May 16, 2005
Volume 9, Issue 1
Welcome to 33rd Street Records
Please warmly welcome 33rd Street Records to the Content Group. We look forward to providing valuable services to this newest DCIA Member and supporting its contributions to commercial development of the distributed computing industry.
The concept of 33rd Street Records originated in the gap created by major label consolidation. Funded by Tower Records, 33rd Street is a boutique label with a strong emphasis on artist development in the retail marketplace. In contrast to major label machinery, 33rd Street offers its artists more focused attention, greater creative control, and the opportunity to earn royalties at a lower sales point.
Representative 33rd Street artists and albums include Alex Woodard, Anthony Gomes, Army Of Freshmen, Be Gee, Carlton Blount, Celly Cel, Christmas Gumbo, Coley Cole, Coo Coo Cal, Cowboy Mouth, Don't Look Down, D-Shot Presents, En Vogue, Gangsta Dre, Gary Stier, Goldie Loc, Gregg Rolie, Hollow Tip, Issac Delgado, Jamie Reno, Jondi & Spesh, Kokane, KRSH Collection, Lee Rocker, Ludo, Luni Coleone/Damu, Mavericks Surf, Maxim Swimsuit, Miggs, Mitchy Slick, Mr. Shadow, Mundo Aparte, NHL Rivals 2004, Ottmar Liebert, Pete Sears, Peter Frampton, Peter Welker, Ralph E. Hayes, Randy Sharp, RebbeSoul, Richard Bowden, Sammy Hagar, Settie, Shock G, Spice 1 & MC Eiht, Suga Free, The Push Stars, Tommy Castro, TriChromes, and Tuck & Patti.
33rd Street Records is distributed by Bayside Entertainment Distribution, also a member of the Tower family. This relationship with Tower enables 33rd Street to acquire special coop promotional pricing and comps that are not offered to other labels. In addition, the Tower chain is very supportive of the 33rd Street Records titles as they recognize the label as "Tower's own." It's an advantage money can't buy, and a very important one for 33rd Street's current and future clients. Tower is a major retail player for established touring acts.
Now 33rd Street is further advancing its marketing and promotion strategy using the Internet by expanding into the P2P distribution channel, in addition to the TowerRecords.com website. The label believes that its roster of new as well as established artists will best be served by exploiting the discovery capabilities of file sharing and beginning to explore the potential of online sales in the P2P marketplace.
33rd Street Records' President Morty Wiggins said, "We see the value of marketing and promotion in P2P based on its enormous and steadily growing usage and attractive demographics. In a very real sense, file sharing has grown in this millennium to serve the role that radio played for music sales in the last."
Claria Launches PersonalWeb
DCIA Member Claria, a pioneer and leader in the behavioral marketing space, last week announced the launch of its PersonalWeb content customization platform. This new technology will provide website publishers and content aggregators with the ability to dynamically offer their audiences personalized Web content, based on a broad spectrum of users' browsing behavior.
PersonalWeb is the latest technology developed by Vista Marketing Services that leverages Claria's behavioral insights platform – including the BehaviorLink ad network and RelevancyRank personalized search technology. PersonalWeb allows large publishers and content aggregators to utilize the targeting capabilities of Claria's behavioral insights platform to dynamically deliver custom content unique to each opted-in user including news stories, editorial, articles, RSS feeds, and sponsored content.
In April, a Market Research and Web Analytics study conducted by Claria's Feedback Research division highlighted that delivering meaningful content will increase satisfaction levels and increase the likelihood of future views. Of the millions of consumers who visit portals and ISPs like Yahoo, MSN, and AOL, only a small number (14%) take the time to personalize their experience.
However, users that have a personalized page spend 90% more time at these sites and view over 130% more pages versus users who did not customize their content. Additional findings of the Feedback Research study concluded that consumers are very interested in a more customized Web experience.
"Having a deep understanding of users' evolving interests and being able to combine that with the vast sources of information on the Web dramatically increases the relevancy of the Internet experience," said Jeff McFadden, President & CEO of Claria. "Our technology automates the personalization process, offering consumers the benefit of a more relevant and custom user experience – which will drive consumer loyalty to publishers' websites and result in increased user involvement and higher revenue."
Publishers that adopt the personalization program can theoretically serve every participating visitor a different home page. "If you have a huge Yankees fan, you might want to give that person Yankee headlines," said Scott Eagle, Claria's Chief Marketing Officer.
Eagle added that he anticipates some publishers who participate will only want to allow a small sliver of the home page to be customized. For instance, a news site might set aside 20% of its home page for personalized content, so that the vast majority of the page would be uniform for all visitors.
Report from CEO Marty Lafferty
 Yahoo, which acquired Jukebox online service provider MusicMatch last September for $160 million, expanded its presence in the digital music distribution marketplace last week with its launch of Yahoo Music Unlimited (YMU), a deeply discounted subscription service, powered by AOL Music's Applications Service Provider (ASP) MusicNet.
Digital Music News' Paul Resnikoff responded by asking, "Will the music subscription format hit it big? With the entrance of Yahoo, we are about to find out. The idea of paying a monthly fee for unlimited on-demand music is still well outside the mainstream, with most only familiar with a la carte or P2P downloads."
