=====================================================================
THE STANDARD'S
B E A T S H E E T
The Latest Digital Music News - and It's Free
=====================================================================
For more on digital music, visit
The Standard's Media & Marketing page:
http://www.thestandard.com/subject/marketing
Tuesday, February 20, 2001
TOP STORY:
* When the Digital Music Dust Clears, Will EMusic Be Standing?
NET NOISE:
* Kick.com
BEATS:
* Napster, the Sequel to the Sequel
* So Long, Soundbreak
DOT DOT DOT:
* Myplay Cuts Staff, Refocuses ... Eminem and Pat Boone, Sittin' in a
Tree
SOUND OFF:
* Have you found yourself downloading more music than usual in case
Napster is shut down? How will you get music online if Napster goes
away?
/=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= advertisement =-=-=\
The Standard's New Tech Traveler Newsletter
Net cafes blanket Istanbul. A Howard Johnson's in St. Louis tries to
become wireless-friendly. Priceline squares off with Travelocity.
Whatever the issue, technology's impact on travelling and the travel
industry is undeniable. For news, features and first-person accounts
of how technology is affecting our wanderlust, sign up for Tech Traveler
today at http://www.thestandard.com/newsletters/?nns=techt
\=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=/
TOP STORY
~~~~~~~~~
When the Digital Music Dust Clears, Will EMusic Be Standing?
By Julene Snyder
In the wake of last week's judicial blow against Napster, competitor
EMusic.com - a company that's been characterized lately with terms
like "beleaguered," "hapless" and "struggling" - continues to elbow
its way into the cantankerous debate over the future of digital music.
Despite cutting 36 percent of its staff (along with three top
executives) last month, issuing a dismal financial report for the last
quarter of 2000 and a maintaining a stock price that hovers stubbornly
under a dollar, President and CEO Gene Hoffman insists things are
starting to look up for the Redwood City, Calif., firm, which was one
of the first digital music players to implement a subscription-based
revenue model.
The news that Napster's days as a free-for-all buffet are numbered is
a big part of the 25-year-old Hoffman's ebullience. He took his wife
out for champagne and sushi to celebrate the decision, which he calls
a "landslide win for the copyright industry," and he projects that a
Napster injunction could significantly increase the number of EMusic's
active subscribers in a matter of weeks. The company could use a
boost: The stock ended trading Tuesday at 40 cents a share, down
precipitously from its 52-week high of $8. More importantly, he says,
last week's decision removed some uncertainty about the direction of
digital-music subscription services and could "reinvigorate the
strategic environment" for Napster's competitors.
But EMusic hasn't been standing by idly waiting for the court to make
a decision. Last November, the company developed a tracking system to
identify which of Napster's users were illegally swapping tracks from
the EMusic catalog. When EMusic notified the users, Hoffman says that
most of them replied, "Oops, sorry, I didn't understand that I was
sharing those files." Clearly, not all of those users were thrilled to
get word that EMusic wanted them to stop-it-or-else. On one ZDNet
message board linked to a story titled "EMusic wants Napster users
banished," the tenor of the conversation is decidedly hostile toward
EMusic, but at least a few posters see some humor in the debate. As
one user remarked, "It's very amusing to read people here threatening
to boycott EMusic. As if a bunch of deadbeat Napster users wield any
economic power at all. I suppose if Napster starts charging, you'll
boycott them too. You'll take your getting-things-free business
elsewhere."
Despite recent positive developments at EMusic - including a
partnership with Hewlett-Packard in which EMusic will provide free MP3
downloads to buyers of a HP Pavilion home PC - it's still unclear
where the company will stand when the dust from the Napster scuffle
clears. Senior analyst Brian Alger of Pacific Growth Equities says in
the wake of what he calls the "Napster indecision" that EMusic's
future is closely linked to Napster's. "The question is, are they
going to die, or are they going to heal?" he says. Alger predicts some
type of resolution to the Napster scenario within the next four to six
weeks. "If there is an elimination of Napster as it appears today -
meaning distribution of copyrighted material through illegal means -
the value of EMusic's business plan, intangible assets and the
business as a whole rises dramatically."
