What The Publishing Biz Learned From The Music Industry's Mistakes
June 8, 2012
"The proper response to digital technology is to embrace it as a new window on everything that's eternally human, and to use it with passion, wisdom, fearlessness, and joy."
-- Ralph Lombreglia
Back in 2004 in the newsletter I wrote the following, "The sale of iPods and other portable music storage devices that allow consumers to keep thousands of songs at their disposal for playback at any time (and the consumer can pick playback by artist, genre, etc.) are signaling that the CD is already obsolete to many consumers. As the iPod and similar device sales grow like the Walkman did some three decades ago, CD sales will slowly and continually decline. People won't feel the need to have a "library" of CDs because that very library will be on their iPod and they'll have back-up library on their computers (with ever increasing hard drive capacity) or on next generation silicon chips...
The music industry should be rejoicing at the Internet and new technologies being developed. The Internet can provide a fool-proof way to deliver music to millions who might otherwise never purchase a CD in a store. The cross-marketing and vertical integration opportunities are unbelievable. It's instantaneous, costs are minimal, shipping non-existent, making the Internet a staggering vehicle for higher earnings and lower costs.
The World Wide Web we weave is tangled one indeed. But it's not all that difficult to step back, look at it, and see that's there's money (serious money -- gazillions) to be made out here in cyberspace. Just look at amazon.com, eBay, and Mr. Job's iTunes.
My hope is the industry knows all this and is making plans as I write this and maybe we just don't know what's really going on behind those closed doors. But if not, the industry is going to be floating out there in space like Dave in '2001: A Space Odyssey' and when they want to get back into the mothership, HAL 9000's going to' say, "I'm sorry Dave ... it's too late."
This week, the Wall Street journal had a terrific article by Rob Reid, who founded Listen.com, the company that created the Rhapsody music service, titled 'What To Do When Attacked by Pirates -- The music industry fought the future and created a black market; book publishers tried another tack' ( http://tinyurl.com/7en69g3 )
From that article, "If you were attacked by pirates, who would you want by your side? A loyal horde of head bangers, gangstas and hard-core punks? Or a brainy clutch of bookish types? I'd generally advise you to go with the former group. But it turns out that in the swashbuckling arena of digital piracy, the publishing world is acquitting itself far better than the brash music industry."
And this, "The record labels greeted the first mass-market mp3 player -- the Diamond Multimedia Rio -- with a lawsuit. An industry news release justified this, saying it was "doubtful that there would be a market for mp3 recording devices but for the thousands and thousands of illicit songs on the Internet." Note the word "thousands." Illicit music traffic was a wisp compared with the hundreds of millions of tracks that now traverse the wires each month. Napster's debut was almost a year off, and file sharing was unknown outside of technical and college circles."
It's a terrific article that all should read.
I'm sure the mistakes the music industry made will be discussed in classrooms where students read about, and then discuss all the missed opportunities early on, when the industry chose to ignore the Internet.
It's 2012, and though sales of digital music are increasing, those sales don't provide the same big profits that labels made from CDs.
There are still far too many opportunities for new revenue streams to be discovered, and if the industry doesn't explore all options available, they will lose their future.
THE 'A-SIDE' - TRACK 2
YOUR MUSIC SHOULD BE EVERYWHERE
Back in 2007 in the newsletter I wrote, "Ubiquity is the answer to maximizing online revenues, and choosing sides with other online stores at this point in place in time is rather silly. If people can't find what they want easily, they will steal it by downloading it for free. I wonder how many execs think about such things before they make such decisions for their artists and their label?"
This week Jay Frank posted a great article titled "Distribute Music Everywhere Or Perish." Amen.
Read Jay's article here: http://tinyurl.com/77k4ob5
THE 'A-SIDE' - TRACK 3
IFPI REPORT FOR 2011: GLOBAL MUSIC SALES DROPPED 3%; DIGITAL SALES, SYNC, UP
From Billboard Biz: "Trade revenue generated by the global recorded music industry in 2011 dropped by 3% to $16.6 billion, according to the International Federation of the Phonographic Industry's (IFPI) annual "Recording Industry in Numbers" report, published this week.
