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Big Wheels Keep On Turning
January 26, 2007
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"It's EMI now, but it could be any one of us in a month's time," fears a source at one of the label's rivals. "This is a year of significant change in the music industry, it's potentially cataclysmic."
-- From the article below, "Death Of The Diva".Well hooray and hallelujah. Another industry source speaks the truth about just how serious things are in the music industry and is quoted in the press. And yes, this person paints a potentially dire picture of what is to come. But that picture continues to shake like a Polaroid picture, and it is coming into focus quickly.
I don't print these quotes and look for dire news reports because I like to or want to. I've said over and over again in this newsletter I love the music industry and I have been privileged to be a part of it now for some 36 years. It's my sincere hope many readers read the content and referenced news articles and glean some information that might actually plant the seeds of change somewhere, anywhere, within the industry.
Last week I talked about "avoiding reality while the clock ticks," and this week the clock seems to be picking up speed. Here's just a few of the items this week that show (again) the wheels of progress are rolling down the technology highway faster than ever.
First: The number of Internet users in China made its highest recorded jump to reach 137 million at the end of 2006, a state information center said this past Tuesday. (Source: http://tinyurl.com/2d7v2p.) China's 'Net users grew by 26 million, or 23.4%, year over year -- the highest jump since the report began in 1997 -- to reach 10.5% of the total population.
In addition, in China, which is close to launching the data-rich third-generation wireless standard -- 17 million people use their cell phones to go online, and 104 million have broadband Internet access. These numbers are staggering by themselves, but considering the population of China is in excess of 1 billion, it doesn't take a whole lot of Excel spreadsheets to forecast the unrealized market as simply explosive.
The good news? The online market opens up a myriad of new potential revenue streams for content providers, and entertainment content providers can reap the rewards if they start planning now. The bad news? Yes, more people online means more illegal downloading will occur. So what to do? Plan now how to MAKE money, and stop worrying about what cannot be prevented. If the entertainment industry doesn't create new models soon, there won't be any reason to file lawsuits anymore because there will be no industry left to fund attorneys and the associations they work for.
Next: It seems that after wasting precious time and resources the major record labels are moving closer to releasing music on the Internet with no copying restrictions -- a step they once vowed never to take. (See the news story below, "Record Labels Mull Unrestricted Digital Music.")
At Midem in Cannes this past week, RealNetworks chief Rob Glaser spoke to The New York Times on the majors' growing willingness to sell DRM-free downloads and said, "There is a groundswell, and I say that on the basis of private conversations. It will happen between next year and five years from now, but it is more likely to be in one to two years."
That's good news indeed, because if this is true, the industry can shift its focus away from the pro/anti DRM (Digital Rights Management) issue, and move on to creating methods to grow the online business faster as CD sales continue to decline globally.
Next: This week there was more press about yet another artist, singer Lily Allen, who has found success because of the Internet. (See the story below, "Digital Pop Star Is Poster Girl For Social Networking Sites.") Ms. Allen has now become the "poster girl" for social networking sites in the United Kingdom and has reached platinum status there (300,000 units) for her Regal/Parlophone album "Alright, Still" on the back of an innovative digital campaign.
Ms. Allen's success provides further evidence that the Internet can not only launch artists online, it can convert the launch into real sales. With MySpace.com overtaking eBay as the most-searched query on the Internet (see story below), there's little doubt that social networking sites are replacing radio for many people.
And then there's the news this week that global spending on mobile music is expected to top $32 billion by 2010; independent labels are moving to creating online licensing and distribution deals fast (see both these stories below); and once again, TV proves the power it has to impact sales, with Corrine Bailey Rae's debut album (already platinum and on the chart 31 weeks) shooting from #32 to #4 on the Billboard Top 200 Album Chart after her appearance on the Oprah Winfrey show.
And the good news is that a new report says that more people will watch more TV and video content in the future, not less, in spite digital video recorders (DVRs) and video-on-demand (VOD). They will just be doing so in different ways: via the TV, the Internet, the PC and their portable devices. (Source: http://tinyurl.com/2xu565.)
