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Be Careful What You Wish For
May 8, 2009
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"It is absolutely ridiculous that the music industry is demanding more. Yes, I know they are in a bad way. But so is radio. And the fact remains, without the radio industry all these decades, the music business would have been a mere shadow of itself."
-- Jerry Del Collianno's post 'Radio Is Losing The Royalty Exemption Battle' on 'Inside Music Media' (http://tinyurl.com/cwwlak ).
I've mentioned it several times in the newsletter, and referenced links to news stories about it. If you haven't heard, Congress is considering a bill that could change forever the way money gets distributed in the music business by giving artists and record labels a share of the broadcasters' take.
The new legislation would force radio companies to pay royalties of as much as $500 million a year to record labels and artists whose music they play. (That's a half-billion dollars, folks) By estimates, radio currently pays about that same amount in royalties to songwriters and music publishers. Funny, we never hear about that much, but that's radio's fault for not constantly reminding everyone in the industry of that fact year over year.
"I really want the artist to understand radio has been paying. We are more than just a jukebox. We devote a lot of time to marketing artists," said WRXP N.Y. PD Leslie Fram, arguing against the so-called Performance Rights Bill now and quoted in the Wall Street Journal.
Now get this: MusicFIRST's person-in-charge, Jennifer Bendall, countered with, "Music promotes radio." That's a very bold statement to say the least. I for one, would sure like Ms. Bendall to qualify that statement with specifics, because as an ex-industry executive I always thought radio promoted music, and in doing so, they end up paying that half-billion dollars annually to songwriters and publishers as I already mentioned.
I did radio promotion for 25 years, and I remember how every single artist would tell me how thrilled they were to hear their songs on the radio. And every time radio played their songs, the labels sold more records, which in turn generated more royalties to the artists, the publishers, the producers and the labels. I don't remember ever thinking music was promoting radio. Sure, great new music was (and still is) great for radio. But without radio, that great new music would never reach the millions of people who BUY music everyday.
Ms. Bendall must also not be aware about the current state of financial affairs in the radio industry. I guess she hasn't heard that all corporate radio stocks are a step away from being in the "penny stock" (if not already) hotsheets and that radio is having fire-sales daily when it comes to selling advertising. Overhead has been cut so radically at stations, there isn't much left to pay the bills.
Don't get me wrong ... I'm not singing the blues for the corporate radio monoliths that destroyed the very vitality that once made radio so engaging that we all HAD to tune-in to our favorite station every day to hear our favorite on-air personality and the great music they played.
The corporate suits in radio who decided they could "do it better" (and fatten their Wall Street portfolios by doing so) and stripped music radio of everything that ever made it great (after they paid way too much for station licenses) are largely to blame for what's happened at radio. They can point their fingers at the Internet all they want to (as the labels do) for the reason why their profits have evaporated and stations aren't worth anywhere near what they once were. They can try and analyze why generation X, Y and Z aren't listening, but the simple truth is: They forgot that people tuned on the radio to be entertained. Once the entertainment factor was taken out of the equation, bye bye love.
In my opinion, it's a foregone conclusion that if this legislation passes, labels will deal yet another final death blow to radio. Radio. Yes, the labels aren't in great financial shape either, but next to radio, they look like Triple-A Dunn&Bradstreet companies.
This new legislation will never generate the payments expected to artists who really need the money because if radio can't pay another half-billion a year, they will simply be forced to play less music less often. (And certainly the artists who will be most damaged by all this, will be the new emerging artists who struggle for airplay everyday at every format against established artists with proven track records)
The possibility of less music on radio will mean less revenue generated for artists, publishers, labels, etc. It's kind of like what happens when the politicians figure they'll fund yet another (bloated) government program by raising taxes on cigarettes. Each time that's been done, less cigarettes are sold and less taxes are collected, Great way to get people to stop smoking. Bad way to try and fund that program they sold us on. (And that's why in the end, when the bill comes due, we end up paying for those programs through higher taxes)
Of course, the labels (and those who buy into MusicFirst's stance) argue that without music, radio wouldn't have anything to generate their advertising revenues. But that's already a problem at radio, so increasing royalty rates to the tune of $500 million more a year certainly isn't going to make radio anymore financially stable. I'm wondering how many corporate analysts are already drawing up plans on exactly what their stations will do if this legislation passes. (And that seems likely at this point.)
