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And It Goes On And On
October 20, 2006
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"WalMart won't sue you if you don't shop with them. Let's not sue our customers if they don't shop with us. Let's give them more incentive to buy what we have to offer."
-- Disc & Dat reader, 12/9/05Before we begin, I want to know: Who are all these people e-mailing stock tips to all of us daily? What do they know that we don't? And if these are good stock tips, wouldn't the people e-mailing us all be filthy rich? And if they were, would they spend their time spamming stock tips to millions of us? But I digress. Enough about e-mail spam issues, time to get down to business....
FACT: The U.S. government's "War On Drugs" was lost a long time ago.
FACT: Despite all the lawsuits filed, people still download and will continue to do so.
From this newsletter on April 13, 2004: " If all the websites around the world offering free downloads could be eliminated tomorrow, it wouldn't stop people from burning multiple copies of CDs. If all the websites around the world offering free downloads could be eliminated tomorrow, it wouldn't change the fact that CD prices are still too high. If all the websites around the world offering free downloads could be eliminated tomorrow, it wouldn't mean that all the money being spent on video games, DVDs, movies, and other recreational diversions would be redirected to improved retail music sales. If the industry attacks these problems head on, one by one, it will do itself a greater service than all the lawsuits it could ever file."
This week, in continuing efforts to combat piracy and migrate online users to legal download stores such as iTunes, etc., the industry launched a new round of lawsuits against 8,000 alleged file-sharers around the world. The International Federation of the Phonographic Industry (IFPI), which represents the world's music companies, said on Tuesday the new cases were brought in 17 countries, including the first ones ever in Brazil, Mexico and Poland. (Read the whole story below, "Music Industry Files 8,000 New File-Swap Lawsuits.")
I've said too many times in this newsletter I don't condone illegal downloading. But I've also said as many times, there's little any organization can do to ever stop it legally, with technology or otherwise. According to the article, the IFPI estimates some 20 billion songs (!) were illegally downloaded worldwide last year. I don't know what the estimate was for how many songs were downloaded the previous year, but if 20 billion were downloaded last year, it doesn't take a rocket scientist to look at the data and see that current courses of action are having little or no effect on diminishing the problem.
The IFPI also reported this week that digital music sales around the world now account for 11% of all recorded music revenues, while physical CD sales continue to decline. The RIAA, in the meantime, reported domestic music sales fell another 6.1% in the first half of 2006, CD sales dropping by 15%.
Add to this the fact that the Consumer Electronics Association said this week that MP3 players will be the holiday gift of choice for the second consecutive year (see story below, "MP3 Players Top Holiday Wish Lists, CEA Survey Finds"), and Apple's reporting it sold another 8 million-plus iPods in the last quarter, and it's easy to see the handwriting on the music retailers' walls: CD sales will decline even further in 2007 as more people buy their music online.
It's far too soon to say that online music sales will be the salvation of the industry, but the growth in that sector is staggering. According to the IFPI report, legal downloads now represent about 11% of total music sales. If the growth remains constant, legal downloads could double in 2007. Whether or not that will make up for the decline in CD sales is another question. But the fact that millions more are buying music online is a big positive.
So another round of lawsuits are filed around the globe. Maybe next year, IFPI hopes that 20 billion number will drop to 19 billion. If they knock off 1 billion a year, it would only take 20 years to do the impossible -- eliminate all illegal downloads.
I know, that sounds silly. But no sillier than filing 8,000 lawsuits and thinking they might provide some sort of relief.
Time Warner CEO Hails Google's YouTube Acquisition
Parsons Weighs in on New Media, International ProspectsCANNES, October 11: In a briefing with reporters at MIPCOM today, Richard Parsons, the chairman and CEO of Time Warner and this year's MIPCOM Personality of the Year, weighed in on this week's "stunning" YouTube deal, Time Warner's international strategy and new media business models.
