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The Storm Is Coming ... And It Has Nothing To Do With Global Warming
June 8, 2007
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"The CD is dying at a rate that is predictable at this point. It will someday level off into a niche market the way vinyl has. In five years, it will be of very little consequence. The problem is there is no physical medium to replace it. It's digital, but digital is in its infancy."
-- Larry Kenswil, executive vice president of business strategy for Universal Music. (As quoted in the article, "Does digital file sharing render copyright obsolete?" -- see link below.).Well, I'm glad another label executive has come out and admitted the obvious. But since the CD "is dying at a rate that is predictable at this point," it immediately brings about several questions.
1. If the labels all know this, why haven't they dropped prices on CDs even more? This should be done as soon as possible to extend whatever shelf life is left for physical disc sales. Profits would still be more than those generated by online sales of music at iTunes and elsewhere, and lower prices might even increase disc sales of hot product and possibly good catalog titles. Online sales of digital music make current CD pricing inane and if prices aren't lowered, CD sales will decline even faster.
2. If the labels all know this, why aren't they trying to offer more "bang for the buck" by introducing something like more Dual-Disc/DVD titles into the marketplace that could open up another ancillary revenue stream beyond the CD? The Dual-Disc is a format that would allow labels to package great video content with great albums, and in doing could possibly provide even greater profits than music DVDs being sold separately. Imagine the marketing possibilities, and, at this point, what is there to lose by trying this? Not a thing. Oh sure, there are label suits who say the cost of making such packages won't be justified in the end because sales won't reach levels needed to make these profitable. But why not try it first with some great classic album titles and video content and see what happens. When consumers know what they want, and they want it badly enough, they somehow always find a way to get it. They've bought special box-sets, enhanced audio CDs of great albums, and special edition titles as well.
3. If the labels all know this, where is the innovation needed for the industry to successfully move from one business model to another as online digital sales of music increase? If indeed, there are strategies being drawn up in smoke-filled rooms somewhere at any labels, nobody anywhere is talking about them. The ONLY innovative ideas we read about are coming from technology companies like Apple, Microsoft, et al. Why aren't any labels working to create symbiotic relationships with tech companies? (And again, if they are, let's hear about it.) Yes, technology companies must innovate to survive, but is there any doubt now that all entertainment\content companies must do so as well?
4. While it's true that CD sales are declining fast, there are audiophiles and others who will always want to own CDs. This market can be exploited with great growth possibilities if labels utilize customer retention methodologies already in place in so many other industries. Reward programs that offer points towards future purchases (online or off) will generate not only more retention, but they can also generate a great database for individual labels that they can utilize to communicate directly with their consumers. As Sam Walton said, "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else." With all the entertainment options out there, it's more than high time to for the industry to create more customer loyalty.
Once CD sales do get to a level "of very little consequence" the industry will possibly find itself like the crew aboard the Andrea Gail. Headed into "The Perfect Storm."
A tidal wave of digital music sales that don't offer the same profit margins and a whirlpool sucking away physical CD sales. How to stay afloat during this time will be the industry's greatest test.
AND NOW THIS
This week Justin Timberlake signed YouTube.com sensation from Holland, Esmee Denters, as the first artist to his newly formed Tennman Records. The 18-year-old Denters is one of the most notable singers-songwriters to gain attention strictly as an Internet performer and with a soulful voice beyond her years, she quickly became a YouTube celebrity.
Here's the big reason why Esmee is a YouTube hottie. She has allegedly received over 21 million views since posting his first performance on YouTube a little over eight months ago. 21 million!
Try and relate how 21 million views compares to a #1 record that gets 8,000 to 9,000+ spins a week (while it's red hot) at radio here, and you can see quite easily that radio is not the primary media of choice for active music people who are potential consumers looking for new music by new artists.
If only five percent of the people who have been potentially exposed to Esmee's videos (I say potentially because repeated views by people add into the total view number tally) buy her music, she has a potential platinum level album upon release. If only two-and-a-half percent buy her debut release, she's gold out-of-the-box.
Yet another case of artist development 2007 style by an artist that did it on her own.
Does Digital File Sharing Render Copyright Obsolete?
When the 1980s pop star Robin Gibb writes a song these days, he says he doesn't think about whether it is copyrighted or licensed - he devotes himself to his art and lets his handlers see to its legal and financial well-being. But when NoobishPineapple, an 18-year-old from Spearfish, South Dakota, uploads his 36-second rap video about fast food onto YouTube, he has no staff of assistants to make sure his creation is protected or paid for - and he probably doesn't care, anyway.
That makes people like David Ferguson, head of the British Academy of Composers and Authors, nervous about how art will be sustained in the future. And it is giving people like Lawrence Lessig, founder of Creative Commons, an opening to promote alternatives to the world's increasingly maligned copyright systems.
