Timing Of Music Service Announcement Questioned - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

Timing Of Music Service Announcement Questioned

Vivendi Universal chairman Jean-Marie Messier's confirmation Thursday that a music subscription service is being created jointly by Universal Music Group and Sony Music Entertainment provides the latest indication that the music industry is growing increasingly fractured over the future of online distribution. While a Sony spokeswoman stressed that Messier's comments during an interview with Reuters represent no new developments since the announcement of the joint venture in May, analysts questioned the timing.

Messier's comments come 10 days after the 9th Circuit Court of Appeals ruled that file-sharing service Napster Inc. enables copyright infringement and two days after Napster divulged its plan to pay labels $1 billion during the next five years. Napster's plan was greeted with skepticism from a number of music industry execs, including Vivendi vice chairman Edgar Bronfman.

Jupiter Research analyst Aram Sinnreich says none of the labels will make money online until they're all on the same page, and that the actions of Universal and Sony cement his sense that the labels don't really view the Internet as a threat but instead want to own the distribution channel outright. "Announcing their service a day after they vociferously expressed their doubts about the Napster business model strikes me as disingenuous and smacks of chutzpah," says Sinnreich, referring to Universal and Sony. He says three camps have emerged: the new America Online/Time Warner combination, the Universal/Sony joint venture, and the BMG Entertainment/Napster alliance that could soon include EMI Recorded Music if BMG and EMI make progress in their merger talks.

Sinnreich and Gartner analyst P.J. McNealy admit that even a unified online front among the labels would have challenges. Both say that if all the labels joined forces as one digital distribution front, they'd expect federal regulators to look into possible price fixing. Even so, McNealy expects some kind of distribution consolidation to occur. "I think there's going to be a third-party aggregator who'll step up and become a super distributor." Among those that McNealy says could become such an aggregator are AOL Time Warner or Yahoo.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of IT & Cybersecurity Operations 2020
The State of IT & Cybersecurity Operations 2020
Download this report from InformationWeek, in partnership with Dark Reading, to learn more about how today's IT operations teams work with cybersecurity operations, what technologies they are using, and how they communicate and share responsibility--or create risk by failing to do so. Get it now!
Slideshows
IT Careers: 10 Industries with Job Openings Right Now
Cynthia Harvey, Freelance Journalist, InformationWeek,  5/27/2020
Commentary
How 5G Rollout May Benefit Businesses More than Consumers
Joao-Pierre S. Ruth, Senior Writer,  5/21/2020
News
IT Leadership in Education: Getting Online School Right
Jessica Davis, Senior Editor, Enterprise Apps,  5/20/2020
Register for InformationWeek Newsletters
Video
Current Issue
Key to Cloud Success: The Right Management
This IT Trend highlights some of the steps IT teams can take to keep their cloud environments running in a safe, efficient manner.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll