Virtual Reality Concerts To Begin This Summer

I'm a big proponent of virtual reality, especially when the audio is done well, and many have predicted that the technology will eventually be a boon to concerts. We're going to see soon enough as virtual reality concerts will actually begin to roll out this summer.

NextVR, which has been a leader in VR broadcasting of sporting events, has teamed up with LiveNation to broadcast a series of concerts, although no artists have been named as of yet. There will be a limited number of VR music events this summer, with a full schedule planned for 2017.

The NextVR broadcast will be available via Samsung's Gear VR using the Oculus Home app, although they will also most likely be available on other VR platforms as well.

LiveNation/NextVR aren't the only companies jumping into the concert broadcast game. iHeartRadio and Universal Music Group previously announced that they would also broadcast VR concerts this year.

Virtual reality concerts hold great promise because it gives the viewer a feeling of actually being there and watching from the best seat in the house, which many feel may eventually eclipse attending an event. Paying $200 for a nosebleed seat might not be a suitable option when you can get a better view from your home while still feeling immersed in the event.

The same can be said for sporting events as well, as NextVR recently signed a 5 year deal with Fox Sports, although there may be more technical challenges in this niche than with music.

One thing's for sure, VR is taking beginning to take off, even though it still hasn't hit the general public yet, as more and more companies are jockeying for position.

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Universal Music Group To Present Virtual Reality Concerts

There's no doubt that virtual reality will be a hot item this year, but so far most of the attention of VR content has been around games, and to a lesser extent, movies.

Universal Music Group (UMG) believes that VR extends to music as well, and has teamed with online radio giant iHeartMedia to create a series of of 4 virtual reality concerts in the upcoming year.

Indeed, VR and music seem like they're made for each other, especially when coupled with an immersive audio technology like binaural or 3D headphone surround. That said, UMG's shows are very much in the planning stage, and few firm details have been revealed except that the shows will be shot at the iHeartRadio Theater in Los Angeles later this year.

In addition to the 4 full-length shows, UMG will also shoot at least 6 short-form "experiences," presumably music videos, in VR throughout the year.

The first attempt at a VR showcase apparently will be the iHeartRadio Music Awards on April 3rd, but other events thought to be in contention include iHeartRadio's Country Festival, Summer Pool Part, Fiesta Latina, Music Festival and Jingle Ball Tour.

iHeartMedia is a perfect partner for UMG in that it has around 245 broadcast listeners and another 90 million online each month.

Although I predicted that virtual and augmented reality headsets would set Christmas on fire, it appears that projection was a little premature - but not by much. Look for VR to be the next killer app for both audio and picture this year.

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Universal Music To Get A Piece Of Soundcloud

Soundcloud is trying hard to go legit and if industry insiders have it correctly, a deal with Universal Music is imminent. This would be the second of the 3 major labels to license their music to Soundcloud, the first being Warner Music Group in November of last year.

As with most licensing deals these days, Universal is said to have pushed for equity in Soundcloud as well as an advance in exchange for the deal. Warners already owns 5% of the company, and it's said that Universal will actually receive a larger piece based on its market share, which is much larger than WMG.

This is a continuing trend in music distribution today where the 3 major labels will not grant a license unless they receive equity in the company. This worked out well for Warners in the Beats Music deal when Apple purchased the company, as the holding company that owns Warners walked away with a hefty profit.

The major labels are hoping that happens again with Spotify (they all hold equity), and now also with Soundcloud.

Of course, none of that income goes to the artist, falling instead to the company's bottom lines. Once again the artist only sees a trickle of the major income. Same as it ever was.

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I'm Appearing On The Waves Everything Audio Show

Check out the very cool Waves Everything Audio Webshow with host Dave Hampton. I'm appearing along with Barak Moffitt (Head of Strategic Operations - Universal Music Group) and producers, songwriters and artists The Avila Brothers (Usher, J Lo, Janet Jackson).

We'll be talking about the new business of music (or the new music business, depending upon how you look at it), and you'll get some great insights as well as some answers to some Twitter questions.

Go to waves.com/everything-audio

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A Bank Starts Its Own Streaming Service, And It Might Make Sense

What do you think your reaction would be if I told you that a major banking institution just started its own music streaming service? If you knew anything about the music business, chances are you'd be incredulous. With all the existing competition in the marketplace and some deep pocketed players about to re-enter the sector in a big way, at first look this move seems to be somewhat misguided, especially for a major bank.

There may be one place where this action defies common wisdom however, and that's in Brazil.

Billboard recently reported that Brazilian banking giant Banco Bradesco (#63 on the Forbes Global 2000) entered into a partnership with Universal Music Group to create a new streaming music service exclusively for its credit card holders.

Now, read that again and tell me what your reaction is. I bet at least part of it is, "Why?"

On the surface this seems like a crazy move, but that's because we automatically think of the music industry of the United States as a reference point. The reality is that Brazil is a different animal completely.

According to the IFPI, Brazil is the ninth largest music market with $228 million in total revenue last year. It's also still a young market when it comes to streaming, even though most of the major players have launched there. Read more on Forbes.

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Universal Music Group Using Big Data For Big Decisions

For most of its lifetime, the music business was run on the gut instincts of its executives in everything from artist signings, which songs to release as singles, marketing, promotion, and just about everything else.

The major labels of today and their precursors were built on these decisions, but we live in the age of Music 4.0, where just about any decision can be a lot more precise and pragmatic, thanks to the influx of data on just about every aspect of the business, and that's exactly how Universal Music Group is going about things, according to an article in the Wall Street Journal.

The company is using a new software tool that was built in-house called Artist Portal to help its execs make smarter marketing decisions. The app allows a user to track everything from artists sales, music streams, airplay and social media buzz happening globally and in real time, then overlay sets of data that include television appearances, concert dates, commercials featuring an artist's songs, social media posts and promotional events. This allows the company to be able to better analyze sales and interest spikes, which in turn helps it to better allocate marketing funds as needed.

Something that's a bit more insidious is that upper level label management can also track how much each Universal employee uses the app, which could play into future staffing decisions, which seems to take the gut instinct out of the picture entirely, which at least some is needed when it comes to creating, selling and creating art. That said, the tool is proving a big help in a variety of ways, with one major example being that its data used as a help to show promoters in Finland that there was indeed an audience for the label's hip hop acts in that country.

UMG isn't the only major label to employee a big data app though, as both Warner Music Group and Sony Music are also developing their own versions of Artist Portal. In fact, Sony now has 25 people on its analytics team, showing its deep commitment to the concept.

I equate this to baseball in that it took the sport a long time to begin to use precision metrics to help executives get a better picture before they made their biggest decisions. It took the music business a long time to come to the same party, but big data is now becoming a major part of the way a major label does business.

Big Music Stars Have A New Label

You won't be seeing artists like Coldplay, Pink Floyd and Radiohead on the Parlophone label anymore as its acquisition by Warner Music Group has now been finalized. Parlophone was one of the world's oldest record labels, having been founded in 1896, but had been part of EMI since 1926. It was also the British home of The Beatles during their 1960's heyday.

Just to show you what an interesting ride it can be for an artist, EMI was purchased was purchased by Universal Music Group in 2012, but in order for the sale to go through, UMG was forced to divest Parlophone to appease European regulators. In February of 2013, Parlophone was then purchased by Warner Music Group, which then had to gain approval of both European and American regulators, hence the delay before they could release titles by Parlophone artists.

Now that the ride through the major label roller coaster is over, Warner Bros Records will distribute new releases from artists like Kylie Minogue, Lily Allen, and Eliza Doolittle, and catalog titles by Pink Floyd, Jethro Tull, Blur, Gorillaz, Radiohead, Kraftwerk, Supergrass and Sinead O'Connor. Atlantic Records (a subsidiary of WMG) will distribute new releases from Coldplay, Tinie Tempah and David Guetta (although through his own imprint called Big Beat).

This story just goes to show that once an artist is signed to a label, he or she has little control over their fate down the line. If artists like Coldplay and Pink Floyd don't have the control over their own destinies, than what hope does an artist of lessor stature have? That said, the above artists do appear to be landing in a good place, as WMG is noted for having some great digital chops, and that's where the business is going.

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Should Artist Royalties Be Private?

There are so many things in life that are meant to be private yet turn up before the public. Executive salaries, artist contract riders, tax returns, rehab, criminal and medical histories are just some of what comes before our eager eyes on a daily basis. There's a school of thought that says that a celebrity's total life should be totally open to whatever scrutiny the public desires, since that's what the artist signed up for in the first place. Others believe that some things are sacred in their privacy, regardless of how popular you are.

One of these privacy battles is now being played out in the class action lawsuit against Universal Music Group over digital income. After the successful appeal by Eminem's production team against UMG in 2010 where the court agreed that a digital download was subject to a license fee rather than a royalty, other artists like Rob Zombie and the estate of Rick James were quick to sue UMG in order to gain the same advantage. After all, earning 50% of the license income from a download is far better than the 15 to 20% a royalty would generate.

The real problem comes from the fact that the attorneys in the matter want UMG to turn over the sales and royalty data from other artists not involved in the suit so they can have enough information to calculate the damages. UMG has balked, more from the standpoint of self-preservation rather than a defense of their artist's privacy rights. It's now up to a judge to decide.

The problem is that each artist has a slightly different contract, and of course, their sales are different, which makes you wonder just how useful the data would actually be even if turned over.

While various approximations of artist sales have always been around, the exact numbers have always been somewhat of a mystery, sometimes even to the artists themselves. While definitively determining that number might not be such a bad thing, having the terms of one's contract available to someone else's prying eyes can only open up a can of worms for all concerned. Sometimes things are better off left private.

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Cassettes Go To Prison

Cassettes may be an audio delivery platform from a different era, but just like vinyl, there's still a bit of life left. Believe it or not, there are still a number of indie record labels that provide limited editions of cassette releases (Baldy Longhair Records, Scotch Tapes, Cold Slice, to name just a few), but cassettes are now getting a new lease on life thanks to the New York prison system.

Now a New York marketing company that sells exclusively to prison inmates called Send A Package has made a deal with Universal Music Group to sell cassettes from artists like Jay-Z, 50 Cent, Nas and Jadakiss to the inmates of New York. While on the surface this sounds completely ludicrous, it becomes a well-thought plan when you realize that prisoners aren't allowed to have CDs. Cassettes however, are allowed, and Universal is more than pleased to supply them with their favorite hip-hop from the present and the past.

Send A Package is unique in that it allows family and friends to send gifts to prisoners that are pre-approved and not subject to search by prison security. It's also a place where inmates can buy anything from food to magazines to clothing. The company buys the cassettes from UMG at $6 each, then resells them to inmates for $13.

Believe it or not, cassettes are still widely used throughout the world as in many cases that's all that's available for music delivery. While that usually applies to what we would consider the third world, it just goes to show that there's still a little bit of the third world right at home, and that some formats refuse to die.

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Universal Music Sells Sanctuary, And Why That Matters

According to a story in the LA Times last week, Universal Music Group has agreed to sell Sanctuary Records, home to metal acts like Black Sabbath, Motorhead, Iron Maiden and Megadeth, to BMG Rights Management. Universal was forced to sell the label as well as other assets as part of an agreement with regulators from the EU in order for the purchase of EMI to be approved.

What's interesting here is that BMG has quietly been acquiring publishing and record labels over the past 4 years, and now looks like it might position itself once again as one of the major record labels, which is good news to everyone in the business. After all, the more competition, the better. It's true that BMG was once one of the Big 5 major labels, but decided to go more into publishing after it merged and unmerged with Sony Music. Now it looks like it's back in the "record" business again.