Once this new bill passes, the labels will find they have killed the hand that fed them for so many years. Artists who think radio has been ripping the off for years will find their broadcast royalty checks diminishing. New artists, already at the back of the bus for airplay consideration, will have to wait even longer for their big breakthrough.
Back in November of 2007 Pali media and entertainment analyst Richard Greenfield said, "Artists make the vast majority of their money on touring and merchandise, not CDs. In turn, it is increasingly logical to believe that artists want to have their music reach the widest possible audience at the lowest possible price ... meaning FREE."
The "widest possible audience" has been on the radio dial for years. Yes, Internet radio audience is increasing in numbers year over year, but terrestrial radio is still the number one away-from-home media, and all the time tens of millions of people spend in their cars everyday commuting to and from work makes for a very captive audience.
Those artists who hope to continue making "the vast majority of their money on touring and merchandise, not CDs" should really think about how that's going to happen if this bill passes.
Those labels hoping to sell more music by those artists (in whatever format) should be very careful what they wish for.
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THE 'A-SIDE' - TRACK 2
LABELS DUMP ON MYSPACE MUSIC
"Innovation is the specific instrument of entrepreneurship -- the act that endows resources with a new capacity to create wealth." - Peter Drucker
It's only been eight months, but that's long enough for the major labels to voice their unhappiness about MySpace Music. MySpace Music is a joint venture formed by the four largest recording companies and the News Corp. (MySpace's owner).
At last month's MySpace Music board meeting, the company's CEO, Courtney Holt, allegedly heard complaints from several music label representatives. ("Several key players were unhappy" with how MySpace Music was performing, said a source with knowledge of the talks)
The labels would, of course, like to see sales increase at a better rate while making MySpace Music more symbiotic with the regular MySpace website.
From an article about the meeting in cnet.com, "The meeting was designed to provide 'open dialogue' and 'constructive feedback' from the board to the service's managers, said a source. But another source described parts of the discussions as 'tense.' On Wednesday morning, a MySpace Music spokeswoman declined to comment." (You can read the entire article here: http://tinyurl.com/d923nd )
The article goes on to say, "With Apple dominating online music retail, MySpace Music is seen as a potential new opportunity to generate sales. At the very least, MySpace Music's sluggish performance illustrates how difficult that task is. Music consumption on the Web has really come down to two horses: iTunes and illegal peer-to-peer sites." (Note to all label execs: Reminder, yet again, nobody has done a better job getting people to BUY music online than Steve Jobs)
From the article, "The labels have been spurring Web music services to start generating profits. The record companies say they have offered price breaks and other concessions to help start-ups build audiences, but they won't offer these forever. The labels are telling companies that they want to see results sooner rather than later."
And after reading that one must wonder what the hell the labels are doing themselves to generate more profits online. The labels might want to use the millions they every year give to their (alleged) industry association, the RIAA, to help them navigate a better course through the storms in cyberspace instead of expressing their discontent with MySpace Music or other online stores.
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THE 'A-SIDE' - TRACK 3
THE CONTINUING TWITTER UPDATE TO KEEP IT ALL IN PERSPECTIVE
Yes, here are yet more updates on the hottest thing on the Internet -- and I must admit that I do find great satisfaction when something I've been saying for weeks here in the newsletter is baked up by some research elsewhere.
This week The Center For Media Research released a report titled 'Twitter Just A Blip So Far' based on "findings of the Online The Harris Poll, conducted between March 31st and April 1st, 2009, show that 51% of Americans do not use Twitter or have a MySpace or Facebook account. 48% of adults have either a MySpace or Facebook page, with 16% of adults updating their page at least once a day. While the media may have found Twitter, only 5% of Americans are currently using it." (You can read the whole report here: http://tinyurl.com/obos9x )
Read the article for all the details, but I, for one, am happy to see some statistical reality on Twitter for all those hot to trot and "follow" other online.
