Masterbeat.com Launches First Music Download Site Focused on Dance & Electronica to Offer Music From Sony BMG and Warner Music Group

Congrats to my friend, Brett and Masterbeat on this major announcement. You can find Spyder's single, "Ecstasy, Desire & Dreams" on Masterbeat (click banners in right column).**Mixes by Platinum-selling artists including Madonna, Justin Timberlake, Britney Spears, Seal, Whitney Houston, and Cher now easily found as iPod compatible mp3s on Masterbeat.com.

www.Masterbeat.com is a new digital download music site that offers consumers a virtual shopping mall of current hits and classic tracks across a wide variety of dance and electronica genres including House, Disco, Electro, Trance, Garage and Pop. Masterbeat announced that they have signed deals with Sony BMG and Warner Music Group that will allow the site to highlight each label's dance remixes and electronica artists alongside their entire catalogs. Masterbeat.com is the first online niche retailer to safely and securely deliver high quality DRM-free MP3's of dance tracks from Platinum-selling pop artists via its easy to navigate and state-of-the-art website.

Until now, no online retailer has specialized in promoting and selling dance and electronica product from the major labels. "These are the dance tracks made by and for the industry's top DJs and remixers," said Brett Henrichsen, Founder and President of Masterbeat, at yesterday's announcement in Los Angeles. Henrichsen, himself an internationally renowned DJ, understands the frustration of consumers who have traditionally been unable to legally obtain mixes they hear on the radio or in a club. "These recordings were not originally intended for commercial sale. They were commissioned by the labels to be played at dance clubs and on radio mix shows to promote their artists and mainstream albums. Masterbeat.com is the first online retailer to offer the recordings to fans for commercial sale."

Hosh Gureli, a former radio programmer turned A&R executive at RCA Music Group explained that major labels have not promoted their dance and electronica product for retail sale because mainstream retailers have traditionally been ill-equipped to handle these complex and quickly changing genres. "Hot remixes only have a week or two on the charts before another hit is rising to the top." Now Head of Development at Masterbeat, Gureli contends that the major labels needed a retailer that understood the intricacies of the genre. "Mass merchants and online sites cannot react as quickly as the DJ's, clubs and radio; which made it difficult for the labels to think of dance remixes as anything but promotion. That's where Masterbeat.com comes in. We're providing a site where fans know they can find and purchase a remix the moment they hear it."

Masterbeat.com is a vast catalog of current and classic tracks. In addition to distribution deals with thousands of independent labels around the world, Masterbeat has secured rights to distribute the entire catalogs of Sony BMG and Warner Music Group. This makes the depth of music available on Masterbeat rival that of iTunes and Amazon.com and allows the consumer to use Masterbeat's intuitive site to find and purchase music from all of their favorite artists across every musical genre, even if it's not dance or electronica related. Artist's full albums are available alongside their remixes.

The dance and electronica industry needed to be redefined. "We had to eliminate the old physical mindset of street dates," added Henrichsen. "Fans of dance and electronica are not willing to wait for their favorite records to hit store shelves. They want their music now." With no legal site to obtain the mixes they were hearing, many have turned to file sharing networks to find the music. In order to meet fans' demands, Masterbeat.com built an expedient distribution system. If a label chooses to do so, a remix can be sold at the same time it is being promoted to radio and DJ's, thus diminishing illegal file sharing by providing a legal alternative for consumers who have indicated they are willing to pay for their music if they knew where to find it.

A key element to Masterbeat is promoting the genre as a community. In addition to being a retailer, Masterbeat.com is an educational tool, offering profiles and extensive information on its featured artists, DJs, remixers and record labels. Through partnerships with Billboard, DJ's and leading radio stations, Masterbeat.com posts weekly club charts and playlists, keeping fans up-to-the-minute on the hottest tracks.

Finally, sales on Masterbeat.com count. Masterbeat.com will be the first online dance and electronica online distributor to be a reporting retailer to Nielsen Soundscan, the company that tallies artist sales charts for Billboard. Now sales of an artist's dance remixes can impact the record's Billboard chart position.

"It's an exciting time, not only for Masterbeat.com, but for the entire dance and electronica music community," concluded Henrichsen. "These new deals with two of America's leading record groups, signifies that the major labels are finally recognizing there is profit potential in their dance and electronica repertoire."

For additional information, visit www.masterbeat.com .

[Market Watch]

Bertelsmann Exits Sony BMG

As we reported a couple of weeks ago, the demerger of SonyBMG is now in effect.

Sony Corporation has reached an agreement to acquire Bertelsmann AG's 50% stake in Sony BMG, four years after the joint venture was created.

