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The State Of The (Music Industry) Union
February 5, 2010
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There have been a lot of changes over the past 10 years. The industry is adapting to consumer's demands of how they listen to music, when and where, and we've had some growing pains in terms of monetizing those changes.
-- Joshua Friedlander, vice president of research at RIAA. (From the first article posted below with link, "Music's Lost Decade, Sales Cut In Half")Yes, "growing pains" indeed, Mr. Friedlander. And still the RIAA hasn't done a thing about "adapting to consumer's demands." But, to give Mr. Friedlander the benefit of the doubt, I'll look forward to hearing from him (or any reader) about all the things the RIAA has done to assist the industry in transitioning from a world where every label was reaping tens of millions in profits from CD sales, to a digital world that every label tried to ignore far too long.
I've said countless times all the money spent on suing people for illegally downloading music hasn't done one thing to help the industry adapt to consumer's demands. The RIAA lawsuits have been nothing more than a PR disaster for the industry, and more important, haven't stopped people from downloading music one bit. As Dan Ingala, founder and lead singer of the band Plushgun says, "People will steal music regardless, so it's not worth trying to fight against something where the fight's already over."
Neil Portnow, NARAS President, made an appeal to the audience watching the Grammy broadcast about how stealing music is damaging to the community of artists at large. Especially those up-and-coming artists that don't make the millions that established artists do who sell at Gold and Platinum levels.
It's amazing how many of those artists know the fight is over. Especially the newer and younger artists. Many of them have been downloading music themselves for years. They see the opportunities the Internet provides them with to expose their music to an untold number of people, and embrace the technology that lets them communicate directly with their fans and potential audience. Many of them view file-sharing and downloading as nothing more than turning on friends to new (or old) music virally. Many of them have been successful in utilizing the Internet to create niche markets for themselves. They may not sell their music in big quantities, but they are making money by playing live as much as possible locally, regionally, or even nationally. Those lucky enough to generate significant sales and press from live appearances, are obviously the ones most likely to get a label deal.
Back to what's happening today. Obviously, things aren't good in the industry. In the past decade thousands of talented people have lost their jobs. One big reason: Total revenue from U.S. music sales and licensing plunged to $6.3 billion in 2009, according to Forrester Research. In 1999, that revenue figure topped $14.6 billion. Ouch.
Is there no way to stop the decline? That's the question every industry leader should be asking in meetings among themselves, with their peers at other labels, and their (alleged) association, the RIAA.
It would appear to outsiders the industry is like a ship without a captain, looking for a safe port to dock at so it can refuel, and head back out to tackle rougher (digital) seas. It appears, to many others, that the ship has already run aground or hit an iceberg and it's too late.
Yes, things are bad. But at the same time that industry revenues are declining, there is some cause for some celebration. One only had to watch the Grammy show to see some of the best talent in years performing live. It was like a "Greatest Hits" show with one hit after another: Lady GaGa, Beyonce, Taylor Swift, Lady Antebellum, Green Day, The Black Eyed Peas, Pink, Jeff Beck and more, entertaining the audience throughout the evening. (Even if the broadcast ran a bit too long) Even in these difficult times, good talent is shining through, and a lot of it new.
But all those artists, and all the king's men, can't put the industry back together again the way it used to be. That will take a great deal of work on behalf of every person in the industry in every capacity.
Here's hoping those with vision in the industry can create what will eventually become the new business model.
There are a whole bunch of new, younger, unsigned artists that aren't waiting for that in the meantime. They've taken matters into hand and are doing everything to move forward.
That's one reason why so many indie artists are having success today.
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THE 'A-SIDE' - TRACK 2
THE GRAMMY-MUSIC INDUSTRY DISCONNECT
From Jerry Del Colliano's INSIDE MUSIC MEDIA this week, another article about the industry worth reading.
From his post: "The 52nd annual Grammy music awards walloped its television network competitors Sunday night with an almost one-third increase of last year's audience. The Nielsen numbers won't be final until later today. but the Grammys attracted about 23 million viewers -- winning the day ... So, the music industry must be getting its groove back. Not so fast. The love of music never died. Musicians never lost their passion for making it. So why is the record industry declining? ... With music so popular and even the Grammy showathon pulling in an impressive audience, why can't record labels make money? ... This is the disconnect."
Read the rest here: http://tinyurl.com/ygehgub
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THE 'A-SIDE' - TRACK 3
MTV HAS HIT SHOWS...WHERE'S THE MUSIC?
MTV must be raking in those Madison Avenue ad dollars.
MTV now has three top-rated cable TV programs "Teen Mom," "Jersey Shore" and "Real World: D.C." -- claiming the #1 original series spots among P12-34 on Tuesdays, Wednesdays and Thursdays, according to Nielsen research. Furthermore in 2009, MTV had an astounding nine of the top 30 original ad-supported cable series among P12-34, more than double the next competitive network, including "The Hills" (seasons 5 and 5.5), "Randy Jackson Presents America's Best Dance Crew" (seasons 3 and 4), "Teen Mom," "Real World: Brooklyn," "Real World: Cancun," "Jersey Shore" and "Real World/Road Rules: The Duel 2." Among P12-24, MTV is the #1 full-day, ad-supported cable network for 18 consecutive years. " (Source: http://tinyurl.com/ydgm3uk )
This is certainly a cause for celebration for the program execs responsible for putting these programs on MTV. It's their jobs to deliver such ratings so network sales people can sell their advertising inventory at the highest rates possible, to deliver maximum revenue and earnings. That's the way all TV networks make their money. Nothing wrong with that.
I just think the days of thinking the call letters MTV stands for "Music Television" are long past.
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THE 'A-SIDE' - TRACK 4
TERRA FIRMA IS LOOKING FOR $160 MILLION TO KEEP EMI AFLOAT ... ANY TAKERS?
Things aren't looking good at EMI right now.
It seems that Guy Hands' "Terra Firma, the private-equity firm that owns major record label EMI, is seeking to raise an additional $160 million to help repay loans to Citigroup, which helped finance the firm's $4.7 billion acquisition of EMI, according to published reports. Terra may soon default on loan payments due, if it fails to raise the additional capital." ( Source: http://tinyurl.com/ykz26rv )
This is what Guy Hands had to say back in January 2008, "We have spent a long time looking intensely at EMI and the problems faced by its recorded music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment. The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."
Part of the "changes" at that time was cutting over 2,00 jobs at EMI. I said from day one that I believed Terra Firma had overpaid for EMI, and that music companies are best when they are run by those who understand fully the core competencies of a music company, and what it takes to make real profits. Investment firms that have no experience in the entertainment industry, are going to experience problems down the road and Terra Firma is now finding that out.
Back in November I said this about the Terra Firma/EMI thing going sour, "Perhaps this news will stop any other investment companies looking to turn around a music company and make a quick profit. Perhaps this will shake the windows and rattle the walls in all music companies that are looking for possible financial white knights. "
Whatever happens in the end with EMI, I'm pretty sure the "perhaps" has turned into a certainty.
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THE 'A-SIDE' - TRACK 5
ANOTHER UPDATE ON TWITTER
I said I would keep you all apprised of Twitter's progress (or lack thereof) and I will continue to do so. I also said from the very beginning, I thought Twitter would have a very fast burn rate.
Now this: Leading some to question Twitter's fate, a new study by RJMetrics shows that the site's adoption and usage rates may be slowing. The survey -- which involved downloading 2 million tweets from about 50,000 users over several months late last year -- found that by year-end Twitter had just over 75 million user accounts. The monthly rate of new user accounts, meanwhile, peaked in July, and is currently running at around 6.2 million new accounts per month.
Of note, this rate is about 20% below July's peak rate. Similarly, a recent report from HubSpot found that Twitter adoption peaked last March, and has slowed dramatically. HubSpot's research did indicate that the average active user on Twitter is now more engaged than six months ago. Still, 75 million user accounts is nothing to ignore.
You can read the article 'Is Twitter Losing Its Luster' from the San Francisco Chronicle here: http://tinyurl.com/ybb84om
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THE 'A-SIDE' - TRACK 6
INTERNET RADIO INCREASING
"Our panel revealed that over time their usage with Internet-only radio becomes more sophisticated and they learn which sites generate the best consumer experience. Unlike the AM/FM simulcast experience, which duplicates the terrestrial broadcast consumption model, there is a consumer learning curve of sorts with Internet-only radio streaming. Experimenting with different sites over time provides more comfort for the user and time spent with those sites increases. This is why we project time-spent-listening improving for Internet-only streams." -- Bridge Ratings President Dave Van Dyke
The above quote from Bridge Ratings President Dave Van Dyke is drawn from a recent report they did. ( Source: http://tinyurl.com/ydjcnhs )
During the months of December 2009 and January 2010, Bridge Ratings conducted interviews with over 3000 Internet radio listeners to determine their current and intended Internet radio listening preferences. A few highlights of the results were the following:
* Just over 60 million Americans listen to some form of Internet radio in a typical week. This includes both AM/FM simulcast streams and Internet-only radio (e.g. Pandora, AccuRadio).