"Yahoo's new unlimited digital music service may be the most significant development since the launch of Apple's iTunes," noted Inside Digital Media's Phil Leigh.
American Technology Research's PJ McNealy added, "We believe, plain and simply, that this could prove to be landscape-changing news. Yahoo can use a subscription service as a break-even proposition to do what it does best: sell advertising."
Jupiter Research forecasts that digital music revenue will reach $500 million this year (60% of that downloads) – a small portion of the $33 billion music market – with subscriptions overtaking downloads by 2009 when online music will reach $1.7 billion. As we have previously noted, the digital music marketplace could already be generating more per month than it currently will for the year if the majors embraced P2P, which can readily support advertising-supported, a la carte, and subscription business models.
YMU, priced initially at $6.99 per month or $60 per year for access to a million+ music tracks transferable to (currently 10 MSFT) portable players, at a minimum should raise awareness of the music subscription concept by being publicized to 176 million users of Yahoo online services, comparable in size to the universe of P2P software users.
Unlike download music purchases, songs from subscription services are essentially rented: they work only while the monthly fee is paid. YMU's chief non-P2P competitors include Apple's iTunes, which simply sells music at $0.99 per track transferable to iPods, and Napster (412K subs and $180M in reserves) and Rhapsody (1M subs and $300M in reserves), whose directly competing $15 per month subscriptions support transferring tracks to MSFT and iPod & MSFT portables respectively. YMU also permits burning tracks to CDs for $0.79.
The day after YMU's launch, Yahoo's shares rose $0.82 to $34.88, while Apple's fell $0.81 to $35.61, Napster's fell $1.70 to $4.65, and Rhapsody's (parent Real Networks') fell $1.54 to $5.76. Although Apple has provided a credible market trial for non-P2P a la carte music sales, with its large advertising campaigns driving well integrated iTunes-iPod search-and-download-to-player functionality, results have been lackluster, causing music industry leaders privately to question the a la carte model for online distribution.
Meanwhile, without participation of major labels, but thanks to games publishers and independent music and movie suppliers, P2P has quietly become the largest medium for distribution of authorized content on the Internet, generating ten times the volume of iTunes and other older-architecture centralized-server online stores.
Without fanfare, P2P has continued to make strides in attracting more independent labels to the advertising-supported business model originally introduced by DCIA Member Altnet and now also employed successfully by DCIA Member INTENT MediaWorks, as well as a la carte sales, again led by Altnet with other prominent players including DCIA Member Shared Media Licensing (SML) with its innovative Weed technology.
Majors may end-up preferring subscriptions over a la carte downloads, however, for stimulating greater interest in new artists and releases. "People who spend a lot of time on subscription services are buying more music," both online and on disc, noted EMI's Ted Cohen referencing YMU. "The subscription basically creates the appetite, it doesn't fulfill the appetite for music."
With this as background, we hope the music industry will greet DCIA Member RazorPop's highly innovative proposal for a P2P subscription service, being announced today, with alacrity rather than "not-invented-here syndrome."
The company says it intends to offer thirty-times more music tracks than YMU to RazorPop subscribers, accessing most major P2P platforms and supporting multiple formats, charging $9.95 per month or $99.95 per year, and to provide insurance against copyright infringement lawsuits.
RazorPop is offering music rights holders a percentage of subscription revenue comparable to that paid by centralized online service providers, and plans to have "mutually agreed upon third-party vendors actuarially calculate the numbers of downloads and plays, initially using statistically projectible samples, and allocate payments among rights holders."
The company believes its insurance, which is capped at $5,000 and comes with other caveats, "comprises an important extra measure of protection, since the RIAA may continue to target non-subscribing P2P users with copyright infringement lawsuits, and inadvertently sue RazorPop's paying customers."
RazorPop's launch of this business model is "predicated upon execution of licensing agreements with music industry rights holders," and it says it is providing a simple form agreement that can be executed electronically to facilitate this.
YMU will use Yahoo Messenger to emulate P2P with a music-sharing feature that could increase the number of tracks available to subscribers by adding live recordings and obscure tracks that users collect from other sources — including through use of P2P software – unless rights holders object.
It seems that we could be getting closer to a commercial solution for open decentralized P2P that would require neither compulsory licensing nor unworkable filtering. We support RazorPop in its efforts to move forward with this proposal for a P2P subscription offering.
LimeWire & KUFALA Choose Weed
Peer-to-peer (P2P) file-sharing leader LimeWire and independent label KUFALA Recordings have partnered to distribute KUFALA music using the Weed technology of DCIA Member Shared Media Licensing (SML).
Weed files of KUFALA music are now distributed via LimeWire and the LimeWire-owned MagnetMix site.
For the first time, famed artists in the jam band circuit including Soul Coughing, The Slip, and New Riders of the Purple Sage can be downloaded and shared using LimeWire software and SML's unique Weed digital rights management (DRM) technology.
Weed files offer users an opportunity to download a song and listen to it three times free of charge before deciding to buy. Weed files typically cost between $.50 and $1.25 per track. LimeWire's 20 million users can download and share KUFALA Recordings music and thousands of other Weed files freely with LimeWire software.
