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Radiohead Is #1, CD Prices, Real Artists And The Real Holiday Sales Story
January 11, 2008
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"I'll namecheck Radiohead on this--they've done a pretty suave marketing plan on this new record. I think generally it's been a pretty cool thing, but what they've done is used those (sales) numbers in a way that they can spin them anyway they want cause you don't know what they are."
-- Trent Reznor, talking to CNet.com about his online experiment with Saul Williams, which he modeled after what Radiohead did late last year.With over 120,000 copies sold this past week, Radiohead's "In Rainbows" CD charts at #1 on the Billboard Top 200 Album Chart.
As we all know by now, "In Rainbows" was previously available for several weeks as a "name your own price" download exclusively from Radiohead.com, and although sales figures for that experiment have not been released, the band has said that they were quite happy with the overall results. If we now view what Radiohead did as part of a bigger picture in what Reznor accurately calls above "a pretty suave marketing plan,", then it's obvious the band succeeded in maximizing every avenue of exposure and sales.
Renor's interview with CNet.com about his experiment provides some great insights. (You can read his comments here: http://tinyurl.com/2k7ubt ) Among other things he offers this suggestion: "I think if there was an ISP tax of some sort, we can say to the consumer, ''All music is now available and able to be downloaded and put in your car and put in your iPod and put up your a-- if you want and it's $5 on your cable bill.'" Whether you agree with what Radiohead and Trent have done, it's worth reading his comments to see just how big a part the Internet now plays in the overall marketing plans for all forward-thinking artists and industry people.
In more news: I knew Warner Music Group stock was still sinking, but I thought it certainly wouldn't fall below the $5 per share mark. I was wrong. This week WMG stock sunk into the high $4 range. One would think the mere catalog at the WMG would liquidate for a price higher than that if sold off. Add to that all the capital assets and who knows what the real value is? I wonder why Rupert Murdoch or Kirk Kerkorian hasn't swooped in and bought a few million shares by now. Stay tuned.
Next: For years now, I've been talking about how CD pricing in the marketplace is no longer justifiable. This week comes the news that the average selling price of a DVD dropped 0.5% to $14.63. (See the story below "DVD Feels First Sting Of Slipping Sales")
While $14.63 might be the average price for a DVD, I found tons of DVDs on sale during the holidays and after for as low as $5, and many for $7. And they weren't DVDs of bad movies' they were just a few months older than the new releases. But there they were on tables in Wal-Mart, Target, the supermarkets, drugstores, and almost any mass merchandiser.
With DVDs now selling at such low prices, how much longer can the music industry keep CD prices at the $10 level in an ever-shrinking disposable income market with a multitude of entertainment options?
The good news for the industry is that despite current CD prices, and (again) the rampant downloading the RIAA says is killing everything, and all the other problems people can point their fingers at, one can look at the charts and see again that REAL artists sell BIG quantities at retail.
Alicia Keys has sold over three million in just eight weeks, The Eagles have sold over three million in just 10 weeks, Chris Brown is over one million in just nine weeks, Garth Brooks over a million in nine weeks, Carrie Underwood two million in nine weeks, and new artists like Colbie Caillat, Keyshia Cole, and Taylor Swift are all enjoying platinum success stories.
All these artists have one thing in common: They've made great albums that contain a whole lot more than one or two disposable tracks that will end up on the next "Now That What I Call Music" volume. I've said it before and I'll say it again and again. The best cure for the industry's ills, is developing more artists like those mentioned above.
Building rosters of real artists instead of warehouses to store the returns of disposable product will result in a whole lot more at retail.
And just think about how many consumers might actually get in the habit of buying lots of music again.
Last: Many of you have probably heard on one of the cable news networks or elsewhere that holiday sales were not that great.
According to an update from ComScore, Inc. for the 57 days of the 2007 holiday season (November 1 - December 27), nearly $28 billion was been spent online during the season-to-date, marking a 19% gain versus the corresponding days last year. Online holiday sales were up 20%, and total retail almost 5% over last year.
You can read the complete breakdown here:
http://blogs.mediapost.com/research_brief/?p=1612
It's obvious those sound-bytes you've heard on TV don't tell the whole picture.
And Now This...
THE DRM WALLS COME TUMBLIN' DOWN...THE FINALE
Last week I told you that WMG's Edgar Bronfman Jr. had finally waived the white flag an unleashed WMG's catalog of three million songs without DRM, after being a staunch pro-DRM advocate.
If you haven't already heard, Sony BMG Music Entertainment became the last of music's Big Four to free its music from digital rights management software with a plan to do so during the first quarter. Previously, the Universal Music Group, Warner Music Group and EMI Group all announced plans to sell DRM-free songs.
