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Doug Morris Had It Right
May 6, 2011
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"Baio showed the jury a note written by Doug Morris, the former CEO of Universal Music, that seemed to blame the record labels for not innovating quickly enough. Morris wrote that every time in the past that a new technology had come on the scene, the music industry was able to use it to make money. But in the Internet age "the real problem is that there is no technology coming from the record companies," Morris wrote."
-- From Greg Sandovals' CNET article 'LimeWire Strike Back In Court Against RIAA' ( http://tiny.cc/pdzkx )Back in 2003 I actually believed the major record labels would "get it" when it came to the Internet.
I wrote the following in the second issue of the newsletter in November 2003: "Okay ... like it or not folks, the Internet is the new media. It's delivering news, and it enables us all to spread information faster than ever before with one click of a mouse. And oh, yes, it's enabled tens of millions all over the globe to download their favorite songs (and entire albums) for free with that same click of the mouse. As I mentioned in last week's edition of the newsletter, " The reality is: it's never going to go away and the most important reality is: IT CAN NEVER BE ELIMINATED no matter how much effort the RIAA, labels, and others try to do so ... So now what? Is it over for the industry? Yes ... and no ... the old industry model is gone, and the technology is at hand. Make no doubt about it, it will become a reality, and if you think the music and film industries will look upon the new format as yet another problem, you're wrong. Why? Because it will allow them to sell music and film catalog in yet another new format that will cost them a fraction to produce. All the while of course, broadband services on the Internet will increase in abilities to deliver data faster than ever, and more consumers will eventually choose broadband. Downloading music online will in fact become the primary distribution source for getting music to the consumer."
I never thought I'd be so wrong. I started the newsletter at the insistence of several friends who I was dialoguing with at the time via e-mail about the industry's problems. They warned me the labels were not adapting to the changes the Internet and technology had brought. They told me the labels would wage wars against all the illegal P2P websites. And I asked them all the same question back then: "If the RIAA could hypothetically eliminate all the websites offering P2P services, does anyone actually believe it will solve the industry's problems? Does anyone actually believe that people won't still burn copies of CDs and swap mp3s with friends? And what about Intranets and 'darknets'?"
Of course, we know now the labels didn't adapt to the changes that were occurring faster than Paris Hilton changes boyfriends. And based on what Doug Morris said as noted above, the labels had no real desire to develop any technology or exploit the Internet as a great new revenue stream. (What was it again that Warner Music Group vice chairman Lyor Cohen said? Oh yeah, ""The CD made us sleepy. A lot of people got rich and nobody wanted it to stop. The CD masked a lot of problems.")
So here we are in 2011, and LimeWire is appealing $1.4 billion in damages U.S. District Judge Kimba Wood found Lime Wire founder Mark Gorton liable for in willful copyright infringement and last October. (Lime Wire was shut down and The Recording Industry Association of America (RIAA) wants Gorton and LimeWire to pay the maximum amount under the law: $150,000 for each of the 9,715 albums it seeks damages for, for the total of $1.4 billion)
Gorton's attorneys are fighting back, but whether they will win or not remains to be seen.
A few things are certain: a) $1.4 billion in damages won't save the industry unless it is reinvested in developing new revenue streams that utilize technology; b) LimeWire is "off the air" and shutdown, but I'll ask the same question: Does anybody believe illegal file-sharing is still not occurring every minute of the day around the globe? That it has NOT decreased? If industry execs believe that shutting down LimeWire has actually accomplished something (other than great press coverage), then they can stop blaming the Internet for year-over-year declining sales figures; c) all the RIAA's attorneys won't solve the industry's problems with all their lawsuits and time in court. In fact the only thing they have done is generate lots of legal fees to the labels; d) it's 2011 and as of this moment I still don't see the industry moving forward fast enough to take advantage of all the technology at hand ... do you?
Someone once said "You can't turn back the clock. But you can wind it up again."
Wind it up people. Fast.
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THE 'A-SIDE - TRACK 2
401K MUSIC: AN ARTIST DEVELOPMENT PUBLISHING COMPANY
What a great idea.
