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EMI's Nicoli Speaks Out

In a wide ranging keynote speech at the CITA mobile conference, EMI head Eric Nicoli spoke about the state of the music industry and EMI's plans to overcome the current malaise.  Over the next week we will be featuring portions of the speech:

"...I often get asked which product or service will win in the digital arena and what current business model would EMI pin its hopes on. And the answer is that, right now, we’re 100% agnostic – if that’s not a contradiction in terms. The glib answer is - we don’t care for the moment. We don’t care if it’s Over the Air, fixed download, ad supported subscription or carrier pigeon… we’ll try anything and everything recognizing that the consumer will ultimately decide."

New Music Business Briefing - iTunes Credits Albums, Napster Settlement Tag $100M & More

>>> In a effort to boost complete album sales and calm label concerns that individual track sales are hurting profit margins, a new iTunes feature gives credits for tracks bought on future album purchase.

>>> The NY Post chronicled how its battered strike price is hurting WMG quest for EMI.

>>> A new Criterion study confirmed what most already know, an XM and Sirius merger does create a monopoly.

>>> Reports emerge that the Napster settlement with EMI cost BMG $100 million.

>>> Live Nation is going to start using the Filmore name in at least three other cities - NYC, Philly and Detroit

>>> Last week's attempt by bloggers to make an indie band #1 on iTunes fell short, but it did have an impact:

>>> Black Lab's "Mine Again" reached #11 on the US Rock Chart.
>>> #99 in the overall Top 100 Songs Chart.
>>> Only charted track without any label support

New Music Tipsheet's Perry Chronicles Industry Woes

"... CD sales are down. WAY down, 20% so far this year alone -- that translates into at least $300 MILLION dollars in gross revenues lost... I've been hearing it from my label folks for a while "Yeah man! We got a top-5 track at radio, but we're selling 100,000 single downloads and only 15,000 CDs a week!" OUCH! Let's do the quick math on that: 100,000 singles might yield $60,000 to the label, whereas 100,000 CDs (old math) would have netted the label at least $600,000 -- that's half a million dollars, per title, per week, gone....when your marketing costs stay the same and your revenues get smaller, it doesn't take a rocket scientist to figure out that things aren't so good."

"... Label and distribution staffs have been cut in half as their release rosters have doubled, and quite honestly, it's making a bigger mess than the one we're already in. People are losing their focus, and it's really starting to affect how business gets done..."

"Forget about the old days of artist development -- bringing a band into an office to play, getting the entire staff to go to the mat for a single band, sticking with that release for 6-12 months, and reaping the rewards of watching them blow up bigtime? Not happening so much these days. Unfortunately, as much as every label would like to be about artist development, people turn into Lucy & Ethel at the chocolate factory after another half dozen new titles come out the next week..."

Read the full text of Scott's open letter after the jump and check out his New Music Tipsheet.

Guest Commentary: How To Save Internet Radio

COMMENTARY FROM FROM GUEST BLOGGER ATTORNEY BENNETT LINOCFF -

Consumers and webcasters are outraged at the license fees that the Copyright Royalty Board (the CRB) has determined will be charged under the webcasting statutory license in the United States. Everyone except spokespeople for the record labels expect that these fees will drive nearly all independent webcasters out of business.

But inhibiting the growth of webcasting was the goal from the outset, with passage of the anti-webcasting provisions of the DMCA. The impossibly burdensome music use reporting requirements and now these grossly unreasonably statutory license fees are part and parcel of the over all effort to put an end to webcasting....

...The music industry's concern about webcasting has nothing to do with license fees. Rather, the industry fears that webcasting allows consumers to make unauthorized digital copies of recordings as they are being streamed. In other words, the music industry is concerned that webcasting threatens the label's traditional sales based revenue model; and because the industry has no alternative business model in mind, it must seek to suppress the growth of webcasting to the greatest extent possible.

