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Ch-Ch-Ch-Changes
January 20, 2006
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"Everyone is acquainted with the famous 'law of diminishing returns.' But hardly anyone is aware of the opposite law -- that just a little extra effort can add up to a significant difference." -- Sydney J. Harris
Faster than a speeding bullet … well okay, maybe not that fast, but certainly faster than most any industry people expected (yet predicted here in this newsletter early last year), sales of digital music soared in 2005 with worldwide digital music sales surging threefold to $1.1 billion and now accounting for 6 percent of the industry's total sales from near nothing two years ago (See link in story below: 'Digital Music Sales Tripled In 2005' )
This is indeed good news because it evidences yet again, people will BUY music online at reasonable prices, they'll buy it again and again, and that the industry can still make money selling music online despite all the illegal P2P activity that still exists.
In the study of economics the law of diminishing returns state, in simplest terms, that at some point the same efforts to increase favorable (and profitable) results will in time return less than favorable results. I couldn't help but have that thought come to mind when I read the good news about the progress of digital music sales and how this news is in such sharp contrast to the efforts that have been forth by the RIAA and the major labels to achieve favorable results, and have had just the opposite effect.
First: Too much time and effort is still being spent by all labels on finding the "right" copy-protection application to put on CDs. But as I've said here in the newsletter countless times, any and all efforts at employing some type of "silver bullet" successful encryption technology to prevent people from copying CDs (which are nothing more than digital programs) will only prove fruitless in time. Anything done digitally, can be undone and any educated computer/technology person knows this.
There is NO magic silver bullet that will ever provide a permanent solution to people copying CDs and any applications used to discourage it will be short-lived. As I've said numerous times in 2004 and 2005, if there's a single solitary tech person out there that wants to write me and argue otherwise, please do so. But having made half a dozen trips to Silicon Valley in the past five years, I've been told repeatedly by all I've spoken to, that the industry should stop wasting money and time on trying these applications, because they will all fail in the end. So then why are the labels trying to seek a solution that: a) will be undone in any event; and b) does NOTHING to increase sales of CDs and as exemplified in the SONYBMG rootkit fiasco, turns off more consumers?
Instead of trying to do things to somehow protect content from an unprotect able environment (i.e., the digital world we now live in), why aren't the labels looking for ways to provide added value and content to the consumer? What efforts are they undertaking in marketing to gather data from their buyers? Why aren't they looking for solutions from companies that offer such services as specific market intelligence and permanent data collection? If there's any label executive reading this that wants to see one such example of just how much one company can deliver for you, check out www.cdintelligence.com and download the brochure. I already have and was so intrigued I called them and spoke to them this past week. In my opinion, they are exactly the type of company labels need to seek out to better their sales and marketing efforts.
This past week album sales for the week ending January 15th were 9.4 million, down 17.7% from a week ago, and down 2.3% from the comparable week of 2005. The law of diminishing returns in evidence. It's now time to do SOMETHING else. Time to employ the RCE (Relevance, Creativity, Engagement) model I talked about last week as quickly as possible.
Tension Grows Between Labels and Digital Radio
The entry of satellite and digital radio into the technological mainstream is increasing tension with the record industry, which wants new rules governing how consumers can make digital copies of songs from the airwaves.
At issue are new devices that can record and save high-quality digital copies of tunes as they're being broadcast by these new networks. Recording executives are worried that consumers might increasingly opt to make such copies instead of purchasing the music on a commercial CD or from a download store like Apple Computer's iTunes.
Read more about it by clicking here.
Google To Buy Radio Ad Company
Google is acquiring a radio advertising company, broadening the reach of its ad business. The search giant said Tuesday that it will pay $102 million in cash for DMarc Broadcasting, a Newport Beach, Calif., company that works with radio advertisers in the sales, scheduling, delivery and reporting of radio ads.
Read more about it by clicking here.