401k Music is a full-service independent music publishing company with a heavy and continued emphasis on artist development. 401k Music not only creates and collects publishing revenues for our writers, but guides and counsels artists by both offering strong management support to their existing personal managers and creating worldwide career building opportunities and introductions. We want musicians, writers, producers to have the opportunity of making a career out of their talents.
"The company name is somewhat tongue-in-cheek as I always tell artists that their songs are their retirement funds, and if treated professionally and carefully, they will be the gift that keeps on giving," explained founder Veronica Gretton.
Check it out here: http://tiny.cc/z8gxk
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THE 'A-SIDE' - TRACK 3
MAJORITY OF AMERICANS NOT WILLING TO PAY FOR NEWS
More bad news for those newspapers that believe online subscriptions will be the key to future earnings.
A whopping 80% of Americans say they would be willing to pay "nothing" per month to read a daily newspaper's content online, according to a new survey conducted by Adweek/Harris Poll. Ouch.
Read more here: http://tiny.cc/4bewg
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THE 'A-SIDE' - TRACK 4
TV HOUSEHOLDS DOWN FOR FIRST TIME IN TWO DECADES (DUH ... PCs!)
The number of U.S. television households has declined for the first time since 1992, a decline attributed to the transition from analog to digital broadcasting, the economy, and the new video platforms available to consumers, according to a report from Nielsen.
Read the rest here: http://tiny.cc/2heak
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THE 'A-SIDE' - TRACK 5
WE'RE ALL JUST WORKING FOR THE CIA, FBI, AND SO ON AND SO ON AND SCOOBY-DOOBY-DOOBY
WikilLeaks Founder Julian Assange is calling Facebook the "most appalling spy machine that has ever been invented." The Wikileaks founder made the comments to Russia Today as he awaits extradition to Sweden on sexual assault charges.
"According to Assange," notes The Next Web, "It doesn't stop with Facebook. He believes the social network is joined by Google, Yahoo and other major U.S. organizations that have 'built in interfaces for US Intelligence.'" Said Assange: "It's not a matter of serving a subpoena, they have an interface they have developed for U.S. Intelligence to use. Now, is the case that Facebook is run by U.S. Intelligence? No, it's not like that. It's simply that U.S. Intelligence is able to bring to bear legal and political pressure to them."
You can read more here if you buy into this: http://tiny.cc/s6j1s
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THE 'A-SIDE' - TRACK 6
MORE SIGNS THAT OUR CULTURE IS DECLINING FASTER THAN YOU THINK
Once upon a time TV personalities actually had to have talent. That's obviously not the case anymore.
Some of you may have heard that "Jersey Shore" stars Snooki, JWOWW and DJ Pauly D were given spin-off shows a few weeks back. This news confirms just how badly the audience is dumbing down.
Now comes news that Mike Sorrentino, a.k.a. "The Situation," has also signed a series development deal with MTV.
One of Woody Allen's memorable lines from Annie Hall was "they don't throw their garbage away (here in L.A), they turn it into television shows."
MTV does the same now.
And Now For Some News ...
Apple Makes More Profit Than Microsoft
BLOOMBERG BUSINESSWEEKWhile Microsoft just reported strong sales and profits for the third quarter, some analysts took note of the fact that, for the first time in 20 years, the software maker achieved a smaller quarterly profit than Apple. Microsoft's "Net income was $5.23 billion, eclipsed by the $5.99 billion reported by Apple last quarter," notes Bloomberg Businessweek.
What's more, consumer PC shipments dropped 8% in the quarter, and Netbooks fell 40%, which Microsoft CFO Peter Klein blamed partially on the rise of tablet computers like the iPad. Indeed, "You have to live underneath a rock not to know that the iPad has taken share from the netbook," Pat Becker Jr., principal of Becker Capital Management, told Bloomberg Businessweek. "It's a problem on the consumer side, and that's a market where Microsoft continues to give up territory to Apple."
Read more about it by clicking here.
