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Avoiding Reality While The Clock Ticks
January 19, 2007
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"If the ISPs (Internet Service Providers) would step up and play their part in preventing piracy, we would be able to eradicate it."
-- IFPI Chairman John Kennedy, this week on WSJ.com.The above quote from Mr. Kennedy shows just how out of touch so many music industry leaders still are with the realities of existing technology. It's mind-boggling (to me anyway) that anybody in any high-level executive capacity at any label or any industry association (and again, the RIAA is a poor excuse for an industry association) could make such a statement at this point in time. Either Mr. Kennedy (or anybody else thinking like him) doesn't read about what's really happening with available technology, or he's simply got his head in the sand.
Two years ago in the newsletter, I wrote about the existence of "darknets." As defined on Wikipedia: "A Darknet is a private virtual network where users connect only to people they trust. Typically such networks are small, often with fewer than 10 users each. In its most general meaning, a Darknet can be any type of closed, private group of people communicating, but the name is most often used specifically for file-sharing networks." (Read more at: http://en.wikipedia.org/wiki/Darknet.)
Well, the fact is that darknets aren't small anymore, and they flourish not only here in the U.S. but globally. And because they fly well below the radar of detectable ISPs and other online radar, there's virtually no way to stop them.
But darknets are just part of the problem for Mr. Kennedy and his legions. There's offline intranets flourishing in college dorms, in high schools, in neighborhoods among teens and pre-teens, and again, globally. So you see, Mr. Kennedy, your statement is almost laughable to any person already file-sharing and utilizing a means to do so without use of an ISP.
Of course that reality didn't stop Mr. Kennedy and the IFPI. This week they opened up a new front in the war on online music piracy and threatened to sue internet service providers that allow customers to illegally share copyrighted tracks over their networks. (Source: http://news.independent.co.uk/business/news/article2162919.ece.)
Barney Wragg, the head of EMI's digital music division, echoed the IFPI's actions and said the industry had been left "with no other option" but to pursue ISPs in the courts.
No other options, Mr. Wragg? Really? How about focusing on how your label will survive five and 10 years down the road when you realize that all these lawsuits will do nothing to slow the decline in CD sales. All the lawsuits filed here by the RIAA and abroad have done absolutely nothing to reverse that trend, and still the lawsuits are filed, wasting precious time, energy and resources needed to focus on the industry's future survival.
During 2006, global digital music sales doubled to about $2 billion on the back of an 8%-9% surge in music downloads, to 795 million. This dramatic increase wasn't enough to offset revenues lost from falling CD sales, but it gives a clear picture of where music sales are going at an ever-faster rate. If the labels aren't happy about the revenues they receive from online sales of songs, then they should focus efforts on artist development and releasing better albums. The consumers have already wised up, and they are no longer going to pay $15-$18 for a CD that has only one or two good tracks.
And then there's the news this week that Apple's quarterly profit rose 78% and revenue jumped 24% to $7.12 billion on strong holiday sales of its iPod. The company shipped 21 million iPods in the quarter, up 50% from a year earlier. Oh, I know the industry doesn't root for iTunes and iPod sales, but Steve Jobs didn't view the Internet the same way so many in the music industry have. He saw the OPPORTUNITY it offered and created a whole new business for Apple. In the course of doing so (as he said in his MacWorld keynote), "Apple not only changed the way people listen to music, we changed the music industry."
Like it or not, that's a fact. And there's nothing the industry can do to change that.
And whether Mr. Kennedy or his peers like it or not, there's nothing they can do to change all the technology available and already in consumers hands that allows them to copy and burn their own CDs (despite any encryption efforts) and share files with others.
Perhaps if Mr. Kennedy and his colleagues accept reality, they can go about the business of planning their survival.
One person who did speak the truth this week was media consultant Aram Sinnreich, who commented on the executive changes at the EMI Group in last Saturday's L.A. Times and said, "It's like rearranging deck chairs on the Titanic. There's a much larger problem in that the economic and distribution model for major labels today is fundamentally broken."
Amen.
It's Back And Bigger Than Ever
'American Idol'...A Giant On TV...A Giant At Retail.
Unless you live under a rock, you know that "American Idol" debuted this past week with Season 6.
While it was expected the show would debut at #1 in its time slot with big number, the actual numbers were astonishing.
Fox utterly dominated the night's ratings with a 20.3 rating/30 share in households, and the 37.3 million who watched the two-hour premiere was up over last year's 35.5 million. But here's the amazing part...at 9pm, "Idol" increased to 21.3/32, topping 41 million viewers in its final half-hour!
