Business News Week In Five

The music business week in five – 27 Jan 2012

By | Published on Friday 27 January 2012

Chris Cooke

Right, another busy, busy week in music then. But before we get to that, forgive me for doing two quick plugs.

First up, don’t forget we made our first convention announcement for this year’s Great Escape this week, which you can catch up on here. We’ve got loads more to tell you about this year’s TGE in the coming weeks, so why not get your tickets now?

Second plug, we have a few places left on our next CMU Training course, which is a real cracker – throwing a spotlight on the whole business of monetising music, with a look at how the industry, artist deals and record companies are changing. Book your tickets here.

But now, this week’s five big music business stories.

01: The aftershocks of the Mega attack were felt. After the US authorities shut down MegaUpload and related sites last week, this week four of the firm’s execs, arrested in New Zealand, applied for bail while they wait to be extradited to America. Larger than life founder Kim Schmitz was denied bail, the judge ruling there was a genuine risk the accused could flee back to his home country of Germany, where extradition would be harder. That despite the US authorities freezing his bank accounts and seizing his passport.

In the US, Mega’s legal reps dropped their lawsuit against Universal Music over the major’s request to Google that they remove the file-transfer’s company’s ‘Mega Song’ from YouTube last year. Perhaps they thought they’d better focus on the criminal proceedings. Online some of Mega’s US competitors cut back their services to avoid being likewise accused of enabling copyright infringement.

The RIAA speculated the Mega shut down could lead to a tangible increase in the usage of legitimate digital music services, though Torrentfreak said Mega competitors that hadn’t cut back their services in response to last week’s arrests were enjoying the biggest flurry of new customers. CMU reports

02: HMV announced new supplier deals. While the terms of the new deals with the big music companies and movie studios are not known, they likely put more risk onto the CD and DVD producing companies – certainly the new deals persuaded the struggling retailer’s banks to lighten up the covenant terms associated with their £180 million debts, assuring short term survival. The big music and movie companies desperately want to see HMV succeed, it being the last big CD and DVD seller on the high street. The suppliers were also allocated 2.5% of HMV’s equity as part of the new arrangements. CMU report | Telegraph report

03: The Live Music Bill was passed by the Commons. This happened last week, but after Friday’s CMU Daily went out. With minutes to spare, the House Of Commons approved Lord Tim Clement-Jones’ private member’s bill to relax the bureaucracy involved in staging small scale gigs. Many in grass roots music community say new rules introduced by the 2003 Licensing Act resulted in many pubs and such like ending their live music nights. It’s hoped the Live Music Bill will remove the blocks to such gigs, meaning more opportunities for grass roots artists to play. The Lords will now quickly consider some final amendments before the Bill becomes law. Hurrah. CMU report | NME report

04: IFPI published its Digital Music Report. A quick summary of the record label trade body’s review of the digital year: digital music is doing very well thank you very much, but only because governments and courts are cracking down on piracy, so much more of that please Mr Minister and Mr Judge. Single downloads, digital albums and subscription services all saw growth in 2011, with digital revenues for the global record industry up about 8%. It seems that the growth of Spotify style services is not having an overall negative impact on iTunes-style platforms as some have feared. Universals’ digital chief Rob Wells, present at the launch of the report, said people who claimed Spotify negatively impact iTunes sales were nutters anyway. Well, those weren’t his exact words, but it’s what he meant. CMU report | IFPI report as PDF

05: Beyond Oblivion filed for bankruptcy. We knew the ambitious plan for a global all-you-can-eat free download service, funded by charging a fee to hardware manufacturers for the software that enabled it all, was defunct, Team Boinc calling it a day over Christmas. But the formal application for bankruptcy protection came this week, revealing the company has over $100 million in debts, with Warner and Sony its biggest creditors. Quite how it ran up such big debts without ever going live isn’t clear. CMU report | Register report

And that is your lot people. Have a lovely Friday.

Chris Cooke
Business Editor, CMU



READ MORE ABOUT: