:  Losing low-level and free users will actually strengthen Spotify’s business going forward. Since Spotify’s model is about ideally selling premium subscriptions – which is what will help the company itself, along with labels, publishers and artists make money from their work – the “free” part of its business is just a marketing tactic. The number of free users that keep listening is not actually important. What is important is how many of them convert to paying customers.

 

“… It benefits Spotify if those users who have no intention of paying churn out early on from the free service as it means less cost to Spotify’s bottom line.  As challenging a path towards profitability as Spotify may find itself on, it would be a dramatically more difficult road if all of those 32.8 million users were active.  So Spotify’s business model and margins actually benefit from the majority of those new free users churning out of the service early, allowing Spotify to focus on migrating the remaining engaged free users to paid.”

 

And this “free churn” concept is what led Mulligan to question the profit opportunities for streaming services. As he pointed out, while the “free-user-leakage” factor fits in with Spotify’s business model, it challenges the foundation of that model.

 

Two-thirds of Spotify’s customers in 2011said “no” to something that was free, which means that streaming audio may not be appealing enough to music fans. The reasons that Spotify’s free users disappear are varied and include advertising, the inability to burn to CD and the fact these digital tracks cannot be downloaded for offline listening. While a lot of these issues can be rectified by paying $9.99 per month, the average consumer is not spending that much money on music monthly anymore. In fact, that number is the average spend for only the top 20% of music fans.

 

Mulligan stressed that because most consumers will not experience the incredible ease of use and features attached to the full streaming audio experience, they will never be enticed to pay for it. Therefore, cheaper price points will be the key for Spotify and other streaming services going forward.  

 

Production Music Hitting a Crossroads

 

Where is production music heading in the future? And how can artists get their music into film and television?

 

These are some of the questions Sonic Scoop asked newly-appointed Production Music Association (PMA) Chairman Randy Thornton recently, in anticipation of the organization’s upcoming gathering, “The Future of Production Music:  Opportunities, Challenges & Threats” on October 11 in New York City. The PMA is a non-profit organization that promotes and protects the rights and interests of publishers and composers of music used in film, television, radio and other media. Thornton, also the CEO of Warner/Chappell Production Music said he is anticipating some big challenges for those working with production music going forward.

 

The production music market has actually managed to stay profitable and stable, even while the rest of the industry has been thrust into chaos. However, while the number of production music catalogs and creators has been expanding, the amount that customers have to spend is decreasing. And the retitling of tracks – which is legal and lets rights holders put the same song in a variety of libraries – is creating some confusion for those distributing revenue.  

 

Thornton pointed out that the biggest issue in the production music industry as it expands has become keeping the quality of music high and selling that quality to those that have much less to spend than in previous decades:  “I feel that the biggest challenge currently facing the production music industry is that of maintaining the value of our music in the marketplace … The current environment is one of increasing competition for ever-dwindling budgets.  The upside is that there are more potential clients than ever.  The downside is that many clients are being squeezed financially and are therefore pressured to look for ‘alternative sources/practices’ for production music, many of which are detrimental to the sustainability of the industry as a whole … I feel that it is critical that we strive to maintain or elevate the value of our music, thus enabling a viable financial future for our industry as a whole.”

 

And the landscape has changed significantly in the past five, to 10 years. The PMA currently represents 450 catalogs, which is ten times more than it represented a decade ago. And decreased budgets, combined with the splitting apart of many TV, film and new media companies has created mass confusion when it comes to analyzing licensing models and the cost/benefits of each one:  “Education and a commitment to understand current needs on both sides of the fence are crucial to ensuring real progress for our industry.”

 

Thornton stressed that he feels recent changes in the production music climate could actually provide positive opportunities:  “The production music industry has consistently grown in both size and quality over the past 10 years:  Long gone are the days of clients bemoaning the fact that they ‘had to use a library cue.’  The creative and production values of current production music works are leading the world in many segments of the market, including the work of many GRAMMY and Emmy award-winning composers and producers.”

 

And this could offer many new artists the chance to start diversifying their careers by writing production music:  “Clients have a huge choice these days when it comes to choosing music, and their choice more often than not centers around creativity and production values — both of which are good news for our industry!”

Yahoo! Music, Sony, Universal and Metallica News, May 26, 2012

Posted By Julia Rogers on May 26th, 2012

News this past week stressed the seismic music industry shifts of the past decade as experts analyzed why the Yahoo! Music service is booming and explored Sony’s increase in market share and its implications on the hotly-contested EMI deal. Also, Metallica members talked about their struggles to stay afloat in the current business climate.

 

 

Yahoo! Music Thriving Under the Radar

 

Yahoo! Music is enjoying 27 million monthly U.S. visitors despite massive industry changes; yet, this success seems to be escaping the attention of artists and music executives, according to a recent article on Billboard.biz. While the company got some negative media coverage recently when it lost some major executives, Ken Fuchs, the president overseeing sports, entertainment, music and other verticals claimed the recent changes will not affect Yahoo! Music.

 

And to which factors does he attribute the success of the service? Fuchs stated that it is a combination of brand alignment, the availability of robust emerging artist services, mobile services and the company’s focus on breaking original ground:  “[The recent staff change] certainly doesn’t affect our mission and our ability to continue to build on creating a great voice on breaking news and original programs.” He added that Yahoo! is “ramping up in video programming,” which includes interviews, video series and live and on-demand concerts.

