LONDON, 10th December 2007: EMI Records today announced a series of artist marketing campaigns utilising the Apple iPhone and iPod touch platforms to showcase audiovisual content.
Initial activity to make use of the devices’ compelling wi-fi experience is an artist-branded website to promote the launch of Heima, the critically acclaimed music film of the homecoming tour of Icelandic quartet Sigur Ros. To celebrate the release of this feature-length music DVD, EMI Records has created a specially optimised microsite for the iPhone and iPod touch’s display and interaction. Including the full-length trailer of the film, the site offers finger-sized navigation, a layout that changes according to orientation and a video stream that adapts depending on whether the viewer is connected via WiFi or the EDGE cellular connection.
The site makes attractive use of a Yahoo! Maps mash-up tool, allowing the viewer to easily navigate over the map of Iceland and click on the various locations where Sigur Ros performed. The site’s design has been kept purposely simple to complement the evocative visual depictions of the Icelandic landscape and to convey the impact of the music.
Eric Winbolt, Head of Digital, EMI Records, comments “These touchscreen wireless devices offer an exceptional user experience. Being the first truly converged mass market devices to do so, we were very keen to use them to showcase our artists’ content and offer the consumer this unbeatable user experience.”
Also included in the site are links to buy, meaning the viewer can go straight to the iTunes Wi-Fi Music Store to purchase Sigur Rós' music.
Thursday, December 20, 2007
The Music Building Continues Its 30-year Claim To Music Fame
The Vesties Perform On The View
From its 70 rehearsal studios housed in a 12-story high rise in Manhattan, the famed Music Building has nurtured the talents of budding music legends for nearly 30 years — Madonna, Billy Idol and Blondie once rehearsed in the building's studios at 584 Eighth Avenue before they became music icons.
Now the only musical venue of its kind devoted to providing rehearsal outlets for undiscovered talent is poised to launch yet another smashing success — The Vesties. The all-girl band from Brooklyn recently performed on the hit daytime talk show "The View" as first-place winners of a national contest.
The Vesties performed a live rendition of "Oh, Caravan," a 30-second Christmas carol they submitted as part of The View's Caroling for a Caravan contest sponsored by Dodge. Contestants were required to write lyrics and submit a video of their performance of a Christmas carol that uses specific keywords.
The Vesties' video beat thousands of contestants to win the contest, which features three winners each week. The Vesties' award-winning video was filmed in the Music Building and can be viewed on their MySpace page.
"We sat down and thought about the lyrics... and we brainstormed the whole concept," said Vesties' band member Julie Kowalchick, whose band has practiced in the Music Building for over two years.
The Vesties' appearance on The View marks the band's first national performance and is what co-producer Joseph Guido hopes is the first step in what will be a long musical career. The Vesties have performed at venues across New York and Seattle for nearly three years. The band is made up of Julie, a guitarist and vocalist; Willow, a keyboardist and vocalist; and drummer Mary Jane.
"Opportunities like this come once in a lifetime for an unsigned band," said Guido, a music industry veteran who once played in the NYC bands The Brats and The Koalas, and who produces the Vesties along with Scott Sheets (formerly of The Brats and Pat Benatar). "The band has been working hard rehearsing and writing for a long time and I am sure this national appearance will be the catalyst that gets them signed."
The Vesties won a new 2008 Dodge Caravan, $15,000 in cash and plenty of accolades from The View guest co-host Ricki Lake.
"You're a pretty hot band," Lake said after the Vesties' performance.
The Vesties plan to use their winnings to travel to New York, Florida and Atlanta in February 2008 as part of the group's first national tour. The band recently released their first 11-song CD, "The Vesties." The band is also scheduled to record a single with Joe Blaney, who produced The Clash.
It's another great opportunity for the iconic Music Building, said Roget M. Lerner, Chief Financial Officer of the Music Building.
"We are always happy when one of our tenants gets the recognition and national exposure that so many of them deserve," Lerner said. "We're a place that's conducive to musicians, and if they want to be in music, the Music Building is the place to be."
From its 70 rehearsal studios housed in a 12-story high rise in Manhattan, the famed Music Building has nurtured the talents of budding music legends for nearly 30 years — Madonna, Billy Idol and Blondie once rehearsed in the building's studios at 584 Eighth Avenue before they became music icons.
Now the only musical venue of its kind devoted to providing rehearsal outlets for undiscovered talent is poised to launch yet another smashing success — The Vesties. The all-girl band from Brooklyn recently performed on the hit daytime talk show "The View" as first-place winners of a national contest.
The Vesties performed a live rendition of "Oh, Caravan," a 30-second Christmas carol they submitted as part of The View's Caroling for a Caravan contest sponsored by Dodge. Contestants were required to write lyrics and submit a video of their performance of a Christmas carol that uses specific keywords.
The Vesties' video beat thousands of contestants to win the contest, which features three winners each week. The Vesties' award-winning video was filmed in the Music Building and can be viewed on their MySpace page.
"We sat down and thought about the lyrics... and we brainstormed the whole concept," said Vesties' band member Julie Kowalchick, whose band has practiced in the Music Building for over two years.
The Vesties' appearance on The View marks the band's first national performance and is what co-producer Joseph Guido hopes is the first step in what will be a long musical career. The Vesties have performed at venues across New York and Seattle for nearly three years. The band is made up of Julie, a guitarist and vocalist; Willow, a keyboardist and vocalist; and drummer Mary Jane.
"Opportunities like this come once in a lifetime for an unsigned band," said Guido, a music industry veteran who once played in the NYC bands The Brats and The Koalas, and who produces the Vesties along with Scott Sheets (formerly of The Brats and Pat Benatar). "The band has been working hard rehearsing and writing for a long time and I am sure this national appearance will be the catalyst that gets them signed."
The Vesties won a new 2008 Dodge Caravan, $15,000 in cash and plenty of accolades from The View guest co-host Ricki Lake.
"You're a pretty hot band," Lake said after the Vesties' performance.
The Vesties plan to use their winnings to travel to New York, Florida and Atlanta in February 2008 as part of the group's first national tour. The band recently released their first 11-song CD, "The Vesties." The band is also scheduled to record a single with Joe Blaney, who produced The Clash.
It's another great opportunity for the iconic Music Building, said Roget M. Lerner, Chief Financial Officer of the Music Building.
"We are always happy when one of our tenants gets the recognition and national exposure that so many of them deserve," Lerner said. "We're a place that's conducive to musicians, and if they want to be in music, the Music Building is the place to be."
Universal Music Group (UMG) And XM Satellite Radio Reach Agreement On Pioneer Inno
Universal Music Group (UMG), the world's leading music company, and XM Satellite Radio, the nation's leading satellite radio company, today announced that they have resolved the lawsuit brought by UMG against XM over its Pioneer Inno, a portable satellite receiver with advanced recording functionality. The companies did not disclose terms of the deal.
As part of the agreement, UMG becomes the first music company to reach a multi-year deal covering all XM radios with advanced recording functionality, including both those currently available as well as future product releases. In addition, UMG will withdraw as a party to the complaint filed by the major record companies against XM in May, 2006.
"We are pleased to have resolved this situation in an amicable manner," stated Doug Morris, Chairman & CEO, Universal Music Group. "We pride ourselves on empowering new technology and expanding consumer choice. And XM is providing a new and exciting opportunity for music lovers around the world to discover and enjoy our content, while at the same time recognizing the intrinsic value of music to their business and the need to respect the rights of content owners."
"Our agreement is a win for everyone involved, especially for consumers," said Nate Davis, President and CEO, XM Satellite Radio. "Today's announcement underscores the fact that XM competes in an audio entertainment market in which consumers have more options than ever. We commend UMG for being the first music company to take this step forward with us and look forward to continuing our discussions with our other partners in the music industry."
As part of the agreement, UMG becomes the first music company to reach a multi-year deal covering all XM radios with advanced recording functionality, including both those currently available as well as future product releases. In addition, UMG will withdraw as a party to the complaint filed by the major record companies against XM in May, 2006.
"We are pleased to have resolved this situation in an amicable manner," stated Doug Morris, Chairman & CEO, Universal Music Group. "We pride ourselves on empowering new technology and expanding consumer choice. And XM is providing a new and exciting opportunity for music lovers around the world to discover and enjoy our content, while at the same time recognizing the intrinsic value of music to their business and the need to respect the rights of content owners."
"Our agreement is a win for everyone involved, especially for consumers," said Nate Davis, President and CEO, XM Satellite Radio. "Today's announcement underscores the fact that XM competes in an audio entertainment market in which consumers have more options than ever. We commend UMG for being the first music company to take this step forward with us and look forward to continuing our discussions with our other partners in the music industry."
Rhapsody Extends Full-Song Streams To Facebook
December 17, 2007 - Digital and Mobile
By Antony Bruno, Denver
Rhapsody has beta-launched a Facebook widget designed to extend full-song music streaming into the popular social network. The application allows Facebook users to recommend songs, and lets visitors to their profiles stream the full versions of songs by artists listed in each member's "Favorite Music" section.
Existing Rhapsody subscribers will be able to play an unlimited number of full songs, while non-subscribers will be limited to the 25 free songs a month that are offered under the company’s ad-supported model.
Rhapsody has also extended all 150,000 artist bio pages to Facebook as well. The company says additional functionality will be added over time.
By Antony Bruno, Denver
Rhapsody has beta-launched a Facebook widget designed to extend full-song music streaming into the popular social network. The application allows Facebook users to recommend songs, and lets visitors to their profiles stream the full versions of songs by artists listed in each member's "Favorite Music" section.
Existing Rhapsody subscribers will be able to play an unlimited number of full songs, while non-subscribers will be limited to the 25 free songs a month that are offered under the company’s ad-supported model.
Rhapsody has also extended all 150,000 artist bio pages to Facebook as well. The company says additional functionality will be added over time.
Aussie TV Network SBS, Universal Pair On Label
December 19, 2007 - Global
By Christie Eliezer, Sydney
Universal Music Australia and multicultural free-to-air radio and TV network SBS have teamed up to create a music label, SBS Music.
The deal, initially for three years, will see Universal manufacture, market and distribute SBS-associated concept and artist albums. SBS programs represent 68 different languages, and the label will source from Universal's local talent in Eastern Europe, the Middle East, Africa and Asia.
"Universal has always been the most aggressive of companies with its local A&R and we have a large repertoire to choose from," UMA's Sydney-based managing director George Ash tells Billboard.biz.
SBS Music is expected to handle 50 releases in the first 12 months, says UMA's GM of commercial affairs Rod Cameron. He tells Billboard.biz this will include concept albums. One such example will build around the Tour de France, for which the label will produce a set featuring tracks from countries that the annual bicycle race visits.
The first products through SBS Music will be a CD and DVD from SBS' broadcast of the New Year's Concert 2008 in Vienna, and a CD and DVD accompanying the Jan 4 airing of the Buddy Holly "Definitive History" documentary.
Product will be released through SBS and Universal Web sites, through SBS' existing distribution arrangements with CD and electronic chain JB Hi-Fi and Dymock Books, plus music stores supplied by UMA.
"This is a physical and digital deal, so we're very excited about the new marketing possibilities it offers," says Cameron, who co-ordinated UMA's successful tender and manages the major's external business partnerships.
Corinne Schmitt, SBS products manager, will manage the operations and marketing for all SBS music/DVD products within UMA.
"Universal delivered a comprehensive and compelling business plan for SBS Music," said SBS director of commercial affairs Richard Finlayson in a statement. "They are the industry leader and we are delighted to be working with them. SBS Music is a key component to the expansion of our consumer products program that has already delivered great results in the DVD business and will, together with SBS Books, further contribute to content funding for SBS programming."
Last year, Universal and SBS teamed up for the "World Games" compilation of music used during SBS' coverage of the soccer world cup, and with a competition to find a theme song for Australia's "Socceroos" team.
By Christie Eliezer, Sydney
Universal Music Australia and multicultural free-to-air radio and TV network SBS have teamed up to create a music label, SBS Music.
The deal, initially for three years, will see Universal manufacture, market and distribute SBS-associated concept and artist albums. SBS programs represent 68 different languages, and the label will source from Universal's local talent in Eastern Europe, the Middle East, Africa and Asia.
"Universal has always been the most aggressive of companies with its local A&R and we have a large repertoire to choose from," UMA's Sydney-based managing director George Ash tells Billboard.biz.
SBS Music is expected to handle 50 releases in the first 12 months, says UMA's GM of commercial affairs Rod Cameron. He tells Billboard.biz this will include concept albums. One such example will build around the Tour de France, for which the label will produce a set featuring tracks from countries that the annual bicycle race visits.
The first products through SBS Music will be a CD and DVD from SBS' broadcast of the New Year's Concert 2008 in Vienna, and a CD and DVD accompanying the Jan 4 airing of the Buddy Holly "Definitive History" documentary.
Product will be released through SBS and Universal Web sites, through SBS' existing distribution arrangements with CD and electronic chain JB Hi-Fi and Dymock Books, plus music stores supplied by UMA.
"This is a physical and digital deal, so we're very excited about the new marketing possibilities it offers," says Cameron, who co-ordinated UMA's successful tender and manages the major's external business partnerships.
Corinne Schmitt, SBS products manager, will manage the operations and marketing for all SBS music/DVD products within UMA.
"Universal delivered a comprehensive and compelling business plan for SBS Music," said SBS director of commercial affairs Richard Finlayson in a statement. "They are the industry leader and we are delighted to be working with them. SBS Music is a key component to the expansion of our consumer products program that has already delivered great results in the DVD business and will, together with SBS Books, further contribute to content funding for SBS programming."
Last year, Universal and SBS teamed up for the "World Games" compilation of music used during SBS' coverage of the soccer world cup, and with a competition to find a theme song for Australia's "Socceroos" team.
Sony, HMV, MixRevolution, AOL
December 19, 2007 - Digital and Mobile | Retail
By Antony Bruno, Denver
- Sony Electronics has teamed up with HMV stores to offer anyone buying Walkman-branded MP3 player a free three-month trial of the HMV digital music service. The promotion does not include Walkman branded phones, however.
- MixRevolution.com is a new online social network designed specifically for DJs. It offers original video content, artist and DJ interviews, product reviews, event coverage, as well as a wide selection of music genres to sample. The site also features incentive-based surveys that lets DJs discuss what music works and what doesn't for various purposes.
- Sony Computer Entertainment is upgrading the PlayStation Portable handheld game platform to add support for AOL's SHOUTCast Internet radio service. As long as the device is connected to a WiFi hotspot, users can stream any of AOL's 20,000 Internet radio stations on the device. The company says more than half of PSP owners already use it for music listening purposes.
By Antony Bruno, Denver
- Sony Electronics has teamed up with HMV stores to offer anyone buying Walkman-branded MP3 player a free three-month trial of the HMV digital music service. The promotion does not include Walkman branded phones, however.
- MixRevolution.com is a new online social network designed specifically for DJs. It offers original video content, artist and DJ interviews, product reviews, event coverage, as well as a wide selection of music genres to sample. The site also features incentive-based surveys that lets DJs discuss what music works and what doesn't for various purposes.
- Sony Computer Entertainment is upgrading the PlayStation Portable handheld game platform to add support for AOL's SHOUTCast Internet radio service. As long as the device is connected to a WiFi hotspot, users can stream any of AOL's 20,000 Internet radio stations on the device. The company says more than half of PSP owners already use it for music listening purposes.
David Byrne and Thom Yorke on the Real Value of Music
It seemed like a crazy idea. When Radiohead said it would release its new album, In Rainbows, as a pay-what-you-will digital download, you'd have thought the band had gone communist. After all, Thom Yorke and company are one of the world's most successful groups — a critical darling as well as a fan favorite for nearly 15 years. They hadn't put out a new album in more than four years, and the market was hungry for their next disc. So why would Radiohead conduct such a radical experiment?
It turns out the gambit was a savvy business move. In the first month, about a million fans downloaded In Rainbows. Roughly 40 percent of them paid for it, according to comScore, at an average of $6 each, netting the band nearly $3 million. Plus, since it owns the master recording (a first for the band), Radiohead was also able to license the album for a record label to distribute the old-fashioned way — on CD. In the US, it goes on sale January 1 through TBD Records/ATO Records Group.
While pay-what-you-will worked for Radiohead, though, it's hard to imagine the model paying off for Miley Cyrus — aka chart-topping teenybopper Hannah Montana. Cyrus' label, Walt Disney Records, will stick to selling CDs in Wal-Mart, thank you very much. But the truth is that Radiohead didn't intend In Rainbows to start a revolution. The experiment simply proves there is plenty of room for innovation in the music business — this is just one of many new paths. Wired asked David Byrne — a legendary innovator himself and the man who wrote the Talking Heads song "Radio Head" from which the group takes its name — to talk with Yorke about the In Rainbows distribution strategy and what others can learn from the experience.
Byrne: OK.
Yorke: [To assistant.] Shut the bloody door.
Byrne: Well, nice record, very nice record.
Yorke: Thank you. Wicked.
Byrne: [Laughs.]
Yorke: That's it, isn't it?
Byrne: That's it, we're done. [Laughs.] OK. I'll start by asking some of the business stuff. What you did with this record wasn't traditional, not even in the sense of sending advance copies out to the press and such.
Yorke: The way we termed it was "our leak date." Every record for the last four — including my solo record — has been leaked. So the idea was like, we'll leak it, then.
Byrne: Previously there'd be a release date, and advance copies would get sent to reviewers months ahead of that.
Yorke: Yeah, and then you'd ring up and say, "Did you like it? What did you think?" And it's three months in advance. And then it'd be, "Would you go do this for this magazine," and maybe this journalist has heard it. All these silly games.
Radiohead performs "Bodysnatchers."
Byrne: That's mainly about the charts, right? About gearing marketing and prerelease to the moment a record comes out so that — boom! — it goes into the charts.
Yorke: That's what major labels do, yeah. But it does us no good, because we don't cross over [to other fan bases]. The main thing was, there's all this bollocks [with the media]. We were trying to avoid that whole game of who gets in first with the reviews. These days there's so much paper to fill, or digital paper to fill, that whoever writes the first few things gets cut and pasted. Whoever gets their opinion in first has all that power. Especially for a band like ours, it's totally the luck of the draw whether that person is into us or not. It just seems wildly unfair, I think.
http://www.wired.com/entertainment/music/magazine/16-01/ff_yorke
It turns out the gambit was a savvy business move. In the first month, about a million fans downloaded In Rainbows. Roughly 40 percent of them paid for it, according to comScore, at an average of $6 each, netting the band nearly $3 million. Plus, since it owns the master recording (a first for the band), Radiohead was also able to license the album for a record label to distribute the old-fashioned way — on CD. In the US, it goes on sale January 1 through TBD Records/ATO Records Group.
While pay-what-you-will worked for Radiohead, though, it's hard to imagine the model paying off for Miley Cyrus — aka chart-topping teenybopper Hannah Montana. Cyrus' label, Walt Disney Records, will stick to selling CDs in Wal-Mart, thank you very much. But the truth is that Radiohead didn't intend In Rainbows to start a revolution. The experiment simply proves there is plenty of room for innovation in the music business — this is just one of many new paths. Wired asked David Byrne — a legendary innovator himself and the man who wrote the Talking Heads song "Radio Head" from which the group takes its name — to talk with Yorke about the In Rainbows distribution strategy and what others can learn from the experience.
Byrne: OK.
