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When Worlds Collide
May 26, 2006
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"If you do not seek out allies and helpers, then you will be isolated and weak."
-- Sun Tzu, "The Art of War"Three years ago I wrote in this newsletter:
"If ever there was a time for the music industry to seek symbiotic relationships, it's now. The formation of these partnerships is becoming a key component in all corporate thinking and has been talked about recently in leading business publications. This from BUSINESS WEEK: "... companies should expand beyond their existing resources through licensing arrangements, strategic alliances, and supplier relationships." From FORTUNE: "Alliances have become an integral part of contemporary strategicthinking."
More and more businesses now realize there is no such thing as having too many customers. No business today is safe from shifting trends and changes in the marketplace as consumers have more choices than ever where to spend their disposable income when it comes to entertainment options. The 'old world' strategies of traditional entertainment and media are fading faster than those old Kodachrome snapshots you've got pasted in your photo albums. The 'new world' of digital entertainment changed all that forever.
The most beneficial type of partnering companies can engage in, is partnering with other companies that can provide compelling benefits for their customers. If used properly, the partnerships can be used to gain customers, protect them from predation by competitors, and protect profit margins. Of course opening the doors to create such alliances means "thinking outside of the box" more than ever. But the rewards can be extraordinary. Just witness the success of companies utilizing product placement and alliances with 'American Idol'. These same companies would have had to spend tens of millions more in advertising on different shows and diversified media to equal the impressions made weekly by reaching thirty million plus people in the one-hour mega hit TV show.
"The greatest change in corporate culture - and the way business is being conducted - may be the accelerated growth of relationships based ... on partnership." - Peter F. Drucker.
One thing is certain: strategic partnerships are fueling the growth of the world's most successful companies as Madison Avenue finds it increasingly harder to capture consumers in an ever-changing fragmented media world. Alliances also allow companies to enter new markets and expose products they otherwise wouldn't do on their own. In other words, their marketing reach is extended across a much broader consumer landscape allowing for the possibility of increased market share and sales.
I've always believed that music is one of life's greatest pleasures and it carries with it so much of our emotions, our memories, and it even provides comfort in times when needed. All those people we see with their iPod earplugs in place seem to still be multiplying like rabbits. We see them everywhere now. In movie theaters, wait rooms in doctors' offices, at the dentist's office, the supermarket, driving, eating their lunch, and well ... you get the picture, and I already said it: they're EVERYWHERE.
Some marketing people see this as a bad sign. It means it's harder to capture that consumer. Au contraire my friends. It just means the consumer is that much more engaged in the media of their choice: music.
As long as music (in any format) is in such demand, it's a very positive sign.
So ring out the old, ring in the new. The music will continue to play and people will still hear it. Strategic alliances will only fuel their desires more.
The Free Media Ride Is Over
Audio and video entertainment on the Web has media execs and consumers clinging desperately to the old ways. Both will have to give up eventually and get used to a new world before we can all take the most advantage of new technologies. It's well covered how music and video companies fail to "get" the promise of new digital technology. They're trying by DRM or legislation to force the continuation of 50- to 100-year-old business practices developed when you had two choices: over the air or in the theater.
What's admitted much less often is that consumers dig in their heels as well. For decades now, thrifty consumers, myself included, could get free content while letting others pick up the virtual tab. My grandfather did it with a mute button, one of his favorite inventions. I've done it with the snack/bathroom break and later the fast-forward button on the VCR.
The old business practices developed naturally. You could make content and broadcast it, but how did you get people to pay for it? There wasn't a very good way to make people pay for it on their end. So the industry innovated, starting with radio ... There have always been cheats out there, though. Whether by mute, fast-forward, or bathroom, clever folks could get TV shows without paying proper attention to the commercials. Media companies never tried to outlaw the bathroom break or the channel changer, because they
understood that enough people saw the commercials to still make money. As a result, some folks got their content subsidized by the attention of others.
Read more about it by clicking here.
Microsoft Making Better Music?
