Face the Music: It’s Time To Fix Licensing

I was talking to an executive at a major label the other day. We were talking about startups and he noted that they either sue these companies out of business or legitimize them out of business. That is not far from the truth. How many legitimate, standalone digital businesses can you name that rely on licenses from the labels for their primary business and are profitable? Let’s categorize by business model:

E-Commerce/Transaction-based: iTunes immediately comes to mind. It may be profitable on its own, but we all know that Apple’s main business is to sell iPods and now iPhones. eMusic is the other one, and I think it has a real business on its hands — of course the vast majority of its repertoire is non-major label.

Music Subscriptions: This segment is dominated by Rhapsody and Napster. Neither is solely a music subscription service, but that’s what both are best known for. At any rate, neither is profitable. RealNetworks’ music business lost $1.9 M in the second quarter of this year. Napster? Well its stock chart kinda says it all; it’s currently trading for a little less than the cash it has on its books. Read More about Face the Music: It’s Time To Fix Licensing

Ad-Supported “Free” Music Plays On: SpiralFrog, Imeem, QTrax

[qi:005] As Apple (APPL) and Amazon (AMZN) duke it out in the MP3 price war, music publishers are still trying to figure out how to cash in on a crowd that will go to great lengths to get its music for free.
Imeem, a San Francisco-based music discovery startup, said it has signed a content agreement with Sony BMG Music Entertainment that gives users access to the Sony(SNE)-Bertelsmann joint venture’s digital catalog of music and video for ad-supported, “free” streaming of these files.
The company, which competes with Project Playlist, makes a customizable music playlist that can be embedded into MySpace and Facebook profiles. This is its second deal with a major label; it inked a similar partnership with Warner Music Group (WMG) earlier this summer.
SpiralFrog, which has a partnership with Vivendi’s (V) Universal Music Group, also offers free music downloads, but of course there’s a catch (actually there’s about 20 catches).
Launched earlier this month after lengthy delays, SpiralFrog makes money through site ads, and then splits these profits with the music publisher. Read More about Ad-Supported “Free” Music Plays On: SpiralFrog, Imeem, QTrax