Auctioning Interests in Songs

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Songvest:

What if that song could actually be your song? Now it can.
By connecting songwriters with fans through auctions, SongVest is transforming the music industry. We've created a new patent pending venue for the trading of artists'
intellectual and commercial property—their song rights and associated royalty
streams.
Songwriters, now you can sell your rights to the highest bidder. In
essence, it's payday. And because all transactions are reviewed and managed by
legal and financial experts to make sure they're entirely lawful and future
royalty payments are sent promptly, buyers can play their song all the way to
the bank.

Rolling Stone article.

Popcuts

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A novel way to sell music online: Popcuts.

From their website:

"Every time a song you bought sells, you get a cut of the proceeds. Earlier buyers get more, so it pays to be a trendspotter."

Rolling Stone describes it as "stock market-like method to lure people toward its service."

How it works: Popcuts takes in a 10-20 percent cut of each purchase, then leaves it to the artist to decide their own percentage. From there, the rest of the earnings go towards the users’ accounts.

But currently their catalog has only 200 obscure artists and roughly 700 songs.

Napster - DRM Free

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Napster, who has a sale catalogue of 6 million songs, today stripped DRM from all paid downloads on its digital music service in favor of unprotected MP3s.

The company has support from all 4 major labels. (Given Napster's legal history with the labels, it's kind of ironic, right?)

Notably, customers cannot (yet) replace their previously purchased DRM-laden files with the new unprotected versions. Does the media-upgrade strategy correlate to other historical "upgrades": LP to tape, tape to CD, CD to...errr...minidisc? Will consumers purchase DRM-free copies of songs they previously downloaded with DRM?

[Billboard article.]

Coldplay Single - Free for a Week

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Beginning tomorrow (4/29/08) and lasting for a one week period, Coldplay will offer at no cost on their website the first single on their new album. On May 6th, the single will be available as a conventional "pay to download" track.

Why only a one week free-trial? The free-download period coincides with the beginning of radio-release. Isn't the first week likely to be the week when demand for the single is highest?

[Billboard article.]

Section 115

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General Counsel from Copyright Office.

Amend it? " Most important musical issue for digital music distribution".

Another look at it. Look at business models of digital music distribution. Limited download v interactive streams. All implicate copies. Is that delivery as defined in scope of license? Server copies. Steaming copies.

Important because royalty judges are hearing on new rates. Novel question of law is whether interactive streaming a digital phono record delivery? No. on demand digital transmission : should they be eligible for royalty rate?

Everything depends on definition of digital phono record delivery.

Notice of proposed rule making forthcoming.

Apple and "Subscription" - In the Same Sentence?

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The Financial Times reports:

Apple is in discussions with the big music companies about a radical new business model that would give customers unlimited access to its entire iTunes music library in exchange for paying a premium for its iPod and iPhone devices.

Called an "all you can eat" model. Who knew the record industry was turning into an Old Country Buffet?

NIN: "Navigating the Digital Wilderness"

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Jeff Leeds, "Nine Inch Nails Fashions Innovative Web Pricing Plan", The New York Times (Mar. 4, 2008):

Nine Inch Nails has responded to the wash of free music on the Internet, but with its own tactic: the band has uploaded tracks from its new album directly to an unauthorized file-sharing network even as it offered more elaborate versions for up to $300.
...

The band decided to offer the music with a Creative Commons license, a new type of intellectual-property copyright. It allows creators to reserve certain rights and, in effect, authorize various unpaid uses of their products. In this instance the band is allowing virtually any noncommercial use of its music.

U2 Manager - Achtung Baby!

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Rolling Stone reports that U2 manager Paul McGuinness "called for an end to illegal music downloading and placed much of the blame squarely at the feet of Internet service providers. He also called out record labels for their lack of foresight and governments for not holding ISPs responsible for what pumps through their wires."

Understandably, McGuiness wants to secure the financial future of the band. And yes, U2 should not only strive to be great at music, but also great at business too.

