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Yahoo Inks Streaming Deal with Grateful Dead’s Weir
11 Apr 2012 EDT - CNBC.com

Bob Weir’s Tri Studios announced Wednesday on CNBC a deal with Yahoo that could help bring high quality music and videos into homes around the world and change the music streaming business model that has so far made losers out of both the studios and the artists.

TRI Studios , a state-of-the-art music studio Weir built near San Francisco, entered into a third-party revenue-sharing deal with Yahoo’s music website, providing it with HD-quality streaming content. Yahoo Music has 34 million viewers monthly.

The trouble for streaming content has never been the amount of it, but the quality and how to pay for it. Pay-per-view for online concerts has so far had underwhelming results. Under the TRI/Yahoo deal, TRI will split the online revenue with Yahoo, according to TRI. Weir said he sees the advertising linked to the live music as a move away from traditional corporate sponsorship of performances and toward “patronage for rock and roll” the way companies underwrite classical music.

“Bobby and TRI Studios are interested in bringing the highest-quality sound to the audience when they want and where they want on it and on any device they want it on, and we’re enabling them to interact,” TRI President and CEO Chris McCutcheon said.

TRI online shows, which so far have featured the likes of Weir, Sammy Hagar and Carlos Santana, allow viewers to watch on their home theater systems and interact using Facebook and Twitter. Yahoo declined to confirm the business aspects of the deal, but confirmed a partnership with TRI.

Ken Fuchs, vice president of Yahoo Media Network for Sports, Entertain and Games, confirmed the partnership.

Weir, former rhythm guitarist with the Grateful Dead now touring with Furthur, built TRI-Studios with state-of-the-art cameras and sound equipment, allowing, for example, artists to program the type of concert hall they want the room to sound like, such as a stadium or a cathedral. One key was providing sufficient data connections to stream massive amounts of high-quality audio and video. The price tag for the studio came in around $5 million.

The music industry and artists were among the first casualties of the deflationary force that is the Internet, which lowered barriers to entry and allowed for pirated content to tear apart profit margins. The patronage model that Weir describes may be a way for both to make a comeback.

Yahoo could use the help. While it remains the fourth-most trafficked site in the world, the company has seen its search and advertising market share lost to Google and Facebook , the top two websites in the world, according to Alexa.

Shares of Yahoo have lost half their value in five years and are down 8 percent this year. The company’s CEO, Scott Thompson, its third leader in four years, announced a major restructuring of the firm this week to focus on three core units. This follows layoffs of 2,000 workers earlier this month.

Streaming music application Pandora has also failed to turn music into a winning business model. The stock is down more than 50 percent since its initial public offering last year.

“The Music Never Stopped,” with music written by Bob Weir, appeared on the Grateful Dead’s eighth studio album, Blues for Allah. The tour for Weir’s band, Further, with original Dead bassist Phil Lesh, began in April and continues through October.

Fast Money EP John Melloy contributed to this report. For the best market insight, catch 'Fast Money' each night at 5pm ET, and the ‘Halftime Report’ each afternoon at 12:00 ET on CNBC. Follow @CNBCMelloy on Twitter.

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