Former MP3.com Founder & CEO Talks About Label Demands From Amazon
TECHCRUNCHThe major record labels are variously insisting that cloud-based digital music locker services only authorize songs that come with digital receipts from approved online retailers, and that providers place restrictions on the sharing of locker access, and the number of times songs may be downloaded from the cloud, according to a post on TechCrunch authored by Michael Robertson, founder of digital locker service MP3tunes.
Read more about it by clicking here.
CNET & Parent (CBS) Sued Over LimeWire Downloads
TORRENTFREAKIn the same week that file-sharing service LimeWire was in court defending against a potential $1.4 billion in copyright infringement damages, a number of companies, including CBS-owned CNET Download.com, have been sued for distributing LimeWire and similar applications.
Read more about it by clicking here.
Game Maker Electronic Arts Sez Future Is Online Digital Distribution
CNETSeeing where the market is heading for all media, video game publisher Electronic Arts plans, in coming years, to eliminate physical distribution of games on disc in favor of all-digital distribution, CEO John Riccitiello said on an earnings conference call transcribed by SeekingAlpha and picked up by CNET.
Read more about it by clicking here.
"Social" Radio You Can Program Yourself
PR NEWSWIREA good idea? Time will tell.
Jelli, the developer of a "crowd-sourced" interactive radio platform, said on Thursday that its platform will take over programming operations for two terrestrial radio stations in Las Vegas.
Las Vegas is the first market to launch Jelli as a revolutionary, new 24-hour radio format. On KHIJ-FM and KVBE-FM, listeners will be able to choose in real time every song that plays on the air via Jelli's website or Jelli's free iPhone app. One station will generally play Pop music, and the other Rock music, but both will be branded "Jelli."
Read more about it by clicking here.
Testing 8 iPad Apps
WALL STREET JOURNALThe iPad is an "especially good" option for watching TV shows on something besides a TV set, writes Walt Mossberg, who goes on to provide his take on a range of iPad TV viewing apps -- from HBO's new app HBO Go, WatchESPN and the ABC Player to iTunes, Netflix, Hulu Plus, Xfinity TV, and even MLB At Bat. "I hope eventually tablet offerings are more complete," Mossberg concludes.
Read more about it by clicking here.
Is Facebook The Key To The Web?
SEARCH ENGINE LANDSearch Engine Land's Danny Sullivan is wondering whether Facebook has successfully positioned itself as "the master key to unlocking the Web," or, put another way, if the social network "has won the battle to be the one true log-in." In other words, Facebook is making it possible so that users' accounts can open an ever-increasing number of non-Facebook doors.
For one, Facebook "Like" buttons are now ubiquitous online. The new Facebook Comments system, which rolled out in March, is being adopted by an increasing number of publishers. What's more, the new Facebook "Send" button makes it easy for users to e-mail stories to friends. "Yes, the final frontier, the ages-old 'e-mail story to a friend' button has now been conquered by Facebook," Sullivan believes. Why is Facebook winning on all these fronts?
Read more about it by clicking here.
EVERDAY LOW PRICES NOT JUST AT WAL-MART:
Amazon.com has launched a new rolling promotion that will see mp3 singles priced at just 69 cents, at launch offering some 200 songs at the new price point
STARBUCKS & BONAROO:
Starbucks has partnered with MOG Music Network (MMN) to provide music fans with exclusive access to video coverage of the Bonnaroo Buzz Tour leading up to the Bonnaroo Music & Arts Festival (June 9th-12th in Manchester, TN). The coverage is sponsored by Starbucks' Frappuccino beverages
REMASTERED PUMPKINS:
The Smashing Pumpkins announced that they'll be releasing remastered versions of their albums over the course of the next three years, starting this fall with 1991's Gish, 1993's Siamese Dream and the 1994 compilation Pisces Iscariot.
GROWING MOBILE:
Fueled by higher smartphone sales, the worldwide mobile phone market grew 19.8%% in the first quarter of 2011, according to new data from technology research firm IDC. The number of mobile devices shipped increased to 372 million from 310.5 million in the year-earlier quarter.
SPECTOR LOSES APPEAL:
Phil Spector's murder conviction was upheld yesterday by a California appeals court, ensuring the famed Wall of Sound music producer will remain behind bars for killing actress Lana Clarkson in 2003.
