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Why The Dual Disc With Dvd Plus Makes Sense
June 2, 2006
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"In my opinion it's far too early to ring the death knell for retail disc sales. With new technology, the future is as bright and shiny as the disc itself. The double sided hybrid is the future of the physical disc if the industry sees just how much they can benefit from it."
-- David Krebs, President/CEO - Krebs Communications, Vice Chairman - DVD Plus InternationalDavid Krebs has been an entertainment industry professional for 40-plus years.
As one of the most successful and innovative producers and managers in the entertainment industry some of the many artists whose Mr. whose careers Mr. Krebs launched and guided to superstardom are the rock stars Aerosmith and AC/DC (the number 10 & 11 all-time best-selling album artists in America), Ted Nugent, the Scorpions , as well as pop stars Michael Bolton and Rex Smith, all performers whose record sales total well over two-hundred million units, and who continue to sell millions of records each year.
With Steve Leber in 1972, David formed Contemporary Communications Corporation, a company that created successful ventures all across the spectrum of America's entertainment and communications industries during the next 17 years. Together they created some of rock-n-roll's largest outdoor festivals (Texas World Music Festival, Texas Jam and the California World Music Festival) which became the major venues for rock performers in the 70's and 80's. With Steve Leber he also co- produced the blockbuster Broadway hit "Beatlemania."
One of his latest success stories, the Trans-Siberian Orchestra (TSO), is a multi-platinum phenomenon. TSO's Christmas Rock Opera, "Christmas Eve and Other Stories," is the fourth highest grossing Christmas Attraction in the country, along with A Christmas Carol, Radio City Music Hall's Rockettes, and The Nutcracker. An acknowledged creative force in the industry, Billboard Magazine has attributed TSO's success to both its great music, and to "the Krebs factor."
He also launched The National Times, a monthly publication for those who like to stay on top of current issues, but cannot find time to read hundreds of magazines and newspapers. The magazine was selected by Library Journal Magazine for being one of the ten best magazines of 1992. Initially released as a magazine, The National Times is being readied for internet distribution as a not-for-profit venture.
David is currently developing The American Rock Opera Repertory, a company that will fuse rock, theater, and the classics, and is managing the legendary rock group Hanoi Rocks. In addition he is Vice Chairman of DVD Plus International.
I've talked about how the industry can benefit from the DualDisc format in several issues of this newsletter, and I thought it would make great sense to ask David (obviously a big supporter of the DualDisc/DVD Plus format as Vice Chairman of DVD Plus) some questions about this great format and how the industry can use it to engage the music consumer(s) more at retail.
SM: Thanks for taking the time to talk with me about the DualDisc utilizing DVD Plus. I'm a strong advocate of this great format. First off, can you start by telling the readers the difference between DualDisc and DualDisc with DVD Plus?
DK: The RIAA defines the DualDisc as a CD side with maximum of sixty three minutes of music and a DVD side with enhanced stereo or surround sound of the same music as on the CD side, plus some video. DVD Plus uses the same patent but different manufacturing techniques and has a CD side with up to eighty minutes of music and a DVD side with music and video or video only at your option.
I strongly believe the future of the physical disc can be this great hybrid invertible product. These value-added double-sided discs have already reinvigorated sales by giving consumers more incentive to buy their music through retailers, and the American music industry has only begun to scratch the surface of their potential.
And it's not just consumers and retailers who like the double-sided discs. Artists appreciate that these discs allow them to present their fans (and the audience at large) with the full range of their music experience, whether in the form of live concert footage, documentaries, videos, discographies, or by combining any of these with 5.1 surround sound or other enhanced audio! The content of each disc can vary depending on the performer's vision, but the European DVD Plus model firmly indicates that concert and behind-the-scenes footage particularly permits artists to connect with their fans in an intensely personal level and drive traffic to retail.
SM: Can you site some examples of that?