This is not only great news for Fox, but it's evidence again that the show will continue to provide great retail results.
Chris Daughtry's debut album is platinum plus and still Top-5 on the Billboard Top 200; Taylor Hicks album is near platinum and he's hitting the road; Carrie Underwood (Season 4 winner) is still in the Top 20 on the Billboard Top 200 and approaching 5 million in sales. Katherine McPhee (last season's runner-up) is scheduled to release her debut album momentarily.
Global Digital-Music Sales Nearly Doubled In 2006
Global digital-music sales almost doubled in 2006 to around $2 billion, or 10% of all sales, but have not reached the industry's "holy grail" of offsetting the fall in CD sales, a trade organization said. In its 2007 Digital Music Report, the International Federation of the Phonographic Industry (IFPI) said on Wednesday it expected digital sales to account for a quarter of all sales worldwide by 2010.
"The pace of transformation in our industry is breathtaking, but at the moment the holy grail is evading us," IFPI Chairman and Chief Executive John Kennedy said in the report. "I would like to be announcing that a fall in CD sales is being compensated for by an equal or greater increase in online and mobile revenues. But that is not yet happening on a global basis."
Read more about it by clicking here.
Senators Aim To Restrict Net, Satellite Radio Recording
Satellite and Internet radio services must restrict listeners' ability to record and play back individual songs, under new legislation introduced this week in the U.S. Senate.
The rules are embedded in a copyright bill called the "Platform Equality and Remedies for Rights Holders in Music Act," or Perform Act, which was reintroduced Thursday by Senators Dianne Feinstein (D-CA), Lindsey Graham (R-SC), Joseph Biden (D-DE) and Lamar Alexander (R-TN). They have pitched the proposal, which first emerged in an earlier version last spring, as a means to level the playing field among "radio-like services" available via cable, satellite and the Internet.
Read more about it by clicking here.
British Band's Breakthrough Another Online Victory
A little-known band reaching No. 31 on the British charts is not normally the stuff of headlines. But Koopa's breakthrough into the prestigious top 40 this week is another landmark in an Internet revolution sweeping the music industry. The punk-rock trio from Essex, east England, has literally played to one man and his dog, so modest is the group's background.
"At one point the man left for 10 minutes, but the dog, he weren't going nowhere," Joe Murphy, guitarist and singer, said in his distinctive Essex slang.
"He loved it, tail wagging," the 26-year-old added during an interview in a rundown studio on a bleak industrial estate where the band has been rehearsing and recording for years.
Koopa is the first unsigned band to land a top 40 single, "Blag, Steal & Borrow," that is available only via Internet download. The breakthrough followed changes to the chart this month that mean no physical version of a record is required for the track to qualify. Record executives believe the change will level the playing field in music making, allowing new acts to land hits and old favorites to get a fresh lease of life.
Read more about it by clicking here.
EMI, Baidu Launch Chinese Music Service
Chinese Internet search service Baidu.com on Tuesday said it is launching an advertising-supported online music service in mainland China with Britain's EMI Music Publishing. The service will provide a stream of free online music, the company said, but will include only Chinese-language music, which people could listen to but not download.
EMI and Baidu would also continue to explore developing an advertising-supported service for downloading music, the companies said. They did not disclose any financial terms of the deal, which comes after Baidu was ordered by a Beijing court in 2005 to stop directing users to illegal music download sites.
Read more about it by clicking here.
Apple, Microsoft Have Designs On Your Living Room
If you're looking to give your home a digital makeover, both Apple and Microsoft have some ideas. The two companies last week each revealed new pieces to their digital living room strategy, aiming to move beyond their core strengths. At the Consumer Electronics Show in Las Vegas, Microsoft Chairman Bill Gates showed off Windows Home Server, a slimmed-down version of its operating system. It's designed to power a new generation of cheap and simple servers that can serve as a central household repository for photos, music, movies and more.
Two days later, Apple CEO Steve Jobs formally introduced Apple TV, a small box that sits next to a television set and enables people to play content stored on a Mac or PC elsewhere in the home.
Read more about it by clicking here.
Connected Consumers Watch More Network Broadcasting
A recent comprehensive study by CBS Research, examining consumers' attitudes towards digital media, and the role television will play in the near future, found that as the public at large becomes more connected to digital media, the more engaged they become in primetime television programming. And, as viewers become aware of the deadline for full digital transmissions, the likelihood of them investing in new digital TV sets increases substantially.
