Business Matters: The Numbers Behind Vevo's Potential Facebook Move
Business Matters: The Numbers Behind Vevo's Potential Facebook Move

Vevo Moves Closer To Facebook, But Won't Jump Yet
Starting March 9, Vevo users can log into the service using only Facebook. News of the change was sent to Vevo users and a copy of the email was posted at Digital Music News. A Vevo spokesperson verified to Billboard.biz that both new and existing Vevo users will be able to log into Vevo only using Facebook. Any visitor to Vevo can view videos without logging in, however.

Does this portent a bigger partnership between Vevo and Facebook? As CNET reported in January, Vevo had exploratory discussions with Facebook about migrating its video content over from YouTube. Facebook would host Vevo's videos and share the ad revenue they generate. Talks were said to be quite preliminary because the partnership between Vevo and YouTube won't expire for almost a year.

Vevo and Facebook are already intertwined. Recall that Vevo was a Facebook partner at the f8 conference, so it has already been using Facebook's Open Graph for over 5 months. Open Graph allows Vevo to offer a more personalized service - expect more of these features in the near future. Vevo also uses its Facebook app to power artist videos on the pages of its artists.

But rumors about Vevo moving to Facebook seem like more of a negotiating tactic used to gain leverage against Google. It's not as far-fetched as the idea of a Spotify IPO that was floated by paidContent this week, but it doesn't exactly pass a basic sniff test with flying colors. Facebook is not a video platform and does not specialize in storing and streaming videos. Nor is Facebook the de facto web location for people to search for and upload video content. YouTube is synonymous with online video. And Vevo holdout Warner Music Group appears content enough with YouTube: it just announced "Warner Sound," a YouTube channel with original content from Warner.

Turning The Music Industry Into The Water Industry
"Music like water" is the phrase used to describe music as a service - usually a paid subscription service - rather than discrete purchases. But how literally should that term be interpreted? A post at Hypebot likens music accessed to subscription service to water in the way people take its low cost (it seems practically free, until you don't pay your bill) and abundance for granted. There may be dangers in giving customers a sense that music should always be there, the post argues. Think of how people expect nearly free, clean water without thinking of the costs that go into it. "Entitlement is a symptom of immaturity, and we as a society have a lot of growing up to do."

But "music like water" turns out to be a pretty good metaphor for music - but not for the obvious reasons. If you think subscription services and/or radio fulfills all consumers' needs for music, you're overlooking the opportunities that exist to package, market and sell music in ways that meet different needs. Downloads (and other high-value music purchases) are to subscription services like bottled water is to tap water. People spend billions each year on distilled and purified water even though tap water is plentiful, ubiquitous and inexpensive.

Any product, even something as basic as water, can be packaged differently, marketed differently and sold at a premium. Coca-Cola and Pepsi were not dissuaded by the availability of tap water. They went out and purchased water brands -- Dasani by Coca-Cola and Aquafina by Pepsi - and turned something practically worthless into something far more valuable. Inexpensive water is also mixed with, say, tea leaves or coffee grounds and sold at a markup. Artists and music companies can and will do the same with music. On-demand, ubiquitous music will be the foundation upon which other revenue is made. Neither subscription services nor Internet radio will prevent music from being sold in some way as a higher value product. ( Hypebot)

Dotcom Takes To The Media, Blames U.S. Gov't
Get ready for one of the most entertaining copyright trials of all time. Megaupload founder Kim Dotcom, out on bail in New Zealand and facing extradition to the U.S., is giving interviews and calling out the entertainment industry for lack of evidence and out-of-date business models. "If the business model would be one where everyone has access to this content at the same time, you know, you wouldn't have a piracy problem," he told TorrentFreak. "So it's really, in my opinion, the government of the United States protecting an outdated monopolistic business model that doesn't work anymore in the age of the Internet and that's what it all boils down to."

In an interview with a New Zealand TV station, Dotcom also blamed lack of internal resources that are insufficient for policing 800 file transfers per second. "We are a relatively small company; you can't expect us to police that kind of traffic." He went on to say he is being targeted in part because of his flamboyant lifestyle and personality.

He's partially right about one thing: copyright does give owners a limited monopoly over their creations. But it sounds like Dotcom has a problem with copyright itself, not the business models that work within the copyright system. iTunes seems like a pretty good business model even though Apple has to negotiate with rights holders (who have a monopoly on the sale and distribution of their works). Same with Pandora, which uses a compulsory license granted to webcasters. And Dotcom is certainly free to have his opinion on the efficacy of copyright in 2012. But so far there's no evidence that Megaupload negotiated with rights owners to create a business model better suited for today's Internet, or lobbied to have countries alter their copyright laws so new business models could flourish. And don't expect any such evidence to come out during the trial. ( TorrentFreak)