The effort, codenamed "Vevo" according to the Wall Street Journal, would involve a new showcase for music videos on YouTube, with the notion of commanding higher advertising rates. Right now, YouTube makes pennies per view — if it's lucky. Most of YouTube's bandwidth-consuming video funhouse goes unburdened with revenue.
Remember when the music industry said MP3s on the Internet were going to destroy music? Here's an inside glimpse at how much things have changed since Napster. Today, publicists contact me to try to arrange stories about songs their clients have intentionally "leaked" onto the Internet. American Idol David Cook is the latest in a long line. David, I love your act, but next time bypass the "mobile-only social network" and upload yourself straight to YouTube. Here's the pitch, minus the name of the hanger-on tech company trying to ride along with Cook's fame:
Be careful what you wish for. Owen Van Natta, the former Facebook COO who left the social network in February, has gotten the CEO job he said he wanted — as the new chief of Project Playlist, an online-music startup. (It's been widely reported that MySpace wooed him to run its MySpace Music spinoff. He also had conversations with social-news site Digg and shopping search engine Nextag, among others.) Van Natta's an investor in Project Playlist, and the company has just announced funding from former AOL CEO Bob Pittman's Pilot Group. But powerful backers won't change the toxic business environment all online-music startups face.A group of record labels sued Project Playlist in April — which is, sad to say, the music industry's usual approach to beginning talks. Van Natta has a reputation as a skilled dealmaker, and he led talks with the labels while at Facebook. But sources who have had recent negotiations with labels say they have been granting only short-term licenses for music — typically a year in length. Their strategy is to give startups a year to grow — and then shake them down for most of the profits they generate. Does Van Natta think he can get a better deal? Since he's taking the job, he must be betting on it.
Why can't News Corp. find anyone to run MySpace Music, the spinoff from its social network which is part-owned by major labels? No one seems able to state the obvious: MySpace Music is a feature, not a company. The outside investment it garners is just an elaborate way of cutting in the labels on MySpace's music-related profits. No wonder former Facebook COO Owen Van Natta turned down the job; TechCrunch reports that he cleverly tried to get MySpace to buy Project Playlist, a music startup he'd invested in, as part of the deal. Van Natta picked the right test: If MySpace had been willing to fold Project Playlist into MySpace Music, it would have proven that the music venture really had some independence. Any other CEO candidate should ask the same questions Van Natta raised with his quid-pro-quo deal.
Justin Ouellette's music trading site Muxtape, shut down after failed talks with the RIAA, the music labels' copyright cops, may not have earned him a fortune. But it has secured him a modicum of infamy. He got invited to speak earlier this week at the WebbyConnect Summit in Laguna Niguel, explaining to others on how to replicate his overnight success with making a website deeply popular with Brooklyn's most outspoken Internet users. As Ouellette elaborates in this interview, the key is to just make up something that people want. Guess what? Just because people want free music doesn't mean you can give it to them. Ouellette never figured that part out.
Serial entrepreneur Bill Nguyen just relaunched Lala's music service in the middle of layoff mania. The new version — high audio quality, no DRM — is pretty good. But I have to ask: Why bother, Bill? This is Lala's fourth or fifth attempt at a business model. Nguyen could get funding for another boring enterprise wireless startup like Onebox or Seven tomorrow. Those things make money.I think I've outed Bill Nguyen's secret: In a Valley full of people who want to be Steve Jobs, he wants to be David Geffen — the maverick behind the scenes in the music business. Stoking the starmaker machinery behind the popular song! Too bad the truth is more like that other Joni Mitchell line: "I deal in dreamers, and telephone screamers." UPDATE: Bill replied after I hit Publish too soon. I'll just paste it in:
Imeem is laying off a quarter of its 80-person staff, PaidContent reports. The music-centered social network has been more adept than many of its rivals at navigating the cutthroat music business. But one of its backers is Sequoia Capital, the ruthless VC firm which has ordered its portfolio companies to slash expenses. Imeem is also seeking to sell itself, with the help of investment bank Montgomery & Co. Imeem may be better than most digital-music startups — but it is still a digital-music startup, faced with fickle consumers, thin margins, and antagonistic partners in the record labels.
