English rock band The Verve, famous for the hit single "Bitter Sweet Symphony" and the ensuing struggle over the rights to the song (eventually awarded to Mick Jagger and Keith Richards because the song sampled a short snippet of a Rolling Stone song), are set to return in August with a new album -- the band's first since 1997's Urban Hymns that featured that bitter sweet single. Billboard reported last week that the new album, titled Forth (Billboard cites it incorrectly as Four) will be released on August 18 in the United Kingdom and a day later in the United States.

While the band had not worked together in nine years before reuniting last year to commence work on new music and play a number of festivals, lead singer Richard Ashcroft had enjoyed a semi-successful solo career built on the success that the band had enjoyed in the nineties. He joined Coldplay onstage at Live 8 in 2005 to perform "Bitter Sweet Symphony" to an elated Chris Martin (lead singer of Coldplay) and cheering crowds. The first single from Forth, "Love is Noise", was premiered on British radio June 23 and will be released a couple of weeks before the album. It is currently streaming from the band's News Corp. (NYSE: NWS) MySpace page.

In the United Kingdom, The Verve are signed to EMI Group and will release Forth via Parlophone, but in the United States, a unique release scheme will be utilized, somewhat similar to Radiohead's deal in the U.S. for In Rainbows earlier this year. The band has set up a label, On Our Own, and will release the album through a distribution deal with RED Distribution and Megaforce Records. Previously, the band's albums had been released through EMI's Virgin Records imprint in the United States.

In the last few weeks, I've become more and more critical about the British music company EMI Group, especially with the coming release of Coldplay's fourth album Viva la Vida or Death and All His Friends. Numerous reports and rumors are circulating that the company is betting all of its yearly profits on the album's success, and this only fuels my fears about the success that the album would enjoy. It was never in doubt that the album would be huge, but with the band hoping to shake the image of a band that earns more profits for label management, the rumors worked against that.

In any case, I finally bought the album this morning from Best Buy Co., Inc. (NYSE: BBY) and was slightly surprised to see that the retail chain was carrying a very limited number of vinyl copies. Naturally, and possibly without thinking of my Apple Inc. (NASDAQ: AAPL) iPod, I splurged for this version of the album. Regardless, when I finally opened the shrinkwrap I found another surprise -- a CD copy packaged with the vinyl. Clearly, EMI and American branch Capitol Records are aware that a vinyl copy hardly transfers to an iPod easily.

The label may not like the fact that I will burn that CD copy to my iPod because of lingering fears that somehow that will result in illegal sharing, but it does say something possibly revealing about EMI. Since Guy Hands and private equity firm Terra Firma bought out the music company last September, the company has taken steps that some view as not music company practices, and lost many big artists in the mean time. But if a consumer can purchase one copy of an album from the music giant and receive two, then the company might not be in such trouble.

That is the very dynamic that the music industry needed to show: that it cared about the consumer. Digital growth in the past year has indicated that it did, and while a vinyl and CD copy might seem against that trend, it shows that the industry knows where consumers are listening to music the most: through portable devices.

Germany-based Bertelsmann has valued its half of Sony BMG Music Entertainment between $1.2 and $1.5 billion, according to a report by Billboard published Thursday. The company reportedly wants to pull out of the joint venture with Sony Corporation (NYSE: SNE), and the noted price would lower if Sony offered to buy some services from Bertelsmann. Apparently the separation was expected to take place this summer, but neither party has reached a satisfactory agreement on the price of the aforementioned half.

The venture between Sony and Bertelsmann started in 2004 and is set to expire in August 2009, but rumors have emerged from within Bertelsmann that a new deal will take place before the expiration date, according to Billboard. Despite these rumors, Bertelsmann CEO Hartmut Ostrowski revealed in January that there were three options at that time: Bertelsmann would take over 100% ownership, sell the company's 50% to Sony, or continue the venture. More frightening is the note by Billboard that Bertelsmann's CFO Thomas Rabe has "reportedly met with at least two private equity companies to discuss the possible sale of its share" in the months since Ostrowski revealed the options.

Sale to a private equity firm would mirror a similar sale that occurred last year with British-based EMI Group. The label responsible for groups like The Beatles and Coldplay sold out to private equity firm Terra Firma, which resulted in mass layoffs and a new management plan that has not benefited the label or its artists. Billboard also notes that industry sources expect much of the European management and control for Sony BMG to shift to the U.S. anyway. If that is the case, it would leave two of the four major record labels based in the United States. The other label is Warner Music Group (NYSE: WMG).

