Music Ally

Digital distributor The Orchard is looking for a new CEO, after current boss Greg Scholl announced his resignation. He’ll quit on 1st November, and is promising to announce a new position in the coming weeks, which he’ll start on 2nd November.

The Orchard’s board is now kicking off a search for Scholl’s replacement, although intriguingly its interim CEO will be Danny Stein, who besides being a director of The Orchard is also boss of music service eMusic. Scholl’s resignation was announced alongside news that The Orchard is to cut 20% of its global workforce.

“Over the past two years, The Orchard has completed two major acquisitions and invested in technology efficiencies to make our global team more productive,” said Stein in a statement. “As a result, and also considering the digital music market grew less quickly than we expected it to grow during 2009, we have eliminated positions and implemented other cost saving measures.”

There’s been plenty of speculation in recent months that digital growth is seeing a worrying slowdown, but The Orchard is one of the first companies to (publicly at least) announce job losses as a result. “Reducing staff is always a difficult decision, but in this case, the responsible one, and it better positions The Orchard for future growth and profitability,” says Scholl.

Live from London, we’re liveblogging our own Mobile Music In The Dock event, for which we’ve gathered expert witnesses, canny prosecution and defence teams, and a raucous (we hope) jury to decide whether mobile music is living up to the industry’s expectations. Read on, and refresh for the latest entries…

18.35: We’re about to get underway, but here’s a rundown of who’s who tonight. The prosecutor is Jeremy Silver QC from Sibelius Software, while the defence counsel is Ralph Simon QC from the Mobile Entertainment Forum.

Expert witnesses include Paul Kenny (Global Head of Music, Vodafone), Tim Grimsditch (Global Product Marketing, Nokia Music), Mark Mulligan (Senior Analyst, Jupiter Research), Scott Cohen (Founder, The Orchard), Paul Lee (Deloitte) and Gary McClarnan (Sparklestreet).

The judge? Our own Paul Brindley. No, he’s not wearing a dusty wig. We did try to persuade him. Read on for the report of what happens, as it happens.

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Here’s another vid from our Resonancia Colombia conference, which was organised in partnership with the British Council and held in Bogota recently. This time, it’s the Q&A with The Orchard co-founder Scott Cohen, interviewed by our own Paul Brindley. He has informed views on how the digital music ecosystem is shaking out, its relevance to Latin America, and many other topics. Enjoy!

Yesterday, indie digital distributor The Orchard announced its third-quarter financial results, revealing a net loss of $59,000 (down from $3 million in Q3 last year), with revenues more than doubling year-on-year from $6.7 million to $14.6 million.

You can read a full transcript of the company’s analyst conference call here, but we’ve filleted out some of the key stats and quotes from CEO Greg Scholl:

- iTunes is still the company’s biggest source of revenues, followed by eMusic and then Verizon. That’s the same as Q2.

- At the end of Q3, The Orchard had $3.5 million of cash, cash equivalents and marketable securities, with no debt.

- Paid downloads rose 133% year-on-year to around 12 million in Q3. 61% of those tracks were downloaded at least once during the quarter, and the average number of downloads per track was 16. Meanwhile, paid streams totalled 42 million in the quarter (up 53%), with nearly 75% of the tracks being streamed at least once. However, paid downloads are still 62% of The Orchard’s revenue, while streams are only 7%.

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While the world (well, independent labels) complain about MySpace Music, rival services are busy signing their own deals. UK firm We7 has just announced a licensing agreement with indie distributor The Orchard, adding 1.3 million of its tracks to We7’s ad-funded streaming, downloads and paid-for MP3 download services.

It’s just the latest deal for We7, which has come to similar agreements with PIAS Digital and EMI in recent weeks. Its streaming service launched earlier this year, playing targeted audio ads before each track. Meanwhile, The Orchard is also on-board MySpace Music. We7 CEO Steve Purdham is certainly chuffed:

“We’re very excited to have The Orchard on board at a time when we’re gaining real momentum ahead of our full launch in the coming months,” he says. “It’s an exciting time as the ad-funded model becomes accepted as a legal alternative to piracy, and we look forward to a fruitful relationship with The Orchard as our catalogue continues to grow.”

Digital distributor The Orchard has emerged as the winning bidder in the auction for the assets of bankrupt label TVT Records, reportedly paying $6.05 million. The Orchard will now assume control of TVT’s master recordings, artist contracts and physical distribution infrastructure, but not its music publishing subsidiary. (more…)