Music Ally

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Read on for today’s Bulletin, and do pass this link on to any colleagues or contacts who  you think would be interested too.

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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.

Google has announced that it is abandoning its policy of censoring search results on its Chinese search engine, in response to a sophisticated cyber attack that tried to gain access to Gmail accounts of Chinese human rights activists.

“We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all,” writes SVP of corporate development and chief legal officer David Drummond. “We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.”

Why are we writing about this? Last year, Google launched a free ad-supported music downloads service in China. It was hailed for its piracy-deflating potential, not to mention the contrast between it and local search engine Baidu, which has provoked anger in the music industry by deep-linking to copyrighted songs in the past.

Don’t get us wrong: this is much bigger than music. Google squaring up to the Chinese government will be welcomed around the world – its original decision to censor search engine results there has been criticised often. But it will be interesting to see what the knock-on effects are at a time when the Chinese government is also trying to make the country more hospitable for legal music services.

It’s been nearly three years since Viacom announced plans for a $1 billion copyright infringement lawsuit against Google over YouTube, but the intricacies of the case mean it still hasn’t come to trial.

Now it may not, as both sides have filed motions for summary judgement, asking the court to rule in the case without sending it to trial.

Google maintains that YouTube is protected by the Digital Millennium Copyright Act (DMCA), and cites the recent decision in favour of Veoh in its legal battle with UMG.

Meanwhile, Viacom reiterates that Google knew about widespread copyright infringement on YouTube and profited from it, meaning it can’t claim DMCA protection. A resolution could – and we stress the ‘could’ – come sometime this year.

Its three-strikes law may have been delayed, but a report presented to the French government is barking up another tree entirely in an effort to compensate the creative industries hardest hit by the shift to digital.

The Zelnik Report suggests a tax on online advertising firms (Google, Microsoft, Yahoo and even Facebook) as well as ISPs, which could raise €35-€50 million a year ($50-$72 million). The tax would involve a levy every time an ad or sponsored link is clicked by a French internet user.

It’s worth stressing that this is a report, rather than planned government policy at this stage. Digital levies like this tend to provoke controversy when governments do try to implement them – we wonder if the French government will have enough on its plate managing the three-strikes regime once that’s in place later this Spring.

Tomorrow should see the formal unveiling of the Nexus One, the latest Android smartphone – differentiated by the fact that it’s Google’s brand on the handset rather than a manufacturer.

The company is holding an Android-themed event at its US headquarters, with information on the Nexus One all over the blogosphere in recent weeks in what smacked of a clever and deliberate campaign of leaks.

But here’s the really interesting thing. TechCrunch is claiming that Google has been in talks with Spotify to not only preload the latter’s Android app on the handset – but to pay the licensing fees to labels for music streamed by its users.

“Google wanted Spotify badly enough that they were willing to cover the label costs for every user of $3 – $4 per month. Spotify would add advertising on top of it, as they do with the free version in Europe, to make additional revenue.”

Spotify hasn’t even launched in the US yet, but persuading Google to foot the bill for its Android licensing costs would be a huge coup. However, TechCrunch admits that its sources claim the deal “has likely gone cold”, so perhaps won’t feature in tomorrow’s launch after all. Still, it’s not such a big leap from Spotify getting operators like 3 and Telia to bundle the cost of a premium subscription into their data tariffs, so it could still happen.

2009 has seen the rise of streaming services Spotify and Pandora (and the fall of several of their rivals); governments grappling with anti-piracy legislation; The Pirate Bay trial – and then its tragicomic sale saga; and hundreds of bright-eyed music start-ups and thousands of iPhone apps. And STILL no Yellow Submarine iPod.

We rounded up the key trends from the year for our final Music Ally Report of 2009, and the article is republished below in full. If you’re interested in our service in 2010, with its daily bulletin and fortnightly analytical report, click here for a free trial.

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The Wall Street Journal is claiming that Google was in “serious discussions” to buy Lala before Apple acquired the company last week.

The article suggests that Google has deeper ambitions in the music space than its recently-launched music search service – possibly tied into giving people a way to stream music to netbooks running its Chrome OS platform. Meanwhile, Apple was apparently interested in buying mobile advertising company AdMob before Google acquired it last month for $750 million.

The picture painted is of two companies increasingly muscling in on one another’s turf – with startups caught in the middle (although if this means bidding wars, it’s not such a bad place to be caught). The question now is whether Google will buy another music startup instead…

We knew that ISPs weren’t too keen on the clause in the UK government’s Digital Economy bill that allows ministers to change UK copyright law without primary legislation. But now four of the biggest web companies have joined the battle.

Google, Yahoo, Facebook and eBay have written to business secretary Lord Mandelson expressing “grave concerns” at the bill. “The industry as a whole had hoped that the outcome of Digital Britain would be a clear, workable set of principles by which the industry could operate,” says the letter.

“On the contrary, Clause 17 creates uncertainty for consumers and businesses and puts at risk the UK’s leading position in a digital Europe… This clause is so wide that it could put at risk legitimate consumer use of current technology as well as future developments”.

Vevo, the joint venture between Google and Universal, is set to launch in the US on December 8. First announced in April of this year, the service will be a “premium online music video hub built for consumers, advertisers and content owners” featuring Universal music (and we expect ultimately other major label music) but making use of Google’s technology and the YouTube community. Back in April, Universal CEO Doug Morris said that “We believe that at launch, VEVO will already have more traffic than any other music video site in the United States and in the world.” In a few weeks we’ll find out whether or not he’s right.