 

In April, the site enjoyed 171 million unique visitors in the United States, declared a report from comScore. And Fuchs said that its popularity has been building excitement among music fans both on and offline, which has helped the service direct traffic around its diverse offerings, or, as Fuchs stated, “the water-cooler events that create conversation and create context for that conversation. It could be a big concert. It could be breaking news.”

 

Major artists account for a lot of the traffic. Whitney Houston’s funeral was among the top 10 live streaming events in Yahoo’s history. And the Clinton Foundation Concert, which saw performances by Lady Gaga, Bono and Usher had more than one million live streams at the time of broadcast and has garnered well over 20 million video streams and 13 million content interactions since it aired. The popularity of these events has brought brands like Nissan and Unilever into the fold to sponsor genre-specific major events with big artists.

 

However, Fuchs stressed the growing popularity of Yahoo! Music can also be good for emerging and independent artists, because the focus of the service is always on “music discovery:”  “We try to do it in a fairly intimate way, through strong editorial, access to artists and, more and more, original programming and live performances that create a very unique canvas to perform and interact with their fan bases.”

 

Yahoo! has also introduced several products across its different platforms that could significantly add to the strength of its music service. One is the Yahoo! “Social Bar,” a social media interaction tool that has been downloaded by over 68 million and sees about 40 million monthly users. The “IntoNow” mobile app could also help Yahoo! better serve music fans and artists by informing Yahoo! of music listeners’ preferences. It tracks the shows people watch and delivers this information to Yahoo! so they can shape their programming. Fuchs said it works similarly to Shazam and SoundHound:  “You can be watching a football game or CNN or a live concert and it will understand and pick up the signal regardless of what’s coming out of you TV and drop into an experience where you can get more information, you can interact with friends around that show … It allows the user to get deeper, especially around big events like concerts or sporting events or the Grammys.”

 

Above all, Fuchs continues to hope that Yahoo! Music will continue to grow by giving consumers what they want musically:  “We believe in being able to extend our experiences across screens and scale. So whether it’s a concert with the National and Bob Wier that’s fully available across all screens, or it’s the Clinton concert or breaing news, we don’t really care where you’re accessing it from, we want you to be able to access it.”

 

Sony vs. Universal:  Who Will Win the War for Top Tracks?

 

Although the spotlight is currently on the EMI deal, with many industry analysts and critics scrutinizing the fairness of Sony Entertainment’s and Universal Music Group (UMG)’s takeovers of two divisions, no one seemed to notice Billboard.biz’s report that Sony overtook Universal in U.S. market-share rankings over a month ago until this past week. And the experts at Billboard stated this is because those in the music industry fretting over the potential deal might be picking the wrong battle.

 

Sony surpassed UMG in year-to-date album market share including track equivalents in the first week in March. It also held the #1 spot during the month, only relinquishing control in the final week of the first quarter, ending April 1. Recent figures from Nielsen SoundScan reported that UMG’s market share for music albums is 30.35 percent, vs. Sony’s 29.14 percent, which contradicted numbers from SounScan, which reported the two companies were even closer, at 29.98 and 29.36 percent, respectively.

 

Despite the on-going battle for market share between the two major labels, critics continue to focus on the EMI merger, which still has an uncertain outcome, as no final decisions have yet been made by trade commissions. They have failed to notice the race between Sony and UMG for top spots on the charts, which many feel could provide important insights into the future of the label system.

 

Billboard stated that whether Sony or UMG will ultimately grab more market share likely depends on album release schedules. Many analysts are banking on Adam Lambert’s “Tresspassing” to put Sony over the top, even though that album has not had as many weekly scans as other #1s before it. Sony has some big releases coming up, including albums from One Direction, Usher, Kenny Chesney and R. Kelly. And these releases, on paper, look stronger than the releases on the UMG side, who will only have Justin Bieber’s “Believe” and Maroon 5’s “Overexposed,” both going on sale in June.

 

However, analysts at Billboard noted that which company wins the market share for albums has become less of a focus than which has put out the most popular individual tracks. And a look at the popularity of albums has seen Sony on top almost every single week this year so far. But UMG has been the winner when it comes to individual tracks through this past week:  32.66 percent vs. Sony’s 25.89 percent. If Sony wants to win the war, it will have to keep a steady schedule of strong individual track releases.

 

Metallica:  Touring to Stay Afloat

 

The dissolution of the former business models within the music industry as it makes way for new income streams has seen even big bands like Metallica working harder for a buck, according to an article in Rolling Stone, reported by Classic Rock magazine.

 

Metallica guitarist Kirk Hammett stated that, while the band used to be able to take a few years off after a big album release and accompanying tour, thanks to dwindling music sales and royalties, members now have to be on tour almost constantly to stay afloat:  “The cycles of taking two years off don’t exist anymore. We were able to do that because we had record royalties coming In consistently. Now you put out an album and you have a windfall maybe once or twice. But it’s not the way it used to be – a cheque every three months.”

 

He said that he believes Metallica and other big and small artists have had to get more creative than ever in the past few years when determining different income streams that will pay for future projects and necessary growth as musicians. All Metallica’s recent merchandise sales on the road together paid for their new recording studio. And even though Hammett and his band mates calculated that they will likely only break even at the big Orion Music Festival in June, they are optimistic about future opportunities:  “We basically take funds from wherever we can. This is a real luxury, but great things come out of this.”