Watching more TV will no doubt mean more exposure for artists struggling to gain a foothold in a world where every minute of discretionary disposable time is taken up by more options for the consumer.
So, the big wheels are definitely going to keep on turning. Now it's time to get the creative juices burning.
The industry's future is at stake. But it's starting to look like the glass is half-full, not half-empty.
Music Industry Divided Over Digital Future
With global music sales down for a seventh straight year, the talk at an annual industry meeting in Cannes, France, has become heated over how to develop digital sales against competition from the dreaded F word -- free. Global sales are expected to be down again for 2006 despite digital sales almost doubling to $2 billion and the popularity of music being as strong as ever.
Critics of the major players in the industry argue that they have been distracted by the fight against piracy and in doing so, hindered the growth of the legal business.
Read more about it by clicking here.
eMusic Hears Sweet Sound Of Success In Europe
eMusic, the digital music download service, says it is eyeing Asia after a successful launch across Europe last year. eMusic became the first service to launch in all 27 European Union member states when it kicked off in September, taking on iTunes in some of the big markets such as Britain and Germany.
In its search for further expansion, New York-based eMusic is looking toward Asia--and Japan in particular. eMusic said it believes it is now Europe's second biggest digital music service, although there were no official industry figures to confirm this.
Read more about it by clicking here.
Record Labels Mull Unrestricted Digital Music
As even digital music revenue growth falters because of rampant file-sharing by consumers, the major record labels are moving closer to releasing music on the Internet with no copying restrictions--a step they once vowed never to take.
Executives of several technology companies meeting here at Midem, the annual global trade fair for the music industry, said over the weekend that at least one of the four major record companies could move toward the sale of unrestricted digital files in the MP3 format within months.
Read more about it by clicking here.
Judge Allows Music Industry To Sue XM Satellite
A judge has ruled that the music industry is free to go ahead with a lawsuit against XM Satellite Radio, the company accused of allowing customers to store songs without paying for them.
The finding, made Friday by U.S. District Court Judge Diane Batts in New York, opens the door for music labels such as Atlantic Recording and Capitol Records to press their case against the satellite radio broadcaster.
The record industry alleged in a civil suit filed in May that XM allows subscribers to listen to, store and replay songs as MP3 files. Devices marketed as "XM + MP3" players help people trap the music from XM's broadcasts and then turn them into MP3s. The music labels argue that this infringes on their copyrights.
Read more about it by clicking here.
Indie Music Labels Create Merlin To Conjure Licensing Deals
The world's independent music sector, which has produced such artists as the Arctic Monkeys, has grouped together to launch an agency to secure licensing deals with emerging media such as MySpace and YouTube.
The group, called Merlin, was launched at the annual MidemNet music industry conference with its backers saying it would become the "fifth major" in the industry. The launch follows the rapid growth in popularity of sites like YouTube, where fans post video clips carrying their choice of music without permission from copyright holders.
Read more about it by clicking here.
Independent Record Labels Sign Web Distribution Deal
Merlin, the new agency representing the world's independent music sector, has agreed to a deal with digital music company Snocap that will allow its labels' music to be sold from Web sites such as MySpace. The group announced the deal at the annual MidemNet music conference in France, saying it would allow thousands of independent labels across the world to sell digital downloads of their music from their MySpace pages and other sites.
Merlin was launched on Saturday to secure licensing deals with emerging media such as MySpace and YouTube. The group said it would act as the "fifth major" in the world with a view to rectifying the "poor cousin" status of deals previously offered to independent labels.
Read more about it by clicking here.
Digital Pop Star Is Poster Girl For Social Networking Sites
Pop singer Lily Allen knows precisely where she was when she first realized her "Smile" single was taking off in the United Kingdom: on the Internet.
"I was in America and Jo Whiley played it on Radio 1 back home," Allen said. "My MySpace (page) just went insane. It was first thing in the morning where I was, but there were hundreds of comments and I thought, 'This is it now.'"
Since that moment, 21-year-old Allen has become the poster girl for social networking sites in the United Kingdom, reaching platinum status (300,000 units) for her Regal/Parlophone album, Alright, Still, on the back of an innovative digital campaign.
Read more about it by clicking here.
