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The Hudsucker Proxy: The Music Biz?
March 7, 2008
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"Well, to be honest, I thought you were an imbecile. But then I figured out you WERE a swell guy ... A little slow, maybe, but a swell guy. Well, maybe you're not so slow, But you're not so swell either. And it looks like you're an imbecile after all!"
-- From 'The Hudsucker Proxy'In Joel and Ethan Coen's 1994 fictitious film, "The Hudsucker Proxy," a naive young executive is elevated up to the position of president at Hudsucker Industries because a ruthless member of the board of directors, Sydney Mussberger, mounts a scheme to buy up the controlling interest in the company's stock before Hudsucker's shares are made available to buy for the public after the death of the company's founder. Hoping to temporarily depress the stock price, Mussburger planned to install "some jerk" as a proxy for the deceased president.
The plan almost works, except the "jerk," Norville Barnes, invents the hula hoop, and all Mussberger's best-laid plans are soon laid to rest.
While watching the film again this week, I realized that if the Coens made the film today, Hudsucker Industries could be a music company. If there was ever a time when a music company needed something as insanely successful as the mindless hula hoop to rejuvenate sales beyond expectations, it's now.
But alas, there is no hula hoop, no silver bullet, no magic wand to wave to create such a product.
Oh, wait ... actually there is such a product. It was created seven years ago, and it's called the iPod. And now there's over 100 million of them out there.
Ah, but those Hudsucker Board of Directors guys at the labels ignored the iPod in its infancy. They ignored it until iTunes sold its first BILLION songs. Song sales today have surpassed four billion.
One would think that when iTunes sold its second or third billion songs that SOMEBODY at the labels might have seen the handwriting on the walls in all the meeting rooms they were meeting in, while discussing how CD sales were decreasing year over year. Uh-uh. Didn't happen. Instead, the label execs started attacking iTunes and blaming a lot of their problems on the very existence of the iPod and iTunes. Of course, they completely forgot that the next gen of young people started downloading songs for free on Napster and other places as early as the mid-1990s.
In so many ways, the iPod was the "hula hoop" for the music industry. It was a product that exploded in the marketplace and created the demand for consumers to get more music. A visionary would have seen the incredible opportunities available for the music industry. Steve Jobs thought the labels would actually thank him at one time. Har-har-har-dee-har-har.
I'm not going to get into all the reasons why the iPod should have been embraced by the music industry, because I've done it too many times before. But as Sony's Walkmantm revolutionized the portability of popular music and exploded cassette sales, the iPod did the same for the sales of online music. And NO, iTunes and the iPod did NOT "cannibalize" CD sales. Bad music, over-priced CDs, and the endless "Now That's What I Call Music" compilations did that more than anything.
While the executives in the industry still try and figure out how this will all end up in the very near future, time is running out. Basically, it's bottom of the ninth, two outs, and to win the game, the labels need the bases loaded and a grand-slam home run. The Vegas oddmakers would not suggest placing a bet on the chances of that happening.
In a recent interview, Windows consumer marketing vice president Brad Brooks said that Microsoft had been testing lower prices over the past few months and was surprised to find that the amount of revenue lost was more than made up for by an increase in the number of PC buyers willing to shell out for an upgrade.
Well, at least Microsoft and Brad get it. They have reacted to the marketplace and seen positive results. Maybe some label executive will be bold enough to suggest that lower CD prices could result in an increase in the number of people buying more CDs and hence more revenues. Of course, at some point, whether the labels want to or not, they will be forced to lower CD prices significantly. It will be the only way to get rid of all the inventory out there once physical sales become almost meaningless. In the meantime, why wait?
If you read my commentary last week, and Chris Anderson's article "Free! Why $0.00 Is the Future of Business," then you already know where almost all consumer product business and marketing is headed. Those that choose to ignore this strategic alliance future where companies create symbiotic relationships, will be left in the dust.
And guess what? New survey results from RealGames consumers/customers playing downloadable casual games from the RealGames family of sites, but data nonetheless, suggests that nearly 90% will watch video ads before and during natural breaks in casual games in exchange for free game play. Just like Anderson said. It's already happening. More important, The Yankee Group, notes the report, recently reported that the global in-game advertising market which generated $77.7 million globally in 2006 will grow to $971.3 million by 2011. Isn't there a way to create the same type of model for the music business? Is anybody in the industry even exploring these possibilities?
