-- AdAge.com has an in-depth piece on Warner Music Group's Web strategy and its new deal with YouTube. What really stands out about the strategy is that it represents a market-driven solution to a complicated licensing problem. The incentives of service and content owner are in better alignment. From the article: "The deal is the engine that is expected to power Warner's new approach to the web, which will include distribution deals on similar terms with big portals and distributors from AOL to Yahoo to MySpace to MTV... Warner's core requirement is that the distributor allows Outrigger to monetize the videos, and that the videos link back to artist sites. The reversal in terms should appeal to web distributors. Before, a deal to host Warner video was an expensive proposition for them because they had to pay license fees; now they'll collect a percentage of ad revenue commensurate with the traffic they deliver."
(AdAge.com)

-- Spotify founder Daniel Ek had an op-ed at the Times Online. He called on the music industry to envision a multitude of formats and products - ad-supported, subscriptions, downloads and non-music product sales. Ek called for a departure from per-play royalties in exchange for a system that would encourage average revenue per user. In other words, Spotify would like lower rates from content owners (who happen to own equity in the company) to build a massively successful company. Spotify is in it for the long haul, he wrote, and argued there are precious few examples of companies that quickly achieved big success. Even iTunes missed its first-year revenue goals by 30%, he says. On one hand, that's a strange example to use since content owners did not slash their rates to help iTunes balance its budget. On the other hand, iTunes' costs are based on a limited variety of products. Spotify clearly wants to use music as a promotional tool for the sale of not only music downloads but other items. Trillions of streams, goes the thinking, will generate enough interest to fuel other revenue streams. And to do get those trillions of streams, Ek believes, per-stream rates are impractical.
(Times Online)

- From Digital Music Forum West: The complexity of licensing content for online services. "I wish I could say this is getting better, but this is getting worse," said Michael Petricone of the Consume Electronics Association.
(Digital Music News)

-- Topspin's James Lamberti wrote about the Digital Music Forum West conference and brings up a few main points about product offerings and cost reduction. If you don't read the post and want the best takeaway, here it is: Topspin artists who give away music (think free download) achieve a conversion rate four times higher than artists who offer only free audio streams."
(Topspin Blog)

-- A new study found that two-thirds of adult Americans do not want marketers to tailor advertisements to their interests. Over half of 18-24 year olds said they do not want such tailored messages.
(Press release, via IP Carrier)

-- Online advertisers - such as record labels embarking on new online video strategies - should be focusing on ROI, not click-through rates. An X-Y graph of 200 online ad campaigns (ROI on Y axis and click-through rate on X axis) show no correlation between the two (actually it showed a slightly negative correlation). "Beyond the obvious finding that advertisers should not be overly focused on click through rates, the big idea here is that advertisers should be including online display advertising in their overall marketing mix, increasingly taking advantage of flash/video ad units to reach the consumer, without the hope that the person exposed to the ad will be one of the few that actually click on ads."
(Nielsen Wire)

Follow Billboard senior analyst Glenn Peoples on Twitter at twitter.com/billboardglenn.

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