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Brave New World Revisited
April 29, 2011
Have an opinion? Add your comment below. 24 years working in executive promotion capacities at both Capitol Records and at Universal Studios' MCA Records. Recognized as one of the industry's top professionals.
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"The CD made us sleepy. A lot of people got rich and nobody wanted it to stop. The CD masked a lot of problems -- bad taste, for example -- but that party's over."
-- Lyor Cohen, speaking this week at the Rethink Music Conference in BostonIn the first issue of the newsletter back in November 2003, I wrote the following in my first commentary titled 'Brave New World':
"How did it come to this? Did we suddenly wake up one day and realize that 60 to 100 million people were downloading music for free from a myriad of websites globally and that's the sole reason the music industry is in dire straits? Sure, file-sharing and downloading can be blamed for some of the problems inherent in the industry today, but to point a finger at the Internet and say it's the prime reason for the music industry's ills is just plain irresponsible and without merit.
Let's first look at the technology in hand today that's made it so easy for millions to exchange mp3s on the Internet. In the early 1980s the music industry started manufacturing CDs. Retailing only to audiophiles initially -- who'd shelled out anywhere from $300-$800 for the first CD players -- sales accelerated rapidly as player prices dropped and manufacturers battled for market share. Within one year, the CES (Consumer Electronics Industry) reported turntable sales had plummeted as CD player sales literally detonated when they hit the $100-$199 price range.
As player sales exploded (and Sony, Toshiba, Panasonic, etc. were literally unable to keep supplies in stock), record labels saw the same type of retail demand for CDs from major artists. Michael Jackson's "Thriller" was as hot in CD format as it had been in vinyl and tape, and then labels realized that their cash cows (catalog) were just sitting there waiting to bring in millions of dollars in profits by just releasing them in this new format.
And of course the labels did just that and the CD explosion continued throughout the '80s and into the mid 1990s. The profits they reaped were extraordinary, and in fact distorted in reality the true growth of sales. Because if catalog was taken out of the equation, the profits would not have been near as healthy, and close examination would have revealed that though they were mega-selling, multi-Platinum artists/projects during this time, the number of REAL artists established with long-term potential, diminished as the focus was shifted from developing artists to getting "product" to fill the distribution/retail pipeline."
Now, in 2011, Warner Music Group vice chairman Lyor Cohen, admits that the CD explosion made people in the industry "sleepy."
Sleepy indeed, but sleepy and greedy would better define the era. I know, because I was there at a major label when it all happened. Annual sales numbers were staggering as catalogs from major artists on every label were released on shiny new digital discs. In 1987, in Oliver Stone's 'Wall Street' Gordon Gekko told us "Greed is good." Of course, we all knew deep inside Gekko was wrong, but who doesn't like making lots of money? Mr. Cohen sure likes it. And before you get the wrong idea, I have nothing against people making lots of money. As someone once said, "It isn't necessary to be rich and famous to be happy, it's only necessary to be rich."
Coupled with the explosion of the MTV juggernaut back then (MTV actually played a ton of music videos back then and broke artists), labels were pumping out big quantities of CDs as fast as MTV upped the rotation on the videos they played. When MTV finally was available nationally, increased rotation could singlehandedly break an act wide open at retail -- even before there was coast-to-coast radio play. Duran Duran was the first act to literally explode via MTV without massive radio play. Once MTV created a retail storm, radio came to the party.
The result? The video quickly replaced the artist development budgets labels had for years put aside to ensure they could properly and methodically nurture the artists they had signed to their rosters. Artist development dissipated as video budgets swelled. It wasn't good enough just to have a video; you had to have something special that would move all the MTV people so much they would put it on the air almost immediately.
When video budgets started going over $100,000 a clip and more, what money was left for tour support to put the artists on the road to actually play in front of an audience? Not much. I often wonder how many millions of dollars labels spent making absolutely dreadful videos that never did a thing for the artists except get them in the hole financially so bad that they were later dropped.
This is all ancient history, of course, and any label person who worked during that era knows all this. But for too long, most people in the industry ignored all the warning signs that were grossly apparent. The profits were just too damn good. Until the same digital technology that gave the industry the CD, made it easy to trade music online or burn copies of CDs on personal computers. It's all just a bunch of ones and zeroes, whether a CD or online.
Yeah, and then that thing called the Internet came along and spoiled it all. The single greatest direct-to-consumer distribution system ever created.
But the labels hated it because it quickly vaporized the profits they had reaped from CDs.