If so, love to hear about them folks.
And Now This...
In the meantime, more artists will continue to create their own alliances, and new deals without labels in mind.
This week, Trent Reznor made downloads of the new Nine Inch Nails album available for sale on the Internet at the band's website ( www.nin.com ), and offering an edited version for free.
According to the information, Ghosts I-IV, is a 36-track, two-hour instrumental collection recorded over "an intense 10-week period" and is available immediately as a download for $5, including a 40-page pdf file formatted booklet. Ghost I, the first nine tracks, can be downloaded in high-quality, DRM-free MP3 form for nothing.
The album is also available in a variety of configurations and prices, including 2,500 personally numbered and signed by Reznor. All the physical copies come with free downloads as well. The album will hit U.S. retail on April 8.
Artists To Labels: Where's Our Napster Money?
From cnet.comSo what happened to all the settlement money that Napster and Kazaa were forced to pay the record labels? That's the question some music artists are asking, according to a story that appeared in The New York Post. The Post quoted two talent managers who said that artists have yet to see their cut of the Napster-Kazaa settlements. This isn't pocket change we're talking here. Napster paid $270 million to settle its copyright infringement case and Kazaa forked over $100 million. Some on the talent side suspect the top four record companies of foot dragging or playing "hide and seek" with the cash.
If nothing else, the controversy illuminates the degree of distrust that exists between artists and the labels. As CD sales continue to shrink, look for more squabbling between them. Warners, for its part, has already moved on paying its artists.
"The labels are always going to try to hide the money or use some self-serving formula when they finally get around to paying the artists," said Jay Rosenthal, counsel for Recording Artists Coalition
Read more about it by clicking here.
Musicians Still Waiting On A YouTube Payday
From cnet.comHow important is music to Google's YouTube.com? Out of the 12 all-time most-viewed YouTube clips, nine are professionally made music videos. At least one rock video has been watched more than 75 million times on YouTube. But do the performers in the videos share in the advertising revenue generated by their work?
Some top music managers have told CNET News.com that their clients haven't seen any money from the licensing deals the four largest music labels have signed with YouTube over the past 18 months. According to a statement from Google-owned YouTube, the Web site is banking ad dollars generated by the artist's music and is sharing that money with the record labels. What the managers want to know is why little or nothing has trickled down to the artists.
Read more about it by clicking here.
Chinese Music Industry Groups File Suit Against Baidu
From cnet.comTwo industry groups representing China's local musicians and songwriters have filed a lawsuit against the country's Web search leader, Baidu.com, accusing it of copyright violation. The move signaled that domestic artists as well as international firms are disgruntled at the firm's free music search service.
Universal Music, Sony BMG Music Entertainment (Hong Kong), and Warner Music Hong Kong have asked a court to order Baidu to remove all links on its music delivery service to tracks that they own the rights to, the international record industry organization IFPI said. IFPI has said more than 99% of all music files distributed in China are pirated and that the country's total legitimate music market, at $76 million, accounts for less than 1 percent of global recorded music sales.
Read more about it by clicking here.
Coming Soon: Movies On Flash Memory Cards
From cnet.comGALWAY, Ireland--PortoMedia is probably the only start-up in the world inspired by the movie Carlito's Way. Company founder Chris Armstrong explains: Four years ago, he set out to his local DVD store to rent a movie. First, he stopped at the ATM to get cash. The store didn't have Twelve Angry Men, the movie Armstrong wanted. He settled for Carlito's Way instead. He then waited in line, paid for his rental, and returned to his car. Then he remembered another movie, Gone in Sixty Seconds, the title of which got him wondering why the process of renting movies, from start to finish, can take so long. While other companies see the Internet as the answer to that question, Armstrong has another idea. PortoMedia is setting up kiosks that will let consumers download movies to a flash memory key or portable hard drive.
Read more about it by clicking here.
Facebook Seeks To License Music
From Financial TimesFacebook has approached the major record labels about creating a music service for the popular social-networking site. The approach, described as "preliminary," follows a similar move by News Corp.'s MySpace earlier in the year. MySpace is in talks to create an ad-supported music service with music's big four-Universal, Sony BMG, Warner Music and EMI.
