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It's Not Over Till It's Over
March 23, 2007
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"Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream. It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."
-- Jeff Rabhan, who manages artists and music producers including JermaineDupri, Kelis and Elliott Yamin, as quoted in the Wall Street Journal online this week..There's a bunch of different stories out in the media this week about the end-of-the-world-as-we-know-it that's coming in the music business. (And yes, I've included a few below that you read for reference )
Basically, they all note that CD sales are down 20% for the year in the quarter-to-date compared to the same period last year, while sales of digital tracks are up 56%. Several talk about the weak sales of hit product in the Top 10 and Top 20 of the charts as well.
The ONE thing all the articles negate is the fact that even with physical CD sales declining, there are albums in the Top 20 of the Billboard Album Chart that have already been certified with over 21 million in sales (and will very soon account for millions more once Norah Jones and several others are certified). Some will argue that total sales would even be greater without online sales pulling people away from CDs and people illegally downloading. OK, hard to argue that point.
But when there ARE albums selling 5 million in this environment (Carrie Underwood approaching 6 million, Nickelback closing in on 6 million as well) and others selling 2 and 3 million-plus, more analysis must be given to why sales are declining rapidly overall.
The immediate and obvious glaring fact about the multi-platinum sellers is that they are all by artists who have generated multiple hits from one album, hence delivering more for the consumers' money when they are buying their CDs. It sure seems to me people have a whole lot less of a problem spending money on such CDs.
Gee, what a novel conclusion -- CDs that are real ALBUMS that people can listen to repeatedly for more than one or two good songs can actually outsell the quantity of disposable "junk food" music proliferating for far too long on MTV and radio. And these multiple-platinum artists might actually become good catalog sellers in the future. Another novel idea. But of course these novel ideas were once primary and basic foundations for building the rosters at all labels.
There is no doubt that the industry is forever changed as digital technology changes our lives and impacts businesses every day. But one remedy is grossly apparent. Signing the types of artists that can deliver great albums means a whole lot more than satisfying the desire to pump "product" into the pipeline to feed the distribution machines and deliver quarterly figures. It also means more A&R and artist development work at every label. But of course those things were also once primary and basic foundations for building the roster at all labels.
Things are bad. I know it. You know it. But there's no reason that with real focus and a whole lot of new creative ideas, the industry can't minimize the damage already done and possibly create a whole lot better sales picture.
I remember that after Fleetwood Mac sold 10 million copies of "Rumours" and "Saturday Night Fever" sold over 25 million albums, many said that was it and the industry would never see such sales monsters like that again. Then just five years later along came Michael Jackson's "Thriller." And then came because many albums were selling 10 million plus, Billboard magazine created Diamond certification for such an achievement. There's more Diamond certifications than you probably think. (You can check them out on the RIAA's website at www.riaa.org.)
So, the game's not over just yet. What the industry needs is just a few home runs in the bottom of the ninth to possibly get back on track. It's a tough inning for sure, but it's not over till it's over.
Batter up!
AND NOW THIS
Perhaps some of you heard about the RIAA's latest round of lawsuits against colleges and universities.
But I bet few of you heard that the RIAA has now brought suit against a stroke victim in Michigan in Warner v. Paladuk. See a copy of the summons at: http://www.ilrweb.com/viewILRPDF.asp?filename=warner_paladuk_summons (pdf format).
This from Attorney Ray Beckerman's blog post at http://www.digitalmusicnews.com/blog/riaa-sues-stroke-victim-in-michigan (and you should all read Ray's website as well regarding RIAA lawsuits at http://recordingindustryvspeople.blogspot.com):
"Although the defendant John Paladuk, an employee of C&N Railroad for 36 years, was living in Florida at the time of the alleged copyright infringement and had notified the RIAA that he had not engaged in any copyright infringement, and despite that the fact that Mr. Paladuk suffered a stroke last year which resulted in complete paralysis of his entire left side and severely impaired speech, rendering him disabled, and despite the fact that his disability check is his sole source of income, the RIAA commenced suit against him on February 27, 2007. Suing the disabled is not new to the RIAA. Both Atlantic v. Andersen in Oregon and Elektra v. Schwartz in Brooklyn, New York, both brought against disabled people who have never engaged in file sharing and whose sole income is Social Security Disability, are still pending. The local Michigan lawyer being used by the RIAA in the Paladuk case is the same lawyer who was accused by a 15-year-old girl of telling her what to say at her deposition in Motown v. Nelson and, in the Warner v. Scantlebury case, after the defendant died during the lawsuit, indicating to the court that he was going to give the family '60 days to grieve,' after which time he was going to start deposing the late Mr. Scantlebury's children. The RIAA's practice of attacking 'single moms, widows, grandmothers, dead people and children' has recently been pointed out by the well known comic strip FoxTrot by Bill Amend."
