Business News Week In Five

The music business week in five – Friday 16 Mar 2012

By | Published on Friday 16 March 2012

Chris Cooke

Hey there people, welcome to this Friday edition of your CMU Daily. It’s been a busy, busy week for music industry news, even before you add the South By Southwest announcements and debates into the mix (the big thing getting everyone talking this morning being Bruce Springsteen’s keynote). But we’ve still managed to strip it all back to the big five stories, which are as follows…

01: Sony proposed a settlement in the digital royalties dispute. The majors are facing claims from all sorts of veteran artists that they should be paid a higher cut of download sales than traditional record sales, because the former should be classified as ‘licensing revenue’, which generally has a higher artist pay out attached to it in traditional record contracts. Sony has been fighting a claim on this issue, led by the Allman Brothers and Cheap Trick, since 2006. This week the major proposed a settlement to all affected artists that would offer a one off cash pay out and a 3% increase on download royalties. It remains to be seen if affected artists accept that deal rather than pushing for more money through the courts (it’s thought although the Allman Bros and Cheap Trick have been involved in negotiations for that settlement, they also have their own secret deals with Sony on digital monies). Meanwhile all four majors still face newer lawsuits on this issue, with The Temptations being the latest group to file litigation, against Universal. CMU report | DMN report

02: There was more speculation about the MAMA Group sale. The Independent reported that a number of parties had made initial bids to HMV to buy its live music division, and that some of those bidders had been asked to make refined second offers. In particular it’s thought that AEG Live has been invited to make a second bid. HMV confirmed to the City its ‘strategic review’ of its live business was ongoing, but said it was too soon to say whether a sale would happen or not. CMU report | Reuters report

03: The Channel Islands failed to protect their VAT dodge. A tax break that means mail-order firms on Jersey and Guernsey can sell products under £15 into the UK without charging any sales tax is due to end next month. It means said mail-order operators, who have had a 20% advantage over mainland retailers because of the tax relief, are now looking to relocate to other non-EU locations where the VAT dodge will still apply. The governments of Jersey and Guernsey went to the High Court in London this week claiming the decision to remove the tax relief from just the Channel Islands was discriminatory, but the court did not degree, dismissing the legal claim. CMU reportGuardian report

04: Digital services expanded in Europe, as got licensed in the US. Spotify went live in Germany for the first time, having convinced collecting society GEMA it did have a workable business model after all (presumably now that the freemium option has been scaled back). Deezer, meanwhile, announced its arrival in some Eastern European countries, claiming to now have all 46 countries of Europe covered (even though there are at least 47 countries in Europe). In the US, share-via-a-stream service announced licensing deals with all four majors. Spotify report | Deezer report | report

05: Secondary ticketing was discussed in parliament, courtesy of former Pete Waterman aide and now MP for Hove Mike Weatherley, who used the recent ‘Dispatches’ expose on the activities of the ticket resale companies and their tour promoter partners to justify a Westminster Hall debate on whether online touting should be regulated. Weatherley also pointed out that Olympic ticket touting had been banned. According to Music Week, at the debate a government rep said that the coalition would reconsider the issue if an Office Of Fair Trading review found “market failure”. CMU report | Music Week report

And that’s your lot, though do look out for the podcast over the weekend, where some of these stories will be discussed in more detail, plus we consider what links Coke’s flavoured water line, the London Olympics and Jessie J’s hair.

Chris Cooke
Business Editor, CMU