The company was slated to announce the pacts — with Universal Music Group, Warner Music Group, EMI Music Group and Sony — at the South by Southwest conference today. CNET reported on Turntable’s Warner deal last week, and I think that report helped accelerate today’s announcement.

The fact that Turntable was able to get deals done in less than a year — the company is the result of a well-documented pivot from something called Stickybits — says a lot about the newfound flexibility on the part of the music business. Especially since Turntable has carved out a new business model — basically a hybrid between “on-demand” services like Spotify and “radio” services like Pandora.

The flip side is that the buzz and momentum Turntable was generating last summer has gone away. That may be due mostly to Spotify’s U.S. launch, which by all accounts has been a huge success. But it may also be because not that many people want to listen to other people play music.

I do, though, so I hope the deals give Turntable the ability to turn things around. Right now, when I visit the service I don’t see any of my pals there. And while I’m sure I could find some cool people playing cool songs there if I dug around for a while, I don’t want to do a lot of digging.

One thing the deals won’t do is give Turntable the ability to open its doors to users outside the U.S. But it does give the company a better chance of getting international deals done.

That would give Turntable a leg up on rival Pandora. But there are a gazillion legal ways to get your hands on digital music, for very little money these days — from Spotify to Rhapsody to iTunes Match to Deezer. Getting heard above that din will be a challenge.

He replaces Edgar Bronfman Jr., who has run Warner Music Group since 2004, but will remain with the company as chairman of its board.

The company also announced that it is bringing Thomas Lee back to the company’s board. Lee had previously served as a board member from 2004 through this year, when his private equity company held a large stake in the music label. His reappointment does not mean he’ll be reinvesting in the company, I’m told.

People inside the company hold out the possibility that Bronfman could return to day-to-day leadership of the company if it succeeds in buying EMI Music, a longtime would-be merger partner currently owned by Citigroup. But even if Warner wins that bidding round, regulatory approval could take a year or more, so it’s not realistic to expect him back sooner than that, if ever.

Here’s Bronfman’s internal note to his employees, followed by the press release announcing the moves.

Dear Colleagues:

As Warner Music Group begins its next chapter, well-positioned for some truly exciting and unprecedented opportunities, I am pleased to announce we are adding a new member to our management team: Steve Cooper. Effective today, Steve will be serving as WMG’s Chief Executive Officer, working out of our New York office and I will serve as Chairman of the Board of WMG, continuing to work out of both our New York and London offices. Lyor and Cameron will remain in their positions, heading up Recorded Music and Music Publishing respectively, reporting directly to Steve.

I’d like to take a moment to explain to you the rationale behind this change:

Capitalizing on the opportunities before us will require an intensive and all-consuming effort from a broad and deep management team. For this reason, following the close of the sale and the transition of WMG from a public company to a subsidiary of Access Industries, in several discussions with Len and the Access team, I conveyed my strong conviction that my energies on behalf of the company would best be directed toward transformative transactions and long-term strategy. Len was supportive of my wishes provided we could identify the executive to whom I could hand off day-to-day management responsibilities. Fortunately, in Steve Cooper we have that executive.

Steve has a long and distinguished career of service to many companies. Having worked very closely with him over the past several months, I can tell you that he is a highly effective operator who brings a wide range of skills and experience to WMG, most recently, of course, as WMG’s Chairman. And, as a longtime partner to Len, Steve knows the Access team well and will be an effective liaison between them and WMG. More information about Steve’s background can be found in the press release we are issuing today.

Now, a few thank yous are in order. First of all, I want to thank Len and Access for being amenable to my kicking myself upstairs and understanding that I came to WMG as both an investor and operator—a dual role in which I have served throughout my career. After leading the acquisition from Time Warner, transforming the company, and selling it to Access, I believe I can add greater value by addressing the challenges WMG faces on a macro scale, while handing over the day-to-day reins to Steve.

Second, I want to thank Steve for being willing to swap roles with me. After collaborating so well with him, and sensing the energy and enthusiasm he brings to operating a company, I had no doubt that Steve was serving in the role that was more natural for me at this stage in my WMG tenure, while I was in the role in which Steve could bring to bear his many talents.

But the biggest thank you I’ve saved for last. And that’s to all our amazing employees around the world. Thank you. In transforming WMG, together we’ve performed something of a miracle. Despite the industry’s complex transition and the global economic downturn, we have grown profitability, improved our competitive position, and developed new business models, all while continuing to focus intensely on our core mission: artist development. A company’s true value is the quality of its employees, and you are the finest group of employees with whom I have ever worked. None of what we have accomplished could have happened without the extraordinary talent that is the WMG team.

I’m excited for what the next chapter holds. And I look forward to writing that chapter with all of you.

Please join me in welcoming Steve to the team. As always, please email me any questions or comments you may have.

Edgar

WARNER MUSIC GROUP’S BOARD OF DIRECTORS ELECTS
EDGAR BRONFMAN, JR. AS CHAIRMAN TO FOCUS ON STRATEGY AND GROWTH OPPORTUNITIES
NEW YORK, August 19, 2011 – Warner Music Group Corp. (WMG) today announced that Edgar Bronfman, Jr., who had been serving as the company’s Chief Executive Officer, has been appointed to the position of Chairman of the company’s Board of Directors and Stephen F. Cooper, who had been serving as Chairman, has been elected to serve as WMG’s Chief Executive Officer. Bronfman will focus on the company’s strategy and growth opportunities while Cooper will be responsible for the company’s day-to-day operations. Cooper will continue to serve on the company’s Board of Directors.
Lyor Cohen, Chairman and CEO, Recorded Music and Cameron Strang, Chairman and CEO of Warner/Chappell Music, will remain in their positions, reporting directly to Cooper.
Thomas H. Lee, the Chairman and CEO of Thomas H. Lee Capital, LLC, who served as a member of WMG’s Board from March 2004 through July 2011, has been elected as a new Director of WMG. With the appointment of Lee, the size of WMG’s Board has increased from nine to 10 members.
Bronfman said, “With the Access Industries transaction closed and WMG well-positioned for its next exciting chapter, it was clear that in order to best seize the strategic opportunities before us, we needed to deploy our team in the most effective and imaginative manner possible. Given my desire to focus on growth opportunities and Steve’s extensive background in management across a wide array of companies and industries, I am grateful that Steve accepted the offer to change roles and to serve as our CEO. I look forward to continuing our successful partnership.”
Bronfman added, “I’m pleased to welcome Tom Lee to our Board. Tom and I previously served together on WMG’s Board, and his contributions were invaluable. We’re fortunate that going forward we’ll be able to benefit from his insight and his history with the company.”
In addition to his role with WMG, Cooper is a member of the Supervisory Board for LyondellBasell Industries N.V., one of the world’s largest olefins, polyolefins, chemicals and refining companies. Cooper is an advisor at Zolfo Cooper, a leading financial advisory and interim management firm, of which he was a co-founder and former Chairman. Cooper is also Managing Partner of Cooper Investment Partners, a private equity firm. He has more than 30 years of experience as a financial advisor, and has served as chairman or chief executive officer of various businesses, including Vice Chairman and member of the office of Chief Executive Officer of Metro-Goldwyn-Mayer, Inc. and Chief Executive Officer of Hawaiian Telcom. Cooper received a B.A. from Occidental College and an M.B.A. from the University of Pennsylvania Wharton School of Business.

The service still doesn’t have a pact signed with Warner Music Group, but people familiar with discussions say the two sides are closer than they have been, and are optimistic a deal will get done.

It’s possible that Spotify could open in the U.S. without Warner, but that would leave holes in the company’s catalog. And that’s a crummy way to introduce a service that CEO Daniel Ek has been promising to bring to the U.S. for two years.

Even if Warner signs next week, though, it will likely take Spotify some time to ramp up a marketing campaign and other elements it would need for a U.S. launch. I wouldn’t count on seeing anything in the States till July at the earliest.

Multiple sources tell me the Universal deal was finished this week. Spotify declined to comment; a spokesman for Universal hasn’t responded to requests for comment. Spotify signed on Sony and EMI Music Group earlier this year.

In Europe, Spotify offers a “freemium” service, where registered users can listen to a certain amount of music each month for free, and paying subscribers get unlimited music, which they can stream to their computers or phones. People familiar with the company’s plans indicate that it wants to do the same thing in the U.S., and would likely charge around $10 a month for the premium service.

Unlike Europe, however, the U.S. has several existing subscription services that also stream unlimited tunes for $10 a month, and those have yet to take off, even though the services are now compatible with popular handsets like Google’s Android and Apple’s iPhone.

During the time that Spotify has spent trying to get to the States, meanwhile, three different cloud/locker services have launched in the U.S. as well: Amazon and Google allow users to move their own music to an Internet-based server, where they can stream it to PCs and some phones.

Apple has announced its own take on the concept, which will allow users to download copies of music they own to different devices (it’s possible that version will also allow streaming at some point).

The price point for those services all range from free to a few dollars per month — much cheaper than the $10 per month Spotify will likely ask for. But they’re a different offering: Google, Amazon and Apple are all promising to give you mobile access to music you already own, while subscription services like Spotify give access to millions of tracks you don’t have.

Next question: Will Blavatnik keep his new purchase, carve it up, or try to double down on his music bet?

Reuters says Blavatnik’s Access Group has won the auction for Warner with an offer of $8.25, which will give the company an enterprise value of $3.3 billion. The Warner auction has dragged on for months, but reports for the last few days have put Blavatnik in the lead.

[UPDATE: Warner has confirmed the deal via press release. It's all-cash, as expected, and will be financed in part by Credit Suisse and UBS. It's expected to close in Q3.]

The deal will be a victory for the consortium of private equity groups that bought the company from Time Warner in 2004; they’ve already recouped their initial $2.6 billion investment via dividend payouts, so the purchase will be pure profit.

And it’s also supposed to be good news for Warner CEO Edgar Bronfman Jr., who supposedly would like to keep running the music company; he has had a long relationship with Blavatnik, who had previously served on Warner’s board. (“They know that our people are the best in the business,” Bronfman told his employees via an internal memo this morning.)

But Blavatnik’s win may not be the last move for Warner. Speculation will immediately move on to the status of EMI Music Group, which is currently owned by Citigroup but won’t be for long. Warner and EMI have been trying to merge for more than a decade, so it’s possible that Blavatnik will try to make that happen with another deal.

In a related scenario, he may try to sell off part of Warner–most likely its Warner/Chappell publishing arm. A logical buyer for that asset would be the Sony/ATV music publishing company, which was also bidding for Warner this week.

Side note: Blavatnik’s win, for now, also means that Internet star Sean Parker won’t own a piece of the music business; Parker was aligned with supermarket magnate Ron Burkle‘s bid for Warner, and Burkle dropped out last week.

Here’s Bronfman’s companywide memo announcing the deal:

Dear Colleagues:

Today marks a milestone in our evolution as a company.

We have just announced that Warner Music Group is being acquired by Access Industries. This is strong validation that WMG is today one of the most progressive forces in music and recognition that we are well-positioned to succeed through the industry transition.

Access is deeply committed to helping us achieve our fullest potential in the years to come. They value our rich history and understand that success relies on a relentless commitment to artist development and A&R. They know that our people are the best in the business. And they recognize the excellence in both our recorded music and music publishing divisions and our incredible family of recording artists and songwriters. Further, Access has an established and successful track record of supporting entrepreneurs in various fields including media. They understand our business and our culture, and we will no doubt benefit from their global business expertise and strategic wisdom.