When it comes to music, mighty Microsoft is the underdog. For the company that dominates PC operating systems, desktop software suites and e-mail software and has a darn good business in everything from databases to video games, it's an unaccustomed label.
Can the latest version of Microsoft's music software, Windows Media Player 11, be the first in many steps to dropping that underdog tag? While there's little question that Apple Computer is the company to beat in digital music, technology critics and analysts say Microsoft is starting to get its act together.
Read more about it by clicking here.
Sony Rootkit Settlement Gets Final Nod
A federal judge on Monday gave final approval to a settlement in a class action suit against Sony BMG Music Entertainment over anticopying software the company had embedded in some music CDs.
The agreement covers anyone who bought, received or used CDs containing what was revealed to be flawed digital rights management (DRM) software after Aug. 1, 2003. Those customers can file a claim and receive certain benefits, such as a nonprotected replacement CD, free downloads of music from that CD and additional cash payments.
The court action picked up last fall when security researchers discovered vulnerabilities posed by two pieces of software, First4Internet's XCP and SunnComm's MediaMax, which are automatically installed on a user's computer upon loading certain Sony BMG music CDs.
Read more about it by clicking here.
Clerk Says CBS-Howard Stern Suit Settled
A settlement has been reached in CBS Radio's breach of contract lawsuit against radio host Howard Stern, an official in a court clerk's office in New York said on Wednesday, but both sides said no agreement had been signed.
"The only response we're authorized to give you is the settlement agreement is not yet signed. We will release a statement when it is," said the office of Peter Parcher, lawyer for Stern. "A settlement agreement has not been signed. When it is signed, we will make an announcement," said a representative for CBS.
Read more about it by clicking here.
Study: Software Piracy Costs $34 Billion
Software piracy resulted in a loss of $34 billion worldwide in 2005, a $1.6 billion increase over 2004, according to a study commissioned by the Business Software Alliance.
The study, conducted by information-technology research firm IDC, found that roughly one out of every three copies of personal computing software installed in 2005 was pirated. While the rate of piracy has fluctuated from country to country, globally it has remained steady since 2004.
Read more about it by clicking here.
Internet Video Consumption Up Heavily: comScore
The number of Internet users watching video online grew an impressive 18 percent between October 2005 and March 2006. That's according to comScore's first ever analysis of U.S. Web users' online video viewing habits, drawn from its new Video Metrix service.
In March, U.S. Internet users initiated a total of 3.7 billion video content streams; and they watched an average 100 minutes of video content each during the month, compared with 85 minutes back in October.
Men initiated 52 percent of those streams, women 48 percent; splitting genders along roughly equal lines. But men spent far more time with the content, averaging two hours of viewing time during the month, compared with women's hour-and-twenty. Not surprisingly, males 18 to 34 were most engrossed with online video, averaging 140 minutes of video consumption.
Read more about it by clicking here.
Almost Half of Children Under 2 Watch TV Every Day ; 19% of Babies Have TVs in Bedroom
A Kaiser Family Foundation report today is confirming the obvious to parents of young children -- babies and toddlers daily diet includes not only formula and applesauce but also an extensive dose of TV and videos.
14% of children under 2 see two or more hours of screen media a day, 22% see one to two hours, and 25% less than an hour a day.
Kaiser found that 43% of children under 2 watch TV every day and 18% of children watch videos or DVDs every day. All together, 14% of children under 2 see two or more hours of screen media a day, 22% see one to two hours, and 25% less than an hour a day. The report also said 19% of babies under a year old have a TV in their bedrooms and 29% of children 2 to 3 have one.
Read more about it by clicking here.
IF YOU WEREN'T ONE OF THE ESTIMATED 43 MILLION PLUS WATCHING
Taylor Hicks was crowned the winner of this season's 'American Idol' Wednesday night, with over 63 million votes cast. The two-hour fifth-season finale featured guest appearances by Prince, Carrie Underwood, Mary J. Blige, Clay Aiken, Live, Meatloaf, Toni Braxton, Al Jarreau, Dionne Warwick, and Burt Bacharach. Now the other networks breathe a big sigh of relief until next year, when the show is sure to be #1 again in its time slots every week.