Tuning Tech Catches On With Guitarists
No matter how accomplished they are, musicians who play fretted instruments spend a lot of time playing out of tune. Strings stretch and bind. Fluctuations in humidity and string tension cause instrument necks to bow, arch and twist. Something--it is not always clear what--throws string pitch out of whack. Professional players on stage and in recording sessions find themselves twisting tuner knobs between every song and sometimes in the middle of songs.
Technology, it turns out, does offer a remedy for tuning problems--at least for those who play electric guitars. Backers and users of an electronic system called the Performer say it offers a big leap beyond the ubiquitous electronic pitch readers that, while reasonably accurate, still require the player to tune manually.
Read more about it by clicking here.
2006 Q Magazine Readers' 100 Greatest Albums Ever
You might not agree with all the choices, but check it out!
Read more about it by clicking here.
Music Biz Laments "Worst Year Ever"
From Rolling Stone ... A Look at The Biz in 2005It was yet another unhappy New Year for the music industry: Despite hits by Mariah Carey, 50 Cent and Green Day, 2005 saw album sales drop 7.2 percent as labels continued to struggle with adapting to the age of the iPod and the Internet. Overall, consumers bought 48 million fewer albums than in 2004, marking a disastrous twenty-one percent slide from the industry's peak in 2000, according to Nielsen SoundScan. And the holiday season, which typically accounts for forty percent of annual sales, was a bust. "It was arguably the worst in the music business's history," says Steve Bartels, Island Records president.
Read more about it by clicking here.
Sony Rootkit Victims In Every State, Researcher Says
A security researcher has claimed that computers in every U.S. state have been affected by copy-restriction software from Sony BMG. Dan Kaminsky released the information at the Shmoocon 2006 hacker conference in Washington last week.
Read more about it by clicking here.
Digital Music Spins New Sales Approach
Despite the millions of dollars that record labels spend on advertising, it may be folks like Robert Burke who determine the future of music marketing. Burke, a South Carolina software tester, operates a popular series of Web sites called Scopecreep.com where he's posted thousands of digital music playlists, from "Best songs of 1989" to "Palindrome songs," that can be played by any Yahoo or RealNetworks Rhapsody music service subscriber.
Read more about it by clicking here.
Digital Music Sales Tripled In 2005
Worldwide digital music sales surged threefold to $1.1 billion in 2005, an industry trade group said on Thursday, as consumers flocked to buy music for their computers, iPods and mobile phones. Revenues are split roughly 60-40 between online music services such as Apple's iTunes Music Store and mobile phone revenues such as "ringtunes" that contain excerpts of songs, the International Federation of the Phonographic Industry said.
Digital music now makes up about 6 percent of the industry's total sales, up from virtually nothing two years ago.
Read more about it by clicking here.
Universal Music Opens Vaults For Digital Downloads
Universal Music, the world's biggest record label, is digging deep into its vaults to release download-only recordings from its vast back catalog. The company said Wednesday that it is embarking on a program to digitize 100,000 out-of-print European recordings, beginning with 3,000 British, French and German albums from artists such as Marianne Faithfull, Brian Auger and Brigitte Bardot.
Read more about it by clicking here.
IDOL DOINGS
A whopping 35.5 million viewers tuning in for the two-hour season five premiere of American Idol, giving Fox its best ratings for an entertainment program ever. In the meantime, Paula Abdul skipped out on a press conference with her fellow American Idol judges on Tuesday and blamed her absence on an "eye infection," just hours before the fifth season of the talent competition debuted on Fox. Also: Kelly Clarkson (the first 'American Idol' winner whose current album is near five million in sales) was blasted by Simon Cowell over her alleged refusal to allow American Idol contestants to perform her songs, but Kelly is denying any conflict with the show and claiming she always intended to allow her songs to be used.
SUPER BOWL MUSIC
Aretha Franklin, Aaron Neville and Dr. John teaming to perform the national anthem at next month's Super Bowl. Joss Stone and John Legend joining with Stevie Wonder to provide pregame entertainment and the Rolling Stones performing during halftime.