The demerged music company is to be called Sony Music Entertainment Inc and it will become a wholly owned subsidiary of Sony Corporation of America.

The deal has been anticipated since last month (see Billboard.biz, July 26). Sony Corporation will pay the German media company $1.2 billion, according to a filing with the U.S. Securities and Exchange Commission today. Bertelsmann will receive approximately $900 million for its 50% stake plus $300m of its share of cash on Sony BMG's balance sheet.

"This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products, operating companies and affiliates," says Sony Corporation chairman and CEO Sir Howard Stringer.

"Over the past four years, Sony BMG has undertaken a very successful restructuring, streamlined operations and developed innovative digital partnerships that ensure it will continue to be a leader in the creation and distribution of music worldwide."

The joint venture was due to expire in August 2009. In a statement, Bertelsmann AG chairman and CEO Hartmut Ostrowski says, "The move is consistent with our new growth strategy and will enable us to focus on our defined growth areas. Sony has been an excellent partner, and they are the right company to take this business to the next step and ensure that it realizes its full value and potential."

The buy-out remains subject to regulatory approval in certain jurisdictions. U.S. and European regulators could raise concerns about vertical integration at Sony, as the company's hardware business includes a joint venture with handset giant Ericsson for Walkman music-enabled mobile devices.

European independent music companies trade group Impala has already said it will continue to oppose the concentration of the market which it says resulted from the original Sony BMG arrangement.

Once the deal is completed, Sony Music Entertainment Inc will be home to labels such as Arista Records, Columbia Records, Epic Records, J Records Jive Records, RCA and Zomba with a roster of artists including Celine Dion, Alicia Keys, Bruce Springsteen, Usher and Justin Timberlake.

The two companies have agreed to continue to share the new company's manufacturing and distribution requirements between Sony's manufacturing subsidiary Sony DADC and Bertelsmann's services company, Arvato Digital Services GmbH, extending agreements with Arvato for additional terms of up to six years.

[Billboard]

Sony BMG Music's days are numbered

The clock is quickly ticking down on a process that could see German media giant Bertelsmann sell its 50% stake in Sony BMG Music Entertainment tojoint-venture partner Sony Corp in the coming months.

Sources say the Sony board will meet July 29 to discuss the future of the 4-year-old venture, whose artists include Britney Spears, Bob Dylan and the Foo Fighters. The combo is due to expire next August.

Bertelsmann's 12-person supervisory board convened in early July to examine the possibility of an exit. Although the closely held company had originally considered a target sale price of about 1.8 billion euros ($2.8 billion), the difficult economic climate and tough credit conditions mean that a price tag closer to a meager 1 billion euros ($1.5 billion) is far more likely.

Since Hartmut Ostrowski assumed the post of Bertelsmann CEO January 1, he has sounded a "go for growth" battle cry. Bertelsmann's move out of recorded music is part of a broader effort to exit businesses that don't fit Ostrowski's high-growth focus. In a related move, the company said July 11 that it agreed to sell its Direct Group North America unit to Najafi Cos., a Phoenix-based private equity firm.

Sony appears to be the only serious party interested in acquiring Bertelsmann's stake. Unlike EMI Group, which British private equity fund Terra Firma acquired last year for 2.4 billion pounds ($4.7 billion), Sony BMG doesn't include a lucrative music publishing business that might attract other private equity bidders.

Drew Lipsher, a partner at venture-capital firm Greycroft Partners in New York, says Sony's buyout of Bertelsmann's stake is a necessary move if the Japanese electronics giant is to have any hope of building its music business.

"By controlling the whole show, they stand a chance," Lipsher says, noting that "a single parent with a single perspective is better-positioned to make far more aggressive and, especially over the short term, unpopular decisions."

A Sony Corp. spokesman in New York declined to comment. A Bertelsmann spokesman says only that the company continues to mull three possible scenarios: a sale of its BMG stake, the buyout of Sony's stake or maintaining the status quo.

Any spinoff of Bertelsmann's stake would also have to be approved by U.S. and European regulators, who could raise concerns about vertical integration at Sony, given that its hardware business includes a joint venture with handset giant Ericsson for Walkman music-enabled mobile devices. Another potential sticking point: octogenarian billionaire Reinhard Mohn, whose family owns a controlling stake in Bertelsmann, is understood to be keen on retaining German repertoire label Ariola.

[Reuters/Billboard]

Sony BMG To Debut MP3 Album Cards

Sony BMG Music Entertainment will roll out its Platinum MusicPass series of digital album cards beginning Jan. 15 at Best Buy, Target and Fred's, with Trans World and Winn-Dixie coming to the party by the end of January.

In Canada, participating retailers include Best Buy, CD Plus, Shoppers Drug Mart, and Wal-Mart with HMV coming on board sometime during the first quarter.