We have achieved so much in the past seven years in the transformation of our company and, in addition to these achievements, we have continued to invest strongly in A&R and artist development while also fundamentally revamping our approach to artist relationships. Now, we are true partners with artists in almost every aspect of their careers. This disciplined, thoughtful and creative approach sets the stage for our future growth.

I would also like to thank our original investors, who remained steadfast in their support of our company even during a very challenging industry transition. We are grateful for their thoughtful guidance and wise counsel. Today’s announcement is also a validation of their vision for the prospects of a progressive music company.

I have no doubt that our new owners will serve as fantastic new stewards for our company, our artists and songwriters, for music fans and for our employees.

The transaction is expected to close in the third quarter of this calendar year, subject to stockholder approval and the customary closing conditions and regulatory reviews. After the closing, WMG will become a private company and our stock will no longer trade on the New York Stock Exchange.

Until that time, it is business in the normal course. Again, it’s very important that we keep our eye on the ball and continue to serve artists, songwriters, customers, partners and music fans at the same high levels they have come to expect of us.

Finally, let me once again thank you for everything you’ve done to help bring us to this moment. Today’s news is tangible evidence of how far we’ve come as a company and how much WMG can accomplish in the years ahead. You remain, quite simply, the best in the entire industry and I can’t wait to see what the future brings.

If you do have further questions or comments, I hope that you will email me directly at edgar@wmg.com. You can read the full press release at www.wmg.com.

Sincerely,

Edgar

Which may sound a lot like what Amazon rolled out last month.

From the music industry’s perspective, however, there’s a big difference: Amazon started its service without getting approval from the big music labels. But Apple is actively seeking licenses for its service, and will pay the labels for the privilege.

And sources tell me that Apple has already procured deals from at least two of the big four labels (Universal Music Group, Warner Music Group, Sony and EMI) within the last two months. One source tells me Apple content boss Eddy Cue will be in New York tomorrow to try to finalize remaining deals.

“They’ve been very aggressive and thoughtful about it,” says an industry executive. “It feels like they want to go pretty soon.”

Reuters reported earlier today that Apple has “completed work on an online music storage service,” but said the company had not obtained licenses from any labels so far. I’ve asked all four labels for comment; an Apple rep declined to comment.

The industry executives I’ve talked to haven’t seen Apple’s service themselves, but say they’re aware of the broad strokes. The idea is that Apple will let users store songs they’ve purchased from its iTunes store, as well as others songs stored on their hard drives, and listen to them on multiple devices.

Amazon’s service does the same thing, but label executives have argued that a license would allow Apple (or Google, if it moves forward on similar, but stalled, plans) to create a more “robust service” with better user interfaces, sound quality, and other features.

I’ve never understood how a license would affect things like product design, but there’s at least one practical benefit from Apple’s perspective: The deals it is signing will allow it to store a single master copy of a song on its servers, and share that with multiple users.

Amazon’s service, by comparison, works much more like an external hard drive, where users are required to upload a copy of every song they’ll want to get via remote access.

Amazon offers its user a limited amount of storage for free. I don’t know if Apple intends to charge its users for the service, or will absorb the storage and licensing costs on its own.

The streaming music service is going to raise something like $100 million, at a valuation of $1 billion or more, very shortly, according to TechCrunch, the Financial Times, the New York Times and Sky News (?).

People who tell me they’re familiar with Spotify’s plans also tell me all of those publications are wrong. But they won’t be specific about why they’re wrong. So my hunch is that some combination of the total amount raised, the valuation and the investors may still be in flux. Or not.

Whatever. Sooner, or later, Spotify is set to cash a very big check. What’s it going to do with that money?

The easy assumption is that the company will turn around and redistribute its new investors’ funds to the big music labels, as part of the distribution deals it is cutting to get into the U.S.

Spotify already has deals with Sony and EMI, and is supposedly closing in on one with Vivendi’s Universal Music Group, the world’s biggest label.

And as I wrote last fall, Spotify is willing to pay the labels real money over the life of these deals to get them done. But I don’t think the bulk of this cash goes immediately from DST, or Kleiner Perkins, or whomever, to UMG, Sony, et al.

For starters, I don’t think Spotify’s backers would be happy to serve as a direct funding source for the flailing labels. And remember that Spotify is a money-losing startup, so it would likely need cash to fund operations even if it was staying put.

But I think that Spotify is going to have to spend real money to break into America, which already has plenty of streaming music services, and doesn’t seem very interested in them.

A rough guesstimate is that Rhapsody, Napster, MOG, Rdio and Thumbplay have a total of about a million subscribers–about the same that Spotify has on its own. So in order to really make the case for music you rent by the month, Spotify is going to have to lay out serious marketing cash to get people to pay attention.

It will need to staff up, too: The company, based in Sweden and London, has a handful of people working in a small corner of Google’s New York City office, but that won’t be nearly enough to tackle the States.

The other big variable, which wasn’t on Spotify’s radar when it started looking for cash last year but certainly is now, is the impact of Apple’s new subscription plan. As described in Apple’s press release, that plan will lop 30 percent off of every subscription Spotify sells through Apple’s iTunes store.

Spotify, like every other music service, can’t live with that. So if Apple doesn’t back down, and U.S. or European regulators don’t force it to back down, Spotify will have two choices:

• It can market the heck out of the service on everywhere but Apple’s platform, and hope that the overwhelming majority of its signups happen via some other outlet, where they won’t have to pay Apple’s tariff.
• And/or it can spend a lot of time fighting Apple in court.

Either way, some extra cash might be handy. Good thing the company has some lined up.

And yes, it’s slightly jarring to have a giant Wall Street bank holding the keys to one of the world’s biggest music companies, which also happens to be the home of the Beatles.

But that’s going to be a temporary situation: The only question is, who will end up buying the company from EMI, and whether they take the whole thing or split it into parts.

Warner Music Group has been trying to link up with EMI for years, but Universal Music Group and Sony, the two other big music labels, could conceivably bid on at least a portion of EMI. So could KKR and Bertelsmann’s BMG.