If you've read my Music 3.0 book, you know that Sanctuary was a unique record label in that it lead the way to the DIY movement that we have today. The problem was that it got too successful and veered off-course, causing it to become just another label which was eventually acquired by Universal in 2007. Here's an excerpt from the book that explains just how influential the company was.

"In 1979 Rod Smallwood and Andy Taylor discovered and then managed the legendary metal band Iron Maiden. They subsequently named their management company after the band’s song “Sanctuary” and expanded their roster to include similar bands of the genre.

Soon afterwards, Sanctuary Management had a brilliant idea. As managers of so-called “heritage acts” that had long-term appeal and large fan bases but no record deals, the company decided to independently finance CD releases for the bands themselves. After all, the audience was built-in and rabid. They’d buy anything the bands would put out, so why not release it themselves if a major label wouldn’t? The bands were going to tour anyway, so they might as well have a product to sell. Little did they know at the time, but this was the beginning of the new business model where the tour sells the record instead of the record selling the tour, as it did in Music 1.0 to 2.0. 

In the past, if an act would get hot as a result of local radio play, they would then tour in that location to take advantage of the energized interest. The record sold the tour by virtue of the airplay it received. The record was selling the tour. If the record flopped, there would be no tour. 

But in the new Sanctuary model, since the act had a strong enough fan base to support a tour anyway, why not have some product to back it up? With these new economics of self-financing the release, the act could now make more money than ever on fewer units sold. And since it was cheaper than ever to create a release (since by then most musicians had a studio at home that was more powerful than The Beatles ever had during their heyday), the stage was set for taking advantage of both the technology and the consumer environment. 

For a time, Sanctuary Records and its artists succeeded wildly, to the point that the company expanded into a full-fledged record label (and a subsidiary of Universal Music) with traditional Music 2.0 staff and infrastructure. Soon afterward, however, it collapsed under the weight of that traditional infrastructure. The company had ventured beyond its original concept and comfort level, and eventually paid for it. Sanctuary was acquired by Universal at the end of 2007, but today Sanctuary Management continues to represent the likes of Fleetwood Mac, ZZ Top, Tommy Lee, and Velvet Revolver, among others, but has drifted somewhat from its initial intentions and goals. 

Sanctuary started the trend of an artist self-releasing a record during Music 2.0, way ahead of the curve and way ahead of what's commonplace today. Without knowing it at the time, the company paved the way for artists living in Music 3.0, where self-production, promotion, and distribution is not only commonplace, but becoming the norm."

You can read additional excerpts from my books at bobbyowsinski.com.

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

YouTube Strips Labels Of 2 Billion Fake Views

Since the beginning of music on the Internet, people have been trying to game the system. Fake likes and views have been plaguing everyone from record labels to publicists to the media when trying to get a true gauge on exactly what kind of traffic an artist has. New artists want to crank up the Likes and views to get label interest and make fans think they're more widely appealing than they are. But record labels do the same thing, it turns out.

Recently YouTube slashed the accounts of Universal Music Group, Sony and RCA Records by more than 2 billion views in a move that was aimed at shutting down the illicit view count-building techniques used to manipulate some sites.

Universal took the biggest hit when more than a billion views were eliminated, while Sony lost 850 million. RCA dropped a mere 159 million. It appears that the labels have responded by eliminating most of the videos from their YouTube channels, as Universal now has only 5 videos on their channel and Sony has none. Of course they favor their own Vivo service anyway so they didn't lose their entire video exposure.

So who were the artists that suffered? The personal channels of Michael Jackson, Chris Brown, Beyonce and Avril Lavigne, as well as 500 other prominent channels were stripped of views in the last 30 days.

The next time you look at a video and it has millions of views, you may want to question how many of those are legit.

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Why The EMI Acquisition Will Be Bad For Universal

The Universal Music acquisition of EMI is finally complete and the weeping and gnashing of teeth has begun. For the last 6 months the employees of both companies have been walking on egg shells, not knowing if the ax would fall on them if and when the merger occurred. The ax finally dropped last week when 50 people were let go from Universal distribution and another 10 from Nashville, although most of those were EMI employees. Others were told up front that their positions would be eliminated within 120 days.