And now it's 2011. And Mr. Cohen admits the CD made the industry "sleepy." And yes, the party is over. It has been over for some time now and thousands of music industry people have lost jobs. Jobs that possibly could have been saved or shifted into new areas if labels had been more proactive and embraced technology. Instead they gave their association, the RIAA, millions to go out and sue the evil-doers who downloaded music. The RIAA has been as successful in their attempts as NBC has been in trying to pull out of last place in the TV network ratings.
Dear Mr. Cohen: You should be made to wear earphones. Because something is happening here, but you don't know what it is, do you Mr. Cohen? (My apologies to Bob Dylan)
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THE 'A-SIDE' - TRACK 2
IN THIS 30-SECOND CLIP, WILCO'S JEFF TWEEDY TELLS WHO HE THINKS KILLED THE MUSIC BIZ
My thanks to Portland's DJ Clarence Duffy for sending me this clip ... it is indeed worth putting in the newsletter and letting readers see. It's a good laugh ... even if Jeff is being sarcastic.
Check it out here: http://tiny.cc/ddgql------------------------------
THE 'A-SIDE' - TRACK 3
NETFLIX NOW BIGGER THAN COMCAST
In the battle for entertainment subscriptions, video should pass cable TV and satellite radio for the first time. Netflix is poised to become the largest subscription entertainment business in the world, with around 23.7 million subs, edging past Comcast, which could take a number-three spot to Sirius XM, according to Hollywood Reporter.
Read the rest here: http://tiny.cc/jx096-------------------------------
THE 'A-SIDE' - TRACK 4
A GREAT ONLINE RESOURCE FOR MUSICIANS AND MUSIC PROFESSIONALS ... CHECK IT OUT
I wanted to share a free resource that can help, created to benefit aspiring musicians, bands, venues, and music professionals:
Munite.net is designed with the purpose to help discover musical talent, as well as connect industry professionals with agents, labels, promoters and managers. The site provides an arena to facilitate partnerships, build communities, source talent in a multitude of musical genres, as well as "Fortify" and "Strengthen" relationships with meaningful purpose. Whether your talent is singing, playing the guitar, bass, or drums; a musician, band, lyricist, or DJ, Munite provides the essential platform and sets the stage, allowing people to take their career to the next level.
Check it out here: http://tiny.cc/v5h70-------------------------------
THE 'A-SIDE' - TRACK 5
ALMOST 100 MILLION HOMES ONLINE IN FIVE YEARS
Paving the way for more online activity, 99.4 million U.S. households will be online by the end of 2016 -- of which 97.9 million will have broadband services -- according to a new forecast from Interpublic Group's Magna Global.
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THE 'A-SIDE' - TRACK 6
FOLLOW-UP: MORE ABOUT THOSE MOVIES COMING EARLIER TO PAY-FOR VIEW
And the walls come tumblin' down.
Now cable TV company Comcast is reportedly in talks with movie studios to offer on-demand home screening of films six to eight weeks after their theatrical release. The company already shows select indie features on the day they premiere in cinemas.
Comcast would thus be the first competitor to satellite-TV operator DirecTV, which just began a premium home video program showing films roughly eight weeks after release for a cost of $29.99. Comcast says it may experiment with a variety of prices for its service, depending on locale and film.
Read more here: http://tiny.cc/jr9pv-------------------------------
THE 'A-SIDE' - TRACK 7
THOSE DROIDS KEEP GOING AND GROWING
Despite the marketing brilliance of Apple, Android-powered smartphones were the most desired devices in March, according to Nielsen. Last month, the research firm said 31.1% of respondents said they wanted their next smartphone to be an Android, while 30% said they wanted an iPhone. "That's not terribly surprising considering the growing momentum behind Android," comments GigaOm.
"But it shows that Android's appeal is continuing to grow even despite the broader availability of the iPhone on Verizon." Indeed, the share of consumers planning on buying an Android in the next year increased from 25.5% in July to September, according to Nielsen, while people planning on buying an iPhone slipped from 32.7% during the same period.
And Now For Some News ...
Mobile Music Sales & Subscription Revenues Down In 2010
BILLBOARDI predicted both of these happening.
Last year I said, "Do people really want to play their music on their mobile devices? If so, for how long?"
In 2008 I said, "Given the choice between buying and owning their music versus renting it (which in essence, is what you are doing if you choose a subscription service), the consumers will buy it. If they wanted to "rent" their music, the subscription services would be wildly successful. That isn't the case."
Mobile sales experienced a big drop, subscription service revenue dipped slightly and digital track revenue had a healthy increase in 2010. These and other statistics are available in the RIAA's 2010 Year-End Shipment Statistics report at the organization's website. Nielsen SoundScan tracks purchases of digital tracks, digital albums and physical formats; the RIAA's annual report offers insight into other formats and products and revenues not tracked by SoundScan.