Universal, Sony and Berners-Lee News, April 21, 2012

Posted By Julia Rogers on April 21st, 2012

The purchase of EMI continued to make the news this week as several entertainment industry trade unions publicly voiced their support of Universal’s purchase of the recording arm, and Sony revealed its plans for the publishing side post-trade-commission approval. Also, the creator of the World Wide Web criticized the music industry’s push to stop “openness” on the Web through anti-piracy initiatives.

 

 

Two Trade Unions Backing the Benefits of Universal’s EMI Purchase

 

Letters sent to the U.S. Federal Trade Commission by the American Federation of Musicians (AMF) and the recently-merged Screen Actors Guild and the American Federation of Television and Radio Artists (SAG-AFTRA) surfaced last week, voicing support for Universal Music Group’s potential purchase of EMI’s recorded music faction, an article posted on the Bloomberg site stated. The possible sale and two-way split of EMI was announced in November and, if approved will close for $4.1 billion. The two organizations commended UMG’s handling of previous labor agreements and advocated for the FTC’s approval on April 12. Correspondence from AMF read,  “[Universal’s] compliance with and respect for its collective bargaining agreements has been positive when compared to its peer companies … Sustaining the EMI legacy would appear to benefit AMF recording musicians.”

 

SAG-AFTRA, which houses over 150,000 members, pointed out UMG’s history of commitment to improving the landscape of the music industry by investing in new artists and supporting new, inventive musical genres and advocated for a speedy FTC decision via email:  “For EMI to be left to further drift into oblivion, or for EMI to be acquired and sold off in pieces by capital investment speculators with no appreciation for, or commitment to, artists who fuel the recording industry, would ill serve the industry … [Universal is] committed to reinvesting in EMI to create even more opportunities for new and established artists, expand the marketplace with more music and support new digital services.”

 

Other groups, including the public advocacy group Public Knowledge, who expressed concerns in March, have asked the FTC to very carefully consider the ramifications of the final sale of EMI, for fear it might infringe upon healthy competition within the music industry when the number of major record labels dwindle from four, to three. Many continue to feel that this consolidation could put Universal too firmly in control of new distribution options and strategies.

 

Regulators in Europe are still looking at the UMG deal, and California Attorney General Kamala Harris is also formally investigating the proposed purchase.

 

Sony Could Mass Cut EMI Jobs Post Purchase

 

European regulators approved Sony’s $2.2 billion purchase of EMI Music Publishing on April 18, according to The New York Times. This will put Sony firmly in control of 31 percent of music publishing – copyrights and songwriting. The EMI catalog is comprised of 1.3 million songs, including the entire Motown collection and hits like “Over the Rainbow.” Sony’s own publishing faction, Sony/ATV has 750,000 songs and the rights to the entire Beatles oeuvre.

 

While the FTC continues to review Sony (and Universal)’s absorption of EMI – and the American and European regulators communicate but do not always issue the same judgment – early European approval has spared Sony from a second, more intensive phase of scrutiny. It also has Sony pushing ahead for its future plans, which, according to both Bloomberg Businessweek and The New York Times will include cutting 326 EMI Publishing jobs in the first two years after the acquisition.

 

A recently-leaked document created by UBS AG (UBSN), an advisor to Sony listed $39 million in potential severance costs and the elimination of 152 positions within the first year. Sony stated these mass layoffs will be necessary because of the $106 million worth of restructuring costs in the two years after the deal is finalized. These layoffs will get rid of 60 percent of the current EMI staff and will reduce the company’s annual operating cost by $70 million.

 

All regulators are closely investigating Sony, EMI (and Universal’s) growth and how much of an advantage merging assets would give to them over, particularly, competing digital music services, which are highly dependent on licenses from labels and publishers. Indie labels, consumer advocates and organizations – such as Impala in Europe – that represent small music companies have been very vocal about their concerns over the deal. Helen Smith, executive director of Impala revealed in an interview earlier this week, “We believe these deals would give Sony and Universal excessive control over the markets for publishing and recordings, over collecting societies, how artists are signed, and how their careers are able to develop.”

 

While Sony representatives limited their comments on the issue, Sony/ATV spokesman Jimmy Asci said, “Discussing details of any integration plan is premature while the regulatory approval processes are ongoing.”

 

The European rights to the EMI catalogs made $20 million in revenue in 2011.

 

Sir Tim Berners-Lee:  The Email Snooping Plan Should be Dropped

 

Renowned computer scientist and inventor of the World Wide Web Sir Tim Berners-Lee stated that recent initiatives to curb piracy and those designed to allow security services to monitor websites should be cut off, as they entirely go against the purpose of the Internet. New email surveillance plans in the UK are set to be laid out in the Queen’s speech in May, according to a piece in The Telegraph. Sir Tim expressed that these plans could potentially dangerously compromise private and sensitive information – like political figures’ sexuality or medical history, putting them at risk for blackmail and other issues.

 

He told the Guardian:  “The amount of control you have over somebody if you can monitor internet activity is amazing … You get to know every detail, you get to know, in a way, more intimate details about their life than any person that they talk to because often people will confide in the internet as they find their way through medical websites … The idea that we should routinely record information about people is obviously very dangerous. It means that there will be information around which could be stolen, which can be acquired through corrupt officials or corrupt operators. We open ourselves out, if we store this information, to it being abused.”

 

And his concerns about what the Internet has become also extend to recently heavily-debated issues over SOPA, PIPA and other anti-piracy bills. At a recent conference in Lyon, France, he stated that record labels have had “too narrow a focus” in the digital arena:  “Record labels have a very strong voice when it comes to arguing for their particular business model, which is in fact out of date. The result is that laws have been created which make out as if the only problem on the internet is teenagers stealing music.”

