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Time To Face The Music
January 27, 2006
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"Truth is like the sun. You can shut it out for a time, but it ain't goin' away."
-- Elvis PresleyUnless you've been hibernating or haven't turned on your TV this week, you already know the big media story bicycled around every 24/7 news channel and alphabet network news broadcast was Oprah's humble apology to her audience (the world?) as she decimated James Frey, the author of "A Million Little Pieces," on her television show for lying about his past and portraying the book as a truthful account of his life.
Once again, the Internet and new media brought out the truth. The website www.thesmokinggun.com had pages up online within no time revealing all the falsehoods in Frey's book. Other news people jumped on the story and before you knew it, Oprah was taking back the words of support for Frey she had spoken just a week earlier on 'Larry King Live.'
This unraveling of Frey's tale is another realization of just how much the Internet and new media have affected our popular culture and how much more the traditional media conglomerates need to do before they regain overall viewer confidence in the news they report. The public is watching the news, but they aren't necessarily buying all of what they hear.
People are seeking out more information now. And not at their local libraries or their local newspapers where circulation is falling as fast as the price of General Motors stock. Nope. They go online, do the research and seek out the facts. Needless to say, this presents an enormous cultural change to all media companies and the echoes of such changes ring out loud and clear.
These same cultural changes have been ringing out loud and clear now for almost a decade and presented enormous challenges as the music business has had to rethink its consumer marketing approach, pricing strategies and artist-compensation standards to compete in the "brave new digital world" I've talked about for the past five years in the newsletter.
Why so many in the business still don't want to see the truths unfolding before their eyes is quite astonishing. This past week's total record sales for the top 10 albums was less than 700,000 CDs and that's a very harsh and ugly reality.
In the meantime, satellite radio (another part of the new media options available to the consumer) continues to grow with over nine million total subscribers currently purchasing the services from XM and Sirius. One company is predicting that satellite subscribers will exceed twenty-nine million by the end of 2009. ( Source: 'Satellite Radio Reaches New Heights' at http://www.emarketer.com/Article.aspx?1003765 )
In the meantime, computers (today's music machines for so many people) keep dropping in price and offering more media applications. Apple's tunes is still selling lots of songs here and in other countries where other tunes stores have opened. Piracy is still rampant around the globe, and despite all the thousands of lawsuits filed by the RIAA, illegal downloading flourishes and will never be eliminated.
Users of Apple's iTunes now make up 14% of active Internet users, according to a Nielsen survey. The survey also estimated that iTunes use has grown 241% over the past year, from 6.1 million unique visitors in December 2004 to 20.7 million in December 2005. Of course the good news is that distributing music digitally saves lots of money. It reduces operating costs dramatically from manufacturing and distribution to inventory.
I know it's difficult to make revenues made from CD sales from online sales of 99 cent songs, but, again, by employing the REC strategy (Relevance, Engagement, Creativity), the industry can generate new ways to grow exponentially.
We've all heard the adage "the truth will set you free." Accepting the truth (even if you won't reveal it) is equally important. The truth is now even more potent than its ever been in regards to just how quickly the music industry model needs to change as digital music sales soar and CD sales decline. I know there's more profit in CDs, but whether we like it or not, CDs won't provide us with a lifeboat on the digital seas we're sailing on.
The Coming Tug of War Over the Internet
Do you prefer to search for information online with Google or Yahoo? What about bargain shopping -- do you go to Amazon or eBay? Many of us make these kinds of decisions several times a day, based on who knows what -- maybe you don't like bidding, or maybe Google's clean white search page suits you better than Yahoo's colorful clutter. But the nation's largest telephone companies have a new business plan, and if it comes to pass you may one day discover that Yahoo suddenly responds much faster to your inquiries, overriding your affinity for Google. Or that Amazon's Web site seems sluggish compared with eBay's.
The changes may sound subtle, but make no mistake: The telecommunications companies' proposals have the potential, within just a few years, to alter the flow of commerce and information -- and your personal experience -- on the Internet.
Read more about it by clicking here.
Make Your Own Kind Of Music
Amoeba does, and the indie retailer is bucking industry odds and expanding.
In 1990, as music megastores were taking over city blocks and CDs were spinning LPs into relics, Marc Weinstein launched what seemed like the wrong company at the wrong time. Weinstein, who managed San Francisco's legendary Streetlight Records Ltd. for seven years, went ahead and started Amoeba Music Inc., a Berkeley (Calif.) record shop devoting half its inventory to used and rare vinyl. Weinstein wanted to make Amoeba into his ideal of the music shopping experience. "I always imagined a community-based record store where everyone celebrated the artists and the music," he says.
Read more about it by clicking here.
EMI Chairman Sees Net Reviving Music Industry
Nobody said it was easy for EMI, the world's third-largest record company and the home of British band Coldplay, as the music industry has weathered six straight years of falling sales. Yet EMI Chairman Eric Nicoli and others in the industry are seeing signs of hope coming from the very source of many of the industry's woes--the Internet.
Sales of downloaded music on online services such as Apple Computer's iTunes Music Store are surging, and made up 6 percent of industry revenues in 2005. Nicoli said digital revenues are now expected to offset flagging CD sales within a few years.
Read more about it by clicking here.
Satellite Radio Reaches New Heights
Satellite radio had another big fourth quarter, consolidating a big year. The total number of subscribers for XM and Sirius reached over 9 million, more than double the number of paying listeners from the year before.
XM announced that it had added 2.7 million subscribers in the fourth quarter of 2005, bringing its year-end total to 5.9 million. Sirius added over 1.1 million new subscribers in Q4 2005, representing about one-half of the 2.2 million subscribers it added in 2005. By the end of the year, the company could claim over 3.3 million paying listeners in the US.
E-Marketer projects over 29 million subscribers between both services by the end of 2009.
Read more about it by clicking here.
Digital Music: Industry Answers
Some of the top executives in the music industry have answered your questions about digital music.
The BBC News website asked for your queries and gripes about the way new technology is being used - and the eight sharpest, most frequent and most important questions were put to the virtual panel.
Read more about it by clicking here.
Wal-Mart Launches Online Music Service
Wal-Mart Stores Inc. launched an online music video and audio service with exclusive studio performances Wednesday, part of a broader strategy to make itself trendier and draw consumers already in the store for cheap staples into other departments. Dubbed "Wal-Mart Soundcheck", the service features studio performances and interviews with new and established bands and musicians.
Read more about it by clicking here.
By Wire or Wi-Fi, Connecting the PC to the Hi-Fi
For many people, the ease of playing digital music on home computers has been reason enough to abandon their old stereo systems. For true audiophiles, who would never consider that option, there are new ways to stream music files stored on a PC to a home stereo system.
The New York Times profiles the Squeezebox, a device that allows you to stream music files from a computer to your home stereo system.
Read more about it by clicking here.
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