Digital Music World

D I G I T A L M U S I C N E W S>online at digitalmusicnews.com
Daily SnapshotMonday, February 4, 2008
Paul ResnikoffFounder, Publisher
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TOP STORIES
*Super Bowl XLII Stuns; Music-Related Ads Proliferate
*Unlimited Has Its Limits; Yahoo Taps Rhapsody on Subscription
*Microsoft Floats $44.6 Billion Yahoo Buyout Offer
*RealNetworks Sheds Music Staff, Cuts Confirmed
*XM Satellite Settles Down, Reaches Sony BMG Accord
*89.9 Goes 2.0: KCRW Unleashes Flexible Streaming Application
*U2's McGuinness: We're Sticking With Universal
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ARTICLES
Super Bowl XLII Stuns; Music-Related Ads Proliferate
Super Bowl Sunday frequently disappoints, especially when match-ups are lopsided. But this time, the heavily-favored New England Patriots fell to the underdog New York Giants, a stunning result that kept viewers interested in more than just the advertisements.

The game is an unofficial American holiday, and the biggest and most expensive advertising window. In the dot-com boom, high-flying startups dominated the action. After the crash, the focus shifted back towards established heavyweights.

As expected, Pepsi and Amazon proved a potent combination, thanks to a quick-moving ad spotlighting Justin Timberlake. The Pepsi Stuff spot featured Timberlake being magically dragged around town by a Pepsi-sipping fan, a teaser for a massive redemption program involving Amazon and its MP3-based download store.

And Pepsi stuffed even more celebrities - including LL Cool J, Busta Rhymes, and Missy Elliott - into its spot for Diet Pepsi Max.

Other music-focused spots weren't hard to find. Ford promoted its voice-activated Sync dashboard before the coin toss - and tossed the Flaming Lips a nice promotion in the process.
American Idol, also broadcast by Fox, enjoyed a few special moments during the game. Jordin Sparks, the most recent winner and daughter of former Giants player Phillippi Sparks, handled the national anthem with aplomb.

Ben Roethlisberger, quarterback of the Super Bowl XL champion Pittsburgh Steelers, was less convincing. Roethlisberger delivered a painful rendition of "Escape (The Pina Colada Song)" in an offbeat American Idol promotion.

Elsewhere, Madonna - ranked the richest female singer by Forbes - racked more earnings by singing the praises of Sunsilk hair products. Shakira and images of the legendary Marilyn Monroe also shared the spotlight.

But superstar artists weren't the only ones featured during the game. Developing singer-songwriter Kina Grannis, winner of the Doritos "Crash the Super Bowl" contest, enjoyed an amazing promotional showcase during the first quarter. Grannis recently signed with Interscope.

But the sweetest song was being sung by the Giants, a team that pulled an improbable late-stage victory. Giants wide receiver Plaxico Burress grabbed a stunning, fourth quarter pass by MVP Eli Manning that put the team ahead 17-14 with seconds to go.
MySpace is hosting all of the Super Bowl ads on myspace.com/SuperBowlAds.
Permalink: http://www.digitalmusicnews.com/stories/020108super
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Unlimited Has Its Limits; Yahoo Taps Rhapsody on Subscription
Yahoo Music is now outsourcing its subscription-based offerings to both RealNetworks and Viacom-owned MTV, according to information disclosed Sunday. As part of the deal, subscription application Rhapsody - now a joint venture between RealNetworks and MTV - will become the exclusive provider of on-demand music services for Yahoo. The move replaces Yahoo Music Unlimited, a service that experienced tepid uptake despite aggressive pricing. Yahoo Music subscribers will migrate their accounts mid-year, according to the companies.

For RealNetworks and MTV, the move introduces Rhapsody to an immense audience, and a larger potential subscriber pool. "Soon, tens of millions of Yahoo users will be able to access their favorite music through Rhapsody – wherever they go, whenever they want it," said RealNetworks chairman and chief executive Rob Glaser. Rhapsody will also handle various non-subscription transactions, including a-la-carte downloads.

The news comes alongside a music-related acquisition by Yahoo. The mega-portal revealed that it has now purchased the privately-held FoxyTunes, a player plug-in that quickly finds lyrics, videos, bios, and other song- and artist-related information. FoxyTunes offers compatibility with 30 desktop and web-based players.
Permalink: http://www.digitalmusicnews.com/stories/020108unlimited
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Microsoft Floats $44.6 Billion Yahoo Buyout Offer
Microsoft has now floated an unsolicited, $44.6 billion buyout offer to Yahoo, according to details confirmed Friday. "Today, the market is increasingly dominated by one player who is consolidating its dominance through acquisition," Microsoft chief executive Steve Ballmer pitched the Yahoo board of directors. "Together, Microsoft and Yahoo can offer a credible alternative for consumers, advertisers, and publishers."

Of course, Ballmer is referring to the megalith Google, which has grown immensely over the past five years and currently dominates search and online video. The bid translates into $31 per Yahoo share, a healthy 62 percent premium over recent valuations.

Just recently, Yahoo posted sizable quarterly profit dips and eliminated 1,000 employees, a reflection of deeper challenges. In the old days, internet users lived on Yahoo, thanks to a strong portfolio of search and content. But mega-players like Google, Facebook, iTunes, and MySpace are now dominating bandwidth, and draining attention away from both Yahoo and Microsoft's MSN.