Yorke: [To assistant.] Shut the bloody door.
Byrne: Well, nice record, very nice record.
Yorke: Thank you. Wicked.
Byrne: [Laughs.]
Yorke: That's it, isn't it?
Byrne: That's it, we're done. [Laughs.] OK. I'll start by asking some of the business stuff. What you did with this record wasn't traditional, not even in the sense of sending advance copies out to the press and such.
Yorke: The way we termed it was "our leak date." Every record for the last four — including my solo record — has been leaked. So the idea was like, we'll leak it, then.
Byrne: Previously there'd be a release date, and advance copies would get sent to reviewers months ahead of that.
Yorke: Yeah, and then you'd ring up and say, "Did you like it? What did you think?" And it's three months in advance. And then it'd be, "Would you go do this for this magazine," and maybe this journalist has heard it. All these silly games.
Radiohead performs "Bodysnatchers."
Byrne: That's mainly about the charts, right? About gearing marketing and prerelease to the moment a record comes out so that — boom! — it goes into the charts.
Yorke: That's what major labels do, yeah. But it does us no good, because we don't cross over [to other fan bases]. The main thing was, there's all this bollocks [with the media]. We were trying to avoid that whole game of who gets in first with the reviews. These days there's so much paper to fill, or digital paper to fill, that whoever writes the first few things gets cut and pasted. Whoever gets their opinion in first has all that power. Especially for a band like ours, it's totally the luck of the draw whether that person is into us or not. It just seems wildly unfair, I think.
http://www.wired.com/entertainment/music/magazine/16-01/ff_yorke
David Byrne's Survival Strategies for Emerging Artists — and Megastars
Full disclosure: I used to own a record label. That label, Luaka Bop, still exists, though I'm no longer involved in running it. My last record came out through Nonesuch, a subsidiary of the Warner Music Group empire. I have also released music through indie labels like Thrill Jockey, and I have pressed up CDs and sold them on tour. I tour every few years, and I don't see it as simply a loss leader for CD sales. So I have seen this business from both sides. I've made money, and I've been ripped off. I've had creative freedom, and I've been pressured to make hits. I have dealt with diva behavior from crazy musicians, and I have seen genius records by wonderful artists get completely ignored. I love music. I always will. It saved my life, and I bet I'm not the only one who can say that.
What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.
Where are things going? Well, some people's charts look like this:
What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.
Where are things going? Well, some people's charts look like this:
NPD: Mac users saving music business
It's a good thing the music industry has Mac users, according to The NPD Group.
That's because according to a survey conducted by the market research firm, Mac users are more likely to pay to download music--and buy CDs--than Windows users. "There's still a cultural divide between Apple consumers and the rest of the computing world, and that's especially apparent when it comes to the way they interact with music," said Russ Crupnick, an analyst with NPD, in a press release.
The data says that 50 percent of all Mac users surveyed by NPD purchased at least one song during the third quarter, while only 16 percent of Windows users purchased a song from an online music store. And 32 percent of Mac users bought a CD during that same time, while just 28 percent of Windows users did so.
NPD says this means Mac users are "more active" when it comes to digital music than their PC counterparts. It also says that the data "helps debunk the myth that digital music consumers stop buying music in CD format."
So, what conclusion should we draw, then? Mac users are more honest than piracy-loving Windows users? Mac users are more satisfied with the current craptacular state of popular music than Windows users? NPD has a vested interest in keeping one of its clients happy with press releases such as this one, which basically reinforces Apple's branding as the computer company for cool creative people?
http://www.news.com/8301-13579_3-9835725-37.html
That's because according to a survey conducted by the market research firm, Mac users are more likely to pay to download music--and buy CDs--than Windows users. "There's still a cultural divide between Apple consumers and the rest of the computing world, and that's especially apparent when it comes to the way they interact with music," said Russ Crupnick, an analyst with NPD, in a press release.
The data says that 50 percent of all Mac users surveyed by NPD purchased at least one song during the third quarter, while only 16 percent of Windows users purchased a song from an online music store. And 32 percent of Mac users bought a CD during that same time, while just 28 percent of Windows users did so.
NPD says this means Mac users are "more active" when it comes to digital music than their PC counterparts. It also says that the data "helps debunk the myth that digital music consumers stop buying music in CD format."
So, what conclusion should we draw, then? Mac users are more honest than piracy-loving Windows users? Mac users are more satisfied with the current craptacular state of popular music than Windows users? NPD has a vested interest in keeping one of its clients happy with press releases such as this one, which basically reinforces Apple's branding as the computer company for cool creative people?
http://www.news.com/8301-13579_3-9835725-37.html
If The Old Music Business Is Dead, What's Next?
Paramore, Fall Out Boy and experts weigh in on what the next few years may hold.
By Gil Kaufman, with additional reporting by James Montgomery
Letting fans choose how much to pay for your album. ... Leaving the label you've called home for your entire career to hook up with a concert-promotions giant for a $100 million-plus deal. ... Recording iTunes-only one-off singles not slated for inclusion on an album. ... Offering "artist subscriptions" to fans, who pay a flat annual fee for more intimate access to their favorite acts. ... Serving up the millions of songs in your label's catalog to MP3 players and cell phones for one all-you-can-listen-to price per month. ...
These are just a few of the game-shifting changes the music industry toyed with in 2007, a year when the old model of signing with a major label and releasing an album every few years finally began to look like a relic of the distant past. As artists stretched their minds to imagine new and innovative ways to get their music into the hands of fans faster, cheaper and on the fly, what some have called the death of the music business is being viewed by others as the opportunity of a lifetime.
"The meteor's hit, the dinosaurs have all died and now it's time for whoever's next to take over," said Fall Out Boy bassist/lyricist Pete Wentz of the wide open future he sees for the industry. "And I think that it's a good time for new ideas to be out there." Wentz is at the vanguard of the new model of music-industry success where record sales are great (if you can get them), but delivering in concert, merchandising your "brand" and branching out into fashion, vanity labels and celebrity endorsements are almost as vital as writing "Umbrella"-like hooks.
This was the year of the so-called "360 deal," what some are calling the wave of the future in which companies like concert promoter Live Nation cut $100-million plus deals with longtime major-label superstars like Madonna in exchange for a piece of her merchandising, touring and recording monies. According to reports, one of the motivations for Live Nation to partner with Madonna is an expectation that, over the next decade, they might be able to rake in hundreds of millions of dollars in tour revenue from one of the most recognizable, and profitable, live performers on the planet. And while it was a shock that Madonna left her career label home, Warner Bros. Records, to sign with a company that has never released an album before, 360 deals were being cut across the board, even by fresh faces like Paramore, and some think they could be the thing that helps kick start a hit-starved industry.
http://www.mtv.com/news/articles/1576838/20071219/paramore.jhtml
By Gil Kaufman, with additional reporting by James Montgomery
Letting fans choose how much to pay for your album. ... Leaving the label you've called home for your entire career to hook up with a concert-promotions giant for a $100 million-plus deal. ... Recording iTunes-only one-off singles not slated for inclusion on an album. ... Offering "artist subscriptions" to fans, who pay a flat annual fee for more intimate access to their favorite acts. ... Serving up the millions of songs in your label's catalog to MP3 players and cell phones for one all-you-can-listen-to price per month. ...
These are just a few of the game-shifting changes the music industry toyed with in 2007, a year when the old model of signing with a major label and releasing an album every few years finally began to look like a relic of the distant past. As artists stretched their minds to imagine new and innovative ways to get their music into the hands of fans faster, cheaper and on the fly, what some have called the death of the music business is being viewed by others as the opportunity of a lifetime.
"The meteor's hit, the dinosaurs have all died and now it's time for whoever's next to take over," said Fall Out Boy bassist/lyricist Pete Wentz of the wide open future he sees for the industry. "And I think that it's a good time for new ideas to be out there." Wentz is at the vanguard of the new model of music-industry success where record sales are great (if you can get them), but delivering in concert, merchandising your "brand" and branching out into fashion, vanity labels and celebrity endorsements are almost as vital as writing "Umbrella"-like hooks.
This was the year of the so-called "360 deal," what some are calling the wave of the future in which companies like concert promoter Live Nation cut $100-million plus deals with longtime major-label superstars like Madonna in exchange for a piece of her merchandising, touring and recording monies. According to reports, one of the motivations for Live Nation to partner with Madonna is an expectation that, over the next decade, they might be able to rake in hundreds of millions of dollars in tour revenue from one of the most recognizable, and profitable, live performers on the planet. And while it was a shock that Madonna left her career label home, Warner Bros. Records, to sign with a company that has never released an album before, 360 deals were being cut across the board, even by fresh faces like Paramore, and some think they could be the thing that helps kick start a hit-starved industry.
http://www.mtv.com/news/articles/1576838/20071219/paramore.jhtml
2007 Best & Worst: Music business survival tactics
By Todd Martens, Los Angeles Times Staff Writer
As the year rushes to a close, it's time to sift through the mountains of pop culture detritus that have piled up on our computers and in our brains over the last 12 months. Let's try to figure out what worked, what didn't and what's best forgotten by New Year's Day.
Another year and another major decline in CD sales for the music business. But even as CD sales dip, labels and artists continue to find creative ways to try to sell them.
Radiohead, for instance, tried to make money by telling fans they didn’t have to spend a dime. Others opted for comic books.
There was plenty of great music released in 2007, and that’s all reviewed here, and here, but not here. Instead, what follows is a critique of what worked – and what didn’t – when it came to marketing the CD over the past 12 months.
The artist: Radiohead
The tactic: Completely disregarding the music businesses standard three/four-month lead time for new releases, Radiohead announced on Oct. 1 that its new album would be released in 10 days. The distribution system? The Internet. The cost? Whatever you want.
The review: Downloads went off without any major hitches, even if Radiohead is keeping a lid on just how many hard drives were graced with “In Rainbows.” And OK, with a higher-quality CD coming out Jan. 1, ultimately the move wasn’t quite as revolutionary as we press folk made it out to be, since Radiohead simply opted for a tiered release plan. But the band put the fans first, and no other group of its stature has so bluntly worked around the standard industry model.
Grade: A
(AFP / Getty Images)
The artist: Avril Lavigne
The tactic: The U.S. via Canada pop star said the heck with dwindling U.S. album sales and became the star of a comic book -- one targeted at mobile phone users in Asian territories. And she recorded lead single/pep-rally “Girlfriend” in at least seven different languages.
The review: The Avril-meets-“Buffy” comic “Make 5 Wishes” isn’t exactly “The Dark Knight Returns,” but credit Avril (and her management team) for thinking globally, and including some unreleased Avril tracks in the comic downloads. That being said, Avril completists would likely prefer to just buy the music instead of a comic. And for those who may be wondering, yes, “Girlfriend” sounds just as annoyingly dang catchy in Mandarin as it does in English.
Grade: B-
(Jonathan Hayward / The Canadian Press / Associated Press)
The artist: The Eagles
The tactic: Record labels may be in trouble and Tower Records is no more. But retail behemoth Wal-Mart seems to be doing just fine. So for the Eagles’ first album in nearly 30 years, the group partnered with Wal-Mart for an exclusive release.
The review: Dumping a record label for one of the world’s largest corporations is certainly not a play for credibility, and big box stores such as Wal-Mart are often blamed for killing off the mom-and-pop music stores. But the backlash was surprisingly minimal. The band’s “The Long Road Out of Eden” has become one of the top-selling albums of 2007 -- not bad for a record that came out Oct. 30. Yet from now on, the Eagles will forever be associated with the house that Sam Walton built, and all -- good and bad -- that it represents.
Grade: C-
(Jeff Adkins / Associated Press)
See the rest
http://www.latimes.com/entertainment/news/galleries/la-et-2007bwmusic-pg,1,2171082.photogallery?coll=la-headlines-entnews&index=1
As the year rushes to a close, it's time to sift through the mountains of pop culture detritus that have piled up on our computers and in our brains over the last 12 months. Let's try to figure out what worked, what didn't and what's best forgotten by New Year's Day.
Another year and another major decline in CD sales for the music business. But even as CD sales dip, labels and artists continue to find creative ways to try to sell them.
Radiohead, for instance, tried to make money by telling fans they didn’t have to spend a dime. Others opted for comic books.
There was plenty of great music released in 2007, and that’s all reviewed here, and here, but not here. Instead, what follows is a critique of what worked – and what didn’t – when it came to marketing the CD over the past 12 months.
The artist: Radiohead
The tactic: Completely disregarding the music businesses standard three/four-month lead time for new releases, Radiohead announced on Oct. 1 that its new album would be released in 10 days. The distribution system? The Internet. The cost? Whatever you want.
The review: Downloads went off without any major hitches, even if Radiohead is keeping a lid on just how many hard drives were graced with “In Rainbows.” And OK, with a higher-quality CD coming out Jan. 1, ultimately the move wasn’t quite as revolutionary as we press folk made it out to be, since Radiohead simply opted for a tiered release plan. But the band put the fans first, and no other group of its stature has so bluntly worked around the standard industry model.
Grade: A
(AFP / Getty Images)
The artist: Avril Lavigne
The tactic: The U.S. via Canada pop star said the heck with dwindling U.S. album sales and became the star of a comic book -- one targeted at mobile phone users in Asian territories. And she recorded lead single/pep-rally “Girlfriend” in at least seven different languages.
The review: The Avril-meets-“Buffy” comic “Make 5 Wishes” isn’t exactly “The Dark Knight Returns,” but credit Avril (and her management team) for thinking globally, and including some unreleased Avril tracks in the comic downloads. That being said, Avril completists would likely prefer to just buy the music instead of a comic. And for those who may be wondering, yes, “Girlfriend” sounds just as annoyingly dang catchy in Mandarin as it does in English.
Grade: B-
(Jonathan Hayward / The Canadian Press / Associated Press)
The artist: The Eagles
The tactic: Record labels may be in trouble and Tower Records is no more. But retail behemoth Wal-Mart seems to be doing just fine. So for the Eagles’ first album in nearly 30 years, the group partnered with Wal-Mart for an exclusive release.
The review: Dumping a record label for one of the world’s largest corporations is certainly not a play for credibility, and big box stores such as Wal-Mart are often blamed for killing off the mom-and-pop music stores. But the backlash was surprisingly minimal. The band’s “The Long Road Out of Eden” has become one of the top-selling albums of 2007 -- not bad for a record that came out Oct. 30. Yet from now on, the Eagles will forever be associated with the house that Sam Walton built, and all -- good and bad -- that it represents.
Grade: C-
(Jeff Adkins / Associated Press)
See the rest
http://www.latimes.com/entertainment/news/galleries/la-et-2007bwmusic-pg,1,2171082.photogallery?coll=la-headlines-entnews&index=1
Amazon does a deal to "crowdsource" music
Mathew Ingram, December 18, 2007 at 1:30 PM EST
As musicians and record labels alike try to come up with new ways of reaching fans and new business models, one of the most unusual experiments is a site called Sellaband. Based in Amsterdam, the service takes what some have called a "crowdsourcing" approach to the music business: musicians and bands upload songs, which fans can pay to download, and the money they pay goes into a fund that can be used to record an album.
On Tuesday, online-retailing giant Amazon announced a deal with the service that will see Sellaband open an official Amazon store, as well as an affiliate arrangement in which other Amazon sellers can direct music lovers to the service and get a promotional fee. Amazon will also promote Sellaband within its community of active reviewers, known as The Vine.
Sellaband lets fans listen to a band or musician's tracks for free, but if they want to support the artist then they pay $10 for what amounts to a share of a future album. Once the artist raises $50,000 Sellaband arranges for a professional engineer and studio to do the recording in, and all the other arrangements a band might need.
Most importantly, the funds that are raised through the sale of the album aren't just split between Sellaband and the artist -- the fans who paid to download the music get a share of the proceeds as well, and a free copy of the album (which they can then sell if they wish to). The service makes money from advertising, as well as interest on the money that is being raised for its members.
The site says it has more than 4,000 bands signed up, 11 of which have hit the $50,000 level, and three have made albums. "The advantage for fans is that they feel part of the activity," Sellaband co-founder Johan Vosmeijer told The Guardian's Jemima Kiss. "There are direct friendships between the bands and their fans, and they even organize their own festivals."
Vosmeijer is a former Sony BMG executive who says the major record labels are afraid to experiment with new business models. "Record companies are afraid to embrace new technologies and new opportunities because they don't know what to do with the web," he told The Guardian.
As musicians and record labels alike try to come up with new ways of reaching fans and new business models, one of the most unusual experiments is a site called Sellaband. Based in Amsterdam, the service takes what some have called a "crowdsourcing" approach to the music business: musicians and bands upload songs, which fans can pay to download, and the money they pay goes into a fund that can be used to record an album.
On Tuesday, online-retailing giant Amazon announced a deal with the service that will see Sellaband open an official Amazon store, as well as an affiliate arrangement in which other Amazon sellers can direct music lovers to the service and get a promotional fee. Amazon will also promote Sellaband within its community of active reviewers, known as The Vine.
Sellaband lets fans listen to a band or musician's tracks for free, but if they want to support the artist then they pay $10 for what amounts to a share of a future album. Once the artist raises $50,000 Sellaband arranges for a professional engineer and studio to do the recording in, and all the other arrangements a band might need.
Most importantly, the funds that are raised through the sale of the album aren't just split between Sellaband and the artist -- the fans who paid to download the music get a share of the proceeds as well, and a free copy of the album (which they can then sell if they wish to). The service makes money from advertising, as well as interest on the money that is being raised for its members.
The site says it has more than 4,000 bands signed up, 11 of which have hit the $50,000 level, and three have made albums. "The advantage for fans is that they feel part of the activity," Sellaband co-founder Johan Vosmeijer told The Guardian's Jemima Kiss. "There are direct friendships between the bands and their fans, and they even organize their own festivals."
Vosmeijer is a former Sony BMG executive who says the major record labels are afraid to experiment with new business models. "Record companies are afraid to embrace new technologies and new opportunities because they don't know what to do with the web," he told The Guardian.
Music criticism 2.0?
A maturing MP3 blogosphere grapples with the ethics, responsibility as its industry value swells.
By Jim Wayne
Posted: 2007-12-18
It’s a slow, lazy Sunday at Elbo.ws. Just 14 new posts from the site’s 2,497 aggregated music blogs. Buried somewhere in those posts are 11 new MP3 music files, bringing the total number of free, downloadable songs on their radar to 378,196 (Elbo.ws doesn’t host the files; it simply points you to the blogs that do). By iTunes’ $0.99-per-song standard, that’s $374,414 worth of music available, for free, to anyone with an Internet connection.
Copyright infringement? Sure. But an awful lot of those freebie files come directly from the infringees themselves.
This is no Napster. Music blogs are the new Rolling Stone; the new top-40 radio; the new MTV; on crack (or more likely microbrews and potweed). In about the time it takes the Chili Peppers to put out a new record, this audioblogosphere has become the undisputed industry think tank.
A counterculture of laptop-toting aural misanthropes has successfully (if not accidentally) managed to turn the music industry on its head. Suddenly indie is not so “indie,” and the counterculture—like it or not—is not so “counter.” Ironically, the citizen journalism cult built on P2P file sharing and hipster snarkiness is driving the music business, not draining it.
http://www.ojr.org/ojr/stories/071218wayne/
By Jim Wayne
Posted: 2007-12-18
It’s a slow, lazy Sunday at Elbo.ws. Just 14 new posts from the site’s 2,497 aggregated music blogs. Buried somewhere in those posts are 11 new MP3 music files, bringing the total number of free, downloadable songs on their radar to 378,196 (Elbo.ws doesn’t host the files; it simply points you to the blogs that do). By iTunes’ $0.99-per-song standard, that’s $374,414 worth of music available, for free, to anyone with an Internet connection.
Copyright infringement? Sure. But an awful lot of those freebie files come directly from the infringees themselves.
This is no Napster. Music blogs are the new Rolling Stone; the new top-40 radio; the new MTV; on crack (or more likely microbrews and potweed). In about the time it takes the Chili Peppers to put out a new record, this audioblogosphere has become the undisputed industry think tank.
A counterculture of laptop-toting aural misanthropes has successfully (if not accidentally) managed to turn the music industry on its head. Suddenly indie is not so “indie,” and the counterculture—like it or not—is not so “counter.” Ironically, the citizen journalism cult built on P2P file sharing and hipster snarkiness is driving the music business, not draining it.
http://www.ojr.org/ojr/stories/071218wayne/
Tuesday, December 18, 2007
'Performance Rights Act' Introduced
December 18, 2007 - Legal and Management
By Cortney Harding, N.Y.
Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT) and Representatives Howard Berman (D-CA) and Darrell Issa (R-CA) jointly introduced legislation today that would end the exemption of terrestrial radio stations from current copyright law which requires satellite radio, cable radio channels, and Internet webcasts to pay a royalty for the use of sound recordings.
The 'Performance Rights Act' remove the broadcaster exemption in the copyright law to assure that all platforms pay a performance royalty to artists.
The proposed legislation would give over-the-air broadcast stations the ability to use a statutory license and make one payment annually under a government-set rate for all the music they play, instead of having to negotiate with every copyright owner for each use of music.
Under the legislation, small commercial stations would pay $5,000 per year; noncommercial stations would pay $1,000 per year; stations that make only incidental uses of music, such as "talk radio" stations, would not pay for that music; and religious services that are broadcast on radio would be completely exempt.
By Cortney Harding, N.Y.
Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT) and Representatives Howard Berman (D-CA) and Darrell Issa (R-CA) jointly introduced legislation today that would end the exemption of terrestrial radio stations from current copyright law which requires satellite radio, cable radio channels, and Internet webcasts to pay a royalty for the use of sound recordings.
The 'Performance Rights Act' remove the broadcaster exemption in the copyright law to assure that all platforms pay a performance royalty to artists.
The proposed legislation would give over-the-air broadcast stations the ability to use a statutory license and make one payment annually under a government-set rate for all the music they play, instead of having to negotiate with every copyright owner for each use of music.
Under the legislation, small commercial stations would pay $5,000 per year; noncommercial stations would pay $1,000 per year; stations that make only incidental uses of music, such as "talk radio" stations, would not pay for that music; and religious services that are broadcast on radio would be completely exempt.
Dutch court fines Bollywood pirates
Amsterdam, 10 December 2007
A Dutch court has fined a number of Rotterdam shopkeepers up to €15,000 each for selling illegal pirated Bollywood material. Three of the defendants were also given community service sentences of up to 200 hours and a three month conditional prison sentence.
The verdicts came at the end of a trial that was triggered by a raid in March 2005 which saw the seizure of more than 140,000 CDs and DVDs containing Indian music and movies from 13 shops across Rotterdam.
Most of the illegal product originated in Pakistan, a major source of illegal copies of popular Indian films and music.
The raids had involved around 100 officers from the Dutch fiscal police, supported by investigators from record industry bodies IFPI and BPI as well as Dutch anti-piracy group BREIN, who assisted the authorities in identifying illegal product.
BPI, which represents the UK recording industry, had a Bollywood music and film piracy expert who supplied specialist advice and additional intelligence ahead of the raids. The rate of Bollywood music and film piracy in the UK is estimated at 70 per cent, far higher than the average national music piracy rate of 10 per cent.
Tim Kuik, Managing Director of BREIN, says: “Despite the high profile of online piracy, the sale of counterfeit Bollywood CDs and DVDs is still a major problem in the Netherlands. We are pleased with this verdict that sends a strong message to shopkeepers tempted to make a quick profit by selling illegal product.”
Paul Warren, European Anti-Piracy Co-ordinator for IFPI, adds: “The import and sale of discs containing illegal copies of music and film from India is sadly still a continuing problem across Europe. Such illegal trade directly undermines the creative industries in India that are doing so much to generate employment and growth to help that country develop.”
David Wood, Anti-Piracy Investigator at BPI, adds: “BPI was pleased to be able to assist our Dutch colleagues in this case. The UK is a major market for pirate Bollywood material and we were able to share our expertise in this area. Working together we can crack the supply chain of counterfeit music and help ensure that artists, composers and record producers are not ripped off by these organised gangs.”
The 140,000 counterfeit discs seized in the raid will now be destroyed on the order of the court.
International Recording Industry welcomes groundbreaking agreement in France to help in the fight against internet piracy
The accord backed by French President Sarkozy has been signed in Paris today by music and audiovisual producers, internet service providers and public authorities
London/Brussels, 23rd November 2007
The international recording industry today welcomed a groundbreaking agreement in France which is intended to help in the fight against massive internet music piracy. This agreement provides for the setting up of an independent government body which will operate a system of warnings leading to the suspension or termination of internet subscriptions used for illegal file-sharing.
The Memorandum of Understanding, signed in Paris today by music producers, audiovisual producers, internet service providers and public authorities, involves concrete undertakings by all of the signatories. The agreement is the result of a wide-ranging negotiation on the fight against internet piracy and availability of creative content online, carried out by FNAC Chief Executive Officer, Denis Olivennes, at the request of the French Government.
John Kennedy, Chairman & CEO of IFPI, the organisation representing the recording industry worldwide, said: “This is the single most important initiative to help win the war on online piracy that we have seen so far. President Sarkozy has shown leadership and vision. He has recognised the importance that the creative industries play in contemporary western economies. The winners will be French music, French employees and French music fans. By requiring ISPs to play a role in the fight against piracy, President Sarkozy has set an example to others of how to ensure that the creative industries remain strong in difficult markets so that they can remain major economic and cultural contributors to society.
“It was an inspired idea of the President to appoint Denis Olivennes to try and find a solution to these problems. The mission was accomplished speedily, with a minimum of fuss, with proper consultation and most importantly of all, decisively. By ensuring that all parties compromised their positions, Monsieur Olivennes has laid the foundation for a major lasting contribution to French culture and the French economy.”
Under the terms of the agreement, access providers have committed to experimenting with technologies to filter out infringing content on their networks. Record producers have undertaken to make a special effort in favour of interoperability, particularly with regard to music catalogue produced in France. The independent government body will publish monthly the results of its anti-piracy actions so the effectiveness of the measures can be assessed.
Amsterdam, 10 December 2007
A Dutch court has fined a number of Rotterdam shopkeepers up to €15,000 each for selling illegal pirated Bollywood material. Three of the defendants were also given community service sentences of up to 200 hours and a three month conditional prison sentence.
The verdicts came at the end of a trial that was triggered by a raid in March 2005 which saw the seizure of more than 140,000 CDs and DVDs containing Indian music and movies from 13 shops across Rotterdam.
Most of the illegal product originated in Pakistan, a major source of illegal copies of popular Indian films and music.
The raids had involved around 100 officers from the Dutch fiscal police, supported by investigators from record industry bodies IFPI and BPI as well as Dutch anti-piracy group BREIN, who assisted the authorities in identifying illegal product.
BPI, which represents the UK recording industry, had a Bollywood music and film piracy expert who supplied specialist advice and additional intelligence ahead of the raids. The rate of Bollywood music and film piracy in the UK is estimated at 70 per cent, far higher than the average national music piracy rate of 10 per cent.
Tim Kuik, Managing Director of BREIN, says: “Despite the high profile of online piracy, the sale of counterfeit Bollywood CDs and DVDs is still a major problem in the Netherlands. We are pleased with this verdict that sends a strong message to shopkeepers tempted to make a quick profit by selling illegal product.”
Paul Warren, European Anti-Piracy Co-ordinator for IFPI, adds: “The import and sale of discs containing illegal copies of music and film from India is sadly still a continuing problem across Europe. Such illegal trade directly undermines the creative industries in India that are doing so much to generate employment and growth to help that country develop.”
David Wood, Anti-Piracy Investigator at BPI, adds: “BPI was pleased to be able to assist our Dutch colleagues in this case. The UK is a major market for pirate Bollywood material and we were able to share our expertise in this area. Working together we can crack the supply chain of counterfeit music and help ensure that artists, composers and record producers are not ripped off by these organised gangs.”
The 140,000 counterfeit discs seized in the raid will now be destroyed on the order of the court.
International Recording Industry welcomes groundbreaking agreement in France to help in the fight against internet piracy
The accord backed by French President Sarkozy has been signed in Paris today by music and audiovisual producers, internet service providers and public authorities
London/Brussels, 23rd November 2007
The international recording industry today welcomed a groundbreaking agreement in France which is intended to help in the fight against massive internet music piracy. This agreement provides for the setting up of an independent government body which will operate a system of warnings leading to the suspension or termination of internet subscriptions used for illegal file-sharing.
The Memorandum of Understanding, signed in Paris today by music producers, audiovisual producers, internet service providers and public authorities, involves concrete undertakings by all of the signatories. The agreement is the result of a wide-ranging negotiation on the fight against internet piracy and availability of creative content online, carried out by FNAC Chief Executive Officer, Denis Olivennes, at the request of the French Government.
John Kennedy, Chairman & CEO of IFPI, the organisation representing the recording industry worldwide, said: “This is the single most important initiative to help win the war on online piracy that we have seen so far. President Sarkozy has shown leadership and vision. He has recognised the importance that the creative industries play in contemporary western economies. The winners will be French music, French employees and French music fans. By requiring ISPs to play a role in the fight against piracy, President Sarkozy has set an example to others of how to ensure that the creative industries remain strong in difficult markets so that they can remain major economic and cultural contributors to society.
“It was an inspired idea of the President to appoint Denis Olivennes to try and find a solution to these problems. The mission was accomplished speedily, with a minimum of fuss, with proper consultation and most importantly of all, decisively. By ensuring that all parties compromised their positions, Monsieur Olivennes has laid the foundation for a major lasting contribution to French culture and the French economy.”
Under the terms of the agreement, access providers have committed to experimenting with technologies to filter out infringing content on their networks. Record producers have undertaken to make a special effort in favour of interoperability, particularly with regard to music catalogue produced in France. The independent government body will publish monthly the results of its anti-piracy actions so the effectiveness of the measures can be assessed.
Italian police shut eBay scam
Rome, 17th December 2007
Fiscal Police from Udine have concluded an investigation into the illegal sale of CD-Rs containing music, video, professional software and videogames on eBay. The operation, carried out with the co-operation of music anti-piracy experts FPM, has led to the prosecution of 18 people and the seizure of 600,000 illegal files.
Most of the illegal files were downloaded using the main peer-to-peer (P2P) platforms, burnt on CD-Rs and DVD-Rs and then sold through web auctions on eBay. The 18 people now face heavy administrative sanctions, with the fines that could total hundreds of millions of euros, as Italian copyright law sanctions a penalty ranging from €103 to €1032 euros for each illegal file.
For futher information contact:
Enzo Mazza, FIMI
Email: enzo.mazza@fimi.it
Tel: +39 279 5879
Rome, 17th December 2007
Fiscal Police from Udine have concluded an investigation into the illegal sale of CD-Rs containing music, video, professional software and videogames on eBay. The operation, carried out with the co-operation of music anti-piracy experts FPM, has led to the prosecution of 18 people and the seizure of 600,000 illegal files.
Most of the illegal files were downloaded using the main peer-to-peer (P2P) platforms, burnt on CD-Rs and DVD-Rs and then sold through web auctions on eBay. The 18 people now face heavy administrative sanctions, with the fines that could total hundreds of millions of euros, as Italian copyright law sanctions a penalty ranging from €103 to €1032 euros for each illegal file.
For futher information contact:
Enzo Mazza, FIMI
Email: enzo.mazza@fimi.it
Tel: +39 279 5879
Monday, December 17, 2007
SBS, Universal create new music label
SBS is teaming up with Universal Music Australia (UMA) to create a new music label.
SBS Music will distribute up to 50 new releases in the next 12 months.
The albums will be inspired by SBS TV and radio content and on-air personalities.
SBS's director of commercial affairs, Richard Finlayson, says he is looking forward
to working with the industry-leading record company.
"Universal delivered a comprehensive and compelling business plan for SBS Music," Mr Finlayson said.
"SBS Music is a key component to the expansion of our consumer products program that has already delivered great results in the DVD business and will, together with SBS Books, further contribute to content funding for SBS programming."
The albums will be packaged in 100 per cent recycled and recyclable packing materials.
http://www.abc.net.au/news/stories/2007/12/18/2121426.htm?section=business
SBS Music will distribute up to 50 new releases in the next 12 months.
The albums will be inspired by SBS TV and radio content and on-air personalities.
SBS's director of commercial affairs, Richard Finlayson, says he is looking forward
to working with the industry-leading record company.
"Universal delivered a comprehensive and compelling business plan for SBS Music," Mr Finlayson said.
"SBS Music is a key component to the expansion of our consumer products program that has already delivered great results in the DVD business and will, together with SBS Books, further contribute to content funding for SBS programming."
The albums will be packaged in 100 per cent recycled and recyclable packing materials.
http://www.abc.net.au/news/stories/2007/12/18/2121426.htm?section=business
XM, Universal Music settle copyright lawsuit
Universal Music Group and XM Satellite Radio Holdings Inc. said they have agreed to settle a copyright infringement lawsuit over a portable music player sold by the broadcaster that enables users to make digital copies of music. The deal calls for XM to pay Universal Music a fee for every device sold with the ability to make digital copies of individual tracks, a person familiar with the agreement said on condition of anonymity, citing the confidential nature of the matter. The companies did not disclose the terms of the settlement in their joint statement.
http://www.startribune.com/business/12577106.html
http://www.startribune.com/business/12577106.html
Steun de muziek, koop een t-shirt!
Onder het motto ‘nothing says you care, more than a t-shirt’ brengt Beluga Recordings shirts op de markt met de teksten ‘Save the music industry’ of ‘Fuck the music industry’.Wilt u even een keuze maken?
Het blijft een beetje een vreemde eend in de bijt, dat Utrechtse label Beluga Recordings (onder meer bekend door hun experimentele electronische releases en video-kunstenaars). Je weet niet goed wat je aan ze hebt. Op hun website wordt erg veel gratis weggeven, wat lijkt te duiden op een groot hart voor muziek en kunst, zonder al te grote eurotekens in de ogen.
Hoe valt dat dan te rijmen met hun recente shirtactie waarbij je voor €26,91 stelling mag nemen voor of tegen de muziekindustrie? Dat kan toch bijvoorbeeld ook via een gratis poll op hun website of, beter nog, met gratis shirts! En kunnen we nog een soort uitslag verwachten in de trant van: ‘de meeste kopers willen de muziekindustrie echt redden’ of worden we zelf geacht shirts te gaan lopen tellen op feestjes?
De opbrengst van de shirtactie lijkt gewoon in de zakken van Beluga Recordings zelf te verdwijnen. Wel een beetje lijkenpikkerei, geld verdienen door in te spelen op een afstervende muziekindustrie waar je zelf onderdeel van uitmaakt. Wij gaan binnenkort maar eens gratis t-shirts laten drukken: ‘Nothing says you don’t care, more than asking your fans to pay €26,91 for a useless t-shirt’. Details over de verkoopadressen volgen binnenkort.
Onder het motto ‘nothing says you care, more than a t-shirt’ brengt Beluga Recordings shirts op de markt met de teksten ‘Save the music industry’ of ‘Fuck the music industry’.Wilt u even een keuze maken?
Het blijft een beetje een vreemde eend in de bijt, dat Utrechtse label Beluga Recordings (onder meer bekend door hun experimentele electronische releases en video-kunstenaars). Je weet niet goed wat je aan ze hebt. Op hun website wordt erg veel gratis weggeven, wat lijkt te duiden op een groot hart voor muziek en kunst, zonder al te grote eurotekens in de ogen.
Hoe valt dat dan te rijmen met hun recente shirtactie waarbij je voor €26,91 stelling mag nemen voor of tegen de muziekindustrie? Dat kan toch bijvoorbeeld ook via een gratis poll op hun website of, beter nog, met gratis shirts! En kunnen we nog een soort uitslag verwachten in de trant van: ‘de meeste kopers willen de muziekindustrie echt redden’ of worden we zelf geacht shirts te gaan lopen tellen op feestjes?
De opbrengst van de shirtactie lijkt gewoon in de zakken van Beluga Recordings zelf te verdwijnen. Wel een beetje lijkenpikkerei, geld verdienen door in te spelen op een afstervende muziekindustrie waar je zelf onderdeel van uitmaakt. Wij gaan binnenkort maar eens gratis t-shirts laten drukken: ‘Nothing says you don’t care, more than asking your fans to pay €26,91 for a useless t-shirt’. Details over de verkoopadressen volgen binnenkort.
Universal's CEO Once Called iPod Users Thieves. Now He's Giving Songs Away
By Seth Mnookin 11.27.07 | 12:00 AM
It's Monday afternoon, and Doug Morris, chair and CEO of Universal Music Group, is eating lunch in his private dining room at the company's Manhattan headquarters. Morris hasn't been here much in recent months, though it's hard to imagine he misses the place. For one thing, workers have been renovating the building: To reach his corner suite, you need to take an elevator to the floor above, walk down a hallway covered with plastic sheeting, and then descend a flight of stairs. For another, these are tough times for the music business. In 2006, the number of CDs sold worldwide fell 10 percent, the largest one-year drop ever — steeper than in any of the so-called Napster-era years from 2001 to 2004. Early indications suggest that 2007 will be at least as bad. The shades in the adjoining office are drawn, making the room feel a little like a crypt — albeit one outfitted with leather couches and tasteful art.
For the past several minutes, Morris has been listening to Rio Caraeff, executive VP in charge of the company's digital strategy, tell me how the sagging fortunes of the music industry highlight the need to diversify revenue streams. Caraeff explains that the company will eventually need to transition from running a product-based business to running a service-based one. He talks about ringtones, subscription services, and deals with mobile providers, stressing the need to raise the industry's "digital IQ."
Morris seems distracted. At 68, he looks every bit the prototypical New York big shot. What remains of his hair is slicked back along the sides of his head, and if his face is fleshier than it once was, the ever-probing, slightly combative intensity of his eyes hasn't dulled a bit. Morris has spent his entire life working with musicians and producers, finding and nurturing the talents that make his company a $7 billion-a-year business. It's safe to say that increasing his digital IQ and pondering a service-based business model aren't the topics that get him out of bed in the morning.
But digital strategies are important these days, and Morris has become entangled in them whether he wants to be or not. Over the past several years, he has been one of the most staunch and vocal proponents of aggressive copyright enforcement, at one point publicly blasting MP3 players as merely "repositories for stolen music." When he realized, after watching his grandson stream online clips, that portals weren't paying Universal for playing its music videos, Morris pulled the company's content off of Yahoo. Once the two sides came to terms, Morris went after YouTube and MySpace — "copyright infringers" both, as he put it. YouTube eventually agreed to a deal; a lawsuit against MySpace is ongoing. (Licensing of videos to Web sites now nets Universal more than $20million annually.) And in November 2006, Morris parlayed Microsoft's desperation to establish a true alternative to the iPod into a $1 ransom to Universal for every Zune music player sold — and that's on top of the licensing fees Microsoft pays to have Universal's songs in its Zune Marketplace online store. It's a sign of Morris' power that he is able to pressure so many players in the technology world to bend to his will.