"This is how things should work," said LimeWire COO Greg Bildson. "It is a new way for record companies and artists to market themselves as opposed to traditional radio promotion. Artists connect to an audience of literally millions – what record store or radio station can do that?"
Beginning with a small catalog of KUFALA recordings, LimeWire will soon host a growing 3,000-song catalog including rare live concerts. An upcoming version of LimeWire software will also include Weed-specific search capabilities. LimeWire 4.8 is now available for free download.
LimeWire is a leading developer of advanced P2P file-sharing software. The company currently employs the largest number of expert developers dedicated to open standard software development. LimeWire's software allows users to share and search for any file type. Headquartered in New York City, LimeWire was founded in June 2000 and currently has 20 million unique users monthly.
Consumer Disclosures Update
According to DCIA Best Practices leader Elaine Reiss, "All DCIA Members who distribute peer-to-peer (P2P) software have now complied with the second phase of our three-phase plan to regularly and systematically provide consumer disclosures information in clear and understandable language. We will now move ahead with phase three."
Phase one featured a prominently displayed message-box on the home-pages of websites for Grokster, iPeer, Kazaa, MyPeer, and TrustyFiles, that reads, "Click Here for Important Information about Using P2P Software Safely."
Users who respond are linked to a customized P2P Software User Advisories page, such as this example from industry leading Kazaa Media Desktop distributed by DCIA Member Sharman Networks, which provides information regarding five items identified by law makers as potential risk areas for consumers.
It also encourages users to, "Read the important Consumer Alert concerning P2P software from the US Federal Trade Commission."
Phase two includes further improvements in communications regarding copyrighted works, such as a notification with premium advertising-free versions of P2P software that "Purchase of this software is not a license to upload or download copyrighted material."
Reiss cited Sharman Networks in particular for making extra efforts to obtain all necessary approvals from multinational jurisdictions in order to move forward with implementation of phase two.
Phase three will involve input from US Congressional staff on a more comprehensive program to regularly and conspicuously remind users that their software is active, simplify end user license agreements (EULAs), add elements from the originally proposed P2P Software Risks, and make additional enhancements.
For participating firms to invest the considerable effort, time, and money required to introduce and maintain the fully realized disclosures regime, it is important to have an understanding with appropriate governmental authorities that this work will be deemed satisfactory.
Coming Events of Interest
-
Emerging Business Models in Digital Music – Join this discussion and networking event produced by the Entertainment and Telecom Practice of Greenberg Traurig, ThinkAndLink, and AllAccessGroup, with featured speakers co-author of "The Future of Music" Gerd Leonhard, co-author of "The Art of Digital Music" Kelli Richards, and Greenberg Traurig's Judith O'Neill, at the MefLife Building in NYC on June 2nd at 6 pm.
-
OMMA WEST Conference & Expo – MediaPost presents two days of workshops and keynotes with more than 50 of the industry's knowledge leaders addressing Search, Behavioral Targeting, and Cross-Media Integration, June 6th-7th in San Francisco, CA. Consider the industry's most vital debates: how to re-aggregate media which has dis-integrated, and how to market in an era of consumer control. Share your experiences and meet your peers at the Meeting & Exhibition Hall. Take home tools and knowledge of immediate value with focused conference tracks for Media, Marketing, Advertising and Online Publishing. Hear the most provocative thinkers in the industry consider the state of modern marketing.
-
DCIA Summer Meeting – The DCIA will hold its Summer 2005 Meeting on Thursday evening, June 16th at the Hilton McLean in Tysons Corner, McLean, VA. Please contact DCIA Member Services leader Karen Kaplowitz at 888-890-4240 or karen@dcia.info for more information.
-
Digital Media Conference – The 2nd annual Washington Digital Media Conference is set for Friday, June 17th at the Hilton McLean in Tysons Corner. This is a must-attend event for media, entertainment and technology businesses, educational institutions, and government agencies involved in the digital distribution of media, including information, education & entertainment products. More than 300 digital media industry decision-makers and policy-makers attended the 2004 conference, which was co-sponsored by the DCIA. Phil Corwin, US lobbyist for DCIA Member Sharman Networks will be a featured speaker.
-
DRM Strategies Conference – Jupitermedia's comprehensive event on digital rights management business and technology issues will be held July 27th-28th at the Puck Building in NYC. This is a must-attend for those involved in content security in both consumer media distribution and information security for businesses. DRM Strategies will be your chance to experience and compare the most important DRM technology solutions under one roof. The conference will feature keynotes from leading industry figures that will introduce the fundamentals of DRM, shed light on future DRM directions, and provide incendiary debate on today's controversial issues of online piracy and digital copyright.
-
Technology Law Institute – A Digital Media Rights panel will be featured September 20th at the Headquarters of the State Bar of Georgia, in downtown Atlanta, GA. Kilpatrick & Stockton's James Trigg will moderate with speakers Miles O'Brien from CNN, Kevin Lapidus from YellowBrixx, and Marty Lafferty from the DCIA.
|