Read more about it by clicking here.
"On The Music Path" iPad App Offers Users One-On-One Lessons From Musicians Including Jackson Browne, Ravi Shankar, and Others
YAHOONEWS/PR NEWSWIREImagine taking in-depth, one-on-one guitar lessons from Jackson Browne or Richard Thompson via high-definition video.
These are among the rarefied experiences offered by On The Music Path, a new iPad app designed to teach users to play real instruments with instruction from world-class musicians.
Read more about it by clicking here.
Apple vs. Amazon In The Clouds: One Big Difference
ALL THINGS DIGITAL/MEDIA MEMOApple's service: The deals it is signing will allow it to store a single master copy of a song on its servers, and share that with multiple users.
Amazon's service, by comparison, works much more like an external hard drive, where users are required to upload a copy of every song they'll want to get via remote access.
Read more about it by clicking here.
RealNetworks Will 'Rinse" Your iTunes Library
GEEKWIRERealNetworks plans to soon release Rinse, a new application that can be used to "clean" a user's iTunes or other digital music library, fixing song data, deleting duplications and adding album artwork.
Read more about it by clicking here.
Challenges and Opportunities for In-Car Streaming Radio
KNOW DIGITALA great seven-page report on the above subject.
Read more about it by clicking here.
Concert Videos Now On Wolfgang's Vault
WOLFGANGSVAULT.COMWolfgang's Vault, an archive of live music recordings and vintage music memorabilia, on Wednesday announced the launch of the Video Vault, which will offer thousands of live concert performances for free streaming.
Some footage is not excellent quality; some is fine. It's all worth checking out from a historical perspective.
Read more about it by clicking here.
Sonicbids and Live Nation Team Up To Bring Emerging Music to House of Blues
BUSINESS WIRESonicbids, the leading matchmaking site for bands and music promoters, and Live Nation Entertainment, the world's leading live entertainment and eCommerce company, today announced a partnership to bring new emerging music to House of Blues. The program -- New Music Nights at House of Blues, Powered by Sonicbids -- will launch in Los Angeles, San Diego and Las Vegas to start, with plans to rollout nationwide.
Read more about it by clicking here.
Here Comes iCloud.com
GIGA OMLikely readying the launch of its online music storage service, Apple has reportedly bought the domain named iCloud.com.
"My source, who is familiar with the company, says that [desktop-as-a-service company] Xcerion has sold the domain to Apple for about $4.5 million," reports GigaOm's Om Malik.
Read more about it by clicking here.
GOING MOBILE TO GO ANYWHERE:
Half a billion people worldwide will use their mobile devices as travel tickets on metros, subways and buses by 2015, according to a new forecast from Juniper Research.
'ELLO VEVO:
Vevo, the music video portal joint venture between Sony Music, Universal Music and Abu Dhabi Media Company that launched in North America in 2009, on Tuesday announced its availability in the U.K.
ALL ABOUT THE VOICE:
"The Voice" had a strong premiere for NBC Tuesday, outrating "Glee" in the half-hour they opposed each other and giving the network an adults 18-49 victory for the night.
GAME HARDWARE UP, SOFTWARE DOWN:
U.S. video game sales were down 4% in March, to $1.53 billion, as hardware sales climbed while sales of game software fell, according to a report from market research firm NPD Group.
NOW YOUTUBE GETS IN THE PICTURE BIZ:
YouTube may finally be ready to get into the video-on-demand market. Google's video-sharing site is lining up deals with major Hollywood studios and could launch an online movie rental service that would feature premium titles as early as next week, according to a report by entertainment Web site The Wrap.
RACE TO THE CLOUDS:
Apple has "completed work" on its online music locker service and will launch ahead of Google's anticipated similar offering, Reuters reported, citing people familiar with both companies' plans.
ARMSTRONG SEZ BUH-BYE TO BROADWAY:
Green Day's Billie Joe Armstrong gave his final performance as St. Jimmy in the Broadway production of American Idiot this week.
FRIENDSTER GOES BUH-BYE:
Pioneering social network Friendster has informed users that it will delete all photos, blogs, comments and groups from the site on May 31st, encouraging users to utilize an export application to download their uploaded content, TechCrunch reported.
REAL CLEAN:
RealNetworks has just introduced a new app designed to "clean" a user's iTunes or other digital music library, fixing song names, deleting duplicate tracks and adding album artwork, GeekWire reported. Dubbed Rinse, the $39 app taps into the Gracenote CDDB database. The official Rinse product site touts the software as "smarter than other programs," including iTunes itself.