As reported previously, the move marks the company's first commercial foray into MP3s in the U.S., a strategy that until recently it resisted in favor of selling files with digital rights management capabilities.

The digital album gift cards, which retail for $12.99, will be artist-specific and feature album artwork, and will come with bonus material. The card will contain a scratch-off that will reveal a PIN number that can be redeemed for a download at MusicPass.com.

"We see MusicPass as a great way to bring digital music to the physical retail space," said Sony BMG Music Entertainment global digital business & U.S. sales president Thomas Hesse in a statement. "We believe it will have strong appeal for a broad range of consumers, and that it will ultimately expand both the digital and physical markets for music."

Among the titles receiving this treatment are the Backstreet Boys' "Unbreakable"; Brad Paisley's "5th Gear;" Bruce Springsteen's "Magic"; Celine Dion’s "Taking Chances"; John Mayer’s "Continuum"; Three Days Grace's "One-X"; and Tony Bennett's "Duets." Compilations include "70's Pop Hits"; "Sensational 60's"; "Country Gold"; and "Everlasting Love."

In addition, as part of the launch, two titles--Kenny Chesney's "Just Who I Am: Poets & Pirates" and Celine Dion's "Taking Chances"--will also come with expanded offerings that retail for $19.99. In addition to those complete albums, the expanded MusicPass offering on those titles will include bonus material and the choice of one additional album from that same artist's catalog.

Source [Billboard]

The initial slate of Platinum MusicPass titles is as follows:

Platinum MusicPass Albums with Bonus Material (slrp $12.99):

Alejandro Fernandez, Viento A Favor
Alicia Keys, As I Am
Avril Lavigne, The Best Damn Thing
Backstreet Boys, UnBreakable
Barry Manilow, The Greatest Songs of the Seventies
Bob Dylan, Dylan
Boys Like Girls, Boys Like Girls
Brad Paisley, 5th Gear
Britney Spears, Blackout
Brooks & Dunn, Cowboy Town
Bruce Springsteen, Magic
Calle 13, Residente o Visitante
Camila, Todo Cambio
Carrie Underwood, Carnival Ride
Casting Crowns, The Altar and The Door
Celine Dion, Taking Chances
Chris Brown, Exclusive
Daughtry, Daughtry
Elvis Presley, Elvis 30 #1 Hits
Jennifer Lopez, Brave
John Mayer, Continuum
Kenny Chesney, Just Who I Am: Poets & Pirates
Martina McBride, Waking Up Laughing
P!nk, I'm Not Dead
Santana, Ultimate Santana
Sara Bareilles, Little Voice
Sean Kingston, Sean Kingston
The Fray, How To Save A Life
Three Days Grace, One-X
Tony Bennett, Duets

Platinum MusicPass Compilations (slrp $12.99)

Various, 70's POP HITS
Various, ROCK OF THE 70's
Various, SENSATIONAL 60's
Various, COUNTRY GOLD: THE 90's
Various, 80's POP HITS
Various, CLASSIC ROCK
Various, Everlasting Love

Expanded MusicPass Titles (slrp $19.99 versions which include the complete album, bonus material, plus choice of one additional album from that same artist's rich catalog of recordings.)

Kenny Chesney, Just Who I Am: Poets & Pirates
Celine Dion, Taking Chances

RIP DRM

Report: RIP DRM, as Last Major Label Plans to Ditch Restrictions

In a move certain to rock the distribution of digital music, Sony BMG is in the midst of finalizing plans to begin offering at least part of its downloadable music catalog DRM-free, according to BusinessWeek.com.

This makes Sony BMG the last of the Big Four record labels to cave on digital rights management schemes designed to restrict the distribution of music via peer-to-peer networks. The decision follows the Warner Music Group announcement in late December saying the label would sell songs sans DRM through Amazon.com. The EMI- and Vivendi-owned Universal Music Group announced a plan to offer DRM-free downloadable content in 2007.

As the major labels abandon DRM, it becomes increasingly likely that new distribution channels will rise up capable of challenging Apple's market-dominating iTunes Store. Amazon's DRM-free store, for instance, offers variable pricing. Social network sites like Facebook and MySpace could also potentially provide outlets for the sale of DRM-free songs as well. The record labels want that type of flexibility, which Apple has been reluctant to provide.

Adjusting the digital music distribution model is becoming more crucial than ever: The Associated Press reported Thursday that album sales fell 9.5 percent in 2007.

Sony BMG will participate in a Super Bowl promotion with Pepsi and Amazon that will give away 1 billion songs from major labels, BusinessWeek reported, citing an anonymous source. The promotion will kick off Feb 3.

Source [Wired]