Music Ally

Music Ally has been studying the intersection between entertainment and technology since 2000, publishing reports throughout that time. But now that we’re fewer than two weeks from the start of a new decade, Music Ally has taken some time to reflect on the past ten years – a decade that will forever be remembered as the era when digital entertainment went mainstream.

Since 2003, all subscribers to the full Music Ally service have been able to search our archives of news, insight and analysis. Today, as part of a series in which we excerpt the most fascinating digital music events of the years 2000-2008. we unearth some of our reports from the year 2000.  

Sign up for a free two-week trial to Music Ally and get access to all our past reports and bulletins plus a suite of research tools including market data, a deal tracker and an analyst forecast tracker. In the most recent PDF Report you can find a rundown of 2009’s big events plus an extensive timeline detailing the key digital music happenings of the past ten years.

And continue reading after the jump to take a look back at the year 2000, as we reported it at the time.

Now, Music Ally comments:

Back in 2000, Napster meant only one thing – the renegade filesharing service that had launched the year before, forcing the record industry to pay attention to an increasing public hunger for online music. But we now know that its attempts to legitimise, in tandem with Bertelsmann, would fail; today’s licensed Napster bears no relation to the p2p parent after which it is named. Certainly the notion that students might pay $15 per month for a Napster-like subscription seems far-fetched in retrospect.

This was a time before the iPod, before the iTunes Store and before liberalisation of copy protection rules. In 2000 we saw the first indications of copy-protected CDs, a trend that would backfire horribly on the music industry over the next few years. If only it hadn’t taken nine years to get to the point where labels agreed that DRM on downloads is largely a daft idea. Looking back it’s incredible to think that Universal charged $1.99 for downloads that could not be played on portable devices or burned to CD, but that’s just how tentative the majors’ early digital efforts were.

May 02 2000

http://www.musically.com/oldarchive/2000/000502.doc

Napster, which is still facing a high-profile court dispute with the RIAA over illicit copying of copyright music, has now released a new beta version of its file-sharing application that allows users to trade secure Windows Media Audio files. The move opens the possibility of legitimising its clientele, and creating a viable business model

June 01 2000

http://www.musically.com/oldarchive/2000/000601.doc

On Monday 12th June the Recording Industry Association of America asked for a preliminary injunction against enabling Napster users from copying or downloading copyright music, a move that, if successful, could shut down the song-swapping service. The company has recently appointed a new chief executive – ex lawyer Hank Berry who immediately retaliated with a particularly bullish response, saying he was confident that the company would win the case.  When college students in the US – 57% of whom are at least weekly users of Napster – were asked whether they would be prepared to pay a subscription to continue to use Napster, 58.8% said yes. The average amount appeared to gravitate towards $15 a month.

U.K.-based and Peter Gabriel-backed online music distributor On Demand Distribution (www.od2.co.uk) has debuted its service by providing downloadable tracks through ecommerce sites HMV and Tower Records.

June 30 2000

http://www.musically.com/oldarchive/2000/000630.doc

Thomson Multimedia, which collects MP3 royalties for Fraunhofer – the Institute which developed the MP3 format, has always charged fees to hardware makers, software developers and downloadable music vendors. Beginning next year, webcasters will also pay. Everyone pays an annual minimum of $15,000, and after that, per-use fees accumulate. Companies that sell downloadable music must pay 1% of the price charged to the listener per song.

Last week BT lawyers sent out letters to the top Internet service providers in the United States, alerting them they’d best begin discussions for licensing the technology, referred to in BT’s patent as “an information handling system in which information is derived from a computer at a remote point and transmitted via the public telephone network to terminal apparatus.” In other words whenever one page connects to another via a textual or pictorial link BT claims it is entitled to collect.

Sony’s Epic Records has launched DealWithEpic.com. The idea behind the site is to source new talent exclusively for the record label which should eventually replace the need for unsigned artists to send in demos. Ironically, while the site is purely an effort to recruit talent for Epic UK, there has been an unexpectedly large response from unsigned American artists, according to Danny Hayward, a talent scout for dealwithepic.com.

Through an agreement with Liquid Audio, UK based HMV.com will have access to 70,000 CD-Quality Music Downloads From More Than 8,500 Artists On 1,400 Labels Starting this summer, consumers will be able to securely purchase and download more than 70,000 digital music tracks at HMV.com. While pricing has yet to be finalized, Internet singles are expected to retail for $.99 to $2.99.

July 01 2000

http://www.musically.com/oldarchive/2000/000714.doc

Capital Interactive, the new-media division of Capital Radio, has unveiled an ambitious new online music strategy. The group is to launch three new narrowcast web radio stations this autumn, each aimed at a niche audience. The working titles for the stations are Diva, which will focus on ‘women’s anthems’ and ballads; Rage, which is to play music for computer games players; and Urban Grooves, offering R&B and soul. Later this year Capital Interactive will also launch a new online music brand, kikido, which will appears as a standalone brand as well as on the narrowcast stations and Capital’s existing websites for its Capital FM, Capital Gold and Xfm radio stations

BT has unveiled details of its much-anticipated broadband internet service, BT Openworld, which it is billing as the ‘most content-rich broadband portal in Europe. BT Openworld senior vice-president, consumer content John Raczka said that the service would launch with 10 channels in late August and grow to 21 channels by the end of the year. The consumer portal will initially offer news, sport, jobs, auctions, games, shopping, travel, money, entertainment and music services. Available first via PCs and the internet, the channels will be available on TV when BT receives its broadcaster licence on 1 January 2001. Raczka said BT Openworld already had more than 110,000 ‘prescribers’ with 75 per cent of those opting for the £39.99 per month consumer service.