Read more about it by clicking here.
Apple Criticized For Embedding Names, E-mails In Songs
It used to be that music fans believed cryptic messages about Satan or the death of a band member were hidden within rock albums. Nowadays, the secrets buried in digital music are way too easy to find, according to the Electronic Frontier Foundation (EFF). The consumer watchdog group, which focuses on the Web, claims Apple has left information belonging to customers of the new iTunes Plus service exposed. Music purchased from iTunes Plus is embedded with unencrypted customer names and e-mail addresses.
An Apple spokesman declined to comment. Apple has for a long time included a customer's name and e-mail address within song files purchased from iTunes. But the personal information was encrypted. On Wednesday, the company launched iTunes Plus, a service that features music without controversial copy-protection software.
Read more about it by clicking here.
Microsoft Turns Ignition For Music Marketing
Microsoft is introducing an initiative on Monday to promote emerging music acts across its digital properties.
Called Ignition, the program is designed to expose new artists and their music to consumers for an entire month by featuring exclusive content through Microsoft's multiple services, including MSN, Xbox Live and Zune.
Read more about it by clicking here.
iPod-compatible Music Site To Offer Free Web Play
Lala.com, a Silicon Valley-based digital music start-up, said Monday it is launching an iPod-compatible online music service that offers free online song play in a bid to get customers to buy music downloads.
The start-up is launching the service with artists from the fourth-largest music company, Warner Music Group, which will sell songs and albums without copy protection software known as digital rights management. To prevent illegal distribution, downloads will be possible only to an iPod.
Read more about it by clicking here.
News: iTunes vs. eMusic
Apple's iTunes 7.2 is here, and with it, the DRM-free tracks from EMI that Steve Jobs told us to expect sometime in May. Will most people hear the difference in iTunes Plus? To put it to the test, PC Mag analysts pitted iTunes DRM-free music against eMusic sans-DRM tracks. See what happens when these two giants go head-to-head.
Read more about it by clicking here.
iTunes Crosses Language Barrier With Foreign Exchange
Apple's iTunes Music Store is introducing a new original programming feature designed to promote foreign-language music in its stores around the world, Billboard has learned.
The program is called Foreign Exchange. Under the initiative, two artists from different countries translate and cover each other's music in their native tongues.
Read more about it by clicking here.
Melodeo: We'll Stream iTunes To Your Phone
Melodeo on Tuesday said it plans to help music fans stream their iTunes digital-music playlists to mobile phones.
Privately held Melodeo, which already delivers Web-based audio clips to phones, said the service--now in test mode--will enable consumers to listen to digital music on the go without a portable player. It also will help listeners access songs in their iTunes library on more than one personal computer.
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES?' NEWS ITEMS
ITEM #1: Paris Hilton's attorney, Richard Hutton, told reporters Monday that his client was "doing very well under the circumstances" since turning herself in to begin what was supposed to be a 23-day jail sentence. At that time he said, "She's using this time to reflect on her life, to see what she can do to make the world better." Want to make the world a better place, Paris? Stop acting like a spoiled brat, and go into hiding for a long time so we don't have to hear about you anymore. Unfortunately, as luck would have it, Paris was released after only three days and the media is all over the story.
ITEM #2: Jessica Simpson and John Mayer have broken up yet again. At this rate they will have broken up more times than Larry King has been married. Maybe they already have.
CONGRATS
CONGRATS #1 TO: To Jackson Browne and Don Black, who were among the artists being inducted into the Songwriters Hall of Fame Thursday. Dolly Parton received the Johnny Mercer award in recognition of her career achievements, and John Legend received the Hal David Starlight Award.
MORE 'PEPPER' DOINGS
It was 40 years ago the Beatles released "Sgt. Pepper's Lonely Hearts Club Band." In honor of the groundbreaking album's anniversary, Oasis, Kaiser Chiefs and Razorlight have recorded their own versions of the Fab Four's iconic songs.
MENUDO IS THE EXCEPTION
Nevada on Thursday became one of a number of states to enact laws requiring bands promoting themselves as famous acts to include at least one member from the group they claim a connection to, or else label themselves a "tribute" or "salute." One of the bill's supporters was Supremes singer Mary Wilson, who told lawmakers that there are currently at least five acts touring around the world as the Supremes without any real link to the group. She said she sued them all but lost millions in the process.
DIVORCE COURT
The inconvenient truth for Laurie and Larry David (the co-creator of "Seinfeld" and star of "Curb Your Enthusiasm") is that their marriage is over. The couple has separated after 14 years and two kids. Laurie is a liberal die-hard who produced "An Inconvenient Truth" and recently toured with Sheryl Crow to promote global warming.
