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BUSINESS & TECHNOLOGY: XM Satellite Radio Tops One Million Subscribers (Click on More to view all articles)

(CelebrityAccess News Service) – XM Satellite Radio recently surpassed 1 million subscribers, reaching this major milestone in less than two years since its national debut on November 12, 2001.

"With more than one million subscribers, XM has firmly established a new mass-market entertainment medium for consumers nationwide," said Hugh Panero, XM's president and CEO. "XM's success is particularly evident when compared to other media, from the inception of radio to today's latest technology."

Consumers have adopted XM Satellite Radio faster than local radio, television, satellite TV, CD players, MP3 players, or digital video recorders. As a mass medium, XM has reached one million subscribers in less time than cable television or online subscription services — two of the nation's most successful subscriber businesses.

Number of years to 1 Million (comparative products and services):

DVD Players 1 year, 9 months

XM Satellite Radio 1 year, 11 months

Compact Disc Players 2 years, 4 months
MP3 Players 2 years, 4 months
Radio 3 years, 3 months
Television 3 years, 4 months
Digital Video Recorders (DVR) 4 years, 5 months
Video Cassette Recorders (VCR) 4 years, 10 months
Online Subscription Services 9 years, 6 months
Cable Television 12 years
Satellite Television 12 years

Sources: Greystone Communications, Yankee Group

"XM's success has been driven by several factors. We offer 101 channels of critically-acclaimed, live programming, coast-to-coast coverage, and superior sound. We have succeeded in bringing down the cost of equipment quickly, and we have unprecedented distribution through retailers and automotive dealerships nationwide. Plus, the positive word-of-mouth about XM has spread at an extraordinary rate. XM is well-prepared for the traditionally strong holiday selling season," Panero said.

XM will celebrate its one-millionth subscriber with a gala celebration on November 4 at its national broadcast headquarters in Washington, D.C. The master of ceremonies for the day-long celebration will be Quincy Jones. The event will feature live music and stand-up comedy by Shelby Lynne, Cassandra Wilson, Marty Stuart, Kenny Wayne Shepherd, Musiq and Lewis Black. The event will be aired throughout the day exclusively on XM Live (XM Radio Channel 168). –Jane Cohen and Bob Grossweiner

RealNetworks Has More Than 250,000 Subscribers

(CelebrityAccess News Service) – RealNetworks had more than a quarter million subscribers to its digital music services at the end of the third quarter, September 30, and its Rhapsody digital music service now offers more than 400,000 songs.

"Consumers are embracing our subscription services because they let you discover and play all the music you want for one low price, instead of charging you for each new song you want to try," said Sean Ryan, vice president, Music Services, RealNetworks, Inc. "Rhapsody makes it easy to explore new music and enjoy more of it at no extra cost. And when you find songs you love and want to take with you, you can burn your favorite tracks for the industry-low price of 79-cents per song. Rhapsody does it all."

RealNetworks' digital music subscription services include RealOne RadioPass, a commercial free Internet radio service, and Rhapsody, the on-demand music service. For $9.95 per month, Rhapsody delivers unlimited access to a broad library of major and independent label music, with more than 400,000 songs available for on-demand streaming and more than 320,000 songs available for purchase at the industry-low price of 79 cents. In addition to the ability to play any of the music as much as they want, Rhapsody subscribers can burn full albums or custom mix CDs, build their own custom Internet radio stations, listen to professionally programmed, commercial free stations, and browse extensive music information and editorial recommendations to help them find more of the music they like. –Jane Cohen and Bob Grossweiner

Best Buy Wins Rights to Rolling Stones DVD

RICHFIELD, MN (AP) Best Buy Inc has been given exclusive US and Canadian selling rights to the Rolling Stones' new DVD box set "Four Flicks" from Nov. 11 and on into February in a deal initiated by the Stones' record company.

The agreement with the rock 'n' roll band and their record producer TGA Entertainment is considered a major coup for the Richfield-based consumer electronics giant, which said the deal was hammered out over several months.

"We think the Rolling Stones are an incredible band," said Mike Linton, Best Buy executive vice president of consumer and brand marketing. "They have a giant appeal. When we enter into these partnerships, we want to partner with other brands that matter and come together to do things that could not be done separately."

Clark Benson, head of the Almighty Institute of Music Retail, a California-based music marketing firm, predicted that most of the Stones' sales from the new DVD set will occur within four months of its release. Given the Stones' history with previous albums, the "Four Flicks" DVD set, priced at $29.99, seems likely to sell at least 1 million copies in North America.