The first US satellite to broadcast digital radio is now in space. Sirius Satellite Radio, a US digital radio broadcaster launched the orb last week and wants to revitalize an industry that has remained mostly unchanged for decades by getting people to pay for radio. Two more will be launched this year to provide digital radio to motorists in the US only starting in 2001. The company will broadcast its 100 CD-quality music, news, sports, and talk radio channels for a monthly charge of $9.95. In order to receive the digital signal, cars must be outfitted with new receivers that will cost around $280.

August 01 2000

http://www.musically.com/oldarchive/2000/000801.doc

Universal plans to roll out a market trial of a downloadable music initiative later this week. The trial is dubbed Bluematter and is based on the Magex DRM (itself based on Intertrust). 60 tracks will be made available from the Universal catalogue in the US and can be downloaded for $1.99 through eight affiliate partners. Unlike similar trials by EMI & Sony (also both in the US) the consumer will receive virtual currency good for two free tracks, as well as photos and lyrics along with each music file. In addition once the Magex software is set up consumers will receive $4 with which to begin buying. However, as with most current DRM (digital rights management) systems the downloaded songs will work only on the desktop computer to which a user downloads the files; they won’t be transferable to other computers a user owns. Also consumers won’t be able to play the tracks on any hardware devices currently on the market (eg Rio MP3 player). Software support will be limited as well – RealNetworks’ RealJukebox will initially be the only player to let fans hear Universal music they have taken the trouble to purchase.

August 25 2000

http://www.musically.com/oldarchive/2000/000825.doc

We asked: What is broadband? According to eMarketer, “By 2003, the residential broadband market will grow to 20.73 million subscribers”

MARILLION have created music business history by getting fans to finance the recording of their forthcoming album. Through an internet whip-round among the 30,000 fans on their mailing list they managed to raise 100,000 pounds in donations within three weeks, underwriting the cost of recording the album.

November 01 2000

http://www.musically.com/oldarchive/2000/001101.doc

BMG and Napster intends to develop what the partners characterized as a new, secure membership-based distribution system that will guarantee payments to artists. According to Napster CEO Hank Barry the service will evolve into a membership-based model – not a subscription model, the difference being that in a subscription, you pay money, you get something. In a membership model, you belong to a community and (supposedly) get something more tailored. The pair are aiming for a $4.95 a month price point. Barry said the new service will likely include two areas–a free promotional area, and a paid “membership” area. Bertelsmann’s Schmidt said that Napster will also start offering “added convenience,” such as links to Cdnow where users can purchase CDs.

According to Netimperitive, UK company Wippit is currently in the testing phase for a Napster-like music search tool, that aims to generate revenues for the artists and labels involved. The user must pay for the software which enables the song swapping, and additional revenue is derived through advertising. The software is valid for 12 months, during which time a user can download as much as they wish. Revenues are to be distributed between the rights holders and a system will be completed by the end of the year.

December 01, 2000

http://www.musically.com/oldarchive/2000/001201.doc

In a blow to the nation’s big broadcasters, the U.S. Copyright Office ruled last Friday that record labels are entitled to royalties when terrestrial radio stations also transmit music over the Internet. Traditional AM and FM broadcasters were hoping that they wouldn’t be subject to the Digital Millennium Copyright Act of 1998, as they have not had to pay royalties for their terrestrial broadcasts. But this ruling means that they will now have to pay royalties when those terrestrial broadcasts are also rebroadcast over the Web.

Streaming-music company Musicbank is almost there. The San Francisco-based start-up announced that it has sealed a licensing deal with EMI, meaning Musicbank now has content from all five major labels. In a deal similar to ones previously made by the other majors, EMI took a small equity stake in Musicbank. Now Musicbank’s final hurdle will be to sign an agreement with the National Music Publishers Association/Harry Fox Agency. Musicbank said it will launch later this month.

As promised, last week EMusic.com began its crackdown on Napster users who were trading files from its catalogue. According to Inside.com, about 1,400 Napster users “had their access to the file-sharing service yanked” on Thursday when they continued to make the offending files available after being warned to stop sharing them

The US country label Fahrenheit Entertainment has announced plans to begin selling copy-protected CDs, incorporating technology from SunnComm. SunnComm (a Phoenix-based firm that, according to CNet, ”few industry analysts have heard of”) says its technology prevents users from ”ripping” CD data into MP3 format (which is how most of the illicitly duplicated material on services like Napster gets there) or ”burning” CD copies of protected discs. The record industry has had little success with anti-piracy measures along these lines — earlier this year, BMG Germany shipped 130,000 copy-protected CDs, but had to abandon the initiative when consumers complained that the discs wouldn’t play in their machines.

Browse past reports from across the decade

Sign up for a free two-week trial to Music Ally and get access to all our past reports and bulletins plus a suite of research tools including market data, a deal tracker and an analyst forecast tracker. In the most recent PDF Report you can find a rundown of 2009’s big events plus an extensive timeline detailing the key digital music happenings of the past ten years.

Tags: 2000 - 2009, bluematter, BT, decade, digital, Digital music history, history, HMV, magex, marillion, mp3, Napster, RIAA, sunncomm, ten years, timeline

This entry was posted on Monday, December 21st, 2009 at 9:37 am and is filed under Digital music history. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.