Billboard reported yesterday that the International Federation of the Phonographic Industry, a global recording industry trade body based in London, has welcomed a new European Union court ruling that still forbids record labels from "demanding that telecom companies hand over the names and addresses of people suspected of illegal file sharing."

This contradictory stance is a reaction to the ruling's assertion that "EU countries could introduce their own rules to oblige ISPs to hand over such personal data," and comes only a few days after it announced that illegal file-sharing is outpacing legal means by 20-to-1.

The ruling the IFPI welcomed revolved around Spanish telecommunication company Telefonica SA's "right to refuse to disclose details that would identify who had used peer-to-peer file-sharing application Kazaa to illegally swap material owned by members of IFPI-affiliated Spanish labels body Promusicae."

A new report indicates that worldwide music sales will drop some $5 billion by 2011. The 18-page discussion of music sales also indicates that the drop from $31.8 billion last year to $26.2 billion four years from now will also play out in U.S. sales, with a $2 billion drop occurring. The loss is attributable to "plummeting CD sales" and "faster-than-expected declines in sales of physical recordings in key markets."

In reality though, such a loss should not be unexpected. Digital sales are simply less expensive than physical sales and as a result of other high commodities more accessible. Digital growth has taken off this year, following EMI's drop in use of Digital Rights Management technology, which prohibits the piracy of downloaded media files. Of course, the big news and more long-lasting growth was Radiohead's decision to initially release their new album online, DRM-free, and giving fans the option to pay what they want.

The true discussion should be, and in some sectors is, the value of music. Some say Radiohead has lowered that value, while others argue that music is a freedom all consumers should not have to pay extravagantly for. But if, in four years, this report becomes a reality, rather than a prediction, we should be ready to blame the record industry for failing to adapt to the changing market as swiftly as it should have. Consumers deserve the "pay as they want" scheme because it adds a level of excitement (and concern) to the industry that was not there two months ago.

Warner Music Group Inc. (NYSE: WMG), whose roster of artists includes Madonna, the White Stripes and the Red Hot Chili Peppers, today reported that its third quarter net loss widened as sales continued to shift away from CDs to digital sales.

The company lost $17 million, or 12 cents per share, compared with $14 million, or 10 cents, the New York-based company said in a press release. Revenue fell 2% to $804 million. Excluding one-time items, profit was 20 cents. Wall Street analysts, who excluded these types of charges, expected a loss of 14 cents on revenue of $836 million.

Digital revenue was a bright spot, rising 29% to $119 million. The company's recorded music, however, performed poorly, dropping 4% to $653 million.

Shares of Warner Music Group have dropped almost 52% this year, even though Wall Street cheered the company's decision not to bid for EMI Group Plc. The shares, though, have recently rebounded and were poised to open higher today as investors expressed confidence that Warner Music will be able to survive the upheaval caused by the digital music revolution.

Following two secret shows in London and New York, Paul McCartney is planning to stage another impromptu show tonight in Los Angeles. Fans from across the nation have reportedly rushed to Los Angeles with hopes of seeing the former Beatle in concert, as rumors that McCartney will tour are quietly dismissed. McCartney has repeatedly admitted that any tour in support of his first album for Starbucks Corporation (NASDAQ: SBUX)'s music label Hear Music, Memory Almost Full, is postponed until his divorce from Heather Mills is final.

According to McCartney's spokesman, around 300 people will be the final tally of fans to see the show at Sunset Boulevard's Amoeba Music tonight. The same article does not quote the number of fans waiting to get a wristband for the show, but it does imply that hundred waited outside the record store. While a tour of grand scale would normally accompany a McCartney album, Memory Almost Full was released during a difficult time for McCartney. The album however, is a beacon of hope for McCartney in its musical and lyrical content and due to the success he has enjoyed after the album peaked at #3 in Billboard's album chart.

Starbucks staged a day long celebration of the album, repeatedly playing it all day when it was released on June 5th. The coffee-company secured McCartney from his 45-year relationship with EMI Group PLC (OTC EMI) in March and rumors are circulating that McCartney aims to secure a long-term deal with Hear Music because the success he has enjoyed with Starbucks.

It's stunning: Apple Inc. (Nasdaq: AAPL) has sold 100 million iPods since November 2001. A look at the stock chart for this period tells the whole story for investors.

Of course, part of the success was having good content and selling it for $0.99 a pop. But why this amount?

I had a chance to interview Rafi Mohammed, who is an expert on pricing. He runs a consulting firm, Culture of Profit, and is the author of the book The Art of Pricing.

He admits that having a fixed-price system is a bit strange. After all, some people would rather spend a couple bucks for some music – while practically nothing for other music. Why not have a dynamic pricing system?

Then again, it seems that Steve Jobs can do just about anything. In fact, Rafi considers him kind of like Wal-Mart Stores Inc. (NYSE: WMT). That is, if you want to make it in the music biz, you have no choice but to deal with Jobs. It's that simple.

According to Rafi: "It's interesting that analysts haven't picked up on the fact that as long as the iPod remains popular, Apple's pricing policies are going to be a thorn to the music industry. With digital music forecasted to account for 25% of all music sales by 2010 (it's 10% today), a growing percentage of the music industry's revenue will be subject to Mr. Jobs' decision on what he thinks the 'right price' should be for iPod owners and potential customers."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

According to the HRRC, a new lawsuit brought by the recording industry's bulldog, the RIAA, is treating law-abiding consumers as "pirates" and violating the implied promise that they would not go after consumers who rip their own recordings for personal use. At the heart of the lawsuit is a new device released by XM Satellite Radio, the Inno, which allows consumers to record the programming broadcast over its network.

The RIAA seeks $150,000 in damages for every song copied by consumers onto the Inno. The suit is roundly being attacked as a desperate and evil move by an industry association that has already placed itself on everyone's most-hated list. The most succinct analysis, though, comes from Mike at Techdirt: "this is about the recording industry looking to squeeze more money out of a dying business model rather than recognizing these new services help make the recording industry's product much more valuable."

Either way, this could be very critical for XMSR (and similar products that Sirius might have in development) if it's taken at all seriously by the courts. The stock is down $0.12 in intraday trading, which saw the stock dip to its 52-week low, to $16.50, after a relatively huge drop yesterday.