Sony suddenly comes up with a digital strategy

It might be a little late in the day, but Sony seems to have decided to try taking digital music seriously.

It had owned 51% of the incorrectly named IODA - "Independent" Online Distribution Alliance - and now it's going to buy up the rest, in order to be able to merge it with the other significant American digital distributor, The Orchard. Sony will then own about half of the new company, which will be called The Orchard.

Keeping it? This is a fairly dull post, but probably quite significant: as a label, Sony is as clueless as its competitors about how to make money online; as a distributor, it might well be getting its act together.

"Save iTunes" cries distributor

ST Holdings, which distributes electronic music (as in mp3, not as in Delia Derbyshire), has noticed that it's earning less money of late. In the third quarter of 2011, total revenue has fallen 14% and revenue from iTunes is down nearly a quarter.

Why?

Hypebot says the company says the drop came after it started supplying to streaming services, and as a reaction to the drop in income, has now stopped Spotify:

"As a distributor we have to do what is best for our labels," states the company. "The majority of which do not want their music on such services because of the poor revenues and the detrimental affect on sales. Add to that, the feeling that their music looses it’s specialness by it’s exploitation as a low value/free commodity."

The tracks, from 234 of the 238 labels who ST work with, are also being taken from Rdio and Napster.

The reaction of one of their labels reaction was, “Let’s keep the music special, fuck Spotify”.

You'll spot the use of the word "special", which is being used here to mean something other than special; something between "lucrative" and "exclusive".

There's something a little amusing about parts of the music industry suddenly coming to see iTunes as the high-value way of distributing music and streaming as a cost-cutting upstart. It remains to be seen if this short-term decision makes sense in the long-term: will iTunes always be offering such a good deal? Will there be an inexorable shift to streaming? Might people feel their "special" music shouldn't attract "special" prices? (At a guess: no, maybe, and yes.)

Sony Distribution fire not actually part of the riots

Shortly after the Sony Warehouse went up in flames, I said it seemed unlike the other riot-related incidents, being away from the High Streets and a well-defended space.

This morning, the Telegraph reports that, indeed, it wasn't a rioter target; rather, a professional raid making using of the riots as a distraction:

[E]vidence has now emerged suggesting that the well-guarded Sony DADC distribution centre was deliberately targeted by a professional gang, in a carefully planned raid, using the riots as a distraction.

Sources in the security industry disclosed that intruders first arrived wielding specialist cutting equipment and spent up to two hours dismantling a high security fence before breaking in.

It is claimed that they then summoned a fleet of vans and drove inside the premises, which are set back from the main focus of rioting in the area, before beginning to load up stock.

According to one source, security guards on site were effectively overwhelmed and unable to fend
off the intruders, knowing that police were already stretched as anarchy gripped the capital.
After loading up with stolen goods, the robbers are then said to have invited other gangs in to continue the looting in an attempt to cover their tracks.

Now, that sounds much more plausible than the idea of marauding kids making a detour onto an industrial estate.

Don't worry about the warehouse, apparently

There's a long and interesting post from Alexei out of Johnny Foreigner on the PIAS fire and, to a greater extent, why they don't need your help:

this is the same industry that brought you "return to live aid". nothing drives sales better than a palatable tragedy, the only exception here is this tragedy is somewhat exaggerated for dramatic purpose. You know the warehouse was insured right? I didn't, i had to use the google, and 5 pages later i found someone who wasn't alec empire referring to it.

so eventually, all them records will be paid for. losses compensated. I'm not saying that there won't be huge logistical problems and dashed dreams occurring as a result of product loss and the time insurance companies will take to settle, but all the claims of "disaster! label x looses £x000 of stock" are pretty disingenuous. The industry has a chance here to convert thousands of unsold cds into digital sales, and they're gunning for it, they're just leaving the "insured against fire" part out.

This is right, of course, there is insurance. But is there anything more soulless than someone who surveys the loss of a massive part of someone's business, shrugs and says "well, at least you've got insurance."

Yeah, possibly everything was insured. Although who knows what the exclusions, and the excesses, and how long its going to take for money to come through? Larger labels might be able to cope, but if you're a smaller label which runs on fumes for the back end of the month, losing so much of your stock in one go could push you out of business long before Axa get round to sending you a heavily-adjusted-down payment.

