../Access Blows Its Download Part II *Exclusive*
In an exclusive story last month, Futuremusic reported that Access, a German synthesizer manufacturer, was offering an operating system update on its web site that damaged the Virus kb's keyboard's controller card. Futuremusic has learned that this is not an isolated incident and several other Virus kb owners have come forward to report that their synth's keyboards have been rendered useless by the downloadable update.
Futuremusic brought our disabled Virus kb to DBM Professional Audio in New York City for a PIC card replacement. Due to our conversations with Virus in Germany and their US distributor, a card was waiting for us at this renowned repair facility. DBM's Steve Dwork was able to replace the fried keyboard controller card and the keyboard was back in our studio in less than a week. Unfortunately, that hasn't been the case with some owners who are now waiting for their cards to arrive from Germany. The first cards that the US Distributor received immediately went out to owners with disabled units, and there now is a back order.
The Access web site still has not issued a warning or notified owners of the kb of the potential for harm to their units by installing the downloadable update. This is completely irresponsible. Especially when they cannot satisfy the demand for new cards from owners here in the US.
Basically, Access adopted the car industry's defect philosophy. Instead of coming forward and being honest with its owners, Access has decided to just pay off its inconvenienced owners with a a replacement. Not cool.
The Future: It was this same philosophy that damaged Novation's brand name beyond repair in the US when they failed to replace defective DrumStation units.

../Universal Gets Liposuction Before Big Beauty Pageant
As Vivendi actively presents its Universal Music Group to a short list of interested suitors, it has begun restructuring its bloated music divisions in a move to significantly cut costs. MCA has been in dire straits since it hasn't broken a new artist or released a hit record for some time. In January, Jay Boberg was forced to resign as MCA's market share fell to 1.87 percent from 2.37 just a year earlier.
Universal will roll up the MCA division and tuck it inside the Geffen Records operation resulting in a unknown number of layoffs and staffing upheavals.
The Future: Already sluggish from its girth and declining sales, Universal is making a pre-emptive strike if several of their suitors don't hit their 'reserve' in the closed envelope bidding process. After this miracle diet, look for some really large implants to be added to send Edgar Bronfman Jr. into an absolute tizzy.

../Warner UK Eats Shrooms
Futuremusic has learned that Warner Music UK has acquired Mushroom Records for an undisclosed amount. The transaction encompasses all of Mushroom's substantial subsidiaries including Perfecto, Ultimate, Infectious and Dilemma, their entire back catalog and such key acts as Timo Maas, Garbage, Paul Oakenfold and Zero 7. Industry insiders value the deal at $15 million. Korda Marshall who founded Mushroom ten years ago with $8000 of his own money and grew it to a $35 million dollar company will join Warner as the Managing Director of the EastWest division.

../No Logic
Logic Records has ceased operations. According to sources, Logic Records officially closed down at the end of May. Former head honcho Thom Storr has reportedly accepted a job as Senior Director of International Marketing for Artemis who has been looking to get back into the dance music arena.

../Digidesign Acquires Rocket Network's Assets
Following Rocket Network's demise last month, Futuremusic has learned that Digidesign has acquired Rocket's online collaboration technology for an undisclosed sum. According to Scott Dailey, Vice President of Business Development, Digidesign will not resurrect the service in its former incarnation. That means that Rocket's former collaboration partners such as Cubase and Emagic will have to find a new technology partner or develop their own remote collaboration service. Futuremusic feels that Apple will definitely incorporate a remote service into a forthcoming version of Logic Audio, but Cubase's strategy remains foggy at this point.
How will Digidesign utilize Rocket's technology? It appears that the first application will be to add LAN and WAN based secure networking into a future version of ProTools for work group collaboration and data storage. Although Dailey did state that even though the central server collaboration model would be discontinued, he left the door open by stating that Digidesign may pursue "simple individual solutions." This sounds like he's hinting at a Peer-To-Peer solution which would allow musicians to collaborate by exchanging files directly to each other.
The Future: Rocket's original remote collaboration model was an exciting concept, however the reality of converting enough users to the system to support their costs was too high a hurdle to jump into profitability. The concept as a P2P feature incorporated into audio software sounds like a viable and worthwhile pursuit for Apple, Steinberg and Digidesign.