DK: One example of how double-sided discs motivate a consumer's passion to purchase took place last year when the Jennifer Lopez album 'Rebirth' landed at #2 on the charts with thirty percent of her sales coming as DualDisc purchases. People who wanted more than an audio album were willing to spend more to get exclusive behind-the-scenes documentary of the making of 'Rebirth' and the video content as well.
When we released AC/DC's 'Back In Black' in 2005 as a DualDisc we sold over 100,000 more units total in that format than we sold the previous year when it was just a CD.
As you know some titles, such as Bruce Springsteen's 'Devils & Dust' were released in the US on DualDisc only. That was so successful, it led to Springsteen's current success with his release of the 'Pete Seeger Sessions' which debuted on the Billboard Top 200 Album Chart at #3 in it's first week. It's now five weeks later, the disc is certified Gold (sales in excess of 500,000 units), ands it's still in the top 30 on the Billboard Album Charts. Springsteen or not (as you've said in your newsletter), the DualDisc obviously helped elevate this album at retail far beyond expectations for something that has virtually no radio or video play.
While DualDisc has thus far generally limited itself to a predominantly audio format, research has shown that the consumer is much more interested in the added value of video content. Sony/BMG Europe released a slate of Michael Jackson catalogue singles as hybrids that feature the hits on the CD side and the videos on the DVD side this year and had success at retail on all of them.
Studies are showing us too that consumers are exceedingly satisfied with the format, and more than ninety-percent indicated that they would recommend the double-sided disc to others. A staggering 96% say they're interested in buying DualDisc versions of new releases. In addition, almost 80% plan on purchasing DualDisc versions of CDs they already own!
SM: The marketing potential then is a veritable goldmine...
DK: Yes, and consider the ongoing fan interest and sales success in compilations. There's hardly a hit from the past that hasn't been sold and resold on a myriad of compilations. The double-sided discs can help to remarket the entire back catalogue one more time in a fresh and innovative way by creating a genuine collector's item loaded with old videos, classic interviews. and updated with all kinds of contemporary information.
Music lovers who buy music want and deserve the best, especially in this difficult, almost anti-industry environment. So it's particularly important that we offer the double-sided disc and look at the opportunities it presents because it offers the most extras with the least limitations.
The European hybrid disc, DVD Plus, offers some distinct advantages over its American counterpart. These discs offer an 80-minute audio side (compared to USA's DualDisc's 63 minutes), an available printed surface and scratch resistant coat, together with better play because there are no compatibility issue warning stickers necessary. Sony/BMG and 5.1 were among the first to license DVD Plus patents from its inventor/patent holder Dieter Dierks, and both companies now market these hybrids as DualDisc/DVD Plus in Europe.
SM: Why do you think the DualDisc hasn't happened more in the mainstream retail music market yet?
DK: I think there's several reasons, the principal being that the format was introduced in an unorganized fashion with little or no fanfare by labels and with no coordination or strategic planning with hardware manufacturers. But, if one extracts the titles that have been released on DualDisc, it's easy to see a pattern of success at retail and that evidences the consumers willingness to embrace the DualDisc. I can't imagine any artist not wanting to utilize this great format to their benefit.
SM: I heard something about the RIAA and IFPI's objection to the DualDisc...what's this all about?
DK: The RIAA and IFPI have filed an action in Europe to overturn the DVD Plus International's patent. It is height of hypocrisy that at the same time they are attacking our intellectual property they are filing tens of thousands of lawsuits to protect musical intellectual property . It simply makes no sense at all. It limits the full potential of the DualDisc and how it can benefit not only the labels, artists, and the industry, but also the consumers options at purchasing music in another format that they perceive has real value.
SM: The potential of this format with consumers sounds HUGE.
DK: Well it is, and think about this: in the USA millions of homes already have surround sound in their home entertainment centers which have been for sale for under $500 for some time. If an intelligent and powerful marketing plan was executed in conjunction with the audio hardware manufacturers we would have an opportunity to dramatically increase by tens of millions the household penetration of surround sound systems and sell these same households a surround sound version of best selling albums!
