2011: An Industry Odyssey
May 13, 2011
"They (the labels) tend to not look at these things as opportunities, but as someone taking advantage of their business. Until they figure out how they're going to deal new technology on their terms, they don't make a move. And when they finally do, it's usually too late."-- Fred Goldring, a former top music lawyer who invests in media and technology companies, as quoted in the New York Times article this week, "Google's Digital Music Service Falls Short of Ambition." ( http://tiny.cc/is2t6 )
"The history of the digital music marketplace is littered with the ramifications of record label conservatism," -- Mark Mulligan, an analyst at Forrester Research. (From the same article)
I started talking about the industry's reluctance to change in the very first issues of the newsletter. In one commentary back in January of 2004, I used this quote: "If your environment is changing, you must change with it. If you don't, you perish." -- Curtis E. Sahakian.
That quote is now echoed by the two above from the New York Times article in 2011. From that article as well, "Neither Google nor the labels would specify which points they stumbled over. But their disagreement follows a long pattern of friction in which the labels demand high prices for licenses or withhold the licenses altogether. The stubbornness of the labels has earned them a particular caricature in Silicon Valley: the bridge troll, demanding payment for passage."
And while the labels still haven't figured out yet how to navigate the digital waters online and off, the Wall Street Journal reported the Lime Wire lawsuit was settled. Lime Wire founder Mark Gorton has agreed to pay the major record labels and their trade group $105 million to settle the copyright infringement lawsuit. The settlement amount was far below the $1.4 billion sought earlier by the labels. (You can read about that here: http://tiny.cc/i6ywg )
Why the RIAA should receive any compensation is beyond me, but the chairman Mitch Bainwol called the outcome "reason for celebration by the entire music community, its fans and the legal services that play by the rules."
Mr. Bainwol is sure to celebrate the outcome. His annual salary exceeds what most label execs make these days and I suppose whatever money the RIAA receives will go a long way to ensuring he (and other RIAA execs) continue receiving those salaries.
One person who did earn more than Mr. Bainwol was Edgar Bronfman Jr., CEO of Warner Music Group. He "received more than $17 million in total compensation for the year 2008, even as he and his managers were laying off hundreds of employees and claiming that online piracy was to blame for much of the music industry's financial woes." (LimeWire's attorney attempted to show the court that labels were more damaged from mismanagement than piracy. Source: http://tiny.cc/0v6uj )
Piracy, of course, has damaged the industry. But the failure of industry executives to react to a marketplace changing because of technology made available to consumers, is grossly apparent. To say that many were irresponsible in their capacities as this happened is simply too weak. Most had their eyes on their stock portfolios instead of on the fastballs the Internet was throwing at them
It's time to ask Mr. Bainwol and his crew what their plans are for then future. Because "Once a new technology rolls over you, if you're not part of the steamroller, you're part of the road."
And that "new technology" ain't new anymore.
THE 'A-SIDE' - TRACK 2
APPLE NOW THE WORLD'S MOST VALUABLE BRAND
Apple has overtaken Google to become the world's most valuable brand with an estimated brand value of more than $153 billion, according to new rankings published on Monday.
Read more on the Financial Times site here: http://tiny.cc/mhm0o
And here's one big reason why: In the first calendar quarter, Apple outpaced the smartphone industry's average growth of 79.7%, according to new data from IDC. As a result, as Apple Insider notes, Apple was able to edge out RIM as the second-largest producer of smartphones behind Nokia. During the quarter, according to IDC, Apple sold 18.7 million iPhones, giving it an 18.7% share of the market -- or almost exactly 100 million devices.
"That put Apple within 6 million units of first place Nokia, which grew only 12.6% over the year ago quarter, dropping its leading share of the smartphone market from 38.8% to just 24.3%," Apple Insider points out. According to IDC: "As Nokia transitions from Symbian to Windows Phone, it may find itself in danger of ceding market share as the competition ramps up smartphone production."
THE 'A-SIDE' - TRACK 3
THE TABLETS ARE WHERE IT'S AT
Research from Nielsen Thursday on how tablets are eating into the use of PCs and laptops as well as newer devices like e-readers stirred a buzz in the tech blogosphere.
Yes, the tablet drives another nail in the coffin of the traditional desktop computer in the era of cloud computing and portable machines.