Hoffman, for one, is banking on the injunction going into effect, and
he says the company is in a "great position" to move ahead on plans to
sign up more Napster users. But the clock is ticking. Alger points out
that EMusic's stock is in danger of being delisted from the Nasdaq,
since it's been trading for under a dollar since Jan. 4. "They're not
in a great position by any means," he says. But given that the company
reportedly had $16 million in the bank at the end of the fourth
quarter and projected costs of running the business are just $4
million a quarter, he believes that EMusic isn't going anywhere any
time soon. At least as long as the users accustomed to "getting things
free" pony up the bucks when the bill is due.
/=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-= advertisement =-=-=\
SNAPSHOTS OF THE E-COMMERCE CONSUMER.
The Standard and Forrester Research have joined forces to bring you a
series of EXCLUSIVE reports designed to help marketers identify online
buyers by demographic group, market segment and attitude towards the key
issues affecting the future of e-commerce. Each report is only $50.00
Available now at
http://search.thestandard.com/texis/store?stype=&search=netinsights/?nst=nbs
\=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=/
NET NOISE
~~~~~~~~~
Kick.com
OK, so this is one of those deals where at first you don't see the
point, then you install the thing to find out, and after futzing
around a bit, you smack your forehead with the fleshy part of your
palm and say, "Wow! This is totally cool!" The deal with Kick.com's
free product, "designed to compliment your existing music player," is
that you start up a track (MP3, CD, whatever) on your preferred player
and automatically get all sorts of related information for the artist.
For example: I fired up Iggy Pop's "The Passenger" (MP3 via Winamp),
and while I'm listening to the track, I can read a bio (did you know
he was born in Ypsilanti, Mich., with the name James Osterberg?),
peruse a review claiming that he never made a better record than "Lust
for Life" and find out that the Rolling Stones are considered a
"related artist." Plug in another song - say Joy Division's "Love Will
Keep Us Apart" - and learn that the band's lead vocalist, Ian Curtis,
hung himself just a few days before the band's big breakthrough tour
was set to start. While that's kind of a bummer, this is the sort of
thing the Internet was always supposed to do but seldom does: Give you
useful information, when you want it, with minimal fuss. Sure, the
toolbar of the "music companion" does have an alarming tendency to
shove its way in front of other things on your desktop, but that's a
small price to pay for crucial information like whether the upcoming
U2 concert is really sold out. Well, OK, bad example, but still ...
sweet!
----------------------------------------------------------------------
BEATS
~~~~~
Napster, the Sequel to the Sequel
In Napster news - is there any other kind? - we have several
developments in the last week, presented here in no particular order.
Sen. Orrin Hatch, R-Utah, told Reuters that he's going to convene
hearings of the Senate Judiciary Committee to discuss his "gnawing
concern that this legal victory for the record labels may prove
pyrrhic and shortsighted from a policy perspective." He urged major
labels to get on the stick with licensing digital music rights to more
lawful sites. ... Meanwhile, plaintiffs in the Napster litigation
didn't lose any time before submitting a modified preliminary
injunction for the court's consideration. Although the document wasn't
public, a brief statement on Wednesday revealed that under the
proposed order, Napster must "patrol" its own system to prevent its
users from infringing on copyrights. At Napster's site, users are
urged to join the so-called Napster Action Network: "We'll need to act
quickly and with unity if our voice is going to be heard - and the
Napster Action Network is one way you can influence this fast-moving
process." Those who want to do something besides frantically download
songs are urged to write letters and e-mail messages, phone members of
Congress and recruit friends to the cause.
So Long, Soundbreak
My computer had never spoken directly to me before I went to
Soundbreak.com, an online radio channel that abruptly shut down last
week. I'd been watching the site's live DJ spin tunes and had joined
the chat room to get the full experience. When I typed in a comment
that blew my cover as a writer looking to see what was worth reporting
on at the site, DJ Marnie stopped in her tracks, looked up into the
Webcam and addressed me by name. I literally jumped back in alarm.