The RIAA lists 380 albums with sales of five million or more, with total sales of three billion units in the US alone. Just a ten percent conversion factor would equal 300 million sales at an $18.98 list, and that would total almost $6 billion including approximately $750 million in artist and songwriter royalties. It is estimated that the average conversion cost for surround sound is $20,000 and therefore a total cost of under $7 million for all of these 380 albums. All SONY SACD titles are easily converted at almost no cost. Then we could even go a step further and educate the music fans that compared to inferior download sound quality (something I'm sure the industry would love!), there is a higher level musical experience available ... a higher level with an incredible new dimension in audio quality. All one need do is listen to this sound and they are immediately convinced it's far beyond anything out there.
Every 'Greatest Hits' album by all artists with significant sales could be reissued as a DualDisc/DVD Plus. Compilations like the 'NOW THAT'S WHAT I CALL MUSIC' series could be reissued with videos on the DVD side. The possibilities are abundant.
SM: It sure sounds like a "no brainer" to me..
DK: It is ... and going further, now think about this: a recent Billboard Top 100 Albums chart showed that forty-two titles had a list price of $13.98. To maintain margins a second-tier higher suggested list price could be introduced at retail for these albums. The Dual Disc with DVD Plus would provide the labels with those margins, and again, more value for the consumers.
SM: This sounds like a logical step in meeting the needs of the industry and retailers and it could serve as a "bridge" as the world converts to digital day by day.
DK: Absolutely...and how about this fact: it's cheaper than a separate CD and DVD in a jewel box! Replicators in the USA are charging far too much compared to importation from Europe on spindles shipped by air or boat!
SM: I personally like the idea of the DualDisc because it lets people become more "involved" with the music.
DK: Yes, and if the industry wants to continue to promote the concept of the album as a complete work of art as opposed to the commodization of music in the world of single downloads and its denigration in the world of ringtones and ringbacks, this format provides a great solution...and the BEST solution.
During the next several years, and until digital downloads completely dominate the market, these hybrid discs offer consumers something extra in multimedia content while providing the industry with a justification for maintaining prices.
With digital sales growing three-fold over last year and no real accurate figures available for the increase of digital piracy, retailers will gladly turn to a new product that has captured the hearts, minds, and dollars of music fans. And there are improved technologies on the way.
According to Dieter Dierks, DVD Plus' inventor, his new discs will soon be no thicker than a standard CD and able to hold double capacity! We will shortly be able to print 1-color art on both sides with a choice of 4-colors in a process called Lazza Print. DVD Plus International has already developed the ability to manufacture HD-DVD Plus and soon expects to be able to manufacture DVD nineplus.(Even more content)
In my opinion it's far too early to ring the death knell for retail disc sales. With new technology, the future is as bright and shiny as the disc itself. The double sided hybrid is the future of the physical disc if the industry sees just how much they can benefit from it.
SM: The DualDisc with DVD Plus makes all the sense in the world if the industry really wants to keep disc sales in the marketplace and the consumer(s) get more "bang for the buck" at retail when they buy music.
DK: Yes ... the DualDisc/DVD Plus is simply one of the most engaging products the industry could use to bolster music sales globally. Why anyone wouldn't want this great format in the marketplace is beyond me.
SM: Thanks for the time David.
DK: My pleasure Steve ... and I'll keep you posted on our developments!
( To get in touch with David, you can e-mail him at: David.Krebs@Mindspring.com )
Mobile Content Going Slow
Despite the recent buzz about entertainment on cell phones, the mobile-content market has hit a speed bump. After an initial burst of growth, mobile content--which can include everything from ring tones to video clips--is struggling to break out of the early adopter segment and achieve mass consumption. It is too soon to forecast the demise of this promising new field, but it is evident that wireless entertainment is wavering during a crucial transition to third-generation mobile telephony, or 3G.
