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FROM THIS EPISODE

This is Celia Hirschman with On the Beat for KCRW.

This week's record-business news underscores just how bizarre things have gotten.

Sixteen individual companies bid on the opportunity to own the bankrupt Tower Records in a court-appointed auction. The winner won the right to sell off the record stores' assets in liquidation sale. Say goodbye to the Queen of Sunset Boulevard. After 46 years, she's closing her doors. Tower Records will cease to exist.

Of course, Tower Records was really a magnet for music discovery for 30 and 40 year-olds. Judging from the news this week, MySpace may be filling that void. Comscore, a leading measuring service for the web, announced that people 25 years and older comprise 68% of MySpace-user's base. In fact, they report that more than half of all the MySpace users are over 35 and surprisingly only 30% of visitors are under 25. Since a Myspace page allows streaming of four of your favorite songs, the website is a music-discovery goldmine.

Meanwhile, another destination site for discovery on the web, YouTube, was purchased for a cool $1.6 billion by the search engine giant Google. With only 67 employees, and online less than 2 years, YouTube has to be one of the biggest success stories on the Internet.

But of course, detractors argue that YouTube tramples on basic copyright issues without appropriate permission or compensation. Google clearly isn't interested in mega-buck lawsuits. Hours before the deal was disclosed, YouTube announced they had secured content deals with the Universal Music Group, Sony BMG and CBS. They already had deals in place with NBC and the Warner Music Group. The new deals allow each content provider to receive a share of the advertising revenue.

One site that has no interest in distributing revenue is that pesky Russian mp3 site, which shall remain unnamed on this show. The site sells downloads for pennies, implying that revenue makes it way back to the artists and owners.

But nothing could be further from the truth. Both the European Union and the US have strenuously petitioned to have the pirate site removed from the web. In fact, our World Trade Organization representative, Susan Schwab, argues that Russia should not be allowed into the WTO, until they agree to shut down or legitimize the site. The music site responded, slapping her by saying, "Susan Schwab markets us so effectively, she could already be our press secretary." They just might be right. The illegal site ranks #2 in the UK just behind Itunes.

And speaking of unreal, perhaps one of the most unbelievable stories in music this week is the announcement by the UK Official Chart Company that Beck's new album, will not be eligible for any chart position on sales. This is due to the fact that the CD packaging features white graph paper. The dozens of peel-and-stick stickers inside the package allow the consumer to create their own covers. The UK chart commission had a most unusual reason why the CD would not be eligible for chart status, citing the album packaging gives the artist an "unfair advantage" in the retail market place.

Amazing. Penalizing artists for being innovative. That's rich.

This is Celia Hirschman with On the Beat for KCRW.


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