Business Matters: Terra Firma, Last.fm, Clear Channel and more July 27, 2010
- Digital and Mobile
By Glenn Peoples
TERRA FIRMA SUIT AGAINST CITI GOES FORWARD IN U.S. -- In case you were wondering why Citigroup wasn’t able to have Terra Firma’s lawsuit thrown out earlier this year, the judge released an opinion on Monday that outlined the reasons for his decision. Documents signed at the beginning of bidding specified that if Citi sued Terra Firma, it would have had to sue in England. But Terra Firma is suing Citi, so the trial in the U.S. may proceed. “As to the public factors, there is a legitimate U.S. interest in learning whether Citi, a major American bank, may be liable for fraudulent inducement, and thus subject to substantial damages.”
Terra Firma has accused Citi of fraudulently leading it to believe there were other bidders for EMI, thus driving up price it paid for the music company in 2007. Terra Firma is seeking to recover about $3 billion in losses as well as punitive damages. The private equity firm paid about $6.1 billion for EMI. (Bloomberg)
A LOOK AT THE NUMBERS: LAST.FM -- Some Last.fm stats from an article at The Guardian: It has experienced a 90% audience growth in the U.S. over the last 12 months; U.S. uniques rose to 8 million from 3.5 million 12 months ago (which is obviously greater than 90%, so audience clearly does not equal uniques in this case); the service generates 30-40 million pieces of listening data every day. David Goodman, president of CBS internative music, says CBS, which owns Last.fm, is working on a “next generation chart show” based on Last.fm data. (The Guardian)
IPHONE OPENS WIDE -- Starting Friday, the iPhone will be available in Australia, Austria, Belgium, Canada, Denmark, Finland, Hong Kong, Ireland, Italy, Luxembourg, Netherlands, Norway, New Zealand, Singapore, Spain, Sweden and Switzerland. (Apple)
CHINA SHARPENS FOCUS ON ILLEGAL SITES -- In moves that should help legal music sites in China, the government’s Ministry of Culture appears to be tightening its grip on illegal music sites. About two dozen Chinese music Websites are reported to have gone offline after government authorities released a list of sites operating without permits. The Ministry of Culture had released a list of 68 sites it planned to investigate. Many of the sites offered unlicensed music streaming and lyrics with links to purchase downloads or ringtones. (IDG News Services)
MAIN STREET'S VIEW OF THE MAJORS? -- Here’s a good barometer of Main Street’s current thinking on the music industry: Investor web site The Motley Fool asks if the four major record labels will be around in five or ten years. Now, the Motley Fool has a long history of providing weak analysis of the music industry, and this article continues that unfortunate trend. It lacks an understanding of the majors’ true weaknesses and is years behind their new strategies. For example, Warner is not “trying” to sign artists to multi-rights deals, as the article attests, it has already enacted them and the deals are already standard at the four major music companies. But the fact that an investment-minded Website like this is pondering an impending doom of the major labels is a glimpse into the mindset of the retail investor. And the article shows that Main Street is paying attention to the course of the record business.
An answer to the question is found in the article’s second sentence: “(When Napster launched 11 years ago), it was deemed to be the death of mainstream record labels as we once knew them.” So while their struggles are well documented – albeit not always well understood – the majors have been able to persevere beyond Main Street’s expectations. That’s not to say their future is especially rosy. But if the majors have made it this far, they will probably outlive Main Street’s predictions once again. (Motley Fool)
A LOOK AT THE NUMBERS: CLEAR CHANNEL'S MOBILE APP -- Some stats on Clear Channel’s free iheartradio mobile app: eight million people have downloaded Clear Channel’s free music streaming app; an average users spends 3.5 hours listening to the streaming radio app and visits four stations per week; apps and online services increase Clear Channel’s audience by 15%; mobile ads get a 3-4% click-through rate. In the next iPhone version of the app will have ads from Apple’s iAd network. (mocoNews)
Assorted Links -- Cloud Music turns Google Docs into streaming iPhone app. (Music Ally) -- Wayne Rosso reviews “Fortune’s Fool.” (The Music Void)
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