Universal purchased EMI more to gain market share than anything, but this already looks like it's backfiring. Here's why:

1. In order for the purchase to go through, Universal had to shed labels and publishing units in Europe. That meant that the market share boost wouldn't be as much as they originally thought, nor would the value of EMI be as high as a result.

2. Universal already had the largest market share already with over 30%. What reason was there to increase it other than ego or some obscure executive bonus? Sure Sony Music is strong, but more of that may be due to #3 below.

3. The EMI acquisition has taken up so much time and attention that the execs at Universal have taken their eye off the ball of selling music. This will continue to be a problem for another year at least.

If I was an artist on Universal or EMI right now I'd be worried. You don't know if any of your champions in A&R, sales, marketing will be let go, you don't have their full attention as they angle for new jobs as a fall-back, and the suits in the boardroom continue to play corporate structure games instead of their core business.

This is a perfect example of what happens when big business gets involved in what should be art.

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Major Label Death Predictions May Be Premature

Could everyone's predictions about the demise of the major record labels be premature? What we've heard over and over in the press (and sometimes on this blog) is that the major labels were floundering in red ink, about to go belly up any second. While revenue for the industry is less than half of what it was at it's peak, and profits did take a hit for a while, it appears that everyone has missed the point that the labels have been evolving with the business, and they're pretty healthy as a result.

Case in point - according to Billboard, in the first six months of 2012 Universal Music Group, Sony Music and Warner Music Group had together reported profits of $356 million. Yes, that's profits!

Now take into account that EMI doesn't disclose their finances at the moment because they're privately held by CitiBank (at least until the sale to Universal is finalized), and the CEO of BMG Rights Management has said that their profit would be over 250 million Euros this year (about $325 million), and you can see that no one inside the big music corps are worried about their bonuses.

Then the fact that we're heading into the strongest buying season of the year makes analysts think that the major labels will make over $1 billion in profits in total for 2012.

Here's the fact as it stands today - DIY is great for any artist that's either starting out to even a star level, but if you want to break into superstardom, you still need a major. They're the only ones with the infrastructure to take an artist to those heights, at least at the moment.

That said, the more you DIY and the stronger your audience, the greater your bargaining power is. It's almost like there's no middle ground these days when it comes to making a major label deal. Either you're completely at their mercy with a 360 deal or you have all the leverage because you've built an audience without them.

Whatever the case, the major labels are not going away any time soon. Now if only we had a new crop of indies.

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Breaking Up EMI

As the sale of EMI to Universal Music gets further down the line, more and more interesting details come out, many of which look to have an affect not only on Universal, but the music business in general.

First of all comes word comes that Universal may have to sell off at least Virgin Records and EMI Classics in order to appease European regulators so they will allow the purchase to stand. There are several things in play here:

1. Virgin Founder Richard Branson has indicated that he'll be amongst the bidders to buy back Virgin Records. This could be interesting in that Branson has always been on the cutting edge of technology, and what he might do with a present day record label would hopefully be good for the entire industry for the entire industry.

2. Universal's stock price is at a 9 year low. They desperately need this purchase to happen in hopes of giving the stock a boost.

Now the thing about the purchase that's interesting is that Universal assumed all regulatory risk in the purchase, so they're going to need the deal to be approved or the sale is essential worth zero to them. Also, if the regulators ask them to sell off more of EMI in order to get approval, then they'd probably have to sell at a low price to get the approval sorted ASAP, which wouldn't help their stock much, since any such sale would probably be at a lower than market price.

Then on top of that, Universal has to pay 80% of the purchase price to Citi by September, regardless of whether it's approved or not, which means that they'd pay for it, but not really own it. It would be like buying a car yet not being able to drive it.

The only thing this sale really has going for it in Universal's favor is that it increases their market share in virtually every territory, with their global share increasing to about 40%. It's higher still in some territories.

