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The RIAA's Mitch Bainwol Is Optimistic About The Music Industry...Or How I Learned To Stop Worrying About The Industry And Love The Music
October 9, 2009
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"Be an optimist -- at least until they start moving animals in pairs to the Kennedy Space Center." -- Anonymous
The RIAA's CEO, Mitch Bainwol, recently posted his '5 Reasons For Optimism In The Music Industry,' (Source: http://tinyurl.com/nnnoq8 ), and after reading them I thought I would counterpoint.
Mr. Bainwol gives reason #1 for optimism: "Our product, music, remains as popular as ever. While other businesses may scrap to generate consumer interest in their product, music remains as popular as ever, according to our surveys, and is an economic catalyst for many other industries. Think about some of the news in recent weeks: leading technology company Apple rolls out a new line of its phenomenally popular music-listening gadgets as well as a major upgrade of the iTunes music store. Videogame developers Harmonix and MTV Games introduce a seminal version of its Rock Band franchise featuring the iconic Beatles ... Meanwhile, two of the most popular television programs, 'American Idol' and 'Dancing With the Stars,' are about music. And music is an essential, distinctive part of many hit shows like "Grey's Anatomy" and "Gossip Girl." Last spring, ABC even launched an online "Music Lounge" for fans to locate and purchase music played on its most popular programs. The common thread is that all are platforms for music. We no doubt continue to confront serious challenges to fully monetizing the value of music, but the fundamental relevance of music to the human experience remains as powerful as ever."
Well, thanks for those insights Mitch, but they came just about two weeks ahead of the news that U.S. sales of music dropped another 11.1% in the third quarter, and the NPD Group's Russ Crupnick pointed out this week that the number of music buyers has dropped from 153 million in 2006 to 132 million in 2008, with spending down $44 a year to $35.
The popularity of music was never an issue, Mitch; the issue is how the industry survives in the digital age when so much music is still downloaded for free. We know the lawsuits the RIAA insists on filing and wasting millions on have done nothing. Thanks for pointing out Apple's continuing to be an innovator in creating newer and better iPods, but don't you know those iPods ultimately mean less people will be buying CDs? As for your also pointing out that 'American Idol' and 'Dancing With The Stars' "are about music." let's look at the results: 'American Idol' has been responsible for selling over 40 million units at retail, but I don't recall any albums retailing at all off of 'Dancing With The Stars', do you, Mitch? But maybe that's because the show is about DANCING, not the music. And oh yes, music is now an integral part of many TV shows. That's not news to anybody watching those shows. So, yes, music is as popular as ever. WE KNOW THAT. Now, what is the RIAA going to do to help the industry sell more of it? Can you offer some creative ideas?
Mitch's reason#2 to be optimistic: "Long live the album. The album's demise is exaggerated. CD sales may continue to decline (though the success of the Beatles' remastered catalogue demonstrates an enduring appetite for compelling music in physical form), but so far in 2009, growth in digital album sales is again outpacing digital singles (17.5% vs. 11.7%). Digital music is still a maturing marketplace, and fans are becoming increasingly comfortable buying not just the latest single online, but the entire album. Throw in the recent iTunes LP initiative from Apple and the major record companies and the album's unparalleled significance is taken to the next level."
Unless I'm mistaken and have been dreaming it all for the past few years, it seems to me that all I've read about and heard about from the labels and the RIAA is how iTunes and other online stores (and P2P downloading and file-sharing), are killing the album. I've run many articles about that very topic. But, all one need do is look at album sales every week and see that (overall) albums are not selling anywhere near what they used to in quantity. (e.g. Barbra Streisand's new album is #1 next week on the Billboard Top 200 with sales of less than 200,000) Yes, there are exceptions. Taylor Swift has sold over 10 million albums already. But Taylor Swift is the exception. How many other artists are near that quantity despite several hit singles? As for "the new initiative from Apple" (Cocktail), it remains to be seen whether consumers will start buying albums again in massive quantities if they only contain two or three good tracks. Yes, Michael Jackson and The Beatles sold in huge quantities, but not because people suddenly shifted buying habits. Michael Jackson and The Beatles made great albums.