Remind us: Were we supposed to be impressed that MySpace's minor update to its music feature, dressed up as a joint venture with the record labels, has streamed 1 billion tunes in "a few days"? Before the launch of MySpace Music, MySpace was already streaming 5 billion songs a month, largely thanks to the blaring, automatically played music on most of its users' profiles. How many days are "a few"? In the ordinary course of business, MySpace would play 1 billion songs anyway — whether anyone liked it or not. You'd have to be sleeping with a MySpace flack to think this was a big story.
Most MySpace Music customers won't go searching for the obscure stuff. The big money is in pop hits. The industry's top 10 singles are all available to preview on MySpace Music — and they're all on Amazon.com's MP3 store as well. But that doesn't mean it's one-click easy to buy the music via MySpace. Trying to purchase downloads of 6 of the 10 directly from MySpace's new music widget failed. And those that worked required plenty of clicks and drop-down menus. [Idolator]
SlotMusic is SanDisk's attempt to replace the CD as the brick-and-mortar media for music. Flash-memory cards, preloaded with music files, will be sold in stores like Best Buy and Wal-Mart. There aren't many other details yet, aside from a press release and the "Check back soon" SlotMusic.org site. Here's a primer on the format:
Instead of wasting its time telling people to "start wearing purple," Yahoo should air a campaign boasting of cool features it has that Google and MSN don't. Yahoo could start with a video much like the one here, which shows off a new Yahoo Search feature that allows searchers to play a song straight from a search results page. Google doesn't do that — and Yahoo shouldn't make Internet users read a Google-watching blog to find out that Yahoo does.
Over the years, the reports of Napster's death have been greatly exaggerated. But electronics retailer Best Buy may just manage to put a stake in its heart. Best Buy is buying the online music-subscription service for $121 million — $54 million, really, after setting aside the cash in Napster's bank account. A great return on investment, considering Napster's assets last sold for $5 million out of bankruptcy in 2002, right?Wrong. Roxio, a CD-burning software company, snapped up the Napster name and the technical assets of Shawn Fanning's file-sharing startup on the cheap. But sometimes you get what you pay for. Roxio shed its software business and took the Napster name, but never figured out how to profit from it. In the last year, it lost $16.5 million. And yet Napster managed to live on. If anyone can lay it in the ground once and for all, we're betting it's Best Buy. The retailer has stumbled from one unsuccessful online-music strategy to another, most recently through a partnership with RealNetworks' also-ran music site, Rhapsody. Why doesn't Best Buy just ask Steve Jobs for more iPods to sell? That seems easier.
MySpace Music, a joint venture between the News Corp. social network and music labels Universal, Sony and Warner,finally launches next week, says Fortune, though it still won't have a CEO. MySpace users will be able to listen to and organize playlists full of songs from all three music labels for free. (EMI is the lone holdout, which means no coldplay.) Playlists will include affiliate links to Amazon.com's MP3 store. MySpace CEO Chris DeWolfe says ad revenues and song kickbacks are going to save the music industry, replacing lost CD sales.Imeem CEO Dalton Caldwell, whose company already offers a similar product,
Lars Ulrich, Metallica's Internet-hating drummer, explained to a Bay Area radio station that he's glad the band's new album got leaked all over the world. A copy of the album was bought in a French record store and quickly uploaded to the Internet. The band's new stance is a big jump from 2000, when they sued Napster for distributing their music without permission. Since then Metallica has worked out ways of selling their music online by themselves, finally relenting to iTunes sales in 2006. If you still have a taste for Metallica, head on over to your favorite torrent site. Lars said it's okay.
Amazon is releasing a site called SoundUnwound — a version of IMDB for musicians, editable by anyone like Wikipedia. Few know that IMDB, the movies database, is owned by Amazon.com. But the universal vendor seems to value the data therein — knowing which obscure movies a now-famous actor starred in helps cross-sell DVDs. Most of SoundUnwound's information comes from YouTube, Wikipedia, and MusicBrainz — another open-content music database. You can find out who the sound engineer for Amy Winehouse's studio debut was, if you're so inclined — okay, it's Jimmy Hogarth. With free data, Amazon gets what it pays for, in the form of broken track listings and unknown playtimes on songs, but it's still good enough to help upsell you more MP3s from its struggling music store.