There seems to be a whole lot of fine print though in what SonyBMG is doing, however. According to an article titled "Sony's Non-DRM Dud" (you can read it here at: http://tinyurl.com/3cctpz ), "Basically, starting in mid-January, people can buy DRM-free digital albums from Sony by purchasing a gift card called Platinum MusicPass at retailers like Target, Best Buy and Trans World Entertainment's FYE. That's right: You'll have to get up and go to a physical store, purchase a physical card (for $12.99, more than most online stores charge), bring it back to your computer at home, and then type a numerical code from the card into the MusicPass website."
If that is the plan, I''ve already written my "I told you so" about how long it might last against the competition. But, whatever the outcome, DRM is now officially o-v-e-r.
Now, perhaps all the labels can make up for some of the time they wasted in all the anti-DRM dialogue they spouted last year when Steve Jobs (and others) called for an end to DRM, something consumers had long wanted.
The end to DRM will no doubt increase online sales of music, and many now believe DRM-free music means there will be new distribution models and strategies.
Anything that increases the sales of music online and decreases theft is a plus. That's what Steve Jobs and others said over a year ago.
And This...
Last week my commentary was about the RIAA based on an article published in The Washington Post, and referenced in the newsletter.
This past week The Washington Post admitted its story accusing the RIAA of arguing it was illegal to rip CDs to a personal computer was wrong, a week after defending their writer, who debated the RIAA's head man Cary Sherman on NPR.
The RIAA's lawyers actually charged that the actions of the accused defendant were illegal because the songs were in a shared folder on his computer for distributing them on illegal P2P network KAZAA, and hence were not for "personal use."
I felt it necessary to report this so you, the readers, don't read what happened elsewhere and think I ducked the issue.
I still maintain the RIAA's actions in filing these lawsuits do nothing, and have done nothing, to diminish illegal P2P file-sharing. All the data about how many people still doing so contradicts whatever press releases the RIAA puts out to the contrary.
While Cary Sherman and his RIAA team spent the last two week's correcting The Washington Post story, they took time away from trying to solve some of the more important ongoing industry problems.
When the RIAA does decide to address the industry's problems at large instead of filing these lawsuits, I'll be the first to commend them.
Album Sales Plunge In '07 As Digital Growth Slows
The music industry had an awful 2007 as total album sales plunged 15% to 500.5 million units, according to tracking data from Nielsen SoundScan. Online album sales barely rose at all, up 2.4% to 30.1 million units; growth was 19% in 2006. The figures represent the lowest total and the steepest decline since Nielsen began measuring music sales in 1993.
Experts (predictably) blamed piracy for the declines, but they also cited competition from other entertainment sectors like videogames.
However, overall music sales, which include single and digital track sales, rose 14% to 1.4 billion units, driven mostly by digital tracks, which rose 45% to 844.2 million units. However, the industry driver showed a significant growth decline, up 45% in 2007 after 65% growth in 2006.
Read more about it by clicking here.
Antitrust Suit Filed Against Apple
An antitrust lawsuit filed against Apple on Dec. 31st charges the company with maintaining an illegal monopoly on the digital music market.
Plaintiff Stacie Somers, represented by attorneys Craig Briskin and Steven Skalet of Mehri & Skalet PLLC, Alreen Haeggquist of Haeggquist Law Group, and Helen Zeldes, alleges that Apple dominates the market for online video, online music and digital music players and that its dominance constitutes a violation of the Sherman Antitrust Act. The attorneys are seeking to have their lawsuit certified as a class action.
"Apple has engaged in tying and monopolizing behavior, placing unneeded and unjustifiable technological restrictions on its most popular products in an effort to restrict consumer choice, and to restrain what little remains of its competition in the digital music markets," the complaint states.
"Apple's CEO Steve Jobs had himself compared Apple's digital music dominance to Microsoft's personal computer operating system dominance, calling Apple's Music Store 'the Microsoft of music stores' in a meeting with financial analysts."
Read more about it by clicking here.
Philips Partners With Rhapsody For Digital Music
Dutch electronics group Philips is forming an alliance with digital media company RealNetworks to offer online music using Philips' music players, the two companies said Sunday. Philips, which is redefining its consumer businesses as a broad "lifestyle" company, said it would start selling portable and home audio devices compatible with the Rhapsody subscription service early this year.
Read more about it by clicking here.
Napster Moves To mp3-only Music Download Format
Napster, one of the largest digital music retailers, said Monday it would start selling downloads in the mp3 format from the second quarter of this year in the latest blow to copy protection for songs bought online.
Napster had sold songs protected with Microsoft's Windows-based digital rights management (DRM) to prevent buyers from illegally making multiple copies or distributing songs to other users.