Obviously this sale isn't great for the music business as there's so much power consolidated in one company's hands. The only thing that gives some hope is what Richard Branson might bring to the business again.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

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Songwriters Finally To Be Paid On Videos

Ever wonder how much a songwriter makes from a video that has 100+ million views on Vevo? You'd think it's would be a small fortune, but the answer is actually zero. That may be changing as of yesterday as Universal Music Group signed a deal with the National Music Publishers Group to finally pay royalties to both songwriters and publishers going forward.

Vevo is owned by Universal, Sony Music and Abu Dhabi Media and takes in about $150 million a year in ad revenue, none of which was passed along to songwriters or publishers. With the new agreement, Universal agrees to not only some retroactive compensation, but also to provide a royalty for other UMG offerings like ringtones, dual discs, multi-session audio and locked content products.

There are two things interesting here. First, only UMG is parcel to the agreement. Sony has not signed on. And the agreement specifies that UMG admits no wrongdoing, which stifles and lawsuits on this going forward.

That's one small step for songwriters. Let's see if another happens soon.

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Universal To Sell 3 Publishing Catalogs

In the wake of Universal Music Group announcing its intention to purchase EMI from Citibank comes word that it's about to sell 3 of its music publishing catalogs to help finance the acquisition. These include a classical, Christian and German catalog with the intention of raising around $200 million.

Already there appears to be as many as 12 bidders for the catalogs, a sign that while nothing else may be worth big money in the music business, publishing still is. These catalogs are deemed to be non-essential the Universal business, but they can still fetch a substantial price.

The interesting thing about the sale is that it probably won't help Universal where it really needs it - in Europe. The EU is looking hard at the anti-trust implications of the EMI acquisition, and a catalog sale from the other side of the pond probably would have strategically done them a little more good than in the US.

The decision on whether to let the purchase of EMI publishing by Universal should get a ruling in the next month or so, while a decision on the record label sale will be in August. To make matters worse, the California State Attorney General has also opened up an inquiry into the sale.

Here's the reality. In this climate, the purchase of EMI can only be accomplished by another major label these days because no other major corporation would touch it, so the antitrust issue will always be there. Since Universal is already the largest label, that takes the matter to another level. In the meantime, EMI sits there floundering away with little leadership or direction until the sale is consummated. I feel sorry for the poor artists still signed with them.

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The Big 4 Become The Big 3...Maybe

Citibank finally found a buyer for EMI and it wasn't Warner Bros, like everyone expected. The venerable company was sold to two companies, in fact - Universal Music and Sony Music. Universal bought the recorded music assets (basically the record company) for $1.9 billion, while Sony purchased the much more lucrative publishing assets for $2.2 billion.

But before the ink is dry on the agreements there's trouble brewing for this deal. European regulators (who are much more aggressive than their American counterparts) have already signaled that they will do whatever they can to block the deal, believing that Universal is already too big and adding another huge piece of the music industry will be just way too much of a monopoly.

The interesting part of the deal is that Sony didn't supply all the money and instead used a network of partners that include an Abu Dhabi investment fund, Blackstone, Guggenheim Partners, UBS Investment Bank and several others. Sony will manage the business under its Sony ATV publishing business, which already owns or administers the publishing rights to 750,000 songs, including The Beatles catalog. What they would gain from EMI is a catalog that contains 1.4 million titles including standards like "Over the Rainbow," and Singing in the Rain."

So let's say that the deal does eventually go through. What are the potential ramifications for the musician and consumer? Like with all purchases of this type, there is some good along with some bad, so here are a few things just off the top of my head.

• Universal becomes far bigger than the next biggest major, which is Sony. They'll be able to dictate to the rest of the business because of their sheer size, for better or worse.

• A new digital music company will find it easier to get licenses because there will be one fewer major to deal with.

• Artists will have one less label to go to if they wish to be on a major.

• What's going to happen to the legendary Abbey Road studios and Capitol building and studios? Will they be sold or run differently? I don't know about you, but this scares me the most.

• How much is it going to sting the UK business community that their only major record label (EMI) was purchased by a French company (Vivendi, which owns Universal)?