Meanwhile if you’re a buyer–or non-buyer–of EMI’s music, nothing’s going to change in the near term. The deals EMI has with Apple, Amazon and the remaining physical music retailers will remain in place. I’m curious to find out if EMI and Spotify inked their U.S. distribution deal before Citigroup took back the keys; I’ll update if I get an answer.

I’m told the terms call for a U.S. service that more or less mirrors the one Spotify offers in Europe: A certain number of hours per month of free streaming music, with the ability to pay for an ad-free version, or a more popular one that lets users listen on mobile devices like Apple’s iPhone.

Both Spotify and Sony declined to comment.

The deal doesn’t mean a U.S. launch is imminent for the service, which has been trying to make the leap from Europe for a couple of years, and which missed a self-imposed deadline to make it over in 2010. In order to make a credible offer to U.S. customers, it will need at least two of the three other big music labels to sign on.

And practically, at least one of those labels has to be Vivendi’s Universal Music Group, the world’s biggest music label. So Spotify will need to hammer out a deal with UMG and either Warner Music Group or EMI before we can start talking about a U.S. launch date.

The New York Post reported last week that Spotify was close to a Sony deal.

What’s taking Spotify so long to land in the U.S.? Depends on whom you ask.

Some industry sources tell me the big music labels are genuinely worried that Spotify’s free streaming service will increase the decline of CD sales, which have been dropping for a decade, but still make up the majority of the labels’ revenue.

Others have a more cynical take, though it’s not mutually exclusive: The labels, which have already licensed Spotify in Europe, simply want more cash from the company before they do an American deal. There is also muttering that the labels don’t want to upset Apple, which sells tunes on a track-by-track basis via its iTunes store and dominates the market for digital music.

It’s also unclear how close Spotify is to more label deals. Executives at the service have long been hopeful that getting one deal done would convince the other labels to join up. On the other hand, you could argue that it gives the holdouts that much more leverage.

And in any case, even if Spotify signed two more labels tomorrow, it would still take the company some time to cross the Atlantic, as it prepares a marketing campaign, etc.

It might also be nice for the company to have a new slug of cash on hand, something it would have if it goes through with fundraising talks it has been holding recently.

Spotify CEO Daniel Ek talked to me about some of these issues, in a general and noncommittal way, at our D: Dive Into Mobile conference last month. You can see an abbreviated version of our chat below, or you can watch the whole thing here.

]]> http://allthingsd.com/20110119/one-down-spotify-signs-sony-to-us-deal/feed/ 7 http://allthingsd.com/20110104/money-pink-floyd-stays-at-emi-and-itunes/ http://allthingsd.com/20110104/money-pink-floyd-stays-at-emi-and-itunes/#comments Tue, 04 Jan 2011 18:33:36 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=27604 Remember when Pink Floyd was suing its record label last year? No? Well, it’s resolved: The rich man’s Radiohead is staying with EMI Music Group for another five years.

Phew! EMI says that as part of the agreement, “all legal disputes between the band and the company have been settled.” Which means that if you were worried about the band’s music disappearing from Apple’s iTunes, you can breathe easy.

Of course, it was unlikely that Pink Floyd’s music really was going to leave the world’s biggest music store, even though part of the dispute between the band and the label had to do with online sales: Supposedly, the band was upset that its music was being sold as individual tracks on iTunes, instead of in album-only form.

But that argument never really rang true to me: Sure, it’s great fun to space out to all of “Dark Side of the Moon” in one sitting, but it’s an awful lot to insist that people have to listen to or buy the whole thing. Especially since no one else does that anymore. Not even Radiohead!

In any case, a check seems to have resolved the band’s misgivings, and you can still buy “Money” as a standalone track at iTunes.

]]> http://allthingsd.com/20110104/money-pink-floyd-stays-at-emi-and-itunes/feed/ 9 http://allthingsd.com/20101116/when-does-amazon-and-everyone-else-get-the-beatles-good-question/ http://allthingsd.com/20101116/when-does-amazon-and-everyone-else-get-the-beatles-good-question/#comments Tue, 16 Nov 2010 16:09:45 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=25882 So you can buy the Beatles on iTunes. When will you be able to buy the band’s music from other digital retail outlets?

Good question, says EMI Music, the label that distributes the band’s music.

Apple has exclusive digital rights for the Beatles “into 2011,” says spokesman Dylan Jones, and he notes that the exclusivity doesn’t expire on the first of January. But he confirms that the exclusivity does indeed have an expiration date.

So when that date comes, we should expect to see the Beatles everywhere else you can get music online, right? Namely Amazon, and the subscription services that rent music by the month, like Spotify, Rhapsody and Microsoft’s Zune? Or Google, if and when it launches its music service?

“That’s a question, isn’t it,” Jones says, and doesn’t offer more.

Couple of theories here:

• The easiest explanation is that the Beatles music will follow the path of other digital exclusives, and become widely available after Apple gets its run.
• It’s also possible that Apple and the Beatles will renew their exclusive before it expires. That hasn’t happened before, but if Steve Jobs really, really wants to make it work, I guess he could.
• The most intriguing possibility: The Beatles leave iTunes once their deal ends–and don’t come back to digital again. Seems silly, but big traditional media loves “windowing” their content, and I suppose someone might convince the band this would be a clever way to go–show up, make a splash, walk away and then try it again down the road, like a band that’s always going on a farewell tour. Hope not!

]]> http://allthingsd.com/20101116/when-does-amazon-and-everyone-else-get-the-beatles-good-question/feed/ 13 http://allthingsd.com/20101116/hello-goodbye-the-beatles-come-to-itunes-and-now-we-can-move-on/ http://allthingsd.com/20101116/hello-goodbye-the-beatles-come-to-itunes-and-now-we-can-move-on/#comments Tue, 16 Nov 2010 11:30:41 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=25848 If you checked in with the Twittersphere last night, you might think that getting the world’s biggest band into the world’s biggest music store is a bad thing. Cue the jaded digerati complaining that the Beatles to iTunes news is a yawn.

