Bye Bye EMI
November 4, 2011
"We have spent a long time looking intensely at EMI and the problems faced by its recorded music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment. The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."-- Terra Firma's Guy Hands in January '08
I was going to make this an "I told you so" commentary, but why bother with that. Suffice it to say that everything I wrote about EMI when Guy Hands and Terra Firma took it over, came to pass.
Someone once said, "Nothing travels faster than light, with the possible exception of bad news, which follows its own rules." This past week the bad news about the possible sale and break-up of EMI, once one of the greatest record labels in the world, was all over the place. If you haven't already heard about the problems with the sale, just Google "EMI sale" and click on any of the recent results.
Whatever happens from this point in will be reported about in all the industry trades and elsewhere for some time. Another major label bites the proverbial dust is what it all comes down to. A label so rich in history and talent, it's almost hard to believe this could happen.
But this is what does happen when non-music people take over music companies. Non-music people (like Hands and others) look at spreadsheets and numbers and think they can apply some good business sense to a music company, or better yet, cut its costs then break it up and sell off the pieces a la Gordon Gekko.
The problem with that, of course, is that the music industry is a creative entity, like all entities in the entertainment industry. No matter how much analysts and Wall Street people think they can run businesses better than those who eat, sleep, and breathe the very core competencies essential to succeed in their businesses, the truth is they can't.
Just look at all the companies that have been destroyed by mergers and takeovers in the past few decades. It's a long list. Of course, those holding the "paper" (the stock price -- always the highest right before they dump it) get rich as another company goes down in flames. They don't care.
But back to EMI. What's happening now at EMI should be a clarion call to everyone in the music industry. No company is safe if this can happen to an EMI. And when EMI goes down, there will be few lifeboats for those currently on board the ship.
Those in the industry still on their ships as the industry sails the very rough digital seas ahead should make sure that all hands on deck are qualified MUSIC people.
It's the MUSIC business, not the business of music. The business of music is what attracted people like Guy Hands and Terra Firma. (And isn't Terra Firma a bad name now for that company?)
The MUSIC will survive with or without EMI, but another great candle that burned so brightly for so many years in the industry will soon be extinguished.
THE 'A-SIDE' - TRACK 2
PETE TOWNSHEND SAYS HE'S A GENIUS AND APPLE IS A "DIGITAL VAMPIRE"
Wasn't it Pete Townshend who wrote that infamous lyric, "Hope I before I get old?"
Well, Pete didn't take his own advice and it seems he's turned into an old crabby man. First he calls himself a genius, even says if it wasn't for him the other members in Who would have been nothing, or worse, "ended up in Led Zeppelin." (Easy Pete ... do I detect some jealousy there?) Oh yeah, and Apple? Why Apple's a "digital vampire."
Well, I was actually going to rant against Pete this week and even make this my main commentary when I found someone had already done it online. If you haven't read about what Townshend said, you can find the link to it in this terrific rebuttal to his comments here: http://tiny.cc/fq7o6
THE 'A-SIDE' - TRACK 3
PIRACY CAN BOOST SALES? SAY WHAT?
From BitTorrent: "A Spanish judge came to an interesting conclusion in a case dealing with a seller of pirated copies. According to the judge, the defendant doesn't have to pay compensation to the rightsholders because it is not possible to determine to what extent piracy actually decreases sales. On the contrary, the judge suggests that piracy may even boost sales."
Read the rest here: http://tiny.cc/0bewz
THE 'A-SIDE' - TRACK 4
HTML5 FOR ROLLING STONE AND PLAYBOY ARCHIVES
Both "Playboy" and "Rolling Stone" magazines are using a sophisticated HTML5 platform to bring their full back-issue archives to tablet and Web users. Avoiding the content restrictions and the limited access to subscriber data in Apple's App Store, the Web-based approach allows the two brands to go direct to consumers with these offerings, yet retain an app-like functionality.
Read the rest here: http://tiny.cc/8sgr6
THE 'A-SIDE' - TRACK 5
SAMSUNG NOW #1 SMARTPHONE COMPANY
Well, that didn't last long.
In the last quarter, Samsung Electronics bypassed Apple to become the world's top smartphone vendor, Bloomberg News reports. Apple held the top spot for only one quarter after displacing Nokia earlier this year. Samsung shipped 27.8 million smartphones in the last quarter -- or 23.8% of the market -- according to Milton Keynes, U.K.- based Strategy Analytics. Meanwhile, Apple's 17.1 million shipments represented 14.6% of the market.
Read the rest here: http://tiny.cc/r7yea
THE 'A-SIDE' - TRACK 6
THE COPYRIGHT THING AGAIN
Proponents and detractors of the Stop Online Piracy Act enlist new allies, while pop icon Justin Bieber suggests a U.S. senator "needs to be locked up."
Read the rest here: http://tiny.cc/at766
THE 'A-SIDE' - TRACK 7
ON NOVEMBER 9th TV WILL STOP ... FOR A FEW MINUTES
If you turn on your TV or radio around 2p ET, next Wednesday, Nov. 9th, all you'll get on every single channel or station will be an emergency alert tone.
