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THE INDUSTRY STANDARD'S
B E A T S H E E T
The Latest Digital Music News - and It's Free
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For more on digital music, visit
The Standard's Media & Marketing page:
Tuesday, July 3, 2001
TOP STORY:
* Such a Deal!
With Yahoo's agreement last week to buy Launch Media for $12 million,
there's not much room left for the little guys in the digital-music
arena.
NET NOISE:
* Neumu.com
BEATS:
* Napster is Just Another Word for Nuthin' Left to Share
DOT DOT DOT:
* MP3 Virus Time-Bomb a Hoax ... Aimster Releases Mac Version ...
Beastie Boy vs. Dubya
SOUND OFF:
* This week's question: Keeping this week's MP3 virus hoax in mind,
what's your experience with computer viruses? Ever fallen for a hoax?
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TOP STORY
~~~~~~~~~
Such a Deal!
With Yahoo's agreement last week to buy Launch Media for $12 million,
there's not much room left for the little guys in the digital-music
arena.
By Julene Snyder
If you're looking for a sign of the times that screams "Boom Over!
Everything Must Go!" the bargain-basement price that Yahoo agreed to
pay for Launch Media last week will do nicely. For a measly $12
million - which would have been considered chump change not all that
long ago - Yahoo will take Launch into the corporate fold and get
instant access to the online music service's 6.4 million registered
users, along with goodies such as LaunchCast, its music-streaming
service.
What a difference a few years make. Just 30 months ago, Yahoo
announced it would acquire Launch's one-time Santa Monica, Calif.,
neighbor, the Web-based community toolmaker GeoCities, for about $4.5
billion. Yes, that's billion with a "b." (Of course, the deal
involved stock that's since dropped a notch or three, but I
digress.)
Numbers with seven zeroes apparently did not get bandied about when
Yahoo got to the endgame of the Launch negotiations. "I'm sure Launch
would have liked to get a fraction of $4 billion - even a small
fraction, not a tiny fraction like they are getting," says digital
media analyst Phil Leigh of Raymond James & Associates. But
despite
the relatively small numbers of dollars involved, many see the cash
deal as the best possible outcome for Launch, which has been
struggling of late. In mid-May, the company announced a sharp drop in
quarterly earnings and cut its staff by 26 percent.
The remaining Launch team is no doubt part of what Yahoo found
attractive about the deal. Nonetheless, Ellen Siminoff, Yahoo's
senior VP of entertainment and small business, told one reporter that
the jury's still out on whether there'll be more job cuts among
Launch's 175 employees. But she waxed rhapsodic in the company's
press release on the deal last week, enthusing that "Launch Media
possesses a large audience, a seasoned team of music-industry
veterans and the broadest array of music and music-related content
available on the Web today."
The consensus seems to be that the acquisition is a smart move on
Yahoo's part. Leigh says Yahoo gets a few valuable assets right out
of the gate. "Yahoo gets a few things out of this: They get an
audience, they get infrastructure such as the servers and equipment,
and to the extent that they can clear the air with the other record
companies, they'll get the LaunchCast radio service, which has proven
to be popular."
Launch co-founder and CEO David Goldberg sounds ebullient about the
deal, saying he's "really excited from a personal standpoint." And
although he can't talk specifics about the negotiations, he thinks
the shareholders got a good deal as well. "There's going to be room
for a couple of winners in the online music space, and we think that
we're going to be one of them." Goldberg says that one big plus for
his company is that it will remain in Santa Monica. (Yahoo is
headquartered in Santa Clara, Calif.)
Launch also announced last week that it's settled a copyright
infringement suit with Universal Music Group. This is obviously a
good thing, because Yahoo's signed up to distribute Pressplay, the
online subscription delivery joint venture that Sony and Universal
have in the works. Goldberg says that negotiations with the remaining
litigants - Sony, BMG and EMI - are ongoing, and that the best-case
scenario for everyone would be an out-of-court settlement.