And let’s be clear: Getting the band’s stuff on Apple’s store won’t fundamentally change anything.

• The band members will see more money. But they have plenty already.
• It’s possible that the Beatles’ label, EMI Music Group, may get enough short-term cash to keep it out of Citigroup’s hands. But there are very few of you reading this who care about that.
• Apple will see a spike in iTunes music sales. But Apple moved on from iTunes music sales a long time ago: ITunes is all about apps these days, and Steve Jobs would like it to be more about TV and movies, too. Meanwhile digital music sales flattened out this year, and even the Fab Four will have a hard time changing that.
• It does mean that bloggy types can stop making random guesses about when the Beatles will come to iTunes. So that’s pretty great, really.

And look. It’s cool that the band will be on iTunes. It’s embarrassing that it hasn’t been, but now that we’re past this, we can just consider the-better-late-than-never move a “pivot,” right? Fundamentally: More good music, available more places, is a good thing.

The thing I’m most interested to learn this morning (or whenever we do find out) is whether you’ll be able to buy the band’s output on a song-by-song basis. [UPDATE: Answered.]

If the band is trying to maximize revenue, it would try to force Jobs to break from store policy and sell their music in only album format. But that would be hypocritical, since the Beatles, like most other bands of their era, were about singles for a very long time.

And wouldn’t it be cool if you’d never heard “Flying” before, and then someone played you the trippy instrumental track from “Magical Mystery Tour,” and then, $1.29 later, you could be walking around with the tune in your iPod? Right?

What’s that? You’ve never heard “Flying” before? No problem: You can hear it on YouTube, of course:

And if you’re looking for other Beatles songs, Google’s video site is happy to oblige. They’ve even made a 41-song mix for you. No credit card required.

]]> http://allthingsd.com/20101116/hello-goodbye-the-beatles-come-to-itunes-and-now-we-can-move-on/feed/ 6 http://allthingsd.com/20101104/citigroup-wins-guy-hands-loses-and-emi-takes-one-step-closer-to-a-new-owner/ http://allthingsd.com/20101104/citigroup-wins-guy-hands-loses-and-emi-takes-one-step-closer-to-a-new-owner/#comments Thu, 04 Nov 2010 21:35:42 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=25541 As of today four big music labels dominate the industry, but a court ruling just increased the chances that the number will shrink to three. A New York jury has ruled against Guy Hands, whose Terra Firma private equity shop owns EMI Music Group, in a suit he brought against Citigroup. Details here, but the only one you care about is that this makes it that much more likely that Citi will end up owning EMI, then selling it, most likely to rival Warner Music Group.

]]> http://allthingsd.com/20101104/citigroup-wins-guy-hands-loses-and-emi-takes-one-step-closer-to-a-new-owner/feed/ 0 http://allthingsd.com/20100311/pink-floyd-wins-court-case-will-money-leave-itunes/ http://allthingsd.com/20100311/pink-floyd-wins-court-case-will-money-leave-itunes/#comments Thu, 11 Mar 2010 15:03:36 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17273 Want to buy Pink Floyd’s “Time” on iTunes but don’t want to pay for all of “Dark Side of the Moon”? You’ll want to make that purchase soon.

A ruling in the band’s lawsuit against EMI Music Group may mean that the band’s songs will only be available online in album form. BBC:

The rock legends, signed to EMI since 1967, said their contract meant their albums could not be split up without their permission.

A judge agreed, saying the contract contained a clause to “preserve the artistic integrity of the albums”.

EMI has been ordered to pay £40,000 ($60,000) in costs, with a further fine to be decided.

…In court, Chancellor Sir Andrew Morritt declared that the contract means EMI is not entitled to exploit recordings by online distribution or by any other means other than the complete original album without Pink Floyd’s consent.

As of this morning, you could still buy much of the band’s output on a track-by-track basis at the online music stores that Apple (AAPL) and Amazon (AMZN) run.

And just because the band has won the ruling doesn’t mean that’s going to stop–its entirely possible, for instance, that a check of a certain size could allay the band’s concerns. Other album-only holdouts like Metallica and Radiohead eventually held their noses and allowed their stuff to be sold by the song on iTunes, too.

But if you really want to buy “Pigs on the Wing Pt. 1,” but not all of “Animals” (apologies to fans of the album I offended earlier in the week), you might want to buy now, just to be safe.

UPDATE: EMI says it hasn’t been ordered to stop selling individual tracks, adding that this will be hashed out in the courts for a while. Here’s the full text:

Today’s judgment does not require EMI to cease making Pink Floyd’s catalogue available as single track downloads, and EMI continues to sell Pink Floyd’s music digitally and in other formats.

This litigation has been running for well over a year and most of its points have already been settled.

This week’s court hearing was around the interpretation of two contractual points, both linked to the digital sale of Pink Floyd’s music. But there are further arguments to be heard on this and the case will go on for some time.

]]> http://allthingsd.com/20100311/pink-floyd-wins-court-case-will-money-leave-itunes/feed/ 0 http://allthingsd.com/20100310/emi-gets-a-new-boss-when-does-it-get-a-new-owner/ http://allthingsd.com/20100310/emi-gets-a-new-boss-when-does-it-get-a-new-owner/#comments Wed, 10 Mar 2010 11:53:12 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=17219 Terra Firma, the private equity fund that owns EMI Music Group, has brought in a new CEO for the music label. Elio Leoni-Sceti is out; Charles Allen, the former CEO of British broadcaster ITV replaces him.

Leoni-Sceti came to the company in July 2008, a move that raised plenty of eyebrows as he had zero experience in the music business. His background was marketing packaged goods like Woolite and French’s Mustard.

But in retrospect it doesn’t really matter who Terra Firma brought in to run the company; the investment group’s big mistake was paying too much for EMI, using too much debt, in 2007.

At this point, the real question for EMI isn’t who runs it, but who owns it. There’s a decent chance that Terra Firma will breach a banking covenant in coming months and that control of EMI will go to Citigroup (C), which owns most of the label’s debt.

The conventional wisdom is that part or all of  EMI will end up in the hands of longtime rival Warner Music Group (WMG) sooner or later.

Release:

CHARLES ALLEN BECOMES EXECUTIVE CHAIRMAN OF EMI MUSIC LONDON, 10 MARCH 2010 — EMI Music announces the appointment of Charles Allen as its Executive Chairman.

Charles has been non-executive Chairman of EMI Music since January 2009, chairing its Board and supporting the transformation of the business. Elio Leoni-Sceti, EMI Music’s Chief Executive, who has successfully led EMI Music through the first phase of its operational turnaround, will be leaving the company on March 31st 2010.

Over the past two and a half years, EMI Music has become a stronger and growing company, with a talented senior team, significant creative success and a more rigorous approach to marketing and operations. This has resulted in increased sales, improved market share and industry-leading EBITDA margins.

Charles said: “Elio has done a great job. I have thoroughly enjoyed working with him; he is a very talented executive and we all wish him well in the future. Our goals for EMI Music remain the same. I will support and guide the group’s strong team, keep EMI’s focus on creativity and superb A&R, and deliver a digital platform. This is a great business – our task is to ensure it has a great future.”

Elio added: “EMI is a wonderful business with a great team and new creative and operational momentum. My job here is now done and it is time for me to move on. It has been a pleasure to work with Charles and so many other talented and committed people. I look forward to seeing the company go on to further success in the future.”

]]> http://allthingsd.com/20100310/emi-gets-a-new-boss-when-does-it-get-a-new-owner/feed/ 0 http://allthingsd.com/20100115/vevo-bounces-back-from-a-rough-start-with-20-million-streams-a-day/ http://allthingsd.com/20100115/vevo-bounces-back-from-a-rough-start-with-20-million-streams-a-day/#comments Fri, 15 Jan 2010 21:02:24 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=15157 Remember Vevo, the “Hulu for music video” service that launched with a lot of fanfare, then earned a ton of lousy press for an error-filled launch?

It has fixed its tech problems and is doing just fine, thank you very much. Vevo says it is generating around 20 million video views a day, which puts it on track to generate some 600 million views a month.

Some context: ComScore (SCOR) says that Hulu itself generates some 900,000 video views in the U.S, making it the second biggest video site after YouTube. And Viacom (VIA), the current No. 3, generates 500,000 views.

If you want to compare apples to apples, though, you have to cut Vevo’s 600 million down to 300 million since about half its views come from outside the U.S. Still, that’s enough to qualify Vevo for eighth place in comScore’s rankings, placing it above AOL (AOL) and CBS (CBS).

And when comScore’s December video numbers are released at the end of this month, Vevo’s numbers will come in below 300 million since it didn’t launch until Dec. 9 and because comScore’s numbers are usually lower than any site’s internal numbers.

Still, that’s a lot of eyeballs, and it’s more than the joint venture between Sony (SNE), Vivendi’s Universal Music Group and Abu Dhabi Media Company expected. But the fact that Vevo began with a huge audience, rocky start and all, shouldn’t be a surprise.

In fact, I said so last month. No need to type it twice:

While everyone has rightly been flocking to Vevo.com itself for a look-see, it’s not the most important Web site for the joint venture. That would be YouTube, where most Vevo users are actually going to encounter–and watch–Vevo videos, without even knowing that they’re watching a Vevo video.

To be clear: When Google’s (GOOG) video site agreed to help Universal Music Group (and later Sony) launch a new hub for music videos, it didn’t mean it would be sending its users away from YouTube.

When you read about Vevo launching with 400 million video views in the first month, understand that the majority of those aren’t coming from the new site but from YouTubers who are watching music clips the same way they always do, on YouTube. But Vevo will get credit for those eyeballs and any ad dollars they generate.

That is: If you’re watching a Ke$ha video on YouTube, there’s a good chance you’re watching a Vevo video.

So. Next question. Can Vevo turn all those views into dollars?

We’ll see. CEO Rio Caraeff tells me his sales group continues to bring in high-profile advertisers–the latest, last week, was Procter & Gamble (PG)–and has been able to get between $25 and $30 for every 1,000 impressions. That’s a whole lot better than videos traditionally earned on YouTube, and as good as some TV shows.

But it’s relatively easy to announce that you’re selling your initial batch of inventory at a high rate. It’s much harder to sustain that over time. So it’s hard to read too much into those numbers just yet.

In the meantime, the site is going to get much bigger in the near future.

For one thing, it should start showing videos from EMI Music Group within a few weeks, which means that it will have clips from three of the four big music labels. Warner Music Group (WMG), the lone holdout, has its own deal with YouTube.

And in March, Vevo should start syndicating its clips to other big properties, starting with CBS and AOL, meaning it will have plenty more eyeballs to sell. The challenge will be proving that the JV’s thesis–music videos alone are attractive to advertisers–is worth the effort.

Meanwhile, here’s a primer on Ke$ha, whom I didn’t know about until the other day. She is apparently big with the kids these days.

Gawker’s Doree Shafrir explains this to the rest of us. And if you don’t like words, here’s the clip:

]]> http://allthingsd.com/20100115/vevo-bounces-back-from-a-rough-start-with-20-million-streams-a-day/feed/ 0 http://allthingsd.com/20091214/beatles-boost-emi-but-about-that-debt/ http://allthingsd.com/20091214/beatles-boost-emi-but-about-that-debt/#comments Mon, 14 Dec 2009 15:11:10 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13944 First, some good news for EMI Music Group, the big music label that’s troubled even by the music industry’s troubled standards: They still have the Beatles.

