Industry information that you can actually use
August 2003
Pending law will allow the FBI to regulate music composers who use the Internet
Tonos knocked down, but not knocked out!!
Gibson releases the new "air guitar."
XM Radio says I'm full of bunk: rebuts my article hinting at Clear Channel pressure.
TONOS LIMPING BUT STILL IN THE RACE
Reports that the popular independent A&R service is out of business are premature. The company may be on life support, but is still alive. However, members of Tonos who logged on this week were greeted by an apologetic letter from Tonos founder and Grammy Award winning songwriter, Carol Sayer. The greeting states that unless something significant happens soon, Tonos will be closing their "doors" come September. (Shutting down their server would be more accurate.)
But conversations with Tonos CEO, Justin Herz, suggest that spirits are optimistic. "I'm 100% focused on finding the right merger opportunity right now." The announcement came as a surprise, because Tonos' track record had begun to outpace their most visible and significant competitor, TAXI. (taxi.com)
Unlike TAXI, which has been doing business for a decade and was grounded in a brick and mortar model, Tonos was the product of the dotcom financing era. Considering their debt-load in the first three years of Tonos' life, it's an impressive achievement that they outlived almost all Internet-based business of their ilk and were able to amass a membership equal to that of their well-established competitor.
Tonos will be in my prayers over these next weeks. Those with suggestions for business opportunities should send an email to:
GIBSON DECIDES TO REINVENT THE WHEEL - A GUITAR WITHOUT PICKUPS.
Sensing that people are getting bored of the sound of electric guitars, Gibson has a solution, one that will appeal to those who also hate getting tangled in patch cables or the bother of returning their instrument-- a digital guitar.
In this new design, the magnetic pickup will be replaced by a computer chip that works through a wireless transmitter (Ethernet). A Gibson spokesperson claims that this will give added versatility to processing the sound and allow "a different effect to each of the six strings."
How the effect of feedback will be created without the use of magnetic pickups or air is absent from their press release. But Gibson swears that this thing will sound bitchin'.
Can you can you say "New Coke?"
A recent bill introduced to the House Judiciary subcommittee, (H.R. 2517, sponsored by Representative Lamar Smith , R-TX) would allow the Federal Bureau of Investigations to monitor those composers and record producers who use elements acquired on the Internet in their music recordings.
The bill suggests that because material protected by copyright is so easily obtainable over the Internet, there needs to be a way to monitor the distribution of content that may end up being infringed upon. Smith's bill would allow the FBI to investigate and "deter" the use of this material. It's presumed that this "monitoring" would lead to arrests.
Several special interest groups are fighting the bill. Mainly, the Consumer Electronics Association (CEA) "The bill as written is troubling for consumers on multiple levels," said CEA President Gary Shapiro. "First, it suggests that any 'unauthorized' home recording is criminal conduct if the content is obtained from the Internet.
Move over RIAA , there's a new sheriff in town, and he has a bigger gun.
Last month I wrote a story implying that if XM Radio didn't shed some debt, they might have to turn the helm over to their stockholders, one of which is radio Goliath, Clear Channel . The net result of this could be the tainting of a relatively "commercial free" product into one that sounds just like every other type of radio.
The original article is part of the July issue of Moses Supposes, on www.MosesAvlaon.com , under Scam Of The Month And Industry News.
Lee Abrams , XM's Chief Programming Officer called me to "set the record straight" about a few of my "facts." Although the facts in dispute do not really alter my thesis, Mr. Abrams impressed me as a sincere person and I extended to him an offer to print his rebuttal in my next newsletter.
I explained to Mr. Abrams that in return, I would be interested in writing a story about their deal with SoundExchange and Royalty Logic, to insure that artists and songwriters are compensated for use of their material on XM. He said that he would be happy to discuss that issue with me at a future date.
Stay tuned.
The printing of this rebuttal is in the interest of "fair play" and is not an endorsement by Moses Supposes as to the factuality of its content. One will also note that the only two "facts" that Mr. Abrams directly disputes is that Clear Channel owns not 3% of XM but "less than 3%," and that XM NEVER asserted that they would be a "commercial free" product, but one that ran, "a very limited number of ads."
The rest of his "disputes" are more differences in opinion. Oddly enough, Mr. Abrams' passionate response actually comes close to supporting my argument by saying that the carrying of ads on digital radio is "an economic reality as these things are expensive to operate." Hmmm.
Having said that, I want to also add that I am a fan of XM Radio, their programs and their entire initiative in digital radio. Furthermore, my initial article should not be viewed as anything other than an editorial for a cynical world filled with argumentative optimists. (like me)
PS: Clear Channel did not contact me to rebut anything.
"Dear Mr. Avalon,
I read your article with interest and, as XM's Chief Programming Officer, I would like to respond to a few points:
While it has less than a three-percent investment in XM, Clear Channel has absolutely no input into XM's programming. A subsidiary of CC does provide us with some national talk talent that we would otherwise be unable to attract.
On the advertising issue, we always promised many ad free channels, but some channels do run a very limited number of ads. That has been our strategy since day one, contrary to your suggestions. Limited ads on some channels are a necessary ingredient to make XM work. Unlike FM radio, we have a built in greed-stopper called subscribers. If we were to get greedy and start playing the 18-30 minutes of ads an hour like FM, we'd be dead. Our ad loads are absurdly low and will stay that way. Half of our music channels play no commercials, and those that do typically run only two minutes per hour. Our competitor advertises itself as "ad free," but several of its channels do carry ads. It's an economic reality as these things are expensive to operate.
The suggestion of outside control borders on ridiculous. XM is attacking the vulnerabilities of FM in the same way that FM responded to the staleness of AM in 1970.
Finally, on the "more commercial music" thinking: Our library is going the other way--DEEPER. We have a no-research policy. We put music selection back in the hands of programmers who live the genres they serve. I respect your opinions, but some of your comments border on insulting to the 100-plus programmers who gave up cushy white-bread gigs to work 24/7 in an effort to actually CHANGE radio instead of throwing a band-aid on a medium in need of major surgery.
Thank you.
Lee Abrams, chief programming officer, XM Satellite Radio."
OBITUARIES
Sam Phillips , the founder of the infamous Sun Studios died Wednesday 7/30 at a Memphis hospital. He was 80. He is credited with discovering Elvis Presley, Roy Orbison, Johnny Cash and Jerry Lee Lewis.
MO OUT
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