Rhapsody Revenue Up 14%

RealNetworks released fourth quarter 2008 earnings that show music revenues for the company increased 8% from the same period last year, to $43.9 million.

The company does not break down specific revenues for the Rhapsody subscription service, but says the total was « driven primarily » from the service, and that the service’s revenue is up 14% year-over-year. And for the first time, the company has broken out Rhapsody subscriber numbers. The service had more than 775,000 subscribers in the fourth quarter, an increase over the 600,000 listed in the fourth quarter of 2007.

RealNetworks credited the removal of DRM from any songs purchased via the service and it’s operational and marketing partnership with mobile operator Verizon Wireless as helping propel Rhapsody forward.

In a pre-earnings announcement, RealNetworks lowered the valuation of the Rhapsody America joint venture-which it operates with partner MTV.

Overall, RealNetworks reported a net loss of $240.5 million on revenues of $152.6 million for the year. It music operations generated the most of all the company’s content areas, and is second only to technology products and solutions division.

By Antony Bruno, Denver

Barnes Responds To Aussie Bushfire Crisis

Australian rock legend Jimmy Barnes is releasing an album exclusively through the iTunes Music Store to raise funds for victims of Australia’s devastating bushfires.

The album, « Live At The Enmore, » contains a mix of current material from his latest platinum certified (70,000 units), ARIA Award-nominated « Out In The Blue » album along with classic hits such as « Rising Sun, » « No Second Prize » and « Little Darlin’. »

The 12-track album featured on iTunes’ Australian homepage over the weekend. The price is set at a discounted rate of just $3.39 Australian ($2.23) in Australia, and $3.59 Australian ( $1.88 ) in New Zealand.

Barnes, who rose to fame as frontman for ’70s and ’80s rockers Cold Chisel, will donate all monies raised to the Victorian Bushfire Appeal Fund, as will his label Liberation Music, publishers Mushroom Music and EMI Music Publishing and Apple Computer Inc.

The bushfires which have blazed across areas of Victoria over the past week have killed at least 181 people and destroyed more than 1,800 homes.

By Lars Brandle, Brisbane

Nokia Unveils Online Software Shop

The world’s top cell phone maker Nokia unveiled on Monday its new online software and media store, hoping to follow the runaway success of Apple’s App Store.

The focus of the cell phone market has been shifting to software development since Google and Apple entered the mobile market in the past two years.

Nokia unveiled the store at a developer conference on the sidelines of Mobile World Congress trade fair in Barcelona.

Also at the fair, telecom operator Orange said it will launch a similar online store from May across Europe. Nokia said it would open the online ‘Ovi’ store in nine countries in May. It said 70% of revenues from the store would go to software developers, and its first model to ship with access to the store would be its new flagship phone N97.

Nokia said partners for the store included, among others, social networking sites like Facebook and MySpace.

« Ovi Store is a much needed response to success of App Store from Apple, » said Ben Wood, research director at CCS Insight.

« Successful deployment is essential to maintaining the competitiveness of Symbian and the key partner is undoubtedly Facebook, given the current momentum around social networking on mobile phones, » Wood said.

Research firm Strategy Analytics forecasts the value of the mobile content market — including downloadable games, ringtones, wallpapers, video, mobile TV, text alerts and mobile web browsing — to grow 18% to $67 billion this year.

Apple’s App Store has proved to be popular with iPhone users, and helped spawn an entire industry of entrepreneurs who design the programs which can then be downloaded by consumers.

Apple said last month a total of 15,000 applications are available and downloads have hit 500 million in six months.

Microsoft Corp is also planning an « online bazaar » for applications running on its Windows Mobile operating system, according to the Wall Street Journal. Blackberry-maker Research in Motion said last year it plans to launch its app store early this year.

Nokia shares were 0.9% lower at €9.46 on a softer Dow Jones Stoxx European Technology index, recovering from a brief knock after Chief Executive Olli-Pekka Kallasvuo told a news conference he saw a deep, long and global economic downturn ahead.

Cellphone makers introduced new advanced cell phone models on Monday, hoping to benefit from expected continued growth in demand for smartphones.

While the overall cell phone market is expected to shrink around 10% in 2009 as consumers rein in spending, analysts and the industry still expect the smartphone market to grow some 10-20% in 2009.

Sony Ericsson unveiled an 8 megapixel camera phone and said it would bring to the market in the second half of the year a 12 megapixel camera phone model codenamed « Idou. »

« There is always demand for something new, better, something attractive, and that’s what we are looking for, » Hideki Komiyama, president of Sony Ericsson, told Reuters in an interview.

At its news conference Nokia also launched two smartphone models, the E75 and E55, along with two GPS navigation phones.

Reuters

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Qtrax completes major label deals

QtraxQtrax has signed a deal with Warner to make the major’s catalogue available through its ad-supported music service, meaning that it now has agreements with all four major record labels and all four major publishers.

« Warner Music Group continues to be a pioneer in the digital music space and we are thrilled to be able to announce our global licensing deal with them, » says Qtrax president and CEO Allan Klepfisz.

« They have one of the greatest collections of iconic American record labels and recognisable artists and we could not be more excited to be partnering with them. The Qtrax platform, among other things, incorporates a unique legal peer-to-peer experience that we strongly believe will compete favourably with illegal sites and will prove the ad supported model to be a viable and valuable alternative in the future monetising of free music.”

Warner senior vice president of digital strategy and business development Stephen Bryan adds, « Today’s music industry is undergoing a dynamic transition which has us continually exploring fresh ways of delivering music to consumers. We look forward to leveraging platforms like Qtrax’s to broaden the reach of our artists’ music and provide consumers with a unique and legal music-discovery experience. »

By Ben Cardew 

Germany Rejects Three-Strikes Piracy Plan

The German federal government has decided against embracing the Olivennes Agreement – the French model for combating illegal file-sharing activities. The French three-strikes scheme would cut off the ISP connections of repeat offenders who violated copyright by illegally downloading content.

In confidential talks between the largest German ISPs and the German federal minister of justice Brigitte Zypries, which took place last month in Berlin, the minister made it clear that she had considerable reservations with respect to the French model of capping Internet access, arguing that this was incompatible with German data and telecommunications privacy legislation.

Dr. Heinz Stroh, managing director of the German Federal Association of Music Publishers (DMV) in Bonn says that he was unable to understand the concerns voiced by the ministry of justice, seeing as it was sufficient for users to be in default of payment for their Internet connections to be cancelled.

Stefan Michalk, managing director of the German Federal Music Association (BMI) in Berlin, adds that the combination of warnings and sanctions provided a very good means of combating Internet piracy.

« Unfortunately, Germany is the only country in which no progress is being made, » he says. « The only alternative still available to companies is to take legal steps against Internet piracy. It is vital for Germany as well to lay the foundations for similar models in the near future. Otherwise the German creative industry will suffer from a clear competitive disadvantage compared with other countries. »

German industry circles do not expect any change in this position to emerge until after the German federal elections on Sept. 23, 2009, assuming that the SPD/CDU grand coalition is replaced by a coalition between the CDU and free-market FDP party.

By Wolfgang Spahr, Berlin

Take the Tube for music

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A new study by Hitwise claims that YouTube has overtaken MySpace as one of the primary research and discovery platforms for music.