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Making Money While Music Becomes 'Demonetized'
May 29, 2009
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"Recorded music is more a marketing tool than a revenue source ... artists used to make $300,000 to $500,000 a year in royalties [from selling recordings]. Now that's diminished to less than $50,000" a year. This means, unsurprisingly, "the creative side" of the music business is "very anxious" about the changes that have swept this landscape."
-- TicketMaster CEO Irving Azoff, at the Wall Street Journal D7 'All Things Digital' Conference this past week."Recorded music is more a marketing tool than a revenue source ... artists used to make $300,000 to $500,000 a year in royalties [from selling recordings]. Now that's diminished to less than $50,000" a year. This means, unsurprisingly, "the creative side" of the music business is "very anxious" about the changes that have swept this landscape. " -- TicketMaster CEO Irving Azoff, at the Wall Street Journal D7 'All Things Digital' Conference this past week.
This week, U2's manager Paul McGuiness was at it again and complaining about how the Internet has destroyed artists' intellectual copyrights (and earnings) and said, "I hope that our politicians, our journalists our media gain a sense of how much we stand to lose if free prevails. Ultimately, free is the enemy of good."
Mr. McGuinness sees stronger copyright laws in France, the Pirate Bay trial and U.S.-based Internet service providers doing more to protect music, but he still he isn't satisfied. ( Source: http://tinyurl.com/m8vdkm )
I'm not going to repeat the rant I wrote initially when Mr. McGuiness talked about these issues back at MIDEM in February of 2008, but I'll summarize it with this excerpt from that column:
McGuiness closes with this, "There's more exciting music being made and more listened to than at any time in history. Cheap technology has made it easy to start a band and make music. This is a gathering of managers; our talented clients deserve better than the shoddy, careless and downright dishonest way they have been treated in the digital age."
Yes, there is more exciting music being made and listened to than ever before and it's easier than ever to start a band and make music. But guess what, all the artists that have done so and are doing that, probably would not agree that they "deserve better than the shoddy, careless and downright dishonest way they have been treated in the digital age."
No. They embrace all the technology and all it has to offer.
The Internet and whole "illegal downloading is killing our business" whine has gone on now for far too long. The music industry must learn to co-exist in a world where people will always download, but millions of others will still buy music when they perceive it has real value and is something they want to keep and not change monthly, as they do their cell phone ringtones."
This week, the Wall Street Journal interviewed TicketMaster CEO Irving Azoff, and he talked about the "demonetization of the music business" and how artists are making money today, and posturing themselves for the future.
You can read a lot of what Irving had to say, and watch an eight-minute video with highlights from his interview by clicking here: http://tinyurl.com/nhu6qe.
Rather than me repeat all the things Irving said here, I highly recommend watching the video and reading what's in the article this week.
Whether or not you like TicketMaster is NOT the issue here.
Irving discusses many of the issues I've commented on (and so many have commented on in the media), and anybody who wants some real intelligent insight into where the music industry is headed should check it out.
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THE 'A-SIDE' - TRACK 2
FURTHER FOLLOW-UP TO 'BE CAREFUL WHAT YOU WISH FOR'
In my commentary of May 8th, I talked about the new pending legislation that would force radio stations to pay almost $500 million more to labels and the artists they represent.
In a letter to House Speaker Nancy Pelosi dated May 14th, based on its knowledge of minority broadcasters' finances, the Minority Media and Telecommunications Counsel predicts that H.R. 848 would lead to the bankruptcies of at least a third of minority radio stations. MMTC's David Honig is one of the signers of the letter.(Source: http://www.rbr.com/radio/14627.html )
As a further response to Mr. Honig's letter, you should read Buzz Brindle's post in which he writes, "Should Congress pass the Performance Rights Act, it would seem reasonable that radio stations which have for decades provided these free advertisements as part of a symbiotic win/win arrangements with the music industry should be allowed to charge labels their :60 unit rate multiplied by each minute of a song's length and for each time that the song is played. Consequently, if a song which is three minutes long were played 10 times between the hours of 6a and 7p, Monday-Friday on a station which normally charges $100/minute for an advertisement, the station would charge the record label $3,000."