You can also reference the article below 'Predicto Predicts Lead Over Twitter' to find out why "Predicto has attracted more mainstream followers, particularly among female and older demographics."
For those of you who bought Sirius satellite radio to listen to Howard Stern, hopefully you all heard Howard's rant about Twitter this week. (If you don't have satellite, just do a Google search on the subject Howard Stern and Twitter and read dozens of articles about it) It seems like the corporate people at Sirius wanted Howard to Twitter but he refused, so his producer Gary ended up doing it for Howard. Howard said stuff like, "it's all a waste of time if you are over 15," "get a job," etc.
The first "tweets" on Howard's Twitter account: (Remember, I told you this stuff was banal)
"Robin is doing the news"
"Playing the Gossip Game"
"Howard is talking to his movie wife Mary McCormack"
Pretty dynamic stuff, huh?
It's probably not only Howard Stern's producer who is "tweeting" for his boss. It seems that the rumors are flying now in many places online that alleged celebrity "tweets" are actually being done by their PR and marketing people. Gee, what a shock. You see, the REAL celebs do have REAL lives and don't have time to bother with all of this. Did you really believe that they are "tweeting" all day long?
PR and marketing people might not be the only ones "tweeting" for celebs; now we find out hackers might be doing it for others. This past week a hacker going by the name 'Hacker Croll' gained access to accounts on Twitter and allegedly broke into Britney Spears and Aston Kutcher's accounts, as well as one of Twitter's director's of product management. (Source: http://tinyurl.com/cdfzxd )These problems can happen on any social networking blog, site, etc., and it's already happening on Twitter.
When you start reading about how marketing people are using Twitter, you know it's more than just a place to "follow" celebs, etc., it's an online media being used by people to promote a whole lot of other stuff. As I said last week, "It's also interesting to note that the majority of people using Twitter are just doing so 'to generate new business.' Nothing wrong with anybody wanting to generate new business, but all you 'tweeters' should keep that fact in mind."
This week The L.A. Times reported that Paul Abdul now has 100,000 followers on Twitter. This immediately prompts the question, "Who are these people?" (And Howard Stern's rant now makes even more sense)
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THE 'A-SIDE' - TRACK 4
ME, MYSELF AND I
Last week I wrote about Killers' front man Brandon Flowers whining about their popularity in America because too many people here still love Nirvana, Led Zeppelin, and others.
This week, inebriated with the exuberance of his own verbosity and an egotistical imagination, English artist Pete Doherty (more famous for his relationship with model Kate Moss than for his music) one-ups Brandon and says in a New Music Express article where Doherty talks about his new group Babyshambles, Doherty says, "The quality is good in Oasis, but there really is no competition because my band is the greatest in the world and we're going to prove it." ( Source: http://tinyurl.com/clj3qe )
Obviously, Doherty's lack of real talent (is there anybody out there that can name this guy's extraordinary contributions to pop music?) is more than compensated for by his keenly developed sense of self-importance.
Woody Allen said, "I'm thankful for laughter except when milk comes out of my nose."
That's what almost happened to me after I read what Doherty said.
This Invention Could Change The Internet Forever
Revolutionary new web software could put giants such as Google in the shade when it comes out later this month.
The biggest Internet revolution for a generation will be unveiled this month with the launch of software that will understand questions and give specific, tailored answers in a way that the web has never managed before.
The new system, Wolfram Alpha, showcased at Harvard University in the U.S. last week, takes the first step towards what many consider to be the Internet's Holy Grail -- a global store of information that understands and responds to ordinary language in the same way a person does.
Read more about it by clicking here.
Apple Rejects Nine Inch Nails iPhone App Update
For a man who has been responsible for some of the more industrial lyrics in the music history, Nine Inch Nails front man Trent Reznor has taken rejection by Apple with a relatively sanguine spirit.
Read more about it by clicking here.