MAJOR PAPERS:

• John Meriwether, whose Long-Term Capital Management lost $4B in 1998, has new troubles with JWN Partners, as his Meriwether's largest hedge fund has fallen 28%, and another market fund is also down. Investors have until Monday to ask to pull out their investment, the Wall Street Journal reported.
• The Wall Street Journal also reported that failed mortgage provider New Century Financial might be able to get back some of its lost funds by suing its auditor KPMG, according to a court appointed investigator who looked at the company's demise.
• After reaching a deal that allows its customers to access many of Universal Music's songs, the Financial Times reported that Nokia Corporation (NYSE: NOK) is in talks with the other three leading record companies - Sony Corporation's (NYSE: SNE) Sony BMG, EMI and Warner Music Group Corp's (NYSE: WMG) - about giving its customers access to their catalogues.

WEB SITES:

• Comscore has released its February "U.S. paid clicks" report, according to a source, which reportedly said Google Inc's (NASDAQ: GOOG) paid clicks in the U.S. during the month increased 3% year-over-year; however, the 'slight, slight improvement' from January may not actually be, the Silicon Alley Insider reported, since Comscore did not adjust for Leap Year. Google's paid clicks in December were up 12% and up 27% in November.

MAJOR PAPERS:

• UBS AG (NYSE: UBS) is launching an initiative to reduce proprietary risk taking by its investment banking division, the Financial Times reported. In an internal memo, UBS CEO Marcel Rohner wrote that the bank would cut by 50% the number of its employees in its real estate and securitization division, and move its troubled mortgage investments into a separate unit.

OTHER PAPERS:

• The UK Times reported that British music company EMI Group PLC (OTC: EMIPY) has made a bid for Chrysalis, one of Britain's last big independent music companies.
• Student loan giant SLM Corporation (NYSE: SLM), also known as Sallie Mae, said it would lay off 350 employees, or about 3% of its workers, the Washington Post said.
• France Telecom (NYSE: FTE) CEO Didier Lombard said sales of Apple Inc's (NASDAQ: AAPL) iPhone device are going better than expected in France, the Associated Press reported.

After the announcement that EMI Group plc (ADR) (OTC: EMIPY) will cut between 1,500 and 2,000 jobs around the world with the goal of saving almost $400 million a year, head Guy Hands made a presentation on the changes he and his consultants feel are necessary for the survival of the music industry. A key component of his presentation was the remark that the changes would not occur "without pain," signaling the "end to the industry model of 'signing up as many artists as possible, while taking huge bets on a few.'"

The push seems aimed at "embracing consumers' needs in the era of digital music." The painful changes he speaks about are nothing more than the commentary the music industry has faced from critics in recent years, and a cut to save money is painful to those who lose their jobs. It is not painful however, if your ideas about the changes do not differ significantly from what critics have stated for so long. If you look at the music industry and disregard its failing business model for a model designed for equity, then the painful changes are only going to be multiplied.

According to Billboard.com, "Hands told staffers that the overall challenge was to move to a structure which can best monetize artists' music in a market where the CD is no longer so dominant, and where many consumers have become used to not paying for music." The problem is that this discussion is centered around music as a commodity that consumers need, and that simply is not the case. If consumers are not used to paying for music, and it is a commodity, then a simply monthly fee like a water or gas bill would provide the simple fix while allowing consumers access to the large quantities of music produced every year. As usual, that type of arrangement speaks directly against the monetary value placed on music, as it turns music into something easily shared and gains are taken from the industry. Is that any different than "an era where consumers are not paying for it" though?

Napster (NASDAQ: NAPS) -- the mother of all file-sharing services that in 10 years' time has found itself one among many digital-music services struggling for its very survival -- is hoping its new move will attract more users. Today, Napster CEO Chris Gorog said the company is shifting to MP3 downloads free of digital-rights-management software [subscription required], or DRM.

The move is expected to occur sometime in the second quarter, but Napster has yet to finalize the arrangements with some of the four major music companies - Sony Corp. (NYSE: SNE), Warner Music Group, EMI Group and Vivendi SA's Universal Music Group. The final three on this list recently began selling MP3s on the download service available through Amazon.com (NASDAQ: AMZN). Sony has yet to report plans to sell its tracks as MP3s, but is reportedly expected to come forward soon.

