2011: A Stinking Situation
January 6, 2012
"LOSER OF THE YEAR: The record industry, as usual. But wait, you say - didn't we just mention sales were up for the first time in seven years? Yes, but that 1 percent sales increase refers to albums in general, both physical and digital; CDs themselves were down 6 percent. So the product with the greatest profit margin continues to slide while the product with the lowest profit margin (digital songs, up 8.5 percent) continues to grow. Plus, the 1 percent uptick may be due to a variety of deep discounts, from Amazon to big-box chains. "When you're selling $5 discs at Walmart and Best Buy, music revenue is actually down," a source at a major label told us recently. "The idea that the industry has somehow hit bottom, and might be hitting an inflection point, I think, is a mistake." To sum up, things that are booming: Adele and digital songs in general. Things that are not booming: pretty much everything else."-- From the ROLLING STONE article 'On the Charts: Adele Ruled a Dismal Year for Record Sales' (You can read the entire article here: http://tiny.cc/bsygb )
The above statement summarizes this past year in the music business perfectly.
Last year was the year that digital sales finally surpassed physical CD sales. (See the link in to the story below in 'Track 3') That increase certainly won't save the lost revenues from sales of music in physical formats, but the consumers have spoken at the cash register yet again and it's obvious they aren't interested in spending the money on CDs. Why would they be when there are over 200 million iPods and other listening devices in their hands?
I said a long time ago that nothing in the industry was more responsible for getting people into the habit of BUYING music online instead of stealing it, than iTunes. I said every song sold meant one less stolen. Now of course, it means there were 10 billion less stolen, and counting.
That's of little consolation to the major labels as they find it harder to generate the revenues from the glory days of big CD sales, but it's a reality that's been coming for a decade, year over year, as CD sales declined.
Despite what you are likely to hear from NARAS on Grammy night, as the above article states, "Things that are not booming: pretty much everything else." Take away Adele and a few other albums, and it was "a dismal year."
While the labels try and figure out how to generate new revenues, isn't it long past the time for the RIAA to join the fight in seeking new solutions for the future, instead of lobbying politicians in Washington D.C.? The majority of tax-paying Americans all realize Congress is broken and it's going to take a major overall to fix the way things work. Trying to pass legislation in hopes that it will solve the music industry's problems is simply as mindless as passing legislation to try and balance our national debt. It's all politics and poker inside the nation's capitol and as the song says, "Politics and poker, shuffle up the cards and find the joker."
Digital sales is where it's at and where it will be. Like it or not.
As author Harry Brown said in his famous novel about World War II, "A Walk In The Sun" (later made into a great film), "God only knows what might be coming down the road ... be ready to fan out at any time ... it's a stinking situation, right?"
Yup, it sure is.
Now, what is the industry going to do about it? Invest its future via millions more spent by the RIAA?
I sincerely hope not. I hope it's the year the labels finally take that same money and invest it generating a better and more secure future via exploiting new revenue streams online. They don't need the RIAA to do that.
NARM is already on the case with their Digital Think Tank. (http://tiny.cc/zk0vr ) Spend money there.
THE 'A-SIDE' - TRACK 2
HOW ARTISTS MAKE BIG MONEY WITHOUT A GOLD ALBUM THESE DAYS
I've mentioned many times in the newsletter that the big money artists are earning these days isn't coming from record sales, but from touring, licensing, merchandising and other areas.
The New York Times wrote an article over the holidays, "Cee Lo Strikes Gold, Without a Gold Album," and it talks about those very things. It mentions how music companies today have "marketing, branding, television and artist management units to exploit songs to their fullest."
Cee Lo: ""There's security in being a brand; there's certainty in being a brand.
McDonald's is a brand. And when you get your fix for a Big Mac, where do you go? There's only one place you can go for a Big Mac, and that's big McDonald's. But my brand has a broader horizon, because my brand is, 'Whatever you think you want, I just may be able to give it to you.' "
Next week, I'll be talking to Steve Jones, author of "Brand Like A Rock Star" and we'll get into that even more.
