In the online music world, there is a trail of dead companies. But, some have somehow found ways to not only survive -- but thrive. One is Shazam, which builds applications for mobile phones.

This week, the firm hit 50 million users. And, it was also able to secure venture funding from the premier VC firm, Kleiner Perkins (the other investors include Acacia Venture Partners and DN Capital). The amount was not disclosed.

What explains the success of Shazam? First of all, the company has cool technology that lets your phone hear a song and then it will figure out its name as well as the artist.

Billboard reported yesterday that Facebook is "reaching out to the major labels and scheduling meetings to discuss the potential implementation of a music acquisition service with the popular social networking site." The music trade magazine also noted that Facebook has been rumored to take this action before with stated deadlines passing and no action taken. According to Billboard, the social networking site also already has portions devoted to creating new pages for artists to create profiles with links to Apple Inc. (NASDAQ: AAPL)'s iTunes Store, an aspect News Corp. (NYSE: NWS)'s MySpace site created long ago via alternate digital stores.

The prospect of both Facebook and MySpace creating services to offer fans direct access to music is something analysts are saying will boost the music industry. James McQuivey, a Forrest Research Analyst, has recently commented that social networking will become the "primary way consumers will acquire digital downloads in the near future" because consumer profiles will become "music stores where friends sell friends their favorite tracks." As it stands now, neither MySpace nor Facebook has anything remotely resembling this prospect.

The major problem Facebook will face with any new venture in the shadow of MySpace is simply following the massive social networking site. Billboard reports that "MySpace controls the most members at more than 110 million, the most traffic with 109 million unique visits a month, and has the greatest number of artists participating at more than 3 million bands."

I read another blog recently that ranted and raved about the request record industry companies recently made to Internet Service Providers to enforce anti-piracy on their servers and networks. The blog was not in favor of that move and I wholly agree that it is not the responsibility of another industry to make up for the problems facing the record industry. True, it would likely be prudent for ISPs to check for anti-piracy issues on their networks, but in the long run it has to be about keeping your own customers and not alienating others with threats against their privacy.

The British government seems poised to deal with the dynamic of this problem directly, after music industry trade groups there asked the government to take action. According to Billboard, the move to fight illegal file-sharing is "intended to ensure the prosperity of the country's creative industries" by taking legislative action as early as 2009 if the music industry and ISPs do not find a common ground. Legislators have also vowed to protect privacy in the face of these challenges. Unfortunately, the challenges of ISPs providing anti-piracy clean-up for the music industry does fly in the face of privacy issues, even if that means protecting the act of illegal file-sharing.

The Australian government has also taken a similar stance, but is keen to implement a "three-strike proposal" where illegal file sharers would be issued warnings before a suspension of access and eventual cancellation. Still, the plan would require ISPs to monitor user traffic and infringe on privacy issues, reports Billboard. Internet industry trade groups in Australia have also defended the position of not adopting these types of policies or "taking responsibility of illegal operations on their networks" because "present legislation already covers copyright infringement, and these should be used against illegal downloaders."

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?

Welcome to the 43rd installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week, I looked at Wal-Mart Stores, Inc. (NYSE: WMT)'s 2007 in review and summed up all the retailing giant had going for it last year along with all the negatives against the company as well. Wal-Mart did a lot of things right in 2007, but still had to fend off daily attacks from its enemies and just about any other entity who took shots at the largest target in the world.

This week, I'll be looking at something that just happened this past week -- when Wal-Mart decided to end its year-old movie download service after middling to no success since its launch in 2006. Why didn't the retailer have any success in the move to offering entertainment content in digital, downloadable form? Read on.

It was bound to happen eventually. Backlash against English band Radiohead has emerged from the band's former label EMI Group plc (ADR) (OTC: EMIPY) in response to the method used to release the band's new album In Rainbows. You may recall that in October, Radiohead received a great deal of media attention and coverage after declaring that fans could "pay-want-they-want" for the new album. Despite hints that the band may have enjoyed a significant monetary figure from that decision, reports since then have claimed otherwise, stating the band took a loss when only about 40% of consumers paid any amount for the album.

The word slinging against Radiohead from EMI began late last week when an article for London-based The Times newspaper cited an EMI spokesman's claim that the band had demanded £10 million (roughly $20 million) upfront. Apparently, the £3 million offered by EMI and new chief Guy Hands was insufficient beside the fact that the label would not give up control over the band's previous six albums, a major point of contention for the band. According to the band's manager in the article, the band left the table when that point became unavailable. Radiohead front man Thom Yorke has since hit back at these claims in the band's official blog, dispelling the notion that Radiohead wanted a load of cash, while questioning EMI's decision to air its "dirty laundry" and backing the comments made by the band's spokesman.

