Sanctuary finds new home

Universal sold Parlophone to Warners. And now, Sanctuary has gone to BMG.

I suppose that at least, this time, it's not gone to an existing major label - BMG used to be half-owners in Sony-BMG until they sold up in 2008, but haven't been a major for half a decade. Apparently, though, they're kinda regretting that, and want to be a major label again:

Hartwig Masuch, chief executive of BMG, said: "We have made no secret of our ambition to create a new force in the music industry focused on delivering service and revenue to artists."

He added: "We believe this deal will be good news for those artists, good news for our partners, particularly in the independent sector, and good news for the music industry as a whole.

To be fair, selling off your major force in the music industry and not doing it for five years was a pretty good way of making a secret of these ambitions.

It's not entirely obvious how owning the Iron Maiden back catalogue is going to create a new force in the music industry, but who knows?

Twenty dollars a pop: BMG chase payments for unlicensed files

Having realised the limitations of dragging everyone who might have got hold of an unlicensed mp3s into court, BMG have come up with a new wheeze. Let's be generous and call it sending a speculative invoice which invites account holders to give them twenty dollars to make the threat of more expensive legal action go away.

Twenty dollars, I guess, seems like a fair price to the RIAA, who believe that a dodgy file or two should destroy your entire life. But, as Torrentfreak points out, they're not actually telling the truth when they make their demands:

TorrentFreak discussed this BMG project with lawyer Samuel Perkins of the Brody Hardoon Perkins & Kesten lawfirm. Perkins pointed us to the FAQ page on the settlement site where it states that even when an Internet account holder is innocent, he must take responsibility for the actions of others.

“BMG acknowledges that in many cases the subscriber will not be involved in any unlawful downloading, and will not even have any knowledge of it. I represent many such innocent subscribers,” Perkins begins.

“Under current US copyright laws, they would not be liable for copyright violations that occurred using their Internet subscription. BMG misrepresents subscribers’ copyright liability by stating that ‘most Internet service provider contracts state that the contract holder is responsible for actions taken on the Internet service.’ This statement is designed to convince subscribers that they are liable for a copyright violation if a neighbor or a family member secretly downloads copyrighted material,” Perkins explains.

“The subscriber is only liable for copyright infringement if he or she intentionally induc[es] or encourag[es] direct infringement, or infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it.

“By deliberately obscuring the distinction between the subscriber’s contract with the ISP and the subscriber’s liability under federal copyright law, BMG’s website attempts to trick innocent subscribers into settling copyright infringement cases when they in fact have no liability,” he concludes.

A 3000% plus mark-up and a false insistence of who owes the money. The record industry is still behaving as it always has, clinging to methods that don't work.

Offloading Parlophone

As Universal continue to try throwing things out the basket to see if their EMI takeover can get lift-off, the latest plan is to try and flog Parlophone to BMG.

Yes, yes, BMG had stopped being in the recorded music business when it withdrew from what is now Sony alone, but that doesn't mean it wouldn't be interested in getting back into such a vibrant, profit-loaded sector, right?

There is a slight problem with the plan, thought. The idea is to convince that the EU that the embiggened Universal wouldn't control too much of the market for the biggest selling acts, but, says MediaGuardian:

One source with knowledge of the situation said that any potential sale of Parlophone, one of EMI's most famous labels, would include Universal "cherry picking" key artists to keep such as the Beatles and, potentially, Coldplay.

It's like those hoarding programmes where the guy agrees to get rid of his enormous collection of plastic horses, only to get to the shop and announce that he's keeping all the dappled ones.

EMI's likely buyers

It's looking more and more likely that EMI will be split into two as the auction continues.

Warner Music will probably pick up the recorded music part of the company, with BMG Rights Management - a 50-50 Bertlesmann/ KKR group - taking the bit that makes money.

Ah, yes, KKR are private equity - that's been something of a success for EMI in the past, hasn't it?

Warners are expected to kill the EMI brand in America - or at least finish off the parts that are still twitching following Bungling Hands' time in charge - but might retain it in the UK. It wouldn't be too surprising if some form of EMI America label clung on at the edges, just to play to the sentimental amongst the people who still buy records.

The record club's old

It's been a few years since there's been much evidence of the Britannia Music Club advertising in British magazines; now, it's American counterpart, the BMG music service, is closing.