Predicto Predicts Lead Over Twitter
Predicto is working to build out user-generated features that would let its mobile community shoot video comments from their cell phone and upload them to the site, according to Itai Kathein, president and co-founder of New York-based company.
The Predicto service, which officially launched in summer 2007, lets people make predictions via mobile phones on topics ranging from entertainment and pop culture, to politics and sports. The company scrolls the predictions in a live feed on its Web page, and taps a Twitter page to tweet the results.
Nielsen Mobile data from the fourth quarter 2008 SMS Media Report compares Twitter's free service with Predicto paid service, according to Kathein. He said the study shows Twitter has a dominant presence among young and male-oriented audiences, but Predicto has attracted more mainstream followers, particularly among female and older demographics.
Read more about it by clicking here.
P2P Bill Could Regulate Web Browsers
The U.S. House of Representatives has scheduled a hearing Tuesday to examine a bill that would force peer-to-peer applications to provide specific notice to consumers that their files might be shared.
The hearing before a House Energy subcommittee comes about a month after reports that specifications about the helicopter used as Marine One may have been leaked through a P2P network. Meanwhile, a second House committee is probing whether LimeWire or another P2P application was responsible.
Read more about it by clicking here.
Labels Unhappy With My Space Music
The good news for MySpace Music is that its record label backers are pleased with the traffic the site is attracting. The bad news is that the 8-month-old service has yet to turn that big audience into big dollars.
At a MySpace Music board meeting last month, the company's CEO, Courtney Holt, got an earful from several music label representatives, according to multiple music industry sources. "Several key players were unhappy" with how MySpace Music was performing, said a source with knowledge of the talks. Some board members want MySpace Music, the joint venture formed by the four largest recording companies and News Corp., to make changes such as boost sales conversions and do more to integrate the service with the regular MySpace site, the sources said.
Read more about it by clicking here.
CBS Interactive Hears the Music
To better align existing assets, CBS Corp. on Tuesday announced the formation of the CBS Interactive Music Group. The new unit brings together CBS's digital music properties -- including CBS Radio's more than 100 music Web sites, online audio streams, and mobile applications -- as well as music discovery engine and social network Last.fm.
Read more about it by clicking here.
Web-To-TV In 24 Million U.S. Homes By 2013
The long awaited promise of Web-to-TV video will finally begin to materialize in the next few years, according to a new report by technology research firm In-Stat. The company forecasts that by 2013 the number of U.S. broadband households watching Web-to-TV content will grow to 24 million, generating $2.9 billion in revenue from streaming services.
Read more about it by clicking here.
IT'S A GOOD THING ENGLAND HAS NATIONAL HEALTHCARE
Amy Winehouse was hospitalized once again this weekend after fainting in St. Lucia. The "Rehab" singer was taken to an area hospital, where she was diagnosed with dehydration and told to drink more water.
WILCO FREEBIE
Wilco, with a hand from Feist, have covered Woody Guthrie's "The Jolly Banker" and are offering the song on their website to raise money for the Woody Guthrie Foundation and Archives. While the band asks for a small donation to grab the track, they also offer the song as a free download.
DIVORCE COURT
One of the biggest couples in hip-hop, Nas and Kelis, are splitting. Kelis, who is seven months pregnant with their first child together, cited "irreconcilable differences" in the filed divorce papers. After meeting at the 2002 MTV Video Music Awards, the pair married in July 2003.
THE PRICE YOU PAY FOR IMPERSONATING THE LAW
DMX was ordered to shell over $240,000 in a civil suit brought forth by a man who said the rapper impersonated an FBI agent five years ago. DMX reportedly used a siren and police light to "pull over" Sergei Priporin's car during an incident at New York's JFK Airport. Priporin originally sought $4 million from the rapper.
VAN HALEN GUITAR HEROES
Gaming blog Joystiq is reporting that Activision Blizzard has confirmed that Guitar Hero: Van Halen is currently in development, and scheduled for release at some point in the second half of this year.
CHRISTINA MOVIE IN WORKS
Christina Aguilera will make her big-screen debut in the upcoming film "Burlesque," According to Variety, she "will play an ambitious small-town girl with a big voice who finds love, family and success in a Los Angeles neo-burlesque club." The film will begin shooting later this year.
