Grokster in Talks to Be Bought By Mashboxx

Carl Bialik from the WSJ writes "The Supreme Court's ruling in Grokster has driven the P2P company to enter talks with Mashboxx, 'an upstart that is attempting to establish a legal peer-to-peer music company, according to people familiar with the matter,' the Wall Street Journal reports. Mashboxx would let users sample free but charge for downloads. The WSJ adds: 'To encourage the file-sharing companies and their users to go legitimate, the labels are seriously considering dropping such claims, some record executives say. In fact, say people close to the talks, Grokster is negotiating a settlement with the RIAA. The RIAA and Grokster declined to comment.'"

Comments

Re:Ruling?

[AviN456]

Read all about it here http://yro.slashdot.org/article.pl?sid=05/06/27/15 5212

Ringtones

[Joe Random]

If the cell phones were capable of playing music samples that were user created it's highly unlikely that people would purchase ringtones.

Some can, and I don't. More specifically, my phone (an LG VX6000) can play MP3 ringtones -- once you've purchased the correct USB cable and scoured the Internet for the necessary software, that is.

As an aside, "Battle without Honor or Humanity" from the Kill Bill soundtrack makes a great alarm. Put that sucker on full volume, and it never fails to wake me up.

Re:Why P2P?

[Jerry Coffin]

Apple has it right for a company that sells consumer electronics. they don't make any money off song sales.

That doesn't seem to square with Apple's financial statements. Their latest 10-Q says they made 241 million US dollars on "other music products". That category covers:

Other music products consists of iTunes Music Store sales, iPod-related services, and Apple-branded and third-party iPodrelated accessories.

Given the looks of the other parts of that, I'd guess the iTunes sales accounts for over $200 million US dollars per quarter.

According to the same statement, Apple's total net sales for the quarter were 3 520 million dollars, so iTunes accounts for between 5 and 6 percent of total sales. Given the profit margin on iTunes versus hardware sales, I'd guess that iTunes accounts for a substantially higher percentage of their profits.

To make a long story short: Apple does make money on iTunes, and fair amount of money at that. Even if we ignore percentages for the moment, $800 million US/year is certainly not a negligible amount of money. It's also worth noting that this currently has a growth rate of 230% annually, so unless the growth stalls out completely, it'll be well over a billion (milliard for non-US residents) US dollars next year.

In fairness, yes, Apple also makes a lot of money by selling iPods, and quite a bit of the cost of running iTunes is probably amortized over other parts of the company, so they can undoubtedly run iTunes profitably at a price per song that would kill almost anybody who was only selling music. --
The universe is a figment of its own imagination.

Re:Why P2P?

[Agrippa]

"What I don't understand is how they can fail to make money at $1 a track. Everyone bangs on about how little the artist cough pretty face cough gets paid. so that must therefore mean a large portion, lets say 90c (and I think that 10c to the artist is generous), of that $1 is being spent on other things."

Because you are forgetting (or don't know about) the fact that publishing companies, which are seperate from the record companies, also get their share of the revenue. Each publishing company gets to negotiate their own rate structure for the use of their songs.

Then, depending on the artist/track, there can be multiple other parties (other than the record company/publishing company) with percentage total ownership of a track who also need to be paid.

The whole music industry is one big clusterfuck of entangling relationships.

.agrippa.