Read more about it by clicking here.
Sony BMG To Drop Copy Protection For Downloads
Hoping to boost digital sales, Sony BMG finally will join EMI, Warner Music Group and Universal Music Group in dropping DRM.
Read more about it by clicking here.
Roadblocks En Route To Free, Legal Music
Free music -- the legal kind -- is supposed to make a splash in 2008. A handful of analysts are calling for the music industry to focus less on CDs, digital rights management and subscription services, and more on giving their product away for free. Whatever gold that is still left to be mined from the music industry is supposed to be had through advertising revenue, according to some.
But exchanging songs for ad money is a frightening proposition for music executives who have depended on hawking discs for decades, and are still putting up major roadblocks for the free, ad-supported model. Couple that with less-than-stellar execution on the part of companies trying to give music away, and you have a business model still trying to get into first gear.
Read more about it by clicking here.
DVD Feels First Sting Of Slipping Sales
Could the luster be coming off the shiny DVD? For the first time since the format was launched in 1997, consumers spent less on DVDs than in the previous year.
Total sales and rentals of DVDs amounted to $23.4 billion in 2007, about 3% lower than in 2006, according to industry figures that the Digital Entertainment Group released this week at the Consumer Electronics Show in Las Vegas.
Read more about it by clicking here.
MTV Networks Unveils Targeted Online Syndication Strategy
MTV Networks has entered into long-term deals with a select group of video sites to deliver a vast library of short and long-form video content as part of its targeted online syndication strategy. "We spent a lot of time talking to a lot of different companies and taking a hard look at how they approach the market and how they approach consumers," Greg Clayman, MTVN's EVP/Digital Distribution and Business Development, told Online Media Daily.
Read more about it by clicking here.
The Untold Story: How the iPhone Blew Up the Wireless Industry
From WIRED magazineThe demo was not going well. Again.
It was a late morning in the fall of 2006. Almost a year earlier, Steve Jobs had tasked about 200 of Apple's top engineers with creating the iPhone. Yet here, in Apple's boardroom, it was clear that the prototype was still a disaster. It wasn't just buggy, it flat-out didn't work. The phone dropped calls constantly, the battery stopped charging before it was full, data and applications routinely became corrupted and unusable. The list of problems seemed endless. At the end of the demo, Jobs fixed the dozen or so people in the room with a level stare and said, "We don't have a product yet."
Read more about it by clicking here.
Henry Diltz Displays His Rock 'n' Roll Picture Show In 'California Dreaming'
It wasn't his camera that won Henry Diltz the ultimate all-access pass into rock 'n' roll's psychedelic age. The founding member of the Modern Folk Quartet captured the public and private lives of music legends by first earning their trust as a fellow musician.
"A musician's life is hanging out, and I knew how to hang out," says Diltz, 69. "I was with my friends. I had no schedule, no agenda. I was an everyman, but I happened to have this entrée in a town and a time full of great musicians."
He bought a $20 used camera while on tour and sold a shot of the Lovin' Spoonful to Teen Set magazine for $100. Roughly 40 years later, his archives comprise California Dreaming (Genesis Publications, 344 pages), a large-format book of more than 500 photos taken between 1966 and 1975, when L.A. was a countercultural hotbed.
Read more about it by clicking here.
Two Law Students Represent U. of Maine Students Accused of Illegal File Sharing
(My thanks to Middle Tennessee State University's Dept.of Recording Industry Professor Paul Fischer for sending me this)Law students don't usually represent other students who are accused of breaking the law. But that's precisely what's happening at the University of Maine. Hannah Ames and Lisa Chmelecki, third-year students at the university's law school, are defending two University of Maine students who are being targeted by the Recording Industry Association of America for allegedly swapping music files online in violation of copyright law.
The law students are with the university's Cumberland Legal Aid Clinic. It offers free legal assistance to low-income people and is located in a building next to the law school in Portland. Ms. Chmelecki and Ms. Ames argue that the suit against John Doe No. 16 and 18 should be dismissed because it is too nebulous and broad. As a result, enforcement of the subpoena should be put on hold, they say. In a court brief filed last month, the two cite a 2007 Supreme Court case, Bell Atlantic Corp. v. Twombly, which said a complaint can be dismissed if it does not allege a specific and plausible claim of wrongdoing.
"The complaint lacks any facts-let alone proof of 'substantial evidence'-to show the plausibility of plaintiffs' allegation of copyright infringement," the law students' brief reads.
Read more about it by clicking here.
CNET's Complete CES Coverage
Read it all!
Read more about it by clicking here.
CHRISTINA DVD ON WAY
Christina Aguilera is releasing a new concert DVD. The singer will release "Back to Basics -- Live and Down Under," featuring her performances in Sydney, Australia in July, exclusively at Best Buy on Feb. 5th.