PASSING:
Phoebe Snow, whose offbeat songs and distinctive, jazz-inflected alto set her apart from her singer/songwriter contemporaries in the 1970s, died Tuesday in Edison, NJ, at 58. She had suffered a brain hemorrhage in January 2010.
PASSING:
Noria Ogha, who initiated the acquisitions of CBS Records and Columbia Pictures during his long tenure as Chairman/CEO of Sony Corp., died last Saturday multiple organ failure in Tokyo.
PASSING:
Marianne Joan Elliot-Said, 53, better known as Poly Styrene, the original teenage punk-rocker as singer of X-Ray Spex, died this week after a battle with breast cancer.
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
Read more about it by clicking here.
Quotes of the week
"Never, in all our history of popular music, has there been such a plethora of composers -- professional, amateur, alleged -- as we have today. Responsible, of course, are those two fresh hotbeds, the coniferous cinema and the radio. The merciless ether -- by unceasing plugging -- has cut down the life of a popular song to but a few weeks, with the result that anyone who thinks he can carry a tune -- even if it's nowhere in particular - nowadays takes a 'shot' at music-making."
-- George Gershwin, ranting in the New York World Sunday Magazine, May, 1930."For every 250,000 streams on YouTube, that is the equivalent of one credit of ASCAP performing rights value. One credit is less than $8, it's about $7.60. You do that math and it's pretty depressing, but that's the world we live in today, and it's causing a lot of consternation and a lot of discussion amongst the industry."
-- David Renzer, Chairman/CEO of Universal Music Group Publishing at a forum held by the Association of Independent Music Publishers (AIMP) in Los Angeles earlier this year."I decided, 'Well, I know that I'm mad at those [Aerosmith] guys, but I'm not that mad. So I called Jimmy (Page) up after I left, two weeks later, and said, 'You're in a classic band, and so is mine, and I just can't do that to my guys, and I can't do it to Robert [Plant],' and I couldn't see finding a year to really put myself into it. So for whatever the band thought, never in a million years was I going to quit Aerosmith to start Zeppelin."
-- Steven Tyler in Rolling Stone talking about when in the fall of 2008 he flew to London to sing for Page, John Paul Jones and Jason Bonham, who were considering starting a new project with him."In the very, very beginning, when we were first signed to Columbia, I really admired Dylan's work. 'The Sound of Silence' wouldn't have been written if it weren't for Dylan. But I left that feeling around 'The Graduate' and 'Mrs. Robinson.' They weren't folky anymore."
-- Paul Simon, in Rolling Stone"I continue to be astonished at the economic naiveté I hear in discussions of the business of news. Circulation will continue to decline. You no longer control the market. You are a member of an ecosystem. Play well with others. Scaling local sales is the key opportunity. We have not begun to explore new definitions of news."
-- Jeff Jarvis, writing on BuzzMachine about the reality of declining newspaper circulation."The working title, as of right now, is 'Get Well Soon Everybody.' If I could say anything to the world at large, that would be it."
-- Jeff Tweedy, the singer-songwriter-leader of Wilco, says of his band's eight studio album, nowin the mixing stage at the group's Chicago studio, the Loft, and due for release in September. The record will be Wilco's first on their own label, dBpm - shorthand for decibels per minute.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
People Who Produce American Culture Warning Nation Ahead Of Time That Rest Of 2011 Going To Be Pretty Rough
NEW YORK-A coalition of artists, filmmakers, novelists, musicians, fashion designers, and other producers of American culture issued a joint statement this week warning the nation's citizens that the remainder of 2011 was going to be "pretty rough stuff."
"Oh man, you should see some of the American culture we've got lined up," said Atlantic Records A&R executive Tom Meyerson, holding a list of all forthcoming films, books, music, visual art, and poems slated for 2011. "About 4,500 terrible novels, some movie called The Zookeeper with Kevin James, and a shitload of new sculptures that we got a sneak peak of and, trust me, these things are not looking too good at all."
Read the rest here and laugh: Click Here.
ALSO...FOR MORE LAUGHS
Today Now! Interviews The 5-Year-Old Screenwriter Of "Fast Five" here: http://tiny.cc/fs6hh
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
Smart Marketing Consulting Services
Smart Marketing Consulting Services has been in business sixteen years, and consults clients in the music, entertainment, attraction, media, and technology industry on branding, marketing, online exploitation, maximizing new media, and more.
"And the beat goes on, the beat goes on ... drums keep poundin' rhythm to the brain."
"Work is life, you know, and without it, there's nothing but fear and insecurity." -- John Lennon
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