AT LONG LAST (MAYBE)
Axl Rose telling Rolling Stone that Guns N' Roses' long-gestating album, Chinese Democracy, will be finished and released this year.
IT'S GOOD TO BE THE KING
Elvis Presley's "Heartbreak Hotel" topping Billboard's Hot Singles Sales chart, 50 years after its initial debut.
GARRETT ARREST
Seventies teen icon Leif Garrett charged with heroin possession stemming from his drug-related arrest Saturday, when he was nabbed by police after allegedly trying to avoid paying a subway fare.
PASSING
Wilson Pickett, the soul pioneer best known for the fiery hits "Mustang Sally" and "In The Midnight Hour," died of a heart attack Thursday, according to his management company. He was 64.
BUT WILL HE STILL GET "HAPPY FEET"?
Steve Martin extending his Saturday Night Live record by returning as host for a 14th time on Feb. 4, with musical guest Prince.
BRAZIL GOES LOCO FOR U2
Fans in Sao Paulo, Brazil, standing in line at city supermarkets up to 12 hours to score tickets to see U2 when the Irish quartet comes to town on Feb. 20. Cashier machines broke down, but no major incidents occurred. Promoters, however, said an extra show would be added.
COMING SOON!
- Jenny Lewis with the Watson Twins, Rabbit Fur Coat (1/24)
- Cat Power, The Greatest (1/24)
- P.O.D., Testify (1/24)
- Beth Orton, Comfort of Strangers (2/5)
- Belle & Sebastian, The Life Pursuit (2/5)
- The Subways, Young for Eternity (2/12)
2006 Industry Conferences
Date Name Location Midem January 22-26, 2006 Paris 2006 Media Summit New York February 8-9, 2006 New York Digital Hollywood Spring March 28-30, 2006 Santa Monica, CA MusExpo 2006 April 30-May 3, 2006 Los Angeles, CA
Quotes of the week
"You gotta feel sorry for Mary-Louise Parker. "Desperate Housewives" is one of the biggest shows on the planet, and "Weeds" is only watched by Snoop Doggy Dog."
-- Chris Rock, before presenting the Golden Globe to Parker for best actress-TV series, musical or comedy on Monday night's Golden Globes Awards Show." Some sad news. The rumor going around, after 14 years of marriage, Whitney Houston and Bobby Brown may be splitting up. I guess Whitney came home early one day and caught bobby hitting other women. "
-- Jay Leno" Here is an odd story. A dentist in Britain has been banned from practicing dentistry after she allowed her unlicensed and untrained boyfriend to perform dental work on patients. How amazing is that? They have dentists in Britain? Who knew? "
-- 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 PARROT KNEW TOO MUCH: LONDON, England -- A computer programmer found out his girlfriend was having an affair when his pet parrot kept repeating her lover's name, British media reported last Tuesday. The African grey parrot kept squawking "I love you, Gary" as his owner, Chris Taylor, sat with girlfriend Suzy Collins on the sofa of their shared flat in Leeds, northern England. But when Taylor saw Collins's embarrassed reaction, he realized she had been having an affair -- meeting her lover in the flat whilst Ziggy looked on, the UK's Press Association reported. Ziggy even mimicked Collins's voice each time she answered her telephone, calling out "Hiya Gary," according to newspaper reports. Call-center worker Collins, 25, admitted the four-month affair with a colleague called Gary to her boyfriend and left the flat she had shared with Taylor, 30, for a year. Taylor said he had also been forced to part with Ziggy after the bird continued to call out Gary's name and refused to stop squawking the phrases in his ex-girlfriend's voice, media reports said.
IF YOU'RE THIS TIRED, STAY AT HOME: CLERMONT, FL -- A man was arrested for drug charges in Clermont after falling asleep at a drive-thru. Police say Richard Sibila III was asleep at the wheel at the Wendy's on State Road 50. After waking him up, police gave him a field sobriety test and he told them he wanted "five double cheeseburgers and a frosty." When police searched his car, they found cocaine and marijuana. He's charged with drug possession.
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