The Stones' "Forty Licks" two-CD set sold about 4 million copies in the United States, according to figures from the Recording Industry Association of America.

The "Four Flicks" DVD set documents three of the band's concerts from its 2002-03 "Live Licks" tour and features more than five hours of music, including some material never recorded before. Concerts featured are from Olympia Theatre in Paris, Madison Square Garden in New York and Twickenham Stadium in London. The DVD package also includes two documentaries on the band.

Exclusive alliances between big recording artists and retailers aren't new. Target had one this summer with Justin Timberlake and Christina Aguilera on a joint CD. And since 2000, Best Buy's exclusive promotions have included deals with Sting, U2 and NSYNC.

But George Whalin, a California retail consultant, said Best Buy's deal with the Rolling Stones gives the nation's largest retailer of consumer electronics "an edge over everyone else who sells music" because of the Stones' popularity.

Best Buy, which operates nearly 700 stores in the United States and Canada, won't say how much it paid for exclusive selling rights. Industry sources estimated Best Buy's deal easily runs into the millions of dollars given the retailer's plans to conduct a multichannel marketing campaign that will include in-store signage, national TV advertising, newspaper circulars, direct mail and the company's Web site.

Benson said the deal hurts all other music retailers and is an insult to many independent music retailers who have carried an extensive catalog of the band's material for years.

In fact, three big music chains in Canada have already announced they are pulling some Rolling Stones merchandise and music off shelves in protest. HMV Canada president Humphrey Kadaner said the company has to take a stand, if it means significant losses by Christmas.

The Wall Street Journal reports the Virgin Megastore chain has sent a letter to a Rolling Stones lawyer saying it's reviewing its support for the band because of the Best Buy deal.

But Best Buy executives believe the partnership with the Rolling Stones will be a winning combo for the band, its fans and their company.

"The decision (on marketing) was that of the Rolling Stones," said Gary Arnold, Best Buy senior vice president entertainment. "We can market the product more effectively to the consumer than anyone else. If other retailers wanted to step forward with a better offer, then the Rolling Stones would have made the decision to go with them."

Said Linton, the Best Buy executive vice president: "In the end, the arbiter of fairness will be the marketplace."

Stones Defend DVD Sales at Best Buy

NEW YORK (AP) — Mick Jagger is defending the Rolling Stones' decision to sell their new DVD box set "Four Flicks" through Best Buy and no other music retailers.

"This is not like not allowing them to sell some Blockbuster movie, which is going to sell 2 million DVDs in first week, you know, a 'Raiders of the Lost Ark' or something like that," Jagger told The Associated Press on Thursday.

"I think that this is like really small potatoes compared to that," he said.

Best Buy, which operates nearly 700 stores in the United States and Canada, won't say how much it paid for exclusive selling rights. Industry sources estimated Best Buy's deal easily runs into the millions of dollars given the retailer's plans to conduct a multichannel marketing campaign that will include in-store signage, national TV advertising, newspaper circulars, direct mail and the company's Web site.

George Whalin, a California retail consultant, has said Best Buy's deal with the Rolling Stones gives the nation's largest retailer of consumer electronics "an edge over everyone else who sells music" because of the Stones' popularity.

Three big music chains in Canada announced they were pulling some of the band's merchandise and music off shelves in protest after learning of the deal.

"I feel bad for the stores that aren't going to have the product, but they have lots of other products, to be honest, and music videos don't sell anything like movie DVDs," Jagger said.

But the band had the fans in mind all along when it made the decision, he said.

The Best Buy partnership will allow them to buy the DVD set for about $30 instead of $60, he said.

The set documents three of the band's concerts from its 2002-03 "Live Licks" tour and features more than five hours of music, including some material never recorded before. Concerts featured are from Olympia Theatre in Paris, Madison Square Garden in New York and Twickenham Stadium in London. The DVD package also includes two documentaries on the band.

Given the Stones' history with previous albums, the "Four Flicks" DVD set seems likely to sell at least 1 million copies in North America.

The Stones' "Forty Licks" two-CD set sold about 4 million copies in the United States, according to figures from the Recording Industry Association of America.

"Four Flicks" will be released Nov. 11.

Fred Carl Named Chairman of Blues Group

INDIANOLA, Mississippi (AP) — Fred Carl Jr., president of Viking Range Corp., has been named chairman of the Mississippi Blues Commission, a group to market the Delta's blues heritage.

