Legion of Angels News Archive

(Fortune Magazine) – Myspace founders Chris DeWolfe and Tom Anderson have had an uneasy relationship with the music industry. Nearly every music act has a MySpace page; some of them, like British pop diva Lily Allen and American psychedelic-funk purveyor Gnarls Barkley, have used the social network to become stars. But two years ago Universal Music Group discovered unauthorized songs from U2 and Jay-Z on MySpace and sued the site in federal court.

Well, that relationship is about to improve. In August some of the industry’s most prominent executives - including Universal’s Jimmy Iovine - showed up at MySpace headquarters in Beverly Hills for a visit that couldn’t have been more cordial. “It was almost like we were all singing ‘Kumbaya’ together,” DeWolfe says.

It was the first meeting of the board of directors of MySpace Music, an unprecedented joint venture between the social network and three of the Big Four music companies: Universal, SonyBMG, and Warner Music (WMG), which together account for 77% of all U.S. album sales, according to Nielsen SoundScan. MySpace is also in talks with the fourth biggie, EMI, whose U.S. market share is 9%.

MySpace Music, scheduled to launch in September, promises to be the most significant rollout of a digital-music service since Apple’s (AAPL, Fortune 500) iTunes. It will enable MySpace users to listen to any song from the catalogs of the three music giants free. There will be on-screen ads along with that music, but yes, it will be free. And that includes U2 and Jay-Z-and Christina Aguilera, Kid Rock, and rap superstar T.I.

DeWolfe says the key to the new service is this: Users will be able to visit the pages of major label artists and click on the songs they like as they listen. Then they’ll be able to create playlists on their own pages made up of those tracks: “There will be a button that says, FOR THE FULL CATALOG, CLICK HERE,” he says. “That’s what’s never been done before.” The idea is that people will use the playlists to personalize their MySpace page, which, in turn, boosts traffic. “Think about why people go to a music service,” he says. “They go to iTunes because they just want to get the songs and get out. MySpace is different. It’s like going to your friend’s house, and they have cool music playing in the background that makes the experience that much better.”

“This is how people discover music now,” says Luke Wood, executive VP of Universal’s Interscope Geffen A&M. “It’s not happening through people reading Rolling Stone. It’s not happening through the radio. It’s happening through social networks online.”

If listeners really like a particular song, they can buy it with one click and have it routed immediately to iTunes or Windows Media Player via a download service created by Amazon (AMZN, Fortune 500). To Amazon CEO Jeff Bezos, the alliance makes perfect sense: “MySpace, with its hundreds of millions of users, is an important place for music discovery, just like the Amazon MP3 store.”

Bezos sounds excited, and no wonder. He’s confident that Amazon’s alliance with MySpace will increase his company’s share of the music-download market. The market research firm NPD says that Amazon’s year-old MP3 store is already the nation’s second-largest digital-music retailer, after iTunes. MySpace’s music company partners are also pleased that the joint venture will strengthen Amazon’s hand. Although they won’t say so on the record, they aren’t happy with iTunes’ current domination of digital music. Says Ivan Gavin, COO of SonyBMG’s BMG Label Group: “Competition isn’t the worst thing in the world.”

DeWolfe believes that MySpace Music could generate enough money through ad sales, downloads, and eventually music-related e-commerce like T-shirt and concert ticket sales to put the industry back on its feet again. The music labels, of course, could use some new revenue streams right now. The industry is in a state of upheaval. Last year alone, CD sales declined an astonishing 20% - that’s $2 billion in revenue gone. Digital sales rose by $500 million - nowhere near enough to make up the difference. “We think this has the ability to change the economics of the music industry and create a revenue stream that replaces lost CD sales,” he says.

Yet for MySpace Music to succeed, it will have to sell ads - lots of them, and at commanding prices. Its label partners want a penny each time someone listens to a song on an ad-supported service. That means MySpace Music needs to charge $10 for every 1,000 ad impressions just to break even. Think how many MySpace pages automatically play a tune when you land on them; each one counts as an impression. MySpace won’t comment, but media buyers say it has been able to charge only $3 per 1,000. Why? Because there’s a glut of social-networking ad inventory on the market. That’s one reason Fox Interactive Media, MySpace’s parent, missed its revenue target for the fiscal year ending in June by an estimated $100 million.

DeWolfe promises that MySpace Music will have no problem selling ads. He points to his company’s 300 ad salespeople, most of whom are working on the new music service. Toyota, McDonald’s, and State Farm are sponsoring the launch. “We recognized that this is a groundbreaking addition to the music industry landscape,” says Doug Frisbie, national media manager for Toyota Motor Sales.

In a way, MySpace Music was something that DeWolfe and Anderson had to do. Their site had a huge audience of music fans, but it wasn’t making enough money. So nine months ago they pitched the idea of an ad-supported service to News Corp. (NWS, Fortune 500) CEO Rupert Murdoch and his deputy, COO Peter Chernin. The two executives took a typically contrarian stance. They weren’t bothered that other major media companies have been fleeing the music business. “This venture marries the largest music community in the world with the biggest music catalogs in the world,” Murdoch tells Fortune. “We’re confident it will be a big success.”

“It’s not like we were going out and starting a record label,” says Chernin. “This is something we’d been talking about for a while.”

Here’s a big question hovering over MySpace Music: Will it actually improve the music industry’s slumping overall sales? “We believe that you can’t just have ad-revenue-sponsored content,” says Michael Nash, Warner’s chief digital strategist. But why will people buy more music when MySpace will be offering so much for free? DeWolfe says people will still need to buy tunes to play on their iPods.

The truth is, MySpace et al. are making a leap of faith by pushing free music. Dalton Caldwell, CEO of imeem, an ad-supported music social network that has 27 million users, warns that DeWolfe is setting the bar too high. “I don’t know if we can be superheroes and save the world,” says Caldwell. “I think it would also be difficult for anybody to say they can replace lost CD sales.”

Don’t tell that to DeWolfe. He’s already talking cultural juggernaut. “Think about MTV,” he says. “Not necessarily what they are right now, but how they created pop culture in the late ’80s, early ’90s. I think that’s what MySpace Music will do now.” Maybe he should get those lost CD revenues replaced first.

Source — CNN

NEW YORK - Picture whipping out your cell phone and catching up with “Lost” or “Jeopardy,” or watching the local 11 o’clock news, all for free.

You can do this with an imported Chinese phone, but you can’t with any phone sold in the U.S. — at least not without monthly charges.

This is one of the reasons the United States is behind several other countries when it comes to making television an attractive option for cell phones. Carrier business models are partly at fault, but choices about TV technology made long ago are largely to blame.

Most phones sold in Japan can tune in to free TV broadcasts, and there are tens of millions of viewers. Cell phones that can tune in to free broadcasts are also available in South Korea, Germany and China.

But only 3 percent of Americans regularly watched video on their cell phones late last year, according to a survey by the Pew Internet & American Life Project. That figure includes people who watched short, downloaded clips rather than broadcast TV.

For starters, you can blame the impending shutdown of all full-power analog TV broadcasts on Feb. 17, a deadline set by the government. That Chinese handset, made by ZTE Corp., can only tune in to analog transmissions. Because most of them are going away, there’s no real point in selling phones like that in the United States.

China is keeping its analog broadcasts until 2015, six years longer than the U.S., so the phones are viable there. Ironically, the TV reception chip inside comes from a U.S. company, Telegent Systems Inc., based in Sunnyvale, Calif.

The analog U.S. broadcasts are being replaced by digital broadcasts, but there are no phones anywhere that can tune in to those.

When the U.S. digital TV standard was laid down in the early ’90s by the Advanced Television Systems Committee, it was optimized for high-definition signals to stationary antennas, according to Mark Richter, president of the industry group.

At the time, cell phones had screens that could display eight digits and nothing else, so little thought was given making the broadcasts work with mobile gadgets.

The Europeans created their digital television standard later and made it a bit more amenable to mobile reception, Richter said. Thus, there are now phones sold in Germany that can receive local digital broadcasts intended for stationary TVs.

Weijie Yun, Telegent’s chief executive, said it’s theoretically possible to receive U.S. digital terrestrial broadcasts on a phone, but engineers have yet to overcome key technical challenges. For now, Telegent’s chips can receive analog broadcasts in most countries of the world, and digital broadcasts in Europe and a few countries outside it.

Because U.S. phones can’t receive regular broadcast TV, carriers have had to look to other solutions. Cell-phone technology company Qualcomm Inc. has created a network that broadcasts signals designed for cell phones. AT&T Inc. and Verizon Wireless sell some handsets that can tune in to these broadcasts.

Sprint Nextel Corp. has contracted with another company, MobiTV Inc., which streams lo-fi streaming video over the phones’ broadband connections. The fourth national carrier, T-Mobile USA, doesn’t have a TV service.

The common denominator for the existing services is that they cost money, limiting their adoption. AT&T and Verizon Wireless charge $15 per month for 10 channels. Sprint bundles MobiTV with some high-end plans and charges $9.99 per month as standalone service.

In-Stat analyst Michelle Abraham estimates that Qualcomm’s MediaFLO has 100,000 subscribers. MobiTV has done better, with about 4 million subscribers.

Research director John Barrett at analysis firm Parks Associates points to the fees as a problem, and recommends that operators provide free content.

“A free taste would go a long way in making the consumer case for mobile TV,” he wrote in a recent report. “Mobile TV services have taken off in Japan and South Korea, where service is offered free of charge. In Italy, where additional fees have been the norm, usage has been limited.”

This month, Toshiba Corp. announced it would end a pay-TV system for handsets because of the popularity of free TV broadcasts.

“That’s one of the key barriers,” Telegent’s Yun said. “Once you start charging consumers, they start getting turned off.”

U.S. TV broadcasters are quite eager to provide free broadcasts to cell phones, just as they do to TVs with “rabbit-ear” antennas. They’ve formed the Open Mobile Video Coalition, which estimates that advertising-financed TV for cell phones could be a $2 billion market.

They want to reach cell phones through another wireless standard the ATSC is creating. It will use regular TV frequencies to reach mobile gadgets, meaning TV stations will be able to broadcast from existing towers.

The goal is to complete the new standard, called ATSC-M/H, by the first quarter of next year, Richter said. That could mean broadcasts will be operational before the end of next year.

It’s not completely clear that the technology would be used for free TV — the possibility to charge viewers monthly fees will be built in — but it would be natural for broadcasters to simulcast their regular advertising-financed programming on the mobile channel.

The big question then, Abraham said, is whether broadcasters will be able to persuade carriers to sell TV-capable phones.

AT&T spokesman Michael Coe said it was too early speculate.

“If the answer ends up being ‘yes,’” Abraham said, “then that opens up a very large market.”

Source — Yahoo!

(CNN) – A one-word blog post from a cell phone helped to free an American student from an Egyptian jail, but it took the signatures and support of thousands of activists to get his translator out.

When detained in April, graduate student James Karl Buck turned to his cell phone and typed the message, “Arrested,” alerting all his friends on the microblog service Twitter site.

Upon his release shortly afterward, the first thing Buck did was send another message, “Free.”

On Tuesday, nearly three months after the American and his translator, Mohammed Maree, were arrested, Buck turned to Twitter again — this time to tell everyone that Maree was safe at home.

The post: “Mohammed is free, Mohammed is free!”

Twitter, a social-networking blog site, allows users to send status updates, or “tweets,” from cell phones, instant messaging services and Facebook in 140 characters or less.

Buck spent much of the time after his release working to free his friend. But it was not until shortly after Maree’s release that Buck and his translator were finally able to speak — through instant messenger.

“He was totally in good spirits; he joked with me,” Buck said. “I told him he was a hero, and that because of his case and what he suffered, he’s brought a lot of attention to the government’s behavior in Egypt.”

Immediately, Buck said he apologized to the translator because he felt guilty about his detention.

Buck, 29, a graduate student from the University of California, Berkeley, working on a photography project for his master’s thesis, met Maree, a 23-year-old Egyptian veterinary student, in Mahalla. Maree offered to help Buck as he photographed anti-government protests over low wages and rising food prices in April.

During one of the demonstrations, Buck and Maree were detained. En route to the police station, Buck sent a message via Twitter, and his school hired an attorney and was able to get him released within a day. But Maree remained in jail for nearly three months.

After his release, Buck returned home and used his Twitter network, now more than 570 followers strong, to help free his translator and friend.

Fueled by the gnawing guilt of leaving Maree behind, Buck set out to enlist all the help he could in hopes of sparking a movement for the translator’s release.

He began setting up a virtual online command post to demand Maree’s release. He contacted U.S. and Egyptian authorities and human rights groups and used everything from Twitter updates, blog posts on his Web site to an electronic petition signed by more than 900 people.

Maree’s brother, Ahmed, said it was an unbelievable feeling to have Mohammed home.

“It’s like someone was dead and [brought] back to life,” he said.

Maree’s family was worried about when, if ever, he would be freed. After reports of alleged torture in prison, relatives feared for his life.

Rumors began swirling a week ago that there had been a development in Maree’s case, but details were scarce, so Buck said he tried not to get too excited.

“Any change in the case could have been equally bad news or good news,” Buck said. “And so far it had all been bad news.”

Buck said he cringed each time he checked his e-mail lately about what was happening. Then he got an e-mail from Maree saying he had been released.

There was little information surrounding Maree’s detention. Speculation about Maree’s whereabouts was fueled by confusion about what initially happened to the translator. Government officials in Egypt said they could neither confirm nor deny Maree’s detention during the past three months as well as his recent release despite repeated requests for comment.

When CNN called Attiya Shakran, press counsel for the Egyptian Consulate in San Francisco about the pair’s detention, he said Maree had been in custody of Egyptian authorities longer than Buck, but was released April 13. But two days later, Maree’s family told CNN they still had not seen him.

And Shakran told CNN in June that Maree, in fact, was still in custody.

Attorneys from the Hisham Mubarak Law Center in Egypt said they visited Maree in one of the three prisons in which he was held. In the meetings, Maree claimed he was tortured, one of the lawyers said.

Maree said he was beaten and electrically shocked throughout his detention by Egyptian authorities, according to that lawyer, Khaled Ali.

“During this period he felt he was on the brink of death,” Ali said in an e-mail.

With Maree finally safe, Buck said he wants to try to work with Twitter on establishing a global network help line for those who find themselves in similar situations.

Buck said he hopes to visit his translator in Egypt as soon as possible and meet his family so he can apologize to them and tell them about the impact Maree has made.

“I think he’s a hero. Some people might think it sounds silly,” Buck said. “But he went to jail for his beliefs. Instead of selling out or making something up, he really was willing to stand up to the intimidation. It’s people like him that make cracks in a dark wall to let light come in.”

Source — CNN