Distorted-Loop.com

Digital is the standout growth story for the Warner Music Group, which confirmed it saw digital revenue climb 39 percent to $166 million year-over-year, or 20 per cent of the company’s total revenue in its third quarter.

Digital sales strength came mostly from global online downloads, and to a lesser extent growth in international mobile.
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The BPI is the record label industry group, its chief executive, Geoff Taylor, today offered his notion of what online music would look like in an “ideal” world through a blog item in the Daily Telegraph.

Taylor’s comments were also distributed as a press release by the BPI this morning, and have been reproduced here.

“Like most music fans of my age, I spent my teens and early twenties building a massive music collection, because the ownership of records, and later CDs, was important to me. I wanted to enjoy my music whenever I felt like it.
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Warner/Chappell Music Chairman and CEO David H. Johnson announced today the appointment of Scott Francis to the newly created position of President, Warner/Chappell Music, and Chairman and CEO, Warner/Chappell Music U.S.

Edgar Bronfman, Jr., Chairman and CEO of Warner Music Group, said, “In looking for a head of Warner/Chappell’s U.S. operations, we wanted an executive who not only has a deep understanding of songwriters and music publishing, but one who also has a vision of how to position a music publishing company to seize the opportunities presented by the industry’s rapid digital transformation.”
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Following Atlantic’s introduction of its socially-connected Fanbase application this week, Warner Music has invested in its own music and social networking start-up, uplayme.com.

In a related move, Dan Pelson left his post as Senior VP of Global Consumer Marketing at Warner Music to become CEO of uPlayMe. The smaller company introduced its new recommendation tools for sharing music and video with others this week.
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T-Mobile will challenge iTunes with its own video-on-demand service for full length video, including film.

The company plans offering a dual service in which content can be watched using a mobile phone or a computer, New Media Age reports.

T-Mobile is currently discussing its notion with a variety of content suppliers, including Ministry of Sound, EMI, ITV, Universal and Warner.
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Apple seems set to face stronger competition in the UK and Europe as whispers tell us Amazon will introduce its DRM-free online MP3 store by as soon as September. With the imminent debut of the online retail giant, the UK’s number two online music service, 7digital, today announced booming sales since the introduction of DRM-free tracks from Warner Music.
7digital.com has seen sales increase 300% in 2008 fuelled by the Warner Music DRM-free MP3 catalogue becoming available for the first time in the UK and Europe. 7digital.com is the second largest digital retailer following the release of the new Coldplay album Viva la Vida and is expecting Sony BMG and Universal to release their DRM-free MP3 catalogues “imminently” in the UK, Distorted Loop has learned. And introduction of MP3-free music through 7digital may also signal Amazon’s imminent entry into the space.
“High-quality, DRM-free MP3 downloads have really sparked a new wave of digital music take up,” said 7digital CEO Ben Drury. “This format makes the digital music proposition simple for consumers with one universal format for all devices. Music lovers are beginning to realise that owning an iPod doesn’t mean just buying tracks from iTunes and, in fact, MP3’s are far superior in terms of compatibility. Since the introduction of EMI and Warner Music’s DRM-free catalogues we’ve been attracting increased numbers of iPod and iPhone users, as well as those using Samsung, Nokia, Blackberry, Sony Walkman devices and mobile phones.:
Approximately 80 per cent of 7digital.com’s 4 million track catalogue is now available in the MP3 format.
“It is now clear that MP3 downloads represent the future for digital music.  With two of the four major labels now supporting MP3 in the UK, we expect to see the whole market supporting MP3 in the not-too-distant future,” said Drury.

Nokia has agreed a deal with major label Warner Music Group under which content from the label will be made available as part of the mobile maker’s “Comes With Music” initiative.
Set to debut later in the year, Comes With Music is a scheme in which some Nokia handsets will be sold with a free subscription to an unlimited music service for the device. Content is tethered to one device and one PC, but at the end of the year users will be able to keep their downloaded songs. Warner also agreed to make its music catalogue available through Nokia’s music stores around the world.
“Warner Music Group has been a pioneer in developing new digital music business models and we are very pleased to have them supporting both the Nokia Music Store and Comes With Music,” said Tero Ojanperä, executive vice president and head of the Nokia Entertainment and Communities business.
“Nokia’s Comes With Music service will be a significant step forward in the evolution of digital music. It’s the first global initiative to fundamentally align the interests of music companies with telecommunications companies,” said Edgar Bronfman, Jr., Warner MusicGroup’s Chairman and CEO. “All parties are equally driven to create the best and most comprehensive music offering designed to meet the ever-expanding consumer appetite for music and music-enabled devices.”

Figures released today by British record companies’ body the BPI show that labels are beginning to generate significant revenues outside their traditional base of retail sales – Record company revenues outside direct sales of music increased by 13.8 per cent to £121.6 million in 2007, from £106.9m in 2006. These additional revenues now account for 11.4 per cent of record companies’ domestic income.
 Record companies generate income through sales (selling music recordings to consumers via retailers), licensing (giving permission for third parties to use recordings commercially) and multiple-rights income (revenue derived outside recording copyright).
New partnerships and business models mean record labels’ income through licensing is increasing. Labels are also generating income outside the direct sales of music and licensing by extending their relationships with artists to include a broader range of artist services.
 Digital sales are going from strength to strength, with digital formats now accounting for around 85 per cent of all Top-20 singles sales. More than 200 million downloads have now been sold in the UK since the launch of the first mainstream stores in early 2004. In total, digital formats now account for 8.6 per cent of all UK record company sales income.
Digital licensing income is increasing too. On-demand streaming services, both online and on mobile platforms, including advertising-supported services such as We7 and Yahoo Music saw income from new digital business models grow by 55.7 per cent.
Synchronisation licence income, from the use of music in advertisements, films and games continued to grow strongly in 2007, where revenues grew by 20.1 per cent. There was also a 14.8 per cent increase in record label income from PPL: broadcast and public performance licensing.
360 degree deals are also having an impact. Such deals may generate income from merchandise, touring, the use of artist logos, digital products such as mobile phone wallpaper, and sponsorship deals. Revenues generated by record companies in this area increased by 16.2 per cent in 2007.
 BPI Chief Executive Geoff Taylor said: “Today’s record business is unrecognisable to that of five years ago. Labels have rapidly evolved into digitally literate businesses that generate significant revenues through licensing.”