Carl was one of 13 people from government, business and arts communities chosen by Gov. Ronnie Musgrove to serve on the commission.

"Mississippi is the undisputed birthplace of the blues, not Memphis or Chicago," Musgrove said at a news conference in Indianola last week.

"Life in the Mississippi Delta was shaped by the land, the river and a people who found release and expression in a profound musical form that came to be known as the blues."

The Blues Commission is to report to the governor and Legislature by Jan. 15 on plans to market the blues, promote tourism and economic development.

Proffitt Resigns as Executive Director of AFIM

(CelebrityAccess News Service) – Courtney Proffitt, executive director of the Association for Independent Music (AFIM), has resigned her post to accept the position of senior vice president of Distribution and National Sales director for Viastar Holdings Inc. AFIM is the professional trade organization serving the independent music industry. Proffitt has served as its executive director since May 1, 2002. Viastar Holdings develops, produces and distributes entertainment related media for music, film, television and publishing.

"I have been very happy and honored to work with AFIM the past year and a half," says Proffitt. "Sales and distribution of music product is my first love, and I am thrilled to be able to return to that part of the business"

Clay Pasternack, chairperson of the AFIM Board of Trustees says, "We could not have made it through the last 18 months without Courtney. Her contributions, enthusiasm, and dedication have been a positive breath of fresh air in an otherwise turbulent industry. She will be missed."

Proffitt's final day at AFIM is October 31. The executive committee of Clay Pasternack, Bruce Iglauer, and Duncan Browne will supervise the day-to-day operations until a new executive director is hired. –Bob Grossweiner and Jane Cohen

CCE's Instant Live CDs to Be Distributed by Newbury Comics

(CelebrityAccess News Service) – Newbury Comics, Inc. has inked a deal with Clear Channel Entertainment to distribute CCE's "Instant Live" CDs to consumers nationwide. Instant Live is Clear Channel's music service providing music fans high quality CD sets of live performances, recorded and sold at the venue immediately after a show. Together, Newbury Comics and Clear Channel Entertainment will be offering Instant Live CD sets to fans across America, who were unable to attend the Instant Live concert through Newbury Comics retail stores and an aggressive Internet marketing effort.

"The Instant Live concept has already proven itself with live concert fans at our test venues," says Steve Simon, executive vice-president of Clear Channel Entertainment, "and when we looked to retail, we knew that Newbury Comics would be a great ally to bring innovative marketing, solid retail insight and a true passion for all types of music."

Mike Dreese, CEO of Newbury Comics, adds, "It is extremely exciting to be collaborating on such an interesting venture. The new business model which Clear Channel Entertainment and Newbury are pioneering together will be a giant step forward in bringing high value, timely content to music fans, whether at the concert or through retail. This is also a great avenue for many artists, who are currently unsigned to get their music out to their fans."

In addition to sales direct to consumers, Newbury Comics, will soon be wholesaling Instant Live CDs to other progressive retailers through its online wholesale distribution company, Toothface Distribution (

The first Instant Live CDs available for distribution will be select live shows from the jam band moe. Clear Channel Entertainment and moe. have produced CD sets as the tour has progressed. Between five and seven recordings from the band's current tour are expected to be released to select retailers. Additional CD sets from other Instant Live shows will be made available through Newbury Comics and its Toothface Distribution in the months ahead.

The 25-year Newbury Comics, Inc. is New England's premier music and pop culture retail chain, with 24 stores in four states and revenues in excess of $75,000,000.00 last year. Newbury has been named "Retailer of the Year" by the National Association of Recording Merchandisers four times. –Bob Grossweiner and Jane Cohen

Hollywood Preaches Anti-Piracy to Schools

SAN FRANCISCO (AP) — As part of its campaign to thwart online music and movie piracy, Hollywood is now reaching into school classrooms with a program that denounces file-sharing and offers prizes for students and teachers who spread the word about Internet theft.

The Motion Picture Association of America paid $100,000 to deliver its anti-piracy message to 900,000 students nationwide in grades 5-9 over the next two years, according to Junior Achievement Inc., which is implementing the program using volunteer teachers from the business sector.

Civil libertarians object that the movie industry is presenting a tainted version of a complex legal issue — while the country's largest teachers' lobby is concerned about the incentives the program offers.

"What's the Diff?: A Guide to Digital Citizenship" launched last week with a lesson plan that aims to keep kids away from Internet services like Kazaa that let users trade digital songs and film clips: "If you haven't paid for it, you've stolen it."