 

Berners-Lee added that he believes creating a new process that excludes record labels will be the only way to get money back in the hands of music creators.


Trent Reznor, Continued Industry Growth and EMI News, February 4, 2012

Posted By Rick Goetz on February 4th, 2012

This past week, the music industry was focused on whether new business models would create growth, as Trent Reznor discussed focusing on music in film and some predictions for the future of the industry with TuneCore, and a new professional study was released about overall profitability of the music business going forward. Also, the Chairman of Warner Music Group (WMG) voiced his objections to the EMI Group acquisition during his last day on the job.

 

 

Trent Reznor:  Scoring for Films and the Shifting Music Industry

 

Trent Reznor talked to CEO of TuneCore Jeff Price last week about his successful shift into writing music for films and where he sees the music industry headed in the future.

 

In the TuneCore blog, he first discussed his growth as an artist over the years and why it was important for him to identify his strengths and weaknesses as an artist through trial and error in order to find a “truthful” voice that would help fans connect with his music:  “… I’ve kind of tried to be editorial about my own writing skill set – what I’m good at and what I’m not so good at. And I’ve focused in on some things that I don’t feel I’m very good at. I’m not good at telling a story. I’m not a Paul McCartney, or a Tom Petty … that can write a story about somebody else. I’ve never really tried it [publicly], and when I’ve tried it privately it feels disingenuous.

 

… I started writing by just opening up a journal and there were words that were truthful because they weren’t meant to be lyrics, and that had a sense of integrity to it that I could tell felt real. And that became kind of a template for me to a) stay sane and get this out of my system, and b) I thought that taking some of this ugliness that was bottled up inside me and channeling it into something that had some degree of beauty to it at times, felt like ‘Wow, I’ve found my voice.’”

 

And how did Reznor break into scoring films? It didn’t necessarily come easily at first, as he does not necessarily consider himself a “real composer.” And the process of scoring The Social Network (for which he won an Academy Award) was far different from the process he (and his partner Atticus Ross) used for The Girl with the Dragon Tattoo. However, he tried to bring what he learned about his own personal skill set as a musician into the experience:  “…I find that if I can emotionally relate to something about it, I can turn the faucet on, and ideas come out. If I feel like I have skin in the game, if I feel like it’s… if I’m a part of it, then I tend to find that I have to get out of the way and just let the ideas and music come out.”

 

It’s one thing to say, ‘Music has a big impact in a movie. It really manipulates how you feel.’ I understand that concept. But to see … a movie that I’d seen a few times now, without any music, transform into something that felt much darker, or weightier, or more vulnerable? It was really fascinating to witness firsthand and be a part of.”

 

Reznor has lately been touted as one of the innovators in the “new music business” who has managed to find a unique business model that allows him to continue to experiment with his art while still working consistently and seemingly effortlessly. Still, he sees a “tough road” ahead for him and other DIY artists, though he is still optimistic:  “… I think we are in between business models. It felt clear to me that labels didn’t know what they were doing back then … We didn’t go, ‘Let’s go with an indie label,” which has the same business model … We went direct from us … The label’s me and my manager, as loud as I can shout on Twitter or anywhere else.  And you realize the shortcomings of that, that you’re only as loud as people that want to listen to you.

 

… I’m not disenchanted by things. I think in a lot of ways it’s the wild west right now, and it’s wildly exciting, and it’s interesting when something’s been disrupted this greatly, the record business. There’s limitless potential, but it also requires a lot of effort.”

 

And according to Reznor, re-building the music industry is going to have to center around really understanding what the fans want and finding an infrastructure that will solidly support artists’ rights:  “I think the promise, and what I would hope more than anything, is that when we get to this new business model, whatever that is, on the record label side and also on the publishing side, [is] that somebody is strongly speaking up for artists’ rights when that starts to get figured out. And that in an age of potential transparency, that the actual content creator has a seat at the table, and it’s not ALL the things glomming on to it that are carving off their parts.

 

What I consider, from a consumer point of view, the next good business model, the next thing that makes sense, is if there were mass adoption of music subscription services, like Spotify. I think in an age of broadband connection being everywhere, everyone having powerful computers in their pockets, this sense of … normal people feeling comfortable with the idea of the cloud and having all the music available in the world available to you at your fingertips, anywhere you want it all the time, that’s pretty cool.  That requires some education on the part of those companies, to help people to understand what that is.”

 

A New Study Shows, “the Sky is Rising” in the Music Industry

 

Industry expert and TechDirt blogger Mike Masnick shared the results of a new professional study of music industry growth in a presentation at the midem music festival last week. And the news seems to be promising:  “Contrary to the dire warnings of the legacy entertainment industry players, the market is booming, with even greater content choices for consumers, more options for creators, and many more opportunities for smart businesses and artists to make money.”

 

Masnick’s presentation revolved around the release of a new research paper put together by TechDirt and sponsored by CCIA and Engine Advocacy. The paper examined the real state of the music and entertainment business and more realistically looked at some of the numbers behind “doom and gloom” reports about the death of the industry that continue to make the same cynical statements about “cheap” consumers, paltry returns for artists on digital sales and why new laws need to be created to prevent a complete implosion.