For now, this is a must read in my opinion. Check it out here: http://tiny.cc/w5llr
THE 'A-SIDE' - TRACK 3
DIGITAL BEATS PHYSICAL IN MUSIC SALES IN 2011
The times they are a-changin'. For the first time in history, digital music sales topped the physical sale of music.
According to a Nielsen and Billboard report, digital music purchases accounted for 50.3% of music sales in 2011. Digital sales were up 8.4% from the previous year, while physical album sales declined 5%.
Read more about it here: http://tiny.cc/23954
THE 'A-SIDE' - TRACK 4
A PREVIEW OF APPLE'S TVs?
From Gig Om comes an article that says the first of Apple's new TVs, set to roll out in Q2 or Q3 next year, will be surprisingly small -- 32 and 37 inches, according to reports from supply chain sources, writes Darrell Ehterington.
"The smaller size displays might help keep costs down and reduce the sticker shock effect on consumers, but I doubt mainstream TV shoppers in the U.S. will be smitten with those relatively small screens," he writes.
"Other reports say that Apple will have several models going up to 55 inches, which would seem to be smarter considering that the market for new HDTVs generally is in the high 40-inch range and up now," writes MediaPost's own Steve Smith, who also puts his own on the speculation about Apple's plans for TV.
Read the article here: http://tiny.cc/1cuc5
THE 'A-SIDE' - TRACK 5
3-D WITHOUT GLASSES COMING?
Stream TV Networks plans to introduce a line of products that feature 3-D viewing without glasses. What's so special about its announcement, on top of scores of 3-D-without-glasses announcements?
The company says it has special technology in the name of Ultra-D, which can do nothing less than shift the way people will view media, according to its CEO.
Read about it on Physorg.com here: http://tiny.cc/tx6co
THE 'A-SIDE' - TRACK 6
NEW iPADS COMING SOON
DigiTimes says Apple's next-generation tablet will feature a 9.7-inch screen and debut next month at Macworld iWorld, a conference the company abandoned three years ago.
But it looks like two new models will debut. Read the rest here: http://tiny.cc/hhjqk
THE 'A-SIDE' - TRACK 7
FIVE TECH PREDICTIONS FOR 2012
From the rise of 3D printing to the increased personalization of mobile news aggregators to the detection of ripples in the fabric of space-time, 2012 could be a very big year for culture.
Read more here: http://tiny.cc/hj632
THE 'A-SIDE' - TRACK 8
SHARING MUSIC ON SPOTIFY
CNET SR. Editor Donald Bell walks you through the process of sharing music on Spotify, including posting to Facebook or Twitter, copying direct links to songs, or putting your Spotify listening habits on Last.fm.
Read about it here: http://tiny.cc/erwrw
THE 'A-SIDE' - TRACK 9
DMCA's SAFE HARBOR PROTECTS VIDEO SHARING SITE FROM COPYRIGHT INFRINGEMENT CLAIMS
The Ninth Circuit has affirmed a district court decision finding that video sharing site Veoh Networks is protected by the Digital Millennium Copyright Act's "safe harbor" against claims by Universal Music Group that Veoh was liable for the copyright infringement of its users. UMG Recordings, Inc. v. Shelter Capital Partners LLC, __ F.3d __ (9th Cir. December 20, 2011).
Veoh operates an Internet-based service that permits its users to share videos free of charge. Universal brought a copyright infringement action against Veoh, claiming that Veoh was liable for the posting of Universal-copyrighted material on its site by its users, and that Veoh was not entitled to the DMCA's safe harbor protections.