Last summer, though, Morris seemed to change direction. After years of tightening controls on his company's content, he agreed to let Amazon.com and other online retailers sell unprotected MP3s of Universal songs. These contain none of the digital rights management software that media companies usually embed in digital files to prevent piracy. Universal wasn't the first big label to offer unprotected tracks; the EMI Group had begun selling DRM-free songs in May. But with its small market share, EMI's decision seemed unlikely to have much effect on the market. Universal, on the other hand, was setting out to change things. In particular, it hoped to end Apple's near monopoly on legal digital downloads.
Discussing Universal's various initiatives, Caraeff, an even-keeled 32-year-old in a crisply tailored suit, is explaining that it's important to be "invigorated and challenged by the opportunities of digital music." At this, Morris puts down his tuna fish on white, wipes some crumbs off his khakis, and clears his throat. I expect him to deliver an explanation of how he learned to stop worrying and love the MP3. Instead, he launches into a rant about a creature that resembles a misshapen bowling ball.
"There was a cartoon character years ago called the Shmoo," he says in a raspy tenor. "It was in Li'l Abner. The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That's what was happening to the music business. Everyone was treating the music business like it was a Shmoo.
"It was only a couple of years ago that we said, What's going on here?' Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?" Morris sighs. "People never really understand what's happening to the artists. All the sharing of the music, right? Is it correct that people share their music, fill up these devices with music they haven't paid for? If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go," he says. "That's what happened to the record business."
Nokia Predicts the Future of Entertainment
Dec 13
Posted in File Sharing / P2P, Music Copyright / Legal, Music Creation, Music Formats, Music Industry, Music Publishing, The Future
A study by Nokia predicts that up to a quarter of the entertainment consumed by people in five years time will have been created, edited and shared within their peer circle rather than coming out of traditional media groups. This phenomenon, dubbed ‘Circular Entertainment’, has been identified by Nokia as a result of a global study into the future of entertainment.
The study, entitled ‘A Glimpse of the Next Episode’, carried out by The Future Laboratory, interviewed trend-setting consumers from 17 countries about their digital behaviors and lifestyles signposting emerging entertainment trends.
“From our research we predict that up to a quarter of the entertainment being consumed in five years will be what we call ‘Circular’. The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups - a form of collaborative social media,” said Mark Selby, Vice President, Multimedia, Nokia.
Selby continues, “We think it will work something like this; someone shares video footage they shot on their mobile device from a night out with a friend, that friend takes that footage and adds an MP3 file - the soundtrack of the evening - then passes it to another friend. That friend edits the footage by adding some photographs and passes it on to another friend and so on. The content keeps circulating between friends, who may or may not be geographically close, and becomes part of the group’s entertainment.”
Tom Savigar, Trends Director at The Future Laboratory added, “Consumers are increasingly demanding their entertainment be truly immersive, engaging and collaborative. Whereas once the act of watching, reading and hearing entertainment was passive, consumers now and in the future will be active and unrestrained by the ubiquitous nature of circular entertainment. Key to this evolution is consumers’ basic human desire to compare and contrast, create and communicate. We believe the next episode promises to deliver the democracy politics can only dream of.”
Of the 9,000 consumers they surveyed:
- 23% buy movies in digital format
- 35% buy music on MP3 files
- 25% buy music on mobile devices
- 39% watch TV on the internet
- 23% watch TV on mobile devices
- 46% regularly use IM, 37% on a mobile device
- 29% regularly blog
- 28% regularly access social networking sites
- 22% connect using technologies such as Skype
- 17% take part in Multiplayer Online Role Playing Games
- 17% upload to the internet from a mobile device
As part of the research they identified four key driving trends; Immersive Living; Geek Culture; G Tech and Localism. As these trends become more mainstream, they predict that they will have a collaborative, creative effect on the way people consume entertainment and, we predict, will lead to the Circular Entertainment phenomenon.
Immersive Living
Immersive Living is the rise of lifestyles which blur the reality of being on and offline. Entertainment will no longer be segmented; people can access and create it wherever they are.
Geek Culture
This triumph marks a shift as consumers become hungry for more sophisticated entertainment. Geek Culture rises, consumers will want to be recognized and rewarded - the boundaries between being commercial and creative will blur.
G Tech
G Tech is an existing social force in Asia that will change the way entertainment will look. Forget pink and sparkly, it is about the feminization of technology that is currently underway. Entertainment will be more collaborative, democratic, emotional and customized - all of which are ‘female’ traits.
Localism
The report uncovered a locally-minded sprit emerging in entertainment consumption and Localism will become a key theme of future entertainment. Consumers will take pride in seeking out the local and home-grown.
Now all that is great, but presents significant challenges to the notion of intellectual property, copyright and ownership - all subjects that have been discussed here before. It is one thing for young hipsters to want to create and mash-up their own material, and an entirely different matter to do so with other peoples property. How this will all shake out remains to be seen.
While I generally agree with the trends they are highlighting, I still wonder how this all plays into the business of music and the opportunities for careers in the music industry if everything is free and can be readily absorbed, modified and regurgitated without any concern for commerce or rights. This would be great for device makers like Nokia and others, but not great for the producers of art seeking to make a living off of that activity.
We have already seen how Apple has benefited dramatically at the expense of the artists, writers and record lables - and shifted the income stream out of their hands and into Apple’s own. Powerful motivation for Nokia to follow suit with an even bigger world view of media and their place in it.
By Seth Mnookin 11.27.07 | 12:00 AM
It's Monday afternoon, and Doug Morris, chair and CEO of Universal Music Group, is eating lunch in his private dining room at the company's Manhattan headquarters. Morris hasn't been here much in recent months, though it's hard to imagine he misses the place. For one thing, workers have been renovating the building: To reach his corner suite, you need to take an elevator to the floor above, walk down a hallway covered with plastic sheeting, and then descend a flight of stairs. For another, these are tough times for the music business. In 2006, the number of CDs sold worldwide fell 10 percent, the largest one-year drop ever — steeper than in any of the so-called Napster-era years from 2001 to 2004. Early indications suggest that 2007 will be at least as bad. The shades in the adjoining office are drawn, making the room feel a little like a crypt — albeit one outfitted with leather couches and tasteful art.
For the past several minutes, Morris has been listening to Rio Caraeff, executive VP in charge of the company's digital strategy, tell me how the sagging fortunes of the music industry highlight the need to diversify revenue streams. Caraeff explains that the company will eventually need to transition from running a product-based business to running a service-based one. He talks about ringtones, subscription services, and deals with mobile providers, stressing the need to raise the industry's "digital IQ."
Morris seems distracted. At 68, he looks every bit the prototypical New York big shot. What remains of his hair is slicked back along the sides of his head, and if his face is fleshier than it once was, the ever-probing, slightly combative intensity of his eyes hasn't dulled a bit. Morris has spent his entire life working with musicians and producers, finding and nurturing the talents that make his company a $7 billion-a-year business. It's safe to say that increasing his digital IQ and pondering a service-based business model aren't the topics that get him out of bed in the morning.
But digital strategies are important these days, and Morris has become entangled in them whether he wants to be or not. Over the past several years, he has been one of the most staunch and vocal proponents of aggressive copyright enforcement, at one point publicly blasting MP3 players as merely "repositories for stolen music." When he realized, after watching his grandson stream online clips, that portals weren't paying Universal for playing its music videos, Morris pulled the company's content off of Yahoo. Once the two sides came to terms, Morris went after YouTube and MySpace — "copyright infringers" both, as he put it. YouTube eventually agreed to a deal; a lawsuit against MySpace is ongoing. (Licensing of videos to Web sites now nets Universal more than $20million annually.) And in November 2006, Morris parlayed Microsoft's desperation to establish a true alternative to the iPod into a $1 ransom to Universal for every Zune music player sold — and that's on top of the licensing fees Microsoft pays to have Universal's songs in its Zune Marketplace online store. It's a sign of Morris' power that he is able to pressure so many players in the technology world to bend to his will.
Last summer, though, Morris seemed to change direction. After years of tightening controls on his company's content, he agreed to let Amazon.com and other online retailers sell unprotected MP3s of Universal songs. These contain none of the digital rights management software that media companies usually embed in digital files to prevent piracy. Universal wasn't the first big label to offer unprotected tracks; the EMI Group had begun selling DRM-free songs in May. But with its small market share, EMI's decision seemed unlikely to have much effect on the market. Universal, on the other hand, was setting out to change things. In particular, it hoped to end Apple's near monopoly on legal digital downloads.
Discussing Universal's various initiatives, Caraeff, an even-keeled 32-year-old in a crisply tailored suit, is explaining that it's important to be "invigorated and challenged by the opportunities of digital music." At this, Morris puts down his tuna fish on white, wipes some crumbs off his khakis, and clears his throat. I expect him to deliver an explanation of how he learned to stop worrying and love the MP3. Instead, he launches into a rant about a creature that resembles a misshapen bowling ball.
"There was a cartoon character years ago called the Shmoo," he says in a raspy tenor. "It was in Li'l Abner. The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That's what was happening to the music business. Everyone was treating the music business like it was a Shmoo.
"It was only a couple of years ago that we said, What's going on here?' Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?" Morris sighs. "People never really understand what's happening to the artists. All the sharing of the music, right? Is it correct that people share their music, fill up these devices with music they haven't paid for? If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go," he says. "That's what happened to the record business."
Nokia Predicts the Future of Entertainment
Dec 13
Posted in File Sharing / P2P, Music Copyright / Legal, Music Creation, Music Formats, Music Industry, Music Publishing, The Future
A study by Nokia predicts that up to a quarter of the entertainment consumed by people in five years time will have been created, edited and shared within their peer circle rather than coming out of traditional media groups. This phenomenon, dubbed ‘Circular Entertainment’, has been identified by Nokia as a result of a global study into the future of entertainment.
The study, entitled ‘A Glimpse of the Next Episode’, carried out by The Future Laboratory, interviewed trend-setting consumers from 17 countries about their digital behaviors and lifestyles signposting emerging entertainment trends.
“From our research we predict that up to a quarter of the entertainment being consumed in five years will be what we call ‘Circular’. The trends we are seeing show us that people will have a genuine desire not only to create and share their own content, but also to remix it, mash it up and pass it on within their peer groups - a form of collaborative social media,” said Mark Selby, Vice President, Multimedia, Nokia.
Selby continues, “We think it will work something like this; someone shares video footage they shot on their mobile device from a night out with a friend, that friend takes that footage and adds an MP3 file - the soundtrack of the evening - then passes it to another friend. That friend edits the footage by adding some photographs and passes it on to another friend and so on. The content keeps circulating between friends, who may or may not be geographically close, and becomes part of the group’s entertainment.”
Tom Savigar, Trends Director at The Future Laboratory added, “Consumers are increasingly demanding their entertainment be truly immersive, engaging and collaborative. Whereas once the act of watching, reading and hearing entertainment was passive, consumers now and in the future will be active and unrestrained by the ubiquitous nature of circular entertainment. Key to this evolution is consumers’ basic human desire to compare and contrast, create and communicate. We believe the next episode promises to deliver the democracy politics can only dream of.”
Of the 9,000 consumers they surveyed:
- 23% buy movies in digital format
- 35% buy music on MP3 files
- 25% buy music on mobile devices
- 39% watch TV on the internet
- 23% watch TV on mobile devices
- 46% regularly use IM, 37% on a mobile device
- 29% regularly blog
- 28% regularly access social networking sites
- 22% connect using technologies such as Skype
- 17% take part in Multiplayer Online Role Playing Games
- 17% upload to the internet from a mobile device
As part of the research they identified four key driving trends; Immersive Living; Geek Culture; G Tech and Localism. As these trends become more mainstream, they predict that they will have a collaborative, creative effect on the way people consume entertainment and, we predict, will lead to the Circular Entertainment phenomenon.
Immersive Living
Immersive Living is the rise of lifestyles which blur the reality of being on and offline. Entertainment will no longer be segmented; people can access and create it wherever they are.
Geek Culture
This triumph marks a shift as consumers become hungry for more sophisticated entertainment. Geek Culture rises, consumers will want to be recognized and rewarded - the boundaries between being commercial and creative will blur.
G Tech
G Tech is an existing social force in Asia that will change the way entertainment will look. Forget pink and sparkly, it is about the feminization of technology that is currently underway. Entertainment will be more collaborative, democratic, emotional and customized - all of which are ‘female’ traits.
Localism
The report uncovered a locally-minded sprit emerging in entertainment consumption and Localism will become a key theme of future entertainment. Consumers will take pride in seeking out the local and home-grown.
Now all that is great, but presents significant challenges to the notion of intellectual property, copyright and ownership - all subjects that have been discussed here before. It is one thing for young hipsters to want to create and mash-up their own material, and an entirely different matter to do so with other peoples property. How this will all shake out remains to be seen.
While I generally agree with the trends they are highlighting, I still wonder how this all plays into the business of music and the opportunities for careers in the music industry if everything is free and can be readily absorbed, modified and regurgitated without any concern for commerce or rights. This would be great for device makers like Nokia and others, but not great for the producers of art seeking to make a living off of that activity.
We have already seen how Apple has benefited dramatically at the expense of the artists, writers and record lables - and shifted the income stream out of their hands and into Apple’s own. Powerful motivation for Nokia to follow suit with an even bigger world view of media and their place in it.
The Police Top Tour in 2007
LOS ANGELES, December 17 /PRNewswire/ --
- Live Nation Produced Tour Sells More Than 2 Million Tickets to Gross Over US$240 Million
Live Nation, the world's largest live music company, closed out 2007 with the top grossing tour of the year, The Police's global concert tour which sold nearly 2.2 million tickets worldwide, grossing nearly US$243 million.
(Photo: http://www.newscom.com/cgi-bin/prnh/20071217/LAM055)
Over the course of their 84 date 2007 tour, the band played everything from multi-day festivals (Bonnaroo, V Fest), to sold-out stadium shows (Dodger Stadium in Los Angeles, Giants Stadium in New York, two Twickenham Stadium shows in London and two Au Stade de France shows in Paris), as well as dozens of other sold-out stadium and arena shows in North America, South America and Europe.
The tour shows no signs of slowing down. The Police have scheduled dates for 2008 in Japan, China, Australia, New Zealand and Europe.
The Police World Tour is produced by Live Nation's Global Touring Division in association with RZO Entertainment, Inc.
In 1977, The Police stormed the music scene by blending reggae, punk, jazz and rock. Sting, Stewart Copeland and Andy Summers created an unmistakably nuanced sound filled with evocative melodies, infectious lyrics and rock & roll swagger. The Police dominated the top of the charts and radio airwaves worldwide with five #1 albums and a succession of top 10 hit singles. In the six years they were together, The Police became one of the world's most famous bands, earning six Grammy Awards and countless fans around the globe.
ABOUT LIVE NATION:
Live Nation is the future of the music business. With the most live concerts, music venues and festivals in the world and the most comprehensive concert search engine on the web, Live Nation is revolutionizing the music industry: onstage and online. Headquartered in Los Angeles, California, Live Nation is listed on the New York Stock Exchange, trading under the symbol "LYV." Additional information about the company can be found at www.livenation.com under the "About Us" section.
Web site: http://www.livenation.com
Distributed by PR Newswire on behalf of Live Nation
http://www.prnewswire.co.uk/cgi/news/release?id=215399
- Live Nation Produced Tour Sells More Than 2 Million Tickets to Gross Over US$240 Million
Live Nation, the world's largest live music company, closed out 2007 with the top grossing tour of the year, The Police's global concert tour which sold nearly 2.2 million tickets worldwide, grossing nearly US$243 million.
(Photo: http://www.newscom.com/cgi-bin/prnh/20071217/LAM055)
Over the course of their 84 date 2007 tour, the band played everything from multi-day festivals (Bonnaroo, V Fest), to sold-out stadium shows (Dodger Stadium in Los Angeles, Giants Stadium in New York, two Twickenham Stadium shows in London and two Au Stade de France shows in Paris), as well as dozens of other sold-out stadium and arena shows in North America, South America and Europe.
The tour shows no signs of slowing down. The Police have scheduled dates for 2008 in Japan, China, Australia, New Zealand and Europe.
The Police World Tour is produced by Live Nation's Global Touring Division in association with RZO Entertainment, Inc.
In 1977, The Police stormed the music scene by blending reggae, punk, jazz and rock. Sting, Stewart Copeland and Andy Summers created an unmistakably nuanced sound filled with evocative melodies, infectious lyrics and rock & roll swagger. The Police dominated the top of the charts and radio airwaves worldwide with five #1 albums and a succession of top 10 hit singles. In the six years they were together, The Police became one of the world's most famous bands, earning six Grammy Awards and countless fans around the globe.
ABOUT LIVE NATION:
Live Nation is the future of the music business. With the most live concerts, music venues and festivals in the world and the most comprehensive concert search engine on the web, Live Nation is revolutionizing the music industry: onstage and online. Headquartered in Los Angeles, California, Live Nation is listed on the New York Stock Exchange, trading under the symbol "LYV." Additional information about the company can be found at www.livenation.com under the "About Us" section.
Web site: http://www.livenation.com
Distributed by PR Newswire on behalf of Live Nation
http://www.prnewswire.co.uk/cgi/news/release?id=215399
Digital business heats up for Latin music
By Leila Cobo and Ayala Ben-Yehuda
Reuters
Sunday, December 16, 2007; 9:53 PM
MIAMI/LOS ANGELES (Billboard) - After years of modest results, the digital marketplace in 2007 finally began to yield considerable revenue streams for Latin labels and acts.
Sales of Latin digital albums numbered 477,000 units by December 10, according to Nielsen SoundScan -- 1.6 percent of all Latin albums sold. That figure is still significantly less than the 10.4 percent portion of album sales overall that were digital, but far exceeds the 293,000 digital album sales tallied for Latin music in 2006.
Growth has been bolstered by iTunes Latino's solidified status as a destination for a vast, well-catalogued library of music and by the proliferation of videos by Latin acts now found on YouTube. Ringtones and master ringtones are also growing sources of revenue for Latin labels.
Following are five digital stories that altered the Latin music business in 2007 and will likely have an impact in 2008.
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/16/AR2007121601903.html
Reuters
Sunday, December 16, 2007; 9:53 PM
MIAMI/LOS ANGELES (Billboard) - After years of modest results, the digital marketplace in 2007 finally began to yield considerable revenue streams for Latin labels and acts.
Sales of Latin digital albums numbered 477,000 units by December 10, according to Nielsen SoundScan -- 1.6 percent of all Latin albums sold. That figure is still significantly less than the 10.4 percent portion of album sales overall that were digital, but far exceeds the 293,000 digital album sales tallied for Latin music in 2006.
Growth has been bolstered by iTunes Latino's solidified status as a destination for a vast, well-catalogued library of music and by the proliferation of videos by Latin acts now found on YouTube. Ringtones and master ringtones are also growing sources of revenue for Latin labels.