Read the rest here and see just how fast tablets have exploded: http://tiny.cc/seidq
THE 'A-SIDE' - TRACK 4
YOUR PAPER SMARTPHONE IS COMING ... NO, REALLY
In an industry where unbreakable and smaller are best, the world's first interactive paper computer looks set to dominate for years to come. The PaperPhone has a flexible electronic display that is set to herald a new generation of computers.
Extremely lightweight and made out of a thin-film, the prototype device can do everything a smartphone currently does. Things are changing by the nanosecond.
Read the rest here: http://tiny.cc/z89u4
THE 'A-SIDE' - TRACK 5
A $20 A MONTH LAPTOP FOR STUDENTS? IT'S HERE FROM GOOGLE
Google announced sale of the new Chrome laptop in a $20 a month "student package" that combines both hardware and online services, according to a senior Google executive.
Read more here: http://tiny.cc/w1lz8
THE 'A-SIDE' - TRACK 6
DVD SALES PLUMMET IN 2010
Here's the big reason Hollywood studios are hoping a shorter TV pay-for-view window for box office release will help: Wholesale revenues from DVD sales dropped a shocking 43.9% from $7.97 billion in 2009 to $4.47 billion in 2010.
Read more here: http://tiny.cc/uxor5
THE 'A-SIDE' - TRACK 7
MUSIC SALES UP 1.6% SO FAR THIS YEAR
Music sales in the U.S. are up 1.6% in 2011, according to The Nielsen Company, as digital album and track sales saw dramatic growth through May 8th. While physical albums saw a decline in year-over-year sales from the same period in 2010, digital album and track purchases went up 16.8% and 9.6%, respectively. Digital retailers received more than half of all music transactions, propelling a 12.4% growth in sales over last year.
Catalog album sales are up 5.4% in 2011, thanks in part to a long-awaited 2010 deal allowing digital distribution of The Beatles' albums for the first time.
Read more here: http://tiny.cc/upw5k
A PERSONAL NOTE ... THE PASSING OF A FRIEND AND A GREAT INDUSTRY TALENT
This week I received the sad news that one of my old friends, and one of the music industry's most beloved people, legendary A&R man, producer, songwriter and manager, John Carter, passed away in Palm Springs.
Carter's career began in 1967, when he wrote the lyrics to "Incense And Peppermints" by the Strawberry Alarm Clock - a group he renamed by picking words from song titles on the week's Hot 100 chart. He subsequently became a radio promotion executive for Atlantic Records in San Francisco, where he hired his favorite winos from the Mission District to hand-deliver the Rolling Stones' 'Exiles On Main Street' to local radio programmers.
If you were privileged to know Carter, you were indeed lucky. If you were even luckier, you had the opportunity to work with him, as I did during my tenure at Capitol Records. John as one of our A&R people and worked with Bob Seger and Steve Miller during the periods of their commercial breakthroughs; he also signed - and co-wrote and produced - landmark albums for Sammy Hagar, Bob Welch and The Motels. In 1983, he fought to sign Tina Turner. He A&R'd her first Capitol album, Private Dancer, and produced several of its tracks, including the title song. That album, of course. made Tina a worldwide superstar and sold more than 20 million copies.
Carter later went on to work at A&M, Atlantic, Chrysalis and Island Records. He nurtured the songwriting of Tonio K; fought inside battles for David & David and Tori Amos; got Melissa Etheridge a publishing deal with A&M's affiliate when the label refused to let him sign her. Carter discovered he was better able to fight for the talents he revered by working independently as an artist manager. His discoveries include Mark Everett, who records as the Eels, and Paula Cole.
John retained the love and respect of nearly everyone he ever worked with, both on the commercial and creative sides of the business. Take as evidence his professional reunion with Sammy Hagar: After decades of unbroken friendship, more than 30 years after they made "Red" together, Hagar invited Carter to manage him. Together with Joe Satriani, and his manager Mick Brigden, they created the group Chickenfoot. It continues to thrive, along with Hagar's solo career.
John and I were literally "Gemini Twins" because we were both born on the same day and same year in June. We "un-celebrated" those birthdays several times, and it was John's idea that we have a "33 1/3" birthday. I can't remember what we did on that occasion, but any time spent with Carter was always pure joy.
