Thursday, February 28, 2008

With I-Tunes, There Is No Bag


Maybe the NAB should just make their new ad contain a photo of a Wal*Mart bag.

Meanwhile, the Nashville buzz is that in the wake of the great traffic generated by Garth's latest repackaging of his hits for a bargain price ($11.88) the massive retailer is telling labels that they will cut back the amount of space for music unless labels cut wholesale prices to the point that the retailer can price albums for under $10.

It would cut further into record label already-shrinking profits, but I bet they decide that when the monster gets hungry the best short term play is to feed the beast.

Longterm,

"If a country music fan in Pittsburgh could buy a custom sequined shirt from Manuel's Exclusive Clothier on Broadway and, via technology heretofore only known in science fiction, have the garment teleported to his or her home instantly (either for a nominal fee or free), the technology would, among many other things, revolutionize the manufacturing industry. And unless it had a stake in the technology, even a billion-dollar behemoth like FedEx would quickly become obsolete. But what is fanciful analogy for FedEx is an all-too-stark reality for the music industry. While it's not Star Trek technology, the Internet represents just as effective a technological dagger into the heart of the current distribution system and business model relied upon by label and listener alike for decades. And make no mistake, it's the distribution model and not piracy that will make or break the current system."

"The future is selling less of more." -- Tim Dubois

...But who's to say how that "more" will be sold? It may be that a major label becomes an umbrella distributor, which probably comes as small comfort to SonyBMG which has owned Napster for years now and has been busier suing itself than working with its competition to make that happen.

1 comment:

Tony Thomas said...

In your post about iTunes (and thanks for the Tennessean article link!), you wrote:

"...comes as small comfort to SonyBMG which has owned Napster for years now...

I’ve been under the impression that Bertelsmann wasn't part of Napster's ownership anymore...

So...in searching, I found this (it picks up the story after Bertelsmann's initial investment in Napster had died in bankruptcy court):

"...Bertelsmann offered to acquire the Napster assets for $8 million as part of a bankruptcy proceeding. In June 2002 Napster filed for Chapter 11 bankruptcy protection. But Bertelsmann's attempt to position itself as Napster's largest creditor, and thus have the inside track to acquiring Napster's assets, failed because its infusion of cash was not considered a loan but, rather, a backdoor attempt to gain an equity stake in Napster, an arrangement that was intended to shield Bertelsmann from any liabilities Napster incurred in its litigation with the music industry.

In November 2002, Roxio Inc., maker of CD-creation and digital-media software, emerged the winner in bankruptcy court, paying $5 million for the Napster name and its intellectual property."

From: http://www.answers.com/topic/napster-inc?cat=biz-fin

Then...it looks like the Roxio--Napster combo sold to Sonic, which then changed its company name to...Napster:

http://investor.napster.com/releasedetail.cfm?ReleaseID=150826

So, to my read...there's no Bertelsmann ownership any more in Napster.

Just FYI, Tony T.