CHINA READIES LEGAL ONLINE MUSIC SERVICE:
Baidu, China's top search engine, is nearing the public launch of a legal music-streaming and download service. Dubbed Ting, the service will allow people to find tracks they may want to hear and to stream them over the Web. Many of the songs will also be available for download at no charge, according to the Ting Web site (Google Translate version) and media reports
SEACREST TO NBC WITH NEW SHOW:
American Idol host Ryan Seacrest is in talks with NBC to create a new music-themed program that he promises will not directly compete with the massively popular Fox singing competition. The show, which is still being developed on a conceptual level, is unlikely to be a traditional singing competition, especially since NBC already has the new singing competition show The Voice.
AMAZON TABLET COMING:
Amazon.com is preparing to launch a new tablet computer that will feature an E Ink touchscreen display, and has placed orders with Taiwan-based manufacturer Quanta Computer, DigiTimes reported.
TABLETS NOT FOR READERS:
According to media and publishing forecast firm Simba Information's "Trade E-Book Publishing 2011," 40% of iPad owners have not used the device to read a single e-book. And, owners of tablet devices do not make up the majority of e-book users, with 45% of survey respondents citing the PC or Mac as their e-reading device.
TIVO WINS:
TiVo announced on Monday that it has settled its long-running patent infringement dispute against EchoStar and DISH Network, with the satellite TV providers agreeing to pay TiVo $500 million.
ECHO NEST & RDIO WILL BUILD MUSIC APPS:
Music intelligence platform and app developer The Echo Nest announced a partnership with streaming music service Rdio, which they say will help developers build music apps using Rdio's catalog of 8 million licensed songs.
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
"Record companies these days don't have the resources, manpower or wherewithal to develop truly undiscovered acts. Television, on the other hand, does, without putting the industry's entire livelihood at stake."
-- Shirley Halperin, in her Hollywood Reporter story about the debut of NBC's The Voice, saying the major labels are no longer capable of nurturing talent"My father was a guitar player, and I was raised with a super-high standard of what good guitar playing was. I'd be in the living room practicing, and he'd walk by and shake his head, like, "That ain't gonna fly." So when I came into indie music, I had already been playing serious heavy metal/Yngwie Malmsteen solos. When I first started playing in front of alternative crowds, they were like, "What's with the solos?" It was probably because I came from a metal background of practicing and my father's very jaundiced eye about my ability, and wasn't really influenced by the alternative mindset about guitar, which was "Don't try too hard."... I always thought Kurt Cobain was the perfect embodiment of the great alternative guitar player. He was a really great guitar player, but when he got to the solo, he played the "I can't really play" solo - even though he could totally play. I was the guy who wanted to play the ripping Queen lead; I didn't want to do the "I can't play" solo."
-- The Smashing Pumpkin's Billy Corgan in Rolling Stone"Gaga is super-Catholic, and gets everyone together for a prayer before everything she does; she's super-religious. She's definitely cool enough to not want to offend people or be offensive. Her idea behind it was a little different than the groups that bash it. I mean it's not like it's never been done before. And it's not always black and white. The thing with Judas is - wasn't his fate sealed already? You kind of can't hate on him. If God created him and made him do it then ... poor bastard."
-- Norman Reedus - best known for his roles in AMC's The Walking Dead, on being in Lady GaGa's 'Judas' video in Rolling Stone
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Silicon Valley Town Pinning Tourism Hopes On World's Largest Website
SUNNYVALE, CA-The wonder in 8-year-old Hayley Dunbar's face as she stares out over what locals claim is the world's largest website makes it easy to understand why she and her father, Tom, drove all the way from Eugene, OR to see it.
"Wow, look at all of the links -- I can't believe how huge it is!" squeals Hayley, whose family is among the 200,000 people expected to make the trip out to California's Santa Clara Valley this year to catch a glimpse of the marvel. "How did they make a website so big, Daddy?"
Read the rest here and laugh: Click Here.
The Blogs
Check out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.comWebsite
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."
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