You can read all of Buzz's letter (which makes a very good argument) here: http://www.rbr.com/features/viewpoints/14669.html.
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THE 'A-SIDE' - TRACK 3
MAYBE THINGS NOT SO TERRA FIRMA?
Back in July of 2008 I wrote the following:
"Giving further proof to the fact some people are still looking at music as 'product' is the news this week that Terra Firma's Guy Hands was talking to former Procter & Gamble executive Elio Leoni-Sceti to possibly run EMI's troubled record division. Sceti is currently the head of the consumer product manufacturer Reckitt Benckiser in Europe...Music, of course, is NOT a generic product. But Guy Hands obviously doesn't care. After all, Sceti worked for Procter & Gamble, makers of Charmin bathroom tissue, Tide detergent, Bounty paper towels, Crest toothpaste, Pampers, Duracell batteries, Bounce, Bounty, Cascade, Cheer, Clairol, Gillette products, Head & Shoulders and so on and so on ... and scooby-doobie-doobie ... and you get the picture, right?
Of course, as you read the list of all those products, you probably thought the same thing I did: "What the hell do any of these products have to do with anything in the music business ... and why would someone from a consumer products company with no experience in the music business have a clue about it?"
One of the most fundamental qualities inherent in all successful business leaders is that they have lengthy experience in the industry they work in, and they have a clear understanding of a company's core competencies within its market segment and industry. Mr. Sceti has neither of those qualifications on his resume. Yes, he's an incredibly successful marketing professional. Yes, he's worked for world-class consumer products corporations. So what?
Unless Mr. Sceti is completely schooled in the challenges facing EMI and the industry, unless he knows how to dialogue with creative talent, unless he knows the basic operational paradigms in the industry ... he's going to be behind the proverbial 8-ball. Big time."
This week comes news that private investment firm Terra Firma has had to "put up an additional £28 million ($45 million) to bail out EMI Group Ltd.,a sign that the entertainment group is still struggling despite efforts to turn it around," despite deep cost cuts. Terra Firma injected the cash avoid breaching covenants on a multibillion-dollar loan from Citigroup Inc. (Source: http://online.wsj.com/article/SB124351929640262615.html )
Anybody surprised? Not me.
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THE 'A-SIDE' - TRACK 4
"AMERICAN IDOL" -- THE FINALE HITS 40 MILLION PEAK
Despite many TV newspaper critics writing about the show's decline in ratings, the American Idol finale drew 40 million people for last seven minutes of the broadcast and drew almost 30 million during the two-hour show. (Source: http://tvbythenumbers.com/2009/05/21/wednesday-ratings-american-idol-finale-surprise-draws-288-million/19222 )
With these kinds of ratings, the show could lose up to 10% of its audience next year, still be #1, and ahead of its nearest weekly competition for the entire five to six-month period the series is broadcast.
Whether you like the show or not, it has been responsible for over 50 million albums sold and millions of singles from "Idol" alumni.
In addition, the show has helped guest mentors/artists sell millions as well.
As a retail generator for the industry, nothing has had the impact of "Idol," with the possible exception of when MTV actually was a video MUSIC channel.
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THE 'A-SIDE' - TRACK 5
THE CONTINUING TWITTER UPDATE TO KEEP IT ALL IN PERSPECTIVE
Well, lo and behold, the once Twitter King and advocate and B-movie star (C-movie star?) Ashton Kutcher is threatening to stop using Twitter.
From a CNN report this week, the following:
"It's all fun and games until somebody gets stalked," Kutcher wrote in a Twitter posting late Monday. The actor, who boasts a record two million Twitter followers, frequently posts updates that take fans behind the scenes of his life and his current movie production -- "Five Killers."