What's really needed is an alternative to this sales based revenue model; one under which Internet radio can flourish without restriction. (more here)

Marketing Guru Seth Godin Says Embrace Music Industry's "Dip"

Marketing guru Seth Godin has new new book coming in May called "The Dip".  On his blog recently he used the music industry as an example of how "The Dip" works:

"The music business used to be simple. You gigged and prayed and waited and hoped that Berry Gordy would give you a contract. Once you had a record label, you were in. The Dip was early and steep.

Now, of course, making a record is trivial. A laptop and some microphones and you're in. No permission needed.

And making a music video is a lot easier. And who needs MTV if you can get it on YouTube.

Hence the problem. Before, there were thousands of frustrated musicians with no record, no promotion and no Clive Davis. Now, there are thousands of frustrated musicians with a lot more at stake. They've got recordings and CDs and videos and MySpace pages but they're still not successful.

It doesn't feel fair. It's not. It's the Dip.

The Dip is what separates a hit from a non-hit. And the irony is that without the Dip, it would be useless to try to succeed in pop music. Without a chasm that separates the hits from everyone else, the hits aren't worth anything.

Embracing the Dip, not cursing it, is the only way to stay sane (and become successful)."

Thanks to Hypebot reader Dave for the (Dip) tip.

New Music Business Briefing - MySpace Files Lawsuits & More

>>> Modest Mouse debuts at #1.

>>> MySpace marketers beware.  They've brought new lawsuits to fight phishing, spam and bots. 

>>> House of Blues Concerts veteran Alex Hodges has joined Nederlander Concerts as COO.

>>> A story and audio from NPR  on how new higher royalty rates could drastically change the internet broadcasting landscape.

>>> Future Of Music Coalition and growing group of musicians lobby for net neutrality.

>>> The RIAA gets a letter showing the weakness of their case and drops at least one lawsuit.

>>> Bonnaroo buys the festival site for $8.7 million.

7 Digital Grabs Access To Bebos 31 Million Users

7digital and Bebo have announced a partnership which will allow Bebo’s 31 million users worldwide to download music directly from the social networking site.  Bebo currently has over 450,000 registered bands worldwide. 

Artists signed-up through Bebo Bands will be able to either sign up for a free Starter indiestore account, which will allow them to sell four tracks, or a Pro account, which enables them to sell 20 tracks. A specially created indiestore widget will further streamline the process.

Read the press release after the jump.

Coalition of Independent Music Stores Top 200 for Week Ending 03-25-07

Pos.  ARTIST    |    TITLE
1 MODEST MOUSE|WE WERE DEAD BEFO
2 ARCADE FIRE|NEON BIBLE
3 WINEHOUSE*AMY|BACK TO BLACK
4 LCD SOUNDSYSTEM|SOUND OF SILVE
5 YOUNG*NEIL|LIVE AT MASSEY HALL
6 BIRD*ANDREW|ARMCHAIR APOCRYPHA
7 LEO*TED & THE P|LIVING WITH TH
8 EL-P|I'LL SLEEP WHEN YOU'RE DE
9 WILLIAMS*LUCIND|WEST
10 J.DILLA|RUFF DRAFT
11 SHINS|WINCING THE NIGHT AWAY
12 LOW|DRUMS & GUNS
13 STONE*JOSS|INTRODUCING JOSS ST
14 MARLEY*STEPHEN|MIND CONTROL
15 ASCENDED KINGS|INEVITABLE, THE

Read the full indie store top 200 after the jump.

EMI Cuts Exclusive Nokia Cross-Promo Pact

The announcement action in the music space this week is in Florida at the CITA mobile phone conference. During a keynote speech there today, EMI CEO Eric Nicoli announced a new exclusive alliance with Nokia.

The new marketing and content agreement will kick off with Capitol Group artists Lily Allen and Red Jumpsuit Apparatus who will be featured in Nokia’s Flagship Store locations worldwide, as well as Nokia’s Experience Centers, theater locations and on Nokia music-related websites.  Going forward, EMI will be the exclusive major label provider of music content for the retail program with new content featured every 60 days. 

The alliance underscores both Nokia's belief in the branding power of music and EMI's understanding that the mobile appears to increasingly be the avenue of choice for music discovery and  purchase. (Read the press release after the jump.)

