Music Notes

Apple vs Apple: Despite persistent rumors of an impending settlement, the trademark dispute between Apple Corps, the Beatles' record company, and Apple Computer remained unresolved as of late September. The rift arose from the computer company's entry into the music business with its iTunes Music Store, in apparent violation of a previous deal in which it agreed not to do so. One possible outcome of current discussions between the two companies could be the first-ever online availability of Beatles recordings, an exclusive arrangement that might give iTunes an advantage over its competitors.

The price of such a purported deal could reach as high as $15 million per each six-month period, according to John Borland and Ina Fried of CNET, with Beatles recordings receiving showcase treatment within iTunes. The return on such an investment could be very slow, given the online music service's estimated 10% profit margin. A decade ago, Apple Computer paid more than $26 million to settle its first run-in with the Beatles' organization. That deal spelled out how each party could use the Apple moniker. The irony in both disputes is that Apple Computer CEO and co-founder Steve Jobs is a diehard Beatles fan and named the company in honor of the group.

Wired shareware: The November issue of Wired magazine will ship with a compilation CD intended to be shared by music fans. Titled Rip. Sample. Mash. Share, the disc will feature songs by David Byrne, the Beastie Boys, Spoon, Paul Westerberg, and seven other artists. The publication and the artists are producing the disc with the intent of encouraging users to "copy, remix, and sample" as they wish without fear of legal retaliation from the music industry, which over the past year has sued approximately 4700 music fans for copyright violations involving online sharing.

The Wired CD project is part of a new experiment in intellectual property licensing called Creative Commons, in which copyright holders are free to specify exactly how their works can be used. The concept was developed by Stanford Law School professor and Wired contributor Lawrence Lessig, and required months of negotiation, according to the financial press. Brazilian pop star Gilberto Gil, whose "Oslodum" appears on the collection, is Minister of Culture in his native country. Artists involved believe that sharing music helps promote sales of recordings.

Anti-bootlegging law unconstitutional: A New York federal judge has dismissed copyright violation charges against a record store owner accused of selling bootleg recordings of live concerts, according to a September 25 report from Reuters news service. In his 18-page ruling, Judge Harold Baer determined that a statute banning bootlegging was unconstitutional because it defines copyrights on live performances as "protected forever," in clear contradiction to the general life-of-the-artist-plus-70-years period spelled out in US copyright law. A spokesman for the Manhattan US Attorney's Office, which had levied charges against record store owner and website operator Jean Martignon, said prosecutors were reconsidering their options in the case.

Warner Music Group IPO? WMG could raise as much as $5 billion through an initial public offering, according to a September 24 report in the Financial Times. WMG was spun off from Time Warner earlier this year, and sold to former Vivendi Universal vice chairman Edgar Bronfman Jr., and a group of private investors. Spring 2005 was mentioned as a possible date for the stock launch.

Sony and MP3: Long known as a company intent on going its own way, Sony Corporation announced September 22 that it would add support for MP3 music files to some of its portable music players. The move is a concession to the near-universal acceptance of MP3 as a compressed audio file format, and an admission that Sony's ATRAC format wasn't winning a large market share. New Sony portables will support both formats, and the company is developing software to translate ATRAC files into MP3s. The first Sony MP3 players will appear in Europe, with a US debut still unscheduled.

Roxio bets it all on Napster: Having sold its CD-burning software business to Sonic Solutions for a reported $80 million, Roxio plans to use a cash base of approximately $100 million to support its Napster online music service. The Santa Clara, CA–based company acquired the Napster name and logo at a bankruptcy auction two years ago. Despite losing $8.1 million in operating the now for-profit service during this year's second fiscal quarter, Roxio executives believe that Napster revenue could reach "$30 million to $40 million" this year, with what they described as "tenfold" growth. Napster's $9.95/month subscription fee gives users access to more than 750,000 recordings. Coming soon is "Napster to Go," a premium service, to be available for an additional $5/month, that will let subscribers transfer downloaded tunes to portable players. Some financial analysts believe that Napster's diverse hardware compatibility could give it a long-term advantage over competitors such as Apple's iTunes.

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