Business News Week In Five

The music business week in five – 14 Oct 2011

By | Published on Friday 14 October 2011

Chris Cooke

So here we go again people, another edition of the Week In Five digest whatnot. But first, a quick plug if you don’t mind.

The latest season of our CMU Training programme continues next week with our rather excellent – if I do say so myself! – music business models course, looking at ways to monetise music, and how such things are a-changing. There’s a couple of spots left, so if you’re interested in the future of this here industry, do check theCMUwebsite.com/training for info. As for the recent past, well, here’s the week in five…

01: It looked increasingly likely that EMI would be split up, as part of Citigroup’s attempts to offload the British music major. The US bank is considering various bids for some or all of the music company, but insiders say that the bankers will be able to make more money by selling the EMI record companies and EMI publishing catalogues separately. It’s thought Universal or Warner are favourites to get the former, and Sony/ATV or BMG the latter, regulatory hurdles permitting. CMU report | Reuters report

02: Chart company and ticketing body launched new logos. The Official Charts Company hopes that anyone using its data from now on will include its new ‘two arrows crossover to make a number one’ logo so that punters learn to recognise it as a mark of ‘officialness’. Meanwhile the Society Of Ticket Agencies And Retailers launched a new kitemark for use by accredited ticketing agents, in a bid to help consumers workout which ticketing firms are legit, and which might rip them off. Chart Company report | STAR report

03: A Demos report said creative start-ups were not specifically risky. The left-leaning think tank criticised banks for automatically assuming creative companies looking for finance, including music ventures, are doomed to fail, citing stats that show new creative firms are no more likely to go bad than any other new business, and actually possibly less so because the people involved are usually more committed. The report also criticised the government for having a misleading definition of what constituted the ‘creative industries’ that ignores some of the more lucrative parts of the sector. CMU report | Independent report

04: Digital firm financials revealed. Music Ally reported on the latest Companies House submissions from both We7 and Spotify. The financial reports for 2010 showed both companies were still making substantial losses, though We7’s were down while Spotify’s were up. We7 made a loss of £2.97 million while Spotify lost £26.54 million. While the business plans of both companies no doubt anticipated sizable losses at this stage in their expansion, it’s a reminder that the money these services pay into the music business – which, of course, some argue isn’t enough already – comes primarily from venture capital rather than customer or advertiser spending, unlike iTunes and YouTube revenue respectively. Of course both We7 and Spotify have cut back on their freemium options this year, reducing their overheads substantially and, in Spotify’s case, pushing up the number of paying subscribers. And Spotify has recently launched in the US, now boasting 250,000 paying subscribers over there apparently. All of which means next year’s financial reports from both We7 and Spotify will likely be even more interesting reading. CMU report | Billboard report

05: ‘X-Factor’ bosses screwed over a children’s charity. Bosses of the ITV talent show were making much this week of their plans to release a charity single involving this year’s finalists in aid of ACT & Children’s Hospices UK. But we also discovered that the X machine is only interested in supporting charities when it can do so on its own terms. When another children’s charity, which uses music to aid personal and communicative development of young people, asked the TV franchises if it might pick another name for the girl group judges had created on air, Rhythmix, because that’s its name and having another music venture using it might cause confusion, ‘X-Factor’ bosses basically told them to fuck off. Trademark law says the charity doesn’t own the name in the music space, the telly franchise’s lawyers boomed, and as for basic human decency? Well, that’s just something you fake when you want to get your telly show – with its declining ratings – into the newspapers, isn’t it? CMU report

And that’s your lot. Though for more musings and chatter, don’t forget the CMU Weekly podcast, which will be online at theCMUwebsite.com/podcast later today.

Chris Cooke
Business Editor, CMU



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