Orchard Losses Jump Even As Revenue Doubles

The Orchard posted a 99% jump over previous year revenue in the 4th quarter of 2007, but losses also grew from $1.4M to $2.4M as gross profit margins fell 34% to 25%. For 4Q 2007, Orchard revenues were $9.9 million, compared to $4.9 million for 4Q 2006, an increase of 99%. These results for 2007 reflect $1.1 million of revenues from Digital Music Group from the 11/17 merger through December 31, 2007.

Napster Q4 Revenue Hits $31 Million

Shares of Napster Inc. jumped Thursday after the online music retailer said it expects its revenue for the fiscal fourth-quarter, which ended March 31, totaled about $31 million, beating analysts' predictions. The company's revenue totaled $29.1 million in the year-ago quarter. Napster also said its subscriber base rose to about 760,000 by the end of March. (Billboard, Digital Music News)

Universal Music Invests in Digital Distributor INgrooves

Universal Music Group announced on Tuesday that it has made a strategic investment in digital music distributor INgrooves, and will partner with the company to distribute music. San Francisco-based INgrooves recently served as the exclusive digital distributor for Dolly Parton's "Backwoods Barbie" album, and also provides distribution and marketing services for partners including ESL Music, VP Records and Stones Throw Records. (Digital Media Wire, PR)

Buzznet Gets Investment From Interscope-Universal Music; Buys Stereogum; Acquisitions Coming?

Pop culture-focused social media site Buzznet, based in Los Angeles, has raised a big-ish third round of funding, as much as $25 million, we have learned, and that Universal Music-owned Interscope has invested a few million in it. A source close to the company tells us that Qloud, the music application maker backed by Steve Case, has been sold to Buzznet for a “little over their last round valuation. Qloud makes the “My Music” application on Facebook (with similar products on Bebo, Friendster, and hi5), which has 1.8 million installed users. (PaidContent, Mashable)

Talks stall in Clear Channel buy-out

Clear Channel’s proposed $19bn buy-out remained on shaky ground Tuesday as private equity firms and banks remained at loggerheads over terms of the deal’s financing. Neither side had been in contact for the past few days, according to a person familiar with the matter, suggesting a stalemate. Clear Channel, the largest US radio station operator, has become a test of banks’ willingness to fund highly leveraged private equity deals agreed when credit was readily available and inexpensive. (Financial Times)

Justice Dept. OKs merger of XM, Sirius; now it's up to FCC

The Justice Department gave its OK on Monday to a deal that would put Howard Stern and Oprah Winfrey under the same satellite radio company roof. Antitrust officials said that they saw no reason to block or put conditions on Sirius' acquisition of XM, leaving consumers with a single satellite radio provider. "We determined that we did not have evidence to support a challenge," says Thomas Barnett, who heads the antitrust division. (AP, Financial Times, PR)

Toshiba counts cost of HD defeat

Toshiba, the Japanese electronics group, expects to lose Y110bn ($1.1bn) this year on its now-defunct HD-DVD business after conceding defeat to rival Sony in the battle to create a standard for high-definition discs. Toshiba said it would also take a Y45bn charge to account for the depreciation of obsolete manufacturing equipment and the scrapping of piled-up inventory. (Financial Times, AP)

Inside The Deals: AOL May Be Worth More Than You Think

Long-suffering AOL may be worth more than some investors think. Last fall, UBS analyst Mark Morris pegged the value of Time Warner’s AOL unit at $13 billion, a mere 2.5 times revenue. That pessimistic view reflects AOL’s declining revenue, which fell 33 percent last year to $5.2 billion. A lot has changed during the last few months. Oh, AOL’s revenue still is on the decline. But Microsoft’s offer to buy Yahoo for $42 billion has pressured its rivals. That bid, currently worth about six times Yahoo revenue, shows that even mature Internet companies have plenty of appeal to the right strategic buyer. (PaidContent)

Bertelsmann ponders its harmony with Sony

Bertelsmann, Europe’s biggest consumer media group, said that it would sell out of the music business if Sony, its joint-venture partner, was willing to offer a similar valuation to that paid by Guy Hands when he bought EMI for £2.1 billion last year. Thomas Rabe, the chief financial officer, said: “What we will do depends on price. Of course, the EMI price is a good price for a seller, but we would not be interested in selling if we were offered a figure based on the current valuation of Warner Music. The market is undervaluing music assets.” (Times Online, FMQB)