Alexei says that there are warehouse screw-ups all the time, but generally we're talking about a box or two going missing, not - as has happened in a few cases - an entire label's stock going entirely.

The whole thing is made murky by the wide variation in size of labels that have been affected. And Alexei is right in pointing to the sense of an original impulse to help rapidly being shaped into a marketing campaign, and how what at the start of the week was a bunch of people buying records is now turning into some dubious sounding charities, and slick PR campaigns, and trying to get people to support Bjork rather than some of the smaller bands involved.

But what's ignored is that starting bit. It was people who love music, hearing that the people who bring them the music they love were struggling, trying to do what they could to help. The rushing to buy music from the affected labels and acts might have a financial aspect to it, and it might be that you're finding money that will, eventually, be coughed up by an insurance company anyway. The main motivation, though, was to show a bit of love to people who had had their work destroyed by idiots with burning wheeliebins.

That's something that insurance cheques can't do; to go up to someone when they've been kicked in the face and try to tell them that, despite what's happened, they're appreciated, and people care, and everything's going to be alright.

That original effort has been wrapped in the usual PR glitz and scent for a sale of the higher branches of the music industry - because that's what the music industry is, that's what it does - but in the rush to be cynical, you risk pissing on the well-meaning instincts of loads of people to just show that they valued something which had been destroyed by others.

[Thanks to @jamesthegill]

Sony Distribtuion Centre destroyed

The Sony Distribution warehouse in Enfield looks to have been

A LFB spokesman said: "We were called just before midnight to a warehouse in Solar Way, Enfield.
"Eight fire engines are in attendance and around 40 firefighters have been fighting the fire.
"They are making steady progress and will remain on the scene into the morning.
"There was quite a lot of black smoke and the building has partially collapsed into itself."

A hit smaller labels could have done without - like too many other small businesses, they've taken a massive hit just because they were in the way.

Indie distro closes: Lumberjack-axed

Lumberjack Mordam Music Group, a large US indie distributor, is closing its doors and, by the sound of things, isn't going to be able to pay all it owes to the labels:

I want to give everyone an idea of where things stand with LMMG as of now and where things will be in the future. At this point LMMG will not be able to continue to provide distribution services for labels. We had hopes for the last several months that we'd be able to find a way to move forward but the triple hits of an expensive merger, a dying business and a bad economy have made it impossible. We are hoping to be able to get some money to labels, but I'm not sure how much or when as we have to try and collect money from customers. If you have not yet moved your distribution to another company, please make arrangements to do so as soon as possible.

Hmm. "An expensive merger" is hardly the sort of thing that accidentally happens to you, though, is it?

The end of EntertainmentUK?

Robert Peston is just on, suggesting that Entertainment UK - the distribution arm of Woolworths - looks unlikely to survive the collapse of the company.

EMI wants to offload, finding buyers difficult

Further indications of the tough going Terra Firma are having trying to make EMI into a plausible private equity business: the FT reports that the label has had difficulty finding anyone to take up assets it wanted to offload to help get down the corporate debt:

Terra Firma initially discussed a sale of its large Japanese business as well as its Christian, country music, classical and jazz labels. Talks then changed to possible licensing deals and have stalled since the arrival of Elio Leoni-Sceti as chief executive of EMI Music, the recorded music division, in September.

The company has now come up with a new wheeze - it's trying to interest its supposed rivals to take over its US distribution. The idea would be that Universal or Sony or whoever would write EMI a large cheque for the right to keep large piles of unwanted Robbie Williams records in warehouses across the US, and to drive boxes of Viva La Diva Loca And All His Friends about the nation, in the hope that EMI would then pay them for the services they provide in the future.

Given that this offer is being made by an increasingly out-of-options label, the shrewd rival might wager it'd be better to wait until EMI collapses under the weight of its own debt and pick up the business for a song, rather than invest heavily in a business which is starting to sweat more than a bus driver crossing an icy mountain pass in a gale.

