Everyone is talking about Rick Rubin

Over Labor Day weekend, my girlfriend Missy and I were spending the Labor Day weekend on Martha's Vineyard. The weather was gorgeous, the food tremendous and the laid back atmosphere mixed with sea salt from the ocean air was a welcome respite from our busy New York City lives.

On Saturday, we rented bikes and rode over to Oak Bluffs for lunch, ice cream and a little window shopping. Later that evening, upon our return to the quaint and homey Crocker House Inn, a quiet and well kept bed & breakfast in Vineyard Haven, I found our hosts had set out the early edition of the Sunday New York Times. Keeping with my normal traditions, I dug out my favorite section, The New York Times Sunday Magazine and was surprised to find legendary producer and record man, Rick Rubin, cross-legged on the cover, looking much like the guru his peers consider him to be.

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Get the look of Paul Van Dyk on StarStyle.com

StarStyle.com, a web site that provides music fans with a way to purchase the items seen in music videos launched its first dance music video: Paul Van Dyk's "White Lies" featuring the vocals of Pussycat Doll, Jessica Sutta."

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UMG to drop DRM until January

The New York Times reported today that–in a incredible reversal of position–the world’s largest record company, Universal Music Group, has made the decision to sell music tracks DRM-free until January. DRM-free music will be available through Real Networks, Walmart, Amazon, and a few web sites of artists under the UMG umbrella.

An interesting twist to this story is that DRM-free music will not be available through Apple’s iTunes download music service. UMG, in trying to break iTunes stranglehold on the digital download market, would like to see users migrate to other services to purchase music from artists on their affiliated labels. By taking this step, UMG are playing their trump card, and it’s certainly a big card to play.

Just a few months ago, UMG refused to renew the iTunes license to sell UMG music when Apple founder Steve Jobs refused to pay UMG a per unit revenue share for every iPod sold. Last year, Microsoft agreed to pay $1 per unit to UMG for every Zune player sold, but the company has yet to see any real traction in user adoption of their product.

This game of cat and mouse could potentially hurt UMG if Apple pulls their catalog from the service before the Christmas shopping season. In fact, it could cripple UMG’s bottom line in the 4th quarter. I’m willing to guess that the other services have been working on solutions to launch in September or October and are going to roll out marketing campaigns to try to drive users to their services to get certain albums DRM-free.

This is a gamble. At this point, there are so many iPods in the marketplace connecting directly to the iTunes store that users may not really care if the music is DRM-free. They have something that works, is high quality and they can connect once and take away.

Does UMG think consumers are going to go out and purchase players that play only their music DRM-free, but not be able to connect to iTunes for the rest? Has EMI licensed their catalogs to all the new services, so users can get both UMG and EMI music? If so, could there be some collusion on the labels parts to work with these services to the disadvantage of Apple? That might spur an anti-trust law suit if Apple were to learn that the labels discussed this with each other and then with the various services they were willing to license. It’s a tricky situation.

As Times reporter, Jeff Leeds noted, UMG will keep their music DRM-free on these services until January in order to test the marketplace and see what the rate of user adoption is. If things go well, you could see Warner Brothers and Sony/BMG drop DRM soon thereafter, or maybe earlier as they feel the pressure to submit to what consumers have been demanding.

I didn’t expect to see this story in the headlines tonight. It’s quite shocking actually and is going to make for some interesting commentary in the blog-o-sphere. I’d keep my eye on http://www.paidcontent.org, who I’m sure will have posted something about this turnabout very soon.

Beatport's New Affiliate Program Falls Short

For the past year, I've been trying to contact both Beatport's founder and Biz Dev rep with little success. I guess they feel they're too self-important to respond to phone messages or emails. While they're DJing in Denver or out skiing on the slopes, let's not rest on our laurel's fellas, because what happened to Friendster (MySpace ring a bell?) or the record industry (does p2p sound familiar?) can happen to you too.

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StarStyle Music Widgets!

Here's something cool for my friends who have been following my work as VP of Music at StarStyle.com. We've been working hard and have introduced StarStyle widgets to take what we're doing on StarStyle viral.

