• by September 5, 2003

It appears it may be time to short any positions you might have in the music industry. And it's not because the major music companies are still wrestling with ways to control online piracy. It's because technology publisher Future Network is getting into the business. Future Network, you may recall, founded Business 2.0 magazine, which more or less served as the poster child for the pre-bubble burst new economy. And even though the publisher showed some market timing acumen by unloading that title to Time Inc. just before the market crashed - and for the tidy sum of $68 million - we can't help question the company's new diversification strategy into music industry publishing.

Future said it is acquiring several musical titles including Guitar World from Harris Publications for $16 million. We assume they're banking on both luck and plucks. Meanwhile, the major labels are still grasping for a way to get a handle on the rampant piracy of their recordings. There latest strategy is an amnesty program that will grant immunity to any consumer who signs an affidavit and agreeing to remove any unauthorized music downloads from their hard drives. Do you hear that sound? No it's not the rush of notarized affidavits being faxed, it sounds more like chortling. It's a good thing the labels are hedging their bets. After seeing Apple Computer's success with the paid download model - at least for i-pod equipped Mac users - Sony apparently wants to do the same for the Microsoft crowd. The company is said to be hatching a plan to launch a new online music service in the U.S. and hopes to license tracks from the other majors.

Meanwhile, one of those majors, Vivendi Universal's Music Group has hit on a plan reduce the retail costs of its CDs in an effort to combat pirated downloads. The company said it would slash the retail price of its most popular CDs to $12.98, nearly a third off its previous costs. But let's do the math. CD: $12.98; download: free. It still doesn't add up to us. It could be that Vivendi simply sees the writing on the recorded music wall. Or maybe they got a gander at Forrester Research's latest report, "From Discs to Downloads." The report find that one our of five Americans already are downloading music files and that half of those are buying fewer CDs as a result. Within five years, Forrester predicts a third of all music sales will come from paid downloads. "We're about to see a massive power shift in the entertainment industry," says Forrester analyst Josh Bernoff, who predicts all forms of physical recorded media - including CDs and DVDs - will "become obsolete." We assume Bernoff hasn't been in the East Village lately where vintage vinyls are fetching hefty prices. Then again, the Riff has a whole garage full of 8-tracks lying around with nothing to play our Bachman-Turner Overdrives on. Note to Restoration Hardware.

And The Survivor Is: In retrospect, it seems inevitable that the reality TV programming genre eventually would adopt one of the original forms of reality TV, an awards show. And that's just what ABC plans this fall, a prime time awards show telecast celebrating the best reality TV shows on broadcast and cable TV. The still unnamed show and awards ceremony is expected to have categories such as "Best Series" and "Best Twist."