Mitch's reason #3: "But it's more than just the album. Too often, observers assess the health and vitality of the music business simply by comparing year-over-year unit sales. But that narrow analysis of yesterday's music business fails to capture the whole story. The modern music company is an increasingly diversified, full-service entertainment firm deriving revenues from a variety of different streams. The success of a new album is not simply based on unit sales, but the cumulative revenues earned from album and single track downloads, online music videos, ringtones and other mobile phone content, digital radio performance royalties, video games downloads and licensing fees, background music to television shows and films, audio streaming sites, and countless other ancillary revenue streams. One example? Revenues from digital platforms like satellite and online radio grew more than 70% in 2008 and should experience continuing significant growth this year and beyond."
I don't think those "revenues from a variety of different streams" are enough to make any major label financially secure yet; if so, we wouldn't be reading about the year-over-year loss in sales at retail and elsewhere. Yes, "the modern music company is increasingly diversified," but diversification doesn't guarantee healthy profits yet at this point. In time, labels will hopefully see these areas for growth grow as CD sales decline, but let's not pin the hopes for the industry on ringtones and other ancillary streams. Why can't more new, innovative methods to generate more revenues be developed? I'm hopeful new methods will be developed, but I'm sure they won't come from any ideas offered by the RIAA. Those ideas will come from companies like Apple who innovate in the toughest of times, while others sit idly by.
Mitch's reason #4: "Record labels make or break the day. A handful of well-known bands have elected to distribute their latest albums without the help of a record label. More power to them. But, interestingly and tellingly, what connects the few oft-cited examples is that virtually all are established acts, with a devoted fan base and an established brand. That notoriety and fan support exists in the first place because of the unique marketing and promotional expertise of a record label ... Digital technologies have indeed made it easier for an artist to "DIY." But more often than not, it is the music label that can uniquely help the artist cross the bridge between anonymity and artistic and commercial success. There were more than 100,000 different albums released in 2008 alone, yet only 950 of them sold more than 25,000 copies. There are more than 2 million hip-hop artists on MySpace and more than 1.8 million rock acts. It's a sure bet that most of these acts are hoping that a label will pluck them from the mass of aspiring, unsigned artists online and take their careers to the next level. Breaking through, developing and cultivating an audience, working with the most talented musicians and top notch equipment, leveraging opportunities in a cluttered multi-platform digital media world -- all are the invaluable and irreplaceable functions of a modern record label."
Here Mitch contradicts himself. If music remains as popular as ever (his reason #1 for optimism), and more artists are doing-it-themselves, why then are record labels the only way to "make or break the day"? Oh, that's right, I forgot. Record labels fully fund the RIAA. Okay, forgetting that for the moment, I think Mitch needs to know that there are plenty of artists who are supporting themselves and making a decent living independently of major labels. Sure, what artists wouldn't want to sell millions of albums or downloads? But the fact is before the Internet, independent artists had a much tougher time surviving at all. Outside of label distribution, they had almost no chance of making a career as an artist unless they had great success on a regional level. The Internet changed all that, because now an artist can create their music, put it online with a video at YouTube, generate millions of views, and sell music without being signed to a label. Of course, once that happens, labels seek out those very artists that are successful independently, and sign them as quickly as possible. But as time goes on, the Internet will become the primary distribution method for music (and film) and social networking has advanced those once "invaluable and irreplaceable functions of a modern record label."
Lastly, Mitch says it's about "Great music. The Wrap rightly plugged Jack White's phenomenal musicianship. He's worthy of the accolades, but he's hardly alone. This fall, fans will hear another great slate of albums from the world's most talented bands and artists, including Alicia Keys, Nelly Furtado, Pearl Jam, Norah Jones, Bon Jovi, KISS, Leona Lewis, Tim McGraw, Shakira, Rod Stewart, Carrie Underwood and countless others. This is yet another encouraging sign of a music business that is energized, vital, relevant and here to stay."
So a great fall release schedule is great reason to celebrate? Nice of Mitch to name some of the heavyweights that will release product in the fourth quarter, but no matter when great music is released, isn't it always a cause for celebration? The fact that a good number of established artists who sell in the platinum category are being released in the heaviest buying season of the year is always good news. Hits sell and name power draws people at retail. This isn't news. But, name power doesn't always sell as fast, or as much as labels hope.
"After 30 weeks on the Billboard chart, U2's No Line on the Horizon reached platinum two weeks ago, while Green Day's 21st Century Breakdown and DMB's Big Whiskey and the GrooGrux King have yet to pass the million copies sold mark." (Source: http://tinyurl.com/yfftfgl ) And despite the millions of albums Michael Jackson and The Beatles sold, album sales are still down double-digits. Without Jackson and The Beatles, sales would have declined at a much higher percentage.
There are many reasons to be optimistic about the industry. When a bright shining star like Taylor Swift comes along and takes radio and retail by storm, she brings a whole lot of people back into retail to buy music. When an artist like Lady GaGa scores major hits at radio, goes platinum, and generates incredible concert reviews, it reinforces the fact again that new talent has been and always will be the lifeblood of the industry. When new artists that never had the chance before are gaining more exposure than ever via the Internet, it's reason to be optimistic the consumers are constantly looking for, and discovering new music faster than ever.
I'm a whole lot more optimistic about the industry than Mitch Bainwol, and for a whole lot of different reasons. Reasons (in my opinion) that are founded on logic and continually observing of the realities in the marketplace.
The MUSIC will go on and on. With or without the industry as we now know it. With or without the RIAA.
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THE 'A-SIDE' - TRACK 2
"JAZZ IS JUST AN ACCIDENT WAITING TO HAPPEN." -- SPINAL TAP
For all of you who love Spinal Tap, this two-minute video is a must and will make you glad that the boys in the band still haven't lost their edge when it comes to humor.
Check it out here: http://tinyurl.com/ybo5llt
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THE 'A-SIDE' - TRACK 3
'GLEE' SELLING MUSIC BIG TIME
Whether or not you've seen the show, or are aware of what it's doing for the sales of music, the TV Fox show, "Glee," currently has 10 songs in the Top 200, with a total of 1.1 million downloads in the month the show has aired.
Television is once again flexing its muscles when it comes to exposing and selling music to consumers, and the placement of songs in key series is becoming more important and more prevalent.
But if you read my commentary this week, you probably already know all this. Mitch Barnwell told us so.
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THE 'A-SIDE' - TRACK 4
A PERSONAL NOTE: A GREAT READ FOR ANYBODY WHO WANTS TO REVISIT THE "GLORY DAYS" OF RADIO & RECORD PEOPLE WORKING TOGETHER
Social networking is great, and I'm a big fan of Facebook. Not for business reasons (which so many use it for), but for reconnecting with old friends, and connecting with new ones.
Several weeks ago, I found my old friend Gary Granger online. Gary was the Program Director of SHE-FM in Fort Lauderdale back in another time ... a time when radio and record people had incredible symbiotic relationships. A time when it was fun to be a promotion man and work radio because so many radio people were as passionate about the music as we were. SHE was simply one of the best AOR (Album Oriented Radio) stations in the country for a number of years, and Gary was at the helm. I was Capitol Records Florida Promotion Manager when SHE launched, and it took South Florida by storm.
While reconnecting with Gary and "talking" online with him, he told me about a book he'd written that I might enjoy, that so many others might enjoy as well who lived and worked in that era. Others who wonder what it was like might like it to he told me. I asked Gary to send me a copy and I finished it in one evening.
The book is titled "Doc And The Judge -- Sex, Drugs, Rock Enroll & A One-Eyed Scratch Golfer" ( You can check it out at www.docandthejudge.com. ) Knowing Gary (and that "One-Eyed Golfer", Tommy Judge) the book was especially a great read for me. But as soon as I finished it, I realized that anybody who wants to take a trip in a literary time machine back to the real "glory days" of the business, would find this compilation of stories great fun to read.
And yes, the kind of crazy things that Gary writes about really went on, folks ... he didn't make any of it up. It's all a nice little memoir of a time past, a great friend lost, and it's put together damn well.
OHM. Krill, author of "Montauk Babies," says "Somewhere between Thompson's 'Hell And Angels' and the Coen Brothers' "The Big Lebowski," you'll find "Doc And The Judge."
That about sums it all up.
On A Sad Note...
My good friend, and a friend to all in the industry, Mike Lyons lost his battle with pancreatic cancer this week. Mike was veteran Florida broadcaster and part of the staff at the legendary WORK in Orlando in the '70s. He programmed WAX in Tampa and hosted mornings at WIZ in Orlando for many years as well. If you had the privilege of knowing Mike, you were indeed lucky. His knowledge of music and his passion for radio was unbridled, and he enriched the lives of all those he worked with.
After doing independent record promotion in Milwaukee for a number of years, Mike returned to the Orlando area and became one of the industry\s leading Triple A Radio advocates. On his Facebook page, Mike's WORJ co-worker Neal Mirsky reported, "Mike fought very hard to beat this terrible disease and in the end he passed peacefully, surrounded by his sister Deb and his close friends Robin & Rick Birkbeck, Lee Arnold and myself."
Funeral arrangements are pending.
And Now For Some News ...
Music Publishers Say 'Copyright Should Be Technology Neutral'
Composers, music publishers, and songwriters have told federal lawmakers that regardless of whether music is distributed to consumers via TV, DVDs or digital download, they need legislative help to ensure they get their fair share.
Some of these groups want iTunes and other Web music retailers to pay performance fees for downloads of TV shows and films. They also want online music stores to cough up fees for 30-second song previews. Those revelations didn't go over well with many techies.
Read more about it by clicking here.
Schmidt: We Overpaid By $1 Billion For YouTube
From CnetGoogle head Eric Schmidt is now admitting he overpaid for YouTube by, oh, $1 billion or so. And he did it under oath during his testimony before Viacom lawyers.
Schmidt estimates the video sharing site was actually worth about $600-$700 million when Google agreed to pay $1.65 billion for it in 2006. Why? To edge out the competition, he says. "They had indicated to us that they would be sold, and we believed that there would be a competing offer -- because of who Google was -- paying much more than they were worth," said Schmidt. "In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow ... It's set by what people are willing to pay."
Read more about it by clicking here.
Amie Street Raises New Capital
GigaOmDespite the falling valuations of many digital music startups, online music store Amie Street has secured another $3.9 million in second round financing. The company, best known for its dynamic pricing of songs, has been raising the round for about a year, and inked a regulatory filing on Sept. 30, with a formal announcement expected on Thursday. Menlo Park, Calif.-based digital media specialist Deep Fork Capital was the lead investor.
Amie Street's dynamic pricing model introduces new songs as free downloads, then raises the price as they are downloaded more frequently. Though primarily a channel for indie labels and artists, Sony Music distributes its content on the site.
Read more about it by clicking here.
Tough ASCAP-BMI Negotiations
Despite several meetings between the Radio Music Licensing Committee, BMI and ASCAP, the radio industry and the performance rights organizations are still far apart on any new deal. "The overriding issue is dollars," says RMLC Exec. Dir. William Velez.
Read more about it by clicking here.
EMI and Myxer Ink Mobile Music Deal For US and Canada
Myxer and EMI Music today announced a strategic agreement in which Myxer will make EMI Music's digital repertoire of world-renowned full track music, music videos, images, ringtones and other EMI Music entertainment content available to music fans. The agreement covers the US and Canadian markets, and EMI Music becomes the first major label music company to make its digital entertainment catalog available on Myxer's powerful mobile internet platform. EMI Music and Myxer will also leverage Myxer's customizable mobile web platform to create artist-branded mobile sites to help create better connections between EMI Music artists and fans.
Read more about it by clicking here.
Gartner Says Android Will Reign Supreme By 2012
Computer World et al.On the heels of Google's far-reaching partnership with Verizon Wireless -- which has been lauded by the FCC Chairman --a report from Gartner Inc. now predicts that the search giant's Android mobile operating system is poised to dominate the global smartphone market in just two years. That's right, by 2012, the research firm expects Android adoption to rocket from a 2% to 14% market share -- positioning it ahead of the iPhone, as well as Windows Mobile and BlackBerry smartphones.
All told, Android is expected to ship on nearly 76 million units sold in 2012, according to Gartner. Coming in a close third, the iPhone will ship on 71.5 million devices, giving a 13.7% market share. Windows Mobile will come in fourth, with 66.8 million units sold, or 12.8% of the market, while BlackBerry OS will sell on 65.25 million devices, making it fifth with a 12.5% market share.
Read more about it by clicking here.
Married White Males Who Drive Convertibles Are Likely To Suffer Hearing Loss
(No, This Not An Article From THE ONION) - From Cnet.comWell, gee, after reading the results from a new study presented by the American Academy of Otolaryngology-Head and Neck Surgery Foundation, now I know why I'm usually going, "Huh? What did you say?" more often than a lot of other people. (I guess I was lucky I gave up the convertible some time ago!)