Today Amazon.com, Inc. (NASDAQ: AMZN) announced an agreement with Warner Music Group Corp. (NYSE: WMG) to distribute music through the Amazon.com digital music store. The key feature to these downloads will be the absence of digital rights management (DRM), meaning that customers who download these songs will not be restricted in their use. They will be able to play them with any music player or computer, unlike Apple, Inc. (NASDAQ: AAPL)'s limited format.

Now, more than 2.9 million titles will be available at Amazon, including those by many well-known artists. Warner Music is added to the line-up, which already included Universal Music Group, EMI Group plc (ADR) (OTC: EMIPY), and thousands of independent labels.

Songs on Amazon cost $0.89 to $0.99, with full albums priced at $5.99 to $9.99. These prices are somewhat comparable to Apple's iTunes, whose individual songs sell for $0.99, with album prices varying.

While some consumers and analysts feel that DRM is necessary to protect the financial interests of the artists and record companies, others think that the lack of DRM will actually benefit them more in the long run. By making the music more accessible and transferable, some people think that consumers will be more likely to buy more music. (I agree!)

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Billboard reported music sales for the first half of 2007 according to Nielsen SoundScan this morning. To no surprise, physical formats have dropped 15.1% in the period while digital sales have increased 48.5%. Single track downloads, the most popular format of digital sales, are responsible for that boost - 417.3 million tracks were sold in the first half, a significant boost over the 281 million of the first half of 2006. Of course, even with the continued growth of digital sales, the industry is not in good health (this is nothing new).

The report notes that among the labels, Universal Music Group sold the largest share of sales with 31.6% over the 25.2% and 20% of Sony BMG and Warner Music Group (NYSE: WMG) respectively. Independent music labels disconnected from the majors accounted for 12.85%, while EMI Group PLC (LSE: EMI) only maintained a 10.3% share despite the company's introduction of Digital Rights Management technology free tracks midway through the time period.

According to the article, with the combined numbers of physical formats and the translation of digital sales to the corresponding physical value, there is only 9.1% decrease compared to the first half of 2006. Despite the apparent "good" news that the lesser number means, the music industry is still falling apart in all sectors. Digital track sales make it apparent that the album truly is dying and that a new model is needed. The music industry will have to start completely over from scratch because the continued decline makes it obvious that survival is becoming less and less an option.

Billboard released the weekly chart details for last week yesterday and holding tight at number three is Paul McCartney's debut for Starbucks Corp.'s (NASDAQ: SBUX) Hear Music, Memory Almost Full. The nice surprise in the announcement was the news that the Traveling Wilburys reissue set debuted at number nine with over 78,000 copies sold last week. In the United Kingdom, the set debuted at number one in the Albums Chart. The UK charting is much higher than either albums in the set originally achieved upon release in 1988 and 1990 respectively.

I first blogged on BloggingStocks about the Traveling Wilburys set in April, commenting that a nice chart placement for this release might boost Warner Music Group Corp. (NYSE: WMG), but more importantly help revitalize the reissue "series" it is effectively part of: the George Harrison catalog. The debut is higher than last year's Living in the Material World from George Harrison's early solo career, but it does not indicate any growth for Warner Music. The stock closed at $15.05 yesterday after falling from over $15.60 before the reissue came out. The two may not be directly connected, but such a strong debut for a reissue is nice, especially as WMG is rumored to bid for EMI Group PLC (LSE: EMI) soon.

The George Harrison reissue "series" (as I call it, it's not really very organized) remained unavailable on downloading services like Apple Inc.'s (NASDAQ: AAPL) iTunes until the release of the Traveling Wilburys set. With the addition of Ringo Starr's early solo catalog this means that all or portions of three of the four Beatles solo material are available to download: a nice sign for every Beatle fan hoping to download the Fab Four's catalog. Such high placement in the charts for new and reissued albums (Paul McCartney and the Traveling Wilburys) makes it clear that the band is still profitable.

MAJOR PAPERS:

• Barron's Online's (subscription required) "Inside Scoop" section reported that Thomas Everist, an MDU Resources Group (NYSE: MDU) board member since 1995, has sold a total of 742K shares for a total of $22.6M in MDU stock since May 2, according SEC data.
• The Wall Street Journal (subscription required) reported that EMI Group (OTC: EMIPY), the third largest music company by sales agreed to sell to Terra Firma Capital Partners for $4.74B, possibly ending its seven year battle with Warner Music Group Corp (NYSE: WMG).

