The State of the Music Biz Nation

Issue #04 (August/September 2006)

9-30-06

Out with the old...

Tower Records Files For Bankruptcy

On August 21, 2006, Tower Records filed for Chapter 11 bankruptcy protection. It had previously emerged from a bankruptcy filing just two years before. Tower Records operates 89 stores in 20 states. Its revenue this fiscal year had fallen to $430 million from $476 million the year before and it had dropped from the 9th to 12th largest seller of physical music. Tower Records is seeking to sell its assets through a court-supervised auction on October 5th. According to its court papers, "[t]he brick-and-mortar specialty music retail industry has suffered substantial deterioration..."

This news sent Fate Sensation on a walk down memory lane. He remembered being in college in the 1980s and living only a few blocks from the Tower Records at the corner of Mill and University in Tempe, Arizona. When needing to escape from the stress of final exams or perhaps to recover from the previous night's festivities at The Dash, Fate Sensation would spend several hours combing through the store's seemingly endless vinyl record bins. Fate Sensation still possesses the fruits of such labor - a crate of records that, when played, bring on a flood of mostly happy memories. It is the end of the world as Fate Sensation knows it. The Cure's "Disintegration" (purchased at Tower Records in 1989) plays on the turntable as these words are composed. How apropos.

In with the new...

MySpace To Allow Independent Artists To Sell Music

Using digital licensing and copyright management services provided by Snocap, a company started by Napster founder, Shawn Fanning, MySpace has begun allowing a limited number of independent artists to sell their music directly from MySpace. Eventually this service will be available to all of the nearly 3 million independent artists with MySpace profiles. The songs will be non-copyright protected MP3 files with the band setting the price above a MySpace distribution fee.

Spiral Frog To Offer Free Legal Music Downloads

Spiral Frog plans to debut its advertising-supported, free music download service early next year. It has signed deals with Universal Music Group, the world's largest record label, EMI Music Publishing, the world's largest music publishing company, and Koch Records, a top independent label. Potential red flags include that Spiral Frog will only be PC compatible, it's commercials may be intrusive and its use limitations may be burdensome.

While Fate Sensation is ambivalent about MySpace's entry into the paid internet downloading market because of his satisfaction with CDBaby and iTunes, Fate Sensation can't wait to start downloading from Spiral Frog. Fate Sensation would gladly look at or listen to an ad or two to get a free song. Hopefully, the Spiral Frog reality will meet the hype. Fate Sensation looks forward to when you can download his album free from Spiral Frog. He hopes Derek Sivers, the CEO and owner of CDBaby, is negotiating a deal right now to allow this to happen.

Support Fate Sensation by buying his CD at CDBaby, downloading it from iTunes or streaming it at Rhapsody.

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