MAJORS BUYING INTO AEG?
-- According to the New York Post, AEG is in talks with major record labels about taking a minority stake in the company.
The talks could result in either a sale to one of the major music companies or possibly a consortium of bidders, one executive close to the matter said. The discussions are said to have been on and off with Universal for more than a year, but have broadened recently to include other labels. "The talks are still going on. There is no definitive agreement," warned one person close to the discussions.
An AEG spokesperson told the Post it had spoken with some companies. A spokesperson for Universal Music Group said the company is not in discussions with AEG.
The Post isn’t sure about AEG’s rationale but brings up the possibility that it may want to raise capital “while the business is still robust.” Actually, there are two forces at play: the concert business is relatively healthy, which makes it relatively attractive compared to a music content company, and the record industry is relatively weak, which gives a record label an incentive to seek a more stable part of the business.
Of course, AEG is likely to eventually have an answer to the Live Nation-Ticketmaster merger. Joining with a major music group would be just such an answer. And what better time to seek an investment than at a time when a concert promoter can garner a healthy valuation? It seems that everybody is bullish on live events right now. If AEG is going to sell a stake, it would be wise to sell high. (NY Post)
BRONFMAN JR. DISCUSSES SHARE SALE AT TRIAL
-- At an insider trading trial in Paris, Edgar Bronfman Jr. told the court a Vivendi share sale was not definite when he executed a planned exercise of his options. The charge against Bronfman, then a Vivendi vice chairman and currently the CEO and chairman of Warner Music Group, relates to his 2002 sale of Vivendi shares. The judge in the case is focusing on a December 2001 meeting at which the company discussed the purchase of assets from USA Networks. (BusinessWeek)
REPORT: CABLE, BROADBAND PENETRATION UP
-- Penetration of both cable and broadband services has increased about 11 percentage points over the last two years, according to Nielsen. Broadband-only subscribers, however, have barely increased over that time span. That may seem counterintuitive given the growth in video streaming and online options for viewers. In recent years there has been much hoopla over people who ditched their cable subscriptions in favor of Netflix, Hulu and other alternatives. But the numbers show people still want television. For their part, cable companies have addressed changing consumer habits through the bundling of services (triple play voice-cable-broadband, for example). (Business Insider)
A LOOK AT RDIO'S MATCH RATE
-- A tale of two music collections: In a positive review of new music streaming service Rdio, TechCrunch lauded the wide breadth of its catalog right out of the gate. “One thing Rdio has over the original Joost video service at launch is that it is coming out of the gate with great licensing deals. I’d say it matched between 70 and 80 percent of my iTunes songs.”
My match rate, on the other hand, was about 25%. So while the interests of the TechCrunch writer are more or less covered, a person with more out-of-the-mainstream tastes – not to mention advances, out of print titles and bootlegs – finds the catalogs of all subscriptions services to be wholly unfulfilling. There is a fix, however. Unlike Rdio, Spotify mixes a user’s local files (from a user’s hard drive) with its licensed catalog. It’s a key feature that helps mitigate the problems inherent with offering only what can be licensed.
Rdio is indeed a pretty good product (weak catalog notwithstanding), but keep in mind that coverage and positive reviews at TechCrunch don’t correlate with success. The site was been an avid supporter of two dead music services (Imeem and Lala), one new one that has a long, tough slog ahead (Mog) and another that hasn’t yet appeared in the U.S. (Spotify). Rave reviews by a tech blog – no matter how influential – does not necessary reflect the mainstream appeal these services desire. (TechCrunch)
LIVE NATION SUIT CONTINUES
-- Saying the lawsuit’s allegations “indicating a capacity to mislead consumers,” a federal judge ruled the New Jersey ticket gauging lawsuit against Live Nation can continue. The plaintiff sued because because his ticket to a concert at PNC Banks Art Center in Homdel, New Jersey included a $6 parking fee regardless of the concertgoers mode of transportation. Live Nation had claimed it was a no-fee promotion. If Live Nation is found to have mislead consumers, it would be in violation of the state’s Consumer Fraud Act. The plaintiff’s attorney said he will file a motion to make this a class action lawsuit. (BusinessWeek.com)
-- Digital distributor TuneCore has partnered with Jango Internet Radio to offer a channel for only TuneCore artists. (TuneCorner)
-- IMP Inc., owner of DC’s 9:30 Club, has filed suit over Montgomery County plan to give over $4 million in planned subsidies for Live Nation’s Fillmore venue in Silver Springs, Maryland. (Washington Post)
-- Raleigh’s new 5,000-seat outdoor amphitheater won’t be named after Bud Light after all. (News Observer)