 

As Masnick argued, an honest look at the numbers shows that “the overall entertainment ecosystem is in a real renaissance period … the industry is growing both in terms of revenue and content.” The report was split into video and film, books, music and video games and showed that during the last decade, all four segments have actually showed significant growth and opportunity. The amount of content produced in each area has grown at an astronomical rate, revenue has grown and, despite rumors of consumers just wanting everything for free, these consumers have actually continued to spend more of their income on entertainment – 15% more in the period from 2000 to 2008.

 

What were some of Masnick’s other key points? In the past decade …

 

  1. Employment in the entertainment industry rose 20%, with indie artists seeing a 43% growth in employment opportunities.
  2. The overall entertainment industry grew 66% in the period from 1998 – 2010.
  3. Consumers are in the middle of an “age of abundance” when it comes to entertainment. More content is available and in many more ways than before.
  4. Content creators are currently in the midst of an “age of amazing new opportunity as, in many cases, old “gatekeepers” have disappeared. A huge number of people are making money from creating content – with much of that content coming courtesy of new tools that have allowed artists to use the Internet to create, promote, distribute and monetize works.

 

Masnick admitted that there are significant challenges, including the Internet itself:  “the Internet has eaten away at some traditional means by which these businesses made money. But, as the data shows, there is more money going into the overall market, more content being created, and many new ways to make money. That shows that there is a business model challenge – and a marketing challenge – but much more opportunity in the long run.”

 

He concluded that the major challenge will not be to respond to a business that is getting smaller, but to figure out how to “route around existing structures” in an industry that has actually expanded significantly.

 

More information on this study can be found on the TechDirt blog and in Forbes.

 

Out-Going Chairman of WMG Edgar Bronfman Against EMI Acquisition

 

Edgar Bronfman, Jr. stated he was strongly opposed to Universal Music Group (UMG)’s acquisition of EMI Group, according to an article published in The Wall Street Journal. At the D:  Dive into Media conference on his final day as Chairman of WMG, he said he was concerned that bringing EMI on board “would create what I call a super-major that would control not only the future of recorded music but the future of all digital media.”

 

He added, “I think it’s dangerous, I think it’s problematic and I think it’s got to be stopped … It does strike me as hubris particularly for Universal to think it’s going to be easy to buy EMI, and frankly to think they can buy EMI at all.”

 

According to Bronfman, WMG has plans to lobby against the upcoming merger, both in the U.S. and abroad. However, a senior Universal Music executive who listened to Bronfman’s statements declined to respond, claiming that only an official spokesperson for UMG – who was not present at the conference – was permitted to make a statement. And the spokesman was traveling and unable to be reached.

 

Once combined, Universal and EMI would control 40% of the worldwide music market. Bronfman stated that this would give the mega-company the power to establish terms for new online music services and other companies and would greatly decrease artists’ options for earning income.

 

When criticized for voicing his objections merely because of a “sour grapes” situation – since WMG lost out on a bid for EMI – Bronfman stated that had nothing to do with his analysis, especially since a partnership between Warner and EMI would have resulted in a smaller market share than Universal currently has by itself.

 

January 31 was Bronfman’s final day as chairman of WMG, though he will continue to serve on its Board of Directors. He was appointed CEO in 2004 as the leader of the investment group that bought the company from Time Warner, Inc. He also led the company’s push to acquire EMI.

 

Universal won EMI in an auction, settling on a price of $1.9 billion and agreeing to be responsible for meeting any regulatory conditions. The deal is set to close before 2013.

Music Business News, December 3, 2011

Posted By Rick Goetz on December 3rd, 2011

Napster officially called it quits and folded into Rhapsody last week. Also, in the wake of the EMI sale, experts discussed whether or not the music industry will never reach a point where one major label controls it. And finally, several analysts and legislators explored the complexities of SOPA legislation.

 

 

Napster and Rhapsody Merger Finalized

 

Napster had its last day on November 30. As of December 1, it officially merged with the #1 American on-demand music service Rhapsody, a month after the company finally bought the digital music company from Best Buy.

 

Of course, Napster has been a controversy in the music industry since its launch in 1999 as a peer-to-peer file-sharing service designed to help users swap music files. It only lived in its original incantation for two years before it was shut down by court order. Music industry trade groups including the Recording Industry Association of America filed hundreds of lawsuits against its users for copyright infringement and illegal downloading.

 

While it has been over 10 years since the original Napster ceased to exist, what many in the music business have called “the Napster effect” has profoundly shaped the way the digital music space has evolved. The company’s model brought to light a major supply-and-demand problem:  Consumers did not want to pay $20 for an entire CD when all they wanted was a few songs off that CD. They also wanted a simple and inexpensive way to get digital tracks. The death of Napster brought about the birth of services like iTunes, Rhapsody and others that would follow.

 

Rhapsody was founded in 2001, and currently allows its users to download unlimited songs for $10 per month. It has 800,000 subscribers.

 

Financial terms of the Napster/Rhapsody merger were not released.

 

Will One Corporation Ever Control the Music Business?

 

The answer is “not entirely,” according to many entertainment industry experts. Many in the music business have been concerned about an impending monopoly by major record labels ever since EMI was put up for public auction and sold to Universal Music Group (UMG), who bought the record label component, and Sony/ATV, who purchased its publishing division.

 

Professor Nick Baxter-Moore of Brock University in Ontario, Canada said, “… It might be argued that one reason why EMI wasn’t sold as a whole to either [Sony/ATV or UMG] was to avoid regulatory obstacles being thrown up to block the sale.”