Perhaps now many of you understand why I consistently hammer the RIAA for wasting time and energy on these lawsuits while the music industry is going down in flames.
The Unintended Consequences of P2P Piracy
Some stories hitting the blogs recently seem to indicate that, as an unintended consequence of BitTorrent and other peer-to-peer systems, the business of organized piracy has been seriously hurt.
When you think about this, it's obvious. In fact, online piracy could be used as a strategy by record producers and movie folks to eliminate piracy altogether. But would anyone listen to the idea? And would there be anyone visionary enough to even dream up the concept?
You have to hand it to John C. Dvorak. He's come up with a fascinating, unique way to stamp out piracy - and it doesn't put any dogs in danger. You have to read all seven steps to understand the sheer brilliance (and chutzpah) of his plan. Here's a taste of just how unconventional it is: in the first step, the RIAA and MPAA have to implicitly condone file swapping and sharing. Just let it go. Amazing. It might actually work too!
Read more about it by clicking here.
Perspective: Where Did The Music Industry Go So Wrong?
Wasn't it all so gloriously simple back when people listened to top 40 radio and obediently paid $20 for discs at record store chains? Labels set the deal terms for artists. Managers handled the "biz." The touring circuits were maintained by well-mannered warlords that politely divvied up the venues. And everyone had their place in the pond.
So where did it all go wrong with the music business? Somehow, the pond became stagnant over time, mucked up with greed, laziness, contempt and excess. People got bored with music. Then, someone threw a rock into the middle of it called the Internet, and nothing will ever be the same. Today, anyone can hum a tune, mix it with a rhythm track and some samples on their Mac at home, put it up on MySpace.com, and end up with a publishing deal from Moby, which will then sell it to the next Super Bowl sponsor.
Read more about it by clicking here.
Record Labels' Digital Strategy -- Do Nothing
LOS ANGELES (Billboard) - Record labels need the digital music market to take off. So why aren't they helping it any? Physical CD sales have been in decline for the last five years, and according to various estimates are expected to fall another 15%-20% again this year. And while digital revenue is on the rise, it is not yet reversing the trend. Sony BMG global digital business president Thomas Hesse says that if physical revenue drops by 15%, digital revenue must rise by 60% to compensate. This year, he expects net revenue to fall.
So what are labels doing other than licensing their music to digital services that they hope will become successful? According to many service providers and industry analysts, the answer is -- nothing.
"There's no plan, no sense of direction," one digital retailer executive says. "They're just hoping somebody is going to figure all this out for them."
Read more about it by clicking here.
Slacker Personalizes Internet Radio with iPod Rival
NEW YORK (Reuters)-Fans of Internet radio who want to listen to their favorite stations away from the computer will soon be able to do so with a new digital music player called Slacker.
The new gadget, by a San Diego-based start-up of the same name, aims to compete with Apple's iPod and in-car digital radios offered by XM Satellite Radio and Sirius Satellite Radio.
Slacker, which has the backing of three of the four biggest music companies and hundreds of independent labels, also launched its own Internet radio stations at http://www.slacker.com this week.
Read more about it by clicking here.
Music Publishers Accuse XM Of Copyright Infringement
An association of music publishers late on Thursday filed a lawsuit that accuses XM Satellite Radio of refusing to stop "widespread infringement" of popular copyrighted songs.