Despite the continued year-on-year decline in trade revenue, last year's sales figures represent a significant slowing in the fall of the market, according to IFPI, who for the first time include synchronization revenues in its annual report.
The inclusion of global sync revenues, which amount to $342 million in 2011, pushed global record music sales well above 2010's published total of $15.9 billion, as stated in IFPI's "Recording Industry in Numbers" 2011 report."
Read the rest here on Billboard Biz: http://tinyurl.com/cebgo5s
THE 'A-SIDE' - TRACK 4
XBOX GETS MUSIC SERVICE
Slacker's personal radio service will be available to Xbox Live Gold subscribers later this year.
At the same time, Microsoft announced its own music service for the Xbox 360, Xbox Music, which will give users access to over 30 million tracks on the network.
Read the rest here: http://tinyurl.com/c54d8oc
THE 'A-SIDE' - TRACK 5
MORE FROM JAY FRANK: 7 OVERLOOKED CATEGORIES OF THE NEW MUSIC BUSINESS
Are there more than 228 artists grossing over $100,000 in recorded music revenue? Plenty. Who are they?
Read Jay Frank's article to see where and how people can make money in the new music business: http://tinyurl.com/7h2875w
THE 'A-SIDE' - TRACK 6
THE INTERNET GETS READY TO FLIP SWITCH TO IPV6 AND WHAT IT MEANS TO YOU
From CNET: "The time for testing is over as Facebook, Cisco, Comcast, and others will soon permanently enable next-generation Internet technology with vastly more elbow room. What's it all mean?
What began as a 24-hour test a year ago will become business as usual on Wednesday as a range of big-name Internet companies permanently switch on the next-generation IPv6 (Internet Protocol version 6) networking technology. And now there's no turning back. "IPv6 is being enabled and kept on by more than 1,500 websites and ISPs in 22 countries," said Arbor Networks, a company that monitors global Internet traffic closely."
Read the rest here: http://tinyurl.com/cqzl7qx
THE 'A-SIDE' - TRACK 7
THE 60 BEST ALBUMS OF THE '60s
Paste magazine has put together a list of what they consider to be "The 60 Best Albums Of The 60's."
I certainly don't agree with all the titles on the list, and they have limited the number of titles by artists to a maximum of three. (Otherwise, The Beatles and others, would have far too many titles on the list)
Check it out and see if you agree with the choices: http://tinyurl.com/789xtz7
And you can check out Rolling Stone's list of the Top 500 Albums Of All Time here: http://tinyurl.com/cfk37xl
THE 'A-SIDE' - TRACK 8
THE BERKLEE SCHOOL OF MUSIC OPEN ARCHIVE
Berklee's instructors join regularly for live "open house" style discussions to talk about and illustrate concepts and ideas in their area of expertise. These free, exclusive, and in-depth tutorials cover topics including performance, music production, music business and much more.
Take a look at their archived Open House tutorials here: http://tinyurl.com/7wl8nsn
THE 'A-SIDE' - TRACK 9
MORE ON MASTERED FOR iTUNES
Read how Mastered for iTunes, an Apple program that makes new mastering software and guidelines available to recording studios to boost sound quality for the AAC file format.
The program officially began in late February, and since then, iTunes has made 300 such recordings available, including Coldplay's Mylo Zyloto, Bruce Springsteen's Wrecking Ball, Pink Floyd's Dark Side of the Moon and Nirvana's Nevermind.
Read more on Rolling Stone here: http://tinyurl.com/7yshe47
THE 'A-SIDE' - TRACK 10
SAG-AFTRA REACHED A DEAL WITH RECORD LABELS RE: MUSIC VIDEOS
SAG-AFTRA has reached a three-year agreement with the major record labels to provide safe and fair working conditions for performers in music videos, including dancers, actors, narrators, singers, models and stunt performers.
