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Bronfman Wants To Take A Bite Out Of Apple
September 30, 2005
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"The number one benefit of information technology is that it empowers people to do what they want to do. It lets people be creative. It lets people be productive. It lets people learn things they didn't think they could learn before, and so in a sense it is all about potential." -- Steve Ballmer, Microsoft's President & CEO
Perhaps you read the news article I included in the newsletter last week, 'Steve Jobs: Record Labels 'getting greedy'(Click Here for moreinformation).
Maybe you also read elsewhere this week that at an investors' conference in New York, Warner Music Group CEO Edgar Bronfman Jr. said in response to Mr. Jobs' comments the price of downloaded songs should vary depending on the popularity of the songs and the artists. He also called Apple's across-the-board $0.99-per-song charge unfair.
"There's no content that I know of that does not have variable pricing," said Mr. Bronfman at the Goldman Sachs Communacopia investor conference. "Not all songs are created equal-not all time periods are created equal. We want, and will insist upon having, variable pricing. To have only one price point is not fair to our artists, and I dare say not appropriate to consumers. The market should decide, not a single retailer," said Mr. Bronfman. "Some songs should be $0.99 and some songs should be more. I don't want to give anyone the impression that $0.99 is a thing of the past."
Mr. Bronfman also made reference to Apple's incredible success with the iPod and added: "We are selling our songs through iPod, but we don't have a share of iPod's revenue," he said. "We want to share in those revenue streams. We have to get out of the mindset that our content has promotional value only."
While many in industry label executives agree with Mr. Bronfman, I think it's important to point out yet again that had it not been for Apple's iTunes and iPods, success beyond expectations, and now they're both being synonymous with portable digital music, hundreds of millions of people would probably not have become online consumers and started BUYING music. Instead, many of them would still be stealing music at the hundreds of P2P sites around the globe that have billions of songs on them for free.
Along time ago, I asked in this newsletter how the leaders in the music industry actually let someone in Silicon Valley create the premiere online music destination site without seeing the full potential of the Internet, the distribution it has (global), and all the marketing abilities it provides for those who choose to harness its full power. iTunes has sold over a half-billion songs and is growing globally in other countries as I write this. What have the major labels done to try and mirror such a success story for themselves online in the meantime?
Before Mr. Bronfman and other label heads start ganging up on Apple's pricing and policies, I suggest they do some serious thinking about the state of the business today. Sales this past week were 9.8 million, making the year-to-date total to 404.4 million, or 37.5 million units lower than a year ago at this point. That's an 8.5% decline. Raising online prices won't reverse that trend.
If Mr. Bronfman and his followers want to raise online prices, I strongly suggest they consider lowering retail prices on CDs if they want the CD to stay in the marketplace longer or give consumers more for the money.
"The CD is a fading technology that has lost some of its appeal," said Andrew Lack, the chief executive of Sony BMG in The Wall Street Journal, 'What's on the flip side of that CD? Increasingly, a DVD', March 21, 2005.
Trying to come up with real SOLUTIONS to some of the industry's ills will provide real alternatives and new paradigms for the many ways the industry can generate revenues in the future. Pointing fingers at Apple, who like it or not, has done more than anyone in promoting the SALES of digital music, is not going to accomplish anything.
MTV, Sprint in Mobile Programming Deal
By Alorie Gilbert, Staff Writer, CNET News.comMTV Networks and Sprint are joining forces to bring TV programming to mobile phones, the companies said Wednesday. The companies plan to deliver music, comedy and other TV segments to Sprint PCS subscribers beginning in October, they said. The programming will consist of short segments from numerous MTV channels, including Comedy Central, VH1 and Nickelodeon, MTV said. It also plans to air content exclusive to mobile phone viewers.
Read more about it by clicking here.
Music Service To Target At-home High-end Listeners
By Sue ZeidlerLOS ANGELES (Reuters) - MusicGiants Inc. will launch a new music download service on Wednesday hoping to stand out from the crowded digital audio market by appealing to high-end at-home listeners, the company said. MusicGiants said it reached licensing deals with all the major music labels including EMI Group, Sony/BMG, Vivendi Universal and Warner Music Group for its commercial download service, which it says is the first to offer music files in Microsoft Corp's Windows Media Audio "lossless" format.
Lossless files have up to 7 times the sound quality of music files on other commercial music services, it said.
Read more about it by clicking here.
Recording Web Radio, TiVo Style
NEW YORK - Want to take your favorite radio shows with you on your portable music player? A few new software packages that record Internet radio make that possible. They all aim to be TiVo for radio," but the comparison is not quite deserved - none of them is as easy to use as a TiVo. But if you're a radio fan, or getting bored of the same old songs on your iPod, Radiotime ($39.99 for one year), Magix Webradio Recorder ($29.99), or Replay Radio ($49.99) are worth a shot, particularly Replay Radio.