SUE ME, SUE YOU BLUES
Former Wilco member Jay Bennett is suing his old bandmate Jeff Tweedy, claiming Tweedy owes him royalties from Bennett's seven-year tenure in the group, plus money from their 2002 documentary "I Am Trying to Break Your Heart," the Chicago Tribune reports.
MORE TV MUSIC MERGE
ABC has launched an online "music lounge," according to the Associated Press. Songs featured on shows like "Grey's Anatomy" and "Desperate Housewives" will be on the website, and the ABC Music Lounge will stream music from more than 200 artists heard throughout its roster of programming and feature videos and artists interviews.
PLAY THE BEATLES GUITARS ALSO
The makers of The Beatles: Rock Band have revealed the two vintage replica guitars that will be available for purchase when the game hits stores September 9th, 2009: John Lennon's Rickenbacker 325 and George Harrison's Gretsch Duo Jet. According to an official press release, the plastic six-strings will be available as "standalone music peripheral controllers," meaning they won't be included as part of the Special Edition package that features the vintage bass, drums and microphone.
PASSING
David Cook's brother Adam, who battled cancer throughout David's victorious "American Idol" run, succumbed to a brain tumor this weekend, People reports. He was 37. David Cook made the announcement yesterday before participating in the Race for Hope 5K in Washington, D.C. "I actually lost my brother yesterday to a brain tumor and I couldn't imagine being anywhere else right now," Cook said at the event, which benefits brain cancer research.
Quotes of the week
"Can you brush them?"
-- Elisabeth Hasselbeck, asking rapper Lil Wayne about his diamond-encrusted teeth, on 'The View'"I still had the big hair, looking trashy like I do."
-- Dolly Parton, recalling being mistaken for a prostitute during her first trip to New York City, on the Late Show with David Letterman"I had a horrible dream. I couldn't breathe ... Then I woke up and realized Conan [O'Brien] was holding a pillow over my face."
-- Jay Leno, joking about his visit to the hospital, on The Tonight Show"Casey's making a documentary about Joaquin's segue from being an actor to being a musician ... I think it's going to be a pretty great documentary from what I've seen so far."
-- Ben Affleck, talking to Extra about his brother's actually documenting Joaquin Phoenix's idiotic behavior."Botox is becoming the new face of beauty and it's unfortunate because it makes everybody look like Satan's children. Everybody has pointed eyebrows. Everybody looks related."
-- Stevie Nicks, in a new interview with WWD."I've never had this so-called 'make-up' sex ... I've only had hookers make up the fact that I'm good in bed."
-- Artie Lange, on the Howard Stern show.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Nation Ready To Be Lied To About Economy Again
WASHINGTON-After nearly four months of frank, honest, and open dialogue about the failing economy, a weary U.S. populace announced this week that it is once again ready to be lied to about the current state of the financial system.
Tired of hearing the grim truth about their economic future, Americans demanded that the bald-faced lies resume immediately, particularly whenever politicians feel the need to divulge another terrifying problem with Wall Street, the housing market, or any one of a hundred other ticking time bombs everyone was better off not knowing about.
In addition, citizens are requesting that the phrase, "It will only get worse before it gets better," be permanently replaced with, "Things are going great. Enjoy yourselves."
THE RADIO INTERVIEW on 'THE AMERICAN PERSPECTIVE' - From newsblaze.com
"Steve Meyer is on the front line of global music sales and distribution which he expects will soar to pocket-bursting levels. What's more, he shares his insight and ingenuity with us. Steve gives us both historical perspective and futuristic vision as he chats with Judy about the love of his work, trends of the business and his personal points of view about success, happiness and blending life with the lust for life. Steve joins Judy and helps us discover the thrill of having it all with a sense of balance and purpose. "
You can listen to an interview I did with Judy Piazza of 'The American Perspective' by clicking here: (It runs about 15 minutes)
http://www.thesop.org/index.php?id=10306.
The Blogs
Check out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.com