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UPDATE: 5:02 P.M. Federal regulators have begun asking questions about a plan supported by at least two major record companies to launch a jointly operated music-subscription site.

The U.S. Department of Justice has requested information from Sony BMG Music Entertainment and Universal Music Group about Total Music, an iTunes competitor that plans to offer music from all the majors for a $5-per-month subscription fee, according to a report in the newsletter Music Alley.

Two sources close to both record companies confirmed that that the labels had received letters from the DOJ in an interview with CNET News.… Read more

At first blush, Qtrax seemed like a good idea.

Executives there wooed reporters by promising to corral illegal file sharing. They built an interface on top of the Gnutella network where millions of songs are pirated. They pledged to offer users a legal way to download and share music.

Qtrax managers said they had convinced the big record labels that it could turn file sharing into a cash cow for them. They said all four of the most powerful labels were on board.

But on Monday, Qtrax was more than 12 hours late launching its music service. A day earlier, … Read more

UPDATE: 7:12 A.M. (1-28-08): Qtrax continues to delay the launch of its much awaited legal file-sharing site as more record labels confirm that the startup doesn't have permission to sell their music.

For weeks, Qtrax, an ad-supported P2P site, had promised to offer free and legal music downloads from all four of the major record labels when it opened for business.

But despite earlier reports, Qtrax's Web site will apparently not feature legal downloads from any of the majors when it debuts. On the eve of the site's launch, Warner Music Group and Universal Music … Read more

I picked this book up while traveling yesterday, read a few pages in the bookstore, bought it, and have blazed through the first 150 pages in little more than a day. It's one of the funniest and most entertaining books about music, culture, and business that I've ever read.

Like a lot of suburban white boys of a certain age, Dan Kennedy dreamed about being a rock star in his youth, but reality eventually intervened and he got a corporate gig. Only in this case, the corporation was Atlantic Records--Led Zeppelin's record label, as he points out. … Read more

Musicians aren't merchants.

We certainly learned that through Radiohead and Trent Reznor's separate experiments with choose-your-price album promotions.

In October, Reznor, the leader of the band Nine Inch Nails, and Radiohead attempted to promote and distribute albums online without the help of a major record label. Both offered fans the opportunity to obtain the music for free. Both saw some success.

But they also illustrated that the music business is probably better left in the hands of businessmen. Musicians are not the new labels. Artists need someone to provide financial support and business acumen. If we end up ridding the world of labels, we'll only have to re-create them--in some other, probably more nimble form.

Last week, I interviewed Reznor about the online promotion of rapper Saul William's album The Inevitable Rise and Liberation of NiggyTardust. In that interview, Reznor said he was disappointed that only 18 percent of the more than 150,000 people who downloaded the album paid for it. He and Williams offered two options: pay nothing or obtain a higher-quality audio version for $5.

By backing Williams with his money, name, and know-how, Reznor essentially thrust himself into the role of a music label. That is, a music label with a lot to learn. The first lesson was that you don't always back a winner. A music company's fortunes can often rest on its ability to discover superstars. Profits generated by a few marquee acts have always kept the companies going while all the other performers break even or lose money.

EMI said this week that only 5 percent of its acts are profitable. This kind of prospecting requires a huge investment.

Reznor said he didn't get involved with Williams to profit, but acknowledged that he spent too much making the album and said he hasn't yet recouped his money. A record company can afford to make bad bets once in a while, said Chris Castle, a music industry insider who has worked as a vice president for both Sony Music and A&M Records. Musicians, even successful ones like Reznor, probably can't.

… Read more

Last week, IBM System Technology Group (STG) announced its plans for a reorg. Historically, STG was organized around five hardware "brands" (i.e. mainframe, storage, microprocessors, etc.), but this led to customer confusion and channel overlap. What's more, IBM found its salespeople competing with each other in the field. Something had to give.

IBM, the company that practically invented business computing, will now market its systems in a software, solutions, or industry context. To me, this is an indication that the rules of the technology game continue to evolve into a model where vertical solutions trump horizontal … Read more

Call it a mix-and-match approach to music retailing.

Sony BMG Music Entertainment, one of the top four music labels, is the latest to meld an offline-online sales strategy. The record company said in a press release it will soon offer gift cards through brick-and-mortar stores that can be used to redeem music from the Web.

The best part of the offering is that the music is available in unprotected MP3s, more proof that Sony BMG is easing away from copy-protection software. Citing unnamed sources, BusinessWeek reported last week that the label is preparing to strip digital rights management software from … Read more

Maybe bleeding to death is the last thing you think about in the morning as you pull on your pants, but it could happen.

That's why a Norfolk, VA based manufacturer of military and law enforcement equipment has developed a uniform with built-in tourniquets, which it says will save lives on the battlefield.

The Warrior Wear Integrated Tourniquet System by Blackhawk Products Group has eight tourniquets; four in the pants and four in the shirt (two in the short sleeve version), which may, in case of injury, be constricted immediately with one hand by the wearer, their buddy or … Read more

The former president and CEO of eGroups, once the world's largest group e-mail provider and now part of Yahoo, was killed Sunday in a small-plane crash in a remote jungle in Panama.

Michael Klein, 37, of Santa Barbara, Calif., died in the crash of a Cessna 172 in the remote mountains about 270 miles west of Panama City, according to the Associated Press and other sources. Also killed in the crash were Klein's 13-year-old daughter, Talia, and Panamanian pilot Edwin Lasso, 23.

According to reports, the only survivor of the crash was Francesca Lewis, 12, a friend of … Read more