Well, now that majority owner Acacia Research has decided to close the
site and return remaining cash to investors, the DJs have left the
building. (Soundbreak recently laid off dozens of off-air staffers.) A
tersely worded statement from Acacia Chairman and CEO Paul Ryan made
it all sound very cut-and-dried: "Due to market conditions, we were
unable to monetize the business plan or to raise the additional
capital necessary to sustain the company's long-term growth ... The
dedicated employees of Soundbreak should be very proud of having
created the first 24/7 live Webcast." Now get out.
Read more at
http://www.thestandard.com/article/display/0,1151,22274,00.html?nl=bts
----------------------------------------------------------------------
DOT DOT DOT
~~~~~~~~~~~
Myplay Cuts Staff, Refocuses ... Eminem and Pat Boone, Sittin' in a
Tree
Another day, another round of layoffs: Word comes from Myplay that the
digital music storage site laid off 22 employees (41 percent of its
staff) last week in order to "conserve our available funding,"
according to a statement by Doug Camplejohn, the company's CEO and
co-founder. He added that the company's remaining 31 employees will
focus on the company's new direction as a "digital subscription
company offering business-to-business subscription services." Myplay's
free digital locker service will remain available. ... From the
strange bedfellows department comes word from Radio Undercover that
Pat Boone is defending Eminem (who's already got us scratching our
collective head over that Elton John duet we're promised at the
Grammys tomorrow night). The crooner and one-time heavy-metal singer
offered this tepid endorsement of Eminem's God-given right to be an
idiot, saying, "I don't agree with his lyrics, their content or tone
... but I vigorously feel that we must respect an individual's right
to speak his mind." Which is not to say that Boone's letting the
Em-ster off the hook for being a hateful little twit: "His wild rant
and aggressive lyrics might be his 'act,' but when young fans put his
musical anger into action, he can't escape responsibility." Yeah,
let's give him the spotlight at the Grammys and vote for him as
"Artist of the Year." That'll show him.
----------------------------------------------------------------------
SOUND OFF
~~~~~~~~~~
This week's question: Have you found yourself downloading more music
than usual in case Napster is shut down? How will you get music online
if Napster goes away?
E-mail your opinions to julene@well.com with "sound off" in the
subject line, and we'll print a selection of the responses in next
week's newsletter. Letters may be edited for clarity and length, so
keep them short and include your name and affiliation, if any.
----------------------------------------------------------------------
ERRATA
~~~~~~~
Last week's lead story ("Streaming Legalese," Feb. 13) contained two
errors. Due to an editing error, the story stated that artists are
eligible to buy Webcasting licenses. It is in fact the Webcasters who
hold this option. Additionally, Gloria Hylton of Wnez.net was
misidentified. Her correct title is president. TheStandard.com regrets
the errors.
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Editor: Michele Keller (mkeller@thestandard.com).
GET THE MAGAZINE
~~~~~~~~~~~~~~~~
4 RISK-FREE issues at this URL:
http://www.thestandard.com/account/magazine
GET MORE NEWSLETTERS
~~~~~~~~~~~~~~~~~~~~
The Standard newsletters cover the media, stock market,
e-commerce, music, law and more. To SUBSCRIBE to other
newsletters, click here:
http://www.thestandard.com/newsletters/
To UNSUBSCRIBE to any newsletters, click here:
http://www.thestandard.com/account/newsletters/unsubscribe/
ADVERTISING INFORMATION
~~~~~~~~~~~~~~~~~~~~~~~
For more information on advertising in The Standard
Newsletters, contact:
West Coast
Amy Kastrinos (mailto:akastrinos@thestandard.com)
East Coast
Norma Wesolowski (mailto:normaw@thestandard.com)
FEEDBACK AND PROBLEMS
~~~~~~~~~~~~~~~~~~~~~
Send letters to the editor to letters@thestandard.com.
Please contact us with any problems that arise:
http://www.thestandard.com/service
You can also contact us via phone or mail:
Standard Media International, Customer Service
(402) 293-0386 (phone)
(402) 293-0794 (fax)
Copyright 2001 Standard Media International |