John's sense of humor and quick wit were an essential part of his persona, and he could say more with fewer words than almost anybody I ever knew. His one or two word answers were legendary. If you asked John to join you for sushi he would just shake his head no, say "Bait," and walk away. He had an ink-pad with a stamp he used after listening to music from certain unsigned artists or unsolicited material that was not up to snuff. He'd stamp the word "Hobby" on that music. That was John.
I could fill pages here with stories about John. His passion for music was relentless and he could not wait to call the promotion department so he could play us new music by Bob Welch, Sammy Hagar, The Motels and others. After I left Capitol and went to MCA, he would still call me and say, "I got new music you have to hear ... lunch?" I never turned him down. I often told him I wished I could promote the music he was involved with even though I was now at another label.
I received a few dozen e-mails from other ex-Capitol Records people this week, and others who knew John throughout his career. All were shocked and saddened to say the least. But all echoed what I have said here about knowing John.
We all miss him, and will miss him even more as days go by.
Carter is survived by his wife, Christy Carter, and his daughter, Crosby Carter.
And Now For Some News ...
Live Nation & Groupon Form Joint VentureTECHCRUNCH
Likely changing the shape of live event marketing, Groupon and Live Nation have a formed a joint venture to create an online ticketing deals channel. Named GrouponLive, the site will serve as a local resource for Live Nation events, ranging from concerts, sports, theater, arts and other live events, as well as clients of its ticketing business Ticketmaster, the companies said in a statement.
Read more about it by clicking here.
Judges Cite Dylan More Than Any Other SongwriterTHE LOS ANGELES TIMES
The protest era's vagabond poet is cited more often than any other songwriter in legal opinions and briefs. His ballads have become models for legal storytelling.
Others cited? The Beatles, 74 times; Bruce Springsteen, 69; Paul Simon, 59; Woody Guthrie, 43; the Rolling Stones, 39; the Grateful Dead, 32; Simon & Garfunkel, 30; Joni Mitchell, 28; and R.E.M., 27.
Read more about it by clicking here.
Google Music Is Now In The CloudsCNET & THE HOLLYWOOD REPORTER
This week Google introduced a beta of its long-awaited cloud-based music service, Music Beta by Google, opting to launch without licensing deals with the major record labels.
The National Jukebox Courtesy of Library Of CongressLIBRARY OF CONGRESS
The U.S. Library of Congress on Tuesday introduced the National Jukebox, a new website featuring over 10,000 rare historic sound recordings that are being made available to the public for the first time digitally.
There is a wealth of historical recordings you can listen to, and the site is easy to navigate,
Read more about it by clicking here.
Tunecore Raises Renewal Fees By 150%MUSICBUSINESS HERETIC
In the past few weeks Tunecore has more than doubled its album distribution renewal fees, from $19.98 to $49.99, and that's a 150% increase.
Read more about it by clicking here.
Revised 'Net Censorship Bill Requires Search Engines To Block SitesWIRED.COM
After months in the oven, the soon-to-be-released new version of a major U.S. Internet censorship bill didn't shrink in scope -- it got much broader.
Read more about it by clicking here.
GLEE PRODUCER STARTS LABEL:
Glee Executive Producer Adam Anders, the man responsible for putting together the show's musical performances, is launching his own record label, Anders Music, based in L.A. The label's first signing is singer/songwriter Shane Harper, who was discovered on MySpace. (MySpace?)
Lady Gaga will debut songs from her new album, Born This Way, in Zynga's popular online social game FarmVille (a big Facebook hit) in the week leading up to the record's official release on May 23rd. The game, in which 46 million players around the world manage virtual farms, will feature a special GagaVille farm beginning on May 17th.
BEAUTY DOESN'T NECESSARILY MEAN YOU'RE GOING TO SELL TONS OF ALBUMS:
J-Lo might have been crowned "The Most Beautiful Woman In The World" (with the help of great Hollywood PR), but with all her exposure on "American Idol" and all the media hoopla, her new album 'Love?' sold just over 80,000 in its first week at retail. That was enough for her to debut in the top 5 on the album charts, but let's see if it holds up.
As expected, Paula Abdul closed a last-minute deal with Fox that will reunite her with her Simon Cowell on the highly anticipated U.S. version of The X Factor. (Whether that's a good idea on Simon's part only time will tell)
IT IS WHAT IT IS DEPARTMENT:
Beyoncé has announced that the title of her forthcoming fourth album will appropriately be '4'.
