Atlantic, Sony Plan Web Video Channels

NEW YORK‹Plans by Atlantic Records and Sony Music to launch their own online music video channels, announced during the Plug.In technology/music conference held July 15-16 here (BillboardBulletin, July 15 and 16), underscore the expanding role of record labels in the online world.
The moves, which also include Atlantic's establishment of an in-house digital production studio for live Webcasts and performances, mark labels' transition from content providers to content programmers, and as such they are raising both hopes and concerns over the implications among those in the industry.
Sony's Video Music Network (www.videomusicnetwork.com), which launches this summer, and Atlantic's INSTAVID (www.instavid.com), which bows Sept. 1, will be part of the default channel offerings on RealNetworks' new audio/video player, RealSystem G2. Seattle-based RealNetworks already has 25 million registered users for previous editions of its RealPlayer software.
"RealNetworks' goal is to enable companies to better reach their customers and let them do their magic," says Brett Atwood, the company's editor of music services. "For the first time, proactive labels such as Atlantic and Sony can go directly to consumers with the music videos they have produced."
Sony Music Entertainment Inc. VP of new technology and business development J. David Waldman calls the Video Music Network a substantial direct marketing tool and says Sony will make good use of the new channel to air new and catalog clips, as well as exclusive premieres from affiliate labels and Sony proper.
The Sony channel will launch with 250-300 videos, equally distributed among five genre-based sub-channels: pop, R&B, rock, dance, and country.
"What could be more natural than for content owners to make their content available?" asks Waldman. "Here we are finding one more way to bring the artist closer to the fans, and we're in the best position to do that."
Atlantic, on the other hand, will blend genres of the approximately 200 catalog and new videos it will offer at launch.
"The music industry has relied for so long on genre and format," says Atlantic senior VP of new media (U.S.) Karen Colamussi. "This is one place where we have the chance to create a unique experience, one that does not depend on the restrictions of the past."
Atlantic also has aggressive plans in other areas of music streaming. In addition to INSTAVID, the label has announced a new, in-house Internet studio, dubbed the Atlantic Digital Studio (www.digitalarena.com). To christen the online venue, which will be the site for various interviews and performances, Hootie & the Blowfish performed an exclusive mini-concert July 16 that featured material from their forthcoming "Musical Chairs" album.
Both Atlantic and Sony have plans to let users provide feedback and vote on favorite videos to affect the playlist, but they won't offer on-demand services.
Sony doesn't plan to provide a direct sales option within the channel; Atlantic does. The labels will still sell music from their main sites, which are linked to each of the channels.
The formation of these new channels raises questions about the future of online music video programmers such as Streamland and MusicVideos.com. So far, most major labels have refused to service these channels. If other major labels follow the lead of Sony and Atlantic, will Internet video programmers that rely on the intellectual property of record companies to sustain their advertising-based businesses be able to survive?
Greg Morrow, VP of marketing for MusicVideos.com, believes there will continue to be a consumer demand for channels that offer videos from a number of different labels. "Everyone has different business models, and the labels have to explore what works for them, but what I think they'll find is the consumers are going to get confused," he says. "Like in retail, there needs to be an aggregater of content."
Colamussi also believes there can be a co-existence. "They're going to develop their own niche," she says. "I predict that as different brands are established, what we'll see are a lot of editorial-based niche channels that will be very healthy for the industry and promote specific types and styles of music."
Atwood, too, sees the advent of major-label video channels as a healthy development for other online programmers.
"When well-known, established corporations enter the [online programming] space, that's good news to everybody," he says.
The new channels could also help remedy a common industry gripe that gatekeepers such as MTV and VH1 have a stranglehold on music video programming. Many clips, which can cost $100,000 or more to produce, often end up receiving no major airplay.
Still, Sony and Atlantic representatives say their efforts aren't designed to be competitive vehicles. Rather, they say, the programs will help the labels market their music more efficiently, expand consumer options, and give baby acts a fair chance of exposure.
"The labels have a tremendous amount of information and source material that, for the most part, the public hasn't had the chance to see only because there is so little room in the pipeline," says Colamussi. "For the first time, all music will be accessible, and it's a level playing field."
Concerns have also been voiced regarding fair-competition practices and licensing issues.
If, as the Recording Industry Assn. of America insists, Internet broadcasters are required to pay licensing fees to sound recording owners (i.e., labels) beyond those collected by organizations like ASCAP and BMI (Billboard, June 27), do labels hold an unfair advantage in the online programming arena?
At an early-July music and technology conference in San Diego, Rep. Brian Bilbray, R-Calif., voiced concern that such fees, negotiated between labels and Webcasters, may be prohibitive to competition.
"There is now a possibility of [a few] people controlling the record industry right now, because they don't have to worry about the bright lines," said Bilbray. "They know they've got copyrights and the right to broadcast. They can move into a new segment of the industry and preempt other, smaller companies because, basically, the smaller companies don't have the absolute right to copyright and can be nickeled and dimed by millions of bits."