While many will decry this sale, there are those artists that applaud it. Mick Jagger, whose dislike of former EMI owner Guy Hands is well-known, said that he "particularly welcomed" the new owners.
"This is a very positive development and I particularly welcome the fact that EMI will once again be owned by people who really do have music in their blood," he said in a Guardian article.

Now the rest of us can just sit back and wait to see if the deal actually happens.

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Chuck D Wants His Royalties

We all knew that this was going to happen, that sooner or later the floodgates would open. Now Public Enemy frontman Chuck D has filed a class-action lawsuit against Universal Music Group in U.S. District Court in Northern California on Tuesday, alleging that the music giant has short-changed its artists and producers in licensing deals for digital downloads and ringtones. The suit alleges that Universal owes its artists "hundreds of millions of dollars in royalties" because of the discrepancies.

This was all thanks to the fact that Eminem's production company, FBT, won a decision against UMG over what amounts to the definition of ownership of a digital file. FBT claimed that UMG owed them a lot more money for each download sold because a digital file sold by iTunes or Amazon MP3 is actually a license. UMG insisted that regardless of whether it's a CD, vinyl record, or digital file, Eminem's music is part of their distribution deal. Eventually UMG lost the decision, and now we're going to see more and more artists suing to take advantage of decision.

The difference between a license and royalty is pretty great. An artist can expect only between 10 and 20% (if they're lucky) of the revenue from a digital sale under a normal royalty agreement, but 50% under a license agreement.

According to Chuck D's claim, UMG's current method of accounting pay artists and producers $80.33 for every 1,000 downloads, when the correct amount should be $315.85 per 1,000. For ringtones it's even more drastic. UMG's current accounting method yields $49.89 per thousand downloads, as opposed to the $660 per 1,000 that the suit claims is actually owed.

You can expect that UMG is going to go down fighting, but this might be already lost. I bet that their strategy is to try to outlast them in court, but if Chuck D wins, UMG might be in big trouble. It could be the beginning of the end for the biggest record label still left standing.

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Intrigue In Major Label Land

So now that Citibank has taken back EMI from the investment group Terra Firma for non-payment, what now? It's almost certain that Citi will sell off EMI's parts to cover as much of the debt as possible (they've already written off about $3 billion), but who are the buyers?

It's said that Warner Music Group really wants EMI publishing badly, but they have a problem as well. Apparently the company that bankrolled Edgar Bronfman Jr to buy Warners in the first place, Thomas Lee Partners, wants out badly and has hired Goldman Sachs to find a buyer. So how does Warner buy something when they're up for sale themselves? With help from a Russian oligarch, that's how.

Apparently Leonid "Len" Blavatnik, who's on the Forbes list of billionaires with $7.5 billion in net worth, is big buddies with Bronfman and it's been reported that he may fund the sale of EMI and buy TMP out of the deal as well. Warners would then sell off their own publishing arm, Warner Chappell Music, to KKR/BMI Rights Management, and be a lot stronger than before, thanks to a new publishing catalog that features The Beatles and Pink Floyd, among others.

But don't be surprised if the other remaining labels, Universal Music Group and Sony Music, have some say into this as well. Even though Universal is more about current music as opposed to catalog, they do own the major market share of today's music business, and would find such a piece as EMI Publishing too savory a tidbit to pass up.

So there's a lot of intrigue in major label land as they all jockey for position at the top of a hill that's getting smaller and smaller every day.

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You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

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The Full "20/20" Show From 1980

A few weeks back I posted an article entitled "The Music Industry Crisis 30 Years Ago" that showed a clip from a 20/20 television news show back in 1980 about the music business. Only the first half of it was available as the second half was reportedly taken down by Universal Music.

Reader Brad Wilson took the initiative to reach out to the person that originally posted the piece (thanks, Brad!), who then posted the entire 20/20 show clip one more time.

Here it is in it's entirety. It's a hoot to look at the fashion, editing, production and opinions from that period, but it's also a little bone-chilling how close some things are to our current slice of the music industry as well.

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