NY Times Looks At New Music Business

“You have to create an almost hysterical pace to find hits to sell as digital downloads and ring tones that everybody’s going to want. It’s scary.”
-  former Atlantic President and artist manager Ron Shapiro

more

New Music Business Briefing: Mecora Goes Mobile With Microsoft, ShoZu Enables Mobile Promo & More

>>> Brigt Eyes frontman goes on record about "selling out" and his own path to success.

>>> Microsoft plans to announce a distribution deal to make Mercora's newly updated social radio service, Mercora M v2, available for Windows Mobile devices.

>>> Details of Sprint's plan to sell 99 cents over the air downloads emerge.

>>> Electronic Arts and Nettwerk form new label Artwerk.

>>> A new Pyramid Research report claims that subscription services will transform the Mobile music market.  Now, they said that about both PC and device based subscriptions services too.

>>> Warner Records extends it partnership with ShoZu providing more bands with the cell handsets which enable instant uploads to MySpace, YouTube and more.

>>> MusicPlusTV.com relaunches with new content and features.

Sprint Slashes Download Prices To 99 Cents. AT&T Offers Free Napster.

The announcement derby in the music space shifts to Florida this week and mobile conference CITA Wireless. Even prior to today's opening the press releases are flying.

Sprint announced late yesterday that it will slash the price of its over the air downloads from $2.49 to $.99 including a copy for the PC.  Other major carriers like Verizon charge in the $1.99 range. 

If other mobile providers match Sprint's prices it could lead to a major shift in consumer behavior matching some Asian and European markets where the majority of paid downloads are initiated on handsets.

AT&T has hooked up with Napster for an offering that includes both downloads and subscriptions. Some new 2 year cell plans will now include the music subscription for free. The deal sent Napster's stock up 10%.

Expect more mobile announcements as CITA continues this week.

Mozes Cuts Universal SMS Pact And Offers Service Free To Indies

SMS broadcast service Mozes has cut a major deal with the Universal Motown record group for campaigns by a bevy of the label's acts. (details here)

The company also told Hypebot Monday that the same service that links acts with fans via cell is available to indie labels and even D.I.Y. artists for free.

New Music Business Briefing: EMI and BMG Settle, College Kids Ignore RIAA & More

>>> EMI and Bertlesmann have agreed to settle old Napster lawsuit.

>>> UK download site 7Digital has been named to magazine Red Herrings's Top 100 emerging EU companies.

>>> Singer Terra Naomi is finding success via YouTube.

>>>  SURPRISE OF THE DAY! Three quarters of college students ignore RIAA warnings!

"O.C." Music Supervisor Gets Atlantic Imprint

Chop Shop Music Supervision's Alexandra Patsavas, whose placements on shows like "The O.C." and "Grey's Anatomy" helped launch Death Cab for Cutie, Snow Patrol, The Fray and others, has inked a deal with Atlantic Records for a new imprint, Chop Shop Records.

"A label seems like a natural extension of what a music supervisor does," said Patsavas. "You can come across things very early, and there have been bands along the way I would have loved to have worked with more closely."

Indie Fueld By Ramen To Launch Streaming Destination

Indie label Fueled By Ramen who already uses new technologies and the net better than most, is set to launch its own streaming destination FBR+ tomorrow 3/27 with a live concert by Paramore.

"We developed our label though the internet, using it to get our artists out there by building a true grassroots community," states Fueled By Ramen president and co-founder John Janick.  "Working with VTech and using Brightcove for the FBR+ Live Series represents an exciting new avenue for introducing great original content from FBR's artists into the digital world.""

New Music Business Briefing - SnoCap + PumpAudo, RIAA Targets Children, MusicWorld 3D & More

>>> SnoCap has cut a deal with PumpAudio to make indie music liscening for films amd commercials almost seemless.

>>> One of the latest targets of RIAA litigation is a 10 year old girl who was 7 when the "infringement" occured.

>>> New music services, better video and "mobile wallet" services and more are part of the offerings of this week's CITA mobile phone conference in Florida.

>>> Music World 3D is a virtual world where musicians, fans amd the industry can interact. Think of its a The Sims meet MySpace.