SpiralFrog gets loan extension, fortunes still look bleak

The troubled ad-supported music service that has needed loans to keep operating was supposed to pay creditors $7 million by April 19. At least from the outside the situation looked bad because it was only three months ago that SpiralFrog needed a $2 million loan. Where would a start-up that's only been in business for six months get that kind of money? (News.com)

Bertelsmann keeps deal powder dry

Bertelsmann believes it can exploit its private status to buy assets from struggling private equity groups, but its new management admitted yesterday that it first needed to clean up underperforming corners of its portfolio. Net income plunged in 2007 from €2.46bn ($3.9bn) to €405m, owing to writedowns of its North American book and music clubs, the costs of settling litigation over the Napster digital music service and the absence of 2006’s gains from selling BMG Music Publishing. (Financial Times)

EMI Boss Puts Jobs 'Under Official Scrutiny'

Every employee in EMI’s UK recorded-music division has been told that their job is “officially under scrutiny” by the label’s new owner Guy Hands. It’s understood that Hands, who owns the private equity company Terra Firma which purchased EMI last August, addressed each member of staff in a personal letter. According to the Times, staff in marketing, sales and distribution will face the biggest job cuts. (Gigwise)

EMI favourite to buy Chrysalis as Warner drops out of race

EMI last night edged closer to winning the auction for Chrysalis, one of Britain’s last big independent music groups, as it emerged that rival Warner Music had been sidelined. EMI’s bid for Chrysalis, first revealed by The Times, surprised the industry, as it came at a time of a restructuring and cost cuts. The auction is expected to see Chrysalis, including the independent Bug Music label, valued at about £170 million. (Times Online)

AOL acquires Bebo social network

Time Warner's AOL internet division is buying the social networking site Bebo for $850m (£417m) in cash. Bebo is the third-biggest social networking site in the US, behind MySpace and Facebook. The price-tag is tiny when compared with the valuations of similar websites. Microsoft bought 1.6% of Facebook last year for $240m. (BBC News, PR, Financial Times)

Babelgum invests $15 million in shorts

Internet TV network Babelgum has earmarked Euro 10 million ($15.4 million) fund that will invest in new, original and exclusive content. Babelgum is “transforming into a digital media studio,” spokesperson Andrea Giannotti said of the company, which uses peer-to-peer technology to deliver professionally produced content, instead of the user-generated clips of sites such as YouTube. (Variety)

Peer-to-Peer Software Firm Pando Raises $8.1 Million

Pando Networks, a provider of peer-to-peer file-sharing software, has secured $8.12 million of a $20.9 million second round of venture capital financing, PEHub.com reported, citing a regulatory filing. Pando provides peer-assisted content delivery to media partners including NBC, Blip.tv and ROO Group. (Digital Media Wire)

Next New Networks raises $15M more for video channels

Next New Networks, a company that publishes thematic channels of video online, including Barely Political (which features Obama-cheering Obama Girl), has raised more capital to keep expanding. It has taken $15 million more from Velocity Interactive and Goldman Sachs, we’ve just learned. This adds to the $8 million it raised a year ago. (Venture Beat)

Live Nation to buy Fantasma Production live music assets

Live Nation has agreed to purchase a majority of the live music assets of late Florida concert promoter Jon Stoll's Fantasma Productions, the company said Wednesday. The purchase includes the Fantasma calendar of shows, leases on two outdoor mid-sized music venues and two outdoor festivals, according to a release. (LA Business)

Fan-Financed Music Site Slicethepie Lands $2 Million

Slicethepie, a music discovery site where fans can invest in the recording of albums by their favorite artists, announced on Monday that it has raised $2 million in its third round of venture capital financing. Investors included Microsoft UK director Mark Taylor, Mears Group chairman and CEO Bob Holt, and Gavin Breeze, founder of Datacash. (Digital Media Wire)

Live Nation Q4 2007 Earnings Call Transcript

There’s no question the live music is the one shining star in the music business as major artists are looking to live music for 50 to 90% of their earning potential. As a global leader in live concerts we are the number one business partner for artists worldwide and we believe we can leverage this position to expand into complementary businesses with the artist. (Full Transcript)