THEN THERE'S THIS FOR ALL THOSE WAITING
Three versions -- CD, CD/DVD and a gift box packed with goodies -- of "Spice Girls: Greatest Hits," featuring 13 favorites and two new tunes, hit stores Jan. 15th. Okay, "13 favorites" maybe, but "Greatest Hits"? Their greatest hits could be an EP.
ON THE ROAD AGAIN
Def Leppard has announced dates for the U.S. leg of an upcoming world tour, kicking off in March in Greensboro, North Carolina. They are also prepping the release of a new studio album, due out later this year.
NOT IDOLS ANYMORE WITH THEIR LABELS
J Records has dropped "American Idol" winners Ruben Studdard and Taylor Hicks from its roster. Runner-up Katherine McPhee was also dropped by RCA.
JOHN MAYER BREAKS UP WITH YET ANOTHER FEMALE
John Mayer and Minka Kelly have called it quits after a brief romance. The question now is: Who is Minka Kelly?
I'M SURE THERE ARE MORE IMPORTANT TOPICS
Dr. Phil McGraw canceled his plans to devote an upcoming episode of his talk show to the troubles of Britney Spears, telling Entertainment Tonight that the "situation is too intense at this time" to proceed. Translation: "Damn, it would've been a ratings home run, but this girl needs some serious help."
RECUPERATING
Stephen Stills is recovering after surgery for prostate cancer, his wife said last week. In a statement, Stills' wife, Kristen Stills, said the "procedure went remarkably well and he couldn't be better. He will be home by noon tomorrow and the pain will be minimal."
RECUPERATING 2
According to his publicist, Eminem is recovering at home and "doing well" after being hospitalized over the holidays with a bout of pneumonia..
DIVORCE COURT
Australian singer and one-hit wonder Natalie Imbruglia, best known for the late '90s single "Torn," announced she is separating from her hubby of four years, Silverchair frontman Daniel Johns.
MORE PRAISE FOR 'NO COUNTRY'
The critics have chosen "No Country for Old Men," the Coen brothers' latest film, for Best Picture, Best Director and Best Supporting Actor at Monday's Critics' Choice Awards.
PASSING
"Ronnie" Johnson, an executive vice president of Capitol Music Group, died this past week at age 49. Johnson succumbed to a heart attack at his home on Sunday. He began at Reprise Records and later worked at Polygram Label Group, Island Records, Mercury Records and Motown Records. He moved to Atlantic Records in 1999 and went to Capitol early last year.
Quotes of the week
"Here's what I learned about myself ... show or no show, I really enjoy drinking in the morning."
-- David Letterman, on being away from his daily Late Show job for two months. Do it more, Dave .. .you'll be a whole lot funnier."Every now and then people would speak of this legendary Connect 4 champion ... BEYONCE!!!. I had 2 play her. [She] beat me 9 times in a row!"
-- Kanye West, in a blog post, on his unlikely Connect Four game rival. Who said all rich rock stars know how to do is party, party, party?"Drinking long-term is a lot worse than doing heroin. Alcohol's a real poison."
-- Amy Winehouse, in the new issue of OK! Magazine. And if anyone would know, it's certainly Ms. Winehouse."People forget about Britney for all the time she was a young, talented, delightful woman. Is she having a rough time right now? Yes, she is. Why? I'm not really going to go into that at this point."
-- Dr. Phil McGraw, discussed Britney's latest round of problems. "All the time she was a young, talented, delightful woman"? I guess that means now she's "old, untalented, and not so much fun to be around"?"I genuinely think that if I sat down with Britney and, No. 1, remind her of all the good things in her life -- which are her kids, her money, her success, everything -- I'd try to give her a sense of perspective. And then I'd take her out of where she's living at the moment and ask her to go and live with her family -- and live normally -- for six months."
-- Simon Cowell, in People magazine, on what he would do to get Britney back on track. Sorry, Simon, at this point, it looks like Ms. Spears needs way more help than that.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Someone Totally Doing It Somewhere Right Now
CHICAGO-According to a groundbreaking new study published Monday in The Journal Of The American Statistical Association, somewhere on the planet someone is totally doing it at this very moment.
"Of the 6.7 billion inhabitants of Earth, approximately 3.5 billion have reached sexual maturity," said Dr. Jerome Carver, a mathematics professor at the University of Chicago and lead author of the study. "From a statistical perspective, it simply stands to reason that at least two of these inhabitants are totally going at it right now. Like, as we speak."
"But it's probably way more than that," Carver added. "Like at least a hundred."
Read the rest and laugh here: http://tinyurl.com/yoaxyv.
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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