Commenting on Google's $1.6-billion deal to acquire the user-generated-content phenomenon YouTube, Parsons noted, "It's a stunning price, it's a stunning story. It's all the rage now that they were able to extract a knockout price for the asset. Whether that will be a value-added acquisition by Google remains to be seen."
The YouTube deal demonstrates the power of user-generated content today. "The question is," Parsons said, "where is it going and how do you make a business out of it? Is it going to take over edited or professional content? No. I don't think its going to overrun TV or movies."
Read more about it by clicking here.
What MTV Says About Google-YouTube Marriage
A recent Google collaboration with MTV Networks may have offered a window into what the combination of Google's online advertising network and YouTube's content will look like.
Google began distributing clips from MTV Networks over its AdSense advertising network in August, in what Jennifer Feikin, Google's director of video and multimedia search partnerships, said at the time was the first, but not the last, syndication deal of its kind.
"It's an amped-up form of AdSense," Feikin said. "We really have high hopes for this test, and we will look to roll the model out to other content providers."
Read more about it by clicking here.
View from the top: Eric Schmidt, CEO of Google
INTERVIEW WITH THE FINANCIAL TIMESFINANCIAL TIMES: Clearly, the dominant business news event this week is your own acquisition of YouTube. Why is user-generated video worth $1.65bn to Google?
ERIC SCHMIDT: Well, on the money side, it's easy because we have what we think is the world's best advertising system and we can take that advertising and use that over time to build quite a business off all of the things the users are doing on YouTube. The real reason, however, was not the money, and not even the advertising, it was because we believe that video is going to be, and is sort of already, one of the most important new media types on the internet.
More and more people are going to be doing videos of one kind or another to communicate ideas, sell their product, record their memories, and ultimately a lot of the existing broadcast world that we're so used to will become available on the Internet.
Read more about it by clicking here.
Universal Music International Finds 'Long Tail' For Old Albums
Older songs no longer sold in stores, including a Greek singer's 2000 Christmas album, have been downloaded 250,000 times since February as part of a broad initiative by Universal Music Group to exhume its archives.
The most popular of the 3,000 tracks made available in digital-only form on online services such as Apple Computer's iTunes was Gun's 1994 U.K. hit "Word Up" and the most popular album was Big Country's "Steeltown," which was released in 1984.
The seven-month sales, disclosed by Universal on Tuesday, represent a fresh example of the "long tail" theory that low sales of many products can collectively create a huge market, particularly in the digital age where costs are lower.
Read more about it by clicking here.
MP3 Players Top Holiday Wish Lists, CEA Survey Finds
SAN FRANCISCO--MP3 players will be the holiday gift of choice for the second consecutive year, the Consumer Electronics Association predicted Monday at its annual industry confab.
A portable music player is the consumer electronics item topping most adults' and teens' wish lists this year, according to CEA's annual holiday spending survey. CEA's head of industry analysis tells Industry Forum attendees that there will be more spent this year than ever before.
In its 13th annual poll of 1,000 U.S. adults, CEA reported it expects a 14 percent growth in money spent on presents this holiday season.
Read more about it by clicking here.
AllofMP3.com to Move To Ad-Supported Model?
According to reports, the Russian music site AllofMP3.com will be moving to an ad-supported model, providing thousands of albums for free.
The International Herald Tribune reported Wednesday that the site will be launching a "Music For the Masses" program as early as today, allowing consumers to download a software application that will play the music within a restricted player. The software was not available at press time.
The report comes as record agencies have begun trying to shut down the site, claiming that it contributes to piracy. Credit-card giant Visa International has begun blocking payments to the site, according to the IHT.
Read more about it by clicking here.
Universal Music Sues Two Video-Sharing Sites
Universal Music Group said on Tuesday it has filed lawsuits against video-sharing sites Grouper and Bolt.com for allowing users to swap pirated versions of its musicians' videos.
Universal, whose artists include U2, Mary J. Blige and Mariah Carey, said it is seeking damages up to as much as $150,000 for each incident of copyright infringement plus costs. It estimated that thousands of music videos were being viewed on both sites, to their benefit alone.
Grouper and Bolt.com "cannot reasonably expect to build their business on the backs of our content and the hard work of our artists and songwriters without permission and without compensating the content creators," a Universal spokesman said.
Read more about it by clicking here.
Music Industry Files 8,000 New File-Swap Lawsuits
The music industry has launched a fresh wave of 8,000 lawsuits against alleged file sharers around the world, escalating its drive to stamp out online piracy and encourage the use of legal download services.
The International Federation of the Phonographic Industry (IFPI), which represents the world's music companies, said on Tuesday the new cases were brought in 17 countries, including the first ones ever in Brazil, Mexico and Poland.
The trade group said more than 1 billion music tracks were illegally downloaded last year in Brazil, the largest market in Latin America. Record company revenue has nearly halved in Brazil since 2000, IFPI said.
IFPI has said some 20 billion songs were illegally downloaded worldwide last year.
Read more about it by clicking here.
The Symbolism Of Losing Tower Records
(From Avrev.com)The closing of the flagship location of Tower Records on Sunset Boulevard in West Hollywood is another shining example of the illness that has infected the music business. Feeding on executive arrogance and technological fear, the pompous geniuses who run today's media conglomerates and so-called major record labels are much to blame for the loss of such an icon. It was on their watch that the music business has gone from a $30 billion business per year (domestically) to one that sells about one-third of that now. For the music business, the fall of the Roman Empire has taken a little more than a decade.
Ask any label executive why, and they scream that the cause of their problem is illegal downloading. Yet Apple's (legal) iTunes along with other legit download sites have become a $3 billion a year domestic business according to many estimates. The idea of legitimately downloading songs is something that mainstream consumers like and have embraced, yet it was the all-knowing leaders of the music industry that chose to sue their clients over embracing new technology.
Read more about it by clicking here.
The Who Return With 1st Album Since 1982
Most of the 24 years since the last time the Who released a new album passed with the group's creative force, guitarist and songwriter Pete Townshend, believing there would never be another one. That doesn't mean no one tried, with almost comically dysfunctional results.
Although the Who are down to only two original members in Townshend and singer Roger Daltrey, the first disc to carry the group's name since 1982 is set for release at the end of October. "Endless Wire" is familiar in its crunchy rock 'n' roll and literary aspirations; half is a rock opera based on a mini-novel Townshend wrote and distributed online.
Read more about it by clicking here.
Yoko Ono Sues EMI, Subsidiary for $10M
Yoko Ono sued music company EMI Group PLC and a subsidiary for $10 million Wednesday, claiming she was cheated out of royalties due from the sale of music recordings by her late husband, John Lennon.
The lawsuit, filed in Manhattan's state Supreme Court, accuses EMI and Capitol Records Inc. of violating a half-dozen agreements by "willfully and knowingly underreporting royalties" by hiding the "true use and disposition of Lennon's recordings."
Read more about it by clicking here.
Music Companies Grab a Share of the YouTube Sale
YouTube's young founders may have been the biggest beneficiaries of last week's $1.65 billion deal with Google, but they have some unexpected bedfellows -- old-line media companies that had been considered YouTube's biggest legal threat.
Three of the four major music companies -- Vivendi's Universal Music Group, Sony and Bertelsmann's jointly owned Sony BMG Music Entertainment, and the Warner Music Group -- each quietly negotiated to take small stakes in YouTube as part of video- and music-licensing deals they struck shortly before the sale, people involved in the talks said yesterday. The music companies collectively stand to receive as much as $50 million from these arrangements, these people said.
Read more about it by clicking here.
THIS WEEK'S 'WHO CARES?' NEWS ITEMS
ITEM#1: Michael Jackson is accusing his former attorneys of conspiring to put him into involuntary bankruptcy. "Involuntary bankruptcy"? Yet further evidence that Michael is third and long on the reality playing field when it comes to finances.