The record companies see social networking as a way to offset shrinking physical album sales. They also see ad-supported music as a way to combat Apple's dominant share of the digital music market. Details about the social network's latest music plans remain vague, but record execs expect it to be a lot like MySpace's proposed service, offering free, ad-supported streaming music as well as the ability to pay for MP3 downloads, which are compatible with any music device.
Read more about it by clicking here.
Are Copyrights Like Property Rights?
From Ars TechnicaCopyrights are often compared to property rights, especially by those who are opposed to the practice of file sharing, which often includes the illegal exchange of copyrighted material over a peer-to-peer file-sharing network. Those who want to increase the power of copyright owners stress the laws' similarities, while those who want to decrease the importance of intellectual property, resist the analogy.
The scarcity argument claims that when a resource is overused, its value is diminished. This is true with respect to land, where communal land inevitably becomes over-grazed and over-farmed, but not true when it comes to copyrighted material. An idea or work suffers no harm from over-use or over-distribution; in other words, it's not an exhaustible resource.
The reward argument claims that people must be able to keep the goods they produce or they will under-produce. This argument does apply to copyright law; after all, what's the incentive for an artist to produce if someone can just come along and reproduce the same thing? Copyright law shouldn't be universally applied to all categories of creative works. For example, would there be a shortage of photographs if no copy protection for photographers existed? Would there be a shortage of music? No, which is why the law needs to be reexamined.
Read more about it by clicking here.
NEXT TIME YOU HERE THOSE HOLLYWOOD PEOPLE CRYING THE BLUES, CONSIDER THESE STATISTICS
The Motion Picture Association of America reported that the amount moviegoers around the world spent on taking in flicks last year was $26.7 billion.$17.1 billion-the amount spent on movie tickets outside of North America. $9.6 billion-the amount spent on movie tickets in the United States and Canada. And that's not even counting the cost of your popcorn, parking, soda and other candy.
THE NEW FACE OF LOUIS VUITTON?
Keith Richards will be one new face of Louis Vuitton as the Rolling Stones guitarist has inked an endorsement deal with the French luxury fashion brand. It is the first endorsement deal for the 64-year-old rocker, known as much for his drug binges as his music. The new campaign was shot by Annie Leibovitz.
IDOL 'GIVES BACK' AGAIN THIS YEAR
Bono, Reese Witherspoon, Miley Cyrus, Mariah Carey, Carrie Underwood and Snoop Dogg are among the many celebrities slated to participate in American Idol's second "Idol Gives Back" special, taking place Apr. 9. Last year's event raised $76 million for kids in need.
IF YOU'RE GOING TO SAN FRANCISCO
Radiohead, Tom Petty and the Heartbreakers and Jack Johnson will headline the inaugural Outside Lands Music & Arts Festival in San Francisco's Golden Gate Park Aug. 22-24, organizers announced Tuesday. Tickets go on sale at the end of March.
OURSTAGE AND AOL
Ourstage, which lets artists submit original music videos for monthly contests in which users vote for their favorite acts (the top prize each month is $5,000), has reached a distribution deal with AOL Music giving the site featured spot on the music portal.
INDIANA RETURNS IN MAY
"Indiana Jones and the Kingdom of the Crystal Skull" will premiere May 18 at the Cannes Film Festival, Variety reports, four days before it opens worldwide.
ESSENCE IN N'AWLINS
Kanye West, Chris Rock, Chris Brown, Mary J. Blige and Jill Scott are among the headliners for the 2008 Essence Music Festival, organizers said Thursday. The annual celebration of black music and culture is scheduled to take place in New Orleans, July 4-6.
FOR CREATING THOSE BOY BANDS, HIS SENTENCE SHOULD BE HARSH
Lou Pearlman, creator of the Backstreet Boys and 'N Sync, will plead guilty to charges of money laundering and making false statements as part of a plea bargain in his case. Pearlman is due to appear in court Thursday to enter his plea. Prosecutors say they still intend to seek a hefty prison sentence.
CONGRATS TO
Kenny Chesney, who leads the field in nominations for the 43rd Annual Academy of Country Music Awards with a total of 11. Rodney Atkins earned six nominations, Brad Paisley racked up four and Miranda Lambert and Taylor Swift earned three apiece. The awards will be presented in a May 18 ceremony.
CONGRATS 2
To Lionel Richie and Steve Miller, who will receive Golden Note Awards at ASCAP's annual awards ceremony next month. The honors go to songwriters, composers and artists who have achieved "extraordinary career milestones."