Death Of The Diva
The music industry is so short of cash that experts are predicting the end of the pop star diva. Many are bracing themselves for a revolution in the music business this year and the first to suffer may be notoriously demanding stars...
Troubles at Britain's last major independent record company last week have marked an end to indulging their whims. EMI announced huge debts and plans to save £120million, while there is cost-cutting across all the big labels. Two of the music industry's most respected executives, EMI boss Alain Levy and his deputy David Munns, were sacked.
"The days of record labels indulging artists are pretty much gone now," said one industry figure.
Read more about it by clicking here.
For Wannabe Music Stars, All The Web's A Stage
American Idol wannabes who miss out at their chance of stardom on the popular television singing contest are finding their 15 minutes of fame elsewhere--online. With the sixth series of American Idol topping TV ratings this month, aspiring singers across North America are flocking to a growing list of online music competitions which require no auditions but can offer prizes and even recording contracts.
Take 14-year-old Mallory Simpson of Lindenhurst, Ill. She missed out on even trying to get onto American Idol as contestants have to be aged 16 plus, so instead entered online contest "American Idol Underground" which is licensed by the producers of the TV show and offers a $10,000 prize.
Read more about it by clicking here.
Warner, Sony BMG Invest In Chinese Mobile Play
Sony BMG Music Entertainment and Warner Music Group announced on Tuesday strategic investments in a Chinese company that makes technology to download songs on to mobile phones in China. Eyeing the potentially lucrative Chinese market, which has about 460 million mobile phone users, Sony BMG and Warner Music have invested in Access China Media Solutions, a partnership between U.S.-based digital content delivery company Melodeo and Japan's Access.
The record companies said they saw mobile phones as the future of the Chinese music industry, which has been hampered by rampant piracy.
Read more about it by clicking here.
Global Spending On Mobile Music To Top $32 Billion By 2010
To keep up momentum, analysts recommend carriers develop improved content partnerships, aggressive pricing, licensing deals, distribution channels and marketing strategies.
Global spending on mobile music from ring tones to full-track downloads is expected to reach $32.2 billion by 2010, with consumers in the Asia-Pacific region and Japan leading the market, a researcher said Tuesday.
Spending on music for handsets is forecast to increase by nearly two and a half times this year's predicted $13.7 billion, Gartner said in its global outlook for the mobile music market. The growth will occur despite competition from digital music players, and a host of challenges faced by telecommunications carriers in delivering these services.
Read more about it by clicking here.
Meet Generation We: Young And Tech Savvy
Young consumers are more comfortable with digital media, they'd rather watch YouTube than television, they'd rather talk to friends on IM and social networks than on the phone, they carry their iPods and phones with them everywhere. They can't sit still for long.
The interesting difference between the youngest digital generation--those born after 1981--and, well, the rest of us, is they're more "Generation We" than "Generation Me." How so? This is a generation that's grown up being instantly in touch with one another and at earlier ages.
This means they have a more global outlook at a younger age. They're also growing up in a world where they discover who they are through the community, less influenced by the media; on the contrary, they control the media. To be sure, as this generation grows up, media will change; it won't go away. Community is the watchword for this transformation.
Read more about it by clicking here.
Update: At Least 25 Million Americans Pirate Movies
Roughly 25 million Americans -- or 18 percent of the U.S. online population -- have illegally downloaded a full-length movie, a study released Wednesday asserts. In a study of 2,600 Americans polled via telephone and online, Digital Life America, a unit of Solutions Research Group, found that 32 million Americans had downloaded a movie at some point in the past.
Of that number, 80 percent of those users -- or 25.6 million Americans -- exclusively used peer-to-peer file-sharing sites, the vast majority of which have typically been used for exchanging copyrighted files. The number of regular file-sharing users doubled between 2005 and 2006, the study found.
Read more about it by clicking here.
