From the New Yorker: "Like many people, I started blogging out of an urgent need to procrastinate. Yet a nagging sense of possibility also drew  me in. Classical music, my subject, was thriving on the Internet in unexpected ways...

"Chris Bell, the director of worldwide product and music marketing at iTunes, happens to be a classically trained violinist, and he has closely monitored the progress of the classical division. He told me, 'An interesting fact I recently uncovered is that, when you look at different genres in terms of sharing and cross-pollination, there’s more dabbling going on than you might expect. We sell almost as much hip-hop to classical buyers as we do jazz,'...

"Classical-music culture on the Internet is expanding at a sometimes alarming pace... Beyond the blogs are the Internet radio stations; streaming broadcasts from opera houses, orchestras, new-music ensembles; and Web sites of individual artists...

"If there is a man behind the curtain of classical music’s online realm, it is Klaus Heymann, the founder of Naxos Records... With the invention of the CD, Heymann (pictured below) saw a market for budget recordings of mainstream repertory; he launched Naxos in 1987, recording huge swaths of music,... In 2006, Heymann said, Naxos had revenues of eighty-two million dollars, and last August was the best-ever month for its U.S. division.

"Heymann was among the first people to grasp classical music’s Internet potential. In 1996, he put his entire catalogue online, inviting listeners to listen to any track for free. It took years before technological advances made this service practicable for a wide range of users, and, by extension, profitable... Digital sales now account for twenty-five per cent of his revenues,...

"Classical music, with its thousand-year back catalogue, has the longest tail of all. In Naxos’s case, thirty to forty per cent of its digital sales in the U.S. come from albums downloaded four times a month or less...

"Ultimately, though, Heymann predicts that many listeners will obtain recorded music by subscribing to a library and searching for the compositions they want... For $19.95 a year, you can have access to all the Naxos recordings that are online. The service has eleven thousand users, around half of them under the age of forty."

Read the entire article at the New Yorker.

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From Radio World Online, by Skip Pizzi: "The battle over performance royalties for U.S. broadcasts of music recordings continues to rage, with no  end in sight.

"The music industry, buoyed by its success in substantially increased royalties via compulsory license for Internet radio, is now trying hard to garner a similar outcome for satellite radio. But their eyes are on the big prize down the road — terrestrial broadcast radio, where the imposition of even a very small royalty could produce greatly increased revenues for the music industry.

"[A] fundamental assumption... is now being challenged by the music industry:... that radio airplay does not necessarily stimulate sales, but may in fact serve as a substitute for them.

"So the word for today is this particular connotation of 'substitution,' the argument for which we will now explore...

"Importantly, most of the substitutional argument seems to be leveled at the narrowly defined (and often commercial-free) formats found on satellite and Internet radio — including the customizable and adaptive streams available on the latter. The more constrained, traditional world of terrestrial music radio isn’t as much of a factor here.

"But as terrestrial broadcasters try to compete with these newer radio forms through experimentation with new formats and multicast channels (not to mention cross-promoted Internet radio services of their own), they too will come increasingly into the crosshairs of the music industry’s royalty crusade.

"Both radio and the record industry should be careful what they wish for, however. Improving quality and quantity of radio service is a good thing for broadcasters, but it provides additional traction to the record industry’s substitution argument. On the other hand, the inequity of different forms of radio paying different royalty rates has raised some concerns among regulators, and one proposed solution is to re-equalize them — at zero.

"Remember also that these royalty negotiations involve the statutory license, but that broadcasters remain free to pursue individual licenses with music rights holders. As labor intensive as this might be, it could have some appeal if the statutory rates were set high enough.

"But this, too, is a slippery slope. Consider that negotiating a free license with a record company in return for generous airplay of its music could be considered tantamount to legal payola, thereby potentially opening another legal can of worms. And the beat goes on.

"It’s now clear that a multi-front royalty war is engaged, and will continue for some time across all radio and regulatory theaters. The endgame will only be reached when the involved industries and policy makers get a grip on the evolving paradigm of music consumption, and they arrive at equitable methods of compensation for all parties involved.

Read the entire article at Radio World Online.

From Digital Music News: "At least one AOL Music executive jumped ship before a massive cutback announcement on Monday. 

"Fast-growing, music-focused social networking destination Buzznet recently announced the arrival of Scott Boyd, a former executive at AOL Music.  Boyd will step into the role of General Manager of Music at Buzznet, and will assume responsibility for music content, production and programming.

"Elsewhere, Maria Thomas has grabbed the role of Senior Vice President at National Public Radio Digital Media...  Thomas has served as Vice President and General Manager of online initiatives since 2001, as has been credited with building a strong digital profile for the broadcasting group."

Read the entire article at Digital Music News.

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