[Fmpro] Music biz hopes to profit from consumer content

[Dana from Serious Vanity Music]

Happy new year, all!  I thought this might be of interest.  From Yahoo! 
News:

http://news.yahoo.com:80/s/nm/20070102/wr_nm/tech_dc_2

By Antony Bruno Tue Jan 2, 12:00 AM ET

LOS ANGELES (Billboard) - If 2006 was the year of user-generated content, 
2007 will be the year the music industry learns to generate new revenue from 
the hugely popular trend.

Labels are striking licensing deals with sites like YouTube so that fans can 
post copyrighted content or include it in videos they make themselves. 
Additionally, labels are expected to start releasing new types of content --  
such as unused clips or video montages -- specifically created for fans to 
manipulate in new ways.
By doing so, record labels can then share in the advertising revenue these 
sites collect. Rather than just suing YouTube and its ilk for how their 
sites are used, the music industry can now profit from them, not to mention 
reap the promotional benefits.

"They're doing it anyway," says Ted Cohen, former EMI Music Group digital 
executive and now founding partner of consulting firm TAG Strategic. 
"There's a chance to monetize this behavior."

Additionally, music companies have the chance to let their fans actually 
sell music to one another via playlist-sharing services and 
peer-recommendation sites. Word-of-mouth marketing is exploding online 
through user-generated activity, creating a new generation of tastemakers. 
How well labels tap this effective source of music discovery will be a 
barometer of their overall digital strategies.

Here are five technologies shaping this space:

SNOCAP

Launched with much fanfare in 2005, SnoCap has generated little momentum to 
date. But after scoring a big win with MySpace, which selected it to power 
its digital music service, 2007 could be SnoCap's year. The company's audio 
fingerprinting technologies -- as well as those from Audible Magic and 
Gracenote -- will play a key role in monetizing user-generated content by 
shifting the burden of acquiring licenses for copyrighted works from the end 
user to the service provider. Each time a fan uploads a copyrighted track, 
for whatever purpose, the technology notes who owns the rights, which ad is 
on the page hosting the content and how much the service provider is then 
owed.

BRIGHTCOVE

Another method of monetizing existing behavior, Brightcove works with 
content owners like Warner Music Group to make videoclips available to fans 
wishing to post content on their blog or Web site. Its embedded video 
technology then tracks how many times a given clip is viewed and compensates 
rights holders via its advertising platform. With broadband now in 80% of 
U.S. Internet households, analysts expect video to be the most important 
form of online media next year.

VENICE PROJECT

Analyst group In-Stat predicts that the Venice Project's peer-to-peer video 
project will be "the big viral media sensation of 2007." Founded by the 
brains behind Kazaa and Skype -- Janus Friis and Niklas Zennstrom -- the 
service uses P2P technology to distribute video a la BitTorrent, but also 
lets users modify the content within the rules that copyright holders set in 
advance. Unlike Kazaa, the Venice Project is built from the get-go with a 
business model and respect for copyrights, and already has attracted 
Paramount Pictures, MTV Networks, Twentieth Century Fox Film and Warner 
Bros. Home Entertainment to the fold.

ILIKE

iLike is one of several taste-matching sites designed to offer music 
recommendations by comparing the musical preferences of members and matching 
those with similar interests. The sites' social-networking aspect provides a 
human element to counter competitors that rely too heavily on algorithms, 
and iLike's integration of Apple's iTunes music service sets it apart from 
the pack. None of these music-discovery services -- others include Last.fm, 
MOG and Mercora -- actually sell music themselves, instead linking to other 
services and often not taking a cut. But Ticketmaster's mid-December 25% 
investment in iLike illustrates how digital retailers and other music 
interests will seek to either partner or acquire such sites to better-link 
the discovery process with a sale.

PASSALONG

Peer-retailing services like PassAlong reward users for the sale of each 
digital track they recommend to friends. So far such services haven't been a 
big hit. But PassAlong's answer has been to branch out with applications 
like OnTour, which notify users when any artist in their digital music 
library is scheduled to appear in their town. As more social networks follow 
MySpace's lead and enter the digital music retail game, peer retailers like 
PassAlong, Weedshare and Peer Impact will become ripe for acquisition.

Reuters/Billboard

Dana Detrick-Clark
Serious Vanity Music
http://www.seriousvanity.com