R2G, IODA launch music service in China

Wawawa, a new MP3 subscription service in China Ioda_logo_2 Here's a value proposition for you: a subscription music service that lets you download 88 MP3s a month for a little less than $3. And you thought eMusic was a good deal.... The catch is, you have to be in China to subscribe. And in China, music fans aren't used to paying anything for MP3s.

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The NFL takes games online

Nfl_logo My colleague Meg James reported Saturday that the NFL will be going online this year with its Sunday night games -- not exactly its most valuable product, but not a bad place to conduct an experiment in online distribution. Although this is close to a no-brainer, it represents something of a leap forward in advertiser-supported sports programming online. All told, 17 games will be shown live on NFL.com and NBCSports.com (NBC has the TV rights to the game), starting with a Giants-Redskins game on, umm, Thursday Sept. 4.

The most significant thing about this one-year test is that, unlike what NBC and other networks do with their prime-time schedules, the free online football games will compete directly with the versions on TV.

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A Paramount movie integrated into Sony web programming

Angus Thongs and Perfect Snogging movie promoted on Bebo through Sofia's DiarySofia's Diary branded entertainment on Bebo This is so meta, I'm having trouble wrapping my brain around it. Sofia's Diary is an "interactive Web drama" that's produced by Sony Pictures Television International. Its episodes and related programming -- e.g., the main character's blog -- are on Bebo.com. Sofia's Diary is branded entertainment, which means that its characters and plot twists are designed to advance an advertiser's message. Anyway, today Bebo announced the integration of a new advertiser into the program: Paramount Pictures UK. Characters and other elements from a new Paramount teen movie,  "Angus, Thongs and Perfect Snogging," were inserted into the world of Sofia's Diary for a two-episode run, timed to the movie's opening weekend. In other words, Sofia's faux reality was tuned to promote a faux reality from a different medium (film).

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The Layaways and Billy Bragg contemplate new business models

The_layaways_logo The Digital Audio Insider blog is a good read for insights about the way the online music business works for indie artists, offering nice details about wholesale prices, royalty rates and the like. Its author, David Harrell, is also in a band called The Layaways. Awesome band name! Anyway, yesterday Harrell's blog post asked the musical question, should his band give away its new album? The tactic seemed to have worked well for Nine Inch Nails and Radiohead, but those bands are well-known quantities with loyal followings. There's also an argument for unknown new bands using their recordings as loss leaders, given that they make their livings (such as they are) off of live performances anyway. My guess is that the wisdom of giving one's music away will depend on one's ability to attract attention to the offer. Plenty of bands have given songs and albums away over the years, so The Layaways wouldn't grab headlines just by joining the pack. Anyway, tell me what you think, but more important, tell David. He's the one with skin in the game.

Billy_bragg_2004_at_afl_cio_hq Another musician with a blog worth reading is Billy Bragg. As dedicated followers of this blog know (OK, it's probably an exaggeration to use the plural form of follower), I'm completely in the tank for the guy. Bragg's blog is mainly about the adventures of a working musician; he seems to prefer publishing his musings about the economics of the business in dead tree media, such as this letter to The Guardian in the UK. In it, he scoffs at the idea of ISPs sending warning letters to suspected file-sharers (as the six top Internet providers in the UK agreed to do yesterday). I'd quibble with his notion of a cozy relationship between ISPs and the labels, as well as his suggestion that the ISPs could be held liable for their users' infringements. But I agree with his bottom line -- the most promising path is to provide an unlimited amount of music for a flat fee or free, with advertiser support. That's the direction the labels are headed, albeit slowly, through initiatives such as Universal Music Group's deal in the UK with BSkyB, ad-supported music sites such as iMeem and SpiralFrog, and Nokia's effort to bundle free downloads with cellphones. Bragg also makes the case for letting royalties flow directly to artists, which is what U.S. law requires for about half of the fees raised from webcasters, satellite radio and non-interactive cable music services.


Consumer groups blast MPAA proposal (a dog bites man story)

Mpaa_logo If you had the chance to watch a movie on cable or satellite TV before it came out on DVD, what sort of trade-offs would you be willing to make? Would you pay more to watch it than a DVD rental or even a movie ticket? Would you accept having to watch the movie in one sitting, with no breaks for phone calls or snacks? Would you lose interest if you couldn't record the movie to watch again later?

These are the sorts of questions the market typically answers, but that's not how it necessarily works in the entertainment industry. This week, seven consumer advocacy groups urged the FCC not to let the studios conduct the experiment they proposed in early video-on-demand releases. The reason: the MPAA wants to deploy an anti-piracy technique that, in the advocacy groups' opinion, would give the studios too much control over the technology used in homes.

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More royalties for songwriters?

Us_copyright_office_logo In an overlooked notice of proposed rulemaking last week, The Library of Congress' Copyright Office lived up to the worst fears about government agencies. It took up a nearly eight-year-old petition and, rather than settling a current dispute, created a new one. It also provided yet more evidence that copyright laws written in the analog era don't map well to the Internet and digital technologies.