Hitwise: MySpace Overtakes eBay As Most Searched Term
Social networking market share was not the only thing MySpace ruled last year. News Corp.'s Web darling also dominated all search-engine queries, according to new research released Wednesday by Hitwise. Other 2006 search query leaders included "eBay," which came in third, "Yahoo" in fourth, "MapQuest" following in fifth, and the only general term, "lyrics," in 10th place. -
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES?' NEWS ITEMS
ITEM #1: Liza Minnelli and David Gest dropped dueling lawsuits against each other in order to move on with their divorce, according to a lawyer for Gest, who said the couple will be divorced in a few weeks in Tennessee -- a state that, unlike New York, has no-fault divorce. Was anybody waiting for this news? And will someone please tell Mr. Gest to change his lipstick when he appears on TV?
ITEM #2: Snoop Dogg pled not guilty Wednesday to a felony charge of possessing a deadly weapon, stemming from his alleged attempt to board a plane while carrying a collapsible police baton in his carry-on luggage at John Wayne Airport in September. The rapper claimed the baton was a prop for a video and that he did not know it was illegal. Uh-huh, sure.
CONGRATS
CONGRATS #1 TO: To Chris Daughtry, whose debut album moved into the #1 spot on the Billboard charts in its ninth week of release, with 65,000 copies sold, per Nielsen SoundScan. The album is already platinum plus (over 1.3 million sold), and I don't think Chris cares for one second that he wasn't crowned the winner on last season's "American Idol."
CONGRATS #2 TO: To Carrie Underwood, "American Idol" season-five winner, whose debut album was certified quintuple platinum and is still riding high on the charts.
CONGRATS #3 TO: To Billy Joel, who will perform the National Anthem before the Super Bowl showdown between the Indianapolis Colts and the Chicago Bears on February 4, making him the only singer to perform the anthem twice at the Super Bowl.
CONGRATS #4 TO: To Best Picture nominees "Babel," "The Departed," "The Queen," "Little Miss Sunshine" and "Letters From Iwo Jima," which are vying for Oscar in that category at the 79th Annual Academy Awards. In a surprise twist, "Dreamgirls" did not make the cut in the Best Picture category but led the field in overall nominations with a total of eight.
DIVORCE COURT: Marilyn Manson filed divorce documents listing the date of his separation from Dita Von Teese as Halloween, not Christmas Eve, as she claimed in her filing. Manson also seeks to block spousal support and requests that Von Teese pay her own attorney fees.
DIVORCE COURT 2: Heather Mills McCartney denied she had agreed to a financial settlement in her divorce proceedings from Paul McCartney after a report in Sunday's News of the World claimed the ex-Beatle had offered her $63 million. Whatsamatta Heather? $63 million isn't enough?
IN THE WORDS OF GOMER PYLE, "SURPRISE, SURPRISE!"
A Bahamian law firm is suing Anna Nicole Smith for $113,000 in unpaid legal fees. Smith apparently hired the firm to handle matters surrounding her son's death in September, but never made good on the payments.
PALM BEACH PATRIOT?
Palm Beach officials voted to fine Donald Trump $1,250 a day for flying an enormous American flag atop an 80-foot flagpole at his Mar-a-Lago club, in violation of town codes. Trump refused to take down the flag and sued the town for $25 million, arguing in part that officials are infringing on his expression of free speech.
PASSING
The Mamas & The Papas singer Denny Doherty died last Friday at his home outside of Toronto after a short illness. He was 66.
AH, ROSIE...SHUT UP!
Rosie O'Donnell attacked Paula Abdul on last week's "The View," claiming that the "American Idol" judge was "probably intoxicated" during Wednesday's show. Sounds like Rosie is losing it and thinks the way to better ratings is picking fights with famous celebrities because she's on a show that nobody would talk about otherwise.
THEN YOU WANT US TO BELIEVE THIS IS NORMAL?
After being questioned over her bizarre behavior in a series of recent interviews, Paula Abdul denied she has been drunk or on drugs while promoting "American Idol." Rampant speculation began after several video clips were posted online showing Abdul slurring her words, giving nonsensical responses to questions, appearing to fall asleep and swaying wildly in her seat. "I've never been drunk. I'm not under the influence of anything," Abdul told the New York Times.
A SEQUEL THAT SHE WISHES SHE HADN'T MADE
Sharon Stone's performance in "Basic Instinct 2" finally got the recognition it deserves, with a leading seven nominations for the 2007 Razzie Awards, which recognize the worst films and performances of the year.
