Magnatune, Others Profiled

Continuing the evolution of the digital distribution models: Online music stores singing a new tune: No big labels allowed [pdf]

Launched in the shadow of large digital distribution empires such as Apple’s iTunes and Napster, these independents-only music stores are designed to serve musicians who find themselves buried beneath the major labels’ artists.

Even on the Internet, where inventory isn’t limited by real-world display space, unsigned artists don’t stand a chance unless they have a record deal.

But the tables are starting to turn, with the emergence of indie-only online music stores that not only give exposure to musicians on independent labels but to unsigned musicians. Businesses like Audiolunchbox.com and Magnatune.com are changing the way fans download music.

Stopped Clocks Right Twice A Day…

And Hiawatha Bray gets it right on occasion, too: Local WiFi plan turning into a federal case [pdf]

If Boston Mayor Thomas M. Menino is tempted to imitate the Philadelphia plan, he may have to clear it with Pete Sessions, a Texas Republican in the US House. This month, Sessions offered a thoroughly odd bill that would ban cities from running communications networks that compete against private-sector telecom companies.

Those of you who thought Republicans believed in states’ rights might be puzzled. If the leaders of Philadelphia or Boston or Sioux Falls want to dabble in WiFi, why should a Texas congressman make a federal case of it? Maybe it has to do with his previous career as an executive of SBC Corp., a large phone company that isn’t too eager to face fresh competition.

[…] What do these examples prove? Mainly, that it’s silly to try to resolve this by law, either state or federal. This is why we have 50 states; so the various regions can experiment with different solutions. Given the fact that half of US Internet households have broadband, it’s not clear there’s really a problem here. But Philadelphians are keen on making the effort, and the rest of us can learn from their experience. It may prove to be a fiasco, but I don’t pay taxes in Philly.

Another Round of Ringtone Stats

Ringtones make sweet music for record label [pdf]

Plus, some thistling past the graveyard by Sony:

While download services like Apple Computer Inc.’s (Nasdaq:AAPL – news) iTunes seem to have settled on a standard price of 99 cents per song, ringtone sellers can charge two to three times as much for a 15-second snippet.

“This is not a fad that will go away in the next year or so,” said Thomas Hesse, president of global digital business at Sony BMG Music Entertainment.

[…] “Ultimately we believe the phone will be the player of choice for mobile music,” said Sony’s Hesse.

Sony BMG already makes as much money from ringtones as it does from computer-based digital downloads, and ringtone revenues at rival EMI Group Plc (EMI.L) only slightly trail those from song downloads.

Declan on the Brewing Public WiFi Battles

Should cities be ISPs?

An opening federal salvo has come from Rep. Pete Sessions, R-Texas, who introduced a bill last month that would effectively prohibit state and local governments from providing Internet, telecommunications or cable hookups if a private company offers a “substantially similar service.” Existing municipal services already in place would be permitted to continue.

[…] Another bill veering in precisely the opposite direction could be introduced as early as this week by Sens. John McCain, R-Ariz., and Frank Lautenberg, D-N.J. Their proposal, the Community Broadband Act of 2005, is expected to permit a town or city to explore the option of deploying its own broadband network.

Promotion in the Digital Age

Fans Spread Jams With Music Mixes

Music fans once turned to radio DJs to expose them to new music. But as music grows on the net, listeners are relying on friends and strangers to feed them — often in creative combinations.

Forget the album and corporate radio. Fan-built playlists and mixes are taking over the way people get their music.

[…] While amateur mixing has been around since the days of taping the radio, making mixes is faster and easier with digital songs. And as people pick and choose what they like, they are sharing these musical collages with their friends — and strangers — on the web.

“Mix tapes and playlists are really the new container for music,” said Lucas Gonze, creator of Webjay, a site that allows visitors to build playlists from free (and legal) MP3s compiled from sources all over the web. “They’re dirt simple, they’re social and they work.”

IFPI Piracy Report

Press release: One in three music discs is illegal but fight back starts to show results

The report, with lots of fun facts to know and tell (plus some graphics): The Recording Industry 2005 Piracy Report

Global pirate sales of music totalled an estimated 1.5 billion units in 2004, worth US$4.6 billion at pirate prices. The value of the world pirate market for music equates to the entire legitimate music markets of the UK, Netherlands and Spain combined.

Disc piracy, which makes up the bulk of the problem,grew only 2% in 2004 to 1.2 billion units. Despite this, global pirate disc sales are almost double the level of 2000, and 34% – one in three – of all music discs sold worldwide in 2004 was a pirate copy.

Sales of all pirate recordings (discs plus cassettes) fell slightly in 2004, mainly due to falling cassette piracy and, particularly in Asia, to piracy on the internet. There were stepped-up anti-piracy initiatives in several territories, including Mexico, Brazil, China, Hong Kong and Spain. However, disc piracy increased overall with particular growth in India, Eastern Europe and parts of Latin America.

Marybeth Peters on Licensing Reform

I am sure that there is a lot of discussion of this testimony and the § 115 issues that underly it — I’ve just been swamped, so here’s a placeholder until I get a chance to do something with this: Statement of Marybeth Peters, The Register of Copyrights before the Subcommittee on Courts, the Internet, and Intellectual Property, Committee on the Judiciary (June 21, 2005)

The increased transactional costs (e.g., arguably duplicative demands for royalties and the delays necessitated by negotiating with multiple licensors) also inhibit the music industry’s ability to combat piracy. Legal music services can combat piracy only if they can offer what the “pirates” offer. I believe that the majority of consumers would choose to use a legal service if it could offer a comparable product. Right now, illegitimate services clearly offer something that consumers want, lots of music at little or no cost. They can do this because they offer people a means to obtain any music they please without obtaining the appropriate licenses. However, under the complex licensing scheme engendered by the present Section 115, legal music services must engage in numerous negotiations which result in time delays and increased transaction costs. In cases where they cannot succeed in obtaining all of the rights they need to make a musical composition available, the legal music services simply cannot offer that selection, thereby making them less attractive to the listening public than the pirates. Reforming Section 115 to provide a streamlined process by which legal music services can clear the rights they need to make music available to consumers will enable these services to compete with, and I believe effectively combat, piracy.