 

Still, the purchase of EMI has brought the number of major record labels down from four, to three:  UMG; Sony/ATV; Warner Music Group. What were referred to as the “Big 5” became the “Big 4” in 2004 with Sony’s acquisition of BMG. The reduction to three has had many seeing the possibility of a recorded music monopoly in the near future.

 

However, Baxter-Moore and others feel that, while many are declaring the downfall of the music industry, it will never get to a point where any one major corporation has control:  “We might get to a point whereby two corporations exercise a duopoly – a situation in which two major firms control the majority of the output of a given industry – that would arise if, or rather when, either Universal, or, more probably, Sony acquires Warner Music Group.”

 

He also believes that the strength of indie labels means they will never fully go away and allow for a single label to control output:  “We might see a recording industry in which Universal and Sony and their many and respective subsidiaries control about 70-75 percent of the market (as long as neither one controls, by itself, 50 percent) and with national, regional and indie labels accounting for the other 25 percent.

 

While major labels are being purchased for huge figures, independents have slowly been brought into the spotlight in recent years, almost to a level of being competitors of the bigger labels. For example, Arcade Fire’s album The Suburbs, released on Merge, was one of the top-selling albums of 2010, and Adele’s 21, attached to XL was by far the most popular. Both these indie labels have been around for almost 20 years and have adopted business models similar to the majors because they release some music they feel will be more widely popular so that they can fund the release of records from emerging or fringe artists.

 

As Baxter-Moore asserts, while monopoly may not be inevitable, the EMI purchase could still cause some complications for artists and industry professionals:  “Corporate concentration is bad for any industry … The sale of EMI, whether in one piece or two, contributes to further concentration of the music industry … History tells us this is bad news for musicians, for the music product, and for audiences and fans.”

 

The Stop Online Piracy Act (SOPA) Legislation:  It’s Getting Complicated

 

Critics within congress of the Stop Online Piracy Act (SOPA) officially introduced a “legislative framework” for an alternative bill that they hoped would address some of the concerns many have had about the legislation on December 2. Their proposal was to update U.S. trade laws to implicate that downloading protected content – like a song, album or a movie – from a foreign-owned website would be treated the same as illegally importing foreign hard goods.

 

SOPA has caused some controversy since it was introduced. Critics have complained the bill directly attacks the freedom of online speech and hinders technological innovation. But proponents claim it is a necessary solution to the huge and growing problem of online piracy, citing stats that show that forty billion music files were shared illegally in 2008 – 95 percent of all music downloads worldwide – and that three-quarters of the video games released in late 2010 and 2011 were acquired illegally.

 

According to a recent editorial in The New York Times, “Musicians, moviemakers, authors and software designers are not the only victims. Piracy’s cost is measured in less innovation and less economic activity, as creators lose hope of making a living from their creations.” Still, the editorial stressed that legislation needs to be “tightened,” and that infringement as defined by SOPA is too broad and could actually cause some domestic websites that are not breaking any laws to be shut down unjustly.

 

Under the bill, copyright owners could tell direct payment providers like Visa or advertising networks like Google to shut down a website by filing a notice that the site or even just “a portion” of it “engages in, enables or facilitates” intellectual property infringement, or is ignoring this infringement on purpose. Once accused, websites would have five days to prove innocence. And companies like Google and Visa would be immune to being sued by websites that were cut off wrongfully. So, technically, copyright owners could prevent a website from earning money with one accusation. Provisions could affect websites that are already protected by the 1998 Digital Millennium Copyright Act, which protects U.S. sites with massive amounts of under-controlled like YouTube as long as they take down copyright-infringing material when it is brought to their attention.

 

The SOPA legislation – as well as similar legislation in other countries like Belgium, Italy and Finland that is already being enforced – was largely inspired by the need to stop foreign, “rogue” websites like the Pirate Bay in Sweden, a bit torrent site that has already been coming up with workarounds to allow it to continue to provide illegal content to its users. According to Torrent Freak, “The Pirate Bay Dancing” add-on has already been created by a group of coders called “MAFIAAFire” in order to redirect Pirate Bay and other bit torrent websites to new domains so if their domains are seized by regulators, their content has new homes. Undoubtedly, regardless of which shape new legislation takes, these types of workarounds will be inevitable.

 

The newly-shaped bill introduced in Congress on December 2 was designed to address many of the concerns about free speech and commerce. U.S. Senators and Representatives who worked on the new framework said they believe that creating a “21st century trade policy” will help prevent infringement while “ensuring the continued free flow of legitimate commerce and speech.” The revised bill would make it possible for a U.S. copyright holder to petition the International Trade Commission to investigate digital imports. That organization would then decide whether the company was violating intellectual property rights. According to these legislators, getting behind the trade laws helps them stay away from the “pitfalls” inherent in the original SOPA, which they claim gives the government too much power to control the internet based on little more than suspicion, does not provide clear definitions for the justification of shutting down an entire site and hinders the openness and innovation that drives the Internet.

 

In an official joint statement, the group of Representatives and Senators who came up with the new framework said, “By putting the regulatory power in the hands of the International Trade Commission – versus a diversity of magistrate judges not versed in Internet and trade policy – we will ensure a transparent process in which import policy is fairly and consistently applied and all interests are taken into account …When infringement is addressed only from a narrow judicial perspective, important issues pertaining to cybersecurity and the promotion of online innovation, commerce and speech get neglected.”

