Business News Week In Five

The music business week in five – Friday 26 Nov 2010

By | Published on Friday 26 November 2010

Hey there people, Happy Friday everybody and belated Thanksgiving greetings to our American readers. We hope much thanks was given. Coming up, your Week In Five round up, but first a quick reminder that the final CMU Training course of 2010 takes place in Shoreditch next week. This one is for anyone who plans to still be working in music in a year’s time. Anyone? Well, the industry is still changing rapidly, and our Music Business Models course keeps you up to date with what’s happening, what new revenue streams and investment models are out there, and what this might been for the future of record labels, artist managers and other music companies. We have a couple of places left, you will find information at www.theCMUwebsite.com/training. Meanwhile, that promised week in five.

01: It was confirmed that Sainsbury’s had joined the VAT dodge party. The Observer revealed that the supermarket firm, which launched a mail-order CD store recently, is outsourcing the operation to a company based on the Channel Islands. US retail giant Best Buy has done the same thing for its CD website. This, of course, means the company doesn’t have to pay VAT on any CDs that cost less than £18. Mainland-based high street and mail-order retailers argue this much exploited VAT loophole is hugely unfair, has contributed to the demise of the indie music retail sector, costs the British tax payer millions and contravenes European tax rules. CMU report | Anti-loophole campaign

02: Spotify made £16.6 million in losses. Not this week, I should add. Well, not as far as we know. But Music Ally got its hands on the company accounts for Spotify Ltd for 2009 and worked out that is how much the firm lost as it built its foothold in the European streaming market last year. Losses for 2010 are almost certainly much higher. Some span this story as doom and gloom for Spotify, though presumably the company’s business plan accommodates such losses in the early years. Though gossipers says investors are now putting on the pressure about the service’s much delayed US launch, which might result in it going live there without all the majors on board. CMU report | Music Ally report

03: The US industry hit out at a PC Mag LimeWire alternatives article. Actually, the letter a bunch of American music industry trade bodies sent to the US tech website was posted earlier this month, but went public this week. They said that, by reporting on what other P2P software web users could utilise once a judge banned the distribution of LimeWire, PC Mag was encouraging copyright infringement. PC Mag said that claim was “nonsense”. CMU reports | PC Mag report

04: Axl Rose sued Activision over ‘Guitar Hero III’, with one of our favourite lawsuits so far this year. The Guns N Roses man says he was assured Slash would not appear in the game when he gave permission for their song ‘Welcome To The Jungle’ to appear. The guitarist then appeared as an avatar and in a Velvet Revolver track. Rose claims that an Activision chief previously admitted the company had screwed him over during a tearful apology. The gaming firm is yet to respond. If this goes to court it could be a classic. CMU report | Radar report

05: Rumour had it the Google Tunes launch has been delayed, because the major record companies still have reservations about the digital locker part of their plans. A source told the New York Post those reservations were delaying licensing talks meaning Google was now unlikely to enter the digital music market before Christmas, as originally planned. CMU report | New York post report

And that’s your lot. Except to say well done to all the winners at last night’s Record Of The Day Awards. And that Chilly Gonzales was freaking marvellous the other night. And did you see the story in the FT yesterday about the brilliant diversity in PR progamme UnLimited Media is involved in? Go read it.

Goodbye,
Chris Cooke
Business Editor, CMU

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