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Some Suggestions
August 29, 2008
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"If you are out of trouble, watch for danger."
-- SophoclesI often get e-mail from readers, or others who read the newsletter online, and they say things like, "You seem to very critical of the industry, but you offer no solutions." (Note to readers: Yes, I've softened the tone of how some people actually ask that question.)
Over the past five years I've often offered some suggestions on things I believe the industry can do to achieve better results, but I thought it might be a good time to list again some of my old ideas, along with some new ones.
1. Fact: The CD is dying ... lower prices now! Nobody in the industry playing with a full-deck denies any longer that CD sales are declining year over year. Yes, there are multi-platinum certifications for many artists, but annual CD sales continue to decrease. If labels want to create a longer shelf life for CDs as consumers transition to purchasing more music online in the future, then dropping prices is mandatory.
When hit CDs are blown-out at retail with sale prices, unit sales increase every time. Lower retail prices might actually increase sales for CDs overall. More volume = more profit. Just ask Wal-Mart, the nation's #1 retailer that sold three-million double-pocket CDs on The Eagles "Long Road Out Of Eden" for just $11.88. That works out to just $5.94 for each CD. A great price and great value for the music consumer.
As I've mentioned before here in the newsletter, when best-selling DVD titles are often selling at $9.99, and video games generate more revenues than hit movies and compete for consumers' shrinking disposable income when it comes to entertainment options, selling CDs at current prices is no longer valid.
2. "If you do not seek out allies and helpers, then you will be isolated and weak." -- Sun Tzu, "The Art of War." Form strategic alliances with as many companies as possible for new revenue streams, and strong alliances have become an integral part of all contemporary strategic thinking.
As I said in the newsletter previously: "If ever there was a time for the music industry to seek symbiotic relationships, it's now. The formation of these partnerships is becoming a key component in all corporate thinking and has been talked about recently in leading business publications. This from BUSINESS WEEK: "...companies should expand beyond their existing resources through licensing arrangements, strategic alliances, and supplier relationships."
The most beneficial type of partnering companies can engage in, is partnering with other companies that can provide compelling benefits for their customers. If used properly, the partnerships can be used to gain customers, protect them from predation by competitors, and protect profit margins. Of course opening the doors to create such alliances means "thinking outside of the box" more than ever. But the rewards can be extraordinary. "The greatest change in corporate culture -- and the way business is being conducted -- may be the accelerated growth of relationships based ... on partnership." - Peter F. Drucker.
3. Launch online stores as soon as possible that can give consumers more than iTunes. Labels are content providers with a wealth of catalog. Think about the packages that can only be created by individual content holders! All that's needed is creative marketing and putting the best heads together at each label to make it happen. Are there any artists that don't want to sell more? Is there any label that doesn't want to sell more?
Stop complaining about iTunes, turn the page, launch your online stores and do what Steve Jobs did: Make the Internet an ally instead of viewing it as an enemy. Like it or not, it's the future distribution means for all entertainment media. So, create great stores and put together incredible packages that are available nowhere else online.
Think of the possibilities. Never mind the negatives. iTunes has sold five billion songs. But iTunes is just an online distributor. Labels are the source for distributors. Why wouldn't they want a bigger piece of the online pie for themselves and their artists? And think of what can be done with video online with artists on your roster that would willingly do more to have the opportunity to generate more sales.
4. Vinyl is back as a viable and growing market segment. JUMP ALL OVER IT NOW. This isn't just a little thing to discuss anymore in sales departments at labels. A Google search on 'Vinyl Records Make A Comeback' comes up with 169,000+ results. Many of the articles found in those results evidence statistics of big growth in vinyl and more consumers seeking it again.
Labels should strategize production of vinyl reissues in the album's original form and try to create new dynamic packages for this growing market that will attract even more buyers.
And the best thing of all about vinyl's rebirth? With very little work on the labels' part, big profits can be generated by examining catalog and re-issuing titles that might not be that active in the CD format, but will find life again at retail in vinyl.
5. Take action and unite to move the RIAA's focus away from the lawsuits and onto developing new ideas for the industry. The lawsuits have done nothing to stop people from downloading, and they never will. Fact: Free is the best price. Fact: Anything that can be done digitally can be undone.
I've probably written more about the RIAA, and how the lawsuits they've filed have done nothing to help the industry, than anything else. (I do so again this week below this commentary.) It's high time for label leaders to demand the association stop spending millions in legal fees and start to spend the millions they fund the association with on seeking meaningful solutions to bigger industry problems.