No matter how the courtroom battles shape up, perhaps the main
implication of last week's deal is that there is less and less room
for the little guys in the digital music arena. "The industry is
going through consolidation," Leigh says flatly. "The online music
business is about a $40 billion business worldwide, and the stakes
are very large."
And when it comes down to it, the new digital-music boss is starting
to look an awful lot like the old recording-industry one. "The big
companies are moving into the territory pretty aggressively," Leigh
says. "Where they had left it to the small innovators a year or two
ago, now that things are coming closer to reality, the big players
want to step in and exercise their influence."
Whether that's a crying shame or business as usual depends, of
course, on your point of view.
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NET NOISE
~~~~~~~~~
Neumu.com
When you've looked at tens of thousands of Web sites, you know at
once when you come across a truly well-designed one. A crisp, somehow
soothing motif is the first thing you notice about Neumu.com, the
brainchild of editor in chief Michael Goldberg and creative director
Emme Stone. Goldberg, of course, is the guy who founded Addicted to
Noise, which he describes in his bio as "the first music-oriented Web
site with original content." His resume includes stints as editor in
chief of SonicNet (where he came up with the "world's first online
album review with audio samples"), being blurbed by Newsweek as an
"Internet visionary," toiling as an editor and senior writer at
Rolling Stone for a decade, and a long string of freelance writing
credits for magazines both prestigious and niche-driven. So what's
the story with the new venture? Goldberg lays it out on the site:
"Neumu comes after some years of doing battle in the business of
corporate music Web sites ... It's an experiment that, to some
extent, comes from my belief that there are smart people in the world who
appreciate smart, challenging art, music and words." The offerings
include
Goldberg's daily musings (today, by the way is his birthday, so send
him a singing telegram if you're so inclined), film and album
reviews, "twinklepop" (described as "streaming audio-visual treats
for the entire family"), photos, drawings, music news and other
slices of cultural life. Will Neumu make money? Haven't a clue, and
it's really not the point. Call it corny, but the raison d'être here
is nothing less than changing the world: "It's a place where you'll
find people who care about the impact of what they do in the world,
people who respect each other, who don't shake your hand and then
stab you in the back. You'll find artists on a journey to, well,
enlightenment. Understanding. Peace." Works for me.
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BEATS
~~~~~
Napster is Just Another Word for Nuthin' Left to Share
Online music research firm Webnoize came out with a report last week
saying the latest incarnation of Napster (version 2.0 beta 10.3, for
those of you keeping track) appears to be driving customers away in
droves. As if the news that the number of users is dropping
precipitously weren't bad enough, it seems that remaining users don't
have many songs that bypass the new fingerprinting technology used to
weed out music that can't be legally shared. The result? Users are
sharing "an average of 1.5 songs, down from a peak of 220 songs per
user in February." Webnoize senior analyst Matt Bailey says that by
reducing the amount of available music, Napster has "provided another
nail in the coffin of the service consumers originally loved." Now,
it's up for debate whether Napster is the one doing the nail-pounding
here or whether it's been assisted just a tad by all those copyright
infringement lawsuits, but there's no denying the headline-hogging
file-swapping service is starting to look a lot like a struggling
swim =mer going down for the third time.
Read the full story:
Database problems with the new version of Napster are blamed for the
service's decision to pull the plug on the file-swapping application
late Sunday night. A brief announcement posted on the Web site
explains the situation: "File transfers have been temporarily
suspended while Napster upgrades the databases that support our new
file identification technology." At press time Tuesday, there was no
word as to when the service might be up and running again.
Read the full story:
----------------------------------------------------------------------
DOT DOT DOT
~~~~~~~~~~~
MP3 Virus Time-Bomb a Hoax ... Aimster Releases Mac Version ...