Following are five digital stories that altered the Latin music business in 2007 and will likely have an impact in 2008.
http://www.washingtonpost.com/wp-dyn/content/article/2007/12/16/AR2007121601903.html
Why Dropping DRM Won't Save The Music Business (AAPL)
Peter Kafka | December 14, 2007 2:58 PM
Add Bernstein Research to the cacophony of voices calling on Big Music to just get it over with and drop digital rights management (DRM) restrictions on their music download sales:
"We think the music industry should call off the RIAA and make all music DRM-free" the firm asserts in a note today. "We think that going DRM-free will maximize the revenues and profits for the music industry in the long term."
We agree with the part about dropping DRM restrictions. Selling music in unencrypted MP3 format makes everyone's music software and music players interoperable, and it gives the industry the best leverage they'll have against Steve Jobs and Apple (AAPL). But it won't do much for them in the long run...
Why not?
• We don't think most consumers are aware of any DRM restrictions, because almost everything they buy or own works on iTunes and iPods.
• We have yet to see any concrete numbers from either EMI or Universal Music Group about their DRM-free tracks sold at iTunes and Amazon's new mp3 store. We've been told, unofficially, that sales are "encouraging," but we think if they were truly impressive, we'd have seen the results already.
• The conventional wisdom is that if only consumers had legal opportunities to buy music online, they would do so instead of using P2P filesharing systems, or borrowing and ripping their friends' CDs etc. But there's no shortage of legal places to buy music online these days, and consumers are indeed buying songs: They bought 1 billion tracks at iTunes in the first half of this year, and we assume that rate increased this fall. But the industry's main problem remains unchanged: It used to sell discs at a wholesale price of $10; now it sells individual songs at a wholesale of about 70 cents. If the business is going to survive, it's going to have to figure out a way to do that profitably -- and dropping DRM isn't going to solve that problem.
http://www.alleyinsider.com/2007/12/why-the-death-of-drm-wont-help-the-music-business.html
Add Bernstein Research to the cacophony of voices calling on Big Music to just get it over with and drop digital rights management (DRM) restrictions on their music download sales:
"We think the music industry should call off the RIAA and make all music DRM-free" the firm asserts in a note today. "We think that going DRM-free will maximize the revenues and profits for the music industry in the long term."
We agree with the part about dropping DRM restrictions. Selling music in unencrypted MP3 format makes everyone's music software and music players interoperable, and it gives the industry the best leverage they'll have against Steve Jobs and Apple (AAPL). But it won't do much for them in the long run...
Why not?
• We don't think most consumers are aware of any DRM restrictions, because almost everything they buy or own works on iTunes and iPods.
• We have yet to see any concrete numbers from either EMI or Universal Music Group about their DRM-free tracks sold at iTunes and Amazon's new mp3 store. We've been told, unofficially, that sales are "encouraging," but we think if they were truly impressive, we'd have seen the results already.
• The conventional wisdom is that if only consumers had legal opportunities to buy music online, they would do so instead of using P2P filesharing systems, or borrowing and ripping their friends' CDs etc. But there's no shortage of legal places to buy music online these days, and consumers are indeed buying songs: They bought 1 billion tracks at iTunes in the first half of this year, and we assume that rate increased this fall. But the industry's main problem remains unchanged: It used to sell discs at a wholesale price of $10; now it sells individual songs at a wholesale of about 70 cents. If the business is going to survive, it's going to have to figure out a way to do that profitably -- and dropping DRM isn't going to solve that problem.
http://www.alleyinsider.com/2007/12/why-the-death-of-drm-wont-help-the-music-business.html
Brand meets band: now they're in business
Having a song featured in an ad can be a vital leg-up for newcomers, writes Julian Lee.
Remember when rock'n'roll was all about rebellion and showing the world the proverbial finger? When the very thought of working with big business would have provoked a splenetic bout of self-righteousness among band members and fans?
As much as some of us like to reminisce about the good old days, it seems the music industry has forsaken them. Up-and-coming bands are likely to seek out business deals that can give them a leg-up and cut short the long and often painful climb to the top.
Apple's use of Are You Going To Be My Girl in iPod ads transformed Jet from a workaday rock band into a global name. A similar deal was cut with Vodafone in Britain, ensuring Jet's musical footprint was extended.
Call it smart marketing or a sell-out, but Jet's album Get Born has sold 3.5 million copies. Had Apple not made the call, Jet might still have been performing at low-rent venues in the US, says Heath Johns of Jet's label, Universal Music Publishing.
"The exposure definitely sped up the process," Johns says. "But they followed up the ad with a killer [album]." Without the exposure, the album might have sold just 100,000 copies.
Although artists are never pressured into commercial deals, they are one of the first things talked about when artists, managers and publishers sit down to draw up a contract.
"There's no glory in the starving artist stereotype any more. These guys don't have a weekly pay packet, they have bills to pay," Johns says.
http://www.smh.com.au/news/music/brand-meets-band-now-theyre-in-business/2007/12/16/1197740082270.html
Remember when rock'n'roll was all about rebellion and showing the world the proverbial finger? When the very thought of working with big business would have provoked a splenetic bout of self-righteousness among band members and fans?
As much as some of us like to reminisce about the good old days, it seems the music industry has forsaken them. Up-and-coming bands are likely to seek out business deals that can give them a leg-up and cut short the long and often painful climb to the top.
Apple's use of Are You Going To Be My Girl in iPod ads transformed Jet from a workaday rock band into a global name. A similar deal was cut with Vodafone in Britain, ensuring Jet's musical footprint was extended.
Call it smart marketing or a sell-out, but Jet's album Get Born has sold 3.5 million copies. Had Apple not made the call, Jet might still have been performing at low-rent venues in the US, says Heath Johns of Jet's label, Universal Music Publishing.
"The exposure definitely sped up the process," Johns says. "But they followed up the ad with a killer [album]." Without the exposure, the album might have sold just 100,000 copies.
Although artists are never pressured into commercial deals, they are one of the first things talked about when artists, managers and publishers sit down to draw up a contract.
"There's no glory in the starving artist stereotype any more. These guys don't have a weekly pay packet, they have bills to pay," Johns says.
http://www.smh.com.au/news/music/brand-meets-band-now-theyre-in-business/2007/12/16/1197740082270.html
Business review: iPhone out of touch with business needs
Daniel Robinson, IT Week 17 Dec 2007
Apple’s iPhone handset sports an advanced touch-driven user interface and an excellent browser that lets the user view full web pages while on the move. However, it does not appear to be an ideal device for either web-based applications or business email access, where the iPhone’s on-screen keyboard makes it unsuitable as a BlackBerry replacement.
The iPhone, available in the UK now from Apple and O2, combines the functions of a smartphone and an iPod media player in a stylish slimline device. It weighs about 135g, making it a little heavier than a standard mobile phone but lighter than many devices with a qwerty keyboard.
We found the iPhone made access to basic functions such as phone calls and voicemail very easy, which will make it appeal to the less tech-savvy user. However, while its web browser excels at displaying pages, the device only supports GPRS networks (with Edge where available) making browsing slow when out of range of a Wi-Fi access point. The iPhone also relies on a “soft” on-screen keyboard for input, and lacks the level of support for corporate email accounts found in many Windows Mobile or Symbian handsets.
http://www.vnunet.com/itweek/hardware/2205871/touch-business-needs-3708374
Apple’s iPhone handset sports an advanced touch-driven user interface and an excellent browser that lets the user view full web pages while on the move. However, it does not appear to be an ideal device for either web-based applications or business email access, where the iPhone’s on-screen keyboard makes it unsuitable as a BlackBerry replacement.
The iPhone, available in the UK now from Apple and O2, combines the functions of a smartphone and an iPod media player in a stylish slimline device. It weighs about 135g, making it a little heavier than a standard mobile phone but lighter than many devices with a qwerty keyboard.
We found the iPhone made access to basic functions such as phone calls and voicemail very easy, which will make it appeal to the less tech-savvy user. However, while its web browser excels at displaying pages, the device only supports GPRS networks (with Edge where available) making browsing slow when out of range of a Wi-Fi access point. The iPhone also relies on a “soft” on-screen keyboard for input, and lacks the level of support for corporate email accounts found in many Windows Mobile or Symbian handsets.
http://www.vnunet.com/itweek/hardware/2205871/touch-business-needs-3708374
Year in Review: Radiohead Kills the Music Business
In what will surely be remembered as 2007's most important blog post (just ahead of this one, we hope), Radiohead's Jonny Greenwood announced the details of his band's seventh LP: "Well, the new album is finished, and it's coming out in 10 days; we've called it In Rainbows." No sooner had he typed those words than Clive Davis exploded, all our CD players turned into pumpkins, and angels came down from heaven and punched Doug Morris in the groin.
In reality, Radiohead probably didn't do much to accelerate the downfall of the traditional music industry (it was doomed anyway). It's also questionable just how big a step In Rainbows and its pay-what-you-want price tag were toward the way music will be sold in the future, since it would probably only work for three or four bands on Earth not named Radiohead. Still, Thom Yorke & Co. were the first to try it; it got them tons of attention — come to think of it, did any other albums come out this year? — and likely even more money. (How much money? We have no idea since the band is keeping quiet ["It's our linen … We don't want to wash it in public," one of their managers told the New York Times on Sunday], but probably millions, though.) And we don't begrudge them any of it. Why not? Well, because In Rainbows is really, really good.
http://nymag.com/daily/entertainment/2007/12/year_in_review_radiohead.html
In reality, Radiohead probably didn't do much to accelerate the downfall of the traditional music industry (it was doomed anyway). It's also questionable just how big a step In Rainbows and its pay-what-you-want price tag were toward the way music will be sold in the future, since it would probably only work for three or four bands on Earth not named Radiohead. Still, Thom Yorke & Co. were the first to try it; it got them tons of attention — come to think of it, did any other albums come out this year? — and likely even more money. (How much money? We have no idea since the band is keeping quiet ["It's our linen … We don't want to wash it in public," one of their managers told the New York Times on Sunday], but probably millions, though.) And we don't begrudge them any of it. Why not? Well, because In Rainbows is really, really good.
http://nymag.com/daily/entertainment/2007/12/year_in_review_radiohead.html
Mobile makers shake up music biz
Nokia and Sony Ericsson threaten cellular carriers with their new music plans.
By Mark Halper
NEW YORK (Fortune Magazine) -- Mobile operators are losing their grip on the mobile-music business. The latest threats: a planned free service from handset vendor Nokia and a new music-downloading service from rival Sony Ericsson that will launch next spring.
Sony Ericsson plans to offer more than one million full-track songs that users can download straight to their phones or PCs with a service called PlayNow. It's a gutsy move, because PlayNow undermines Sony Ericsson's best customers, mobile carriers like Orange and Vodafone that buy hundreds of millions of phones.
In the traditional cellular business, it's the carriers, not the handset vendors, that sell services like music. Just two months earlier, the announcement by Nokia, the world's largest handset maker, that it was launching its own music service triggered a flap with Orange. The operator refused to stock offending Nokia phones that included links to the music site.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/12/24/102025792/?postversion=2007121418
By Mark Halper
NEW YORK (Fortune Magazine) -- Mobile operators are losing their grip on the mobile-music business. The latest threats: a planned free service from handset vendor Nokia and a new music-downloading service from rival Sony Ericsson that will launch next spring.
Sony Ericsson plans to offer more than one million full-track songs that users can download straight to their phones or PCs with a service called PlayNow. It's a gutsy move, because PlayNow undermines Sony Ericsson's best customers, mobile carriers like Orange and Vodafone that buy hundreds of millions of phones.
In the traditional cellular business, it's the carriers, not the handset vendors, that sell services like music. Just two months earlier, the announcement by Nokia, the world's largest handset maker, that it was launching its own music service triggered a flap with Orange. The operator refused to stock offending Nokia phones that included links to the music site.
http://money.cnn.com/magazines/fortune/fortune_archive/2007/12/24/102025792/?postversion=2007121418
Madonna Ditches Label, Radiohead Go Renegade: The Year The Music Industry Broke
In the first installment of our three-part series on the future of music, we take a look back at what went wrong and when.
In April, Trent Reznor released Year Zero, a concept album about a future society teetering on the brink of apocalypse. It was supposed to be a grand work of fiction, but it could just as easily have been about the music industry in 2007 — a bleak, burned-out world where the sky fell on a daily basis and the rivers ran red with the blood of record execs. (That the album didn't sell well only furthers the analogy ...)
Make no mistake about it, 2007 was a b-a-a-a-d year for the industry. According to Nielsen SoundScan, album sales were down 15 percent from 2006 (a trend that's continued for eight straight years now); big-name artists jumped ship in increasingly complicated — and messy — ways; and the powers-that-be seemed to get even more heartless and disconnected, thanks to a series of lawsuits, feuds and terrible decisions.
http://www.mtv.com/news/articles/1576538/20071214/id_0.jhtml
In April, Trent Reznor released Year Zero, a concept album about a future society teetering on the brink of apocalypse. It was supposed to be a grand work of fiction, but it could just as easily have been about the music industry in 2007 — a bleak, burned-out world where the sky fell on a daily basis and the rivers ran red with the blood of record execs. (That the album didn't sell well only furthers the analogy ...)
Make no mistake about it, 2007 was a b-a-a-a-d year for the industry. According to Nielsen SoundScan, album sales were down 15 percent from 2006 (a trend that's continued for eight straight years now); big-name artists jumped ship in increasingly complicated — and messy — ways; and the powers-that-be seemed to get even more heartless and disconnected, thanks to a series of lawsuits, feuds and terrible decisions.
http://www.mtv.com/news/articles/1576538/20071214/id_0.jhtml
Wednesday, December 12, 2007
What’s the Future of the Music Industry?
September 20, 2007, 2:07 pm
What’s the Future of the Music Industry? A Freakonomics Quorum
By Stephen J. Dubner
Before I was in the writing industry, I was in the music industry.
While the economics of journalism have changed a lot over the past 20 years — witness the demise of Times Select and the potential demise of the Wall Street Journal’s pay site — many other aspects of the writing industry haven’t changed much at all. If you are a non-fiction writer who writes books, for instance, the economic setup is pretty much the same as it was, in large part because book publishers still primarily offer hard copies of books to people who pay money for them.
But the music industry of today looks almost nothing like the music industry of 20 years ago. There are a ton of reasons, most of them having to do with digital technology. If you are a young journalist starting out today, you may still aspire to get a big publisher to give you an advance and widely publish your book; but if you are a young musician starting out today, do you want to get a big record advance or do you want to sell the music yourself, like these folks do, and like Jane Siberry does? If you are a record label, what do you do about illegal downloads, and do you keep putting out “albums” that nobody buys or do you instead try to release only individual songs, as many people seem to prefer?
It strikes me as ironic that a new technology (digital music) may have accidentally forced record labels to abandon the status quo (releasing albums) and return to the past (selling singles). I sometimes think that the biggest mistake the record industry ever made was abandoning the pop single in the first place. Customers were forced to buy albums to get the one or two songs they loved; how many albums can you say that you truly love, or love even 50% of the songs — 10? 20? But now the people have spoken: they want one song at a time, digitally please, maybe even free (yikes: big can of worms, which is addressed ably below).
So what really happened to the music industry, and what will it look like in five or ten years?
That’s the question we put to five smart people in our latest Freakonomics Quorum. I found their answers to be incredibly interesting, full of real information and clear-eyed thinking. (If you haven’t already done so, you should also read Lynn Hirschberg’s really good recent profile of Rick Rubin in the Times Magazine.) Huge thanks to all our participants.
Koleman Strumpf, professor of business economics at the University of Kansas Business School whose papers include “The Effect of File Sharing on Record Sales”:
Many dire assessments have been made about the record business. Unfortunately, these claims are rarely supported with data. As such, I will provide specific numbers about the industry’s health, put those numbers in perspective, and discuss several factors that might explain recent trends.
Let me begin by discussing the current state of the U.S. record industry. As has been widely reported, sales are down. According to Nielsen SoundScan, album sales fell 18 percent between 2000 and 2006, after accounting for paid digital downloads from online stores like iTunes. While these numbers are not good, other industries have experienced similar downturns. For example, new car sales are down 22 percent for U.S. automakers.
It is important to remember that sales downturns are not atypical in the music business, and that investors remain interested in selling records. The current situation closely mirrors the post-disco bust in the early 1980s. Specifically, real revenues fell by the same percentage during the years 1979 to 1985 and 1999 to 2006. The record industry also continues to generate profits and attract interest from investors. For example, a private equity firm just last month completed a ₤3 billion takeover of EMI, and an investment group purchased the Warner Music Group in 2004 for $2.6 billion.
Investors seek out high returns, and these large investments suggest that many believe that they can make money in the record business. It also implies that the industry is still profitable. While profit data can be hard to come by, we get a small window from Warner, the only publicly traded standalone record company in the U.S., which enjoyed operating margins of 7 percent and 10 percent from its recorded music segments in 2005 and 2006.
Putting profitability aside for now, what is the explanation for the sales reduction that has occurred? The most obvious culprit is illicit file-sharing on networks such as Napster, KaZaA, eDonkey, and BitTorrent. While linking the two seems tantalizing — file sharing rose to prominence at roughly the same time that record sales started to fall — there is surprisingly little evidence to support the claim that file sharing has significantly hurt record sales. I co-authored a paper with Felix Oberholzer-Gee of the Harvard Business School in which we studied this link using download data from file-sharing networks. If file sharing hurts record sales, then albums that are more heavily downloaded should experience lower sales than comparable albums that are less downloaded. But, after controlling for the role of popularity, we found that downloads had little effect on album sales.
There are several other factors that might explain recent sales trends. First, recall the industry’s similar problems in the early 1980s. Then, as now, sales were down as consumers stopped purchasing albums from a previously popular genre (in the ’80s it was disco; now it’s teen-pop). So one explanation is that the industry has failed to find genres that capture the interests of consumers.
Second, much of the reduction in sales is the direct result of industry cost-cutting. The major record labels have cut large numbers of staff and severed ties with many artists. Such moves are not necessarily bad business choices, but they suggest that less attention should be given to revenues and more to profits.
Third, recorded music has had trouble competing against other products that vie for consumers’ entertainment spending. Consider home video products like the DVD. It does not seem implausible that a good chunk of the $11 billion rise in spending on home video products since 1999 represents foregone CD sales. (Music industry revenues only fell $2 billion over this period.) Entertainment spending was also likely channeled into cell phones and video games, both of which experienced large sales growth and have been particularly popular with the key teen demographic.
A fourth and final factor to consider is the rise of paid digital downloads made popular by iTunes. While this model is often described as a competitor of illicit downloading, there is little evidence that file-sharing users also use iTunes (plus genres like classical music, which are largely ignored on file-sharing networks, are very popular on iTunes). More problematic is the likelihood that music consumers who used to purchase whole albums now download only one or two songs, so rather than getting $15 for an album sale, the industry gets two downloads at $2. While there is no direct evidence that cannibalization is occurring, the growing size of paid downloads makes this factor an important one to consider.
As for the future, I am dubious about making forecasts. Much will depend on the choices the major labels make on key issues (will they run experiments to determine the optimal pricing of digital downloads?) and the arrival of still-unforeseen technologies (which could allow labels to more cheaply distribute music, or lead to new forms of piracy). At the same time, I reject the argument that recorded music is close to death, simply because the financial incentives to create music have never been particularly high. In 2005, less than one in five albums were released on a major label, and even among those releases, fewer than one in fifteen went gold (the usual measure of record success). With such daunting odds, recording an album may have seemed like a pointless task. But in that year, nearly 44,000 albums were released — enough to provide almost three consecutive years of listening. Regardless of what happens to companies that produce and distribute music, I am sure that recorded music will continue to be made.
