-- British Sky Broadcasting will launch its long-awaited ISP-based music service next week. The specifics about the quality of the store and its user experience are still emerging, but details are out about the pricing structure. And they are underwhelming details. A report by the Financial Times says Sky Songs will have two tiers: £6.49 ($10.25) for either one album or ten tracks; and £7.99 ($12.62) for either one album or 15 tracks. Albums will carry one of the two prices. Subscribers of either plan will have unlimited streaming from the entire catalog. Additional songs, according to the report, will cost 65p ($1.03) and £6.49 for tracks and albums, respectively. Those prices do not indicate much of a "compete with free" strategy. They are more indicative of a desire simply to roll out a legal option available for those ISP customers who are notified of their infringing activity and face disconnection (the online service is available for other ISPs' users too, not just Sky Broadband customers).

Given the lead-time of over a year in launching Sky Songs and the urgency of the fight against piracy, a more innovative pricing structure was expected. Of course, it has yet to be seen if the actual product is attractive, easy to use and worth the monthly fee. Since free streaming is part of the package, the user experience goes well beyond purchasing music. Sky Songs is meant to be a place where customers spend a lot of time. It will be imperative that Sky Songs customers really enjoy the product.
(Financial Times)

-- It's said that Apple's iTunes LP is cost prohibitive for small labels - the production fee is $10,000 per title.
(Gizmodo)

-- The New York Times has a special feature on where to buy vinyl records in the East Village of Manhattan. Other Music, Rockit Scientist and Norman's Sound and Vision are on the walking tour.
(Gizmodo)

-- Steve Purdham of We7 talks to the Guardian about the costs related to streaming music services. "By going for scale, Spotify creates the problem that the cost base for the music is so high. The costs make the freemium model, pushing people to subscriptions, hard to handle. The model that Spotify's shown in the public domain will need significant investment. If they've just raised $50 million then before they go to the US, that $50 million has been spoken for across six or seven months."

Becoming very popular is tough for a young music service. The company's desire for lower royalty rates is understandable. Then again, the labels' position is understandable, too. If Spotify chooses to lose incredible amounts of money as it grows its user base - the "grow first, profit later" method - should content owners reduce their rates to help a long-term strategy that may not work out? In that case, Spotify will be supplanted by another "grow first, profit later" service that wants reduced royalty rates during its formative years. If that service fails, labels would allow yet another new company grow with a lower royalty burden. But if nobody is making it far enough to turn a profit, labels aren't going to be able to collect the full royalty rates it reserves for only the mature, profitable companies. So labels need to balance encouragement of new companies with some degree of steadfastness on the value of their product.
(The Guardian)

-- Ben Sheffner (of the blog Copyrights & Campaigns) on the actual law produced in the Joel Tenenbaum file sharing case. "The fair use lesson from the Tenenbaum case? Yes, the doctrine is notoriously vague, and contains vast areas of grey. But though there is much grey, there is still black and white, uses that are clearly fair or not. Obtaining and distributing entire copies of songs to avoid having to pay for them is not fair use, even under the most malleable of standards. Even a Harvard Law School professor ought to be able to tell you that."
(Washington Legal Foundation)

-- Clubs Australia has announced it will stop playing record labels' songs if a hike in public performance goes through in December as planned. The clubs will instead play only unsigned artists and none affiliated with the Phonographic Performance Company of Australia.
(Sydney Morning Herald)

Questions? Comments? Let us know: @billboardbiz

Print