Today's big industry news is the announcement that EMI Records will be offering music for sale without the constraints of DRM (link).

EMI Music has agreed to make its entire digital repertoire available free of digital rights management (DRM) restrictions, effective immediately. The move is groundbreaking for a major multinational music company such as EMI, as the majors have so far insisted that all their digitally distributed music be DRM-protected.

EMI's new "higher quality" DRM-free music will first be available on Apple's iTunes Music Store for $1.29 a track.

The new premium versions of EMI's digital songs will complement the existing DRM-protected songs that iTunes is already selling. Other online music retailers are expected to come on board soon.

Technophobes who are already confused - this means that you can purchase an EMI download and do whatever you want with it. Burn a hundred copies, post playable copies on the Internet, and play on any MP3 player. This is remarkable progress from the record industry and has no doubt set tongues wagging. I qualify it as a giant step in the right direction, even with the almost 30% markup for DRM-free music.

The cynic in me says this may be temporary public relations satisfying ploy to show that DRM-free downloads do not work. If and when consumers reject the increased price ($0.99 for DRM vs. $1.29 for DRM-free), EMI can turn around and say, "we tried going the DRM-free approach, but the market rejected it."

For now we should give EMI the benefit of the doubt and hopefully other labels follow suit. Don't hold your breath.

Privately, sources at rival majors are expressing annoyance that EMI is jumping head first into a DRM-free environment without adequate research and testing.

Posted by Merry Swankster at 05:27 PM | Permalink | Comments (1)

I've given Gawker's new music blog a quick kicking of tires and write up (don't call it a snarkback)

It can be found on my newly-relaunched, wonderful UbiquitousMarketing.com blog. Mmmmm, it's marketing-tastic.

Posted by Keith O'Brien at 04:58 PM | Permalink | Comments (0)

Taking a break from persuing college students, dead grannies, and banging their heads into walls, the Recording Industry Association of America (RIAA) filed a federal lawsuit against XM satellite radio.

SKY Report reports:

The Recording Industry Association of America, which counts as members major labels such as Universal Music Group, Warner Music Group, EMI and Sony BMG, filed the suit late Tuesday in New York federal court. The litigation accuses XM of "massive wholesale infringement," and seeks $150,000 in damages for every song copied by XM customers using the device, which went on sale earlier this month. The litigation involves the Pioneer Inno XM2go radio.

XM responded in a statement:

"These are legal devices that allow consumers to listen to and record radio just as the law has allowed for decades," the company said in a statement. "The music labels are trying to stifle innovation, limit consumer choice and roll back consumers' rights to record content for their personal use." XM also claimed the suit "is a negotiating tactic on the part of the labels to gain an advantage in our private business discussions." The company said it's the largest single payer of digital music broadcast royalties, and royalties paid by XM go to the music industry and benefit artists directly. XM said it will "vigorously defend this lawsuit on behalf of consumers."

My comments after the jump.

Continue reading "XM Radio sued by RIAA" »

Posted by Merry Swankster at 01:00 PM | Permalink | Comments (0)

Spotlighting conventional wisdom at Bruno & the Professor, The Contrarian points how television networks are rolling with the punches versus getting their asses handed to them (see: music industry) with regards to technological challenges to the business model. Prompted by Walt Disney's plans to make television shows available for free online, our blogger compatriot muses on the failings of creativity from the music biz.

"It makes you wonder what the music industry is so afraid of. Could it be that their product is ridiculously overvalued? Could it be that the old marketing and promotional system is an absurd waste of resources?" (via Bruno and the Professor)

This got me thinking. Jeff has questioned why finished albums do not get released right away when the likelihood for leaks is so great. I never put much thought into it until recent releases refocused my perspective.

Two of my favorite groups - Flaming Lips & Yeah Yeah Yeahs - have brand spanking new albums that just hit the stores. As a music fan, I appreciate the full packaging of a CD (artwork, lyrics, liner notes, etc.). I consider every purchase as building on my collection. This all being said, I have not purchased either of the two aforementioned CDs because I got leaked copies months ago. I will probably end up buying both so as to not leave a gap in the CD rack after Yoshimi, and Fever to Tell, but I am the exception and by most accounts sick in the head when it comes to ensuring completeness to my CD collection.

