Business News Week In Five

The music business week in five – Friday 19 Mar 2010

By | Published on Friday 19 March 2010

So, a portion of the music business headed to Austin, Texas for SxSW this week (though is it just me, or were a lot less UK music biz types going this year?).

But while keynotes and debates were delivered and had at the uber-convention, most of the key developments in the industry this week took place away from Texas. Here’s the five biggest stories of the week:

01: The Lords passed the Digital Economy Bill, despite there being no real resolution on the controversial Amendment 120a, an attempt by the BPI and Lib Dems to ensure measures to tackle forms of online piracy other than P2P file-sharing are included. Opposition to that clause from the web sector led to last minute attempts by the Lib Dems to reword their own amendment, but the government opted to speed the Bill through unamended, promising to give the non-P2P provision more consideration as the legislation is discussed in the House Of Commons. Meanwhile a Europe-wide report claimed ever rising piracy, if not challenged by DEB-style provisions, could result in 1.2 million lost jobs in the creative industries by 2012. But those who oppose the legislation picked holes in the report, and continued to call on their supporters to bug their MPs to oppose the Bill. CMU coverage|Pirate Party critique of pan-Europe report

02: It was speculated Warner and KKR might make a joint bid for EMI. Despite EMI’s newly appointed Executive Chairman Charles Allen insisting in Music Week he hadn’t been brought in simply to oversee a firesale of the struggling music company, chatter continued regarding the possibility of EMI’s owners Terra Firma, or their bankers Citigroup, forcing a sale within the year. The most speculated about proposal this week was that Warner Music and equity firm KKR might stage a joint acquisition of EMI, the former taking recordings and the latter publishing. The two parties reportedly discussed such a collaborative deal last weekend. If it did happen, it’s not clear if KKR would merge EMI Music Publishing with BMG Rights Management, in which the equity people already have a stake. CMU coverage|Wall Street Journal coverage

03: PRS announced its revenues were up. The publishing sector’s collecting society reported its revenues for the last year were up 2.6% to £623 million, despite the continued decline in record sales, the publisher’s share of which were once a key revenue stream. Increased digital revenues, from both download stores and streaming services, helped with the increase, with the collecting society reporting that the growth of digital in 2009 compensated for the accompanying decline in physical sales for the first time. That said, the increase in royalty revenue from overseas, the result of PRS being more proactive in collecting these royalties, also played a key role in the overall revenues boost. CMU coverage|PRS official release

04: A report said mobile apps could be worth $17.5 billion a year by 2012. The report, albeit one commissioned by an independent apps store, predicted that consumer appetite for iPhone and smart-phone apps will continue to boom in the next two years, and that the trade in paid-for apps will grow significantly. For record companies, getting a slice of that growing market probably means gimmicky artist-based apps in which sound recordings are bundled. For digital music service providers apps that make their online services mobile seem to be a way to persuade consumers to sign up to premium subscriptions. In the US, Real’s Rhapsody this week started pre-promoting its upcoming iPhone app, while streaming music newcomer MOG was showing off its app at SxSW in Austin. CMU coverage| critique of report

05: We got some interesting insights into the ongoing YouTube/Viacom litigation, when court documents relating to the case were released. MTV owners Viacom reckon YouTube should be liable for letting unlicensed content appear on their site, even though the video service eventually takes that content down once they are made aware of it. The court papers also show that Viacom claim to have evidence that, prior to Google’s acquisition of the video site in 2006, YouTube’s management actively encouraged copyright infringement to boost their traffic. YouTube’s submissions argue that Viacom actively used the video site as a promotional tool prior to 2006, and also allege that the TV firm’s lawsuit was instigated by sour grapes, because they had hoped to buy the video site before Google did so. A judge should rule on the case later this year. CMU coverage|Guardian report

And so that’s the business stuff done. Don’t forget, for a handy digest of all this week’s artist news, subscribe to the CMU Weekly, which will be delivered to your email this afternoon.

Chris Cooke

Business Editor, CMU

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