>>> Bloomberg profiles LimeWire founder and serial entrepreneur Mark Gorton. Sources have the RIAA and others suing the firm turning up the pressure.

Three Music 2.0 Services Worth Watching

Patrick May agent provocateur for our sister firm Skyline Music and one of our SxSW scouts came back from the trade show with these three tips:

Disc Revolt -
Provides physical solutions for digital delivery of media. For artists, DiscRevolt is a way to sell downloads through artist-specific download cards. Artists upload songs to the DiscRevolt site and design artwork for a plastic download card. DiscRevolt prints the cards with a unique redemption code on the back, and artists then sell them to fans at live shows. Fans enter that access code on the DiscRevolt site and receive credits to download that artist's media.  The cool thing about these cards is the fan can ALSO download OTHER ARTISTS with the credits THE BAND SELL!!!!   So the band is not only selling product but a vessel of music discovery to the fan.

MyTracks -
A new music download service that is forging a massive community of music fans and today's top indie artists and labels. In addition to their partnerships with universities across North America, myTracks.com and the their parent company FreshTracks also provide powerful digital media solutions for clients such as Lollapalooza-Chicago, Austin City Limits Fest and many others.

Bandago -
( OK so this one's not technically 2.0 but given the importance of touring its pretty cool.) Progressive, AFFORDABLE van rental company  with locations in  LA, San Fran, Seattle, NYC and soon to open in Atlanta.  Price ranges for feature rich vans are from $105 per day to $200 per day depending on model and time of rental.  250 miles are included for every day you have the vehicle (i.e. 10 days = 2500 miles included). Additional miles are .35 a mile.

UPDATED: New Music Business Week In Review

>>> EU regulators have stopped the clock on their probe of the 2005 merger of Sony with BMG and demanded more information and documents.

>>> COMMENTARY - In the long term, who reality benefits when royalty rates rise?

>>> Is mp3 download site eMusic for sale just as some labels grow restless?

>>> A new SoundScan report offers some small hope even as CD sales tumble.

>>> Ticketmaster buys echomusic and gets into the fan business.

>>> The RIAA gets the cold shoulder from universities in Wisconsin and Nebraska.

>>> The Copyright Board agrees to hear objections to its controversial royalty hike that some say could silence many internet radio stations.

>>> A wrap up from music industry mega-conference SxSW.

EU Regulators Halt Sony BMG Probe. Demand More Info.

European Union regulators hit the pause button today on their antitrust investigation into the 2004 Sony and BMG merger of their music units saying that the companies had failed to provide required data.  The commission notified them of their "failure to provide requested information" and said in a statement, "This means that the clock has stopped on this case until such time as the information is received."

The Commission apparently requested additional info to gauge the merger's impact on the European music market including rivals Universal, Warner Music Group and EMI as well as the indie sector.  This delay can't be good news for WMG as it considers a new offer for EMI; a move that would certainly lead to a similar EU review.

Who Benefits As New Royalty Demands Rise?

Even as music sales are dropping, mechanical and performance royalties are at all time highs thanks payments from emerging media. The push for even higher payments reached new levels this week.  But how these increased demands could effect innovation, consumer behavior and eventually overall revenue remain unanswered.

In an interview in RoyaltyWeek (via RAIN) by Brian Zisk of the Future of Music Coalition with John Simson, Executive Director of SoundExchange, Simson outlined the collection agency's position on the Copyright Royalty Board's recent controversial decision to raise rates for internet broadcasters:

" I’m tired of the claims that have been made over and over, a sort of arrogance on the webcasters side that we’re doing you a favor playing your music...you’re playing it because you either love it or because you think it helps you gain an audience and it serves your purpose... there have been studies that show over the air radio may not be promotional at all; it may be more substitutional...I think we should recognize that we can both benefit as long as we respect each other and say, you know, 'Yeah, they need to be paid fairly when we use their stuff.'

The Copyright Board agreed late this week to review arguments, but how can higher rates be fair for internet broadcasters who already pay significantly higher total royalties than traditional broadcasters? And who gains if higher rates put many webcasters out of business as many believe they will?