David Poltrack, Chief Research Officer for CBS Corporation and President of CBS Vision, concludes "... By offering (consumers) new ways to connect to their favorite shows, whether it's websites, podcasts, ringtones or other mobile features, we've been able to deepen the bond these fully connected viewers have with our programming."
Read more about it by clicking here.
'We Have Replaced MTV'
The New Economy is back again -- and the virtual playground MySpace paved the way. More than 140 million people across the globe are members of the virtual community. In an interview, MySpace's founders explain how the Web site killed some television and changed the world.
Read more about it by clicking here.
Media Buyer's Guide To 'American Idol'
What advertisers get for their $600,000 per spot.
The question each January, as Fox readies the premiere of its mega-hit reality show "American Idol," is whether "Idol's" hold on viewers will finally begin to soften. It's been the No. 1 show among adults 18-49 for the past three seasons and has yet to backslide in that time, pushing Fox to first place in the demographic the past two years.
In fact, all that success has resulted in a rather odd conundrum for Fox. Coming off the show's highest-rated season ever, the network may not want it to grow any more, or advertisers will be priced right out of commercial spots.
Read more about it by clicking here.
Make Mix Tapes And The RIAA May Send A SWAT Team To Bust Down Your Door?
Three years ago, we were a bit surprised that the RIAA had hired a former director of the Bureau of Alcohol, Tobacco and Firearms, and jokingly (we thought!) suggested that perhaps the RIAA was getting ready to bust down some doors.
Apparently a federal SWAT team "assisted" the RIAA in raiding the studio of a DJ in Atlanta. If you're familiar with DJ culture, you know that making mixes is a big part of what they do -- and while it may represent a gray area in legal terms, it hardly seems like the type of thing that requires a SWAT team to bust in (the SWAT team's argument that they often find drugs at such places is meaningless here, since they didn't find any drugs).
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES?' NEWS ITEMS
ITEM #1: Bravo announced they'll air "Hey Paula!" a new reality series following Paula Abdul through her day-to-day life as "American Idol" judge and producer of "Bratz: The Movie." Maybe this will provide some insight into her bizarre behavior.
ITEM #2: Michael Jackson's rep says the Beverly Hills pharmacy suing the pop star, claiming he ran up a $101,000 tab for prescription meds and never coughed up the dough, "has been paid." Mickey Fine Pharmacy claimed in its lawsuit that Jackson had ignored "repeated requests for payment" and was in violation of an oral agreement. Should we be surprised at all that Michael ran up this tab? Now if we only knew what drugs he got for the money.
ITEM #3: Justin Timberlake is showing no signs of mourning his relationship with Cameron Diaz. In his first interview since the ex-couple confirmed their split, Mr. SexyBack tells Ryan Seacrest that he's doing "great" and staying busy. Leave it to Ryan Seacrest to ask Timberlake this burning question.
ITEM #4: Lindsay Lohan enters rehab to seek treatment for an undisclosed issue. "I have made a proactive decision to take care of my personal health," Lohan said in a statement Wednesday. The question now is: which "undisclosed issue" is this for? Lins seems to have so many. According to Us Weekly, the 20-year-old starlet checked into the posh Wonderland Center, a residential treatment facility in L.A.'s Laurel Canyon that provides first-class amenities for its clientele. Laurel Canyon, hmmm...drug central for industry types for years and Wonderland Avenue where the famous John Holmes murders took place. Yeah, sounds like a great place for an upscale rehab place.
ITEM #5: A spokesperson for Britney Spears' record label denies rumors that the mother of two is pregnant again. If Britney was pregnant again, it would create a whirlwind "Who's the daddy?" in the tabloids. So Brit babe, use protection.
CONGRATS
CONGRATS #1 TO: To "Dreamgirls," which took home three Golden Globes on Monday. The Bill Condon-directed musical was named Best Picture, Comedy/Musical, while Jennifer Hudson and Eddie Murphy won Globes for Supporting Actor and Actress in a Comedy/Musical.
CONGRATS #2 TO: To Meryl Streep, who picked up her sixth Golden Globe, winning Best Actress in a Motion Picture, Comedy/Musical for her turn as the boss from fashion heaven and apprentice hell in "The Devil Wears Prada."
CONGRATS #3 TO: To "The Donald." Donald Trump received the 2,327th star on the Hollywood Walk of Fame Tuesday.
CONGRATS #4 TO: To Oprah Winfrey, who was named America's favorite TV personality for the fifth year running, according to a recent Harris poll.