In a complaint filed in New York federal court, the National Music Publishers Association (NMPA) argues that the satellite radio operator's "XM + MP3" music service skirts copyright laws by allowing radio listeners to make permanent copies of on-air tracks through devices like the Pioneer Inno player without permission and without properly compensating songwriters.
Read more about it by clicking here.
CD Sales Slump As Musical Instrument Sales Boom
By Jerry Del Colliana, www.avrev.comBefore the days of grunge and during a time when the compact disc offered the consumer a fair value for $18.99, the domestic music business briskly sold north of 30 billion dollars' worth of music per year. Powered by catchy pop acts and surprisingly well-crafted rock and metal, the music business in the early 1990s made a product that could be sold in a profitable format in high volumes and that mainstream consumers truly wanted.
Roll the tape forward just a few years and couple the Nirvana-esque, "I don't care if I tune my guitar, brush my hair or even blow my brains out, whatever" attitude with the grunge scene, and you see the beginning of the problem. Add in the commercial success of Apple's iPod paired with the launch of the DVD, which gave consumers both an audio and a video experience that lasted two-plus hours, had supplemental goodies, surround sound and more, and you start to see how today CD sales have dipped to about nine billon per year domestically, down from 30 billion only a decade ago.
Read more about it by clicking here.
US CD Sales Plummet As People Turn To Digital Music Downloads
US sales of music compact discs plummeted 20 percent in the first three months of the year as downloading of songs continued to knock the
underpinnings from record studio revenues. Eighty-nine million CDs were sold from the start of the year through March 18 as compared with 112 million CDs sold during the same period in 2006, according to figures released Wednesday by industry tracker Nielsen
SoundScan.
Purchases of digitized albums online failed to make up the difference -- instead they dropped from 119 million during that time period in 2006 to 99 million during the first three months of this year, SoundScan reported.
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES?' NEWS ITEMS
ITEM #1: Richard Hatch, the first "Survivor" winner, expressed his distaste for prison in a new interview with People, calling it "horrendous." (Uh, it's prison Richard, and you're not supposed to find it comfy.) Hatch was convicted last year of failing to pay taxes on his $1 million reality winnings and sentenced to 51 months in jail; he is currently seeking a new trial. I'd bet anything he's not parading around naked in jail like he did on that island.
ITEM #2: MTV is launching the search for the next Menudo with open casting calls beginning in Los Angeles on March 31 and continuing through the end of April in cities including Dallas, Miami and New York. (As if the world is waiting for yet another Menudo.)
THIS MIGHT HAVE AFFECTED HIS RENDERING HIS DECISIONS
Florida Judge Lawrence Korda, who heard evidence in the Anna Nicole Smith paternity battle, was busted for smoking marijuana in a park and charged with possessing an illegal substance, website TMZ.com reports. The judge was not arrested, but was given a notice to appear in court at a later date.
CAN'T WAIT TO SEE THE VIDEO ON YOUTUBE
Naomi Campbell began her court-ordered community service Monday at Manhattan District 3 Garage, Pier 36, where she was scheduled to spend the next five days mopping and pushing a broom as punishment for tossing a cell phone at her maid over a missing pair of jeans.
WELL, THEN IT SHOULDN'T IT BE CALLED 'TOTAL REQUEST ALMOST LIVE'?
MTV's "Total Request Live" is now only partly live, as the network has started taping two broadcasts a week in an effort to save money. So far this year, the show has been averaging 351,000 viewers a day, per Nielsen Media Research, down from an all-time high of 757,000 viewers a day in 1999.
CAPTAIN FANTASTIC ONLINE
Elton John is making his entire music catalogue available online for the first time (at least legally) exclusively through iTunes Music Store from March 26 through April 30, before releasing it to other digital outlets, he said Wednesday. The move coincides with the singer's 60th birthday.
LET'S HOLD OFF CALLING THIS 'SUCCESSFUL' FOR A WHILE
Britney Spears checked out of Promises Treatment Facility in Malibu after "successfully completing their program," her manager, Larry Rudolph, said in a statement Tuesday.
THEY TUBE AGAINST YOUTUBE
NBC Universal and News Corp. joined forces with several Internet companies Thursday to distribute TV shows online in an attempt to wage competitive war against YouTube and better control their own programming.