Read the full article here: http://tiny.cc/y5bed
THE 'A-SIDE' - TRACK 10
PS: THAT VINYL THING AIN'T GOING AWAY
According to stats released by Nielsen Soundscan, vinyl sales in the US topped 3.9 million in 2011, a 39.3% gain over 2010. ( http://tiny.cc/pxbhb )
THE 'A-SIDE' - BONUS TRACKS
* If you're a Steve Jobs fanatic, then the Steve Jobs action figure might be just what you are looking for or for someone you know who idolized Steve. For $99 it comes with three pairs of hands, a mini-iPad, a "One More Thing" backdrop, two pairs of glasses, two apples (one with a bite in it), and two chairs. And no, it's not a joke. Check it out here: http://tiny.cc/8jvd3
* Congratulations, if you are the proud, besotted owner of a shiny new iPad! Before you go crazy downloading every expensive app in the App Store just because you finally can, consult our guide. There are a few iOS apps out there that you absolutely need. Check them out here: http://tiny.cc/zr7xj
* Got yourself a shiny new portable music player? Remember, that's not the only hardware that matters. Do yourself a favor and get a pair of headphones that will make your music really sing. Check them out here: http://tiny.cc/oljo9
* If you're a vinyl lover and want your LPs to sound better, Jolida's JD-9 phono preamplifier, is a bona fide high-end sound component that won't break the bank. http://tinyurl.com/crre879
Short News Items ...
2011 TOP 5 ALBUM SELLERS:
According to Nielsen SoundScan, the following were the top 5 albums last year: 1. Adele, "21" (5.82 million); 2. Michael Buble, "Christmas" (2.45 million); 3. Lady Gaga, "Born This Way" (2.1 million); 4. Lil Wayne, "Tha Carter IV" (1.92 million); 5. Jason Aldean, "My Kinda Party" (1.58 million)
MJ GETS STONED:
Michael Jackson's hand and footprints will be installed in cement at Hollywood's legendary Grauman's Chinese Theatre on Jan. 26.
HERE THEY COME:
Van Halen have announced plans to tour through the year with original frontman David Lee Roth.
FINALLY GETTING HITCHED:
Justin Timberlake has apparently asked longtime girlfriend Jessica Biel to marry him. After an on-again, off-again relationship spanning four years, the celebrity couple were engaged in late December, according to Us Weekly.
GARCIA BIOPIC PLANNED:
The late Grateful Dead guitarist Jerry Garcia will be the subject of a forthcoming feature-length documentary by filmmaker Malcolm Leo, who has previously made movies on Elvis Presley and the Beach Boys.
NOTHING COMPARES TO BEING MARRIED FOR A MINUTE AND GETTING BACK TOGETHER:
Sinead O'Connor ended her marriage to Barry Herridge after only 18 days then got back together with husband Barry Herridge, only days after announcing plans to end their marriage.
GAGA TRACK RELEASED:
Lady Gaga released a brand new song on Christmas day. The track, titled "Stuck On F***in' You," is an outtake from her album "Born This Way," recorded live-to-tape with producer Fernando Garibay on guitar and Paul "DJ White Shadow" Blair on drum machines. "I wrote it in Minnesota after the Monster Ball on the tour bus," Gaga wrote of the largely improvised tune. "I wrote, sang it, and free-styled the last minute-and-a-half of the song."
ON THE ROAD IS WHERE THE BIG MONEY IS:
U2 raked in $156 million from North American cities in 2011, making the band the highest-grossing touring act of the year, according to Pollstar. Worldwide, the group pulled in $231.9 million for the year. Taylor Swift earned $97.7 million. Other top-grossing acts were Kenny Chesney ($84.6 million), Lady Gaga ($63.7 million) and Bon Jovi ($57.1 million), who were the biggest earners of 2010. Rounding out the top 10 were Elton John, Sade, Jay-Z and Kanye West's "Watch the Throne" tour, Lil Wayne and Celine Dion. (And yes, these are all grosses, not what each act netted after costs and taxes)
GEE, A POP STAR MARRYING A SUPER MODEL, HOW UNIQUE ... NOT!:
R&B star John Legend is engaged to marry supermodel Chrissy Teigen. Teigen, 26, has starred on the game show, Deal or No Deal, and has appeared in the Sports Illustrated Swimsuit Issue and Maxim, as well as ad campaigns for Billabong, Fredericks of Hollywood and Victoria's Secret.
