In the battle for music downloads, that is currently dominated by Apple iTunes, Universal has hit back with a stimulating digital music consumption by offering users all-you-can-eat music subscriptions. In solving the problem of online piracy and the decline in CD sales, the music industry has spent the past few years searching for the best way to get consumers to pay for digitally downloaded music as a way of offsetting this decline in sales. There is still a dependency on iTunes that controls 80% of the download market, however it is expected that digital music sales will grow this year by nearly 50%.
In a cry for more competition to take on iTunes, major companies like Universal, Warner Music and Sony BMG have moved to support new services from the likes of Microsoft and Nokia with an all-you-can-eat subscription deal called "Total Music" that is expected to go live in 2008. At this stage it is very early days and the music majors not willing to comment on their plans, however reports suggest the cost of subscribing could be set at $5 (£2.46) a month.
Universal Music is leading the charge against iTunes, balking at the one-third cut Apple takes on every song it sells through its music store. Previous attempts to launch digital music services failed by Napster. Universal still sells songs from artists on its roster including Amy Winehouse and 50 Cent through iTunes, but is keen to develop new ways to sell music digitally, including recent moves to retail singles via USB sticks. (source: Independent)
A jump in Yahoo! shares by 10 % occurred yesterday after-market trading, as Wall Street breathed a sigh of relief that the long-awaited turnaround in the internet company’s online advertising business appeared to be gaining steam.
Chief Executive, Jerry Yang said “while we have a lot more to do, we have taken some important steps and made a lot of progress” Yahoo!’s shares have fallen over the past six months on concerns about a widening gap compared with Google’s more efficient search advertising system, as well as the impact of new lower-priced forms of display advertising that were eating into Yahoo’s traditional “premium” advertising business.
Yahoo!’s revenues, grew by 14% during the quarter, to $1.28 billion (£640 million). This is 11% faster than Wall Street predictions. Revenues generated by its in-house websites and services had risen strongly, by 22% from a year before. In the latest quarter, revenue growth from display advertising jumped back to almost 20%, as a result of recent acquisitions and other adjustments to react to structural changes in the online ad market. (source: Financial Times)
Following on from the first article (above in the battle for downloads), Slicethepie, a stock exchanged website launched this year, allows artists to raise £15,000 from fans to record an album, in return for which the backers get shares in the bands. Shares in Miranda Barber, a 33 year old singer/songwriter from London, and her as-yet unrecorded album has risen to £1.47, giving her an overall market value of £22,050 as she approached the stock market to break into the music industry.
Slicethepie was set up by David Courtier-Dutton, who spent three years with Infobank, the shortlived dot-com darling, during the boom years before coming up with the idea to mix music and high finance in one website. It has 25,000 registered users.
Mr Courtier-Dutton said “it seemed like a great opportunity. The music industry is on its knees and there are only one in three albums in Tesco that you want to buy, but there’s far better music out than what you can get off the shelf.” The website trades off the notion that it is possible to break a band without a record company. Artists retain their copyright, with Slicethepie taking a distribution fee of £2 per album. It uses the money to buy out shares in bands two years after floating, implying that they must sell more than 7,500 albums for the original investors to turn a profit.
The idea is to sell albums for £7.90 on iTunes. After the retailer and Slicethepie take their cuts of £3 and £2 respectively, a band receives £2.90. Mr Courtier-Dutton owns about 60% of the shares in the company behind the site, having raised £800,000 and £600,000 from private individuals on values of £2.5 million and £10 million respectively. (source: Timesonline)