Music Business News, October 29, 2011

Posted By Rick Goetz on October 29th, 2011

This week marked some evidence of major change in the music industry as the split sale of EMI became more certain and record labels showed signs of focusing much of their spending on branded content. Also, new anti-piracy legislation went up for discussion and Coldplay front man Chris Martin took an aggressive stand against online streaming services.

 

 

EMI to Be Split in Half

 

A few weeks ago, I announced that EMI would likely be sold in two parts, with its publishing arm going in one direction and its label in another. While the deal is still not sealed, this past week, The Guardian reported that the process has officially begun to finalize the sale of its music publishing segment to BMG Rights Management and its record label to Warner Music Group, when Universal Music pulled out of the bidding war early last week. The sale of both pieces will bring $3 billion-plus to current owner Citigroup. There has been some speculation that Citigroup may hold onto EMI until the market picks up, but several insiders said they thought the sale would still be completed no later than mid November.

 

Labels Begin to Focus on Brand-Artist Relationships

 

Many record labels are increasing their spending on branding as the music business continues its rapid shift away from record sales and traditional marketing techniques. The power of social and mobile marketing continues to be proven by artists across the board, from major label acts to DIY musicians. And because record labels have been negatively impacted by the Digital Age, in the past few years, many advertising agencies have begun to forge relationships with music executives to help better promote their brands and transform the way labels promote their artists.

 

According to an article published on MarketingWeek.com, Simon Cowell’s label Syco provides a great example of the shift to more creative label marketing strategies. Cowell recently appointed the shop Adam & Eve to cross-promote its musicians. Syco’s marketing director Mark Hardy said he pushed the partnership in order to help fans have more ways to listen to music, both through recorded channels and through live performances.

 

And according to Phil Holiday, head of Sport and Entertainment at Fuse, brands are starting to realize that connecting to a specific artist rather than a larger label is incredibly beneficial and provide them with more business:  “There’s recognition on the brand side now that an artist as opposed to a music partnership will give them a lot more … Music acts have effectively become media owners and as a result can offer brands direct access to their audience, particularly through social media and experiential executions.”

 

While the idea of music branding for labels is not new, the technology component and the need to branch out into many areas of music promotion as possible to stay profitable is. And if labels are going to leverage their relationships with brands, they have to create genuine ways for music and brands to connect and speak to fans.

 

And many in the industry feel that striking the right balance between social media and traditional media is going to be incredibly important moving forward because in modern music marketing, word-of-mouth is critical to what is purchased, and thus artists and labels have to reach as many fans as possible through as many different channels as possible.

 

Record labels are also shifting their focus towards audience research; they are taking note of how “brand friendly” certain acts are so they can get insight into what their consumers will want. A critical change in the music industry happened when labels and brands both realized that emotional connections – which can be achieved very solidly through personal connections on social media sites, etc. – are better for building loyalty.

 

Many label and advertising executives also note that the business side and the artistic side of the music industry are no longer separate entities, which is another reason why so many labels are now looking to develop relationships with brands – in order to support new business models.

 

The House Introduces “Stop Online Piracy” Legislation

 

This week, Republicans and Democrats both got behind the new “Stop Online Piracy” (SOPA) Act, an initiative that would give the government more power to crack down on music, film and other types of piracy on the internet. This legislation would sanction the forfeiture of the domain names of websites that the authorities think are helping people gain access to pirated content. It would also require providers of the services to cut off service in the same way that Mastercard and Visa did to Wikileaks.

 

House Judiciary Committee Chairman Lamar Smith (R-TX) along with John Conyers (D-MI) and Representatives Bob Goodlatte (R-VA) and Howard Berman (D-CA) are heading up the SOPA initiative, which is considered to be very controversial, because it directly challenges and even opposes the way the internet works. Many digital civil libertarians believe the legislation is a direct infringement of free speech. The issue is that it gives authorities the power to shut down websites without a full legal process.

 

According to Smith, “The Stop Online Piracy Act helps stop the flow of revenue to rogue websites and ensures that the profits from American innovations go to American innovators. The bill prevents online thieves from selling counterfeit goods in the U.S., expands international protections for intellectual property, and protects American consumers from dangerous counterfeit products.”
Despite oppositions to the bill, some major music industry societies like the American Association of Independent Music (A2IM) are getting behind it. Last week, the organization issued a press release that stated, “All of our label members have one thing in common; they are small business people with a love for music who are trying to make a living … This year, independently-owned music labels won over half of the 109 GRAMMYs awarded, but economic reward has not always followed critical success. A2IM members share the core conviction that the independent music community plays a vital role in the continued advancement of cultural diversity and innovation in music both at home and abroad, but we need the assistance of the U.S. government in Intellectual Property anti-piracy enforcement … While piracy and the resulting music slump is a worldwide problem, the U.S. is particularly hard hit and needs support as we’re losing our place in the world music market … As music creators and investors in the music creation and promotion of our artists, we applaud our bi-partisan legislative supporters and support their proposed actions.”

 

The SOPA bill is a “sequel” to the Combating Online Infringement and Counterfeits Act – COICA – which was introduced and subsequently blocked in 2010.

 

Chris Martin Refuses to Stream New Coldplay Album

 

Last week, Coldplay’s Chris Martin stated he would not allow the new album Mylo Xyloto – released by EMI – to stream on Spotify. Since Spotify became widely available recently, the music industry has been excited about streaming services as a viable way to reform an industry that had been fractured by piracy. However, Martin and many other big artists have expressed their discontent about having their music available in this format.

