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![]() ![]() CHANNEL ISLANDS VAT DODGE COULD BE AXED THIS WEEK It all goes by the slightly dull sounding name of Low Value Consignment Relief. As previously reported, this system means that companies based in the Channel Islands, which are within the EC customs zone but outside the European Union, do not have to charge VAT when selling goods under £18 to customers back in mainland UK. The result has been an explosion of mail-order businesses on the islands, impacting on numerous industries where VAT-able goods are routinely under £18 in price. Channel Islands-based sellers of CDs and DVDs have been among the most prolific users of the VAT loophole over the years, so much so most of the bigger traditional CD sellers, so the supermarkets and companies like HMV, also moved their mail-order operations into the English Channel, most by outsourcing their mail-order CD services to companies already operating there. The loophole means that mail-order sites based on the Channel Islands can undercut their mainland competitors by whatever the VAT rate is (15-20% during the time the loophole has been operational) without affecting their profit margins. While it's true that consumers have benefited from the loophole too - they get cheaper CDs, and, arguably, the cost cutting of such mail-order operations forced the whole music industry to cut what had always been the overly high profit margins attached to compact discs - the biggest beneficiaries by far have been those companies who were quick to capitalise on the loophole and set up operations in the islands. The owners of one of the most prolific beneficiaries, Play.com, recently sold their company for £25 million. But there have been losers too. The competitive advantage the Channel Islands operations enjoyed put extra strain on high street retailers just as they were dealing with slumping CD sales and the rise of digital. It also meant those independent retailers unable to afford Channel Islands bases couldn't capitalise on the new opportunities in mail-order the internet offered. Even HMV, which eventually joined the VAT dodge party, was a loser, because during the crucial period ten years ago when the online mail-order domain was first maturing the traditional music seller couldn't compete on price. There was also the issue that substantial amounts of VAT income was lost to the UK Treasury, and the tedious fact (for those supporting or benefiting the loophole) that the way LVCR was being used was very probably a breach of European tax laws, even if the UK's Inland Revenue insisted otherwise for years. When the small business community first started to speak out against the VAT dodge several years ago, both the then Labour government in the UK and the governments of the Channel Islands agreed something should be done to ensure the VAT loophole didn't skew the British retail market. They then proceeded to basically do nothing, while playing down the impact of the loophole (on both tax revenues and independent retailers) and insisting everything was legit under European tax rules. In opposition the Tories hit out at the loophole scheme, but cynics suspected that, once in power, they would be lobbied by those who benefited from the loophole and advised by pro-LVCR types at the Inland Revenue and quietly park their criticisms. But no, it took a while, but they actually came good on their commitment to address this issue. Possibly because moves to sue the UK through the European courts for a failure to follow EU tax laws were gaining momentum, but whatever. Earlier this year the government announced it planned to act on the loophole. An initial announcement that it would reduce the extent of the tax relief - so it only applied to products under £15 - seemed something of a lacklustre response, but behind the scenes more work was being done, and European tax officials were being consulted. Then, earlier this summer, we started to hear that a list would be published of products that would be barred from the tax relief system, that would include CDs and DVDs. By late summer, word was that the whole LVCR system would be abolished. And that's where we are at right now. There was speculation yesterday that George Osbourne might make an announcement as soon as today that Channel Islands VAT relief will soon be phased out. Some seem to think a parliamentary statement to that effect could still be published later today, while others are pointing to some sort of formal confirmation from the Treasury later in the week, or maybe early next week. But what seems certain is LVCR is dead. For the Channel Islands at least. Certainly those operating in the Channel Islands under the tax relief scheme seem to be accepting the battle is lost, with many looking to relocate their operations to Switzerland or Eastern Europe, where tax relief may still be available, or cheaper operational costs may help them continue to compete on price back in the UK (at least one such company has already started telling some staff about plans to move to a Swiss base). And, although both companies will deny it, some reckon the decision of Play.com's owners to sell earlier this year, and