Actually, we don't know how annoying the tone -- or picture -- will be under the country's brand-new Emergency Alert System, but we do know that every broadcaster, cable channel, radio station and even satellite and telco TV provider in the whole country will have their signals interrupted for up to three-and-a-half minutes as the FCC and FEMA conduct the system's first-ever nationwide test. Hey, we know how much it will hurt to miss the opening of CBS' "The Talk" or whatever, but this is actually pretty serious.
Read the rest here: http://tiny.cc/lcsp0
THE 'A-SIDE' - TRACK 8
WILL REDBOX SUFFER THE SLINGS & ARROWS OF CONSUMER KICKBACK WITH ITS PRICE HIKE?
The company says that DVD rental fees will now be $1.20 per day, rather than the $1 it previously charged. Blu-ray and video game rental prices will stay the same.
Read the rest here: http://tiny.cc/61j9p
THE 'A-SIDE' - TRACK 9
AOL? Pocket-sized cell phones? Modems?
Read '20 Years of Gadget Reviews' on the Wall Street Journal here: http://tiny.cc/fvjpf
Short News Items ...
NO GO FOR EMI:
Access Industries, the owners of Warner Music Group, has pulled out of the auction for EMI's music operation. According to Billboard's sources, the two sides could not agree on a valuation, though Access' bid was speculated to be in the $1.5-$1.6 billion range.
WINEHOUSE ALBUM COMING:
A collection of unreleased material recorded by the late Amy Winehouse will be released on December 5th. The album, titled Lioness: Hidden Treasures, will contain 12 cuts recorded between 2002 and 2008 including covers of "The Girl From Ipanema" and "Will You Still Love Me Tomorrow?"
SUPER BOWL MATERIAL GIRL:
Madonna has agreed to be the next halftime act at the Super Bowl, which will take place on February 5th in Indianapolis.
GEE, WHAT A SURPRISE ... NOT!
Kim Kardashian filed for divorce from her husband Chris after just 72 days of marriage. Great ratings ploy, Kim.
FOR PHISH FANS:
Phish are releasing a seven-CD box set containing three complete back-to-back shows from their legendary Fall 1997 tour.
WALL STREET RULES:
No big surprises here, but the latest figures from the Audit Bureau of Circulations for the six months ending Sept. 30th showed The Wall Street Journal retaining its position atop the list, with average weekday circulation of 2.1 million. Next came USA Today, with the New York Times number three.
According to new third-quarter data from Nielsen, 43% of U.S. consumers now own smartphones -- up 5 percentage points in the past six months. Within that 43%, according to Nielsen, Android has 43% of the market and the iPhone has 28%, i.e., "exactly where they were three months ago," Fortune points out.
WELL, ANY PUBLICITY IS GOOD PUBLICITY, RIGHT?
Juggalos, the passionate, face-paint-wearing fans of the rap group Insane Clown Posse, have been classified as a gang in the FBI's 2011 National Gang Threat Assessment.
URBAN THROAT SURGERY:
Country star Keith Urban is canceling appearances and must postpone an upcoming benefit concert after scheduling throat surgery for a polyp that has developed on his vocal cords.
GAGA DOES GOOD:
Lady Gaga launched the Born This Way Foundation this week to support anti-bullying programs and youth empowerment groups.
Lady Gaga has directed her own holiday special to air this Thanksgiving, A Very Gaga Thanksgiving. The 90-minute special, which will air November 24th at 8p on ABC, will feature a sit-down with Katie Couric at Gaga's alma mater, Sacred Heart Catholic School, as the two discuss Gaga's relationships, her music, and her career.
X FACTOR BACK NEXT YEAR:
Fox has ordered a second season of The X Factor, Simon Cowell's hit talent competition.
2 BILLION FOR BIEBER:
Spurred by the popularity of his new Christmas single "Mistletoe," the singer passes Lady Gaga -- who was the first to reach 1 billion views -- in setting the new record of two billion YouTube views.
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.
Quotes of the week
"Nothing scares corporate radio more than public radio."
-- Tom Petty, at a benefit concert for the tiny college radio station KCSN-FM (Cal State Northridge). Actually Tom, nothing scares corporate radio more than Internet radio stations.
"It was like one-stop shopping. They stitched up my eye. They did a little plastic surgery. And they fixed my tooth. All in one fell swoop."
-- Steven Tyler, giving a rundown of his hospital care after taking a painful spill in Paraguay, on the Today show.
"Adam Levine. I have a crush on him and his girlfriend."
-- Miranda Lambert, who has the hots for husband Blake Shelton's The Voice co-star and his supermodel ladylove, Anne Vyalitsyna, to PEOPLE.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
New Facebook Feature Allows User To Cancel Account
The company later confirmed that account closures would not stop Facebook from continuing to acquire, permanently store, and sell all information about its current and former users until the day they die.
Read the rest here and laugh: Click Here.
The BlogsCheck out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.com
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
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