CIRQUE THE BEATLES, NOW ELVIS
Cirque du Soleil producing a series of shows about the King's life and music, CKX Inc., the parent company of Elvis Presley Enterprises announced last week. The Cirque du Soleil show utilizing The Beatles music, LOVE, opens next month at The Mirage Hotel in Las Vegas.
HILFIGER DUELS AXL?
The NEW YORK POST's 'Page Six' reported it first, then Axl Rose told Los Angeles radio station KROQ that he got into a fist fight with Tommy Hilfiger at a New York nightclub Thursday after the fashion designer began "smacking" him because he moved Hilfiger's girlfriend's drink. "It was the most surreal thing, I think, that's ever happened to me in my life," Rose said.
NEWTON OUT, BRAXTON IN
Toni Braxton replacing Wayne Newton as the headlining act at the Flamingo hotel and casino beginning Aug. 3.
ACM KUDOS
Brooks & Dunn picking up their 20th and 21st awards at the Academy of Country Music Awards Tuesday, making them the most decorated country artists in history. Idol alumna Carrie Underwood picking up Best New Female Vocalist and Single of the Year for "Jesus Take the Wheel"
STONES DON'T ROLL YET
The Rolling Stones postponing 15 dates on the European leg of their Bigger Bang tour while Keith Richards continues to recuperate from his recent head injury.
BACK TO SUNDAY
The Grammy Awards returning to a traditional Sunday slot in 2007 after 2006's Wednesday telecast pitted the awards show against ratings powerhouse 'American Idol.' Now they only have to go up against the #2 TV rated show 'Desperate Housewives.'
THIS SHOULD PROVE VERY INTERESTING
Cate Blanchett has signed on to play Bob Dylan (in one portion of his life) in the upcoming biopic, I'm Not There, also starring Heath Ledger and Michelle Williams. Blanchett portrays one aspect of the folk legend's personality as embodied by an androgynous singer-songwriter named Jude.
COMING SOON!
- Ralph Stanley, Distant Land to Roam (5/30)
- Zero 7, The Garden (6/6)
- The Replacements, Don't You Know Who I Think I Was? The Best Of (6/13)
- Nelly Furtado, Loose (6/20)
2006 Industry Conferences
Date Name Location Streaming Media East 2006 May 23-24 New York Home Entertainment 2006 June 1-4 Los Angeles
Quotes of the week
"I'm talking ... you f--kwit, f--king photographers, you should be shot, you should be all shot. Thank you."
-- Elton John, during his presentation of an award at the Cannes Film Festival last week to offer his opinion of photographers."Thank you for this doctorate you're going to give me. Now, I can get out of this dead-end job."
-- Billy Joel in People, addressing Syracuse University's graduating class."I thought it was like a hut. And then it's the Four Seasons, and then they rented the whole thing. Is that really roughing it?"
-- David Spade in US magazine on the expected Angelina Jolie/Brad Pitt Africa birthing fracas."Mexico President Vicente Fox arrived in the U.S. today. It's official, he's the last one. Turn off the lights. They are all here now ... don't let the door hit you in the ass."
-- Jay Leno
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'
THIS IS WHAT HAPPENS WHEN YOU LIVE IN A COUNTRY WHERE MORE PEOPLE VOTE ON 'AMERICAN IDOL' THAN IN GENERAL ELECTIONS: PHOENIX -- An Arizona man is betting that a chance at $1 million will bring more people to the polls. Dr. Mark Osterloh is a Tucson, Ariz., ophthalmologist and political activist who headed and bankrolled the campaign to get a proposal on the state's
November ballot that would give one lucky voter $1 million. Under the proposal, anyone who actually casts a ballot would be eligible. Osterloh and other supporters submitted petitions Monday bearing what they said were more than 185,000 signatures of registered voters. That's well over the 122,000 required to put a proposed state law on the 2006 ballot. Osterloh said the money would come from unclaimed lottery winnings.
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