the recently announced delays in plans to float another prolific beneficiary of the dodge, The Hut Group, are both linked to the imminent ending of the VAT system that helped both companies achieve substantial market share. Of course you could argue this is too little too late, with so many British music retailers, big and small, having bitten the dust in the last ten years, arguably in part because of the LVCR-benefiting mail-order sellers. Plus, of course, if there are other tax-dodging options for mail-order services, the Channel Islands may lose a lucrative industry but without the UK benefiting from more tax or a more level playing field for independent retailers. Still, after being all but ignored for years, if the Channel Islands VAT dodge is axed this week it will be quite a victory for those who have led the campaign against it. -------------------------------------------------- STUDENT JOURNALISTS INVITED TO ENTER RECORD OF THE DAY AWARDS Any student writing about music for their student newspaper, magazine or website, or another music publication, is eligible to enter, as are student photographers who regularly shoot artists in a live or studio environment. Winners of these prizes have the unique opportunity to have their talents recognised alongside the very best professional music journalism talent, and past winners have been able to use their win as a platform to build personal networks and score valuable internships at established music publications. Plus this year both winners will be invited to cover The Great Escape, Europe's leading new music festival, for us here at CMU. We will secure the winners complete access to the three-day festival in Brighton next May, provide free journalism coaching, and promote their work to over 20,000 music industry and media practitioners via the CMU Daily and theCMUwebsite.com. Says CMU Publisher Chris Cooke, who also programmes the convention side of The Great Escape: "Through our other publication, ThreeWeeks, every year we work with a hundred student journalists and ten student photographers at the Edinburgh Festival, giving then unique access to great talent, on-the-ground coaching, and a unique platform to develop and promote their skills. Although on a smaller scale, we are very excited to be able to offer a similar opportunity to an aspiring music writer and photographer at next year's Great Escape, one of the world's greatest showcase festivals". To be considered for the RotD student awards, journalists should send three pieces of published work, including at least one review and one feature, with details of their degree course and the publications they work for and a contact phone number to [email protected]. Photographers should send three music-based photos, with details of their degree course and the publications they work for and a contact phone number to [email protected]. The deadline for entries is Thursday 10 Nov. This year's Record Of The Day Awards take place at the Red Gallery in Shoreditch on 23 Nov. Ticket info is at www.recordoftheday.com/awards. -------------------------------------------------- PETE TOWNSHEND DELIVERS INAUGURAL JOHN PEEL LECTURE Among his suggestions, Townshend posited that Apple could give free computers to the 500 new artists it most valued, and offer them assistance with marketing and distribution. He also proposed an Apple streaming service where artists could choose to allow consumers to sample their music "like a radio station". Townshend continued: "Is there really any good reason why, just because iTunes exists in the wild west internet land of Facebook and Twitter, it can't provide some aspect of these services to the artists whose work it bleeds like a digital vampire, like a digital Northern Rock, for its enormous commission?" On the subject of the lecture's namesake, Townshend admitted that he and John Peel had not been "close friends" and that Peel wasn't an "unconditional Who fan", adding: "John Peel played some records that were so bad that I thought he was taking the piss sometimes. Sometimes he played some records that no-one else would ever have played, and that would never be played on radio again". "But he listened", he continued. "And he played a selection of records in the course of each week that his listeners knew - partly because the selection was sometimes so insane - proved he was genuinely engaged in his work as an almost unconditional conduit between creative musicians like me to the radio audience." You can listen to Pete Townshend's John Peel Lecture in full here until 7 Nov: www.bbc.co.uk/i/b016k4d0/ ![]() ![]() STAR DEFENCE WITNESS ACCUSED OF CONTEMPT: MURRAY TRIAL UPDATE Under aggressive questioning, White was forced to concede that he had never heard of propofol being administered in a domestic setting before, and that Murray deviated from commonly accepted medical practices, both on the day Jackson died and various previous occasions, by administering the anaesthetic outside a hospital environment as a cure for insomnia. Asked if Murray had breached his doctor's oath to "do no harm" to his patient by administering the propofol, White responded: "I think he was providing a service to Mr Jackson that