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Music Bits: California Taxes; Chrysalis Off Market; AmazonMP3 Growth; TheFilter

This story was written by Rafat Ali.

-- Potential California Taxes on Digital Music: Didn't really happen, but could: a controversial proposal in the California State Assembly would have extended the state's sales tax to include digital downloads of media, but was narrowly defeated in a hearing. Assemblyman Charles M. Calderon estimated that the additional taxes could bring $500 million in annual additional revenue, but others have disputed that number; Board of Equalization itself cited a more modest potential figure of around $114 million per year.

-- Where is's MP3 Growth Coming From?: Not at the expense of Apple (NSDQ: AAPL) iTunes, says NPD. It says only 10 percent of Amazon (NSDQ: AMZN) MP3 customers had previously purchased music from iTunes. AMZN is number 2, but iTunes digital music sales are still 10 times that of Amazon MP3 on a unit basis. Also 64 percent of Amazon MP3 sales were to males compared to 44 percent for iTunes.

-- Chrysalis Off The Market: The London-based music company has rejected a 155 pence-per-share cash offer, which would have valued the business at about 104 million ($205 million), and terminated formal discussions with potential acquirers. Chrysalis valued the company at 175 million ($344 million); at least one of the final suitors was unable to secure the financing it needed to bolster its offer.

-- Peter Gabriel's TheFilter Launches in U.S.: How many more music filters can we have? Well, another one. Peter Gabriel has backed another digital music company TheFilter, which launched in U.S. today, in closed beta. The site has also expanded beyond music to movies, video, and soon, the books people buy and offer advice about all their entertainment and information options. Gabriel also backed OD2, one of the first digital music companies, and is now also backing UK-based We7.

By Rafat Ali

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