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Every week KOAR will bring you an in-depth article by veteran music attorney and digital music expert Christian Castle. Enjoy!

There are many legal and business problems that have slowed development of digital music services.  One of them is clearing the rights for songs for music subscription services that permit on-demand streaming of sound files. 

  The same problem exists for permanent downloads.  However, record companies have agreed to take responsibility for mechanical licenses for permanent downloads on U.S. based online services, the so-called “pass through� license that is so despised in publisher and songwriter circles.

  Record companies have not, however, agreed to assume responsibility for the payment of royalties for on-demand streaming as their lawyers don’t believe their rights under mechanical licenses and the Copyright Act extend that far.  CONTINUE READING

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Switchfoot will head back into the studio in November to record a new record. The last record “Nothing is Sound” sold a disappointing 526,000 while its predecessor “The Beautiful Letdown” sold 2.6 million. Some say The album got off to a rough start when it was one of 15 titles recalled by Sony BMG because software on the CDs behaved like spyware. C’mon!…The new record was mediocre and the lead off single failed to react which was probably the main culprit rather than the spyware program.

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Digital downloads are beginning to level off according to 2 new reports. This isn’t great news for the music industry which depended on the growth of digital downloads to offset a major decline in compact disc sales which were down 25 percent from a peak of 942 million in 2000. Read the full article here.

Island Def Jam has laid off several employees including sales people and A&R’s. The label will also continue to slash underperforming acts from their roster.

According to Reuters EMI is seeking private equity backing to mount a bid for Bertelsmann’s music publishing holdings. This would allow EMI to retain the resources to bid separately for Warner Music.

British consumers are rewarded being the first in the world able to purchase songs instantly as they listen to them on digital radio by utilizing a new download service from UBC Media.

Koch Distribution has announced exclusive North American agreements with three independent record labels. Koch will handle releases from HBD Label Group which focuses on urban and electronic, gospel label Worldwide Music, Inc. and reggae label Taxi Records.

KOAR Higher Learning artist Fermata will be playing a sold out show at the Whiskey tonight (June 27), open to industry. Sony, Hollywood and TakeOver confirmed for attendance. Fermata has also picked up a slot on The Warped Tour, playing the Ventura, CA date on July 11.

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Apple loses exclusivity in FranceFrench legislation is currently being considered that would prevent Apple from having any sort of exclusivity with its iTunes service or iPod product. The bill would force Apple to make iTunes downloads compatible with other mp3 players and any mp3 compatible with the iPod. While Apple is obviously not a fan of this legislation, other European countries are watching closely and considering similar laws.

Understandably upset, Apple can credit marketing with the initial popularity of their products, but the exclusivity is what has ultimately propelled the iServices to where they are now. iTunes exclusives and incompatible file formats ensured users had to iBundle everything together. For casual downloading and music listening, Apple has taken the lead and is hands down the most popular service, however for those more ‘involved’ in music, iTunes tends to be more trouble than its worth, requiring additional scripts and workarounds for advanced functionality.

Competition generally leads to higher quality products and services and drives down prices, which is great for consumers, but probably not ideal for Apple. The legislation goes to final vote next week, and although Apple may end up losing a few Francs, they always have those thousand dollar bills to wipe their tears away with.

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Coolfer reports that Island/Def Jam dropped Fefe Dobson. Her first album, Fefe Dobson, was released in December 2003 which has sold 304,000 copies. Her second record Sunday Love has been pushed back several times over the past year and now is permanently shelved.

Several failed releases have cost The Sanctuary Group. According to Hits The Sanctuary Group revealed that losses in its record division will be worse than expected for the company’s fiscal year.

Hits also reports the recent changes at Columbia. Staff producer Steve Lillywhite and Chairman Steve Barnette are in the process of setting up a new creative team.
Lillywhite claims that the department will consist of a “fresh creative team that’s enthusiastic and opinionated about music.� He further stated that “Columbia is a big company, and it needs to be a place where art and commerce can be married.� It seems that rock acts will continue to have its place at the label.

Tool’s Vicarious lands #1 on the active rock charts with Red Hot Chili Peppers, Three Days Grace and Buckcherry trailing behind.

According to Forbs satellite radios sales is slowing down. Possible reasons include high gas prices and the decrease in hype surrounding Howard Stern’s move to Sirius. Forbes also suggests other reasons causing the lull in sales could be lack of advertisements, product delays and slower MP3 demand. 

Tower Records is finally entering the digital era and is adding a digital download store to its retail offerings, with the launch of tower.com/digital on Tuesday June 27. The store will offer 1.2 million tracks.

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