 

EMI stated last week that it was “embarrassed” by Martin’s decision not to stream the Coldplay album, especially as the company just recently negotiated a deal to license its music to Spotify, trying to get ahead of its sale and split by Citigroup.

 

CD sales have declined 40 percent since 2001, and Spotify has been named one of a few legal digital services that could entice music fans enough to keep them away from pirate sites and help music industry revenues bounce back. However, Martin and many other artists have already noted the extreme difference between CD sales revenues and streaming plays revenues. Because Spotify only pays .085p per song stream – which is then split between publishers and songwriters – they have to get millions of plays before seeing significant income.

 

While Martin did not disclose the reason he is choosing not to stream the latest Coldplay album, his refusal comes on the heels of Adele’s; she decided not to put 21 – which has sold 10 million CDs and downloads in the past year, thus calling into question the industry’s belief that albums can no longer sell in large volumes – on Spotify. Other artists that have refused to release their music to Spotify include Tom Waits, The Beatles and Pink Floyd.

 

Despite all the buzz about Spotify and its plan to change the music industry for the better, there are still doubts about whether or not the “freemium” model will work long term. And Spotify has already put strict limitations on the amount of free music listeners can access. However, a spokesman for the music service Rhapsody feels that streaming services can actually benefit artists’ bottom line, so they should not be so quick to dismiss them:  “With streaming, if someone plays a song a million times, the artist will earn money from that. Music acts could potentially make more money.”

Music Business News October 15, 2011

Posted By Rick Goetz on October 15th, 2011

This week marked big news for the business side of the industry as Citigroup suggested it would break up EMI and Google Music eyed the MP3 store space. And Björk made music history by releasing the very first “app” album.

 

 

Will Citigroup Sell EMI in Pieces?

 

Artists and music industry professionals have been awaiting the fate of EMI Group Ltd., home of Katy Perry, Colplay, the Beastie Boys and many others. Citigroup has been deliberating over what to do with the company since they took it over in February. And after final bids came in last week, reports suggested the owner will sell it off as two separate businesses – a label and a publisher.

EMI’s Chief Executive Roger Faxon and former head of EMI publishing has been very opposed to cutting the business in two, saying that the publishing arm and the label arm have a symbiotic relationship, which is what has made the company work for so many years. Since he took over leadership, he has tried to integrate both divisions to make a split more difficult.

Two companies have submitted the highest bids on EMI Publishing:  BMG Music, a company run by Bertelsmann and the private equity firm Kohlberg Kravis Roberts and Sony/ATV, a partnership between Sony Corp. and the estate of Michael Jackson.

As for the EMI’s recorded music business, Universal Music Group and Warner Music Group are both trying to seize it. Warner Music has also expressed interest in purchasing all of EMI; however, anti-trust issues on the publishing side and an inability to line up solid financing with the economy and the music industry in particular in flux will likely prevent that deal from closing.

EMI is considered to be one of the last attractive assets in the rapidly-changing music business. In June, the company was exploring alternatives to being sold, running an auction code named “Project Nile.”

Citigroup will also get more money out of EMI if they cut it in half – as much as $4 billion. Winning bidders will be selected by the end of next week.

 

Google Music Poised to Move into the MP3 Space

 

Google will likely open its first MP3 store, possibly as soon as in the next few weeks, says a report published in the New York Times. Five months ago, the company launched its first cloud music service – Music Beta, which allows users to back up songs on remote servers and stream them trough mobile and other devices – and is in negotiations with major labels to build a marketplace that will be an iTunes and Amazon competitor.   

Music executives say that Google is pushing to open the store – which will be connected directly to the cloud service – as soon as possible. Google seems to be pushing up the launch date of the store in hopes of getting in ahead of Apple, who will open its own cloud music program, iTunes Match by the end of October. However, Google must establish partnerships with labels and publishers before it can have a full-service store.

Earlier attempts to begin a “smart locker service” – a storage system that lets people link their personal digital music collections to a large central database – failed when  Google could not convince music companies it was installing anti-piracy features. Many labels and publishers have said they still are not convinced that Google has addressed their concerns regarding piracy, and Google’s ability to license their MP3 store is uncertain. If Google opens an unlicensed service, users will have to upload each song individually, which could take hours, or days depending on the size of the collection.

 

Björk’s Biophilia is Released as the First App Album

 

Björk released the first-ever “app” album last week, opening up new possibilities for artists that want to further integrate music with technology and add new dimensions to recorded music releases. Biophilia features a “set of ten apps contained within a mother app” and was made partly on an iPad. It is available as a CD and is being additionally released as a set of apps – one for each track – so listeners can enjoy a fully-interactive experience. The album represents work of Björk herself as well as work from a team of engineers, scientists, writers and artists/filmmakers, including Sir David Attenborough. App designer/filmmaker/media artist Scott Snibb headed the app design process.

Many believe this album could revolutionize how artists, industry professionals and fans have traditionally defined “music album.” The apps – depicted through images in Wired – are filled with links to reading materials and many interactive features. Interacting with the apps is incredibly comprehensive for those that take time to immerse themselves and even go beyond artistic to become educational. However, some critics worry that all these extra features detract from the main focus of any album – the music itself.

However, Biophilia, which explores music through the themes of science, paganism, nature, love and technology is clearly about the music; two entirely new instruments were even created for it. As the music industry experiences a continued decline in album sales and struggles with piracy, many artists have gone the DIY route. Björk’s latest endeavor could represent an interesting new direction for artists that want to get creative about recorded music and find new ways to embrace and leverage the growing technology side of the industry.