Music Ally

The race to get the UK government’s Digital Economy Bill into law before the country’s general election this Spring has been hit by another ministerial departure.

Creative industries minister Sion Simon is stepping down to stand for election as Mayor of Birmingham – and he was the minister tasked with guiding the legislation through parliament. No replacement has yet been confirmed, but the opposition Conservative Party – who aren’t expected to back the bill if they win the election – has slammed the news.

“This resignation is another chapter in the sorry story of Labour’s disastrous approach to Britain’s digital future,” shadow culture secretary Jeremy Hunt tells the Guardian. “It is a complete farce that a minister responsible should resign his post so close to the digital economy bill arriving in the House of Commons.”

Have we found an online video advertising format that truly works? Digital agency VivaKi has published results from The Pool, a survey of 29 different online long-form video ad formats, and concludes that the best is ‘The Ad Selector’, where users choose what video ad to watch before streaming content.

The idea was invented by online TV portal Hulu. The study suggests that The Ad Selector ads deliver on average click-through rates 106% higher than standard pre-roll ads, while online ad-recall scores were 290% higher.

However, the next phase of the research will be more relevant for the music industry, since it will focus on short-form video.

As Terra Firma fights to convince investors to pump another £120 million into EMI to prevent the company falling into the hands of bank Citigroup, EMI Music CEO Elio Leoni-Sceti has been talking about planned changes in the coming months.

According to the Telegraph, it’s aiming to save tens of millions of pounds by investing in new systems, and reducing the company’s headcount further. “We will present a compelling new five-year business plan with particular focus on the coming year,” says Leoni-Sceti.

“It will involve both an acceleration in revenues coming from product innovation at EMI Music Services and some cost reductions from the introduction of new systems and technology and the elimination of some duplication. This will confirm our vision to evolve into a digitally-led music company”.

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Former eMusic boss David Pakman has penned a blog post warning book publishers not to repeat past mistakes of the music industry when it comes to setting the prices of e-books.

The post comes as Amazon faces a battle with leading publishers, who want to charge more for e-books than the flat $9.99 it’s been charging on the store for its Kindle e-reader. Hachette and Macmillan have already announced plans to switch to an ‘agency model’ where they control the prices.

Pakman says the publishers’ arguments for charging more for e-books are all about self-interest:

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According to a post from CEO Mark Zuckerberg, Facebook now has 400 million users, having doubled its size the last year.

To celebrate, the company has unveiled its latest redesign – expect the usual user complaints throughout the next few days.

New features include new dashboards for applications and games, which Facebook says will “surface the applications you’ve interacted with most recently as well as your most recent application activity and your friends’ activity”.

Which could be significant for companies and artists’ own Facebook apps…

David Eun was one of Google’s key execs when it came to dealings with the music industry – his MidemNet keynote interview last year famously began with the question ‘Why are you trying to screw the labels?’.

However, Google’s content partnerships boss is now leaving the company to take up a position as president of AOL Media and Studios. He’ll be in charge of the company’s network of content sites.

“David brings an impressive breadth of media experience to AOL at an exciting juncture as AOL forges a new future as a high-scale producer and partner in the content space” says the internal memo from CEO Tim Armstrong.

Pretty bad, judging by this blog post from the BBC’s business editor Robert Peston, who knows a thing or two about bad banking deals after the last couple of years. He’s outlined what he describes as “one of the biggest-ever losses on a private equity investment”.

In a nutshell, he says that EMI’s results for 2009 will show earnings before interest, tax, depreciation and amortisation of around £300 million. Which translates into a notional value for the recorded music business of around £1.8 billion – or $2.8 billion.

Yet the takeover was financed with $3 billion of equity from Terra Firma and partners, and $5 billion of loans from US bank Citigroup – with Terra Firma injecting a further $500 million of equity last year.

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“We have no plans to launch a music service on Facebook”. That’s the unequivocal quote from the social network’s spokesperson yesterday, following new speculation about its music plans.

They stemmed from a new application called Music appearing in users’ Applications screens on Facebook, which linked through to the URL Facebook.com/music (the same format as the service’s official photos and events sections).

Facebook says this was a technical bug – but NOT a technical bug showing a secret new official Facebook music service. It’s not a super-convincing explanation, so watch this space…

There’s a theory that ISPs launching their own music services could be quids in when it comes to reducing the number of customers that ‘churn’ to rival providers. But how much?

Billboard has been crunching the numbers, based on US ISP Comcast, and claims that if the ISP launched its own music service and reduced churn by 10%, over five years the positive impact would be $162 million. Reduce it by 20%, and it’d be $325 million.

“These numbers show that broadband providers have reason to place a large value on a music service that is properly integrated into its product offering,” claims Billboard’s Glenn Peoples. “For this reason, record labels have ample reason to pursue deals with broadband providers.”

Spotify has been lauded ever since it first launched for the simplicity and slickness of its user interface. Its desktop client is stripped down and easy to use, and even the more complex features like collaborative playlists are idiot-proof. It just works.

Yet in early 2010, questions are being asked about whether it works well enough, which is healthy for music fans, the music industry and for Spotify itself. The company hardly rested on its laurels in 2009, but attention is turning to what it needs to do now to improve and compete with the new breed of ‘post-Spotify’ music services that will spring up this year.

(Sorry for saying ‘post-Spotify’ – it’s a bit pseudy).

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