So I would surmise based on the following job posting in Digital Media Wire:

Content Acq Mgr-Digital
Music – Amazon.com

                  Amazon.com seeks
senior business development manager for digital services.
Seek & license digital content worldwide. Identify business
opportunities; manage relationships and close deals.
Position offers strong potential for growth.

Ideal candidate has degree, is passionate about technology
and media, is strategic & analytical, knows media licensing,
and has a strong track record of sales or business
development results.  Apply
Online Here.

Amazon have been hot and cold on digital music; mostly cold.  They have a Free Music Downloads section but I doubt there is much traffic to it.  I’m sure they’ve thought long and hard about what kind of a digital music play they could do.  Given the margins on downloads, I don’t blame them for pausing.  Still, it’s a game they need to be in.  Otherwise consumers will become conditioned to visit iTunes or some of the other online music stores for paid downloads, and these retail stores will develop billing relationships with consumers — not a good thing for Amazon.  So when they do launch their store, it may be for defensive reasons more than anything else.  Given Amazon’s UE, its recommendations and its billing relationships, it ought to be able to acquire customers easily and squeeze better margins than some competitors.

That still leaves the little of issue of DRM and compatibility since WindowsMedia-DRM files can’t be played on iPods.  Or maybe Amazon becomes Apple’s first Fairplay licensee.  That would really shake things up.  Given that Apple has licensed Amazon’s one-click ordering patents for the iTMS, maybe it’s not such a stretch!

Music is both over- and undervalued.  It’s overvalued in the eyes of the consumer when they pay $15 for a CD only for it to contain 1 or 2 worthy songs.  On the other hand, it’s undervalued if you consider that, unlike movies or books, a song or album can have a much longer shelf life.  You repeatedly listen to albums until you tire of them only to come back to them years later.  Music is deeply personal in a way movies can’t be because it’s aural and so there is a tendency to associate visual images to music, making the music that much more memorable.  And yet people feel ripped off having to pay for it.  Anecdotally, I believe that consumers harbor deep resentment in past music buying experiences where they were baited with the single and sold the alubm. 

So it’s with great interest that I’ve been following the debate on variable pricing for music.  I am for it.  The fact is that not all songs are made the same, and so they should have different economic values instead of having their prices economically propped up or suppressed.  As to whether it’s too early to introduce variable pricing to the market, I’m not sure.  I can sympathize with the feeling that this would consumer and intimidate consumesr.  On the other hand, aren’t consumers pretty savvy these days about what they buy?  It’s not like the expect every CD to be the same price. 

Small irony in yesterday’s news of Yahoo’s rollout of a podcasting directory, which was first announced on the Podtech.net podcast via an interview.   Savvy move by Yahoo to do this and kudos to Podtech for being, to my knowledge, the first exclusive podcast to break a business story.

Mark today as a turning point in music business history.   It marks the day when the largest major label in the world, Universal Music Group, publicly announced their intention to become a….music entertainment company.  Essentially they’re confirming their strategy of vertically dis-integrating and horiontally integrating, which I think is a good thing.  I admit, getting signed to a music entertainment company doesn’t quite roll off the tongue like getting signed to a label.  But, notwithstanding Rafat’s misgivings, I think it’s the right move.  Indeed it has to be done.

Other majors and indies have been experimenting more and more with this concept.  But UMG’s announcement is a comprehensive statement of strategy, which I don’t think EMI has quite done, though I could be mistaken.  It all comes down to slide 37 on their investor presentation.  Titled "The Transformation is Underway"; sub-titled "We are changing from a ‘record company’ to a ‘music entertainment’ company".  That says it all.  It goes on to list their sources of revenue where it was solely CD Sales & Film & TV Licensing in 2001 vs. CD, Film/TV, Audio downloads, Subscriptions, Mobile, Video, Satellite/Interactive Radio, Ad-supported models, Expanded Artist Relationships.

Whether you blame p2p piracy or the decline of album sales,  recordings are becoming a less important piece of  the pie, and so it makes sense to expand to other horizontal areas.  It’s not to say that UMG will fully succeed at this.  They face many obstacles such as cultural inertia and the traditional mistrust between labels and artists’ management..  However, it is a sea change in the music business and I’m a staunch believer that the future of the music business lies in labels or music entertainment companies truly partnering with their artists and sharing in the upside across the board.

Mo