The issue has a rich back story, much of it laid out in the notice. But here's a distillation. The Copyright Office was asked in late 2000 to resolve a disagreement between the RIAA and music publishers over how large a mechanical royalty, if any, should apply to two types of music services: on-demand streams from an online jukebox, and "tethered" downloads that expire after a certain number of days or plays. Such streams and downloads are at the heart of subscription music services such as Napster and Rhapsody. In its proposed rulemaking Wednesday, the Copyright Office basically punted on that question. But it unexpectedly held that music publishers were entitled to an additional royalty for non-interactive streams -- e.g., webcasts, satellite services and digital over-the-air radio signals. The size of the royalty was left to a three-person arbitration panel, which has been considering the rates for interactive streams but, apparently, not for non-interactive ones.

Representatives of the music publishers were still digesting the decision when I talked to them Friday, so it's not clear how they'll respond. Nor is it possible to say what impact, if any, there would be on webcasters already struggling to pay royalties to the labels. “This is more than we have ever asked for," said Laurie Jakobsen, senior director of communications for the Harry Fox Agency (a royalty collector for the publishers). Added Jay Rosenthal, general counsel for the National Music Publishers Assn., "We're still reviewing the rulemaking documents, but so far we're optimistic."

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That's advertainment

The Rookie Fox 24 Degree deodorant branded entertainment advertising Apologies for stealing the headline from an editorial we ran Monday about the FCC and product placement, but it applies just as well to this post. In the aforementioned opinion piece, the Times' editorial board inveighed against the nanny-state notion that adults can't ward off the siren song of embedded advertising without the government's help. Still, I sense that we might be on the cusp of a new wave in video that intertwines advertising and entertainment more completely than before, and also more subtly. Call it the era of "branded entertainment," brought to you by content providers who can't (or won't) make people pay to watch their programming. And although I think market forces will serve as a powerful deterrent to deceptive behavior, I wonder if even the most in-your-face disclosures about the role of advertisers won't be erased as clips bounce from site to site to site.

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3D movies spread far beyond the House of Wax

Read_d_3d_logo In March I noted that digital cinema rollouts were fast approaching a critical mass. In recent weeks, digital 3D deployments have gained a similar momentum, albeit on a smaller scale. In particular, Beverly Hills-based Real D had two big announcements in quick succession. On May 20 it announced that Regal Entertainment, the world's largest theater chain, would add Real D 3D systems to 1,500 screens, or more than 22% of its U.S. venues. Then on Tuesday, another major U.S. chain, Cinemark, announced plans to add Real D systems to up to 1,500 screens. That's almost a third of Cinemark's total. These commitments should push Real D, which can be seen on a little more than 1,000 screens today, to about 5,000 screens by the end of next year, said Elizabeth Brooks, the company's chief marketing officer. Its closest competitor, Dolby, has deployed its 3D systems to about 30 U.S. theaters and numerous others worldwide.

Because these 3D deployments rely on digital projectors, it's natural that 3D would pick up steam as digital cinema deployments accelerated. According to Brooks, installing the equipment needed to show Real D 3D movies -- the special lens for the projector, the reflective screen and the supply of 3D glasses -- costs about $25,000, or 25%-40% of the cost of converting an exhibition space to digital. With 3D films easily generating two to three times the box office of their 2D counterparts (a margin attributable in part to the $1 to $3 premium charged for tickets to 3D showings) cinemas can recover their costs in a week. Still, cinema owners have a hard time justifying the investment unless they can count on more 3D movies being released.

That part of the picture is brightening, too.

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Nokia phones to come with Warner music

Warner Music Group signs deal Nokia Comes with Music free song downloads The first casualty of this decade's digital music revolution has been music sales, as consumer switched from CDs to 99 cent singles or free downloads. But some industry executives see a chance to reverse the trend and sell music in significantly larger bundles -- more songs, in fact, than the average consumer buys in a year. That's the home-run swing promised by initiatives such as Nokia's Comes with Music, which signed up its third major record company today, Warner Music Group. Universal Music Group, an early advocate of this kind of thing, and Sony BMG were already on board, with EMI still in licensing talks.

The Comes with Music proposition is simple: buy a specially designated Nokia phone, get an unlimited number of seemingly free song downloads for one year. That's seemingly free, not actually free, because the price of the phone will include a hidden sum that Nokia will split with the labels and music publishers.

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iLike Rhapsody - why don't more people?

Rhapsody subscription music service announces iLike deal and MP3 storeToday, Rhapsody (a joint venture between RealNetworks and Viacom's MTV Networks) launches another initiative aimed at selling its subscription music service. My colleague Michelle Quinn has the details here , such as Rhapsody's answer to the new Napster MP3 store, but I wanted to drill down on a couple of elements from the announcement.

iLike free MP3 deal with RhapsodyTo me, the MP3 store is the least interesting feature. Yes, it has more DRM-free tracks than the iTunes store, but so does Napster's. More intriguing are the partnerships aimed at introducing more people to Rhapsody's vast celestial jukebox, the core feature of its subscription service. These deals, especially the one with iLike, may mark the first time Rhapsody or any other subscription-music service has been effectively marketed. (When it comes to selling digital music products and services, Apple has been in a league of its own.) Sometime in July, iLike's 28 million users will be able to play for free just about any song mentioned on its network of sites, not just 30-second samples or the handful of full-length tracks posted by selected artists. The same capability will be rolled out gradually through Yahoo and MTV Networks' online properties, such as CMT.com and VH1.com.

There is, however, a non-trivial caveat.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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