CMA GETS FAITH
Faith Hill will perform at this summer's CMA Music Festival for the first time in 10 years, joining Alan Jackson, Carrie Underwood, Sugarland, Taylor Swift, Dwight Yoakam, Rodney Atkins, Josh Turner, Miranda Lambert, Kellie Pickler, and others. Jewel will also make her CMA Music Festival debut. The Country Music Association's annual festival will be held June 5-8 in downtown Nashville.
ON THE ROAD AGAIN
Dave Matthews Band has announced plans for a North American tour this summer, kicking off May 30 in Burgettstown, Pa., during which they'll premiere songs off their forthcoming studio album, the group's first since 2005's Stand Up.
ANGELS PLOTTED TO KILL MICK?
A new BBC documentary claims that Mick Jagger was the target of an assassination plot by the Hell's Angels after he vowed never to use them as security again following the death of an 18-year-old fan at Altamont. In return, in 1969 members of the biker gang allegedly came up with a plan to kill Jagger at his vacation home in Long Island, New York, but the plot was foiled by stormy seas.
PASSING
Jeff Healey, the blind, Grammy-nominated jazz-rock and blues musician, died Sunday, following a lifelong battle with cancer, according to his bandmate Colin Bray. He was 41.
Quotes of the week
"I'll tell you the dead-honest truth: When I heard him sing 'Maggie's Farm' and I couldn't understand a word, I was furious. I ran over to the sound man and said, 'Fix the sound so we can understand him!'"
-- Pete Seeger, still bitter about his protégé Bob Dylan's going electric at the 1965 Newport Folk Festival, in Billboard magazine. No offense, Pete, but a whole lot of us DID understand Bob ... sorry if you didn't."If you are still at the same point you were after six albums, and all of them came out on a major label, I don't want to hear about how 'the label didn't understand us,' or 'our management didn't make us a priority.' If after that time you are still at the same level, either you suck, or people do not like you."
-- Anonymous"The performers really don't know how they get paid. You just assume you get 50 percent of something... What's happening here are old contracts are colliding with new technologies."
-- Jay Rosenthal, music manager, legal counsel for the Recording Artists Coalition, an organization co-founded by singers Don Henley and Sheryl Crow."I'm not sure I want to be up on a stage when I'm 64 or 65. In my father's case, I think he's going to die onstage and I respect that very much. In my case, in 15 years I'll probably look ridiculous singing 'Bailamos.'"
-- Enrique Iglesias, telling the Associated Press he's planning to call it a career by the time he's 50, unlike his superstar father, Julio Iglesias, who at 64 maintains a busy performance schedule. Of course, Enrique is assuming he'll still have a career when he's 50. Lots of luck, Enrique."You know when you go around to your aunty's and the little chihuahua gets on your leg because they think it's something else? That's my relationship with Ryan. It's like: Off!"
-- Simon Cowell, on how he gets along with Ryan Seacrest, on "Live with Regis & Kelly""To me, Botox is no more unusual than toothpaste. It works, you do it once a year --who cares?"
-- Simon Cowell to British Glamour, on maintaining his youthful facade."It's fun trying to get pregnant."
-- Gwen Stefani, on the process of baby making, to V magazine. Gee, really, Gwen? You just figured that out?"It's double the love, and it's also double the crying and the screaming."
-- Diddy, giving advice to ex-girlfriend Jennifer Lopez as a parent of twins. Yeah, and double the expense.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Report: 6 Out Of 10 Americans Cannot Locate Payless Shoes On A Mall Map
WASHINGTON-An alarming new study conducted by the Department of Education has found that 60% of all Americans are unable to locate the major retail outlet Payless Shoes when presented with an ordinary shopping-center map. The study, which surveyed 200 consumers, has raised a number of troubling questions about the public's grasp of basic mall geography, its ability to identify key regional chains, and its awareness of the diverse brands and logos that make up today's world.
"Not only did a majority of Americans fail to find Payless Shoes on the map, but, more disturbingly, many didn't even know which floor to look on," said Dr. Howard Saunders, a cultural studies professor and the study's lead researcher. "To see countless men and women point to the outline of a parking garage and call it the largest footwear retailer on earth-well, it makes you wonder about our priorities as a society."
Read the rest here and laugh: http://tinyurl.com/ysllhv.
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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