Warner Music Group and AnywhereCD Settle Agreement Dispute

AnywhereCD To Sell Warner CDs Bundled With MP3 Tracks through September

June 7, 2007 – BUSINESSWIRE — Warner Music Group (WMG) and AnywhereCD – www.anywherecd.com – have settled their dispute regarding the scope of their agreement and will be dismissing their respective lawsuits. In the course of settlement discussions, it became clear that the parties had differences as to both the scope of their agreement and the direction of the business model. As a result, the parties mutually agreed to an early termination of their current relationship as of September 30, 2007, until which time AnywhereCD will continue to sell WMG content as bundles of shipped physical CDs with immediately available corresponding downloadable MP3 albums.

About Warner Music Group:

Warner Music Group became the only stand-alone music company to be publicly traded in the United States in May 2005. With its broad roster of new stars and legendary artists, Warner Music Group is home to a collection of the best-known record labels in the music industry including Asylum, Atlantic, Bad Boy, Cordless, East West, Elektra, Lava, Maverick, Nonesuch, Reprise, Rhino, Sire, Warner Bros. and Word. Warner Music International, a leading company in national and international repertoire, operates through numerous international affiliates and licensees in more than 50 countries. Warner Music Group also includes Warner/Chappell Music, one of the world’s leading music publishers.

About AnywhereCD:

AnywhereCD – www.anywherecd.com – is an online music distribution service founded in 2007 by Michael Robertson. Through the site, consumers for the first time can purchase CDs along with legal MP3 albums that can be downloaded to any player. AnywhereCD is committed to delivering consumers’ music that they own forever.

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Media Contacts:

For Warner Music Group

Amanda Collins
212.275.2213
Amanda.Collins@wmg.com

For AnywhereCD

Dianne Gleason
Enfuego Strategic Communications
303.381.2571
dianne@enfuegosc.com

Often times the rationale for using DRM is “keeping honest people honest”. Perhaps that’s true where a hurdle impedes people’s behavior and steers them in a different path.

But what happens where there is NO legitimate path? That creates a blockade forcing people in a negative direction. For those who want on demand digital music, but want to own music and play it everywhere they could only turn to underground channels. (Yes, you can order a CD and wait for it, but today’s consumer wants everything NOW.) iTunes and Napster will give you music on demand but it’s a rental model restricted by time or location. (Even Jobs admits people don’t like to rent music.) Try to play that music from a web page, Linux computer, many MP3 players, Tivo, etc. and it will fail.

One of the most rewarding parts of AnywhereCD is hearing from users. And what many are saying is they WANT to pay for music, but they want to own. They’re honest people trying to be honest. Here’s a representative email:

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From: “Nxx Mxxxx” <xxxxx@sympatico.ca>
Date: Thu, 12 Apr 2007 02:55:22 -0400 (Eastern Daylight Time)
To: “Michael Robertson”

Hurray for you Michael, you did it. Now we who want to be honest can be and that’s marvelous. Thank you for your persistence.

Nxx Mxxxx

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And there’s been public articles about it too. Like Matt Hartley who wrote “Special rules, renting your music — it’s all very silly in my eyes.” and “I want to see the artists getting paid! …. Personally, I am going to make purchases from AnywhereCD and let this (our dispute with WMG) work itself out.”

Thanks for the support Matt and others. I want people to be honest too. I don’t want them to use P2P because there’s no other way to get music legally in MP3 format. Now there’s an option where honest people can remain honest.

Squeezing your music

On another topic this isn’t specifically AnywhereCD related, but Logitech now has locker support for their Squeezebox music appliance. This means you can buy any album from AnywhereCD and play it IMMEDIATELY on your living room, office, bedroom music appliance. (Ok, ‘immediately’ in this context means it will be playable in about 60-90 seconds from the time you click buy confirmation button.) It’s really great stuff! Paying customers should get deluxe service and that’s what is happening here. You can read what Logitech has to say about it here and I talk about it on my blog with pictures here.

AnywhereCD has the utmost respect for Warner Music Group. (Seriously, these guys are smart and progressive.) We want to distribute their music and all other labels through our service.

Unfortunately, as sometimes happens between partners, we ran into a contractual dispute that necessitates the help of the courts and ultimately the oversight of a judge to resolve. You can download a PDF file of the lawsuit with the details here: AnywhereCD v. Warner Music

Our hope is that we figure out a way to resolve this issue without an ugly court battle. We just want to sell music to fans.

Since our goals are in alignment (selling music), we’re hopeful we can work something out and move forward with our business of selling the world’s best music as MP3 Albums. We’ll keep you posted and thanks for all the support!

Thanks for your support!

— MR

We had a crazy day launching yesterday and the first 24 hours have been wild. The team has worked for months on this so it’s nice to finally get it launched. One thing that irked me was that a PC World reporter said that I was “jumping on the non-DRM bandwagon”. He must be a new reporter and unaware that I started MP3.com, helped defend the first portable MP3 player in court and have done more than anyone I know to campaign for open formats. He’s also apparently oblivious to the amount of work required to launch a digital music site with a massive inventory of thousands of digital an physical albums. Anyone thinking about this for 2 seconds realizes that we started work on this business last year. You can read more about it on my web site michaelrobertson.com. It’s amazing how people say that Steve Jobs started the non-DRM campaign. Apple is the biggest DRM vendor in the world. They have the rights to ship non-DRM of indie music, but they do not. He only got religion after the EU threatened boycotts.

The user feedback has been universally great. We’ve also got feedback from one of the big box retailers who wants MP3 delivery for all their CD purchases and email from independants retailers who want this too. We think this is best thing to happen to album sales in a long time and could have a very positive effect on sliding sales. We’ll see how that goes.

We did have a bunch of labels tell us they wanted to participate with AnywhereCD which is great. Not everyone was excited about all the options on the site though. On day 1 you don’t want to fight so we removed the feature where CD delivery was optional. Now you must pay more money and get a physical CD shipped to you. Sorry. I know it’s not what some of you want. I hope we’ll bring this feature back since it’s good for everyone but we won’t reactivate it until we get everyone excited about it. We think it’s a great option for everyone: Users get lower prices, labels get fewer CDs showing up in used CD shelves meaning they actually make more money cause they don’t lose anything to recirculating CDs and of course they still get paid in full for the original CD purchase. All good things.

Thanks again for everyone’s support! You can help us out by buying albums or requesting those you would buy.  If you want to remain anonymous just enter “anonymous” in the Taking Requests field instead of an email.  That’s fine too.
— MR

On June 16, 2006 we registered the AnywhereCD domain and after a lot of hard work and many long nights we launched the site today!