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Politics: Keith Olbermann commentary on Bush commutation of Libby sentence

I usually don't comment on politics here on this blog, but I thought the recent commentary by MSNBC's Keith Olbermann was a clear, powerful, accurate and compelling viewpoint on the current political firestorm our President, George Bush, has created by commuting the sentence of Vice President Dick Cheney's advisor, I. Lewis "Scooter" Libby, who had committed one of the most egregious crimes against his country--the United States--by outing CIA agent, Valerie Plame, after her husband, the former ambassador Joe Wilson, criticized the Bush administration for the use of faulty intelligence to justify the war in Iraq. Today, over 70% of Americans want this war ended now. Despite what Fox News, Rush Limbaugh and other right wing media outlets report, the war has gone horribly wrong and the recent troop surge is making little impact. The United States needs leadership to solve this war, to curtail Wall Street profiteering at the expense of the average American, and to solve the health care crisis in this country that sees some 40 million of its people without basic coverage.

Our government is beholden to corporate interests, graft and corruption and its time for change.

In this MSNBC segment, Olbermann makes an extraordinary statement about the Bush administration's willful manipulation and disregard for the American public, our law, due process and any sense of reason. As a United States citizen, I am sharing this so you too can be equally as outraged as I am about what George W. Bush, Dick Cheney and the Republican party are doing to this country. They have complete and utter disregard for the wishes of the American public. The same American public who recently elected a Democratic House and Senate in a sweeping mandate for reform and a change in the direction of the United States of America. At no time in my 40-years of life have I ever lived through such an era, where an administration came to power only to enrich their cronies and party members while destroying the political capital and good the United States had built up coming into the 21st century.

Despite what people say about Bill Clinton, he put this country on the track to grow into a new world order. People believed in Clinton, and he left office with one of the highest approval ratings of any two term President. Today, that vision has been severely impaired. What Bush, Cheney and the Republican party have done to the United States is shameful. If you speak out, they call you "un-American" and accuse you of "siding with the terrorists." As Rosie O'Donneel pointed out, "who are the terrorists? Are they the Islamic fundamentalists who have set out to harm us, or could they be politicians who use a policy of fear to emotionally freeze a nation that is lulled into a false sense of security and believes its being protected? But, are we?

Now, I don't necessarily agree with everything Rosie says, but she does do one thing. Her speaking out makes you think about the issues. At the very least, it makes you question what you're being told by the right-controlled media. Is what they're telling us correct, or are they using disinformation to lull us into a false sense of security for their own political purposes? How do we, as collective nation, rise up and make our voice heard. Whether it be a general strike, a work slowdown or writing your Senators and Congress men and women, Americans need to do something, and they need to do something now. Calling for the resignation of George W. Bush is certainly a good start.

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Under pressure, BurnLounge drops MLM…finally!

n another "I told you so" moment, Grant Johnson, the new CEO and Chairman of BurnLounge announced in a press release through the Mi2n.com music network the company will abandon its MLM model for a more traditional affiliate model. BurnLounge affiliates will be able to participate directly in the revenue upside from the sales of music, movies, tickets and other online transactional services without having to invest high fees to use the companies software tools.

This is a 180 degree turnaround since the company dumped Alex Arnold (a former executive of another bankrupt MLM, Excel Communications) in the face of criticism about its MLM structure and the Federal Trade Commission building its case against the company.

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More upheaval at BurnLounge

BurnLounge has announced that CEO, Alex Arnold, will step down from his post effective immediately. Grant D. Johnson, one of the company's Board of Directors and founding investor will take the helm. Johnson is also founding managing partner of Benevolent Capital, a hedge fund investing in private and public companies.

The Federal Trade Commission went to court this week to ask for an immediate shutdown of the controversial music service, but the court granted the company a stay. Although it still remains operational, the damage has been done. I think you'll see a number of members canceling their memberships.