An annual symposium with Silicon Valley tech leaders and others might actually result in the development of some NEW ideas. When was the last time the RIAA offered any new ideas? What if they had had such a meeting years ago? What if a strategic alliance had resulted in someone suggesting several years ago the industry sell music online and create online stores? What if those stores today were selling billions of songs? Would iTunes be the digital whipping post then today?
Who knows? But one thing is certain. "If your environment is changing, you must change with it. If you don't, you perish."
6. Develop consumer acquisition, loyalty and retention programs. Why aren't there CRM (Customer Retention Management) programs in place at every major label? And forget the "It won't work ... blah, blah" e-mails. Because the truth is, unless the industry wants to succeed with new options, it will create self-fulfilling prophecies of doom.
Almost every consumer industry now has customer loyalty programs in place. The biggest, of course, are those employed by credit card companies that give customers points back for every dollar they spend. But in the past few years, as retail competition has grown to a fevered pitch, it seems as if every restaurant, retail outlet and manufacturer now has a similar program in place to keep the customer satisfied, and coming back again and again.
With large catalogs, labels can create similar loyalty programs. Tie these programs in with online stores and the purchases consumers make, and a nice database of customers is built to generate repeat business.
Just a few ideas for moving forward.
It would be nice if just one took hold and resulted in success for the industry.
And Now This...
Two weeks ago I wrote my commentary "Blame Canada" in response to what I thought was a ridiculous article in the Wall Street Journal, "The Internet Is Ruining America's Movies and Music" (http://tinyurl.com/6poygu), by Ms. Elizabeth Lee Wurtzel. I said in that commentary, "I think the box office figures for this year, coupled with the increase in DVD sales and rentals, contradict the opinion that the Internet is 'ruining America's movies.'"
Ms. Wurtzel said in her article (among other things) that "Hollywood's motion picture factory is blundering." I commented, "Really? Tell it to the motion picture factories generating this record year in revenues."
I hope Ms. Wurtzel had a chance to read the article in this week's Los Angeles Time "Summer Box Office Sets New Record." ( http://tinyurl.com/64xaag ).
Maybe she'll do a follow-up piece now titled, "Maybe The Internet Is Not Ruining America's Movies And Music, But I Still Don't Like It."
AND THIS...
Until somebody in the industry wakes up and has the courage to say what I've been saying now for the past five years about the RIAA being a useless association that does little in the industry's behalf other than file lawsuits and waste the industry's time, money and resources in courtrooms, I'll continue to do so by printing evidence of that.
This week the big news from the RIAA is that they won a case (note, that's singular) over a defendant who erased the hard drive on his computer. The hard drive allegedly contained evidence the defendant had downloaded music illegally from Kazaa, and that the files were in a shared folder on the computer. (If you want to read about it, here's the link: http://news.cnet.com/8301-1023_3-10026694-93.html?tag=nl.e703 )
Another insignificant victory in a battle lost long ago.
When will the RIAA really do something to justify their existence?
The Internet Radio Death Watch
With royalty fees making a huge dent in the profits of popular sites like Pandora and Slacker, it seems to be only a matter of time until the Web radio model implodes. PC Magazine's Dan Costa sure thinks so.
Read more about it by clicking here.
Why MySpace Is Still Top In The U.S.
TechCrunchSo why is MySpace able to maintain its lead in the U.S.? It's all about music, says Michael Arrington, pointing out that the News Corp. site hosts millions of artist and band pages, which are collectively viewed by around 35 million people per month. Next month, MySpace will roll out the new MySpace Music venture with the major record labels, allowing users to stream their music catalogs live and for free. Merchandise, downloads, concert tickets and ring tones will also be features of the site.
Facebook, on the other hand, doesn't really have a music strategy. Bands can create Facebook pages, but they can't stream or sell music. It does have the application iLike, which runs through a partnership with Rhapsody, but even so, Arrington notes that the social music space is still totally dominated by MySpace, and likely will be for a long time.
Read more about it by clicking here.
Move Over Radio, Apple Ads Are Musical Tastemakers
VarietyIs Apple an electronics brand or a media outlet? At some point, Apple commercials have morphed into musical tastemakers, resulting in overnight stardom for the artists being featured. For instance, after the Canadian pop song "1234" was used to peddle the iPod Nano in September, it skyrocketed from 2,000 downloads per week to 73,000.