"Five Killers" director Robert Luketic, who caught Kutcher's Twitter addiction, also suggested he would disappear from the Twitterverse. Kutcher challenged CNN last month in a race to one million Twitter followers, which he won. His following has almost doubled that in the five weeks since. His wife, actress Demi Moore, also threatened to shut down her Twitter account, which has more than 1 million followers."
(Source: http://tinyurl.com/ojegrw )
This week at the Wall Street Journals' D7 'All Things Digital' Conference, columnist Walt Mossberg asked Twitter co-founders Evan Williams and Biz Stone. "Only 51% of Twitter users are on the service once a month. What's the deal with that?"
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THE 'A-SIDE' - TRACK 5
THE TRUTH CAN BE FUNNY EVEN IF YOUR BOSSES DON'T THINK SO
If you want to see Jimmy Kimmel at his best, watch his six-minute monologue that he did for ABC television at their annual upfront presentation. (When all TV nets present their anticipated Fall Season's to Madison Avenue)
Allegedly, the ABC brass were not too thrilled with Jimmy's monologue, but it is brilliant.
You can watch what Jimmy said here: http://www.youtube.com/watch?v=Y9NOJ_uNo0Q.
Sometimes the truth hurts that bad.
Mobile Music Revenue To Hit $5.5 Billion In 2013
A new report say revenue from streamed music and full-track downloads on mobile phones will grow from $2.5 billion to $5.5 billion worldwide in the next five years as increased applications, all-you-can-eat data plans and more user-friendly services combine to drive up sales, according to a new forecast by Juniper Research.
Read more about it by clicking here.
The Mobile Decade
The Globe and MailIn an interview with The Globe and Mail, Michael Jones, Google's chief technology advocate, claims that, "The mobile phone is for the next decade what the computer has been for the last two or three. As such, he argues that the whole experience of the Web will become more personal; it's something that kids will grow up with, as every device will have Web connectivity.
"It's pretty clear that the Internet is something special," Jones said. "The Internet is sort of like the connective tissue of the global mind. It brings the thoughts of everybody around the world into your home and to your person just because you want to learn."
If the last 10 years can be classified as the "Download Decade," the next 10 may very well end up being known as the mobile decade, the Globe's Matt Hartley says. "If you want to see the next 10 years, just look at the next 10 months," says BlackBerry maker Research in Motion's co-CEO Jim Balsillie. "You can only see so far ahead, but you're just seeing a revolution happening right now and it's just so fast, you almost don't notice -- if that doesn't sound like a paradox." The changes, he says, will bring in a host of new ways to consume music, movies and other information.
Read more about it by clicking here.
Determining the Value of Online Friendships
BusinessWeekMillions of us are "producing oceans of data" through our use of communication platforms and social networking tools, says BusinessWeek's Stephen Baker.
"When I started network research 12 years ago, we had virtually no data," says Duncan J. Watts, a Columbia University professor who is heading a research unit at Yahoo. Now, he and his team can study the network behavior of 295 million e-mail users and 200 million Facebook users. Watts says this flood of data could be "transformative."
Statistically, Baker says, friends tend to behave alike, because they share interests. However, this correlation raises lots of questions, like: which types of friends have the most meaningful connections? Which types of friends have the most effective connections for marketers? Understanding the types of relationships could provide valuable context for advertisers.
However, Facebook, the Web's largest social net, has yet to prove itself as an advertising platform, as visitors tend to ignore ads. With revenues of $300 million, Facebook makes barely a dime a month per member. Nevertheless, the site believes that it's sitting on an advertising gold mine, and that by tracking the different paths of influence, it might be able to offer more effective and lucrative advertisements.
Read more about it by clicking here.
Toyota Launches 'Rock The Space' For Musicians
As part of the deal with MySpace, artists who submit an original mp3 demo can also create a "widget," a viral rich-media component shaped like a demo tape that MySpace users can add to their profiles and use to post comments on the Toyota Music profile.