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Report: FTC Asks Court To Shut Down Illegal Pyramid Operation BurnLounge

I hate to say that I was right, but I’m going to say it anyway. And, not only am I going to say it, I’m going to say it loud: I TOLD YOU SO!

Today, I learned through Mi2n’s music industry news service that Burnlounge, a company I’ve railed against here on this blog (click on link to see original story), is the target of the United States Federal Trade Commission. The FTC is moving against Burnlounge to shut down is operations, citing the companies business model as a “pyramid” scheme.

So…to Barry, whom I’ve parried with over the last four months or so on this subject, I say: I told you what this was from the get go, and you adamantly refused to capitulate that the service is a ponzi scheme. Now, the federal government has confirmed just that. Burnlounge will be gone before you know it and thousands of people will be out of their hard earned dollars this scam stole from them. You should be ashamed of yourself, my friend. Because you were one of the people who were out there spreading the message of false hope yourself. Now, where are you? Now, what do you have to say for yourself?

Anyone in the business of music who got involved with Burnlounge should be taken to task. There is one woman in particular who posted to this very blog, that was directly involved in BurnLounge. That woman works for an independent record company. I’m not going to point the finger directly at you, because you know who you are. My question to you is, how can you live with yourself knowing that you misrepresented artists, music fans and your friends who trusted you and supported this idea based on your word? Now, what are you going to do?

Here is the link to the article on Mi2n.com and I’ve republished below as well:

http://www.mi2n.com/press.php3?press_nb=100940


FTC Asks Court To Shut Down Illegal Pyramid Operation BurnLounge

On June 6, 2007, the FTC filed a complaint in the U.S. District Court for the Central District of California against BurnLounge, Inc. The complaint charges that BurnLounge sold opportunities to operate on-line digital music stores that was, in fact, an illegal pyramid scheme. The agency is seeking a permanent halt to the illegal pyramid practices as well as other illegal practices alleged in the complaint.

According to the FTC, BurnLounge recruited consumers through the Internet, telephone calls, and in-person meetings. The sales pitch represented that participants in BurnLounge were likely to make substantial income. BurnLounge recruited participants by selling them so-called “product packages,” ranging from $29.95 to $429.95 per year. More expensive packages purportedly provided participants with an increased ability to earn rewards through the BurnLounge compensation program.

The BurnLounge compensation program primarily provided payments to participants for recruiting of new participants, not on the retail sale of products or services, which the FTC alleges would result in a substantial percentage of participants losing money.

The FTC specifically alleges that the defendants operate an illegal pyramid scheme, make deceptive earnings claims, and fail to disclose that most consumers who invest in pyramid schemes don’t receive substantial income, but lose money, instead. These practices violate the FTC Act, the agency alleges.

The FTC has asked the court to halt the deceptive practices and misrepresentations and to freeze the defendants assets, pending a trial, to preserve them for consumer redress. At a hearing on the FTC’s request for a temporary restraining order, on June 8, 2007, BurnLounge’s attorneys asked for more time to respond fully, and U. S. District Court Judge George Wu ordered that a full hearing on the FTC’s request for a preliminary injunction and asset freeze be held on June 19, 2007, after which he will rule on the FTC’s requests.

In addition to naming BurnLounge, Inc., a Delaware corporation based in New York City, the Commission’s complaint also names: Juan Alexander Arnold, of Studio City, California; John Taylor, of Houston, Texas; Rob DeBoer of Irmo, South Carolina; and Scott Elliott of Forney, Texas.

This case was brought with the invaluable assistance of the Office of the Attorney General of South Carolina.

Over the last 10 years, the Commission has halted 17 pyramid schemes and has collected almost $90 million in consumer redress and tens of millions of additional dollars in suspended judgments.

Last.fm acquired by CBS Corporation for $280 Million

Last.fm, the popular London-based music recommendation social networking web site, was acquired for U.S. $280 Million by CBS Corporation.

The web site claims over 15 million active users. Its London base is important strategically for a company operating in the music space, as the legalities of Internet music business differ in some respects than in the United States.

For more, see http://news.bbc.co.uk/1/hi/technology/6701863.stm for the story.