he had requested and in fact insisted on". But White conceded that in similar circumstances he would never have left his patient unattended, especially knowing - as Murray did - that Jackson knew how to administrate the dangerous prescription drug himself. Presumably in a bid to damage White's credibility as a witness, the prosecution also asked the expert about his fee for work done for the defence team, which is over $11,000. This contrasts with the prosecution's star witness, Dr Steven Shafer, who received no fee for testifying. In heated exchanges White twice made references to revelations, mainly about Jackson, made to him by Murray which have not previously been presented in court. Judge Michael Pastor insisted White must not make statements which included allegations not previously presented by the defence to court, at one point ordering the jury out of the court room so he could admonish the witness. When White later complained he had information for the jury he wasn't allowed to reveal, the judge said he believed the witness was in contempt of court, and ordered him to face a charge of contempt later in the month. So, some high drama as this case reaches its conclusion. Final arguments are due shortly. COLDPLAY BREAK DIGITAL SALES RECORD According to The Official Charts Company, the previous record holders were Take That, who sold 79,800 downloads of their last album 'Progress' in the first week. After that, only two other artists have ever managed more than 50,000 download sales of an album in one week, they being Adele with '21', which sold 76,000 copies in seven days in January, and Lady Gaga's 'Born This Way', which reached sales of 57,000 earlier this year. The Official Charts Company's Martin Talbot told CMU: "The growth in popularity of digital albums has been evident throughout this year and Coldplay's impressive achievement in setting this new mark further emphasises this explosion of interest. It surely won't be long before an album has surpassed 100,000 downloads in a week". These figures might add credibility to that argument, put forward by some, that by ensuring their new records were not available via Spotify and other streaming services, Adele and Coldplay increased their download sales. Though those are both albums that were likely to sell well anyway, and both were heavily promoted online. Also not on Spotify was Tom Wait's 21st studio album, 'Bad As Me', which saw him reach the highest first week sales of his entire 38 year career. That album too enjoyed premium front page space on iTunes though. ![]() ![]() GAY FOR JOHNNY DEPP SPLIT In a statement, the band said: "When reflecting on the underlying aspects of the oncoming 'bear' market the Gays have considered it best to allow earlier investments to reach a more mature growth potential rather than continue to ride the emotional waves that seem to both rally and frighten most investors. Not that the GFJD believe that we are settling into a deeper recession as much as a long overdue 'correction' we still feel it behoves us to stay a more measured course and feel the need to nurture and capitalise on said previous investments and assets". For the full statement, watch this video here: www.youtube.com/watch?v=aK5-k9HOom8 AMY WINEHOUSE'S POSTHUMOUS LP ANNOUNCED Her father, Mitch Winehouse, has said: "I spent so much time chasing after Amy, telling her off that I never realised what a true genius she was. It wasn't until I sat down with the rest of the family and listened to this album that I fully appreciated the breadth of Amy's talent, from jazz standards to hip hop songs, it really took my breath away". He continues: "If the family had felt that this album wasn't up to the standard of 'Frank' and 'Back To Black' we would never have agreed to release it and we believe it will stand as a fitting tribute to Amy's musical legacy". £1 from each copy sold will be donated to The Amy Winehouse Foundation, which was launched on 14 Sep to coincide with what was to be the late singer's 28th birthday. -------------------------------------------------- IRON AND WINE TO RELEASE RADIO SESSION ON VINYL The tracklisting is as follows: Intro TIMBERLAKE TO STAR IN NEW COEN BROTHERS FILM The film is based on the 1960s folk scene in New York's Greenwich Village. Although a fictional story, Llewyn Davis, who will be played by Oscar Isaac, is based on real life musician Dave Van Ronk, a key figure in that scene and a close friend of Bob Dylan. Timberlake will play a mentor to the lead character. SKRILLEX TO TOUR AGAIN IN 2012 -------------------------------------------------- THE ORDINARY BOYS RETURN Well, says Preston: "It's been five years since the band played live and despite having forged a career as a songwriter for other artists as well as [working on] some development and production [projects] (you've almost certainly heard 'Heart Skips A Beat' performed by Olly Murs and the Rizzle Kicks this summer) I desperately miss those early, sweaty Ordinary Boys shows. I organised some time off in December to play some of my favourite venues from those days as a little release for myself and to give those songs the decent send off that they deserve". Also, he's pretty old now. He