ITEM#2: Bobby Brown has paid the back child support he owed to Kim Ward, the mother of two of his children, the Associated Press reports. Gee, what a model citizen. Only two months behind and paying up. Let's check in again in another two months and see how this situation is going now that Bobby doesn't have Whitney's checkbook in his pocket anymore.
ITEM#3: Paris Hilton. Nothing specific, but she is now a permanent "Who cares?"
CONGRATS
CONGRATS #1 TO: J Records and Rod Stewart, whose new CD Still the Same...Great Rock Classics of Our Time topped the Billboard 200 Chart with more that 184,000 copies sold, per Nielsen SoundScan data.
CONGRATS #2 TO: Stevie Wonder, who received a Lifetime Achievement Award from the National Civil Rights Museum Tuesday and broke into a medley of his songs, including "My Cherie Amour" and "I Wish," during his acceptance speech.
HITTING THE ROAD IN EARLY '07
#1: Christina Aguilera's "Back to Basics" tour to kick off Feb. 20 in Houston. The Pussycat Dolls will join the singer for her North American dates, while Danity Kane will also be along for the ride on all the U.S. stops.
#2: The Red Hot Chili Peppers and Gnarls Barkley hit the road together in January for a three-month U.S. arena tour.
#3: Justin Timberlake's 'FutureSex/LoveShow' World Tour kicks off Jan. 8 in San Diego.
NOW AL FRANKEN HAS TO FIND A REAL JOB
Air America Radio files for Chapter 11 bankruptcy protection, one month after denying rumors that it would do so.
D-I-V-O-R-C-E, AND IT'S GONNA GET UGLY
Country star Sara Evans files for divorce from her husband of 13 years last week and abruptly drops out of ABC's "Dancing with the Stars." According to People magazine, Evans also granted a restraining order prohibiting her allegedly adulterous, porn-loving and abusive estranged husband Craig Schelske from withdrawing money from their joint bank accounts. In the meantime, Alison Clinton, the former nanny Ms. Evans claims had sex with her husband, tells ABC News Radio the country singer suffered an "exhaustion breakdown," and offers to take a lie detector test to set the record straight.
THE WAY TO REBOUND, EVEN IF IT'S NOT REALLY A "BREAK-UP"... IF YOU HAVE THE BIG BUCKS
Jennifer Aniston plunks down $15 million for a new abode in Beverly Hills, the Los Angeles Times reports.
FREE HOWARD
Howard Stern will make his satellite radio show available to non-Sirius subscribers again, but only briefly. Stern will launch his first-ever Internet broadcast, which will be available free of charge Oct. 25-26 on Sirius.com as part of a promotion for the company's new Internet radio service.
KATIE SINKS FURTHER
Katie Couric's ratings in New York City, Los Angeles, and Washington, DC continue to erode, and her third-place ranking against NBC and ABC dropped even more.
MAYBE HE CAN SLAY VAMPIRES, BUT THE I.R.S. IS ANOTHER MONSTER ENTIRELY
Wesley Snipes indicted on eight counts of tax fraud Tuesday for failing to pay nearly $12 million in taxes and neglecting to file tax returns for six years. If convicted on all charges, the actor could face up to 16 years in prison -- though they'll have to catch him first. Last week the U.S. Attorney's office issued a warrant for Snipes' arrest after federal authorities were unable to locate him.
AND OF COURSE HE'LL WRITE SONG ABOUT IT AND PUT IT ON HIS NEXT CD
Rapper Fabolous shot in the thigh while standing in a Manhattan parking garage early Tuesday, then arrested while fleeing the scene. Apparently, the rapper and several associates ran a red light and were stopped by police, who subsequently discovered two loaded, unlicensed guns in the car.
APPLE KEEPS GROWING
Apple said strong sales of Macintosh computers and iPod music players lifted its quarterly profit by 27%, exceeding Wall Street's expectations. The company said iPod shipments climbed to 8.7 million, up 35% from a year ago. It's estimated that total iPod sales are now approaching the 80 million mark.