Tags: Music Industry, Television, Walt Disney

Posted by Merry Swankster at 11:57 AM | Permalink | Comments (0)

From the department of "Economics, Free Market, Undercutting and Misguided Indie Angst" (DEFUMIA) comes this post on the Chromewaves blog regarding a recent Best Buy advertisement for cheap CDs of popular indie bands like Arcade Fire, New Pornographers, Cat Power, Antony & the Johnsons, among others. Cheap like $7.99 cheap.

For years now Best Buy, Wal-Mart and other big box retailers have been selling CDs at a loss as a way to entice customers into their stores in the hope that while at the electronic meccas they will pick up other profitable items. Some critics scoff at this business tactic and claim they never heard of someone going in to "pick up a cheap CD and walk[ing] out with a microwave." As with many debates, that statement is much too simplistic and lacks quantitative data. You need not walk out with a relatively big ticket item like a microwave for this plan to work for Best Buy. Adding a spool of blank CD-Rs or other high margin items such as iPod accessories to your shopping cart gets it done.

The other point of contention with Best Buy's strategy is from independent music store loyalists complaining that the low price points drive away business and spell the eventual demise of their local concert-poster covered sanctuaries. While not entirely untrue, these local stores, like the rest of the music industry, are in trouble anyway whether or not $7.99 CDs are being sold. It definitely does not help matters, but the economics tell you that a customer will buy the cheaper product if given a choice. If I need a hammer and my choices are a $15 one at Bill's hardware store or a $7 at Home Depot, guess who is getting my money? Altruistic purchasing may be well intentioned, but its not sustainable. Plus we all know where good intentions lead to.

I'm willing to counter the complaints with the following points, neatly laid out in bullets:

• Best Buy will never replace the look and feel of an independent record store.
  Anyone who has visited the Amoeba Music record store in Los Angeles or San Francisco knows this to be true. These are palaces of music that no other place can match in selection, atmostphere, and overall feel. Sure Best Buy will carry the big indie bands (not an oxymoron these days) but they will never have the thorough selection of used, imports, rarities, vinyl, etc. that make those local stores so beloved. I dare you to ask a Best Buy clerk if they carry the DFA Holiday mix just to see the awesome blank stare that follows.

• Outside of large cities mom and pop record stores do not exist.
  For many Wal-Mart is the only option for everything, including music. The only real competition is the so very delicious Internet, which in many ways is like those independent stores but better. Which brings us to...

• The Internet
  The great equalizer, sort of. Between Amazon, Insound, iTunes, eMusic, and the more illicit services, every recording is a few clicks away from your mailbox or hard drive. So if you happen to be stuck in say Wichita on Tuesday release day and Wal-Mart isn’t carrying the new Clearlake album, have no fear! Jump online voila, yours it will be.

The sweet smell of commerce on a Monday!

Tags: Best Buy, Indie Music, Wal-Mart, Amoeba

Posted by Merry Swankster at 09:03 AM | Permalink | Comments (1)

Below are excerpts of eMusic CEO David Pakman's interview with mp3.com. Full interview here.

David Pakman on:

customers:

They're a much more pleasant consumer to deal with because they are far less fickle. They are are interested in value but they're not starving for dollars. They have credit cards that are valid and don't max out all the time and they can afford to buy both a $400 hardware device and spend, you know, 100 bucks a year on music. So, we like that consumer a lot better.

DRM:

We'll continue to be no-DRM, not for philosophical reasons but only for practical, compatibility reasons. And if that whole practical, compatibility thing got sorted out, if you could sell DRM-protected music that was interoperable everywhere and that wasn't sort of penalizing customers for buying music digitally, we would do that.
- - -
We certainly do believe that the lack of interoperability is holding the digital music market back. There's no question that Napster and Yahoo and AOL's MusicNow would all sell more music if they worked on the iPod. So definitely DRM as it relates to lack of interoperability is a problem for the industry. In terms of DRM's limitations on consumer behavior, I think you can strike a balance with the consumer that says, "You can still do some things with this, but not everything that you might be expecting to do." You just have to disclose that up front to them.

eMusic's business model:

It's the same way that health clubs exist. If 1,000 people sign up on January 1st with their New Year's resolution and all 1,000 people went every day, the gym would be way too crowded and you would quit.