"We think it's a critical group to be having this conversation with," said MPAA spokesman Rich Taylor, suggesting online piracy may not have yet peaked. "If we sit idly by and we don't have a conversation with the general public of all ages, we could one day look back at October of 2003 as the good old days of piracy."

The effort doesn't stop in the classroom. Beginning Friday, public service announcements are being released to approximately 5,000 theaters nationwide, profiling people in the movie industry and arguing that digital piracy threatens their livelihoods.

Indeed, Jack Valenti, president of the MPAA, told Penn State University faculty and students this week that his industry is in "a state of crisis" over digital theft.

But some copyright law experts aren't pleased that the MPAA is the only sponsor for such classroom discussions. They worry that the lesson plans don't address "fair use" constitutional protections for digital copying for personal or educational use.

"This is really sounding like Soviet-style education. First they're indoctrinating the students and then having students indoctrinate their peers," said Wendy Seltzer, a lawyer for the Electronic Frontier Foundation. "The takeaway message has got to be more nuanced. Copyright is a complicated subject."

Melinda Anderson, a spokeswoman for the National Education Association, says it's unsettling when corporate presence in the classroom is tethered to sponsored incentive programs.

In this case, Junior Achievement is offering students DVD players, DVD movies, theater tickets and all-expenses-paid trips to Hollywood for winning essays about the illegalities of file-sharing. Teachers, too, can win prizes for effectively communicating the approved message in class.

"What it speaks to is kind of a new era in commercialism emerging in classrooms where the attempts to connect with students are becoming more and more sophisticated. Schools that are often strapped for cash are more tempted to partner with these organizations," Anderson said.

"Coming from school, these companies are getting a tacit endorsement for their product," Anderson said. "That's not a school's role — to be the purveyors."

The program got a rocky start during its first presentation, to some relatively cyber-savvy teens at Raoul Wallenberg High School in San Francisco.

Andrew Irgens-Moller, 14, buried his head into a backpack on his desk and rolled his eyes as the guest teacher warned of computer viruses and hackers that could take control of a user's desktop via file-sharing programs. He objected that antivirus software could scan downloaded files and only sophisticated hackers could pull off the remote desktop computer takeover.

Then the teacher cut him off.

Bret Balonick, a tax accountant on loan from PricewaterhouseCoopers to teach the anti-piracy class, was arguing that some downloaders have been affected by malicious activity. Besides, he said, it's illegal to upload and download unauthorized content online.

"If it's illegal in America, host it in Uzbekistan," snapped the 14-year-old.

Balonick then had the freshmen role-play as singers, actors, producers, computer users. But even the "producers" quietly acknowledged that they too share song files over the Internet.

"It's not illegal if you decide to give it away," said Wilson Cen, 13, regarding burning copies of music CDs for his friends. "They don't want you selling them. It's a gift, you're not selling it."

Brenda Chen said she uses Kazaa at home: "I just want certain tracks from the CD, not the whole CD. It's a waste of money."

David Chernow, Junior Achievement's chief executive, said in a telephone interview that the explosion of peer-to-peer activity among young people is a ripe topic for public school classrooms.

"We're really trying to teach young people to be responsible and to obey laws that they may not understand," Chernow said. "Just because it's easy doesn't make it right."

Napster Is Back–Pre-Paid Napster Cards Available

(CelebrityAccess News Service) — Napster's highly-anticipated Napster 2.0 music service went live to music fans across America on October 29. Napster 2.0 offers consumers downloads for just 99 cents a song or $9.95 per album, CD burning, transfer to portable devices, decades of Billboard charts, shared playlists within the Napster community, exclusive and original content, interactive radio, music videos, and access to the world's largest music store with more than half-a-million tracks and growing.

"We have created the most exciting and comprehensive music experience in the world," said Chris Gorog, chairman and CEO of Roxio, Napster's parent company. "Napster 2.0 is extremely easy-to-use and music fans will find endless enjoyment as they search for, discover and share music."

Napster 2.0 boasts an extensive list of exclusive tracks from Coldplay, Wyclef Jean, David Bowie, The Strokes and The Ataris. The new service also features exclusive live sessions recorded in Napster's Los Angeles studio from Guided By Voices, MxPx, Brian McKnight and Cold, among others. Exclusive tracks and live sessions will be regular features on the service.