A HOT TICKET, FOR SURE
Chris Rock and Jerry Seinfeld will team up as co-headliners of the third annual Comedy Festival at Las Vegas' Caesars Palace Nov. 14-17.
OK, THE SINGLE WASN'T A HIT, MAYBE I'LL DO FILMS
American Idol runner-up Katharine McPhee will make her feature film debut in the indie dark romantic comedy "The Last Caller," according to the Hollywood Reporter. The aspiring actress said that she was "up for a couple of big studio projects," but that the low-budget film was the first script she read that she really wanted to do. (Editor's translation: She most likely didn't get the big studio project nods, and this was what was left.)
I'LL HAVE A MACCA-CINO TO GO
Paul McCartney's new album, "Memory Almost Full," hit retail this week on Starbucks' new Hear Music label through Concord Music. Already on ABC's "Good Morning America" this week, expect to see Sir Paul on a whole bunch of TV shows.
FROM LEFT COAST TO THE RIGHT COAST
Tyra Banks is relocating her talk show from Los Angeles to New York. The show begins taping in the Big Apple on Aug. 7, with the new season premiering on Sept. 10.
DON'T KNOW HOW MANY PEOPLE ARE ACTUALLY WAITING FOR THIS NEWS, BUT HERE IT IS ANYWAY
Fifteen years after their last album of new material, The B-52's are wrapping up work on their next one. The group, which came onto the new wave scene in 1979, just returned to their hometown of Athens, GA to finish recording the as-yet-unnamed record.
WHEN YOU REALLY WANT TO GET AWAY FROM IT ALL, JUST CHECK IN
Bon Jovi lead guitarist Richie Sambora has checked into an undisclosed rehab facility in Los Angeles, People magazine reports.
2006 Industry Conferences
Name Date Location Digital Hollywood June 11-June 14 Santa Monica, CA P2P June 11 Media Summit, Santa Monica, CA
Quotes of the week
"How could things go wrong when you see Pamela Anderson in a thong?"
-- David Hasselhoff, among the celebs who turned out last Saturday for Anderson's debut as a magician's scantily clad assistant in the Las Vegas show "The Beauty of Magic.""I cannot stand dealing with people in this business. You have all these people you pay who are supposed to be on your side, but I can't trust them like I can my mother."
-- "Knocked Up" star Katherine Heigl, on choosing her mom as her talent management team, to Entertainment Weekly. Terrific, Katherine, you can't stand Hollywood people, so you put them on your mother, who now has to deal with them."My thin phase is gonna go soon."
-- Courtney Love, on fearing that she'll reverse her recent dramatic weight loss when she quits smoking, on her website."The mighty Sting momentarily looks like a petulant pansy instead of the god of rock."
-- Police drummer Stewart Copeland, rating his bandmate's performance during a reunion concert in Vancouver, on his website. Yo, Stewart, sometimes honesty is NOT the best policy."I wasn't afraid of dying as much as I was really afraid of getting my hair cut. It might sound funny, but it's true."
-- Marilyn Manson, discussing his childhood fear in Rolling Stone. We believe you Marilyn. You're ugly as is, but without your hair, you'd be even uglier."I talk a lot in the bath. It's easier to talk when you're naked."
-- Angelina Jolie in the July issue of Marie Claire magazine, on her preferred location for conversing with Brad Pitt. And I'm sure that Brad just wants to talk to you when you're naked Angie babe. Uh-huh, right."I'm very excited today. Today is Kenny G's birthday. America's favorite elevator jazz musician, 51 today."
-- Craig Ferguson"After serving eight years in jail, assisted suicide doctor Jack Kevorkian was on 'Larry King Live.' When Kevorkian saw Larry King he said, 'I swear, he was like that when I got here.'"
-- Conan O'Brien"A lot people make fun of Los Angeles. They say we have no soul; we're always in the tanning booth. Meanwhile, I don't see any other city throwing Paris Hilton in jail."
-- Jimmy Kimmel
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Rocky II, III, IV Decisions Overturned After Stallone Caught With Performance-Enhancing Drugs
PHILADELPHIA-In the wake of last month's shocking revelation that actor Sylvester Stallone had been caught with the illegal human growth hormone Jintropin at an Australian airport, the World Boxing Association, in a joint decision with the Academy of Motion Picture Arts and Sciences and the Screen Actors Guild, has overturned the uplifting, feel-good endings of Rocky II, III, and IV, sources said Monday.
" This is a sad day for fictional boxing," WBA president Gilberto Mendoza said. "Like many moviegoers, I was deeply touched by Rocky Balboa's story: a street thug from Philadelphia who, when given the chance of a lifetime, was able to overcome seemingly insurmountable odds in the pursuit of his dream. Now we learn that the entire underdog fantasy was based on a lie."
Read the rest and laugh hard: HERE.
The Blogs
Check out a great blog (that I contribute commentary to) 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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