Fredric Dannen, author of Hit Men: Power Brokers and Fast Money Inside the Music Business:
Two decades ago, I was interviewing David Geffen for Hit Men, and he offered a warning about what he saw as a grave threat to the record industry: digital audio tape. If record companies started issuing albums on D.A.T., Geffen said, they would effectively be distributing their master tapes, “obviating the need for catalog.” At the time, Geffen’s admonition made sense; but D.A.T. never caught on with the consumer. The failure of D.A.T. got me thinking, and before long I believed I had discerned something about the consumption of recorded music — something startlingly obvious that has somehow eluded the record industry throughout its history, and led to the industry’s irreversible decline.
My epiphany, if you want to call it that, was simply this: consumers of recorded music will always embrace the format that provides the greatest convenience. No other factor — certainly not high fidelity — will move consumers substantially to change their listening and buying habits. The single exception to this rule was the introduction of two-channel stereo in the late fifties.
Let me state this more clearly, by example. When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).
The industry also resisted the audio cassette. Who in their right mind would prefer a format with an ever-present hiss over the pristine sound of an LP? The answer: nearly everybody. Cassettes were much easier to handle than records; they didn’t scratch, and you could listen to them in your car, or while walking or jogging.
Starting about twenty years ago, the CD took off like a rocket, burying both the LP and the audio cassette in a few short years. At that time, the CD was the last word in simplicity and convenience. I remember meeting an audiophile at a record-industry convention in the late 1980s. The popularity of the CD appalled and befuddled him. Couldn’t people hear that digital sound was cold and harsh compared to the warm, luxurious sound of an LP? Sure. But most consumers of music are not high-end audiophiles. Now you could hear all 74 minutes of Beethoven’s Ninth Symphony on one side of one disk.
I myself am something of a music nut. I cannot get through a day without listening to music, and my personal collection of recordings is enormous. By the early 1990s, I longed for a format even more convenient than the CD. And, based on my own listening habits, I was pretty sure I knew where we were headed. In short, I wanted to be able to run my music library from my home computer, and dispense with disks altogether. What I did not foresee was the advent of MP3 compression. As soon as MP3s hit the scene, I embraced them ecstatically. I was the first person I knew to own a Diamond Rio, the first portable MP3 player.
In 1999, I wrote an editorial for the New York Times predicting that MP3 was an unstoppable force that would destroy the oligopolistic power of the record industry. This paper did not believe me; the editorial ran instead in the Los Angeles Times.
It was an easy prediction to make. You can always count on the record industry to cling to the past, and to fight innovation. (Apart from resisting the LP, the cassette, and the CD, the industry also fought MTV.) The industry could have adopted and embraced MP3 as the new dominant format, had it understood why it was unstoppable. But the business’ failure to understand has been striking for its persistence. By the time Napster hit the scene, the industry had a Hobson’s choice: accept MP3, or die.
We all know what happened next.
George Drakoulias, music producer, artists & repertoire executive at American Recordings, and veteran of Def Jam Recordings:
There are many factors contributing to the industry’s current decline. The biggest ones include the inability of record companies to take advantage of new resources like Napster and American Idol, the continuous churning out of bad music, and, of course, greed, greed, and more greed. I think it is clear how we got here; but where we’re going remains very uncertain.
For starters, while we’re still in agreement as a society that people want music, I’d say music is not as important now as it once was. Instant gratification has removed some of the the demand. Music feels like it has become more disposable and cheap, with less staying power. As a result, it becomes a lot harder to commit to newer acts knowing they may not be around a year from now. I don’t see many kids nowadays wearing the T-shirts of the latest fad bands, but I do see a hell of a lot of AC/DC, Led Zeppelin, and Pink Floyd shirts out there.
In a way, the blogosphere has removed all sense of mystery from the entertainment industry as a whole. For example, everyone knows what Heath Ledger looks like as the Joker in the the new installment of Batman, which won’t be in theaters for almost a year. We see previews of magazine covers weeks before they hit the stands. The Christmas Eve-type excitement and anticipation that used to accompany entertainment seems to have disappeared.
As far as how the music industry fits into this scheme, the old business model is dead. In five years, the CD should be over. Someone will take a stab at a subscription service — though the right way to make that work is a mystery to me. Maybe it will involve several like-minded acts getting together and starting a co-op, such as the bands of Ozzfest, etc. Meanwhile, music executives still need some sort of filter to help them navigate the new playing field.
Without stating the obvious, the future is really in the hands of the consumer. The public will dictate to whatever is left of the record industry (it’s funny that we still call it that — long live vinyl!) the way in which it wants its music delivered. The final product will most likely involve computers, and will give you the ability to take your music with you in your phone, car, bathtub, skydiving parachute, etc.
What am I going to do in the midst of all this? It may sound simple, but my plan is to work as hard as I can to make the best music possible and try to educate the listener. A few years ago, I worked on a record called The Last DJ by Tom Petty. The songs on the album addressed the problems we are currently dealing with in the industry. I thought the record would be a wakeup call for consumers; but it’s hard to tell kids, “Eat your broccoli, it’s good for you.” I’ll try to nurture new talent and make records that sound exciting, emotional, and timeless, and to bring some level of craft back into record-making, ensuring that the artists I work with have the ability to play live and move an audience.
One option that doesn’t seem feasible is making everything free and eliminating copyrights. Hopefully, someone smarter than I am will come up with the right formula to get music to consumers in the way that they want it, and to collect fees that are distributed accordingly. I hope that person shows up soon.
Peter Rojas, founder of Engadget and co-founder of RCRD LBL, a free, online-only music label launched by Downtown Records.
The short answer is that the Internet happened.
I never thought studying Adorno and Horkheimer in college would come in handy (much as I loved them), but they did a good job of identifying how the rise of mechanical reproduction went hand-in-hand with the birth of mass culture. Whether it was television, radio, newspapers, or records, huge media companies were able to take advantage of a curious sweet spot in history — mechanical reproduction made it possible to churn out cheap, identical copies of a book, newspaper, record, etc., but creating and distributing those cheap, identical copies required the sort of capital to which very few individuals had access. In the case of music, a handful of major labels could more or less monopolize the creation and distribution of music.
The Internet changed all that. We’d already been slowly shifting from analog to digital reproduction, but it was digital reproduction combined with the a ridiculously cheap distribution channel (the Internet) that really mucked it up for the major labels. The emergence of Napster (the original one) was the wake-up call, but the record industry would be in trouble now even if no one had invented peer-to-peer file sharing.
The fact of the matter is that the majors thrived in an era of inefficiency, when there was value in physically producing and distributing music. There isn’t any value in that any more (or at least, it’s very quickly declining), and there’s no good way for labels to compete given that the cost structure of the business was designed around physical releases. Major labels need blockbusters, because the costs inherent with producing, distributing, and marketing each physical release means it’s easier to make money from one mega-hit that sells 10 million records than 100 small hits that each sell 100,000 records. In a digital world, you could make money from those 100 small hits almost as easily as you could from that one mega-hit. (See Chris Anderson’s theory of the Long Tail).
If this was merely the extent of the problem, the record industry might be doing okay right now. The majors could have adjusted and reinvented themselves for the digital era. Instead, they took too long to start selling music online (and even when they did agree to start selling digital downloads, they screwed it up by insisting on digital rights management). The lack of legal, paid-for downloads created a vacuum in the pre-iTunes era, one that numerous peer-to-peer file-sharing networks were happy to fill. A generation of kids got used to the idea that music was free, and given the infinite amount of freely — if illegally — available music out there, it was hard to argue with the facts on the ground. Music seemed free, so it was free. It didn’t help that the industry had been gouging consumers for years with high CD prices; prices rose even as the cost of producing CDs plummeted. Digital downloads should have made it possible to slash prices for recorded music, but the majors have done their best to keep prices at around a dollar a track — an artificially high price point that makes piracy more attractive than it should be.
I don’t pretend to know what the industry will look like in ten years, but the funny thing about all of this is that music itself is healthier than ever. The Internet, combined with low-cost (or even no-cost) digital tools, has led to an explosion of creativity, with millions of amateurs making music for every conceivable genre, sub-genre, and microgenre, and then sharing their creations online. Andrew Keen might look down on these results, and no doubt 99.9 percent of the music being created today is terrible; but that’s besides the point. Even that one-tenth of one percent means that there is more great music being created than any of us will have time to listen to — and that’s not even taking into account all of the “professional” music that still manages to get made. Many professional artists are discovering that, regardless of how well their music sells, they’re still able to make a healthy living from live appearances, merchandise, and licensing — and the Internet only makes it easier for them to build a fan base. It’s the Britney Spearses of the world that are hit hardest by all of this change. Manufactured pop doesn’t do quite so well when consumers have better options to choose from.
The majors thrived in an era of artificial scarcity when they were able to control the production and distribution of music. Today, we have an infinite number of choices available to us, and when content is infinitely abundant, the only scarce commodities are convenience, taste, and trust. The music companies that are successfully shaping the Internet era are recognizing that the real value is in making it easier to buy music than to steal it, helping consumers find other people who share their music tastes, and serving as a trusted source for discovering new music.
Steve Gottlieb, president of TVT Records:
The decline in record sales over the past year was entirely predictable. The technology that has wreaked havoc on the industry was developed 8 or 9 years ago, and, while certain features of it have improved, the individual elements that comprise it — an institutionalized standard for non-protected music files like MP3s, music search and swapping protocols, and rip/burn hardware — are not new. Combining these elements allowed CDs to go from a storage medium to a broadcast medium. As such, the passing along of burned CDs now constitutes the primary means of music acquisition. The cycle of reduced demand causing retail channels to reduce distribution pipelines in advance of the marketplace began in earnest last year, when not a single retailer saw enough value in Tower Record to outbid liquidators.
This tale of technology leveling the record industry demonstrates its unique character. Record companies seem unable to digest change, redefine their businesses, and, perhaps most importantly, resist the temptation to seek unfair competitive advantages over one another. The failure of record labels to take collaborative action against piracy has led to the industry’s current bizarre circumstances — in a world of skyrocketing demand for music, the development and sale of recorded music offers ever-decreasing economic returns.
This set of circumstances was entirely avoidable. Many of the blunders that created the current mess were heavily anticipated, as was the recent decline in sales. Major industry mistakes included shutting down Napster after its commitment to begin paying rights holders, suing consumers without clarifying to the public what constituted personal use, and failing to squarely address CD burners and iPods as strategies to sell hardware by bundling them with unlimited access to freely-copied music.
For as long as the woes of MP3s, file sharing and CD burning have existed, solutions to them have existed as well, although their attractiveness and cost of implementation may have changed. These solutions include combining advertising with free consumption, subscription services, and transactional unit-based sales of secure formats. Given the fact that the public has gotten used to sharing music for free, getting people to abandon this notion will be extremely difficult.
Regardless of what created this mess, if we accept that free music has become the model for consumption, then we have little choice but to invest in advertising-supported free services that will make this type of consumption profitable. This step will require patience, leadership and a long-term view. After formulating a way to recapture the revenue it’s losing, the industry can then address the development of a new, secure file format that offers audio, meta-data, and other digital features superior to those of MP3s. This should be an easy task, and will give the industry access to both ad-supported free “iPod quality” MP3s, and higher-quality digital products that can be sold directly.
Unless the labels actively reinvent themselves and embrace change, they will continue to find themselves in an expanding music marketplace that rewards their efforts less and less.
What’s the Future of the Music Industry? A Freakonomics Quorum
By Stephen J. Dubner
Before I was in the writing industry, I was in the music industry.
While the economics of journalism have changed a lot over the past 20 years — witness the demise of Times Select and the potential demise of the Wall Street Journal’s pay site — many other aspects of the writing industry haven’t changed much at all. If you are a non-fiction writer who writes books, for instance, the economic setup is pretty much the same as it was, in large part because book publishers still primarily offer hard copies of books to people who pay money for them.
But the music industry of today looks almost nothing like the music industry of 20 years ago. There are a ton of reasons, most of them having to do with digital technology. If you are a young journalist starting out today, you may still aspire to get a big publisher to give you an advance and widely publish your book; but if you are a young musician starting out today, do you want to get a big record advance or do you want to sell the music yourself, like these folks do, and like Jane Siberry does? If you are a record label, what do you do about illegal downloads, and do you keep putting out “albums” that nobody buys or do you instead try to release only individual songs, as many people seem to prefer?
It strikes me as ironic that a new technology (digital music) may have accidentally forced record labels to abandon the status quo (releasing albums) and return to the past (selling singles). I sometimes think that the biggest mistake the record industry ever made was abandoning the pop single in the first place. Customers were forced to buy albums to get the one or two songs they loved; how many albums can you say that you truly love, or love even 50% of the songs — 10? 20? But now the people have spoken: they want one song at a time, digitally please, maybe even free (yikes: big can of worms, which is addressed ably below).
So what really happened to the music industry, and what will it look like in five or ten years?
That’s the question we put to five smart people in our latest Freakonomics Quorum. I found their answers to be incredibly interesting, full of real information and clear-eyed thinking. (If you haven’t already done so, you should also read Lynn Hirschberg’s really good recent profile of Rick Rubin in the Times Magazine.) Huge thanks to all our participants.
Koleman Strumpf, professor of business economics at the University of Kansas Business School whose papers include “The Effect of File Sharing on Record Sales”:
Many dire assessments have been made about the record business. Unfortunately, these claims are rarely supported with data. As such, I will provide specific numbers about the industry’s health, put those numbers in perspective, and discuss several factors that might explain recent trends.
Let me begin by discussing the current state of the U.S. record industry. As has been widely reported, sales are down. According to Nielsen SoundScan, album sales fell 18 percent between 2000 and 2006, after accounting for paid digital downloads from online stores like iTunes. While these numbers are not good, other industries have experienced similar downturns. For example, new car sales are down 22 percent for U.S. automakers.
It is important to remember that sales downturns are not atypical in the music business, and that investors remain interested in selling records. The current situation closely mirrors the post-disco bust in the early 1980s. Specifically, real revenues fell by the same percentage during the years 1979 to 1985 and 1999 to 2006. The record industry also continues to generate profits and attract interest from investors. For example, a private equity firm just last month completed a ₤3 billion takeover of EMI, and an investment group purchased the Warner Music Group in 2004 for $2.6 billion.
Investors seek out high returns, and these large investments suggest that many believe that they can make money in the record business. It also implies that the industry is still profitable. While profit data can be hard to come by, we get a small window from Warner, the only publicly traded standalone record company in the U.S., which enjoyed operating margins of 7 percent and 10 percent from its recorded music segments in 2005 and 2006.
Putting profitability aside for now, what is the explanation for the sales reduction that has occurred? The most obvious culprit is illicit file-sharing on networks such as Napster, KaZaA, eDonkey, and BitTorrent. While linking the two seems tantalizing — file sharing rose to prominence at roughly the same time that record sales started to fall — there is surprisingly little evidence to support the claim that file sharing has significantly hurt record sales. I co-authored a paper with Felix Oberholzer-Gee of the Harvard Business School in which we studied this link using download data from file-sharing networks. If file sharing hurts record sales, then albums that are more heavily downloaded should experience lower sales than comparable albums that are less downloaded. But, after controlling for the role of popularity, we found that downloads had little effect on album sales.
There are several other factors that might explain recent sales trends. First, recall the industry’s similar problems in the early 1980s. Then, as now, sales were down as consumers stopped purchasing albums from a previously popular genre (in the ’80s it was disco; now it’s teen-pop). So one explanation is that the industry has failed to find genres that capture the interests of consumers.
Second, much of the reduction in sales is the direct result of industry cost-cutting. The major record labels have cut large numbers of staff and severed ties with many artists. Such moves are not necessarily bad business choices, but they suggest that less attention should be given to revenues and more to profits.
Third, recorded music has had trouble competing against other products that vie for consumers’ entertainment spending. Consider home video products like the DVD. It does not seem implausible that a good chunk of the $11 billion rise in spending on home video products since 1999 represents foregone CD sales. (Music industry revenues only fell $2 billion over this period.) Entertainment spending was also likely channeled into cell phones and video games, both of which experienced large sales growth and have been particularly popular with the key teen demographic.
A fourth and final factor to consider is the rise of paid digital downloads made popular by iTunes. While this model is often described as a competitor of illicit downloading, there is little evidence that file-sharing users also use iTunes (plus genres like classical music, which are largely ignored on file-sharing networks, are very popular on iTunes). More problematic is the likelihood that music consumers who used to purchase whole albums now download only one or two songs, so rather than getting $15 for an album sale, the industry gets two downloads at $2. While there is no direct evidence that cannibalization is occurring, the growing size of paid downloads makes this factor an important one to consider.
As for the future, I am dubious about making forecasts. Much will depend on the choices the major labels make on key issues (will they run experiments to determine the optimal pricing of digital downloads?) and the arrival of still-unforeseen technologies (which could allow labels to more cheaply distribute music, or lead to new forms of piracy). At the same time, I reject the argument that recorded music is close to death, simply because the financial incentives to create music have never been particularly high. In 2005, less than one in five albums were released on a major label, and even among those releases, fewer than one in fifteen went gold (the usual measure of record success). With such daunting odds, recording an album may have seemed like a pointless task. But in that year, nearly 44,000 albums were released — enough to provide almost three consecutive years of listening. Regardless of what happens to companies that produce and distribute music, I am sure that recorded music will continue to be made.
Fredric Dannen, author of Hit Men: Power Brokers and Fast Money Inside the Music Business:
Two decades ago, I was interviewing David Geffen for Hit Men, and he offered a warning about what he saw as a grave threat to the record industry: digital audio tape. If record companies started issuing albums on D.A.T., Geffen said, they would effectively be distributing their master tapes, “obviating the need for catalog.” At the time, Geffen’s admonition made sense; but D.A.T. never caught on with the consumer. The failure of D.A.T. got me thinking, and before long I believed I had discerned something about the consumption of recorded music — something startlingly obvious that has somehow eluded the record industry throughout its history, and led to the industry’s irreversible decline.
My epiphany, if you want to call it that, was simply this: consumers of recorded music will always embrace the format that provides the greatest convenience. No other factor — certainly not high fidelity — will move consumers substantially to change their listening and buying habits. The single exception to this rule was the introduction of two-channel stereo in the late fifties.
Let me state this more clearly, by example. When the long-playing record (LP) format was introduced by Columbia Records back in the late 1940s, the industry as a whole resisted it, and many predicted it would never take off because 78s sounded better. Without question, early LPs did not sound nearly as good as 78s. But given the choice of listening to all of Beethoven’s Ninth Symphony on two sides of one record versus sixteen sides of eight records, the consumer opted for convenience and simplicity (not to mention less shelf space).
The industry also resisted the audio cassette. Who in their right mind would prefer a format with an ever-present hiss over the pristine sound of an LP? The answer: nearly everybody. Cassettes were much easier to handle than records; they didn’t scratch, and you could listen to them in your car, or while walking or jogging.
Starting about twenty years ago, the CD took off like a rocket, burying both the LP and the audio cassette in a few short years. At that time, the CD was the last word in simplicity and convenience. I remember meeting an audiophile at a record-industry convention in the late 1980s. The popularity of the CD appalled and befuddled him. Couldn’t people hear that digital sound was cold and harsh compared to the warm, luxurious sound of an LP? Sure. But most consumers of music are not high-end audiophiles. Now you could hear all 74 minutes of Beethoven’s Ninth Symphony on one side of one disk.
