From today's Wall Street Journal: "Starbucks Corp.'s agreement to offer a special Apple Inc. music downloading service helps the Seattle coffee giant tap into the fastest-growing part of the music business...

"The service will allow customers with iPods that have wireless Internet access, such as the new iPod Touch or iPhone, to browse, search and preview for free, as well as buy, millions of songs on Apple's iTunes Wi-Fi Music Store. Customers with PCs or Macs will be able to use the service too. Users won't have to pay a wireless connection fee to shop in the iTunes store like they currently do when they access iTunes from a Starbucks.

"One aspect of the service will answer a question that customers often ask Starbucks's baristas: the name of the song playing inside the store. Now, when a customer walks into a Starbucks that has this new iTunes service, the customer's music device or computer will tell them the name of the song that's currently playing and allow them to buy the song in what Starbucks describes as a 'seamless' transaction...

"In 2004, Starbucks said it would install several dozen so-called media bars in cafes under its Hear Music brand that would allow customers to burn a selection of 200,000 songs onto compact discs, but later backed away from that strategy...

"Starbucks plans to launch the service Oct. 2 at 600 cafes in New York and Seattle, then add it to 350 stores in San Francisco in November, 500 stores in Los Angeles in February, 300 stores in Chicago in March and in more U.S. cities later next year."

Wall Street Journal subscribers can read this entire article online here.

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... So now, much like listeners to many Internet radio outlets, Starbucks customers can instantly learn about the current artist and song they're hearing in the store, and buy it on the spot. Of course, if you're willing to pay for the time on Starbucks' T-Mobile wi-fi spots (only access to the iTunes store is free via the Starbucks wireless), you can listen to something besides the Starbucks channel! -- PM ...

RAIN is brought to you today by:
	There's huge, and growing, demand among consumers for Internet radio (at least during the 9AM-5PM workday), as shown by the rapid growth of our AccuRadio project. AccuRadio features a variety of popular music formats that you simply can't find on the broadcast dial: Swingin' Pop Standards, Brit Rock, Piano Jazz, Broadway and more at www.AccuRadio.com.

From the Chicago Reader's Miles Raymer: "Back in May I reported on a March ruling by the Copyright Royalty Board that threatened to sink the webcasting industry with a huge increase in royalty rates. Since then public outcry and congressional action have earned webcasters a reprieve, but there’s no telling how long it’ll last...

"At the time of my original story, Daniel McSwain of local webcasting outfit AccuRadio explained one of the ways the new royalty rates might benefit major labels. SoundExchange collects royalties whether the rights holders ask for them or not, but a label can sidestep the system by negotiating a different rate with the webcasters playing its music—probably a lower one, to make its catalog more attractive than the competition’s. The trouble is that these deals have to be struck one webcaster at a time. Major labels, with their large staffs and huge rosters, can do this more effectively than indies, offering cheap access to a heap of music at one stroke...

"Fortunately reinforcements are on the way. The UK-based Association of Independent Music announced the incorporation of Merlin, a nonprofit rights group for the indie sector, which by AIM’s reckoning accounts for 80% of the world’s new releases and 30% of the music market. This international coalition of labels says its job is 'ensuring competitive terms' for its members in the new-media marketplace... Merlin promises to undertake negotiations with streaming-media providers in the future, and if the new webcasting royalty rates go into effect, it could give indie-oriented outlets a way to secure a survivable rate with hundreds of like-minded labels at once...

"The American Association of Independent Music, now a subset of Merlin, includes labels like Matador, Victory, Sub Pop, and Tommy Boy, all of whom have a history of landing indie releases on the mainstream charts...

"It’d be naive to imagine that a group like Merlin could totally level the playing field for Indies, but it’s nice to know that when the big boys throw their weight around, the little guys will be able to do something besides run for cover."

Read Miles Raymer's "Sharp Darts" column in the Chicago Reader here.

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... While Merlin may help prevent indie labels from being underpriced by majors in the webcast royalty market, as Miles suggests, this is not necessarily an indication that they'll be more cooperative with webcasters than RIAA labels. You may remember that A2IM fully supports the SoundExchange/RIAA position on webcast royalties [coverage here]. One of the A2IM member labels Miles cites is Tommy Boy Records. You may also remember Tommy Boy chairman Tom Silverman from the House Small Business Committee hearing in June [see RAIN coverage here], in which he painted "Big Net Radio" as the villain trying to steal his royalties. To put it politely, A2IM and Tommy Boy have demonstrated a posture that is something less than sympathetic to the value and plight of webcasters. -- PM ...

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