DUH! WHAT A GENIUS!
Simon Cowell told OK! magazine that he believes the battle for this year's "American Idol" title is between LaKisha Jones and Melinda Doolittle. (And if you've been watching at all, then you already know Melinda will win, and there's absolutely no suspense this year.)
DON'T KNOW WHO'S BEEN WAITING FOR THIS, BUT HERE IT COMES
"Laverne & Shirley" stars Penny Marshall and Cindy Williams will reunite to star as themselves in a new scripted comedy for TV Land. A pilot, featuring the twosome living together at Marshall's home, is scheduled to begin shooting next month.
THESE DOGS HAVE A BOUNTY ON THEIR HEADS
Lucky and Flo, the two Labrador Retrievers who helped officials sniff out nearly 1 million illegal DVDs and CDs in Malaysia last week, moved to a safe house after a bounty was put on their heads by angry film pirates. The two canines are on loan from the Motion Picture Association of America for a month, as part of an effort to fight piracy in the Southeast Asian nation.
ZUNE STILL NOT COMPLETELY IN TUNE
Microsoft is still working to fix issues, including one that causes some purchased songs to skip when played on the device.
SATELLITE A LA CARTE MENU
Sirius Satellite Radio said Wednesday that after its proposed acquisition of XM Satellite Radio, the services expected to offer a lower-priced package consisting of fewer channels. Sirius said that it and XM would provide programming choices on a "more a la carte basis," including tiers of service both higher and lower than the $12.95 per month they each currently charge.
2006 Industry Conferences
Date Name Location 2007 ASCAP "I Create Music" Expo April 18-21 Los Angeles, CA MUSEXPO 2007 April 27 - May 2 Los Angeles, CA
Quotes of the week
"When a newspaper comes out that says 'Duff Puff -- she must have gained 15 pounds' or something like that, how would any normal person react?"
-- Hilary Duff admitting to Britain's Mail On Sunday that she felt pressure to lose weight after reading negative press reports about her appearance."Am I psyched? Yeah -- my wife is probably going to make love to me more often."
-- Former 'N Sync-er Joey Fatone, on losing 14 lbs. since training for "Dancing With The Stars.""I'm the nice guy who follows through on the things he commits to. But I don't know if I'll be going through that sort of thing again. I feel like the Grammys used me for ratings. And look at it -- they were up 18 percent."
-- Justin Timberlake to April's Details magazine, on bringing viewers back to the Grammys with his My Grammy Moment contest."I'm 26 years old, for Christ's sake! Why would I have a baby now?"
-- Supermodel Gisele Bündchen denying reports that she is pregnant with the New England Patriots quarterback Tom Brady's child on Spanish TV show "Corazon de Primavera.""Last week a dead passenger was upgraded to first class on a British Airways flight. That's one of the perks of being Keith Richards."
-- Jay Leno"Spring is here, flowers are in bloom, really the only dark cloud hanging over us now is a young man named Sanjaya [on 'American Idol']. Our nation's deepest fears were realized tonight when his fans, the 'San-ginas,' came through for him. He wasn't even in the bottom three. He wasn't voted off! They voted Bucky Covington off again, and he wasn't even on the show! I found out in his native tongue his name means, 'My ears are bleeding.'"
-- Jimmy Kimmel
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Al Gore Caught Warming Globe To Increase Box Office Profits
Dozens of eyewitness reports indicated that former vice president Al Gore deliberately attempted to raise the earth's temperature in order to boost box office receipts for "An Inconvenient Truth," his documentary film about global warming that was released in May.
"We have accounts from concerned citizens that Mr. Gore purchased a Cadillac Escalade SUV several months before [his film] opened in theaters," said Kimberly Blume, spokeswoman for the California-based environmental group Friends Of The Earth. "Not only did Mr. Gore use his new gas-guzzler to make short trips to the grocery store, he also left the vehicle running 24 hours a day in the driveway of his Tennessee home with the air-conditioning on full-blast."
Read the rest and laugh here: http://tinyurl.com/yp8c64.
The Blogs
Check out a great (that I contribute commentary to) 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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