* 77 million Americans will listen to Internet radio streams (on both computers and mobile devices) by January 1, 2015.
You can read more and see more results from their report here: http://tinyurl.com/ydjcnhs
And Now For Some News ...
In One Decade, The Music Industry Has Lost Over Half Its Value
CNN.com MoneyIf you watched the Grammy Awards last Sunday night, it would appear all is well in the recording industry. Multi-platinum albums with hits from artists like Taylor Swift, Lady GaGa, Beyonce, and others on the annual show, helped make the show the best in years. But at the end of last year, the music business was worth half of what it was 10 years ago and the decline doesn't look like it will be slowing anytime soon.
Total revenue from U.S. music sales and licensing plunged to $6.3 billion in 2009, according to Forrester Research. In 1999, that revenue figure topped $14.6 billion.
Read more about it by clicking here.
Why Lady GaGa's (Digital) Platform Could Be A New Industry Model
Wall Street JournalA terrific article in the Wall Street Journal about Lady GaGa and her business savvy. Along with her sci-fi aesthetic and genre-bending sound, Lady Gaga's success is due in large part to a "shrewd use of new digital platforms," writes The Wall Street Journal. Adding to huge sales on iTunes, much of Gaga's audience gets her music free and legally, listening to streams -- by the hundreds of millions -- on YouTube and the other online services, according to research firm BigChampagne. On MySpace, meanwhile, Gaga has had 321.5 million plays. (By contrast, singer Susan Boyle tallied only 133,000 plays, despite scoring the No. 2 selling album of 2009.)
"While most artists stand to profit more from high-margin CD sales, being embedded across the Web can pay dividends in exposure and the loyalty of fans," BigChampagne founder Eric Garland tell the Journal." The Journal goes on to argue that the music industry's only hope is following Gaga's self-propelled formula. "Without the budget and staff to support their once overloaded artist stables, labels have slashed their rosters and doubled down on acts expected to drive hits."
Read more about it by clicking here.
A Poll Says That Sirius XM Can Do Without Howard Stern, But On The Other Hand...
TheStreetSome 55.2% of TheStreet readers who took the company's survey say Sirius XM can continue successfully without shock jock Howard Stern, though it might take a small hit at the beginning. However, 44.8% of the poll takers say that Stern is the face of Sirius XM, and helped make Sirius XM what it is today -- and that the company should keep him around.
Separately, Sirius XM said that it is set to broadcast Super Bowl XLIV in 10 different languages and 14 different live broadcasts. During Super Bowl Sunday on Feb. 7th, Sirius XM will air an expanded lineup of live play-by-play broadcasts of the Super Bowl from Sun Life Stadium in South Florida. Sirius XM added more than 257,000 net subscribers in the fourth quarter, bringing the total number of Sirius XM subscribers to more than 18.7 million at year's end.
Read more about it by clicking here.
Can YouTube Rival Netflix?
NY TIMES Bits BlogYouTube's first attempt to charge for full-length feature films was no blockbuster, according to initial projections. For 10 days last month, the video-sharing site offered up five independent films from the Sundance Film Festival, which received a combined 2,684 views. At $3.99 per rental, YouTube netted $10,709.16, The Times' Bits blog calculates.
"Those are not numbers that should have executives at Netflix, Apple's iTunes or Amazon's video on demand worried." YouTube, for its part, couldn't be happier with the results. "It definitely exceeded our expectations given all the barriers," Chris Dale, a YouTube spokesman, tells Bits. "The odds are always stacked against independent film makers."
Read more about it by clicking here.
By 2012, Estimated 3/4 Of U.S. Will Have HDTV
Media PostNearly two-thirds of all Americans have a high-definition television in their home, and another 12% intend to buy one within the next two years, according to a consumer survey from the Opinion Research Corporation. ORC also asked consumers which brands were synonymous with quality. By a wide majority, consumers selected Sony.
Read more about it by clicking here.
Apple Releases iTunes 9.0.3
Cnet.comApple has released iTunes 9.0.3, which addresses a number of bugs found in previous versions of iTunes 9. The update provides a number of important bug fixes.
Read more about it by clicking here.
ELTON & LEON? NOW THIS COULD BE GREAT!
Elton John and Bernie Taupin are hooking up with Leon Russell and T Bone Burnett for a new album.