Toyota, which last fall signed on as one of three inaugural sponsors of MySpace Music -- the News Corp. property's independent label -- is activating the partnership with "Rock the Space," a competition encouraging unsigned bands or solo artists. Toyota's MySpace page serves as central casting, a place where musicians and bands can submit an original song for the opportunity to score a recording contract with MySpace Records.
Read more about it by clicking here.
THIS IS WHY YOU BUILD DATA BASES
The Beastie Boys have e-mailed their mailing list and alerted fans that the name of their upcoming LP is "Hot Sauce Committee."
MACCA AND DYLAN?
Recently, both Bob Dylan and Paul McCartney have expressed interest in working together. Now, according to Britain's Daily Express, that collaboration is set to become a reality. The newspaper reports that the legendary rockers will head into the studio together this summer, presumably to work on new songs as a duo.
FOR THOSE WHO ARE ANXIOUSLY AWAITING THIS NEWS
Sony has reportedly confirmed that Sade will release her first album in nine years on November 24, 2009
JAMES BROWN ESTATE SETTLED
James Brown's estate, the subject of a lengthy legal battle, has finally been settled by a South Carolina judge. A charitable trust benefiting needy children in Georgia and South Carolina will receive nearly half the assets; approximately a quarter will go to Brown's wife and son, and the remainder will be distributed to the singer's six adult children. Lawsuits over the distribution of Brown's assets are still pending and appeals are expected.
CONGRATS TO
White Stripes drummer Meg White, who married Jackson Smith (the son of rockers Patti Smith and Fred "Sonic" Smith of the MC5) on Friday in Jack White's backyard, according to a post on the band's site. Raconteurs bassist Jack Lawrence also wed Jo McCaughey at the ceremony.
TYLER SUIT DISMISSED
Aerosmith frontman Steven Tyler's lawsuits against unknown individuals impersonating him on the Internet have been dismissed by a Los Angeles judge, since no impersonators could be named, NBC Los Angeles reports.
GUITAR HERO SEPTEMBER
Activision has confirmed Guitar Hero 5 is due September 1st. The game will boast 85 brand-new master recordings, and this week Activision is announcing the band lineup in a series of scavenger hunt-like stories; fans who track down all the featured artists can enter a sweepstakes to win five tickets to concerts at a venue of their choice. Rolling Stone exclusively revealed that tracks from Queen & David Bowie (presumably "Under Pressure"), Kings of Leon, Santana, Sonic Youth and A Perfect Circle will appear in the game. The title will also come equipped with tunes by Weezer, Bon Jovi, Billy Idol, Elliott Smith and more.
AND THEN OF COURSE, HERE COME THE BEATLES
If you're a fan of The Beatles (who isn't?), September is a big month. In addition to a release of the band's entire remastered catalogue, Harmonix will be dropping The Beatles: Rock Band, as well. George Harrison's son Dhani said was quoted on Music Radar and about the project, "It's been one of my biggest joys to be involved with a company as great as Harmonix. And I'm not hyping in the least when I say The Beatles: Rock Band is going to blow people's minds. It's going to set a new standard for video games. I absolutely love it and can't wait for music fans and gamers to get their hands on it."
NEW ZUNE SOON
Microsoft's new Zune device will feature an HD Radio tuner and OLED screen. Also, Microsoft is rebranding Xbox video service with Zune name. Now the real question is whether it be enough to take on the iPod Touch.
WIPE THAT SMILE OFF YOUR FACE
Arkansas, Indiana, Virginia, and Nevada decide to stop smiley driving license pictures in an attempt to prevent fraud. Face-recognition software in these states can only compare pictures that are serious.
AMEX HAS NO LOVE FOR COURTNEY
Courtney Love is being sued by American Express over an alleged unpaid balance of $352,059.67 Reuters reports.
