Marvin, the entire E-music sector has been placed in a sort of purgatory, pending the finality of the lawsuits by the Record Industry. However, what Wall Street has failed to realize is that the battle is essentially over. The Record Industry won. MP3 has to cough up the lions share of the money it receives from downloads. . .and now has to LICENSE any tracks involving copyrighted works. . . Napster is likewise forced to cut licensing deals with the industry.
In other words the U.S. courts have ruled that both MP3 and Napster FREE downloads of copyrighted music is a violation of Federal Law. Plain and simple.
And both MPPP and Napster hired Liquid Audio to solve their problems!! LQID will be devising software for them to SELL their music to the customer. . .then pay the licensing fees to the record companies.
Meanwhile, Liquid Audio has been quietly cutting licensing deals of their own. . .meaning their catalog has grown dramatically. . . and their system for LEGAL downloads is the oldest on the net. . . I believe they are into about 5.0 software at this time. CD quality downloads with a brief preview of most every recording. It is a great system. . .and because I have their mastering software and a studio, we may even one day see some financial audio transcripts available via LQID.
And while everyone in the record industry was watching the courts on MP3 and Napster. . . Liquid Audio was signing distribution deals with major recording artists. This means that with many artists, if you want their music online, you MUST go to Liquid Audio. Some artists are saying goodbye to the traditional record contracts, where they are lucky to see a quarter for every CD sold AFTER they pay back the millions they received in advance payment against earnings for the production of their recordings and videos. . . . . . and hello to Liquid Audio, where they can see a ten-dollar bill for every CD sold. Where it once required 3 million sales to break even, now they are making their own records and hitting break-even at just 50,000 copies sold! With the rest being gravy!!
And when word of this gets out to many other artists, there will be a mass exodus from record contracts. . . to self-promotion. I predicted this nearly two years ago on my very 1st thread on Silicon Investor. . .Internet Music Winners.
E-Music has been a beaten down sector this year. . . but I believe we are on the verge of a turnaround within about 4 weeks. MPPP will finally cut their deal with Seagram's UMG, the worlds largest record company. . . giving MPPP a nice pop. . .but in my opinion, making them instant shark bait, as they will have given away the store. . .leaving them insufficient revenue to maintain their business model. . . in other words, on the pop from the news with UMG, I would happily short MPPP. . . as the no-brainer short-pick of 2000.
However, about this same time, I would go long LQID and maybe a few others like EMUS. . .
[I still cannot understand why Liberty Digital has not bought Liquid Audio. It makes so much sense.]
Anyway, I hope that helped put things into perspective.
Rande Is |