OTHER PAPERS:

• According to the New York Post, citing people familiar with the situation, the weakening housing market and other issues are making it difficult for Home Depot Inc (NYSE: HD) to sell its professional supply business.
• Discovery Communications is in talks with CBS Corporation (NYSE: CBS) to sell half its Discovery Times channel and form a joint-venture partnership, according to sources close with the situation, reported the Washington Post.

WEBSITES:

• According to an NDP Group report, April sales of Nintendo's (OTC: NTDOY) Wii consoles were almost 3.5 times higher than Sony Corporation's (NYSE: SNE) PlayStation 3, reported DigiTimes.com.

MAJOR PAPERS:

• The 19.4B sale of Clear Channel Communications Inc (NYSE: CCU) to Bain Capital and Thomas H. Lee Partners is expected to proceed quickly as major shareholders Highfields Capital Management and Fidelity Investments are expected to agree to a new proposal raising the sale bid by 20 cents to $39.20 a share, reported the Wall Street Journal.
• Last month stent implants in the U.S. fell 15% to 71,200 from April 2006, signaling that they may no longer be a strong growth area for the medical industry, reported the Wall Street Journal.
• A new EU law that would slash the roaming charges for mobile phone calls by Europeans when they are traveling on the continent is expected to cut into the profits of companies including Vodafone Group (NYSE: VOD), France Telecom ADS (NYSE: FTE), and Telefonica SA ADS (NYSE: TEF) , reported the Financial Times.

OTHER PAPERS:

• EMI Group (OTC: EMIPY) has opened its books to rival Warner Music Group (WMG), setting up a four-way bidding war, reported The Business.
• New explorations by PetroChina Company Limited's (NYSE: PTR) parent company, China National Petroleum Corp, have found that the Jidong Nanpu Oilfield in Bohai Bay may have more reserves than previously estimated, reported China Daily.

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Clear Channel Communications Inc (NYSE: CCU) has said "no" to a new offer from Thomas H. Lee Partners and Bain Capital Partners to buy the company, saying shareholders had no interest.
• The Financial Times (subscription required) reported that One Equity, a private equity firm affiliated with JPMorgan Chase & Co (NYSE: JPM), has approached EMI Group (OTC: EMIPY) about a takeover which could value the British music company at more than $6B, according to sources.

OTHER PAPERS:

• The New York Post has learned that Microsoft Corporation (NASDAQ: MSFT) has asked Yahoo Inc (NASDAQ: YHOO) to re-enter formal negotiations.
• The New York Post has learned that Westwood One Inc (NYSE: WON) has hired UBS to help identify potential buyers as the company anticipates putting itself up for sale next month.

WEBSITES:

• A ChangeWave survey of 3,489 people revealed that 9% of the respondents are likely to buy the Apple Inc (NASDAQ: AAPL) iPhone when it comes out in June, reported Seeking Alpha.
• According to CNBC Champ Thomas Ko on MSN Money, IMAX Corporation (NASDAQ: IMAX) should benefit from what he anticipates will be a record opening for Spider-Man 3.

Though the annoucement by Apple Inc. (NASDAQ:AAPL) and EMI Group Plc. (OTC: EMIPY) last week that ended the British record label's use of DRM technology for everything but the Beatles, more news is emerging that affects fans eager to download the band's songs.

NME is reporting today that Neil Aspinall, a friend of The Beatles and the manager of their Apple Corps. record label since 1970, has stepped down.

Aspinall was responsible for The Beatles catalog and any release it would have had with digital services. It had always been assumed that he was responsible for keeping the catalog from the digital market, though his position obviously had changed in the last couple of years. According to the report, new manager Jeff Jones' first task at Apple Corps. will be to get the catalog ready for digital availability.

Clearly, more waiting is in store for Beatles fans. This got me wondering though about why Aspinall, who was in one of the highest positions of any record company (who wouldn't want to oversee the release and promotion of The Beatles material, seriously), would choose to leave the company at such a pivotal moment. The NME article was vague on that point.

Perhaps Aspinall's reluctance to take the catalog digital was a factor and despite what appeared to have changed in the last few years was in fact bowing to pressure from EMI and the market. It's just a guess, but it seems plausible. At the same time, it could just be that he is tired of the responsibility. That too is certainly understandable.

Nevertheless, and despite my wondering, waiting is going to be a continual game for Beatles fans and music consumers. We may never know why such a pivotal figure in Beatles history left their company, but that is just another peg in the waiting process.