ONJ TO NBC
Olivia Newton-John is set to appear as a guest judge on the first two-hour live performance episode of NBC's "Grease: You're the One That I Want" on Jan. 28.
URBAN OUT
Keith Urban officially checked out of rehab and reunited with Nicole Kidman at a Golden Globes party in Los Angeles Monday night.
AOL MUSIC MOVES TO NAPSTER
AOL announced last week that it struck a deal with music service Napster as the subscription provider for its AOL Music site. Napster will be fully integrated into AOL Music, and it will replace the existing AOL Music Now service.
REALITY HITS MTV
MTV announced reality-TV guru Mark Burnett ("Survivor" producer) will produce the 2007 MTV Movie Awards airing live on June 3.
MISS BRAXTON MISMANAGED?
Toni Braxton is suing her former manager, Barry Hankerson, accusing him of using dirty dealings to get her to switch from longtime label Arista to his own company, Blackground Records. The songstress claims Hankerson owes her more than $10 million after driving a wedge between her and her old label. Billboard is reporting that Braxton has been released from her current contract with Blackground after one album.
NO MORE WAITING
After numerous delays, a judge orders jury selection to begin March 19 in the trial of Phil Spector, who was indicted for murder in the February 2003 shooting death of actress Lana Clarkson at his home in Alhambra, California.
BELIEVE IT OR NOT, THOUGH HE HAS NO TALENT
Kevin Federline is starring in a Super Bowl commercial for Nationwide Insurance as part of the company's "Life Comes at You Fast" campaign. According to a release from the company, viewers will believe they are watching a Federline rap video, at which point the ad takes a "funny, surprise twist."
GRAMMY UPDATE
Christina Aguilera, Justin Timberlake, Carrie Underwood, Mary J. Blige and Ludacris are slated to perform at the 49th Annual Grammy Awards on Feb. 11, where they are all nominated in multiple categories.
USHER'S SPEEDING-TICKET FINE
Usher was found guilty of speeding in a July 4 incident, where he was pulled over in Georgia for driving 103mph. The R&B star was sentenced to 20 hours of community service and fined $425.
CLARKSON PARTNERS WITH NASCAR
Kelly Clarkson is partnering with NASCAR for the 2007 season in a comprehensive deal that involves her headlining the Nextel Tribute to America concert before the Daytona 500, shooting a promotional TV spot, serving as ambassador for NASCAR-related charitable causes and performing at NASCAR's annual Champions Banquet.
2006 Industry Conferences
Date Name Location NAMM January 18-21 Anaheim, CA Midem January 20-25 Cannes, France Media Summit New York February 7-8 New York
Quotes of the week
"Behind every decision I have made in my public life there always seems to be an apparent contradiction. I have come to terms with that, which is why I usually don't pay much attention to it."
-- Britney Spears, in a message to her fans posted on her website. Gee, Brit, tells us something we don't know. And as for Ms. Spears' current behavior? People magazine reported that she danced on the bar at Coyote Ugly in Las Vegas last week and the crowd "was going bananas.""I got bottles of moisturizers older than Tom Hanks."
-- Warren Beatty, upon accepting his lifetime achievement award at the Golden Globes after presenter Hanks reminded him several times he was named "Most Promising Newcomer" in 1962."Maybe I'll go see it with my lawyer."
-- Diana Ross telling David Letterman on Tuesday's "Late Show" that she's been too busy to catch a showing of "Dreamgirls," the film loosely based on her own experiences as a young singer in Motown. Too busy, Diana? Trying to find a hit?"The New York Times says that more women are now living without a husband. The worst part about women living alone is that they no longer have anyone at home to not listen to them."
-- Jay Leno"Last night 'American Idol' began its sixth season. Unfortunately Paula Abdul only remembers three of them."
-- Conan O'Brien
The B-Side - 'Blips'
THIS GIVES A WHOLE NEW MEANING TO "HERE COMES THE JUDGE!": ORLANDO -- An Orange County judge was placed on administrative leave.
Judge James Hauser is under investigation by the Judicial Qualifications Committee in Tallahassee because a law student claimed he performed inappropriate sex acts in front of her. Sources say a student from Barry University claimed Judge Hauser came to her home and then performed inappropriate sex acts.
The judge's attorney said the act between the judge and the student was consensual. Attorney Keith Mitnik of Morgan & Morgan, said Hauser insisted on taking a lie detector test, and passed. Mitnik also said Hauser went to the house for social reasons.
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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