Hands On Experience

Sure, it sounds like déjà vu, like we’ve heard it all before.

Comments about record labels resisting the digital revolution. Remarks about how the recording biz must change with the times or go the way of yesteryear’s 8-track tapes and 45 rpm adapters. Yeah, nothing new there.

Except that the remarks weren’t made by an industry watcher or a so-called expert. This time the remarks come from Guy Hands.

Who is Guy Hands? He’s the CEO of Terra Firma, the private equity firm that made news two months ago when it purchased EMI.

In other words, Hands is EMI’s new owner. And he’s not all that pleased with the recording industry’s digital track record.

Hands apparently made his comments in a confidential e-mail sent to staffers, according to Britain’s Telegraph.co.uk.

"The recorded music industry … has for too long been dependent on how many CDs can be sold," Hands wrote. "Rather than embracing digitalisation and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand."

Hands’ comments were in reaction to Radiohead’s latest Internet adventure where the band sells its latest album, In Rainbows, directly to fans in the form of digital downloads. What’s more, Radiohead lets fans pay what they think the new album is worth.

Hands called Radiohead’s marketing ploy "a wake-up call which we should all welcome and respond to with creativity and energy." He warned that unless the recording industry changes its business practices, such as using profits derived from top-tier artists and bands to subsidize up-and-coming talent, other acts could follow Radiohead’s lead.

Which might happen sooner than later. Trent Reznor recently posted on the Nine Inch Nails Web site that he is finally free of his corporate masters, saying, "… it gives me great pleasure to be able to finally have a direct relationship with the audience as I see fit and appropriate."

Another recording industry practice Hands wasn’t too thrilled about was giving artists hefty advances in return for a major chunk of sales revenue.

"Why should [established recording artists] subsidize their label’s new talent roster – or for that matter their record company’s excessive expenditures and advances?" Hands asked.

Those tempted to blow off Hands’ remarks as those made by someone who doesn’t understand the recording biz might want to read a statement describing Terra Firma’s investment strategy that appears on the company’s corporate Web site.

"Since its launch in 1994, Terra Firma has focused on buyouts of large, asset-rich businesses – often with complex structural or regulatory issues – which are in need of strategic, operational or management change. It is these attributes, rather than any specific sector, that determines where Terra Firma will invest."

Kind of explains why they bought a record label, doesn’t it?



TiVo Duets With Rhapsody

TiVo isn’t just for TV anymore.

The company that changed the way we watch television will now offer the Rhapsody subscription music service.

Rhapsody, now part of the joint venture between RealNetworks and MTV Networks called Rhapsody America, will cost TiVo subscribers $12.99 per month in addition to the $12.95 customers pay for a TiVo subscription.

The new service will be available to TiVo customers using broadband-connected set-top boxes.

The new venture means plenty of cross promotion in hopes of increasing the subscription rolls for both companies.

TiVo, which saw its subscription base drop to 4.2 million in its fiscal second quarter from 4.4 million one year earlier hopes to stop people from deserting the company for other DVRs, specifically those DVRs cable companies rent to their customers.

Rhapsody, on the other hand, has seen its subscription base grow, reporting 2.7 million customers during its fiscal 2nd quarter, a 1 million increase from 1.7 million the previous year.

The TiVo / Rhapsody partnership is a further blurring of the lines between TV and the Internet. TiVo already has a movie download deal with Amazon.com and a photo-sharing arrangement with Yahoo.

"This puts us on the map as distinguishing ourselves from other generic DVRs," said TiVo CEO Tom Rogers. "We not only facilitate getting Rhapsody on the TV set, but most importantly, the quick, easy way to find it, which is how TiVo made its name."


Everybody knows YouTube. Right?

You see YouTube’s presence wherever. Bloggers embed YouTube videos into their own pages, television news and talk shows run clips, and whenever anyone talks about something they just saw the previous night on TV, that spiel usually ends with, "look it up on YouTube."

Yes, YouTube, despite its copyright problems and infringement lawsuits, is one of the most popular destinations on the Net.

But YouTube hasn’t generated any significant cash. Although synonymous with video on the Net, YouTube has yet to turn a profit.

When Google bought YouTube last year, industry watchers predicted big things for the big Web site that had all the videos and none of the profit. With Google’s Net savvy and cash flow, YouTube was a sure bet to thrive.

Advertising is the key. Google plans to show YouTube videos, accompanied by advertising, on thousands of other Web sites. The ads will appear as either a graphic placed across the video or a link along the bottom. The ad-supported videos will appear on Web sites that are members of Google’s AdSense network.

But not all YouTube videos will make it to those AdSense Web sites. Instead, Google will only distribute videos for which the company has signed releases from the content owners.

Participating AdSense Web sites can sign up for videos that relate to their audiences. For example, food Web sites can sign up for cooking and food info clips, while sports Web sites can choose to receive videos about a specific sport or competition.

So far, more than 100 video providers have signed on to Google’s plans, including TV Guide Broadband, Mondo Media and Extreme Elements. Google will share ad revenue with content providers and Web sites showing the vids.

Google better hope its latest AdSense scheme pays off. Viacom is suing Google and YouTube for copyright infringement to the tune of $1 billion. If Google loses the lawsuit, all that extra ad revenue will certainly take the sting out of writing a 10-figure check to Viacom.


Awaiting On You All

You still can’t purchase Beatle songs online.

But you’ll find plenty of music by John, Paul, George and Ringo. With the online release of George Harrison’s catalog, Beatle fans will find plenty of music from all individual Fab Four members.

But you might want to shop around. Due to different pricing structures, a non-DRM "My Sweet Lord" download costs $1.29 at iTunes, but only 99 cents at Amazon. However, if you opt for the entire album, iTunes sells All Things Must Pass for $9.99 while Amazon charges $13.55 for the album, which was a three-record set when it was released in 1970.

"It is exciting that George’s catalog is finally available for downloading," said the artist’s widow, Olivia Harrison. "He had begun the digital remastering of his albums but had no idea how the digital world would change the way we access and listen to music."