Read more about it by clicking here.
XM, DirecTV Ink Distribution Deal
By Katy BachmanThe two leading satellite radio and TV satellite providers, XM Satellite Radio and DirecTV announced Thursday a distribution deal to offer 72 of XM's 150 channels to 14.6 million DirecTV subscribers.
Read more about it by clicking here.
DESTINY FULFILLED
Destiny's Child releasing '#1's,' a goodbye album featuring some of the band's biggest hits, on Oct. 25.
GOOD VIBRATIONS
Beach Boy Brian Wilson announced that he is personally calling to thank everyone who gives $100 to hurricane relief through his website until October 1.
XM BLOWS PAST 5 MILLION AND SATELLITE GROWS
XM Satellite Radio recently passed the five million subscriber mark Strong subscriber growth continues for Sirius as well, which just passed the two million subscriber mark and expects to hit 3 million by year end just prior to Howard Stern's launch in January. In other news, Honda Motor Co. is making XM satellite radio available on four new models. The 2006 Element SUV will have XM as standard equipment. The 2006 Honda Civic car and CR-V and Pilot SUVs will be factory wired for quicker satellite radio installation at auto dealerships. The Civic, which was redesigned for the 2006 model year, is one of the auto industry's best sellers.
ON THE ROAD AGAIN
The Dave Matthews Band kicking off another tour on Nov. 26 in Minneapolis that will run through Dec. 15 in Boston. Matthews will also play solo the Vegoose Festival in Las Vegas Oct. 28 and Neil Young's annual Bridge School Benefit Oct. 30.
NIRVANA STILL ALIVE AT RETAIL
According to Billboard, three rare previously unreleased Nirvana recordings will be included on Sliver: The Best of the Box, a new compilation due to hit stores Nov. 1.
BORN TO RUN REDUX
Some thirty years after its release and some nine million copies later, Columbia is releasing the 'Born to Run 30th Anniversary Edition' as a three-disc box set that includes the remastered original album, the concert film Hammersmith Odeon, London '75 and the newly made documentary Wings for Wheels: The Making of Born to Run-adding up to nearly four hours of previously unseen footage. There will also be a 48-page booklet of previously unpublished photographs. Bob Clearmountain remastered and remixed the DVD in both stereo and 5.1 surround sound.
FOR THOSE WHO HAVE WADS OF MONEY AND WANT TO BUY A MEMORABLE XMAS GIFT
A private 90-minute concert by Elton John among the gifts in Neiman Marcus' 79th annual Christmas Book, with a price tag of $1.5 million. The money goes to the Elton John AIDS Foundation.
STERN'S REPLACEMENTS
Infinity Radio has signed contracts with "five or six people" who will be used to replace departing shock jock Howard Stern in 41 markets, according to CEO Joel Hollander, who made the announcement at a question-and-answer session (with Bill O'Reilly asking the questions) set at the Museum of Television and Radio in Midtown Manhattan. The session was part of Advertising Week's 'Ideas for Life' keynote series.
This week's releases
- Franz Ferdinand, You Could Have It So Much Better (10/4)
- Nickelback, All the Right Reasons (10/4)
- Fiona Apple, Extraordinary Machine (10/4)
- Liz Phair, Somebody's Miracle (10/4)
- Deftones, B-Sides & Rarities (10/4)
- My Morning Jacket, Z (10/4)
- James Blunt, Back to Bedlam (10/4)
2005 Industry Conferences
Date Name Location October 3-5 2005 Computer Disc Jockey Summit/Convention & Expo Tampa Bay, FL November 11-12, 2005 Portable Media Expo Ontario, CA January 5-8 International CES Las Vegas, NV
Quotes of the week
"Someone said, 'Is your book better than Madonna's"' I said, 'Yeah.' Then I thought, Uh-oh, I haven't read hers. "
-- Paul McCartney in People, talking up his new children's book, High in the Clouds."No, I don't like her. She is marrying the son of a friend of mine. They have billions. She is vulgar and not even pretty. The Hiltons. They have nothing."
-- Fashion designer Valentino in Star, when asked if he wanted to design Paris Hilton's wedding gown."Saudi Arabia said today that they have twice the oil they thought they had. Which means they can screw us twice as much as they thought they could."
-- 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.
Date Name Location October 8 NARIP Workshop - Independent Distribution Solution w/Clay Pasternak New York October 17 Business Plan Development Part I w/Harry Redinger Los Angeles October 24 Business Plan Development Part II w/Harry Redinger Los Angeles November 5 NARIP Workshop - Independent Distribution Solution w/Clay Pasternak Los Angeles -
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