GETTING MONEY FOR ARTISTS:
RootMusic, a firm that helps bands develop Facebook Pages, has partnered with SoundExchange to locate artists that have unclaimed digital music royalties due to them.
NEW PINK FLOYD, SORT OF:
EMI will release unheard songs by Pink Floyd starting from September, EMI said Tuesday. The tracks will be unearthed from archives as part of a multi-month schedule of releases, which will include collectors' box sets and remastered studio recordings. In other news, the surviving members of Pink Floyd reunited onstage Thursday night at London's 02 Arena during a stop on Roger Waters' Wall tour -- marking only the second time that Nick Mason, David Gilmour and Waters had played together in the last 30 years.
Sub Pop neo-folk group Fleet Foxes' Helplessness Blues just scored the highest vinyl debut in the history of Soundscan, with 8,900 sold first week.
HOW LONG BEFORE WE SEE VODKA TIE-INS WITH WARNER MUSIC?:
The Warner Music Group announced last week that it has been acquired in a deal valued at $3.3 billion by Access Industries, a private equity firm headed by Russian-born billionaire Len Blavatnik.
Google's YouTube on Monday announced plans to add some 3,000 new movie titles from Hollywood studios for rental from its website by U.S. users.
Microsoft has agreed to acquire Skype for a staggering $8.5 billion. Microsoft CEO Steve Ballmer said the addition of Skype would greatly enhance the company's existing portfolio of real-time communications products and services, while fostering new revenue options.
A new survey conducted by Consumer Reports found that, of the 20 million minors who actively use Facebook, 7.5 million were under the social network's age requirement of 13 years, and more than five million were under 10 years old, CNET reports.
LAWYERING IT UP FOR THOSE WHO DOWNLOAD FILMS ILLEGALLY:
More than 23,000 individuals alleged who have downloaded the 2010 movie "The Expendables" off of the BitTorrent file-sharing network are expected to receive notice soon that they are being sued for copyright infringement, Wired.com reported.
OFFICIAL GETTING MORE OFFICIAL:
Official.fm, a service that lets artists and labels upload and market their music online, has raised $8 million in new funding to develop its platform, according to a post on the company's blog.
Cornell Dupree, 69, a soul/R&B Atlantic Records session guitarist who played alongside Aretha Franklin, King Curtis, Jimi Hendrix and Joe Cocker, died in Ft. Worth, TX, from chronic obstructive pulmonary disease.
Quotes of the week
"I wrote the song at the Sunset Marquis in Los Angeles a few years ago. I swear it's going to be a hit. I can hear it coming out of people's cars this summer. I'm a fool for melody, man. I've got to have melody. I miss it, and there it is."
-- Steven Tyler, talking about his new solo song "(It) Feels So Good" (A "hit" Steven? On what format of radio?)
"One of my bedrooms is filled with clothes, and when people come over, I give them a trash bag and a glass of wine, then say, 'Go!'"
-- Fergie, who has very fortunate friends - and obviously a whole lot of clothes she doesn't need - to Lucky
"At the moment, I've just made space for putting out an album and then touring the world. Maybe in a couple years acting would be a great thing to do, but there aren't going to be any concert dates moved around for acting in the [near] future."
-- Taylor Swift to Billboard Magazine on a future acting career
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
Read more about it by clicking here.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Study Reveals Dolphins Lack Capacity To Mock Celebrity Culture
GALVESTON, TX-A study conducted by marine biologists at Texas A&M University has found that bottlenose dolphins, long thought to be among the most intelligent members of the animal kingdom, are "utterly incapable" of pointing out the flaws of celebrities and knocking them down a peg or two.
According to a paper published last week in the journal Science, when presented with photos of music, TV, and film personalities, dolphins failed on every occasion to mock the well-known public figures, missing countless opportunities to take mean-spirited potshots at their hair, past romantic partners, or breast implants.
Read the rest here and laugh: Click Here.
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
Smart Marketing Consulting Services
Smart Marketing Consulting Services has been in business sixteen years, and consults clients in the music, entertainment, attraction, media, and technology industry on branding, marketing, online exploitation, maximizing new media, and more.
"And the beat goes on, the beat goes on ... drums keep poundin' rhythm to the brain."
"Work is life, you know, and without it, there's nothing but fear and insecurity." -- John Lennon