HEY NOW, HEY NOW, DON'T DREAM, IT'S NOT OVER
Crowded House, one of Australia's most successful bands in the late 1980s and early 1990s, are reforming to record an album and go on tour. Singer-songwriter Neil Finn said this week he would reunite with fellow founding member Nick Seymour. He said they had spent part of last year writing music together. Crowded House's "Don't Dream It's Over" went to #2 on the Billboard Hot 100 Singles Chart in January 1987 and spent 24 weeks on that chart as well.
MIGHT AS WELL JUMP
Van Halen is reuniting with original frontman David Lee Roth for a 40-date tour. It's the first time in two decades Roth will reunite with the band.
ROCK 'N' ROLL AND B-BALL
Chris Daughtry is slated to perform a free concert in Greensboro, NC on March 23 as a prelude to the NCAA women's basketball tournament games on March 24 and 26.
SOMETIMES THEY COME BACK...EVEN IF WE DON'T WANT THEM TO
"American Idol" season-one runner-up, Justin Guarini, has been hired by TV Guide Channel as a correspondent for "Idol Tonight," its live "Idol" preshow. Guarini will work alongside season-two finalist Kimberly Caldwell.
2006 Industry Conferences
Date Name Location Media Summit New York February 7-8 New York
Quotes of the week
"Hollywood's a really, really busy scary place and everything is under control."
-- Lindsay Lohan's mother, Dina, telling People magazine that the actress is doing "absolutely fine" in rehab. Okay, we'll buy that, Dina -- Hollywood is a scary place. So, how is Lins gonna deal with it again when she gets out?"I'll drive in Ireland and park my car and run out into the field and rip all my clothes off and just run in the wheat fields naked. That's for no one to see. That's to have that freedom of feeling, like, at one with nature."
-- Drew Barrymore, on her need to feel free and "unguarded," to Parade magazine. Something tells me there's going to be a whole lot of Irish lads checking out the fields near where they live."Isn't that what America thinks is entertainment? To make fun of someone's physical appearance and then when they leave the room laugh hysterically at them -- three millionaires, one probably intoxicated."
-- Rosie O'Donnell, slamming the "American Idol" judges' attitude toward contestants, on "The View." As if the 40 million plus watching "Idol" care about what Rosie has to say."It's no different than it ever was. It's what we do."
-- Randy Jackson, keeping it real in response to the criticism at a Television Critics Association press event."This is just the start of other things to come -- '07 is a completely life-changing experience for me. We're only a few weeks in, and it's already going in a whole another direction. I'm happy. Definitely happy."
-- Kevin Federline, on changing the public's perception of him, to People. Kev boy, if you can actually change the public's perception of you, then you've got a great future selling more self-motivational tapes than Tony Robbins."I still feel hot, but every day is different. It's when I put on the jeans that used to fit a year ago and don't fit now and give me the muffin top, that's when I say, 'Damn!'"
-- Tyra Banks to People, responding to tabloid coverage of her recent weight gain.
The B-Side - 'Blips'
Find Out How Much Your Job Ages You - Site Lets People See How They'll Look In 2057
Do you ever get the feeling that your job will be the death of you?
A new Web site, AgeOMatic.com, promises to demonstrate how working in a stressful office environment can literally age you.
CareerBuilder.com said its new interactive viral experience cleverly captures the sentiment motivating workers to seek out new opportunities in the New Year: the desire for a better job and a better place to work.
Age-o-Matic uses new technology to age people's photos an average of 50 years, and then allows them to e-mail ancient talking versions of themselves to unsuspecting recipients, according to a press release. After uploading a photo, each visitor is asked to answer a few simple questions about their work environment.
One example: "At work they call me: a) Hey You b) El Stupido or c) No. 655321."
Age-o-Matic instantly produces dramatically altered photos depicting how they will look if they stay in their current positions. They can send talking e-mail messages from their aged selves to friends, family, co-workers and even the boss.
CareerBuilder said Age-o-Matic is the first site to allow an uploaded photo to be aged, as well as integrated into talking avatar technology.
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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