Read the rest here: http://tinyurl.com/7de3caj
THE 'A-SIDE' - TRACK 11
MICROSOFT'S PLAN TO TAKE OVER YOUR IN-HOME MEDIA
To the great dismay of Apple and Google, Microsoft seems to be winning the war for America's living room with, of all things, a videogame console.
"Over the last 10 years, while its rivals have dithered and misfired, Microsoft has been feeding its living-room secret weapon [the Xbox] a nonstop diet of software updates and hardware upgrades," Forbes reports. As a result, this spring -- for the first time ever -- domestic subscribers to Xbox's Live online service spent more time consuming video and music than multiplayer games.
Globally, the hours spent on Xbox Live have grown 30% year over year, including gaming and entertainment, while video consumption has risen 140%. "In some ways the Xbox is emerging as an alternative for those who want to cut the cable cord," Forbes explains. "In effect, the Xbox is Microsoft's profitable Trojan Horse." Xbox's Live service has more than 40 million members in 35 countries. Microsoft makes money selling them points they can use to rent videos or download games, while an estimated 17 million Live members pay about $50 a year for a Gold membership, which gets them access to Netflix, HBO Go, ESPN and multiplayer gaming.
Read the rest on Forbes here: http://tinyurl.com/7nf5kpf
THE 'A-SIDE' - BETWEEN THE GROOVES
WHAT THE CLEAR CHANNEL DEAL TO PAY LABELS DIRECTLY MEANS
This week, Clear Channel Communications made a deal with Big Machine Records (Taylor Swift's label) to pay them directly for royalties for radio play.
Read the article on Bloomberg on how this might become a "template" for the industry here: http://tinyurl.com/d95ljbw
Jay Frank has written a great article as well on what the deal will mean to artists. Read that here: http://tinyurl.com/76ehxhh
THE 'A-SIDE' - BONUS TRACKS
* Jackson Browne did an interview on The Wrap and he talks about lost loves, nukes, composing and more. Read it here: http://tinyurl.com/869sswv
* What do you do to try to stand out from the ultrabook crowd? If you're Toshiba, you make a super-wide-screen ultrabook. Wanna watch a movie? http://tinyurl.com/cs8zm9d
* The Beach Boys took a break from their 50th anniversary tour to perform acoustic versions of their classic pop tunes at the Rolling Stone studio. Hear "In My Room," "Surfer Girl," "Surfin U.S.A." and there's an interview as well: http://tinyurl.com/82lf53o
* The Beatles' animated movie Yellow Submarine has been digitally restored from the original hand-drawn artwork for a brand new DVD and Blu-ray release. In this clip from the new version of the 1968 movie, In this clip from the set's bonus features, director Heinz Edelmann explains the process of animating the group's psychedelic masterpiece "Lucy in the Sky with Diamonds": http://tinyurl.com/73u3jnp
* Here's a list of this summer hottest albums scheduled to be released -- from Billboard: http://tinyurl.com/bqnrhfn
Short News Items ...
Bieber Fever is alive and well. The 18-year-old pop star, whose new album, "Believe," is due out on June 19TH, sold out his entire U.S. and North American tour within one hour, according to his label, Island Def Jam.
AND THIS IS WHY REHEARSALS ARE SO IMPORTANT:
Justin Bieber suffered a concussion during his May 31st show in Paris. Bieber told TMZ that in between songs, he inadvertently ran into a wall of glass backstage.
YOU CAN'T GET AWAY WITHOUT PAYING THE TAXMAN:
Lauryn Hill evaded income tax returns for three years, reports Reuters. The Department of Justice says the singer failed to file returns to the IRS from 2005 to 2007, during which Hill earned an estimated $1.8 million in income. Most of the money was generated from recording and film royalties, but Hill also owns and operates four different companies.
SHERYL CROW REVEALS SHE HAS BENIGN BRAIN TUMOR:
Sheryl Crow, who battled breast cancer six years ago, reveals she has a benign brain tumor. In an interview with the Las Vegas Review-Journal, the singer spoke out about her diagnosis. "In November, I found out I have a brain tumor," she said. "But it's benign, so I don't have to worry about it. But it still gives me a fit."
