EMI might exit US distribution

According to unconfirmed reports EMI Music is thinking about giving up distribution in the United States. Unidentified label sources have told CNET News that EMI is looking to outsource physical and digital distribution in the U.S. to one of the big three competitors.

Representatives from EMI have reportedly met with Universal Music, Sony BMG and Warner Music as recently as this week, writes Greg Sandoval. While talks appear to be in early stages, a move like this seems quite likely, considering the fact that EMI retreated from the Asian market in September by handing over their catalog to licensing partner Warner. 

Other sources told Fortune that EMI is only looking to get out of the delivery of physical product to traditional retailers. Outsourcing both, marketing and distribution could save EMI as much as $300 million per year, these sources say. But for now, it seems like EMI only wants out of the physical distribbery business. This could also encompass indie distribution arm Caroline. Fortune also heard EMI might be willing to license its jazz and classical catalog to another label, but spokeswoman Jeanne Meyer already denied that rumor. 

In Europe EMI has been outsourcing its logistics to a company called CEVA in countries like Germany, UK, Spain, Portugal, Austria, Switzerland or the Netherlands. 

At this point it remains unclear how much of EMI’s distribution and sales expertise will be given to third-party companies. More action to come, I suppose.

France one big step closer to “three strikes” legislation

The French Senate has voted overwhelmingly in favor of President Nicolas Sarkozy’s plan to introduce legislation that will enable authorities to cut off the internet connection of repeated filesharers. The French call this a measure of graduated response or Riposte Gradueé, around the web it is more commonly known as the “three strikes” rule. 297 Senators gave the law (Création et internet) a thumbs up, only 15 voted against it. Now the National Assembly has to greenlight the bill before it can become French law. In theory the Assembly could still throw the bill out, but given its clear acceptance in the Senate and a Sarkozy-leaning majority in the Assembly this looks rather unlikely. 

Under the new law, people who are caught sharing copyrighted files illegally over the internet will first receive a warning email, followed up by a written letter via snail mail. If users continue their downloading and are caught a third time, their ISP will cut them off for one year. Critics had argued a fine would serve better as a punishment, because a connection to the internet has become an essential commodity to most citizens. 

This, however, also seems to be the reasoning of the French government which likens the plan to suspending someone’s driving license due to a DUI charge. Christine Albanel, Minister of Culture and Communication, defended the cut-off as being “educational”, while a fine would simply be a measure of repression. 

Other European countries are looking into similar legislation, namely Great Britain and Germany. Albanel would like to help EU members and the entertianment industry to expand the “three strikes” concept throughout Europe, while France has the Presidency of the EU Council.

At a meeting attended by European independent label group Impala and EU politicians in Paris, Albanel recently said: “Of course, there is no secret plan to impose the French anti-piracy plan to the rest of Europe. I simply wish that our experience will prove an inspiration for other European states whose cultural businesses are as threatened as the French ones.  This law won’t be the law of the majors, it will be the law of all creators and of all the cultural industries, 90 percent of them being SMEs [small and medium enterprises]; it won’t be the law for well-known artists but one for young talent; it won’t be a law for the CEOs of big corporate companies but a law for hundreds of thousands of people employed in this field, from the technician to the artist, from the author to the producer.”

MySpace Music to hire Holt as CEO?

The search for a CEO to lead MySpace Music has been on for almost one year now. Many a good candidate turned down the offer, including Eric Garland, Dave Goldberg, Ian Rogers and Andy Schuon. In early September it looked like Owen Van Natta, who used to work for Facebook, might get the job – or rather: would want the job. 

Meanwhile, some sources point to the imminent appointment of Courtney Holt, CNet reports. Holt currently holds the position of Executive Vice President Digital Music and Media at MTV Networks and he could be close to signing the contract. Word out of New York is, they’re only finishing the details. 

Holt has his work cut out, should he indeed sign up to serve under Chris DeWolfe and Amit Kapur. Even though streaming numbers at MySpace Music were solid in the week after the launch, there wasn’t a lot of positive noise surrounding the service recently. All you hear is independent labels complaining about being left out.