From the study: "The strongest association they found is gender, with men being 2.5 times as likely as women to develop NIHL. Among men, those who are married and white (they specify "non-Hispanic") are at the highest risk.
"Another study looked at drivers who ride in convertibles with the top down on a regular basis. Researchers say that long or repeated exposure to noise above 85 decibels can result in permanent hearing loss; in the convertibles they studied going 50, 60, and 70 miles per hour, drivers were consistently exposed to sounds between 88 and 90 decibels--due to noise associated with road surfaces, traffic congestion, wind, etc."
Read more about it by clicking here.
WELL, SURE, A WHOLE LOT OF PEOPLE CAN'T SING ON KEY:
According To Smule, their Auto-Tune app for the iPhone I Am T-Pain has sold 300k copies in just three weeks.
DIAMOND XMAS LP:
Neil Diamond will release A Cherry Cherry Christmas on October 13th. And check this out: The LP features a cover of Adam Sandler's "The Chanukah Song" produced by new Guns n' Roses guitarist DJ Ashba.
"IDOL" TO GIVE BACK AGAIN:
"American Idol's" charity special "Idol Gives Back" is back for a third installation, according to the Hollywood Reporter. The special will run on April 21st, when there are seven Season Nine hopefuls remaining.
THE TAXMAN COMETH:
Method Man has been busted for tax evasion. TMZ reports The Wu-Tang MC owes $32,799 for four years of back taxes and could face four years in prison.
UNRELEASED JACKSON 5 SINGLE OUT:
Motown/UMe is releasing a new collection of 12 Jackson 5 vault recordings on Nov. 10th. A single, "That's How Love Is," was released this week on iTunes; the song was written and produced by The Corporation, the team of writers and producers that wrote the J5's early material. The song is also streaming on the Jackson 5 website.
THE BRITISH ARE COMING! AND THEY'RE CHEAPER!:
U.K. online music store 7Digital has launched in the U.S., NME reports. The service boasts 8 million tracks and is charging 77 cents per song, undercutting the iTunes and Amazon stores. In September 2007, Radiohead released their catalog on the service digitally for the first time as full album downloads.
FACEBOOK FACELIFT?:
Facebook's news feed service will soon get a new look and feel. Most notably, it will lack Facebook's signature "Publisher" box by default and instead simply feature an alternating title and a button -- positioned to the top right of the news feed -- with the text, "Update Status," which, when clicked, displays the publisher box. The design will also feature a new "Top News" link. The link then switches to "Recent Stories" once you have clicked the "Top News" link, which shows an overview of the top news on your news feed. Who cares? Well, will over 300 million users, the service is bound to have its fair share of neurotics demanding "the old Facebook."
WILSON DOES GERSHWIN:
Brian Wilson will reportedly complete at least two unfinished works by composer George Gershwin for an upcoming release, the Los Angeles Times reports. Wilson received authorization from the Gershwin estate to work on the unfinished songs, which are more than seven decades old. Wilson told the LAT he was "thrilled to death" by the prospect of completing Gershwin's work, adding "I'm proud to be able to do it. Hopefully I'll be able to do them justice."
Quotes of the week
"I'd rather get run over by a train."
-- Madonna, expressing her opposition to getting married again on Late Show with David Letterman"I don't call them birthdays. I refuse birthdays."
-- Mariah Carey, explaining why she calls the day she was born an "anniversary," to USA TODAY. Right there with you, Mimi."Anytime we meet a new band, they say, 'We cut our teeth on your records.' When you see fireworks at Paul McCartney's show, where do you think that came from? 'N Sync? Why should I care about critics when we have 3,000 licensed products, 35 years of touring and every band in the book pointing to Kiss as the pivotal reason they wanted to do something big on stage?"
-- Kiss leader Gene Simmons in USA Today"When we first became very successful, everyone fell prey to their own vices. Drugs, alcohol, women, sycophantic friends. There are piranhas just waiting to put one arm around your shoulder and the other in your pocket. That rock 'n' roll lifestyle is a cartoon, and it's pathetic. You're either a laughingstock or you die. Being a musician who lasts 40 years is nothing short of hard work."
-- Paul Stanley of Kiss in USA Today
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.comWebsite
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
TinyURL
Check out www.tinyurl.com where you can make a smaller URL that will work for any webpage you wish to link to or reference. (As you can see, I'm using it in my news stories above!)
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