I myself am something of a music nut. I cannot get through a day without listening to music, and my personal collection of recordings is enormous. By the early 1990s, I longed for a format even more convenient than the CD. And, based on my own listening habits, I was pretty sure I knew where we were headed. In short, I wanted to be able to run my music library from my home computer, and dispense with disks altogether. What I did not foresee was the advent of MP3 compression. As soon as MP3s hit the scene, I embraced them ecstatically. I was the first person I knew to own a Diamond Rio, the first portable MP3 player.
In 1999, I wrote an editorial for the New York Times predicting that MP3 was an unstoppable force that would destroy the oligopolistic power of the record industry. This paper did not believe me; the editorial ran instead in the Los Angeles Times.
It was an easy prediction to make. You can always count on the record industry to cling to the past, and to fight innovation. (Apart from resisting the LP, the cassette, and the CD, the industry also fought MTV.) The industry could have adopted and embraced MP3 as the new dominant format, had it understood why it was unstoppable. But the business’ failure to understand has been striking for its persistence. By the time Napster hit the scene, the industry had a Hobson’s choice: accept MP3, or die.
We all know what happened next.
George Drakoulias, music producer, artists & repertoire executive at American Recordings, and veteran of Def Jam Recordings:
There are many factors contributing to the industry’s current decline. The biggest ones include the inability of record companies to take advantage of new resources like Napster and American Idol, the continuous churning out of bad music, and, of course, greed, greed, and more greed. I think it is clear how we got here; but where we’re going remains very uncertain.
For starters, while we’re still in agreement as a society that people want music, I’d say music is not as important now as it once was. Instant gratification has removed some of the the demand. Music feels like it has become more disposable and cheap, with less staying power. As a result, it becomes a lot harder to commit to newer acts knowing they may not be around a year from now. I don’t see many kids nowadays wearing the T-shirts of the latest fad bands, but I do see a hell of a lot of AC/DC, Led Zeppelin, and Pink Floyd shirts out there.
In a way, the blogosphere has removed all sense of mystery from the entertainment industry as a whole. For example, everyone knows what Heath Ledger looks like as the Joker in the the new installment of Batman, which won’t be in theaters for almost a year. We see previews of magazine covers weeks before they hit the stands. The Christmas Eve-type excitement and anticipation that used to accompany entertainment seems to have disappeared.
As far as how the music industry fits into this scheme, the old business model is dead. In five years, the CD should be over. Someone will take a stab at a subscription service — though the right way to make that work is a mystery to me. Maybe it will involve several like-minded acts getting together and starting a co-op, such as the bands of Ozzfest, etc. Meanwhile, music executives still need some sort of filter to help them navigate the new playing field.
Without stating the obvious, the future is really in the hands of the consumer. The public will dictate to whatever is left of the record industry (it’s funny that we still call it that — long live vinyl!) the way in which it wants its music delivered. The final product will most likely involve computers, and will give you the ability to take your music with you in your phone, car, bathtub, skydiving parachute, etc.
What am I going to do in the midst of all this? It may sound simple, but my plan is to work as hard as I can to make the best music possible and try to educate the listener. A few years ago, I worked on a record called The Last DJ by Tom Petty. The songs on the album addressed the problems we are currently dealing with in the industry. I thought the record would be a wakeup call for consumers; but it’s hard to tell kids, “Eat your broccoli, it’s good for you.” I’ll try to nurture new talent and make records that sound exciting, emotional, and timeless, and to bring some level of craft back into record-making, ensuring that the artists I work with have the ability to play live and move an audience.
One option that doesn’t seem feasible is making everything free and eliminating copyrights. Hopefully, someone smarter than I am will come up with the right formula to get music to consumers in the way that they want it, and to collect fees that are distributed accordingly. I hope that person shows up soon.
Peter Rojas, founder of Engadget and co-founder of RCRD LBL, a free, online-only music label launched by Downtown Records.
The short answer is that the Internet happened.
I never thought studying Adorno and Horkheimer in college would come in handy (much as I loved them), but they did a good job of identifying how the rise of mechanical reproduction went hand-in-hand with the birth of mass culture. Whether it was television, radio, newspapers, or records, huge media companies were able to take advantage of a curious sweet spot in history — mechanical reproduction made it possible to churn out cheap, identical copies of a book, newspaper, record, etc., but creating and distributing those cheap, identical copies required the sort of capital to which very few individuals had access. In the case of music, a handful of major labels could more or less monopolize the creation and distribution of music.
The Internet changed all that. We’d already been slowly shifting from analog to digital reproduction, but it was digital reproduction combined with the a ridiculously cheap distribution channel (the Internet) that really mucked it up for the major labels. The emergence of Napster (the original one) was the wake-up call, but the record industry would be in trouble now even if no one had invented peer-to-peer file sharing.
The fact of the matter is that the majors thrived in an era of inefficiency, when there was value in physically producing and distributing music. There isn’t any value in that any more (or at least, it’s very quickly declining), and there’s no good way for labels to compete given that the cost structure of the business was designed around physical releases. Major labels need blockbusters, because the costs inherent with producing, distributing, and marketing each physical release means it’s easier to make money from one mega-hit that sells 10 million records than 100 small hits that each sell 100,000 records. In a digital world, you could make money from those 100 small hits almost as easily as you could from that one mega-hit. (See Chris Anderson’s theory of the Long Tail).
If this was merely the extent of the problem, the record industry might be doing okay right now. The majors could have adjusted and reinvented themselves for the digital era. Instead, they took too long to start selling music online (and even when they did agree to start selling digital downloads, they screwed it up by insisting on digital rights management). The lack of legal, paid-for downloads created a vacuum in the pre-iTunes era, one that numerous peer-to-peer file-sharing networks were happy to fill. A generation of kids got used to the idea that music was free, and given the infinite amount of freely — if illegally — available music out there, it was hard to argue with the facts on the ground. Music seemed free, so it was free. It didn’t help that the industry had been gouging consumers for years with high CD prices; prices rose even as the cost of producing CDs plummeted. Digital downloads should have made it possible to slash prices for recorded music, but the majors have done their best to keep prices at around a dollar a track — an artificially high price point that makes piracy more attractive than it should be.
I don’t pretend to know what the industry will look like in ten years, but the funny thing about all of this is that music itself is healthier than ever. The Internet, combined with low-cost (or even no-cost) digital tools, has led to an explosion of creativity, with millions of amateurs making music for every conceivable genre, sub-genre, and microgenre, and then sharing their creations online. Andrew Keen might look down on these results, and no doubt 99.9 percent of the music being created today is terrible; but that’s besides the point. Even that one-tenth of one percent means that there is more great music being created than any of us will have time to listen to — and that’s not even taking into account all of the “professional” music that still manages to get made. Many professional artists are discovering that, regardless of how well their music sells, they’re still able to make a healthy living from live appearances, merchandise, and licensing — and the Internet only makes it easier for them to build a fan base. It’s the Britney Spearses of the world that are hit hardest by all of this change. Manufactured pop doesn’t do quite so well when consumers have better options to choose from.
The majors thrived in an era of artificial scarcity when they were able to control the production and distribution of music. Today, we have an infinite number of choices available to us, and when content is infinitely abundant, the only scarce commodities are convenience, taste, and trust. The music companies that are successfully shaping the Internet era are recognizing that the real value is in making it easier to buy music than to steal it, helping consumers find other people who share their music tastes, and serving as a trusted source for discovering new music.
Steve Gottlieb, president of TVT Records:
The decline in record sales over the past year was entirely predictable. The technology that has wreaked havoc on the industry was developed 8 or 9 years ago, and, while certain features of it have improved, the individual elements that comprise it — an institutionalized standard for non-protected music files like MP3s, music search and swapping protocols, and rip/burn hardware — are not new. Combining these elements allowed CDs to go from a storage medium to a broadcast medium. As such, the passing along of burned CDs now constitutes the primary means of music acquisition. The cycle of reduced demand causing retail channels to reduce distribution pipelines in advance of the marketplace began in earnest last year, when not a single retailer saw enough value in Tower Record to outbid liquidators.
This tale of technology leveling the record industry demonstrates its unique character. Record companies seem unable to digest change, redefine their businesses, and, perhaps most importantly, resist the temptation to seek unfair competitive advantages over one another. The failure of record labels to take collaborative action against piracy has led to the industry’s current bizarre circumstances — in a world of skyrocketing demand for music, the development and sale of recorded music offers ever-decreasing economic returns.
This set of circumstances was entirely avoidable. Many of the blunders that created the current mess were heavily anticipated, as was the recent decline in sales. Major industry mistakes included shutting down Napster after its commitment to begin paying rights holders, suing consumers without clarifying to the public what constituted personal use, and failing to squarely address CD burners and iPods as strategies to sell hardware by bundling them with unlimited access to freely-copied music.
For as long as the woes of MP3s, file sharing and CD burning have existed, solutions to them have existed as well, although their attractiveness and cost of implementation may have changed. These solutions include combining advertising with free consumption, subscription services, and transactional unit-based sales of secure formats. Given the fact that the public has gotten used to sharing music for free, getting people to abandon this notion will be extremely difficult.
Regardless of what created this mess, if we accept that free music has become the model for consumption, then we have little choice but to invest in advertising-supported free services that will make this type of consumption profitable. This step will require patience, leadership and a long-term view. After formulating a way to recapture the revenue it’s losing, the industry can then address the development of a new, secure file format that offers audio, meta-data, and other digital features superior to those of MP3s. This should be an easy task, and will give the industry access to both ad-supported free “iPod quality” MP3s, and higher-quality digital products that can be sold directly.
Unless the labels actively reinvent themselves and embrace change, they will continue to find themselves in an expanding music marketplace that rewards their efforts less and less.
Wendy's and Rhapsody Team Up to Give Away Up to One Hundred Million Songs
Monday November 12, 9:00 am ET
Monumental Digital Music Giveaway Unites Fans of Hot, Juicy Burgers with Premiere Digital Music Experience
NEW YORK, Nov. 12 /PRNewswire-FirstCall/ -- Wendy's® and Rhapsody® have joined forces to delight music fans across the country with the giveaway of up to 100,000,000 songs. Starting this week, every Wendy's medium- and large-sized combo meal sold at participating restaurants will include a unique code redeemable for any of Rhapsody's over 4.5 million songs. The Wendy's/Rhapsody song download giveaway will be supported by a comprehensive marketing campaign including broadcast and online media.
With the purchase of any Wendy's medium- and large-sized combo meal through December, consumers will receive a code to redeem at Wendys.com for a song download of their choice. Consumers will also be able to enter the "Combo Up to Download" sweepstakes for a chance to win a 50-song download bundle from Rhapsody or one of 100 SanDisk Sansa e280R Rhapsody portable mp3 players.
"Rhapsody is all about feeding consumers' passion for music," said Michael Bloom, head of Rhapsody. "Wendy's new giveaway lets customers enjoy their favorite food and music, and introduces them to Rhapsody all at once."
The Wendy's/Rhapsody promotion is the latest in a series of marketing efforts for Rhapsody that began earlier this year with MTV's Video Music Awards and VH1's Hip Hop Honors and will continue throughout the year.
"We're focused on connecting with more consumers on more occasions through the things they feel passionate about. Certainly, music is one of them," said Ian Rowden, chief marketing officer. "Wendy's and Rhapsody make the perfect combo."
The Wendy's download giveaway site also features integrated instant playback of songs from all of today's top artists in Rhapsody and a specially- programmed Wendy's Radio stream.
Rhapsody (www.rhapsody.com) offers consumers a complete digital music experience with unlimited access to millions of songs, professionally programmed music channels and exclusive music content from MTV Networks' music brands including MTV, VH1 and CMT. With Rhapsody, consumers can enjoy their favorite music through popular devices like TiVo set-top boxes and in-home digital audio players, on any personal computer and on the go with a number of portable media players.
ABOUT RHAPSODY
Rhapsody offers an integrated and immersive digital music experience accessible to consumers via their computer, portable music device and soon their mobile phone. Rhapsody is the exclusive digital music service for RealNetworks and for MTV Networks' music and pop-culture brands in the United States. Rhapsody is a service of Rhapsody America LLC, a joint venture between and MTV Networks, a unit of Viacom (NYSE: VIA - News; NYSE: VIA.B - News) and RealNetworks (Nasdaq: RNWK - News).
ABOUT WENDY'S INTERNATIONAL INC.
Wendy's International Inc. (NYSE: WEN - News) is one of the world's most successful restaurant operating and franchising companies. More information about the Company is available at www.wendys-invest.com.
Source: RealNetworks, Inc.
Monumental Digital Music Giveaway Unites Fans of Hot, Juicy Burgers with Premiere Digital Music Experience
NEW YORK, Nov. 12 /PRNewswire-FirstCall/ -- Wendy's® and Rhapsody® have joined forces to delight music fans across the country with the giveaway of up to 100,000,000 songs. Starting this week, every Wendy's medium- and large-sized combo meal sold at participating restaurants will include a unique code redeemable for any of Rhapsody's over 4.5 million songs. The Wendy's/Rhapsody song download giveaway will be supported by a comprehensive marketing campaign including broadcast and online media.
With the purchase of any Wendy's medium- and large-sized combo meal through December, consumers will receive a code to redeem at Wendys.com for a song download of their choice. Consumers will also be able to enter the "Combo Up to Download" sweepstakes for a chance to win a 50-song download bundle from Rhapsody or one of 100 SanDisk Sansa e280R Rhapsody portable mp3 players.
"Rhapsody is all about feeding consumers' passion for music," said Michael Bloom, head of Rhapsody. "Wendy's new giveaway lets customers enjoy their favorite food and music, and introduces them to Rhapsody all at once."
The Wendy's/Rhapsody promotion is the latest in a series of marketing efforts for Rhapsody that began earlier this year with MTV's Video Music Awards and VH1's Hip Hop Honors and will continue throughout the year.
"We're focused on connecting with more consumers on more occasions through the things they feel passionate about. Certainly, music is one of them," said Ian Rowden, chief marketing officer. "Wendy's and Rhapsody make the perfect combo."
The Wendy's download giveaway site also features integrated instant playback of songs from all of today's top artists in Rhapsody and a specially- programmed Wendy's Radio stream.
Rhapsody (www.rhapsody.com) offers consumers a complete digital music experience with unlimited access to millions of songs, professionally programmed music channels and exclusive music content from MTV Networks' music brands including MTV, VH1 and CMT. With Rhapsody, consumers can enjoy their favorite music through popular devices like TiVo set-top boxes and in-home digital audio players, on any personal computer and on the go with a number of portable media players.
ABOUT RHAPSODY
Rhapsody offers an integrated and immersive digital music experience accessible to consumers via their computer, portable music device and soon their mobile phone. Rhapsody is the exclusive digital music service for RealNetworks and for MTV Networks' music and pop-culture brands in the United States. Rhapsody is a service of Rhapsody America LLC, a joint venture between and MTV Networks, a unit of Viacom (NYSE: VIA - News; NYSE: VIA.B - News) and RealNetworks (Nasdaq: RNWK - News).
ABOUT WENDY'S INTERNATIONAL INC.
Wendy's International Inc. (NYSE: WEN - News) is one of the world's most successful restaurant operating and franchising companies. More information about the Company is available at www.wendys-invest.com.
Source: RealNetworks, Inc.
Music Creators Applaud Songwriters' P2P Proposal
Business News [12-08-2007]
Music Creators Applaud Songwriters' P2P Proposal
The Canadian Music Creators Coalition (CMCC) applauded the Songwriters Association of Canada (SAC) today for its innovative, forward-thinking proposal to provide Canadians with legal and affordable access to file-sharing services."This is the first progressive proposal we've seen in Canada to address file-sharing," said Andrew Cash, CMCC spokesperson. "It's telling that creators, the people who actually make the music being shared, are the people showing leadership and pushing for a made- in-Canada approach to file-sharing. We can only hope that the Canadian government will follow the Songwriters' lead and begin exploring alternatives to the failed 'locks, lawsuits and lobbying' strategy of the major labels."The publication of the Songwriters' proposal comes just days before the Government of Canada is expected to introduce copyright legislation, modeled on strict American laws. It's anticipated that the new legislation will give rights-holders new rights over both music recordings and the digital tools, such as digital rights management (DRM), used to lock up that music."We don't know if the Songwriters have all the answers," states CMCC member Steven Page, "but we do know that this proposal moves in the right direction. The Songwriters' proposal offers tremendous value to both consumers and rights-holders. The Songwriters have given us the framework to come together to talk about digital music. The CMCC wholeheartedly endorses the Songwriters' efforts, and looks forward to joining all Canadian stakeholders in considering the merits of this proposal."
Music Creators Applaud Songwriters' P2P Proposal
The Canadian Music Creators Coalition (CMCC) applauded the Songwriters Association of Canada (SAC) today for its innovative, forward-thinking proposal to provide Canadians with legal and affordable access to file-sharing services."This is the first progressive proposal we've seen in Canada to address file-sharing," said Andrew Cash, CMCC spokesperson. "It's telling that creators, the people who actually make the music being shared, are the people showing leadership and pushing for a made- in-Canada approach to file-sharing. We can only hope that the Canadian government will follow the Songwriters' lead and begin exploring alternatives to the failed 'locks, lawsuits and lobbying' strategy of the major labels."The publication of the Songwriters' proposal comes just days before the Government of Canada is expected to introduce copyright legislation, modeled on strict American laws. It's anticipated that the new legislation will give rights-holders new rights over both music recordings and the digital tools, such as digital rights management (DRM), used to lock up that music."We don't know if the Songwriters have all the answers," states CMCC member Steven Page, "but we do know that this proposal moves in the right direction. The Songwriters' proposal offers tremendous value to both consumers and rights-holders. The Songwriters have given us the framework to come together to talk about digital music. The CMCC wholeheartedly endorses the Songwriters' efforts, and looks forward to joining all Canadian stakeholders in considering the merits of this proposal."
Monday, December 10, 2007
Is the music industry embracing the internet?
Posted December 9th, 2007 at 2:09 PM by Chris Marshall
For years now we have heard how the music industry loathes the internet, and a look at some figures could indicate why:
- Industry bosses expect an 11% decline in worldwide sales this year.
- CD sales were down by about 20% in the first half of this year in the US.
- Allowing for growth in digital downloads, total sales fell by 9.3%.
- Illegal downloads at an all-time high - 43% of people download tracks illegally, up from 36% last year.
But there are signs that things are changing after years of denial within the industry. Over the last year we have seen bands launch on the internet, offer their albums on a donation basis, and indie labels using social networking sites to promote their artists.
The latest star to demonstrate this is Kylie Minogue who is the first to create a dedicated social-networking site, KylieKonnect, which “allows her fans to create personal profiles, upload images and blogs, and communicate with other fans across the globe using their mobile phone or web browser.”
http://www.gadgetell.com/2007/12/is-the-music-industry-embracing-the-internet/Pointing the finger at copycats not rare in the music business
John Key has found himself in hot water with EMI Records after a promotional DVD featured a song nearly identical to Coldplay's hit single Clocks.
While Key has been left red-faced by the blunder, he is not the first person to fall foul of the music industry's strict copyright laws.