added: "There is no reason beyond the fun of playing... I just need something loud and fast in my life and I want to do it before I turn 30 next year". Here are the tour dates: 3 Dec: Aberdeen, Lemon Tree IS LAST MINUTE TICKET DISCOUNTING GOOD FOR THE MUSIC INDUSTRY? Radio 1 Newsbeat explored the concept of putting unsold concert tickets on sale via discount websites after Live Nation made a reported 5000 tickets available at vastly discounted prices via Groupon and Travelzoo for the current Britney Spears tour. Meanwhile another Live Nation company, Ticketmaster UK, has launched a new website specifically to promote discount deals. The last minute discounting system works best for artists who are arena tour level, but who don't automatically sell out every time, with average dates probably at 80-90% capacity. If said artists have more casual fans, who won't automatically pay for tickets but can be persuaded if they are getting a last minute bargains, Groupon type websites provide a useful platform for ensuring a full house on the night and bringing in a little bit of extra revenue. There are negatives, of course. First, there is the stigma of making tickets available this way at the last minute, basically admitting that the artist can't sell out the venues they've been booked to play. Second, last minute discounts penalise an artist's more dedicated fanbase, who rush to buy tickets the day they go on sale, possibly damaging the all important artist/fan relationship. And third, there is the risk music fans get in the habit of waiting to buy tickets on the hope there'll be last minute discounts, even though they run the risk of missing out on tickets altogether. But the more artists use Groupon et al the less stigmatised the system will become. Balancing last minute savings with early-bird and mailing list discounts may placate more committed fans. And providing there is a bit of unpredictability regards what events will ultimately sell discounted last minute tickets, a sizable part of the market may not want to risk missing out and will still buy early. Speaking to the Beeb, Benn said that the last minute discounted tickets system "undoubtedly works", adding: "It's definitely emerging, in tough economic times people will look at varying ways of pricing their tickets". However, he added that in his own business - the festivals space - he'd be too concerned about consumers starting to expect last minute discounts, and therefore damaging early sales, to go the Groupon route. He concluded: "People would come to expect it year on year and it would damage the viability of the festival in the long-term". The live sector seems divided regarding the last minute discounts approach. Some fear the negatives can't be overcome as simply as the discounting promoters believe, while others think last minute Groupon discounting, coupled with early-bird discounts, constitute the more dynamic approach to ticket pricing some have long argued the live industry needs. -------------------------------------------------- NEW ZEALAND THREE-STRIKES GETS UNDERWAY As previously, there were a few false starts when the New Zealand government tried to launch a graduated response system for combating illegal file-sharing, with initial legislation rather lacking on how accused file-sharers could appeal claims made against them of copyright infringement. But a fuller system has now been put in place, and according to local reports the Recording Industry Association Of New Zealand has now filed 42 infringement notices, which will be passed to the internet service providers of suspected file-sharers. Under the new anti-piracy laws - which are similar to those provisions in the UK's Digital Economy Act that puts in place a graduated response anti-piracy system over here (though, of course, the UK system is yet to go live) - ISPs will now be obligated to send warning letters to those suspected of sharing unlicensed content online illegally. File-sharers who ignore three warnings could find themselves before the country's Copyright Tribunal, which has the power to fine a proven illegal file-sharer up to NZ$15,000. As previously reported, various countries have been considering the so called three-strikes system, or variations thereof, for combating illegal file-sharing. The process is probably most advanced in South Korea, where the local music industry has seen a resurgence of late, which could be partly attributed to the tougher piracy rules. In the UK there have been numerous delays in getting three-strikes going, amid continued opposition to the measures from some ISPs and web user rights groups. In France, hundreds of thousands of warning letters have been sent out under their three-strikes system, though strike three is only just beginning now and it remains to be seen what sanctions are used against the most persistent file-sharers. -------------------------------------------------- KARAOKE SERVICE ANNOUNCES HMV PARTNERSHIP London-based PureSolo, which also enables musicians to play along to tracks (you can turn certain instrument channels off in the recording), has deals in place with all four major music publishers, and recently announced a move into the US