But, being great at business is not analogous to clinging to the old model of the music business. Adapt. Otherwise, you still haven't found what you're looking for.

More MP3 Choice - Yahoo!

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Yahoo! is in preliminary discussions with major recording labels to offer a DRM-free (i.e., without copyright protection software) digital music down-load service. Amazon and iTunes: look out!

It is not yet clear whether Yahoo! will follow an a la carte purchase model, or a free-download/ad-supported model. OTCS opines that an ad-supported model would be a major shift in the digital download market. Given the death of the subscription model, is ad-supported "free" downloading the nail in the a la carte model's coffin? Time will tell.

Radiohead - Who's Buying

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By now, news of Radiohead offering its latest album on-line at a price chosen by the downloader is old - news. Now the question remains: will anyone buy the album from physical retailers now that it "In Rainbows" is being released in physical formats?

Though Radiohead has not aired any information regarding revenue from the "you-pick" pricing scheme, speculation is abundant. Conversely, sale -- and thus, revenues -- of physical formats will be easy to track. In the end, does it matter?

Radiohead has amassed critical and public following - so let's wait until they go on tour and see what they charge for tickets (and how fast they sell out) before determining how "successful" both "In Rainbow" distribution methods were.

Universal Joins Forces With Social Networking Site

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The Wall Street Journal reports that Universal Music has joined forces with social networking service Imeem, Inc. The licensing agreement will allow Imeem's 19 million users to listen to, and embed, Universal music & videos for free on their personal pages. On Universal's end, it will receive a penny-rate payment each time a user listens to one of its songs in addition to sharing advertising revenue associate with a given song. The deal thus promises to provide labels "a revenue stream they've never seen before".

With this deal, Universal joins the other major label groups and marks the first of its kind to cover all four majors. Notably, Universal has a rough-history in such deals - it sued MySpace.com last year for copyright infringement, alleging that the site didn't do enough to prevent users from posting copyrighted materials without authorization.

A Little Bit Softer Now

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Here's an interesting idea: start pre-selling an album on-line with an initial price point of, for example, $15, and the more people that order before the release date, the lower the price-point drops (with a floor of, for example, $5). Those who originally ordered with a higher price than the final price point get the benefit of the lower price! (Cliff Richards, UK release of "Love, the Album" on EMI)

Is this Amie Street in reverse? At the very least, it is a good way of measuring what music is actually worth to the consumer. But who will be the first person to order the pre-release without a guarantee that the price will drop? At least with Amie Street, you KNOW the price you are ultimately going to pay, because it is in real time.

SonyBMG-MySpace Licensing Deal

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SonyBMG is licensing its artists materials to MySpace for a cut of the sponsorship & ad-revenue generated from the music videos and profile pages.

What does this mean to you, the consumer? Nothing really. OTCS suspects that a very small % of bands on MySpace are signed to a SonyBMG label, and those that are, OTCS suspects were already putting their music/video online anyway.

But mazel to SonyBMG for figuring out a way to monetize this avenue of communication. Of course, the financial terms of the deal were not disclosed...so whether or not it is successful, only time will tell.

Wannabe...Our Distributor?

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OTCS can't believe we missed this one:

Victoria's Secret, the women's lingerie retailer, will be the EXCLUSIVE DISTRIBUTOR of the Spice Girl's soon-to-be-released (Nov. 12) "Greatest Hits" compilation (EMI).

Not sure this is as ground-breaking as last week's Madonna/Live Nation deal, or the Radiohead In Rainbows name-your-own-price model, but an interesting example of a major label seeking revenue from alternative sources. However, OTCS questions how many men will walk into a Victoria's Secret just to buy the album? How will EMI promote this to customers (e.g., men) who do not regularly shop - for either apparel or music - in Victoria's Secret? Victoria's Secret clearly is not the same type of retailer as Starbucks, who draw in a much more diverse demographic of customers to purchase albums on their HearMusic label.

Also interesting, what cut is Victoria's Secret taking on album sales? Or maybe they get their cut on the up-coming Spice Girl's tour? Talk to me people...