Apple asserts there is no set formula for picking artists used in campaigns. Israeli singer-songwriter Yael Naim was plucked out of obscurity when her song "New Soul" accompanied the Macbook Air ads in January. Without radio airplay or a major label push, the song debuted at No. 9 on the Billboard Hot 100, and there have been more than 1 million paid downloads of the tune in the last seven months.
Read more about it by clicking here.
Labels Plan Big Releases For Fall
Following two fizzled-out fourth quarters in a row, the major record labels have prepared a superstar-packed holiday shopping season, with U2, Beyoncé, Dr. Dre, Metallica, AC/DC, Jay-Z and top "American Idol" stars dropping albums through the end of 2008, label sources say. For an industry mired in an eight-year slump, with album sales down 115 so far this year, according to Nielsen SoundScan, the pre-Christmas schedule is a rare bit of good news.
Read more about it by clicking here.
The Top 100 Classic Websites
It's hard to imagine our daily existence without Google, Facebook and YouTube--and that's just the tip of the iceberg. Our collection highlights the top sites that have changed the way countless users experience the Internet. Check out PC Magazine's homage to the best classic Web sites on the Web.
Read more about it by clicking here.
BandsOfTheBay.com Announces 100% Music Sale Price To Bands In Alliance With EarBuzz.com
earBuzz.com, LLC, and BandsOfTheBay.com, announced a partnership that enables BandsOfTheBay artists to sell their music from BandsOfTheBay.com while retaining 100% of the purchase price of physical CDs and high-quality digital downloads. BandsOfTheBay.com, which launched in April, is fast becoming the San Francisco Bay Area's top local music website.
earBuzz is the first and only music store that returns a true 100% of the purchase price to artists on sales of both physical CDs and 256-bit song and album downloads. The move allows artists to increase their incomes without sharing a portion of the sales price with a music download or CD site. Traditionally artists have been asked to pay $4 processing fees by CD distribution companies and 50 percent of the download price.
BandsOfTheBay.com artists will be offered a free earBuzz.com membership for the first 3 months and will pay $5 per month thereafter.
Read more about it by clicking here.
ALLMANS RETURN TO BEACON
After canceling this year's run at the Beacon Theatre, the Allman Brothers promise to make the NYC venue the centerpiece of their 40th anniversary festivities next year.
IDOL COMPETITION
"American Idol" runner-up David Archuleta's first single, "Crush," reached #2 on the Hot 100 chart in its debut week. "Crush" charted one spot higher than winner David Cook's debut did in June.
MY SPACE OVERTAKES YAHOO ADS
MySpace owner Fox Interactive Media has overtaken Yahoo as the top display advertising property in the U.S., according to new data from comScore. In June, 56.8 billion display ads were viewed on the News Corp. company's sites, giving it a 15.2% share of the total U.S. display market. Yahoo, meanwhile, served 53.1 billion display ads in the same time period, accumulating a 14.2% share.
DOORS CLOSED
The Doors' Ray Manzarek and Robby Kreiger will have to pay $5 million to drummer John Densmore and the parents of Jim Morrison and Pamela Courson, Morrison's widow, as the legal battle between the former band members finally reached its conclusion. The lawsuit started in 2003, when Densmore sued his band mates after they "improperly invoked The Doors' name and images."
SWEDEN PINK
Pink Floyd's Roger Waters and Nick Mason were on hand in Stockholm to receive Sweden's Polar Prize honoring the band for their musical contribution to popular music.
WOLFGANG VAULT SETTLES
Bootleg archive site Wolfgang's Vault has reached a tentative settlement with the Doors and Santana, two of the artists that sued the site in 2006 for posting free online recordings and selling copyrighted merchandise.
KENNY AT CRACKER
Kenny Rogers new album, "50 Years," will be available exclusively at Cracker Barrel restaurants. Cracker Barrel has already sold albums by Alison Krauss, Amy Grant and Charlie Daniels.
"IDOL" UPS THE JUDGE COUNT
"American Idol" has added Grammy-nominated songwriter Kara DioGuardi to its panel of judges for the show's eighth season. DioGuardi's songs have appeared on records by Christina Aguilera, Gwen Stefani, Celine Dion, Faith Hill, Pink, Britney Spears, Miley Cyrus, the Jonas Brothers, Jessica Simpson and Nick Lachey, Kelly Clarkson, Carrie Underwood, Taylor Hicks, Bo Bice and Clay Aiken.