According to Seattle-based mobile-market research firm M:Metrics, consumption of wireless content has flatlined. After eight quarters of rapid growth, sales in the two main categories, ring tones and mobile games, have stalled. Every month in the U.S., only 10% of mobile subscribers download a ringtone to their phones, and less than 4% download games. Text messaging is holding steady at about 33%.
Read more about it by clicking here.
Pop in 'Idol' Hands
AMERICA, order has been restored. A white man with the canonical tastes of the classic-rock generation has won "American Idol."
Never mind that he was born in 1976, more than a decade after the British Invasion bands took Elvis' cue and made amped-up rhythm and blues rock's musical template. Taylor Hicks is, in his heart and well-patrolled soul, a baby boomer - a believer in old-fashioned artistic authenticity, who spent years playing oldies at frat parties before charming America with a style untouched by his own generation's hip-hop and alternative rock. For all the judges' yammering about Hicks' originality, he's a throwback, the most traditionalist winner in the contest's history.
Read more about it by clicking here.
Digital Music Finds Some Locker Room
The digital music battle of the future may not be over where music is purchased, but where and how it is stored.
A number of companies have created online content "lockers" where users can upload their digital media files for storage that they can subsequently access from multiple devices.
Examples include Oboe, created by MP3Tunes founder Michael Robertson, and MediaMax, from Streamload. Oboe offers unlimited storage of music-only files for a flat fee of $40 per year, while MediaMax will store 25 GB worth of music, video and photos for free, with up to 1,000 gigabytes for $30 per month.
Read more about it by clicking here.
Digital Jukeboxes Crank Out The Tunes
The Sevens, a beer-and-wine tavern with an oak bar worn smooth by decades of drinkers, has two amenities that set it apart:
a real cork dart board, and arguably one of the best jukeboxes east of the Mississippi River.
From early Bruce Springsteen and Patsy Cline to rare Rolling Stones tunes, the jukebox -- more than the darts or the dark wood benches -- sets a rollicking mood that pulls people through the door.
This spring, the tavern took a leap into the digital age with a new Internet-fueled jukebox that can access hundreds of thousands of songs.
Read more about it by clicking here.
How Sony Failed To Connect, Again
Early in 2005, more than a dozen Sony employees from the company's consumer electronics divisions gathered for an unusual meeting in the tiny Palo Alto, Calif., headquarters of digital media start-up Kinoma.
Kinoma Chief Executive Peter Hoddie, an Apple Computer alumnus, had been put in charge of high-profile Sony software development, including the Connect digital music project. For a company historically averse to using outside technology, this was a significant step.
Programmers went to work on the project, intended to be Sony's answer to Apple's iTunes. But the tone had been set for a dysfunctional mix of politics, programming and pique that would prove deeply destructive to Sony's digital music ambitions. Fourteen months later, a disastrous product launch doomed Sony's latest attempt to catch Apple.
Read more about it by clicking here.
Red Hat Project Brings Open-Source To Digital Media
Red Hat has launched a social-networking project called Mugshot to promote the use of open-source software for digital media.
The Linux distributor detailed Mugshot on Wednesday, calling it a way to add "live social experiences" to desktop applications and expose non-developers to open source.
The initial two services offered on Mugshot--Link Swarm and Music Radar--are for sharing music. But in a blog posting on Thursday the creators said that they are leaving the project's goals open to other possibilities.
Link Swarm is a service that lets people instantly chat with friends about music recommendations. Music Radar is a way to share music lists on a blog or over MySpace.
Read more about it by clicking here.
THE TALE OF THE TAPES
Howard Stern regained control of the tapes from the last 20 years of his terrestrial radio program in a settlement with CBS Radio last Friday, after Sirius Satellite agreed to shell out $2 million for the recordings.
OH REALLY? HAVE YOU PHONED EDDIE YET?
After losing his radio show, David Lee Roth claims he sees becoming Van Halen's lead singer again as "an inevitability." No word yet from the Van Halen camp as to this alleged "inevitability."