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.

For the last month and a half, the buzz on the music industry has revolved around the monumental move by English band Radiohead to self-release a digital version of its seventh album and allow fans to set their own price. It seems Radiohead never had any intention of revolutionizing the music industry; instead the band was attempting to curb a trend of online leaking before an official release, according to an interview transcribed by newspaper NME.

Singer Thom Yorke explains, "every record that we've done for ages has been leaked. Why not leak the bloody thing yourself?" Yorke is referring the the band's previous three albums, which were leaked in the weeks prior to their releases. For the band's 2000 album Kid A, the leak managed to propel the album to #1 in the Billboard 200. Not a bad thing at all really, but it does take the control away from the band.

The front man also revealed that he paid nothing for In Rainbows (it would basically have been like "moving money from one pocket to another"), seeming to acknowledge the rumors that the release was nothing more than a publicity stunt for the pending CD release later this year. In the end, Yorke also admits that the digital move also "came from the band's management who didn't want to release an album while out of contract."

No matter these revelations, the album and its initial release should still be viewed for the changes that will be wrought in the music industry. Radiohead should refrain from being so modest.

In an interview with Billboard, Paul McCartney has revealed that The Beatles catalog is ready to go on sale digitally next year. He has also revealed that the delay "has been due to contractual issues as well as deliberate planning by all parties involved." Unfortunately, the motivation for McCartney to divulge this information came in a press release for his new DVD and the re-release of his new album Memory Almost Full, where he also pleads with fans to buy the new version and the original version released earlier this year, claiming that they are not the same thing. (It almost makes me feel like a tool since I have both.)

The big news here though is the release of The Beatles digitally, which has the potential to completely revolutionize the music industry, just like the band did in the 1960s. Of all the major artist catalog's not available on the web, The Beatles is perhaps the most striking. Other holdouts such as Led Zeppelin and Radiohead have made the leap in the last couple of months. This release will theoretically be much larger, considering that fans will be buying second, or third, or fourth copies, while new listeners more attuned to digital releases will be buying this music for the first time. The potential for massive music sales are very exciting.

The rumors that The Beatles were going digital in 2008 have been long standing, at least since the 2007 release became impossible in recent months (the solo Beatles catalogs seemed to take precedence). No official word from a Beatle or representatives had been issued until now, which means this interview has given credence to those spreading rumors (luckily, it also validates their claims). In the end, all you need is love and for fans in 2008 they will have what they have been hoping would happen for some time.

According to MTV news, the new Radiohead album In Rainbows, released exclusively online yesterday, is being attacked by some fans for the low quality of the MP3 tracks - 160 kbps. These fans are apparently upset because that bit-rate is only slightly better than Apple Inc.'s (NASDAQ: AAPL) iTunes tracks, but well below the available rate of more recently released DRM-free (Digital Rights Technology) tracks with 320 kbps. It is also below the standard rate (192 kbps) that many file sharers apparently "scoff at." Fans are also toting an ulterior motive of marketing the digital release only in preparation for the pending (2008) physical release.

The fans are certainly right that the release was in some way a marketing tool for the physical release. After all, it was not like the announcement was opaque last week, the managers talked about being in negotiations for the CD at the same time!

But is the bit-rate entirely important when you have the music to listen to? That is the question that MTV ends on with the proposition that in the wake of "fans upset because of miscommunication, or if there was some less-than-honest business being done by a band not exactly known for being cold and calculating" could it not be that "Thom Yorke and company tried to do something different with Rainbows, and as is the case with being first, they might not have gotten it right."

That is always the tell of a nice and new marketing ploy, though: the number of complaints. Although in this case you would expect the complaints to be leveled against the method, rather than the finer details of bit-rates. No matter what happens, fan discord or not, In Rainbows is a success because of its innovation - not because its bit rate is low or deters file sharing. As one fan told MTV, if the complainers would not focus on the bit rate "maybe they'd actually remember what music appreciation was and be forced to buy the album based on that notion instead."

Following the excitement and intrigue surrounding English band Radiohead's announcement earlier this week about the quick release of their seventh studio album In Rainbows next week, the band's spokesman is now denying that it will also be released via a major label in December. According to the Billboard report, British retailer HMV had listed a pre-order for a CD version of the album on its website with EMI Group PLC label Parlophone for December 3, the same date the self-released "discbox" will be released to fans who pre-ordered on the band's website.

