Why Spotify Still Hasn’t Launched In the U.S.: $$$
Why has Spotify taken so long to launch? Money, sources tell The Telegraph. “Extremely high cash advances” demanded by record labels, an unnamed senior music executive says. (No indication is given if labels’ demands are higher than typical high demand for advances labels would seek from an ad-supported music service.)
Guess what? It may be working. While The Telegraph writes that Spotify is rethinking a U.S. launch (which sounds like a negotiating tactic more than a legitimate rethinking of the company’s strategy), this music exec claims Spotify is “now looking for additional funding to facilitate the labels’ demands.” The seeking of more funds would imply that Spotify is moving ahead with its launch as well as its plans for an ad-supported version in addition to the less controversial paid version.
And it turns out that’s exactly the dual-version scenario laid out by CEO Daniel Ek last month at the D: Dive Into Mobile conference. Ek said when Spotify launches in the U.S. it will have a free version that will limit users to 20 hours per month. The paid version, he said, will cost $10 per month, a price tag that has become the standard U.S. for unlimited access services with a mobile option.
Cable Execs Finally Admit Cord-Cutting Is For Real
— Just a few months ago cable executives were dismissive of the cord-cutting phenomenon. Now some are changing their tune. “We’ve been looking at this issue for the better part of a year, and our perspective has pretty much done a 180 to a belief now that pay-TV ‘cord cutting’ will happen,” says Verizon VP Shawn Strickland.
Other executives have piled on. “Smart TV is an inevitable trend,” says Baeguen Kang, VP of research and development at LG Electronics Co. “It’s going to be a fundamentally big transition,” says Jason Kilar, CEO of Hulu.
This “180” comes after numerous analysts have warned that cord-cutting is real and Internet programming is starting to replace time spent watching broadcast television. The topic heated up in September when Credit Suisse claimed an internal survey showed 30% of Netflix users between 18 and 24 bypassed cable television to watch programming online.
Companies that could be affected by cord-cutting have often rejected analysts’ claims. Comcast CEO Brian Roberts, for example, has publicly dismissed cord-cutting a number of times. “There’s not any real evidence that [consumers] want to get rid of my distribution, whether it’s satellite, cable, or phone, and just go to the Internet,” he said in May. Roberts reiterated that belief in September. “We really just don’t see it.”
These recent statements come the week of the annual Consumer Electronics Show in Las Vegas. And this year one of the biggest product lines will be Internet-enabled televisions.
( USA Today, Los Angeles Times, Wall Street Journal)
TuneCore Survey Shows Little Support For Labels Being Paid For Radio Airplay
— How unpopular are record labels? Less than half of respondents to a TuneCore survey said record labels should get paid when music is played on the radio. Here’s the breakdown: songwriter/publisher (31.6%), performer (11.6%), other (7.6%), record label (4.8%) and none of the above (0.8%). All of the above got 43.6%, giving record label 48.4%. If passed, the Performance Rights Act would require broadcast radio stations to pay performers and owners of the sound recording (typically the record label). Songwriters (and publishers) already get paid for broadcast radio play.
Sound Familiar? Borders Books Suspends Payments To Vendors
— Here’s a tale that reads like the past ten years of music retail: Borders has suspended payments to vendors and vendors are suspending shipments to Borders. In addition, Borders is asking its vendors to accept delayed IOUs in lieu of payments. Publisher’s Weekly reports that Borders has secured financing and will present its plans to publishers this week.
Some people may see this news and shrug it off by saying Borders represents a dying business model. While that may be true, publishers do not want a national book chain to go under when they need outlets that cater specifically to book buyers. It’s the same predicament record labels and their distributors have faced over the years. To keep a failing retailer in business, vendors occasionally take losses on their receivables. In many cases, extending credit and taking losses only prolongs an inevitable bankruptcy and closure. But that’s how it tends to plays out, and it could happen with Borders. ( Publisher’s Weekly)
Metadata & Too Many Gigis
— It’s 2011 and metadata problems are a part of shopping at digital music services. This week I spotted a new album by Gigi at eMusic under “Your New Arrivals,” a section that offers automated recommended based on customers’ previous purchases. But this album was not by Gigi the Ethiopian-born female singer who is married to musician/producer Bill Laswell, now lives in America and has released albums on Chris Blackwell’s Palm Pictures label. No, this was Gigi the Indonesian rock band. Based on my previous purchases, eMusic thought it was recommending the female singer. To make the Gigi matter more confusing, there is an indie rock group called Gigi that released an album on Tomlab last year.
I’m not picking on eMusic, and this is not just a metadata problem. The ironic part is the same mixup with the same artists occurred to me in real life. A few years back, I bought a $25 ticket to see Gigi at the Knitting Factory in New York – I bought it the moment I saw tickets were on sale. At the time the web site had nothing more than a name and a date and I assumed the performer was Gigi the Ethiopian-born singer. The day before the show I checked the web site for the show’s start time and found out I had purchased a ticket to see an Indonesia rock band called Gigi (who is very popular in their home land and, apparently, with Indonesian expatriates in the New York area). I went to the show, didn’t understand a word and enjoyed it anyway.