FRAMPTON COMES ALIVE ... IN COURT:
Peter Frampton has sued his record label for unpaid digital royalties. Frampton recently filed against A&M Records for "breach of contract and unfair competition" in the belief that his digital sales profits have not been fairly distributed
ALLMANS SET FOR 10-DAY STINT IN NYC:
The Allman Brothers Band has announced dates for its annual March run at New York's Beacon Theater. Ten shows are slated to kick-off March 9th and run through March 25th, but more dates may be added. The Allman Brothers have dubbed 2012 "The Year of the Peach" in celebration of the 40th anniversary of their live album 'Eat A Peach.'
In April, Bonnie Raitt will release Slipstream, her first album in seven years, with major tour dates to follow.
LOUIS C.K. SALES:
Comedian Louis C.K. earned more than $1 million on sales of his latest comedy special, Live at the Beacon Theater, in just 10 days ago as a $5 download on his website. Appearing on Late Night With Jimmy Fallon, the comedian said he'd already given away $280,000 of the money to several charities.
The Allman Brothers Band and Diana Ross will lead the next class of Special Merit Awards recipients at the Grammys. The Allmans, Ross, Glen Campbell, Country music great George Jones, Brazilian songwriter Antonio Carlos Jobim, the late soul poet Gil Scott-Heron and the Memphis Horns are all set to receive Lifetime Achievement Awards.
GUTHRIE MUSEUM PLANNED:
Tulsa, Oklahoma will mark the centennial of the birth of native son Woody Guthrie with a kickoff event in March for a planned archive and museum dedicated to the late folk singer.
DOING GOOD STUFF:
For the second consecutive year, Lady Gaga tops the Celebs Gone Good Top 20 list, courtesy of DoSomething.org. Hot on her heels is another pop superstar, Justin Bieber, who jumps to the No. 2 spot from last year's position at No. 10, with George Clooney rounding out the top 3
Katy Perry and Russell Brand. (Gee, what a surprise ... NOT!)
VIDEO ONLINE STATS:
According to data on worldwide online video viewing from the comScore Video Metrix service, 1.2 billion people age 15 and older watched 201.4 billion videos online globally during October 2011. Google Sites, driven by YouTube.com, ranked as the top video destination with nearly 88.3 billion videos viewed on the property worldwide during the month. China-based Youku, Inc. was the second largest video property globally with 4.6 billion videos viewed in October, followed by VEVO which accounted for nearly 3.7 billion videos .
ONLINE DID FINE:
U.S. online holiday sales from Nov. 1st through Dec. 26th increased 15% from a year ago, totaling a record $35.3 billion, according to comScore. Online retail spending was up 16% to $2.8 billion.
ELECTRIC CARS NOT ELECTRIC IN SALES:
Sales of the plug-in Chevy Volt hit 7,671 for calendar year 2011, falling short of GM's target of selling 10,000 in its first full year of availability.
Sam Rivers, a widely respected jazz saxophonist and composer who played with Miles Davis, Herbie Hancock and many other giants, died in Orlando, Florida on December 26th. The cause of death was pneumonia; he was 88.
Fred Milano, an original member of the 1950s doo-wop group Dion and the Belmonts who sang on hits including "A Teenager in Love," has died of lung cancer at age 72.
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
"I got streptococca-something. It's a form of pneumonia and they spent three weeks keeping me alive basically. If I wasn't spiritual enough before the last four, five weeks, then I certainly am now. It was basically by far the worst month of my life but I'm incredibly, incredibly fortunate to be here."
-- George Michael, who was hospitalized late last month, resulting in the cancellation of the remainder of the tour dates on his Symphonica orchestral tour.
"Never mind the transience of show business and popularity. When we hear Ray Charles, we go, 'That's a great singer.' You don't need a reporter or a writer to tell us. Good is good and it should shine through the years."
-- Art Garfunkel, from Esquire's "The Meaning of Life" issue.
"Heaven looks a lot like New Jersey."
-- Jon Bon Jovi, refuting Internet rumors that he had died, on his band's Twitter feed
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Pop Star's Single, 'Booty Wave', Most Likely Civilization's Downfall
Multi-millionaire pop sensation, K'ronikka, appears on Today Now! completely unaware that she is responsible for the deterioration of civilized society.
Watch the video here and laugh (and see how much K'ronikka actually reminds you of too may real artists out there today) : http://tiny.cc/xz5ix
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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