Its not just internet broadcasters who are under fire. Late Thursday The National Music Publisher's Assocition announced that it was joining a consortium of publishers suing XM over portable players with copying capability.  Just a few weeks ago ASCAP took the position in court that buying a download triggers not only mechanical royalties, but also payments for a performance.

While creators deserve to be paid, when do their demands become excessive?  No one benefits if the music discovery enabled by a multitude of niche broadcasts ends or new platforms like Pandora shut down.

In the end rights holders may drive music discovery further underground leading to smaller payments overall.   

SoundScan Offers Sign Of Hope Amidst Decline

• Overall Consumer Music Purchase Decisions are up 19% including all Album & individual Digital Track sales.
• Consumers have made more than 46 million additional music purchase decisions this year than last year.
  • 288 million individual Digital Tracks vs. 242 million at this time last year.
  • 99 million Albums vs. 119 million at the same time last year.
• Overall Album purchases, including Track Equivalent Albums (total # of Digital track purchases divided by 10, in order to provide a like-for-like comparison with traditional Album purchases), are down 10% this year.
  • 2007: 118 million
  • 2006: 131 million
• Sales of physical CDs have decreased 20% over last year.
  • 2007: 89 million
  • 2006: 112 million
• CD sales account for 90% of Traditional Album sales (an Album purchased in its entirety, whether physical or digital).
• Sales of Digital Albums have increased 100% over last year. Digital Album sales account for 10% of Traditional Album sales.
• Sales of Individual Digital Tracks have increased 54% over last year.

Data From Neilson SoundScan is through week ending 3-18-2007.

Today Is They Day We Find Out If Bloggers Can Influence The iTunes Charts

A large group of bloggers and podcasters are urging their fans to join together today March 22nd and make an independently released track #1 on the iTunes chart with a campaign titled "Bum Rush The Charts"

The beneficiary track is "Mine Again" by the band San Francisco band Black Lab. The act was chosen for the campaign in part because it was dropped from two major record labels (Geffen and Sony/Epic) and then had to fight to get their masters back. By making Black Lab #1,even if just for today, organizers hope to send a message to the major labels both about the multitude of great music they fail to support and the power in new independent media. We'll keep ya posted.

New Music Business Briefing - Elton John Goes Digital, Starbucks Signs McCartney, Sales Continue Fall & More

>>> Elton John finally puts his entire 400 track catalog online. iTunes gets it first.

>>> Paul McCartney officially signs with Starbucks new Hear Music label. (press release)

>>> US CD sales were down 20% in the first quarter along with digital album sales which went from 119 million 1stQ '06 down to 99 million so far this year.  Only single tracks sales rose to 288 million from 242 million for the same quarter last year.

>>> University Of Nebraska has joined Wisconsin in saying it won't go out of its way to help the RIAA to prosecute its students.

>>> As you might expect there was some fan chatter on the eMusic message board on our story that the company may be for sale. Main stream music news and gossip sites like Idolator are posting our story as well.

>>> Here's the full text of the official SEC filing for the proposed Sirius XM merger.

R.I.P.  Soul Singer Luther Ingram.

Is eMusic For Sale Just As Some Labels Grow Restless?

This morning asked why are Vice Recordings (Bloc Party, The Stills, The Streets) tracks no longer on eMusic?  Are other labels here and in Europe unhappy with recent eMusic payouts?

Our sources now tells us that European digital distributor Vital was actually who pulled Vice's content from eMusic Europe because of "royalty issues".  In the US  Atlantic helps fund Vice; so it may have been WMG who forced the eMusic take-down here.

We're also hearing persistent rumors that even as some labels are growing restless, eMusic is actively up for sale. Google and Amazon are most often mentioned as buyers. Some even claim a deal is close and attached a purchase price around $100 million to the rumor. I haven't seen any of the private company's numbers, but the figure seems high given the competition (including Amazon) almost ready to or strongly considering entering the mp3 marketplace.

We're asking Vice, Vital, eMusic and others for comment and will publish any replies.