This is one of those 'buy one full price, get a squillion CDs free' deals that used the offer to lure you in, before announcing that you'd be stuck having to buy at least one record a month for the rest of your natural life; fail to choose a record, and you'd be sent the "club choice". Which would usually be rubbish.

It's hard to see what could possibly have gone wrong. Although Rolling Stone has an idea:

At one point in the service’s history, BMG offered “10 CDs for the price of half,” meaning you could get 10 albums just for buying one-half priced CD, and that’s it. The total math, after shipping charges, came out to roughly $27 for 10 CDs. Thus, we pretended on the subscription forms that our suburban home was an apartment complex, created a ton of aliases and signed up for the service over 25 times, raking in 250 CDs in the process. It ate up a lot of stamps responding “Not Interested” to each month’s spotlight release mailers, but in the long run it was worth it. Share your fond memories of the music service in the comments.

Of course, ultimately it was the decline in physical sales, and CD prices, which did for these clubs. Why pay seven bucks for a CD you don't want when you can get something you do, for the same price, from Target?

Big music gets that little bit bigger

The EU has said "oh, alright, then" to Universal and BMG's publishing arms merging together. Universal has promised to sell off some of its catalogue, convincing Europe it's a good idea. They're going to trade as Universal. This is great news, unless you're a songwriter, or musician, or like music.

Five years on

With version 2.0 Napster almost already over, bar the dwindling away to nothingness, it's something of a surprise to discover the legal battles over the original Napster have only now been settled. EMI have finally settled with Bertelsmann AG. Back in 2002, BAG was the parent of BMG records, and it bought pirate-era Napster with the aim of turning it into some sort of legitimate business. In effect, it purchased a rubbish cat logo, a brand name and a heap of lawsuits.

Now, the last of these have been settled, and EMI is keen to put the distant past behind it:

"We can now put this matter behind us and continue to pursue the development of new legitimate digital music business models."

There's something almost heartbreaking about EMI closing down a lawsuit it embarked on in 2003 against a long-defunct peer-to-peer network and seeing it as part of its 2007 digital strategy.

EMI jerked off; junk not far off?

Strange goings-on at EMI as they mull the possibility of a merger with BMG. They're threatening legal action over a broker's report which suggested investors should sell EMI stock (a record company knee-jerk calling the lawyers in? How unusual); chances are they'll be less than happy with US credit brokers Standard & Poor marking down the value of its long-term credit status to one notch above "junk."

On the other hand, they did reckon that the company was stable and not bad as an investment. The S&P mark-down may lead to the cost of loans EMI takes out to be increased.

EMI 4 BMG

The weekend business papers speculated on sticks about a possible spin off of BMG's music companies to allow a "merger of equals" between them and EMI. It could happen, and if it does, the axing of 400-odd bands when EMI bumped out of its Mariah Carey disaster will look like a papecut...

Contractual wrangle

BMG is cheerfully honest when it describes its new contracts - due to be phased in shortly. The label's worldwide COO Michael Smellie (settle down and stop your snickering at the back) fesses up to Music Week that "the objective is not to give artists more money."

But what the new system should do is make it a lot clearer what those levels of cash actually will be, sweeping away the current practice of saying bands will get X, and then withdrawing sums to cover things like the risk of "new" technology (such as that risky new compact disc), the cost of packaging, some money to feed the meter outside the record company's headquarters and so on.

The new deals will also be for fewer albums at a time - offering the likelihood of less B-side compilations and "Live Again At The Albert Hall" contractual obligation fillers. BMG is really proud of its new system, and although abolishing a system in 2002 that had more in common with the Industrial Revolution-era* Truck Ticket system is hardly much to crow about, it's to be welcomed that they've made a step towards fairness.

We suspect that this isn't the last we've seen of the majors sorting out their acts (if you'll excuse what is, even by our standards, a poor pun) as they struggle to come to terms with the realisation that, actually, selling small plastic discs isn't the safest indsutry to be in. Clive "the aptly-named" Rich, BMG's VP of legal and business affairs observes that "artists are the major asset" for any company. No, Clive, they're the only asset.

* - Before any other history student emails us: We know there was no Industrial Revolution, but we're using the term to describe the era when there was a sudden spurt in the consolidation of industial processes in urban areas, alright?