Opinion and analysis of the day’s music business news.
— Qtrax has appointed Lance. J.O. Ford as co-president and chief marketing officer. He previously held those same positions at Rebel Digital, one of Qtrax’s advertising advisors.
Little has been heard from Qtrax in 2010. The “legal peer-to-peer digital music site” has had a number of false starts. This new press release, however, mentions a new “360 degree model” that features an in-house advertising strategy. It also says Qtrax is in beta testing in the Asia-Pacific region, will soon roll out in other countries (the company website lists Russia, Chile, Brazil and Argentina as upcoming markets). In addition, Qtrax says it has plans for a mobile service. No word was given on any intention to launch in the U.S. (Press release)
— Slowtrain Music in Salt Lake City is a record store as well as a record label. The record label side of the business has an interesting way to release music: pre-order vinyl. Albums are pressed on colored vinyl and paid for in advance by customers. Slowtrain describes itself as a “community-based record label where fans are part of the development process.”
That way of releasing an album is similar to the fan-funded route used by some artists through Kickstarter.com, the fund-raising platform recently named by Billboard as one of the ten best new startups. But Slowtrain handles (Desert News)
— “DJ Hero” release date set for Oct. 19 in North America and Oct. 22 in Europe. That’s a full week before “Rock Band 3” appears on shelves. (Joystiq)
— In a pointed op-ed, Willie Kavanagh, chairman of the Irish Recorded Music Association, picks apart a recent article in the Irish Times. Brian Boyd’s article discussed a GQ article by U2 manager Paul McGuinness that revisited some of the themes (digital piracy, ISP responsibility, government intervention) that he brought up in a now-famous 2008 speech at the Midem conference. Boyd took issue with McGuinness’s characterization of digital piracy as theft and referred to the music industry as a “ship of fools.” In his response, Kavanagh takes up an argument that seems to be gaining a lot of traction lately: the problem goes well beyond the past mistakes of the music industry.
“It is more accurate to say the industry was the ‘canary in the coalmine’ when it came to development of the digital economy. The problems it has experienced are now being visited upon the book, film, games and software industries. Those businesses are looking at how the music industry adapted, and are joining with it to call on governments to ensure that the internet is not a ‘wild west’ where creators’ rights are trampled underfoot.”
Boyd dismisses the music industry’s “it’s not fair” complaints for the past 11 years (since the debut of Napster). Kavanagh didn’t mention it, but Boyd fails to recognize that much of today’s music industry revenue comes from government and judicial responses to just such “it’s not fair” arguments. Collecting societies exist because songwriters did not think it was fair for places of business to benefit from their creations without paying them for the right. That collective licensing model, the one that is seen by many as the future of digital music revenue, arose out of a perceived lack of fairness. Ironically, Boyd calls for the rewriting of copyright law to acknowledge the existence of file sharing. Such an approach to digital piracy is different than the ISP policing desired by McGuiness, but both would have the result of transferring the costs of file sharing to ISPs and their users. Same result, different approaches, both through government reaction to cries of “it’s not fair.” (Irish Times)
— A clarification on a blurb in yesterday’s Business Matters post on Live Nation’s stock. The statement that Live Nation’s market capitalization is currently the same as it was a year ago was incorrect. While the company’s stock price may be about the same – about $9 – Live Nation is now a very different company. Comparing pre-merger Live Nation to post-merger Live Nation is like comparing apples and oranges. A year ago, shares were $9 but Live Nation had about 93 million shares of common stock outstanding (diluted). Now, shares are $9 and the company has about 170 million shares outstanding (diluted).
The point was to show where Live Nation’s stock has been over time. It appears the stock may have bottomed out and investors overreacted to news in mid-July. If that’s the case, they can start paying more attention to 2011 and beyond, which is where shareholders’ value will really be derived. But it’s difficult to track stock price changes over a long period of time when a company merges with another. In this case, the asterisk is that Live Nation’s 52-week low happened before the merger. So, $9 today is very different from $9 a year ago. Different company, different market capitalization.