Indie disaster: Hear a Pinnacle drop

Some really grim news for most of the top tier of UK indie labels, as Hypebot is reporting that Pinnacle distribution has gone into administration. Pinnacle ships out records for the likes of One Little Indian and Cooking Vinyl, as well as running its own label alongside.

Fingers crossed the administrators are able to keep Christmas alive for the labels relying on Pinnacle to get their stuff to customers - otherwise, the collapse of Pinnacle could just be the, well, tip of the iceberg.

Take That saved for a grateful nation

The collapse of Woolworths had thrown a ghastly shadow over Britain - as the biggest distributor of impulse-buy records to UK supermarkets, it could mean that the grudging racks of CDs provided by Asda and the like could run dry.

Into this crisis, the record companies have marched, kind of like the magnificent seven, organising alternative deliveries of Take That's new release and Britney's album:

A spokesman for Asda said new deliveries had been organised, adding that customers "won't notice a thing".

"We are pushing ahead with a planned national poster campaign for a new range of DVD box sets, and can reassure fans of Take That that we will have their new album in store from Monday," he said.

So, your evil plan fails again, Robbie Williams - you won't stop people getting their hands on the new Take That record.

Record labels more obsolete than earlier today

One of the great things about record labels, though, is that they provide a vital physical infrastructure. Sure, anyone can publish online but getting a record into a shop? That's quite a big deal. There'll always be room for labels, as it's not like anyone is going to make releasing physical product as simple as putting stuff online, is it?

Oh. That's what Discmakers are claiming they're going to do:

Disc Makers has launched Elite Artist Services, a new imprint that will make it even easier for established artists to strike out on their own. Disc Makers, one of the industry's most popular CD and DVD manufacturers, has said that the Elite service will provide the infrastructure necessary for artists to manufacture, market and distribute their CDs and downloads without the help of major label. Elite will even offer graphic design, packaging, mastering, warehouse storage and merchandise for their clients. The service will also offer download sales through the artists' website, iTunes, Amazon and Rhapsody.

Doubtless the RIAA are desperately looking for some evidence of how this could be sued out of existence. Let's hope we get a similar service in the UK.

Fanzine distro

And, while we're at it: Caramel Distro is a small UK based fanzine distro house, for all your fanzine needs. It's not all about computers, you know.

Indieobit: Tony Kostrzewa

Genuinely sad news: Tony Kostrzewa, founder of Red Rhino, has died after losing a battle with cancer.

Born in Bradford to a Polish father and a Yorkshire woman, Tony - known universally as Tony K by people willing to avoid trying their luck with his surname - might have had a very different life, originally applying to join the RAF. The forces, however, wouldn't have him due to his Polish ancestry - this as recently as 1966 - so Tony drifted from job to job.

In 1977, though, he discovered a way of making a living out a passion, opening Red Rhino record shop in York. Two years later came the associated record label and distribution network, a crucial part of the proper independent scene that was starting to form from in the post-punk wilderness. Red Rhino would go on to become a key part of the Cartel in the 1980s. Tony took on the role of managing The Catalogue, the Cartel's attempt to move indie music publications away from the xerox machine and into the newsagent. A luxurious, glossy monthly, the regular free flexi disc often featured the biggest fish in the indie pond: The Breeders, Big Black and so on.

Over a ten year period, the label released 125 records, including Akrylykz's debut - featuring a young Roland Gift; the first Pulp album; and a skeleton army of Goth and Industrial classics including Skeletal Family, Front 242 and Red Lorry Yellow Lorry.

Red Rhino would eventually fall victim to the problems of independence - when times get hard, there's nowhere to cross-subsidise from; the label collapsed in 1989 and the shop closed in 1992. Tony moved to Leeds, working in the Laser Game business, although in 2004 he made a return to music, launching 10 X Better Music promotions company.

His love of music never left him; consultants would chide him for dancing when he should have been receiving treatment. He died on May 1st, and is survived by his wife, Gerri, and their two children. The family have set up a fund in aid of the Yorkshire Cancer Centre in his memory.

Downloads come together

Digital Music Group and The Orchard have announced plans to merge, creating a slightly larger company which acts as a middleman between labels and download stores. It's bringing together back episodes of The Cosby Show with Fierce Panda, which can surely only be a thing. Possibly a good thing.