Yahoo indicated that it would review the proposal quickly, though any handshake faces serious regulatory hurdles.

Permalink: http://www.digitalmusicnews.com/stories/020108msft
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RealNetworks Sheds Music Staff, Cuts Confirmed
RealNetworks recently trimmed 10-12 employees within its music division, according to information confirmed Friday by both SF Weekly and paidcontent.org. The cutbacks - which surround the Rhapsody subscription offering - allegedly touched offices in Seattle, New York and San Francisco. The layoffs happened roughly two weeks ago, specifically the week of January 17th, according to a RealNetworks representative.

Rhapsody has always been a strong solution for music enthusiasts, though subscription-based platforms remain niche. Just recently, MTV Networks and RealNetworks blended their respective subscription services, a move that created some redundancies. Over the weekend, that team announced a major deal to power Yahoo's on-demand music offerings.

The developments come ahead of a RealNetworks quarterly earnings call, scheduled for February 7th at 5 pm EST. A webcast of the event is happening at investor.realnetworks.com, viewable through the RealPlayer application. Alternatively, investors can call (800) 857-5305 within the United States, or (773) 681-5857 overseas.
Story by news analyst Alexandra Osorio.
Permalink: http://www.digitalmusicnews.com/stories/020108realnetworks
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XM Satellite Settles Down, Reaches Sony BMG Accord
XM Satellite Radio has now settled a longstanding lawsuit with Sony BMG, the latest major label accord. The contentious barb surrounded the Pioneer Inno, a time-shifting satellite receiver. The Inno allows users to record songs and store them within the device, a usage deemed unlawful by the recording industry. Other time-shifting devices were also roped into the action, part of an emerging class of satellite portable.

XM Satellite Radio initially battled back, arguing that its time-shifting capabilities were covered by its existing licenses. But those hoping for a decisive precedent have been disappointed. In December, XM Satellite finalized out-of-court agreements with Universal Music Group and Warner Music Group, though specific terms - including those related to possible product modifications - were not disclosed. The original filing dates back to May of 2006.
Story by news analyst Alexandra Osorio.
Permalink: http://www.digitalmusicnews.com/stories/020108xm
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89.9 Goes 2.0: KCRW Unleashes Flexible Streaming Application
Southern California has always loved its KCRW, though the internet introduced the station to a global audience years ago. Live broadcasts, music programming, and news streams are now being enjoyed by a widening group of listeners, one that stretches far beyond the hometown tower of Santa Monica, CA.

Now, the listener-supported station is taking its digital game to another level by releasing an interactive, flexible media application. Conventional streaming aspects are included in the beta release, though 2.0 elements enable greater sharing and decentralized distribution.
The new application allows users to share links to broadcasts and embed streams into blogs and social networking profile pages. It also allows listeners to create customized programming collections, and access blogs, playlists, and podcasts. "There isn't another media player that offers listeners all these features in one place," said Anil Dewan, KCRW's director of New Media.
The application also includes access to the considerable KCRW archive, a collection that spans roughly ten years. That includes early performances from a number of important artists, as well as a range of cultural and news-related programming.

Permalink: http://www.digitalmusicnews.com/stories/020108kcrw
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U2's McGuinness: We're Sticking With Universal
U2 is not leaving Universal Music Group, according to recent comments by longtime manager Paul McGuinness. The development follows a rumor published by Fox News indicating otherwise. "This is untrue," McGuinness emailed Hits Magazine. "As I said in my Midem speech, U2 has an excellent relationship with Universal. We have recently relicensed both masters and copyrights to them."

The rumor was fueled by a string of high-profile, major label defections, including those involving Radiohead, Madonna, and the Eagles. U2 is signing a four-album deal, according to the report.
Story by news analyst Alexandra Osorio.
Permalink: http://www.digitalmusicnews.com/stories/020108u2
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CONFERENCES
This section sponsored by...
Musexpo 2008April 27th - 30thHyatt, Sunset Strip in West Hollywood
Participants have included Tom Anderson, Co-Founder, MySpace; Larry King, CNN; Will.I.Am; Chad Hurley, Co-Founder, YouTube; Ken Lombard, President, Starbucks Entertainment; Michael Rapino, Chairman/CEO, Live Nation.
In 2008, Ali Partovi, CEO, iLike.com; David Massey, President, Mercury; Paul Tollett, Co-Founder, Coachella Festival; Simon Renshaw, Manager Dixie Chicks and many others.
More at http://www.musexpo.net
Other Conferences...
The Ypulse College MashupJanuary 31 - February 1Santa Monica, California
Puerto Rico Music Business ConferenceFebruary 1San Juan, PR
Pollstar's Annual Concert Industry ConsortiumFebruary 5-7Los Angeles, CA
European Switchover StrategiesFebruary 5-6London, UK
50th Annual Grammy AwardsFebruary 10Staples Center, Los Angeles
More conferences at http://www.digitalmusicnews.com/events. Plus, check out our Conferences RSS feed.
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ABOUT US
Digital Music News is the leading source of industry news, information and analysis for thousands of executives worldwide. We strive to deliver a publication that carries the highest level of objectivity, accuracy, and timeliness.
The Digital Music News editor and founder is Paul Resnikoff. All articles are written by Resnikoff and news analyst Alexandra Osorio. Donna Snow handles front-end web development, Steve Hindle oversees backend systems, and Rochell Abonalla manages administrative aspects. The company is based in Los Angeles.
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