But, of course 1,000 people don't go every day and some people go for the first couple of months and then don't ever go again for the rest of the year. That's the same model for us and Napster and Rhapsody, where a label might get less on a per-song basis but the consumption tends to go up.

The iTunes customer buys about three or four songs per customer per month on average. The eMusic customer buys 20 songs per month on average. So, the consumption is much higher when a user prepays for music. They want to get their money's worth. That also means that a highly casual user probably won't subscribe to a service because it's too much of a commitment. So, the difference between the models is that labels might get less on a per-song basis in a subscription service but will sell more of their music.

Yes sir! Pragmatic straight shooter, I like this dude. eMusic is a sweet service, check them out here.

Tags: eMusic, David Pakman, DRM, Digital Distribution

Posted by Merry Swankster at 08:35 AM | Permalink | Comments (0)

I didn't even know that this nifty application existed. As I understand it, this tool allowed lyrics to be easily inputted into iTunes mp3 tags. Harmless enough right? Apparantly not says the Music Publishers’ Association (MPA), which represents US sheet music companies. The MPA is on a quest to fine and shut down sites that post song lyrics and aspire to convince authorities to "throw in some jail time." Of course this is all really really dumb.

This is not a case of cows going unsold cause the milk is free. I'm willing to bet that users of the now shut down software were ardent music fans who spend freely on their passion. Why not give them another reason to hate the music industry?

If all lyric sites are wiped off the web tomorrow, people are not going to throw their hands up and start buying sheetmusic so they can get the perfect lyrics for their high school yearbook. They'll use headphones and listen over and over again until they get it right.

Wrapped up like a douche in the middle of the night.

Tags: Pearlyrics, Music Industry, Lyrics

Posted by Merry Swankster at 12:21 PM | Permalink | Comments (0)

Are you sure? Steve Albini lays out what bands are getting into in an essay published back in 1993 (from the baffler via The Contrarian).

Albini:

Whenever I talk to a band who are about to sign with a major label, I always end up thinking of them in a particular context. I imagine a trench, about four feet wide and five feet deep, maybe sixty yards long, filled with runny, decaying shit. I imagine these people, some of them good friends, some of them barely acquaintances, at one end of this trench. I also imagine a faceless industry lackey at the other end, holding a fountain pen and a contract waiting to be signed.

Nobody can see what’s printed on the contract. It’s too far away, and besides, the shit stench is making everybody’s eyes water. The lackey shouts to everybody that the first one to swim the trench gets to sign the contract. Everybody dives in the trench and they struggle furiously to get to the other end. Two people arrive simultaneously and begin wrestling furiously, clawing each other and dunking each other under the shit. Eventually, one of them capitulates, and there’s only one contestant left. He reaches for the pen, but the Lackey says, “Actually, I think you need a little more development. Swim it again, please. Backstroke.”

And he does, of course.

Read the rest here.

I wonder what Albini would write today considering the rise of DIY production, promotion and distribution (due to the Internet and computers of course).

Tags: Steve Albini, Majors, Getting Signed

Posted by Merry Swankster at 04:24 PM | Permalink | Comments (0)

On Monday PRWEEK ran a story speculating on the aftermath of Sony’s controversial inclusion of hidden spyware software on CD releases. The software attached to users’ computers once they ripped the tainted CDs onto their hard drives. Far from me to tell a record company how to do their evil business as I know little about running a mega record factory. But I do know that slipping malicious spyware embedded into CDs purchased legitimately is not a good way to generate happy, returning customers. Didn’t file sharing sites become annoying to use because of the spyware? Isn’t that part of the selling point of for iTunes, Rhapsody and other legal avenues for digital music? Sony claims that they did not know about the code.

Sony BMG spokesman, John McKay explains:

When the company became aware, it offered a software update, addressed the issue of potential virus, announced that it was ceasing manufacture, and embarked on an ambitious exchange campaign. We’re doing whatever it will take to make it right.”

Continue reading "Sony & DRM - It's All Gonna Break" »

Posted by Merry Swankster at 08:01 AM | Permalink | Comments (0)