BEYONCE KNOWS IT'S TOUGH OUT THERE
Beyoncé is offering fans a bargain-basement price on some tickets to her summer tour: $20. One thousand $20 tickets will go on May 29th to all North American shows on her "I Am ... Tour" except for her Vegas gig at the Encore.
PASSING
Former Wilco member Jay Bennett died in his sleep early Sunday morning, May 24th in Urbana, IL, the Chicago Sun-Times, reports. He was 45. No cause of death has been announced and an autopsy is being performed, a spokesperson for the family said.
Quotes of the week
"I was going to ask you what's new, but I think I know."
-- Ryan Seacrest, commenting on "Bikini Girl" Katrina Darrell's apparent chest enhancements since her audition, on the finale of "American Idol.""I don't know what we were thinking. We have nowhere to run if it gets out of hand."
-- Donnie Wahlberg, on taking a cruise with his band New Kids on the Block and 2,000 fans, to PEOPLE"Man, I don't wanna piss Tony Romo off and he starts throwing games for the Cowboys!"
-- Eminem, worrying about his favorite NFL team after mocking the Dallas Cowboys' quarterback and his girlfriend Jessica Simpson in the music video for his song "We Made You," to Metro"I don't like being single, no. I live this fantastic life, full of all these magical things, and at the end of the day all I want to do is pick up my phone and share it with someone. The other day I'd sold a million records in the U.S.. and I didn't have anyone to tell. It was actually a really lonely moment."
-- "Waking Up In Vegas" singer Katy Perry tells the new issue of British Cosmo. Yes, Katy, life is lonely at the top. But it's better to sell a million records and be alone than not sell a million and be alone."I don't compete with other people in the industry. I compete with myself. If I looked at every other girl in the entertainment industry as competition, my life would be really lonely. I wouldn't have some of the coolest friends that I'm so glad I've gotten to know over the last couple of years ... It's really awesome to get to hang out with those girls and to call them friends."
-- Taylor Swift tells the Associated Press."I feel like Adam deserved it just as much as I did. He was the most consistent person all year, and seriously, one of the most gifted performers I've ever met. We became great friends, and we told each other that day, 'You deserve it' ... And so, I think it could have gone either way. America couldn't have gotten it wrong."
-- "American Idol" winner Kris Allen, talking about runner-up Adam Lambert. Yes, Kris, Adam did deserve it. He was the only reason "Idol" was reinvigorated this year -- and the media has said as much in many places."What we've got to realize is that Susan is not an incredible singer; she is merely a good singer wrapped in a fantastic, fairytale story."
-- The UK Sun's TV Editor Sara Nathan, commenting on Internet sensation Susan Boyle, one of two people favored to win "Britain's Got Talent." And hooray to Miss Nathan for telling it like it really is. And how would anyone market Susan in today's music biz?
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Radiohead Denies Influencing Local Band
DAYTON, OH-Although they admit the Dayton-area group may have taken its name from a line in "Karma Police," the members of Radiohead held a press conference in Ohio Monday to dismiss allegations that they played any role in helping to form the musical style of local band Hitler Hairdo.
Radiohead front man Thom Yorke told reporters in no uncertain terms that his band has never met the four high school students who compose Hitler Hairdo, and insisted the moody alt-rock songs they perform in local bars "could not possibly have been derived from [Radiohead's] subtle fusion of electronica, Krautrock, and experimental jazz."
"There is absolutely no evidence to support Hitler Hairdo's claim that listening to OK Computer for the first time changed the whole way they thought about music," said Yorke, flanked by the other members of Radiohead, producer Nigel Godrich, and the band's lawyers. "It's preposterous to think that, as genre-bending pioneers of post-punk techno-rock, we had anything to do with influencing this at-best average band. Anyone who's listened closely to their demo CD could tell you that."
Read the rest here and laugh: http://tinyurl.com/pwscjg.
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