German indie distribbery Neuton is broke

This news has been bubbling under since last week and now is all but confirmed. Neuton, a German distributor mainly for independent electronic music labels, has filed for bankruptcy earlier this week. FOEM first reported rumors about this on November 28, now even Billboard is going with the story. 

Neuton is especially known for vinyl product by labels like Tresor, Perlon, Vakant or Four Twenty. In the past the Frankfurt-based company also handled releases by BPitch Control, Klang or Playhouse. 

As of now it is unknown how many staff will be affected by the insolvency. Some of Neuton’s client labels might feel the squeeze as well, if they don’t receive payment for shipped product. 

A year ago the company together with fellow vinyl experts Intergroove, Word and Sound, Groove Attack and Kompakt had formed the coalition Pro-Vinyl which was aimed at promoting the format.

How much money will Amazon lose selling cheap MP3s?

59 Pence for a song, £3 for an album – how in the world does Amazon UK plan to make money on selling downloads? I suppose by selling a shitload of songs every day. This service will only be more than a huge loss-leader, if the British MP3 store succeeds in attracting millions of customers who not only snap up the bargains but also spend a quid or two on higher-margin products. Is that going to happen? Who knows. 

Some doubt it. The Guardian headlines “The Amazon MP3 store – does anyone care?” and reminds readers that Apple’s iTunes has a share of 70-80 percent of the UK download market. 

Screen Digest senior analyst Dan Cryan said the evidence so far from Amazon MP3’s performance in the UK is that it has been “additive to digital music consumption, rather than eating into it”.

The problem with these discounts – 25 percent on some individual songs and 67 percent on some albums compared to iTunes – is that Amazon, unlike Apple, isn’t selling hardware that could subsidize the low-cost software. 

Dan Cryan again: ”It’s fine if Apple just about break even, and fine for Tesco to sell at a loss. But Amazon is a content retailer so that’s a problem for them, and they don’t have the same advantages as they do with books and DVDs in warehouses where Amazon doesn’t have to pay the same overheads as its rivals.”

But maybe, somehow Amazon can pull this off because of its strong position as an online retailer in Europe. Hard to tell. The company never released any financial details for the MP3 store in the U.S. The analysis remains anyone’s guess. 

Here is what JupiterResearch’s Mark Mulligan thinks: “If anyone can make digital download stores work outside of the iTunes / iPod eco-system, it is Amazon. They have the programming expertise, the packaging expertise, the audience (more European iPod owners buy CDs online than they do downloads).”  

Amazon spokesman Damian Peachey told the Telegraph: ”I don’t want to get into the economics of it, but we want to encourage our customers to get into MP3 who have never downloaded music before.”

UK indie distributor Pinnacle goes into administration

It keeps getting worse for the British music industry. While retailers and labels are still trying to figure out how to best deal with the collapse at Woolworths/EUK news of another fatality are surfacing. Pinnacle Entertainment, one of the leading independent distributors in the UK, is feeling the crunch. The company has gone into administration, Musik Week reports. 

Senior staff are believed to be in meetings this afternoon in an attempt to resolve the situation. Staff are not answering phones at the company’s Sidcup headquarters. However, Music Week has spoken to several sources within the industry who confirmed the news. 

Pinnacle is the distribution company for some 300 indie labels, including Dramatico, One Little Indian, Cooking Vinyl, Fierce Panda, Bella Union or Jeepster. It had a 3.8 percent share of the albums market in Q3. And according to the BPI, Pinnacle had a 4.3 percent market share in 2007. Top titles for the final quarter include albums by Belle & Sebastian, Fleet Foxes, Katie Melua and Eva Cassidy. 

In order to assist labels with the situation UK indie trade body AIM will hold an emergency meeting tomorrow morning.

UPDATE: Billboard now reports that accountancy firm BDO Stoy Hayward confirmed it had been appointed as the administrator today. Following an initial review of the company, 94 staff have been made redundant. The company’s wholesale business Windsong Holdings is also in administration. Matthew Tait, BDO Stoy Hayward business restructuring director, said in a statement: “Unfortunately the company has been affected by the sudden and steep downturn in the U.K. economy. We are looking at how best we may be able to handle the trading assets and work with the company to achieve the most favourable outcome.”

Amazon MP3 crosses the Atlantic, opens shop in UK

It took a little bit longer than expected but the UK version of Amazon MP3 is finally here. During the summer many thought the store would launch in September, now Amazon did a “soft launch” – meaning they are not really making a lot of noise about it. 

They should, though. The prices for some top frontline releases are ridiculously low. “Only By The Night”, one of my favorite albums this year by Kings Of Leon, is only £3 ($4.42/€3.50). And so are many other hot titles. For instance, Take That’s “The Circus” which was released just this week is being offered for £3 as well. Most albums seem to have a £6.49 ($9.57/€7.58) sticker, though. 

Individual tracks are as cheap as £0.59 ($0.87/€0.69) and go up to £0.80. Some recent hits are also being sold at this steep discount that not only targets iTunes UK but also all the other MP3 stores like 7digital, PlayDigital or HMV. Hottest cheap track for the season: “Fairytale of New York” by The Pogues.

All four majors are on board and several independent labels like Beggars Group, IODA, The Orchard, Cooking Vinyl or Harmonmia Mundi. However, there remain holes in the available catalog (appr. three million songs) at launch. Some examples that matter especially in Britain: no Oasis, no Arctic Monkeys, no Franz Ferdinand.