DIGITAL MUSIC NEWS

Al Bell Presents LLC Launches "Artist Career Development And Entertainment Creation" Division The wait is over! Former Stax Records Chairman/Owner and legendary soul icon Al Bell this week announced that his company, Al Bell Presents LLC, has created a groundbreaking new "Artist Career Development and Entertainment Creation" Division designed to develop financially successful careers for one-of-a-kind and authentic "Rare Performing Artists." Through this new division, Mr. Bell will draw on virtually all of his experience in the recorded music industry and his pioneering vision to introduce an innovative business paradigm with anemphasis is on developing artists for career growth, and working with all of the recorded music companies to ensure industry-wide financial success. Specifically, Al Bell Presents LLC will perform or arrange all of the functions that managers, promoters, marketing firms, booking agents, record companies, talent agents, and others have done historically, with the focused objective of developing an artist's career across an entire spectrum of the artist's potential. "The customary ways of doing business in the music industry are no longer appropriate for the development of rare (one-of-a-kind, authentic) artists' careers, considering the changes and evolution that has taken place in the music and entertainment worlds," says Bell, who serves as Chairman/CEO of Al Bell Presents. "The artist's career is the business, and we develop it so it reaches its full potential and flourishes continuously in recorded music, live performances, film, television, books, merchandise, product endorsements, and every other aspect of the related music and entertainment industries. In short, Al Bell Presents does not retain an artist to make a record or arrange a string of concert dates; rather, we build an exclusive new business for the artist with the artist." [Full story: Bunzel Media]

Apple Unveils iTunes Radio, But Few See It As "Pandora Killer" As expected, Apple Inc. this week announced the Fall 2013 launch of iTunes Radio, a free online radio service the company hailed as "the best music player we have ever done" but which many critics claimed was little different from Pandora. "iTunes Radio is an incredible way to listen to personalized radio stations which have been created just for you," said Apple SVP/Internet Software and Services Eddy Cue. "It's the music you love most and the music you're going to love, and you can easily buy it from the iTunes Store with just one click." According to a company statement, iTunes Radio offers music fans "access to thousands of new songs every week, as well as serving up exclusive music from new and popular artists before you hear them anywhere else." The free service can be listened to via iPhone, iPad, iPod touch, Mac, PC, and Apple TV - but apparently not on Android-powered devices. Meanwhile, many Wall Street analysts who were anticipating a "Pandora killer" service said the Apple announcement fell short of the pre-game hype. "Apple's iTunes Radio announcement lessens competitive fears for Pandora, but does not eliminate them," Lazard Capital Markets said in a research note. "The main positives for Pandora are a launch in the fall (vs. some reporting of an earlier debut), and a feature set that at first glance does not appear to be a major advance." And Canaccord Genuity analyst Michael Graham said, "After a long wait, Apple has announced iTunes Radio, and while to our eyes it looks like a compelling product, we don't believe it is a 'Pandora Killer.'" [Full story: Wall Street Journal   Rolling Stone] iTunes Radio "Sets Stage For A Real Bloodbath" "Apple's announcement, coming shortly after Google [said] it also is entering the music streaming space, sets the stage for a real bloodbath in the making." That was TuneIn Radio CEO John Donham's response to the announcement this week that Apple Inc.'s iTunes Radio service would launch this fall, noting in a statement that "tech titans like Google and Apple are now going head to head with Pandora and Spotify, all fighting for top position." Meanwhile, Pandora released a statement that said, "Apple's new feature is an evolution of their iTunes offering to bring it on par with other streaming music services that have added radio into their feature sets. We have spent the last 13 years singularly focused on redefining radio and benefit from unrivaled intellectual property, deep experience in delivering personalized playlists, and ubiquitous product availability across every platform. We make it effortless for our more than 200 million registered users to connect with the music they love anytime, anywhere." And Slacker Radio CEO Jim Cady added, "Apple finally jumping into the streaming music space validates the work we've been doing at Slacker since 2010, offering anytime, anywhere access to the world's music library on any device. Apple creates great products, but unless you're in the Apple ecosystem you're out of luck." [Full story: Venture Beat] Forbes: Apple Faces Four Major Hurdles With iTunes Radio Is Apple poised to do in streaming digital music what it did so successfully in MP3 players, smartphones and tablets? That's the question posed this week by Forbes contributor Peter Cohan, who maintains Apple will be lucky if its radio music streaming service gets 5% of the tiny music streaming industry. "Streaming music - instead of downloading it - is a small fraction