What's the Rights Holders' Plan to Make Streaming Truly Profitable? What the Hell Is a Consumption Chart? And Who’ll Get Timberlaked by the Grammy Cabal This Year?
REROUTING THE STREAM: Ad-supported free streaming simply isn’t putting enough change in the cash register, and that has caused the labels and publishers to rethink the issue. They’re now poised to make the most fiscally significant move since Apple agreed to increase track downloads from 99 cents to $1.29 in 2009. Negotiations between the rights holders and Spotify have been ongoing for months, with the current deals of UMG and Sony expiring in early 2015, and there’s a proposal on the table that would help the Daniel Ek-led service to convert users from free to premium, which pays a higher rate. Up to now, Spotify has been unmotivated to push for conversions, focusing instead in building its overall user base in order to boost the company’s widely anticipated IPO. Under the proposed new model, content will be accessible to free users for a limited trial period, after which users must become premium subscribers or be shut out entirely from that content.

In terms of the next pressing issue, price point, most believe that a $10 monthly subscription is too high. Apple has been negotiating for a rate reduction so that it can reduce the monthly rate for Beats Music to $4.99, and it’s likely that the rights holders will try to persuade Spotify to follow suit. The service currently charges $9.99 for premium but $4.99 for students. Will they also push Ek and company for an increased royalty rate?

BIBLE STUDIES: The Billboard consumption chart, compiled by SoundScan and launching this week, turns out to be quite different from the Hot 200 sales chart, thanks to the TEA component, but not because of streams. The muted impact of streams is most emphatically evidenced by Taylor Swift’s 1989, the week’s runaway #1, with no streaming component whatsoever. The addition of YouTube views would have made a sizable difference, but Google’s stated inability to distinguish between official videos and user-generated clips, along with a few labels’ objections to counting user-generated content, have caused the bible to ignore what is by far the most active streaming sector, with superstars like Katy Perry and Beyoncé, as well as pop-cultural phenomena like Frozen, receiving hundreds of millions of views of individual videos. Once again, we’ll give you the same chart a day earlier, with better analytics and a better title.

WINNERS’ CIRCLE: With one month left in the year, Monte Lipman’s Republic is riding the Borchetta/Swift thoroughbred to big leads in both TEA (8.7%) and frontline (a jaw-dropping 9.5%). But there’s a possible contest for second place shaping up. Steve Barnett’s Capitol Music Group, at 7.8% year-to-date thanks in large part to the ongoing sales impact of artist of the year favorite Sam Smith, is facing a late challenge from Rob Stringer’s Columbia, which picked up .2% last week behind One Direction’s 401k bow to climb to 7.3%. What makes the situation intriguing is that Columbia has a new album this week from AC/DC, whom Barnett once managed, and another potentially strong debut next week from J. Cole. Will those two, plus continuing sales from 1D, Beyoncé and Barbra Streisand, enable Stringer to further close the gap, or will Smith’s expected multiple Grammy noms and featured spot on the Grammy Christmas special this Friday give Barnett the win in this faceoff of friends and former colleagues?

Or perhaps the secret committee that actually chooses the nominees—at times going against the preferences of the voting body, and presumably those of Neil Portnow, Ken Ehrlich and Jack Sussman as well—will make another incomprehensible decision in the tradition of Esperanza Spalding and Herbie Hancock’s shocking wins, or the selection of Sara Bareilles’ album over those from Justin Timberlake and Jay Z a year ago. We’ll know soon who will be victimized—or Timberlaked—by the committee this year. Such occurrences beg the question, what are the committee’s criteria for making their selections?

MOVES: UMG insiders were expecting the company to make a deal that would keep Scott Borchetta and Big Machine as part of the Uni empire even before the word spread that Borchetta had signed on to become a mentor on the next season of American Idol. (Concurrently, the record rights from the show are rumored to be moving from Interscope to Big Machine.) It now looks like an even better bet that Borchetta will remain in the UMG family, while also giving Universal an increased chance of signing Swift after she delivers her last Big Machine album.

Word is the 2015 Coachella headliners will be Jack White, Drake and AC/DC, assuming all three acts accept the invitations to appear at the fest. It’s a little-known fact that for years, Coachella organizer Paul Tollett of Goldenvoice has had standing offers of $8m to Led Zeppelin, Talking Heads, The Smiths and the original lineup of Guns N’ Roses to reunite and perform at the fest.

NAMES IN THE RUMOR MILL: Boyd Muir, Kevin Kelleher, Jeff Harleston, Julie Swidler, Rob Wells and Fred Davis.

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