MUSIC NEWS

Judge Rules Class Action Suit Against UMG May Move Forward   A federal judge in California this week ruled that a class action lawsuit filed against Universal Music Group, alleging that the record label has underpaid royalties on digital downloads and ringtones, may move forward. The consolidated class action, which seeks damages that could total several billion dollars, was filed by musician Rob Zombie and the estate of Rick James after Eminem's former production company, FBT Productions, successfully sued the label for back royalty payments. UMG and other labels claim that when consumers download song recordings via the Internet or on a mobile phone, it constitutes a "sale." By contrast, the plaintiffs in the lawsuit contend that, since there is little manufacturing cost involved, such a transaction actually involves music licensing. The difference between a "sale" and a "license" in many artists' recording contracts is huge, since a "sale" usually provides for a royalty of 10-20%, while licenses generally yield a 50-50 split. In her ruling, Judge Susan Illston wrote, "The Court finds that plaintiffs have alleged more than just a breach of contract because the complaints allege that UMG engaged in a broad scheme to underpay numerous royalty participants, including formulating 'an opaque and artificial method for accounting for and paying its royalty participants for income derived from such licenses,' and engaging in a 'sustained public relations effort designed to convince the public that it had employed 'groundbreaking' and 'enlightened' accounting practices that actually benefited [rather than cheated] the Class." In reaction to the decision, UMG lawyers argue that the claims are dressed-up breach-of-contract claims and hurt neither consumers nor competitors. [Full story:Hollywood Reporter] Sale Of EMI In Jeopardy As Blavatnik Walks Away   Access Industries, the investment group led by financier Len Blavatnik that bought Warner Music earlier this year, reportedly has walked away from the auction for EMI Music. According to theFinancial Times, Blavatnik's offer of $1.5 billion was below the $3-4 billion price CitiBank was willing to accept for the sale of EMI's recorded music division, which it seized in February from Guy Hands' Terra Firma private equity group. Blavatnik, a Soviet-born U.S. citizen with a portfolio of industrial and technology assets, has been considered the front-runner for EMI because of the likely $350 million in savings that many industry executives believe can be realized by combining the two record labels. Universal Music, owned by Vivendi, also was bidding on EMI but withdrew its offer last week, while billionaire investor Ronald Perelman is said to have offered less for EMI than Blavatnik. Meanwhile, FT reported that Citigroup's separate negotiations to sell EMI Music Publishing appeared to have made more progress, with an offer of about $2 billion coming from BMG, the joint venture between Bertelsmann and Kohlberg Kravis Roberts. This bid reportedly beats one from a Sony-led group that was still working to secure financing. [Full story: Financial Times] Pandora Partners With DMX To Offer Music For Businesses   Pandora this week unveiled a business-to-business music service in partnership with "brand experience service" DMX, essentially delivering a form of "storecasting" to businesses for a monthly fee of $24.95 and the cost of the DMX player. As reported by Billboard, the arrangement allows stations to be personalized for each location or set up to cover multiple locations. "Music plays a central role in enhancing retail and service environments," EVP/Business Development and Corporate Development Jessica Steel said in a statement. "Now all businesses, from national chains to local dentist offices, can personalize their brand experiences the same way that people personalize their individual experiences on Pandora." Of course, Pandora is not the only provider in the B2B music market, and will face stiff competition from such companies as Mood Media [which acquired Muzak earlier this year], PlayNetwork,TheRadio.com, Sirius XM, and even DMX, Pandora's partner in this product extension. [Full story: Billboard.biz] RIM To Launch BlackBerry Music Sometime This Week   Research In Motion, which has been hammered by financial markets after losing market share to competitors that manufacture popular digital music and video devices, says the launch of its BlackBerry Messenger [BBM] music service is imminent. The company plans to allow users to download 50 songs from the company's catalog and then share those tunes with friends and family, and a $4.99 monthly premium service offers users a chance to boost their selection by adding contacts who are also BBM premium users. As noted by CNET, BBM Music lets users turn their friends list into a playlist. "Let's say you have 10 BBM friends with BBM Music subscriptions, and they each have 50 songs in their music profiles," RIM said in its blog post. "From those friends alone, plus the 50 songs you downloaded to start your profile, you could have 550 songs." RIM reportedly plans to launch the music sometime this week in the United States, Canada, and Australia. [Full story: CNET] Survey: 50% of Americans Would Rather Lose Vacation Than Digital Files Chalk this up as one of those apples-vs.-orange type of studies, but a new survey conducted by Wakefield Research for Carbonite, Inc. indicates that 50% of Americans would rather lose all of their vacation time for an entire year than lose all the digital files stored on their computer. Further, 38% of married Americans feel that it would be worse to lose everything on their computer than to lose their wedding ring. Three out of five [62%] said they would pay to get back their lost data if their computer crashed, with 21% saying they would pay $500 and 27% saying they would pay as much as they needed to get their documents and files back. So...to what extremes would people go  to immediately recover all of their data if it were lost? One-third [34%] say they would give up beer and wine for a year; 31% would give up coffee for a year; 23% would give up their cell phone for a month; and 18% would give up their free time to mow their neighbor's lawn for a year. Not surprisingly [and, in fact, very predictably], Carbonite Inc. describes itself as a "leading provider of online backup solutions for consumers and small and medium sized businesses." [Full story: MarketWatch] The Who's Pete Townshend: Apple Bleeds Artists Like "Digital Vampires"   The Who guitarist Pete Townshend this week raised eyebrows by claiming that Apple and iTunes "bleed today's artists [like] digital vampires." "Is there really any good reason why, just because iTunes exists in the wild west Internet land of Facebook and Twitter, it can't provide some aspect of these services to the artists whose work it bleeds like a digital vampire, like a digital Northern Rock, for its enormous commission?" he asked in a lecture for BBC 6 in the U.K. "[Apple] is destroying copyright as we know it." He also observed that music consumers who download music illegally are little more than common thieves, and "may as well come and steal my son's bike while they're at it ... I wonder what has gone wrong with human morality and social justice. It would be better if music lovers treated music like food, and paid for every helping, rather than only when it suited them." Townshend also dismissed the notion that "sharing" music helped to spread the word about artists. "The word 'sharing' surely means giving away something you have earned, or made, or paid for," he said. [Full story: Spinner] Al Bell Presents American Soul Music  ... And American Soul TV If you're into classic and contemporary Soul, R&B, Blues, Gospel, Jazz, Hip-Hop Soul, Rap Soul, and Neo-Soul, we invite you to listen to Al Bell Presents American Soul Music. Former Stax Records owner and Motown President Al Bell personally has programmed this awesome radio station online, presenting your favorites from the 1960s and '70s [and some '80s], a lot of the best new music that's being released today, and some real gems you haven't heard in a long, long time. Come to www.AlBellPresents.Com and hear it for yourself!