of the digital music industry," he wrote in an article dated June 10. "And while Apple's pioneering iTunes service still dominates music downloading with 63% market share, it currently has no presence in the streaming segment which accounted for over 20% of 2012's $5.6 billion global market for digital music last year." Cohan says iTunes Radio faces four immediate hurdles: 1) The streaming digital music market is too small (only about $1 billion); 2) Apple is not introducing a ground-breaking device to go along with the "iStream" service; 3) There is limited profit for content providers, since online streaming's economics are extremely complex; and 4) The service may seem to be a "me-too" product for consumers. Furthermore, according to NPD Group, Pandora is the market leader with iHeartRadio running a distant second. "It's too early to tell how much market share Apple will take once iTunes Radio goes live [but] if Apple got 5%, that would add around $50 million to Apple's $169 billion in revenue," Cohan says. [Full story: Forbes] PwC: U.S. Music Business Should Expect 1% Growth Through 2017 Fueled by gains in live concert performances and digital music sales, the overall U.S. music business should see annual growth of just over 1% through 2017. As reported by Billboard, a new report released this week by PricewaterhouseCoopers suggests the concert business will grow at a compound annual growth rate (CAGR) of 3% through 2017; PwC set the value of last year's U.S. concert business at $8.61 billion and forecast growth to $8.9 billion this year and $9.2 billion in 2014. Meanwhile, the digital music business is forecast to grow at a CAGR of 5.1% through 2017; at that rate, last year's $3.6 billion digital market will be worth a little over $4.6 billion in 2017. Digital growth will come from competitors trying to chip away at the dominant market shares of Apple and Pandora while, as PwC notes, download growth was "disappointing" in 2012 - a trend Billboard says has continued into 2013, with sales of digital tracks actually in negative territory so far this year. Furthermore, the PwC analysis indicates the physical sales business will decline at a CAGR of 13% through 2017, with annual deficits of 15.9% this year, followed by 13.2% in 2014, 12.9% in 2015, 12.1% in 2016, and 11.1% in 2017. [Full story: Billboard] Pandora Buys Radio Station To Reduce Some Rights Fees In a maneuver designed to reduce the rates it pays for access to music, Pandora this week purchased KXMZ-FM in Rapid City, SD - the country's 256th largest market - for an undisclosed sum that was rumored to be around $600,000. According to Pandora General Counsel Christopher Harrison, the acquisition means Pandora now qualifies for the same publishing and songwriter rights and fees paid by other terrestrial radio broadcasters through the blanket rate set by the Radio Music Licensing Committee (RMLC). Broadcasters and their online properties - including Clear Channel's iHeartRadio - benefit from a 2012 agreement with ASCAP, BMI, and SESAC that excludes Pandora and other "pure-play" streaming companies. "This acquisition allows us to qualify for the same RMLC license as our competitors," Harrison wrote in a blog post on TheHill.com. Pandora contends ASCAP specifically has violated the terms of an antitrust consent decree by allowing publishers to withdraw their catalogs from ASCAP's license for Pandora while making them available to other Internet radio services. Last November Pandora filed a complaint in federal district court that sought an adjustable-fee blanket license with terms available to internet radio services under the settlement between the RMLC and ASCAP in 2012. That settlement sets a blanket license fee of 1.7% of a licensee's gross revenue, considerably less than the 4.3% of revenue Pandora paid in its last fiscal year, [Full story: Bloomberg] Songwriters Outraged: "Pandora Trying Every Trick To Underpay" Pandora's move to purchase a small market station in South Dakota was not designed to curry favor among music industry songwriters and publishers, and that result was achieved quickly. The ink was barely dry on the purchase contract when National Music Publishers' Association (NMPA) president David Israelite said the move was a declaration of war, telling Digital Music News (no relation to this publication), "This is yet another sad step in Pandora's war against songwriters. While other digital music partners choose to enter into voluntary licensing deals, Pandora chooses to try to enrich itself through a strategy of suing creators and gimmicks. The only positive development from this is that Pandora has removed any shred of credibility it had with creators and now can be seen for what it is - a company with no interest in treating songwriters fairly." ASCAP President Paul Williams piled on, noting that "songwriters and composers are struggling in the digital economy to be paid fairly for their creative work. Pandora is trying every trick in the book to brazenly and unconscionably underpay and take advantage of the creative labor that produces the core offering of their business. Internet and traditional AM/FM radio services are very different businesses, using music in very different ways. Pandora's claims against songwriters and publishers further proves the importance of ASCAP's mission to protect the human rights of its songwriter and composer members to be treated fairly." [Full story: Digital Music News]