And it turns out that people still care about John, Paul, et al.

EMI says it has sold a staggering 10 million copies of the band’s remastered albums since September. The total includes the giant box sets of the band’s work (if you bought the stereo set, that accounted for 14 albums in one purchase; if you went with the mono discs, that counted for 11), as well as downloads for the sort-of successful Beatles Rock Band game.

And, of course, nada from iTunes. Sidebar: If and when the band finally starts selling its music on Apple’s (AAPL) digital storefront, will there be anyone left to buy it?

But back to EMI, which has much more unpleasant news to deal with, namely that owner Terra Firma seems to be at the end of its rope. The private equity firm is now suing Citibank (C), which lent it the billions it needed to buy the music company in 2007, for fraud.

And Terra Firma is reportedly looking for investors to lend it another $1.6 billion to keep the company afloat, in large part because it fears it will default on the money it has already borrowed from Citi.

The conventional wisdom, meanwhile, is that all of this is simply a precursor to an eventual combination between EMI and Warner Music Group (WMG)–a deal the two companies have been trying to pull off for close to a decade.

Terra Firma’s complaint, via the New York Times’s Dealbook, makes for fascinating reading, in large part because of the cognitive dissonance created by Terra Firma’s description of itself.

The company describes itself as a clueless investor duped by Citigroup into buying the music company in an auction with no other bidders and as a savvy manager that has turned around the ailing music company.

Can both descriptions be true?

Terra Firma’s Lawsuit Against Citi Over EMI

(Also, some free fact-checking for Terra Firma’s attorneys: The iTunes Store launched in 2003, not 2005.)

]]> http://allthingsd.com/20091214/beatles-boost-emi-but-about-that-debt/feed/ 0 http://allthingsd.com/20091207/google-rocks-real-time-search/ http://allthingsd.com/20091207/google-rocks-real-time-search/#comments Mon, 07 Dec 2009 19:00:05 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=30379

]]> http://allthingsd.com/20091207/google-rocks-real-time-search/feed/ 0 http://allthingsd.com/20091207/vevos-hulu-for-music-gets-a-pre-launch-boost-emi-adds-its-clips-but-not-equity-to-the-mix/ http://allthingsd.com/20091207/vevos-hulu-for-music-gets-a-pre-launch-boost-emi-adds-its-clips-but-not-equity-to-the-mix/#comments Mon, 07 Dec 2009 14:36:15 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13621 Vevo, the “Hulu for music videos” site that launches tomorrow, just got a bit bigger: In addition to clips from owners Sony (SNE) and Universal Music Group, the site will offer EMI Music Group’s videos.

The press release I’ve reprinted below doesn’t spell this out, but I’m told that EMI is only licensing its videos to the venture and isn’t joining as an equity partner; it will get an advance against revenue upfront.

The deal means Warner Music Group (WMG) will be the only one of the four major labels that isn’t working with the video site. But Warner has struck its own deal with Google’s (GOOG) YouTube, which is powering Vevo.

Here’s a crazee promotional video the site has produced, featuring 50 Cent busting up some TVs. Actually, that’s all it is.

VEVO ANNOUNCES AGREEMENT WITH EMI MUSIC

New Premium Music Service to Launch on December 8
with Content from Universal Music Group, Sony Music Entertainment and EMI Music

New York, New York, Monday, December 7, 2009 — VEVO, the new premium music video and entertainment service, today announced an agreement in which EMI Music will join Universal Music Group and Sony Music Entertainment in providing music fans with professionally-created video content when the service debuts on December 8 in the United States and Canada.

As part of this agreement, music fans will be able to view professionally-created video content from artists on EMI’s labels including Astralwerks, Blue Note, Capitol and Virgin, as well as the independent artists and labels represented by EMI Label Services and EMI’s Caroline Distribution unit.

Across the VEVO Network, users will now enjoy the largest selection of premium music content featuring the broadest array of chart-topping artists found anywhere on the Web. VEVO builds upon the success of YouTube, where Universal Music Group, Sony Music Entertainment and EMI Music stream many hundreds of millions of professionally-created videos per month. In addition, VEVO recently announced a content deal with CBS Interactive Music Group.

“Our agreement with EMI Music marks a milestone in our mission to provide fans everywhere with the world’s best premium music video programming, when, where and how they want it,” stated Rio Caraeff, President & CEO of VEVO.  “We look forward to collaborating with EMI on introducing our users to new professionally-created entertainment products through a truly interactive platform. VEVO is about much more than just high-quality videos; it is also about original programming and strengthening the connection between artists and fans through a dynamic and engaging experience; and immediately providing advertisers with the scalability they desire and access to the most sought after demographic on the Web.”

“VEVO offers the value of a powerful, new environment where our artists can showcase their work and create a deeper relationship with fans,” said Elio Leoni-Sceti, EMI Music CEO.  “It’s an exciting entertainment destination for consumers, a tremendous creative medium for artists and also a great platform for brands.”

]]> http://allthingsd.com/20091207/vevos-hulu-for-music-gets-a-pre-launch-boost-emi-adds-its-clips-but-not-equity-to-the-mix/feed/ 0 http://allthingsd.com/20091123/shhh-emi-quietly-surprising-results/ http://allthingsd.com/20091123/shhh-emi-quietly-surprising-results/#comments Mon, 23 Nov 2009 16:06:57 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13193 The people who own EMI Music Group may regret the purchase, but here’s a tiny bit of good news: Sales are creeping up, even as the rest of the business contracts.

The company’s revenue climbed 7.4 percent in the 12 months ending March 31, the company disclosed (via PaidContent).

The rise is due to increases in both the sale of recorded music and publishing revenue; increases in the former are particularly rare these days. And these numbers ought to bump again in the coming year given that they’ll include dollars/pounds generated by the re-release of the Beatles albums.

Alas, since EMI owner Terra Firma is deep in the midst of negotiations with Citigroup (C), which lent it billions to buy the company, it’s not handing out any other details about the company’s performance, so hard to tell what’s really going on there.

Still, we do know that music has been in decline for a decade, and EMI’s bump up is the first, no matter how modest, in many moons (click on table below to enlarge).

]]> http://allthingsd.com/20091123/shhh-emi-quietly-surprising-results/feed/ 0 http://allthingsd.com/20091118/court-kills-preposterous-pirate-beatles-site/ http://allthingsd.com/20091118/court-kills-preposterous-pirate-beatles-site/#comments Thu, 19 Nov 2009 00:05:15 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13044 It’s official: You still can’t buy the Beatles’ songs on the Web, despite the efforts of a site that attempted to do so by rewriting copyright law on the fly.

A Los Angeles federal judge has issued a preliminary injunction against BlueBeat, a California-based site that had briefly sold the band’s music, arguing it used “psycho-acoustic simulation”–basically, making a note-for-note recording of the band’s recordings–to make the songs its own.

The same judge had already issued a temporary restraining order on behalf of music label EMI Music Group against the site earlier in the month and had scheduled a hearing for Friday, Nov. 20. But this ruling cancels out the hearing and by any reasonable standard should end the case.

Then again, this whole story has been a head-scratcher from the start, so who knows? Maybe the BlueBeat guys will try an even more preposterous argument down the road.

Part of me thinks that the whole thing may be some sort of Negativeland/U2 hack/stunt/performance art piece. Or maybe there were a lot of mood-altering substances involved. Or maybe it’s part of a conspiracy to create work for copyright lawyers.

Whatever. I’ve embedded the court ruling below, if you insist on reading it. But here’s a clip of Richard Pryor reading the alphabet on “Sesame Street,” which is just as edifying and much more entertaining.

bluebeat beatles suit –

]]> http://allthingsd.com/20091118/court-kills-preposterous-pirate-beatles-site/feed/ 0 http://allthingsd.com/20091118/a-few-tunes-for-hulu-remember-norah-jones/ http://allthingsd.com/20091118/a-few-tunes-for-hulu-remember-norah-jones/#comments Wed, 18 Nov 2009 12:04:18 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13017 Here’s a match up that makes plenty of sense: EMI Music Group, which has a new Norah Jones album to promote, is showing her videos on Hulu, the video joint venture that specializes in “premium” content.

But oddly, the deal is the only one of its kind. While the big music labels have played footsie with Hulu in the past, they have yet to actually move any of their clips there.

That could still happen one day, and the site hints that you may see more clips coming down the road. But Hulu is less valuable for the labels than it could have been a year ago: Since then, three of the big four have struck deals that give them much more incentive to show their stuff on Google’s (GOOG) YouTube, the world’s biggest video site.

Vivendi’s Universal Music and Sony (SNE) have a deal that locks up their stuff exclusively on Vevo, a sort of “Hulu for music videos” that will be powered by YouTube. And Warner Music Group (WMG) has convinced YouTube to give the label its own branded channel for its clips.

No word on financials for the Hulu deal, but I’d surprised if this generates much cash for EMI. Hulu’s core partners–News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC–have deals that let them keep 70 percent of any ad revenue their stuff generates on the site. But other partners get closer to 50 percent.

In other Norah news, my soon-to-be sort-of neighbor is having construction problems. Here she is taking on one of the great Wilco songs:

]]> http://allthingsd.com/20091118/a-few-tunes-for-hulu-remember-norah-jones/feed/ 0 http://allthingsd.com/20091117/when-will-warner-music-group-finally-buy-emi/ http://allthingsd.com/20091117/when-will-warner-music-group-finally-buy-emi/#comments Tue, 17 Nov 2009 15:18:39 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13006 Are Warner Music Group and EMI, which have been circling each other for nearly a decade, finally ready to consummate their relationship?

That’s the obvious question in light of news that both Terra Firma, the private equity group that bought EMI in 2007, and Citigroup, which funded most of the transaction, have written down most of their investments in the music company.

This isn’t a surprise–the move has been a long time coming–but it does open the door for Warner, which restructured its debt with an eye toward making such a deal earlier this year.

Pali Research’s Rich Greenfield thinks that Citi (C) will push to break up EMI and sell Warner (WMG) the record music group, which tends to lose money, and keep the music publishing business, which has been a reliable money maker, even during the industry’s 10-year freefall.

But at this point, I don’t know why Warner couldn’t try to swallow the whole thing. In the past, that deal would have been scuttled due to antitrust issues (and in fact, it was), but the music industry is a different beast right now–a sick beast–and I think regulators would be a lot more forgiving this time around.

[Image credit: beggs]

]]> http://allthingsd.com/20091117/when-will-warner-music-group-finally-buy-emi/feed/ 0 http://allthingsd.com/20091103/beatles-on-itunes-nope-mp3-yes/ http://allthingsd.com/20091103/beatles-on-itunes-nope-mp3-yes/#comments Wed, 04 Nov 2009 01:20:12 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=12706 Nope, you still can’t buy the Beatles on Apple’s (AAPL) iTunes. But next month you will finally be able to buy the band’s music in MP3 form, provided you’re willing to plunk down a bunch of cash.

$279.99, exactly.

What do you get for that? The same thing the band and EMI Music Group are already selling for $219: All of the band’s music, in a remastered stereo mix. But if you’re willing to pay extra, you can now get the same tunes bundled up in a single USB stick. Like so:

People who care about this stuff will be pleased to know the files will be available in both FLAC and MP3 formats. More details here, although there does seem to be some confusion about whether there are 30,000 of these puppies or just a couple hundred. Either way, they go on sale Dec. 7 in the U.K. and the next day in the U.S.

By the way, if you’re the kind of Beatles fan who considers plunking down more than $200 for music you already own, then you’ve most likely seen this. But it’s free to everyone, thanks to Google’s (GOOG) YouTube:

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