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bmusic Newsletter No.273 February 11th - February 24th 2008 Well, we're back! After an extended hiatus that saw us first recovering from Christmas and New Year and then absorbing all the new lines and products that came about after the NAMM Show in the USA we're back on deck. I hope you all had a great festive season and were able to recharge ready the year ahead. There's plenty of product news to plow through in the coming months, and there's some very interesting recording industry news as always. The most curious of the new industry stuff is the drama of QTrax, an alleged free music download service that was "launched" at MIDEM (a French acronym that translates to International Record Music Publishing and Video Music Market) Conference in Cannes at the end of January. New York-based QTrax is part of Australian company Brilliant Technologies. There are a number of companies related to QTrax, with LTDNetwork seeimgly it's R & D arm. QTrax's CEO is Australian Allan Klepfisz, the founder and executive chairman of Advantage Australia Group Pty Ltd, and also listed as the CEO & Chairman of Brilliant Technologies and LTDNetwork. At MIDEM Qtrax pasted the town with posters promoting the $1.1 million launch of the service, enlisting the services of James Blunt, Don Henley, LL Cool J and more for the launch. They reportedly paid James Blunt 40,000 pounds to be involved yet reports suggest he really had no clear idea what he was spruiking at the glitzy launch. He must have general idea of what the service was, quoted as saying, "I find it amazing we should let people steal in the first place. But the music industry is in the condition it's in, and we have to try and find new ways." QTrax are also supposed to be sponsoring a NASCAR! This all sounds amazing. The press release and news conference at MIDEM claimed the site had agreements with all four majors to offer a catalogue of 25 million tracks on offer from all official releases by just about every major artist to so-called grey releases such as live bootlegs and alternate versions from their free download service. I'll go to some of the press released at the time of the launch at MIDEM, although strangely there are no media releases on their site from the last six months or so. Here's the press "about me": "We want to bring free music into a legal environment," said chief executive Allan Klepfisz. "People don't want to be illegal, but they do want free music." Within hours of the story breaking that QTrax was launching in nine countries the majors came out with press releases of their own. Warner came out first with a spokesman saying "Warner Music Group has not authorized the use of our content on Qtrax’s recently announced service." Followed by “Sony-BMG does not have a license agreement [with Qtrax]." And then some more positive statements, “While we are in discussions with QTrax, we [Universal Music Group] have not yet signed an agreement. We expect that we will sign an agreement at some point.” EMI were quoted as saying they had an agreement with QTrax, but it's understood it didn't pertain to this method of delivery for their catalogue. Klepfisz countered with, "We are not idiots," he said."We wouldn't have launched the service in front of the whole music industry unless we had secured its backing. We feel we have been unfairly crucified because a competitor tried to damage us. Everyone is very upset......" "We do have industry agreements including the major labels. Even today we are working on more deals," Mr Klepfisz said. He added that although "ink hadn't dried" on some of the deals, Qtrax still planned to deliver on its promises "within months." Much talk ensued at MIDEM about the jumping of the gun by QTrax. "When you launch a service billed as the first legal peer-to-peer, it sets up expectations," said former EMI Group digital executive Ted Cohen, who moderated a panel discussion in Cannes with Qtrax Chief Executive Allan Klepfisz. "It's going to be tough for them to recover from this." "We got nods to go ahead with the service Friday night," Klepfisz said. "There's been a misunderstanding." He said he thought he had "gotten close enough" to final deals to proceed. Not so it seems. The site still delivers nothing of what was promised, being off and online sporadically. With 61,000 hits an hour since the release and those still hitting it hoping the near impossible might come to fruition the company's servers would be taking a hammering. But that's not the only thing taking a beating. Qtrax, as a subsidiary of Brilliant Technologies Corporation, trades as a "penny stock" on the US Stock Exchange, and raised US$30 million to launch this service. (Significantly less than what the launch itself cost). But is any publicity good publicity and the expense worth it? Well, maybe not. Brilliant Technologies shares set a 52-week high of 9.2 cents the Friday before the official announcement and launch in heavy trading. But trading volume tripled the Monday after the proverbial had hit the fan over the weekend and the share price plunged to 5 cents, cutting the stock's market value to about US$35 million. The market value drop of more than US$25 million has been suggested by Columbia University securities law expert John Coffee as enough to trigger a shareholder class-action lawsuit alleging fraud. "There will predictably be some litigation," Coffee said. "There's a good chance the SEC may take action too." Oh dear, what a mess! We've archived past Where Are They Now? features for this week while we finish up the first of the new features for 2008. We're back on deck, but not that back on deck as yet. Regulars including Feature Article, The Weeks Ahead in Music History, Featured Artist and more are all inside Issue 273 of the bmusic Newsletter. Links in the Table of contents below will launch your browser, so you'll need to be online to view the newsletter. If you are unable to receive html format e-mails then copy and paste the following link into your browser's address bar to view the newsletter: http://www.bmusic.com.au/links/whatsnew/newsletters/archives/newsno273.html Thanks to everyone for reading, we'll see you next issue! TABLE OF CONTENTS (You will need to be online to use the Table of Contents to jump through sections) Events Births Deaths |
FEATURED PRODUCT - 2008 ESP GUITARS & BASSES

THIS WEEK'S FEATURE ARTICLE - YOUR STORY ON ONE PAGE
FEATURED ARTIST - TERMINAL THRILL
THE WEEK AHEAD IN MUSIC
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