Radiohead was previously signed to EMI with their first six albums distributed by Parlophone in the UK and Capitol Records in the United States, but that deal ended after the release of their 2003 album Hail to the Thief. The band's spokesman reported to Billboard that "the band had not re-signed to Parlophone, EMI or any other label" for the new album, emphasizing that any release would not be ready by the December 3 date on HMV. The spokesman did affirm that the band is talking to music labels about releasing the album, but that would come after the new year.

The announcement earlier this week spurred a storm of internet blogging, including BloggingStocks, and a spokesperson for HMV commented that the listing was due to "an over-enthusiastic member of staff" but it would be modified to remove the label and the date. The biggest development of the announcement was that fans could set their own price for the download version next week, but some bloggers found that there was a limit of £99.99 (about $205), but most fans are likely to go for much lower prices. Many are already calling the tactic of removing the labels from distribution a success, but it is too early to speculate whether any other band will follow Radiohead's lead. Maybe the labels will catch on and work with artists in the future for the benefit of fans, but that is just too wishful.

Apple, Inc. (Nasdaq: AAPL) and Amazon.com, Inc. (Nasdaq: AMZN) have been hot companies and, yes, hot stocks. But the two companies are taking shots at each other.

Of course, as was expected, Amazon.com launched its digital music store, which has about 2.3 million songs. But as the company is wont to do, it has engaged in some price cutting. For example, a song costs between 89 cents to 99 cents. An album goes for $5.99 to $9.99.

Well, to get some analysis on this, I turned to Rafi Mohammed, who is an expert on pricing. He operates Pricing for Profit and is also the author of the book, the Art of Pricing. According to him:

"Amazon's entry into the digital music market will significantly affect Apple. Drawn by steep discounts, many music aficionados will switch to Amazon's service. This will inject some much needed competition into the digital music market, which will help music companies gain negotiating power. Additionally, a strong iTunes competitor may offer co-branding opportunities for music device makers. My prediction: this is the catalyst to music companies moving to their beloved variable pricing (some prices higher than others) model and new digital music players that will successfully challenge Apple's iPod."

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

Last week, Billboard reported that the Senate announced a new bill to regulate "webcaster" rates for sound recordings. The purpose of the bill is to make internet webcasting payments and use of sound recordings similar to traditional radio practices of a flat per-song rate, which is useful only because a radio station can never truly know how many listeners are tuned in.

Internet radio, on the other hand, knows generally how many listeners are out there, and thus has enjoyed a different system, which benefits the copyright holders over the record labels. The new bill raises the rates internet radio stations pay and brings the system there close in tune with traditional radio stations. Furthermore, the new bill would be "retroactively" applied to all music played since January 2006.

The bill eliminates the amounts of profits the internet radio provider receives because the system is a flat per-song rate, like traditional radio. In the war of digital growth and the record labels, this is another win for the record labels, because internet radio cannot enjoy the profits that are part of traditional radio's payments to the record labels in the flat per-song rate.

With its extensive Web-based platform Google has been pushing into a myriad of categories such as spreadsheets, wi-fi, mapping, enterprise search, and so on. Then again the company's mantra regarding building products is: "No constraints" (you can get more details on this from the company's Analyst Day PowerPoint).

Well maybe there are some self-imposed constraints. Despite intense rumors, it appears that Google will not move into the online music category. This was according to Chris Sacca, the biz development vice president at Google. He made the statement at the annual National Association of Recording Merchandisers conference.

True, from a technology standpoint, building an online store would be a no-brainer for the programming jocks at Google. After all, the company has already developed an online video property.

But Sacca's comments were true to Google's impeccable fuzziness. For example, he also mentioned that online music needs "ecosystem development." Huh? And, he also said, partnerships will be important.

So, is he really saying that Google will not go-it-alone but instead do something within a strategic alliance?

Given how big online music is it's certainly odd that Google would opt out. Besides, isn't the goal of Google to organize all the world's information?

Then again, let's face it: Apple is doing just fine with its online music play. And even though Google has a big footprint this does not necessarily translate into success. Keep in mind that for the most part it's non-search products are not faring too well. So, why expect Google to do well in online music if it can't seem to get much traction in, say, online video?

If anything this may be Google's way of saying that, gulp, it does have constraints.