TICKETMASTER AND LIVE NATION MERGER OK'D:
In case any of you didn't hear the news, the United States Department of Justice, after a year's worth of investigation, approved the proposed merger between Live Nation and Ticketmaster.
LISTEN TO JIMI:
Jimi Hendrix's "Valleys of Neptune," one of his final recordings before his death in 1970 and the lead single off a compilation of the same name out March 9th, is streaming now on Spinner.com. While the track has never been officially released, as Rolling Stone previously reported, it did appear on 1990 four-disc set Lifelines: The Jimi Hendrix Story.
PHISH NEWS:
Phish are releasing their November 19th, 1992 show from Saint Michael's College in Colchester, Vermont, to benefit Haiti relief. According to Live Phish, the show features 28 songs plus four tracks from soundcheck, including "Weigh" and "Caravan."
SIMON'S HAITI SINGLE:
The Simon Cowell-curated all-star rendition of R.E.M.'s "Everybody Hurts" premiered this week on U.K. radio, Reuters reports. The Haiti benefit single, which will be available for download this Sunday, February 7th, features Mariah Carey, Leona Lewis, Susan Boyle, Rod Stewart, Jon Bon Jovi and Miley Cyrus.
ROCK'N'ROLL DEATHS:
VH1 has announced plans to air a new seven-episode series called "Famous Crime Scene" that will revisit the deaths of artists like John Lennon, Tupac Shakur and Michael Jackson, The Hollywood Reporter's The Live Feed reports. The show, which will debut February 12th, recreates the musicians' final moments CSI-style, as experts examine toxicology reports, blood-spray patterns, DNA evidence and more, while witnesses and investigators share their recollection of the case.
AMONG 100 OTHERS:
Kanye West, Brian Wilson and Al Jardine, Jeff Bridges, Lil Wayne, Snoop, the Jonas Brothers, Carrie Underwood, User and Jason Mraz have joined Quincy Jones' remake of "We Are the World," according to CNN and the BBC.
SUPERNATURAL REDUX:
Santana's 'Supernatural' album is returning as a double-disc reissue on February 16th. The bonus LP of unreleased tracks also includes remixes and instrumental versions of the songs.
ROCKIN' SPORTS:
This Sunday the Who rock the Super Bowl, and artists are already lined up for the next big sporting event: Usher, Alicia Keys and Shakira will perform during the NBA's All-Star Weekend. Usher will take the stage before the game, and Keys and Shakira will bring a total of five songs combined to halftime
BUT DON'T HOLD YOUR BREATH WAITING TO COLLECT:
An Australian court has ruled that Men at Work borrowed the flute riff in their hit "Down Under" from Marion Sinclair's 1934 song "Kookaburra Sits in the Old Gum Tree," the BBC reports. The band may have to fork over as much as 60% of their earnings from the track.
Quotes of the week
"Nick, come on, you know you look at porn. Tonight when me and my husband look at porn, I already know it's gonna be a humdinger!"
-- Mariah Carey, pretending to be "Debbie from Long Island," prank calling husband Nick Cannon's radio show, Rollin' With Nick Cannon. (Well, at least we now know how Nick and Mariah spend those evenings at home)"I might just be way too boring to ever be a really great actress."
-- Jessica Biel, to Vogue. (Or, maybe not talented enough?)"I want to make out with the fat guy from The Hangover ... He's amazing. I like big, fat guys with beards that wear thick glasses."
-- Ke$ha, revealing her secret crush on Zach Galifianakis to The Morning Mash Up on SIRIUS XM Radio. (Well, each to his/her own)"I think I have more shit to offer, so I think that 'Animal' is a nice segue into the next record, hopefully. I wanted to be very - who were we trying to emulate? - like Flaming Lips-y, Arcade Fire-y. Not to say I won't still kick it, but I write about what I do, and now I'm over it, so back to Nashville. I got a Dobro, I want to learn to play that really well, and I want to buy a house so I can get an organ. I want to go there."
-- Ke$ha again."This is not a Lifetime movie, sweetheart."
-- "American Idol" guest judge Katy Perry, clashing with fellow judge Kara Dioguardi during the show's L.A. tryouts and reminding her that the show is about talent, not someone's sad story."You can't be Mick and Keith. You can't be the one on drugs and the one in control."
-- Courtney Love, equating her failed solo music effort to the Rolling Stones, to Dazed and Confused magazine. (No offense, Courtney, you're neither Mick or Keith in the talent department)
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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