market. Although already pretty established in the UK, the HMV partnership is presumably designed to take the service to a wider audience. PureSolo co-founder David Kaplan told CMU: "PureSolo is delighted to be working with HMV. Shows like 'The X-Factor' show how much undiscovered musical talent there is in the UK, and the internet provides an increasingly important platform to help them break through, with success assured if an artist's home-made video or TV appearance clips go viral. PureSolo offers the chance for people to practice, upload videos and join an online music-loving community, but also to be discovered. We hope this link-up will help bring a new generation of musicians to the fore". Elsewhere in HMV news, there was speculation in City circles yesterday that the company would soon make an announcement regards the previously reported rumoured sale of some or all of its stake in 7Digital. Meanwhile The Guardian's Zoe Wood this weekend reported on how a new fad for celebrity-endorsed headphones is helping HMV with its bid to move more fully into consumer electronics. And for fans of e-procurement platforms, the entertainment retailer has also confirmed that it has switched to a new procurement system from Wax Digital in a bid to reduce procurement costs. ![]() ![]() BANDCAMP LAUNCHES ALBUM OF THE WEEK FEATURE Asked by Hypebot how he'll be selecting artists to feature in the slot, Dubber said he'll be taking leads from tippers he trusts and from artists directly, but will also browse the Bandcamp network looking for artists that look good. He added: "Essentially this is just me indulging my enthusiasms. As you might be able to tell from everything I have ever said on the internet - I'm a huge fan of music. Lots of music. All sorts of different music. Music's brilliant. It won't just be 'bands' of course, it'll be artists of all types - but I'll typically pick stuff where I think the music is great, first and foremost - and then I'll lean toward artists who use Bandcamp well. A nice bit of design on the page, lyrics uploaded for the songs where appropriate, a little bit of backstory ... that sort of thing". The album of the week feature appears on a recently rejigged Bandcamp home page, which is seemingly designed to encourage music fans as well as musicians to hang out on the site in a bid to discover new talent. The homepage also includes a chart of recent best-sellers and a list of artists "selling right now". -------------------------------------------------- FORMER MYSPACE EXEC JOINS YOUTUBE CONTENT MAKER Holt joins the company as it strikes up a more direct partnership with YouTube, it being one of the outfits to benefit from the Google-owned video site's new investment in original content. Maker is set to run three new channels as part of YouTube's new content initiative, including a music-focused service to be called the Maker Music Network. OFCOM TO ISSUE NEW RADIO RULES OVER EXPLICIT LYRICS It's all part of government efforts to reduce the exposure of young people to sexual imagery, and the new radio rules come amid concerns too many inappropriate tracks are being played during times of the day when children may be listening, especially breakfast and drive time. I blame the fucking rappers myself. In theory rules banning inappropriate lyrics already exist, but the media regulator says too many stations are routinely breaking those rules, and the new guidelines will be more explicit regards what is, erm, too explicit for prime time airing. The new rules will apply to both BBC and commercial stations. Says an OfCom dude: "OfCom takes its role in protecting children from offensive language on the radio very seriously. We are concerned that there have been a number of recent cases where offensive language was broadcast, some at times when children were particularly likely to have been listening. That is why we held a meeting with the radio industry this week to discuss the issues. We intend to publish guidance by the end of the year to clarify the rules in the broadcasting code". One particular breach of the 'fuck' rules on radio recently, which we never got round to reporting on at the time but which made for amusing reading, saw a Scottish community radio station called Brick FM - when held to account by the media regulator for letting the F word go out during daytime broadcasts - defend themselves by claiming that 'fuck' was a "commonly used word in Scotland" and therefore "is not considered offensive locally". Then again, they also claimed, when criticised for playing Dr Evil track 'More Punany' at 3pm, that the reggae singer was chanting about panini sandwiches, so I don't sense they were taking the OfCom regulations very seriously. ![]() ![]() CHRIS MARTIN FEARS THE WORLD HATES HIS BAND No Chris, it's not that the whole world hates you. True, half the world find your music mind numbingly tedious, but scroll back up to that story about how many records you've just sold, the other half of the planet clearly loves your shit. Yin and Yang and all that. I mean look, we're always dissing your music, but our key columnist just wrote about how you're fucking ace. |
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