Indeed, even superstars like Beyonce have been accused of musical plagiarism.
We took a trawl through the archives to see just who else is guilty of playing copycats.
http://www.nzherald.co.nz/topic/story.cfm?c_id=264&objectid=10480273
Making music free (and legal)
Social networking site imeem signs deal with Universal Music and is now the only place on the Web to offer free, unlimited music from all four major record labels.
Hands tries a different tune with EMI
Last Updated: 11:52pm GMT 09/12/2007
City big hitter faces a fight to turn around the music group, reports Dominic White
Is Guy Hands right about EMI? That is the debate raging in the music industry as Hands' private equity lieutenants from Terra Firma crawl over the company that signed the Beatles in an effort to make his bumper £3.2bn acquisition stack up.
The former investment banker is seeking deep cost savings from an industry notorious for its rock and roll profligacy.
About time, say some executives fighting sliding CD sales and rampant web piracy. But creatives at the company behind Kylie and Coldplay fear that Hands is playing a dangerous game.
He has criticised some artists for simply negotiating the best advance rather than "working with their label to promote, perfect and endorse their music", as others do.
He has since written to EMI artists seeking to reassure them that they are "at the epicentre" of his plans to turn the struggling business around.
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2007/12/10/cnemi210.xml
Thursday, December 6, 2007
Recent information concerning the music industry
OCTOBER 29, 2007
OPINION -- MEDIA CENTRIC Leaving Record Labels Behind Musicians are looking for an alternative. Their managers may be the answer
To divine what the record label of the future might look like, keep an eye on the relationship between a band and its management.The creaking and jerry-rigged structure of the major-label music industry continues to sag. Madonna ditches her label for a complex $120 million, three-album pact with concert promoter Live Nation (LYV ). Radiohead self-releases its In Rainbows and makes a digital version available for whatever fans want to pay. (Me-too mutterings from other artists follow.) Radiohead's move netted kudos from writers and bloggers, which, given how many writers and bloggers adore Radiohead and despise the music industry, shouldn't surprise.
But none of this is entirely new. Madonna's move—teaming up with a powerful industry player that's not a record label—was presaged by last year's partnership between the Eagles and Wal-Mart (WMT ) for the band's upcoming Long Road Out Of Eden. That deal gives Wal-Mart, and the Eagles' Web site, exclusive North American and Mexican retail rights. Canadian songwriter Issa, formerly known as Jane Siberry, has long offered pay-what-you-want MP3s on her Web site.To paraphrase Churchill, this is not the end of the music industry as we know it. But it may be the end of the beginning of the end. (Got that?) To sing this reprise again: Physical CD sales continue to tank, and the traditional music retailer is dead. The decline of the CD frees artists to consider primary relationships with nonlabel entities. Savvy management types like Coran Capshaw of Red Light Management (star artist: Dave Matthews Band) and John Silva of Silva Artist Management (star artist: Foo Fighters) have enviable rosters, and skill sets and side ventures worth noting. Capshaw founded record label ATO and fan club/merchandising firm Musictoday—a majority stake in which was, notably, purchased by Live Nation in 2006. Previously, Silva was co-president of Digital Entertainment Network, an ill-fated dot-com attempt at creating a Web-centered video play and record label. Might guys like them eventually outdo the traditional players at, you know, being a record label?In an LP- or CD-centric music world, a label had enormous advantages. It took care of the logistical nightmare of producing, warehousing, and distributing a few million units, and staffing up retail promotion teams to service the beast. That advantage evaporates in the transition to digital. Other market conditions further weaken big labels' grip on artists. Sliding sales and revenues mean labels can't develop slow-building artists, nor can they patiently tolerate stars' occasional slumps. So veteran acts are apt to be labelless for portions of their careers.And often the closest relationship—business, and sometimes personal—that a working band has is with its manager. He or she generally serves as point person to a band's label, and to other arenas in which a band does business, such as tour booking and T-shirt sales. Transitioning to label-like functions is "something managers have been talking about for a long time," says Brian Long of Yes Know Management, which reps disco punks VHS OR BETA. Long, who founded electronic music label Astralwerks, calls such a move "the natural evolution of what a manager already does." In these dispirited times, label executives concede that the guy closest to the band could have the upper hand. "It's a logical place to go," says one.Of course, the grunt work of manufacturing and distribution remains onerous. CD sales are down, but big-deal artists still need to press several hundred thousand. That's a massive capital undertaking for a management firm, and one that could backfire badly if said CD tanks. (Despite all the hype, Radiohead's management made clear that In Rainbows also will be released on an established label next year.)Neither Silva nor Capshaw is known for seeking the spotlight, and both declined to comment. But Radiohead shows that an unusually motivated, successful band can, however briefly, assume the role of a label. Many musicians I know would not want to captain making dinner, much less a complex production and promotion process. The business types, though, are different. Given the chance to solidify their grip on their artists and make everyone richer, why shouldn't they try to do it all?For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
Universal CEO Doug Morris makes an easy target for the blogosphere.
This is the old-school record industry executive who called iPod owners thieves and wanted broad legal enforcement against piracy — enforcement that, in the end, seems to pale in comparison to the revenue generated by actually offering online sales. So, now that Morris has gone up against Wired, the blogosphere can easily see him as a dinosaur.
Universal’s CEO Once Called iPod Users Thieves. Now He’s Giving Songs Away. [Wired News]
But as artists, all of us face a fundamental problem: how do you put value on something that’s ephemeral? It’s an age-old issue that has faced musicians explaining to their parents why they don’t want a real job, and artists to their patrons when affixing a price tag. (And as we’ve seen from veteran software developers and the BanPiracy debate, software “artists” face the same challenge.) Sure, people love to talk piracy, because it’s easier to talk in those terms. Piracy is theft, theft is crime, and crime is bad — including making a mix tape for a friend. Or all music should be free, and never mind that artists need health insurance and rent money. They’re black and white extremes, entirely couched in moral/philosophical terms, neither of which contend with how to solve the actual real-world problem (at least, not if you stop there).
And then I came across this quote from Morris in the interview:
“Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs. “People never really understand what’s happening to the artists … If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.”
Wait a minute… a liquid that comes out of your faucet for free, but is also sold, in bottles, at retail. How much would you be willing to pay? Hmmm… this sounds familiar.
It’s called water.
And how much are people willing to pay for the privilege of packaging, control over subtle variations of taste, and mobility? Quite a lot, as it happens. More than Coke. It’s not uncommon to see Coke for $1.50 at a grocery, and $2.00 or even $3.00 for water. In fact, Coke might have gone for the running water through the tap idea, as additional revenue and a way to increase consumers’ taste for the stuff.
Oh, yeah, and that tap that runs water music into your home for free … the radio? Not a new invention. None of these things is easy to monetize, mind you (ask your local public radio station during their pledge week), but it’s clear there are ways to make people see value.
If this isn’t a lesson for the music industry in the digital age, I don’t know what is. Find a way to increase consumer perception of value, even if the thing supposedly can be gotten readily. Find a way to sell the packaging, and find a way to make that purchase part of people’s daily routine. (And music, in case you haven’t noticed, is ubiquitous these days whether you touch a torrent server or not.) And maybe the bottled water people could teach us a thing or two.
As it happens, Universal’s digital music schemes seem to be a decent start strategically. They have two prongs: one, distribute music, DRM-free, in multiple stores, breaking up the Apple iTunes/iPod monopoly with music that can be bought and played everywhere. Two, provide subscription music, with DRM, for free, subsidized by hardware manufacturers. Now, if the subsidy makes business sense for manufacturers, I honestly don’t see anything wrong with that. Universal ransomed Microsoft over the Zune, which I personally found ridiculous, but now at least the hardware makers get something in return. And while DRM on music you’ve paid for, on subscription services it actually makes some sense. In fact, usually if you really grow attached to music and want to make it mobile, you’d then buy non-DRMed music. Problem solved.
The only really strange twist: a new breed of Apple iPod fanboys, who get their panties in a bunch over the idea of music being bought anywhere other than iTunes and played on anything other than iPod. (I miss the Mac fanboys who fought for you when IT wanted to install a Dell with Windows ‘98 and Novell. Those were the days.)
Personally, I don’t see the problem. With DRM-free MP3s, any device can be a playback device — iPod included. And as far as subscriptions, if you don’t want them, ignore them and buy the MP3s. If you do want them, you can already play Rhapsody over the Web with a Mac and Linux. Firefox + Rhapsody + Linux works quite nicely, in fact. You can’t use them on mobile devices yet beyond Windows, but that seems like a fixable problem — a technological problem, particularly since these devices should in future connect directly to wifi or phone networks, not your computer.
But artists don’t have to worry about such things: you want your music everywhere. And if, in fact, Universal is a dinosaur, then the question is, can you find someone else who does know how make water thicker than Coke?
Everything in the music industry is up! (except those plastic discs)
At a speech last week I was asked a question that has come up every day since the Radiohead (and Madonna, NIN, Prince, etc, etc) announcement: What's going to happen to the music industry?
To which I answered "Which music industry?" You don't mean just the one that sells CDs, do you? Because it's a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don't look so bad at all.
Indeed, it appears that every single part of the music industry except the sale of compact discs is up.
Concerts and merchandise: UP (+4%)
Digital tracks: UP (+46%)
Ringtones: UP (+86% last year, but probably just single-digit percent this year)
Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
Even vinyl singles (think DJs): UP (more than doubled in the UK)
And, if you include the iPod in the music industry, as I'd argue a fair-minded analysis would: UP, UP, UP! (+31% this year)
Only CDs are down (-18%). They're around 60% of the industry not including the MP3 players, but just around 25% if you do include them.
So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they're in. Madonna's switch from a label to a concert promoter should be a clue. This quote from an excellent article (it's worth reading it all) in Entertainment Weekly says it all:
''Soon a lot of these companies won't define themselves as record companies,'' says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ''They'll define themselves as artist development companies. If you're involved in an entire career with an artist, then everyone's interests can be aligned."
I think most music will soon be free, as artists give away the product as marketing for their performances and licensing, and as a celebrity accelerant that creates more opportunities to make money than just from the sale of a record.
And for those who say that this avenue is only available to artists at the head of the curve, such as Madonna and Radiohead, I'd point out that the other group poorly served by the labels are those at the bottom of the curve, the many thousands of bands who fall below the radar of the hit-driven majors. I'd argue that they, too, have nothing to lose by letting their music go free, nothing to lose but the prospect of becoming indentured to companies stuck in last century's model of monetizing music,
OPINION -- MEDIA CENTRIC Leaving Record Labels Behind Musicians are looking for an alternative. Their managers may be the answer
To divine what the record label of the future might look like, keep an eye on the relationship between a band and its management.The creaking and jerry-rigged structure of the major-label music industry continues to sag. Madonna ditches her label for a complex $120 million, three-album pact with concert promoter Live Nation (LYV ). Radiohead self-releases its In Rainbows and makes a digital version available for whatever fans want to pay. (Me-too mutterings from other artists follow.) Radiohead's move netted kudos from writers and bloggers, which, given how many writers and bloggers adore Radiohead and despise the music industry, shouldn't surprise.
But none of this is entirely new. Madonna's move—teaming up with a powerful industry player that's not a record label—was presaged by last year's partnership between the Eagles and Wal-Mart (WMT ) for the band's upcoming Long Road Out Of Eden. That deal gives Wal-Mart, and the Eagles' Web site, exclusive North American and Mexican retail rights. Canadian songwriter Issa, formerly known as Jane Siberry, has long offered pay-what-you-want MP3s on her Web site.To paraphrase Churchill, this is not the end of the music industry as we know it. But it may be the end of the beginning of the end. (Got that?) To sing this reprise again: Physical CD sales continue to tank, and the traditional music retailer is dead. The decline of the CD frees artists to consider primary relationships with nonlabel entities. Savvy management types like Coran Capshaw of Red Light Management (star artist: Dave Matthews Band) and John Silva of Silva Artist Management (star artist: Foo Fighters) have enviable rosters, and skill sets and side ventures worth noting. Capshaw founded record label ATO and fan club/merchandising firm Musictoday—a majority stake in which was, notably, purchased by Live Nation in 2006. Previously, Silva was co-president of Digital Entertainment Network, an ill-fated dot-com attempt at creating a Web-centered video play and record label. Might guys like them eventually outdo the traditional players at, you know, being a record label?In an LP- or CD-centric music world, a label had enormous advantages. It took care of the logistical nightmare of producing, warehousing, and distributing a few million units, and staffing up retail promotion teams to service the beast. That advantage evaporates in the transition to digital. Other market conditions further weaken big labels' grip on artists. Sliding sales and revenues mean labels can't develop slow-building artists, nor can they patiently tolerate stars' occasional slumps. So veteran acts are apt to be labelless for portions of their careers.And often the closest relationship—business, and sometimes personal—that a working band has is with its manager. He or she generally serves as point person to a band's label, and to other arenas in which a band does business, such as tour booking and T-shirt sales. Transitioning to label-like functions is "something managers have been talking about for a long time," says Brian Long of Yes Know Management, which reps disco punks VHS OR BETA. Long, who founded electronic music label Astralwerks, calls such a move "the natural evolution of what a manager already does." In these dispirited times, label executives concede that the guy closest to the band could have the upper hand. "It's a logical place to go," says one.Of course, the grunt work of manufacturing and distribution remains onerous. CD sales are down, but big-deal artists still need to press several hundred thousand. That's a massive capital undertaking for a management firm, and one that could backfire badly if said CD tanks. (Despite all the hype, Radiohead's management made clear that In Rainbows also will be released on an established label next year.)Neither Silva nor Capshaw is known for seeking the spotlight, and both declined to comment. But Radiohead shows that an unusually motivated, successful band can, however briefly, assume the role of a label. Many musicians I know would not want to captain making dinner, much less a complex production and promotion process. The business types, though, are different. Given the chance to solidify their grip on their artists and make everyone richer, why shouldn't they try to do it all?For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
Universal CEO Doug Morris makes an easy target for the blogosphere.
This is the old-school record industry executive who called iPod owners thieves and wanted broad legal enforcement against piracy — enforcement that, in the end, seems to pale in comparison to the revenue generated by actually offering online sales. So, now that Morris has gone up against Wired, the blogosphere can easily see him as a dinosaur.
Universal’s CEO Once Called iPod Users Thieves. Now He’s Giving Songs Away. [Wired News]
But as artists, all of us face a fundamental problem: how do you put value on something that’s ephemeral? It’s an age-old issue that has faced musicians explaining to their parents why they don’t want a real job, and artists to their patrons when affixing a price tag. (And as we’ve seen from veteran software developers and the BanPiracy debate, software “artists” face the same challenge.) Sure, people love to talk piracy, because it’s easier to talk in those terms. Piracy is theft, theft is crime, and crime is bad — including making a mix tape for a friend. Or all music should be free, and never mind that artists need health insurance and rent money. They’re black and white extremes, entirely couched in moral/philosophical terms, neither of which contend with how to solve the actual real-world problem (at least, not if you stop there).
And then I came across this quote from Morris in the interview:
“Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs. “People never really understand what’s happening to the artists … If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.”
Wait a minute… a liquid that comes out of your faucet for free, but is also sold, in bottles, at retail. How much would you be willing to pay? Hmmm… this sounds familiar.
It’s called water.
And how much are people willing to pay for the privilege of packaging, control over subtle variations of taste, and mobility? Quite a lot, as it happens. More than Coke. It’s not uncommon to see Coke for $1.50 at a grocery, and $2.00 or even $3.00 for water. In fact, Coke might have gone for the running water through the tap idea, as additional revenue and a way to increase consumers’ taste for the stuff.
Oh, yeah, and that tap that runs water music into your home for free … the radio? Not a new invention. None of these things is easy to monetize, mind you (ask your local public radio station during their pledge week), but it’s clear there are ways to make people see value.
If this isn’t a lesson for the music industry in the digital age, I don’t know what is. Find a way to increase consumer perception of value, even if the thing supposedly can be gotten readily. Find a way to sell the packaging, and find a way to make that purchase part of people’s daily routine. (And music, in case you haven’t noticed, is ubiquitous these days whether you touch a torrent server or not.) And maybe the bottled water people could teach us a thing or two.
As it happens, Universal’s digital music schemes seem to be a decent start strategically. They have two prongs: one, distribute music, DRM-free, in multiple stores, breaking up the Apple iTunes/iPod monopoly with music that can be bought and played everywhere. Two, provide subscription music, with DRM, for free, subsidized by hardware manufacturers. Now, if the subsidy makes business sense for manufacturers, I honestly don’t see anything wrong with that. Universal ransomed Microsoft over the Zune, which I personally found ridiculous, but now at least the hardware makers get something in return. And while DRM on music you’ve paid for, on subscription services it actually makes some sense. In fact, usually if you really grow attached to music and want to make it mobile, you’d then buy non-DRMed music. Problem solved.
The only really strange twist: a new breed of Apple iPod fanboys, who get their panties in a bunch over the idea of music being bought anywhere other than iTunes and played on anything other than iPod. (I miss the Mac fanboys who fought for you when IT wanted to install a Dell with Windows ‘98 and Novell. Those were the days.)
Personally, I don’t see the problem. With DRM-free MP3s, any device can be a playback device — iPod included. And as far as subscriptions, if you don’t want them, ignore them and buy the MP3s. If you do want them, you can already play Rhapsody over the Web with a Mac and Linux. Firefox + Rhapsody + Linux works quite nicely, in fact. You can’t use them on mobile devices yet beyond Windows, but that seems like a fixable problem — a technological problem, particularly since these devices should in future connect directly to wifi or phone networks, not your computer.
But artists don’t have to worry about such things: you want your music everywhere. And if, in fact, Universal is a dinosaur, then the question is, can you find someone else who does know how make water thicker than Coke?
Everything in the music industry is up! (except those plastic discs)
At a speech last week I was asked a question that has come up every day since the Radiohead (and Madonna, NIN, Prince, etc, etc) announcement: What's going to happen to the music industry?
To which I answered "Which music industry?" You don't mean just the one that sells CDs, do you? Because it's a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don't look so bad at all.
Indeed, it appears that every single part of the music industry except the sale of compact discs is up.
Concerts and merchandise: UP (+4%)
Digital tracks: UP (+46%)
Ringtones: UP (+86% last year, but probably just single-digit percent this year)
Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
Even vinyl singles (think DJs): UP (more than doubled in the UK)
And, if you include the iPod in the music industry, as I'd argue a fair-minded analysis would: UP, UP, UP! (+31% this year)
Only CDs are down (-18%). They're around 60% of the industry not including the MP3 players, but just around 25% if you do include them.
So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they're in. Madonna's switch from a label to a concert promoter should be a clue. This quote from an excellent article (it's worth reading it all) in Entertainment Weekly says it all:
''Soon a lot of these companies won't define themselves as record companies,'' says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ''They'll define themselves as artist development companies. If you're involved in an entire career with an artist, then everyone's interests can be aligned."
I think most music will soon be free, as artists give away the product as marketing for their performances and licensing, and as a celebrity accelerant that creates more opportunities to make money than just from the sale of a record.
And for those who say that this avenue is only available to artists at the head of the curve, such as Madonna and Radiohead, I'd point out that the other group poorly served by the labels are those at the bottom of the curve, the many thousands of bands who fall below the radar of the hit-driven majors. I'd argue that they, too, have nothing to lose by letting their music go free, nothing to lose but the prospect of becoming indentured to companies stuck in last century's model of monetizing music,
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