The End of The Music Industry

Forrester Research is now predicting that half of all music sold in the U.S. will be digital by 2011, with the tide turning against the CD in 2012. "This is the end of the music industry as we know it," stated James McQuivey, VP and principal analyst at Forrester... "experiments in ad-supported downloads will be silenced by the powerful combination of DRM-free music and on-demand music streaming on sites like imeem.com."  McQuivey says that ad-supported Web music services are not the future and that ad-supported music should be "on the radio where it belongs."
OK, maybe I'm missing something here, so what does he call all the banner ads we're forced to see to get to the free on-demand streams....?  Aren't the licenses for this music being subsidized by the advertising, in addition to equity being given to the labels??

Quote of the Day

"To disable the Internet to save EMI and Disney is the moral equivalent of burning down the library of Alexandria to ensure
 the livelihood of monastic scribes."  --Jon Ippolito, of the Guggenheim, on the CBDTPA

 

(Thanks Paul S.!)

 

Universal Sues DivX

Here’s a great blog post by Davis Freeberg on the recent suit UMG has files against DivX’s Stage 6 video site…Personally, I’m glad to see a company with deep pockets challenge a major label under the Safe Harbor provision of the DMCA, but this will no doubt drag on and be very expensive!  “In a legal filing published late Tuesday night, Judge Dana Sabraw dismissed DivX’s request to declare Stage6 legal, ahead of their UMG piracy trial.”

Cell Phone Sales Still Strong

According to the latest figures from Strategy Analytics, “329 million mobile handsets were sold worldwide in Q4 2007. Volumes increased at 12.3% annually. Three of the top five brands saw sequential increase in average selling prices (ASP). Nokia attained 41% market share, revenues and operating profits continued to grow at double digit levels. Motorola and Sony Ericsson slipped to the third position in CDMA and UMTS respectively, Samsung occupied the second spot in both categories. Among others, RIM and Apple gained share, with Apple coming slightly below expectations.”

CD Baby has the largest digital distribution catalog in the world!

Here’ a great story about CD Baby and its founder, Derek Sivers….I’ve always been a big fan and my favorite quote sums it up:  “From the grass roots to the elite, the music industry has taken notice of Sivers, who has rejected lucrative offers to sell his company and declined payments to give preferential placement of an artist's disc on the site. It's never been about the money for Sivers; it's always been about helping musicians. This ethos prompted Esquire magazine to dub him "one of the last music-business folk heroes."

Freescale Buys SigmaTel

Neither story has received a lot of press yet, but in my opinion, BOTH are pretty big deals….

 

“Freescale Semiconductor, plotting a future in digital media, agreed to buy SigmaTel in a $110 million deal.  Freescale, a wireless chip maker that was taken private last year, said Monday that it will pay $3 share for Austin, Texas-based SigmaTel. The deal represents a 67% premium over SigmaTel's closing price of $1.79 Friday.  Shares of SigmaTel surged 52% in pre-market trading Monday.  SigmaTel makes semiconductors for a variety of consumer devices, including media players and some models of Apple's iPods.  The news comes just days after Freescale's largest customer, Motorola, announced that it was exploring the possible sale of its mobile phone business.”

 

PRESS RELEASE:   "The increased demand for feature rich, always-connected consumer electronics devices is driving manufacturers to look for platform-based solutions that will accelerate time to market," said Phil Pompa, president and CEO of SigmaTel. "With the addition of SigmaTel, Freescale is the obvious choice for these next-generation devices."  "The SigmaTel acquisition enhances the long-term, strategic value we can deliver to our customers," said Lynelle McKay, senior vice president and general manager of Freescale's Networking and Multimedia Group. "Freescale's proven strengths in the high-performance multimedia and general purpose markets are complemented by SigmaTel's strong mixed-signal expertise in the portable media player and consumer audio markets."