FROM CHAMPAGNE TO BEER
After his much-publicized falling out with Cristal, Jay-Z signs with Anheuser-Busch to help promote Budweiser Select.
20 Y.O. AND MAYBE HEADED ELSEWHERE
The rumors are flying that Janet Jackson's current album might be her last for Virgin.
COMING SOON!
- My Chemical Romance, The Black Parade (10/24)
- John Legend, Once Again (10/24)
- Nellie McKay, Pretty Little Head (10/31)
- Frank Sinatra, Sinatra: Vegas (11/06)
- Damien Rice, 9 (11/14)
2006 Industry Conferences
Date Name Location CMJ October 31 - November 4 New York
Quotes of the week
"Madonna... I just think she's a vile, hideous, horrible human being with no redeeming qualities. There's nothing nice about her. I've never heard anyone say anything nice about her at all. And anyone that's ever met her she's been vile to. Vile, full of herself -- so unspiritual. How has this woman got away with it for so long?"
-- Boy George, in a new TV documentary in the UK, proving he has lost none of the power to shock by commenting on celebrities"It's mean. They make the loser sing."
-- Comedian Wanda Sykes on what she loves about American Idol, in her HBO stand-up comedy special Sick & Tired"You know what it's called? It's called 10 pounds. Here's what it is -- this is the funny thing -- you're either, 'Oh, look at the bump,' or 'The pregnant...,' and they circle the bump and there's an arrow. But instead it's like, you know, maybe a couple cheese plates too many."
-- Jennifer Aniston on Oprah, denying rumors that she recently had a boob job."Barry Manilow had hip surgery recently. You know why? So he could be billed 'The new, hip ... Barry Manilow!'"
-- Jay Leno"I want to get married before I'm 30. And have my house. And make the kind of record I want. And I'd like to win an Oscar before then."
-- Lindsay Lohan in the November issue of InStyle magazine. Maybe Lindsay is thinking of doing stand-up? How about just settling for the getting-married part, Lindsay? An Oscar? Mucho dubious. The kind of record you want? It doesn't matter. You need to make the kind of record people will buy. Ooops, you tried that once already, and that didn't happen did it?"I don't believe that Jews are responsible for all the wars in the world. I mean, that's an outrageous, drunken statement."
-- Mel Gibson, to Diane Sawyer"Mel Gibson has a new movie out. It's about the end of the Mayan civilization. And guess whose fault that was?"
-- David Letterman
The B-Side - 'Blips'
THERE WON'T BE IN-FLIGHT MOVIES IN THE SMOKING SECTION BECAUSE WITH ALL THE SMOKE YOU WON'T BE ABLE TO SEE THE SCREEN: BERLIN, Germany -- Are you ready to fly the smoky skies? (Cough, cough.)
Here's an airline where you won't have to worry about tampering with the lavatory smoke detector. Because not only are you free to light up -- you can even puff away on a Cuban cigar.
A German businessman with a pack-and-a-half-a-day habit is behind Smoker's International Airways. He hopes to start flying in March between Dusseldorf, Germany, and Tokyo, using a trio of 747s. Not one will have a no-smoking section.
Along with creating a smoker's haven, the plan is to also bring back the golden age of air travel. To that end, flight attendants in designer uniforms will be serving up caviar. But in a nod to the modern age, there will also be TVs, phones and Internet access.
But non-smokers should not worry, according to the company. On its website the founder said the airline will have an air-filtration system that would provide fresher air than on other non-smoking planes.
"Non-smokers will find the cabin air more refreshing than on any other flight with any other airline, as SMINTAIR adds fresh outside air to the conditioning system! This is more expensive, as it burns more fuel, but it is seen as an additional service to our guests," the site said.
Box Office
Check The Daily & Weekly Box Office (and more film info) at: www.boxofficemojo.com.
The Charts
Check out the weekly top album and singles charts from around the world at: http://top40-charts.com.
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