Beastie Boy vs. Dubya
It goes without saying that Beat Sheet readers are too savvy to fall
for e-mail virus hoaxes. But hey, we all know saps who dutifully pass
along every "Good Times" e-mail they get, and perhaps they should be
clued in to the latest one they're likely to fall for. An e-mail is
making the rounds claiming that on July 4th, embedded code will
emerge from the depths of millions of computers, causing them to
crash and prompting MP3 files to self-destruct. This is, of course,
utter hogwash. Too bad it's all bunk; we liked the e-mail's throwaway
line that the program was developed by "disgruntled musicians at an
American Independence Day concert" .. File-swapping upstart Aimster
announced last week that "after literally thousands of queries and
even more hours of work, the first beta version of Aimster Mac is
finally here." Apparently, there are a few bugs left, since the
company itself cautions that "this is VERY much a Beta version," but
I suppose even Mac enthusiasts deserve a crumb now and again ... It's
not easy to change the world, but at least the Web gives you the
illusion
that something's getting done. Witness last week's statement by
Beastie Boy Mike D in opposition to the Bush Energy Plan (
thoughts such as the following: "Every once in a long while, one
nation on our small planet attempts to take a selfish step that goes
against the tide of history. That time is now, and that nation is
us." Also, "Bush wants to build 1,300 new coal power plants. Can you
imagine what that will do to people with asthma?" Oh, and just in
case you doubt Mr. D.'s sincerity, he tells us that when he's in New
York he tries to ride his bike and take the subway, but admits he
takes a cab almost daily. Oh yes, and when he's in L.A., he sure
wishes there were more mass transit. Fight the power, dude!
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SOUND OFF
~~~~~~~~~
This week's question: Keeping this week's MP3 virus hoax in mind,
what's your experience with computer viruses? Ever fallen for a
hoax?
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.
Last week's question: What compels you to tune into your favorite
online radio station?
I grew up with radio all day long - my dad listened in the
bathroom
while showering, shaving and doing all that morning stuff. So do I.
My mom had the radio on in the kitchen all day - it was turned off
only for supper and when the TV was on. So I'm a radio head, and even
more, a Foghead. That's someone who is a loyal fan of San Francisco's
KFOG - one of the most innovative FM stations ever. Both frequencies
(104.5 and 97.7) are tuned on my car radio for to and from work. But,
despite an additional transmitter located in the southern end of the
San Francisco peninsula, I have never been able to pull in the
station clearly from either of my work locations on the east side of
the bay. Hooray for Web radio - I can listen all day long and get all
my favorite DJ's, contests and features without missing a thing.
Fogheads are a family, and the Web lets me stay in touch. They call
my baby boomer demographic the TV generation, but I'm a radio junkie
through and through.
- Carol Braunshausen
I am compelled to tune into an online radio station when I can listen
to my friends spinning their talents On any given day, I can tune
into one of my friends' stations on Live365.com and hear an archive
of a party I was at in San Francisco. Not only do I get to listen to
music I love from people I love, I also get to reminisce about the
first time I heard the music live. Groovetech.com draws me in for a
similar reason. However, the video and audio option adds a whole new
dimension. Not only can I hear music from one of my favorite DJs, who
might also possibly be a personal friend, I can see them, too.
- Michelle Ochoa
Bite Communications
For me, online radio is all about the quality of the programming, not
sonic quality. What makes Net radio so much more interesting to me
than most traditional radio is the opportunity to hear obscurities
that no one's paid to have played hourly. So when I find a station
that comes up with forgotten tracks regularly - such as Radio Free
Virgin's "Guilty Pleasures" or ClickRadio's "Bell Bottom Soul" - I'm
going to listen devotedly. Bring on the Floaters!
- Joseph McCombs
Freelance journalist/critic
My favorite radio station is KCRW, 89.9 (
www.kcrw.org) in Santa
Monica, CA. Three things compel me to listen online: 1.) Most
commercial (airwave) radio sucks; 2.) I can't pick up the broadcast
locally; 3.) It's a bit of 'home' when I'm away. (It's always fun to
hear L.A. traffic reports when I'm in (say) Costa Rica, as I was this
past week.)
- Frank Espinoza
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Edited by Michele Keller (mkeller@thestandard.com).
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