Napster 2.0 users can freely sample the world's largest and most diverse online collection of music, featuring more than 500,000 tracks. A revolutionary user-friendly interface allows people to quickly search for music, discover new artists, burn CDs and transfer music to an array of portable devices. Any visitor to the service can download Napster 2.0 free of charge, watch music videos on demand, listen to 30-second music clips, browse decades of Billboard charts, read Napster's online magazine, Fuzz, email tracks to friends, browse other members' collections and take full advantage of the most robust music recommendation engine ever created — all without spending a dime. Napster 2.0 also allows users to import their existing music files from their hard drive into the service so they can store, organize and access all of their music from one central location. Napster's customer support is available both via phone and email.

Music fans also have the option to upgrade to the Napster's premium service, which offers all of the features of Napster 2.0 plus unlimited online and offline listening, over 40 commercial-free, interactive radio stations and additional community features, all for just $9.95 a month.

"For years, music fans have been asking for a compelling and legal online music service that gives them the ability to share and discover music, the freedom to take their songs anywhere they want, and the choice to pay as they go or subscribe monthly," said Napster President and COO Michael Bebel. "Napster 2.0 addresses everything consumers have been looking for and a whole lot more."

Napster will also have a significant retail presence this holiday season when pre-paid Napster Cards offering 15 songs for $14.85 become available in more than 14,000 leading retail stores nationwide by mid-November. The Napster Card will enable consumers to give the gift of online music and legally download music and burn CDs without the use of a credit card.

Napster's launch was commemorated this with an exclusive concert at the House of Blues on the Sunset Strip in Los Angeles with Ludacris, Dashboard Confessional, Interpol, Metric and DJ Melo-D. More than 500 Napster fans received free tickets to be part of the celebration. –Jane Cohen and Bob Grossweiner

Kazaa Spotlights Emerging Artists

(CelebrityAccess News Service) — Sharman Networks, publishers and distributors of Kazaa, have launched the Kazaa "Emerging Artists Channel," an initiative that enables emerging artists to promote and sell music using peer-to-peer technology. This new feature of Kazaa demonstrates the power and flexibility of peer-to-peer technology as a universal commercial platform for promoting and selling music, especially for independent musicians.

Developed in partnership with Altnet Inc, the leading provider of secure digital media via peer-to-peer technology, and, a self-service online label for musicians, the Emerging Artists Channel provides a new music 'incubator' within Kazaa, allowing independent artists around the world to promote and sell their music directly to an estimated 60 million music lovers worldwide.

From just US$9.99 a month per track, plus a one time set up fee of US$49.95, artists can have their songs promoted in two ways: First, the songs are given preferred placement in Kazaa search results with a 'Gold' colored icon using Altnet's TopSearch service. Second, songs have a listing featured in the Emerging Artist Channel. Altnet also digitally secures each song and allows artists to control the distribution rules of their music, for example, as a paid download, try-before-you-buy, or free sample. Each time a 'Gold Icon' file is shared via Kazaa, each new user must agree to the license before gaining access to its content.

The Emerging Artists Channel showcases the latest and greatest independent music from around the world. Music fans can download songs, share and build playlists, vote in a "best bands" competition, and listen to a free streaming radio player. Popular songs appear in a "Top 100" style hit list, ranked according to their popularity with Kazaa users.

"More than 75 million songs from over 1,000 emerging artists have been downloaded by Kazaa users in the past 12 months through services provided by Altnet and Cornerband," said Nikki Hemming, CEO of Sharman Networks. "The Emerging Artist Channel recognizes the increasing demand for these services that make it even easier for a new generation of bands to take advantage of low cost promotion and for music lovers to discover great new music. Every great band and musician has to start somewhere, and this is a fantastic new way to be discovered."

Illustrating the power of peer-to-peer promotion, San Francisco based band, Ten Mile Tide, has promoted its music through file-sharing on Kazaa for the past 12 months. The band has seen its songs downloaded more than 8.6 million times and online CD sales double, making the dream of being able to quit their day jobs come true.

According to Scott Beck, CEO of Cornerband, "The concept behind the Emerging Artists Channel is to provide a low cost stepping-stone for growth into the mainstream market — it's not much to pay for such great exposure. Once a band becomes more established, they can move to more prominent and higher trafficked promotional areas within Kazaa."

Altnet Senior Vice-President Christian von Burkleo said: "It's the new radio, a perfect win-win for independent musicians and music lovers. Independent musicians get a low-cost way to promote their music to a massive audience and Kazaa users get to discover great new music." –Bob Grossweiner and Jane Cohen