../Verizon Fights the RIAA *Update*
A Federal Court of Appeals ruled that Verizon must turn over the names of four Internet subscribers who allegedly made thousands of songs available for download on Peer To Peer (P2P) networks to the RIAA. A January ruling by a US district court judge requiring Verizon to turn over the names was stayed due to Verizon's appeal. Sarah Deutsch, VP & Associate General Counsil for Verizon, stated that she will turn over the names next week. This is a major blow to Verizon's position even though the Federal Court of Appeals didn't actually rule on the merits of the case which is still under appeal. However, by turning over the names now, Verizon has essentially lost their only collateral and will now just have to wait and see how their appeal affects future requests by the RIAA for subscribers who make huge libraries of songs in the MP3 format available for download.

../Kazaa Introduces Technology to Promote Swapping of Legal Content
Kazaa, the peer to peer (P2P) file sharing concern owned by Sharman Networks, Ltd., announced the debut of new features to promote swapping of licensed content via its freely distributed software. The new features include new channels that promote authorized content and a frequent downloader scheme to award users who swap legal content to garner "points" that they can redeem for prizes.
This new feature set utilizes technology from Brilliant Digital Entertainment a division of Altnet. Futuremusic can't understand how this works into Kazaa's business model. Not only has none of the major record labels authorized their songs for this program, but they are all suing Kazaa for copyright infringement. In addition, Kazaa has, successfully so far, made strategic moves to distance themselves from the RIAA by establishing their business overseas. Our thinking is that BDE is paying Kazaa a fee for the right to implement their technology into Kazaa's software for demonstration purposes.
The Future: If you're going to be an outlaw, be an outlaw. Implementation of any type of scheme to make it look like you're legit is just a waste of resources. No one cares. And no one is going to use it.

../Listen.com Still Doesn't Get It
Trying to fight back against Apple Music's recent momentum, Listen.com's Rhapsody music service announced that it will offer 79 cent downloads of its catalog of licensed content. Rhapsody is a subscription based service that offers on demand access to streaming music for $9.95 per month. Streaming music differs from downloads in that you can only listen to streams via your computer unlike downloads that you can store on a computer's hard drive and then burn to a CD.
This announcement follows a two month sign up promotion where Rhapsody offered subscribers downloads for just 49 cents each. Executives from all the major online subscription concerns including pressplay, MusicNet and Rhapsody used this press release to pontificate on the state of the industry and demonstrated that they haven't learned a damn thing about the digital music space. Listen.com's CEO Sean Ryan made these inane comments regarding their service:
"Subscription services can charge a lower price for CD burns because their revenue streams are diversified." Don't you mean to say that you're using downloads as a loss leader to shackle users to your one dimensional subscription service?
Other executives still haven't realized that subscribers don't want to be strong-armed into having to listen to music solely on their computers. None of the digital music services have created a sophisticated vertical like Apple by combining software with hardware. Executives still think that users just want to sit in front of their computers and click on one poor sounding and poorly delivered streaming song after another.
Ryan went on to say that subscription services "may not end up attracting the same mass of consumer traffic that download services will...they will attract a more active, and perhaps more valuable, music-buying segment."
Does Sean Ryan have any idea what he's doing?
"Perhaps more valuable" Sean, you've been in business for over two years...how come you still have no idea who your customer is and what they in an online music service?
Maybe Rob Glaser, CEO of RealNetworks, can help. Real has agreed to purchase Listen.com and has recently added the Rhapsody service to its RealOne software. However, without a true vertical solution, ease-of-use, open personal use rights and a hardware component that will free users from their computers, you can forget about it. Instead of offering a wireless device that can transmit music from your computer to your stereo or a portable hard disk solution like Apple's iPod, Listen.com promotes an idiotic service to listen to music on your cell phone.
Finally, Ryan states that "This is not a one-size-fits-all market." No kidding...
Listen.com just doesn't get it.
The Future: Hopefully, there won't be one for Listen.com. Let's see what Rob Glaser and Real can do to turn Listen.com into a money making venture.