LEAKING "CHINESE DEMOCRACY" IS A BIG NO-NO
Kevin Cogill, 27, a Los Angeles man who allegedly posted nine pirated tracks from Guns N' Roses long-overdue album "Chinese Democracy," was arrested Thursday by FBI agents and charged with violating federal copyright.
Quotes of the week
"It's Hanson 2008, with Disney behind them ... How do you compete with that?"
-- Staind frontman Aaron Lewis, on the Jonas Brothers standing between his band's album, Illusions of Progress, and the top spot on the Billboard 200 chart, to MTV. Really, Aaron? That's what kept you from the #1 slot? Then what stopped you from getting the #2 slot? Oh, yeah ... Kid Rock. Can't you compete with that? Evidently not."I had a big weekend. I got married to Portia de Rossi! Sorry, John Stamos ... this one's taken."
-- Ellen DeGeneres writing about it all on her website. Don't worry about Stamos, Ellen. Worry about Jodie Foster, Rosie O'Donnell, etc."Making clothes together in our studio makes us feel complete. We probably sound like a group of grannies in a knitting circle, but it's the truth and it gives us some control over our visual identity. When you are a big band and everyone is taking shots at you, the more things you can do together the better."
-- Chris Martin, on the members of Coldplay's hobby of knitting together."You can always get her excited by saying, 'Hey, you want to go shoot some guns or maybe we can go burn this old house down.'"
-- Country heartthrob Blake Shelton, on the kind of dates he goes on with his girlfriend, fellow country singer Miranda Lambert."What do I make of her brother's book? I don't think it would be intelligent to comment. But you'd be hard-pushed to be a homophobe and marry Madonna."
-- Guy Ritchie, in a new interview with The Observer magazine, on Christopher Ciccone's allegations that he is a homophobe."I look up to people like Joan Jett, Pat Benatar, Freddie Mercury and Cyndi Lauper. I want to have that same type of appeal. If people want a role model, they can have Miley Cyrus."
-- Katy Perry tells the new issue of YRB magazine
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Michael Phelps Returns To His Tank At Sea World
ORLANDO -- Fourteen-time Olympic gold medalist and SeaWorld main attraction Michael Phelps returned to his seven-million-gallon water tank Wednesday to resume his normal schedule of performing in six shows a day for marine park crowds every day of the week.
Phelps, the 6'4", 200-pound aquatic mammal, and the first ever SeaWorld swimmer to be raised in captivity by foster swimmers (Mark Spitz and Dara Torres), was recaptured by trainer Bob Bowman in a hoop net baited with an entire Dutch apple pie following Phelps' final Olympic event last Sunday. Phelps was then tethered to the rudder of a container ship bound for St. Petersburg, guided down local waterways, and introduced back into his home habitat, the tank in SeaWorld's 5,500 seat stadium, known to park officials and visitors alike as "Phelps' Happy Harbor."
Read the rest here and laugh: http://www.theonion.com/content/news/michael_phelps_returns_to_his_tank.
THE RADIO INTERVIEW on 'THE AMERICAN PERSPECTIVE' - From newsblaze.com
"Steve Meyer is on the front line of global music sales and distribution which he expects will soar to pocket-bursting levels. What's more, he shares his insight and ingenuity with us. Steve gives us both historical perspective and futuristic vision as he chats with Judy about the love of his work, trends of the business and his personal points of view about success, happiness and blending life with the lust for life. Steve joins Judy and helps us discover the thrill of having it all with a sense of balance and purpose. "
You can listen to an interview I did with Judy Piazza of 'The American Perspective' by clicking here: (It runs about 15 minutes)
http://www.thesop.org/index.php?id=10306.
The Blogs
Check out a great blog by Jerry Del Colliano, the Director Executive Programs, Clinical Professor Music Industry & Recording Arts, at the Thornton School of Music,University of Southern California, by clicking here: http://www.insidemusicmedia.blogspot.com.
Box Office
Check The Daily & Weekly Box Office (and more film info) at: www.boxofficemojo.com.
TinyURL
Check out www.tinyurl.com where you can make a smaller URL that will work for any webpage you wish to link to or reference. (As you can see, I'm using it in my news stories above!)
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