MAYBE THIS IS WHY HE ONLY PUTS OUT AN ALBUM ONCE EVERY TWENTY YEARS
Meatloaf told the press following his performance on the 'American Idol' finale where he did a duet with Katherine McPhee, he had no memory of what happened after he walked on stage. He also admitted he had never sung that song live before, and as he put it, it felt like he had "an alien busting out my chest." And we all know that chest is big enough to house several aliens.
BEING BLUNT ABOUT BLUNT
An English radio station has banned songs by British crooner James Blunt from its airwaves after listeners said they were fed up with hearing "You're Beautiful" and "Goodbye My Lover." Chris Cotton, program controller of local radio Essex FM in southern England, said: "We don't have anything against James Blunt and we're pleased he has been so successful, but we really need a break." Chris, did you ever hear about changing rotation on your records before you make such decisions?
IN THE CONTINUING 'WHO CARES' CATEGORY
Item #1: Katie Couric left 'The Today Show' this week and will begin her stint at CBS in the next few months. Maybe someone should tell the alphabet network execs that we don't really care who reads the news to us anymore since there's been at least three major 24/7 cable news channels on the air for quite sometime. Item#2: Anna Nicole Smith confirming in a video message on her Website that she is pregnant.
HICKS STICKS NAME ON CONTRACT
A week after landing the Idol title, Taylor Hicks making the Soul Patrol proud by signing his record contract with Arista Records in conjunction with 19 Recordings Limited.
INTERNET PRINCE
Prince being honored with the Lifetime Achievement Award at 10th Annual Webby Awards for his use of the Internet to release his music and connect with fans.
COMING SOON!
- Zero 7, The Garden (6/6)
- The Replacements, Don't You Know Who I Think I Was? The Best Of (6/13)
- Live, Songs from Black Mountain (6/13)
- Nelly Furtado, Loose (6/20)
- Keane, Under the Iron Sea (6/20)
2006 Industry Conferences
Date Name Location Home Entertainment 2006 June 1-4 Los Angeles P2P Media Summit June 22-23 McLean, VA CMJ October 31 - November 4 New York
Quotes of the week
"I got shot. I'm cool."
-- Gangsta' Rapper Beanie Sigel, leaving the hospital and showing off his bullet wounds to reporters after he was shot during an attempted robbery last week. Oh, okay, getting shot is "cool." Then I guess getting shot and dying is the coolest, right Beanie?"My kids are going to have to learn what a real job is, what life is. You don't have it easy with me. Period. My kids are going to work at Taco Bell, dammit."
-- Kevin Federline (Britney's lesser half) in Us Weekly. The question for Kevin of course is, how the hell would he know what a real job is?"The hardest thing for me in this movie was having to kiss Beyoncé thinking Jay-Z is gonna kick my ass."
-- Jamie Foxx in Star, on his romantic scenes in the upcoming Dreamgirls.
NARIP Information
NARIP (The National Association of Record Industry Professionals) promotes career advancement, education and good will among record executives. To find out more about this great organization, how you can join or attend their events, just go to: www.narip.com.
The B-Side - 'Blips'
TURBO TAX WAS OBVIOUSLY NOT AN OPTION HERE: WASHINGTON -- Taxpayers who gripe about long returns have nothing on General Electric Co., which filed a 24,000-page tax return this month.
The Internal Revenue Service said the company "stepped up and embraced" the new requirement for companies with more than $50 million in assets to file electronically.
If GE had sent paper forms, the return would have stacked up eight feet high. Instead, it took up 237 megabytes.
A deputy commissioner for the IRS' large and mid-sized business division said "not all of the corporate sector has welcomed" e-filing.
He said the IRS expects at least 11,000 of the biggest companies and maybe up to 20,000 will file electronically.
GE's senior tax counsel said it cost between $500,000 and $1 million to develop a system for electronic filing. But he said GE will save "many millions" by shifting from paper.
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