ELVIS IS BACK IN THE BUILDING, SORT OF:
Elvis will be getting his own hologram, according to Digital Domain Media Group. The group has teamed with Core Media Group to create a virtual Elvis, which will appear on film, television and other media, with concerts apparently an option as well.
WELL, NOT EVERYONE GOES TO GERMANY TO SEE BEATLES' MEMORABILIA:
The Beatles museum in Hamburg, Germany will close at the end of this month due to a lack of interest, the NME reports. The Beatlemania museum, which has a collection of over 1,000 pieces of memorabilia, opened on the Reeperbahn strip in Hamburg in 2009.
AUSTIN CHAOS IN TEJAS:
Now in its eighth year, Austin's punk and metal Chaos in Tejas festival has become an established part of the calendar in the city that also hosts SXSW and Austin City Limits. This year's event featured Ted Leo, the Clean, Best Coast, New Orleans rapper Big Freedia and more.
CRAZY HORSE HITS THE ROAD:
Neil Young and Crazy Horse will launch an American arena tour in early October that will run through early December, according to tour dates that appeared on Ticketmaster on Monday evening.
FOO DRUMMER TO THE MOVIES:
Foo Fighters drummer Taylor Hawkins will portray Iggy Pop in the forthcoming film CBGB, the Hollywood Reporter confirms.
Ozzy Osbourne has confirmed that Black Sabbath have written 15 new songs, NME reports.
Paul McCartney will perform at the opening ceremony of the Summer Olympics in London on July 27th, the BBC reports.
AND STILL ANOTHER SINGING COMPETITION, THIS ONE ONLINE:
MySpace may now have its "American Idol." MySpace has partnered with talent competition network YOBI.tv for "Take the Stage," a new singing competition that will air on the social giant starting Thursday. Nine different artists will compete for $20,000 and a contract with Johnny Wright, the manager for pop giants such as Timberlake and the Jonas Brothers.
Miley Cyrus,19, is engaged to marry Liam Hemsworth, 22, the Australian actor who had a breakout role in "The Hunger Games," Us Weekly reports.
Former Fleetwood Mac member Bob Welch has died of a self-inflicted gunshot wound at the age of 65, the Associated Press reports. Welch was found dead by his wife in their Nashville home Thursday just after noon.
Herb Reed of the Platters has died in a Boston area hospice, reports the Associated Press. He was 83.
Ray Bradbury, the author of 'The Martian Chronicles,' 'Fahrenheit 451,' 'Something Wicked This Way Comes', 'The Illustrated Man,' and many more, died this week in Los Angeles, at the age of 91.
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
"That could happen. But it's not happening now. I'd be on a tour of my past for the rest of fucking time, which I can't do. I have to be able to move forward. I can't be relegated. I did enough of it for right then, but there is this seed of something great still there. It's worth exploring again."
-- Neil Young, talking about the possibility of Buffalo Springfield touring again
"I look at Gaga and I think, 'How does she do it?'" I talk to her mum and dad about it. They worry. She is frail, and she doesn't eat when she should, and she's a girl, and it's tougher for a girl. She works really hard. She will be in Denmark one night and Saudi Arabia the next. I know how tiny she is and I do worry about her, yes."
-- Elton John, talking about his son's godmother, Lady GaGa, in Rolling Stone
"I was really caught off-guard, and it really humiliated me at a time when I'd already been dressed down. I mean, how would you feel if, at the lowest you've ever been, someone kicked you even lower?" When asked about the song's line, "Don't you think I was too young to be messed with?" Mayer says, "I don't want to go into that."
-- John Mayer, in Rolling Stone, commenting on Taylor Swift's song 'Dear John' which she wrote about him.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Man Arrested For Stealing More Than $50,000 In Beards From Hank Williams, Jr.
PARIS, TN-The Henry County Sheriff's Department announced Monday the arrest of a local man charged with burglarizing the climate-controlled beard humidor of country artist Hank Williams, Jr. and stealing his entire archive of human beards.
Read the rest here and laugh: Click Here.
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