hypebot

WMG's Cohen Renews For $3M & Hypebot Renews It's $1 Challenge

Lyor Cohens' new deal  with Warner Music Group includes the following:

(i) the term of Mr. Cohen’s employment agreement was extended until March 15, 2013 and will be automatically extended for successive one-year terms unless either party gives written notice of non-renewal no less than ninety days prior to the annual March 15 expiration date (commencing with March 15, 2013), in which case the agreement shall end on the March 15 immediately following the receipt of such notice; (ii) an annual base salary of $3,000,000, subject to discretionary increases from time to time by the Board of Directors or Compensation Committee; (iii) a target bonus of $2.5 million, with a minimum of $1.5 million and a maximum of $5.0 million; (iv) his new title of Chairman and Chief Executive Officer, Recorded Music – North America

THE HYPEBOT CHALLENGE: Apple's Steve Jobs works for a base pay of just $1 per year. But stock options and bonuses awarded when the company soared have made him a very rich man. Label execs are fond of telling us "its all about the music". It's time they put their money where their mouths are.

Join me in challenging Lyor Cohen, Edgar Bronfman and other major label execs to follow Steve Jobs' example and re-set your base pay at $1 plus generous bonuses based on results. They've made millions from music. Now they need to give something back. I'll even pay the dollar.

Here's the original challenge.

MTV's Rock Band Sells 6 Million Songs

MTV's Rock Band video game continues to fly off the shelves, but more importantly for the music industry the game resulted in more than 6 million song downloads since its launch on November 20, 2007. Songs available for range from classic rock to emerging acts.

On top of the125 Rock Band tracks available to date, the game will add track for download every week through 2008 via song packs, albums and individual tracks with suggested retail pricing varying from $.99 to $2.99 per track with the vast majority selling for $1.99. For a complete list of Rock Band songs available for purchase to date go here.

BoDeans Go D.I.Y. With Impressive Results

Roots-rockers the BoDeans have jumped on the D.I.Y. bandwagon with strong initial results. After nine records on various major and indie labels over 20 years, the  band decided to form their own label, He & He LP, to put out their new album "Still".

Released on March 4th, "Still" debuted in the Billboard Top 200 and at #30 on the Top Independent Albums chart. The record's first single, "Everyday," has also landed in the top 10 on the Americana charts, and is one of the top 3 most-added songs at Triple A radio. The band may have done it themselves, but their campaign is traditional including retailers like Best Buy and Target and  a six-week nationwide radio and retail promotion tour. An upcoming headlining tour will also support the album.

To "run" the label, the BoDeans have put together a team of indie firms like OarFin, Koch, Under The Radar, Songlines and Moxie Star to handle various aspects of distribution, radio promotion, publicity and marketing with the band itself in control. Other established artists like Over The Rhine and Michelle Shocked have chosen a similar team approach for their recent releases with impressive results.

Friday's Music 2.0 Briefing: Border For Sale, BMG Flops, Pumpkins' New Future & More

> Borders Books & Music is up for sale. (SVI)

> Bertelsmann reported annual earnings for 2007 and said that revenues from its share of Sony BMG fell 27.8% to $2.3 billion. CD sales 17% but digital sales jumped 40%. Digital amounts to 17% of total revenue up from 12% in 2006. (pdf of Bertelsmann's annual report) Sony BMG's revenue has  46.3% over the last five years and the number of employees at the label group dropped from 4,880 in 2003, to 2,851 in 2007. The drop in CD sales is predictable, but despite the jump digital's low % of revenue shows just how far SOny BMG is behind the curve.

> Social marketing apps creator SplashCast has grabbed $4 million in funding.The startuo already claims SonyBMG, Universal Music, MTV, AEG and PBS as clients. (press release)

> WATCH FOR THIS TREND TO SPREAD: The Smashing Pumpkins tell Spinner their going to release song not albums. "...I don't think we will make records again," the drummer explains. "...I look at it like the old business model is dead and the music business doesn't know how to move forward...Music has in many ways just become an advertisement for your tour..I think what we'll do is start releasing songs The record or CD format places too many limitations on your piece of art. People just don't buy records anymore. Anyone under the age of 24 just buys songs...I think what we'll do – not to let the cat out of the bag too much – is to create the framework where we can release a number of songs and maybe create a title. We can gather three or four songs, but it will all flow up to a larger body of work. But to call it record in the traditional sense would be anachronistic." (Spinner)

> Don't forget your daily dose of rock wisdom at RockDose.com.

eMusic Promises Lawsuits If Apple Offers "Unlimited"

IS EMUSIC THE BEST COMPANY TO LEAD THE COUNTERATTACK?

Apple is in discussions to offer unlimited access to iTunes with the purchase of a premium iPod or other device. Apple is reportedly promising labels a $20 one time payment for every unit sold.  A similar "Comes With Music" plan by Nokia reportedly offers labels $80.

But if Apple's controversial plan goes forward, eMusic CEO David Packman is promising a nasty lawsuit. "They're basically saying, let's give a piece of every iPod sale to the record labels in exchange for bundling in all the music you can eat with every iPod," says Pakman. "That's classic Sherman Antitrust Act behavior. It's called tying, and it's where a company with a monopoly position in one market uses that monopoly position unfairly to compete in another."

LA antitrust lawyer Maxwell Blecher agrees that Apple could face legal challenges if others are prevented from distributing songs on a "new" iPod. "Apple is going to argue that they compete with lots of other similar devices," Blecher said. "You have to look at whether there are exclusionary aspects or conduct. In that debate lays the outcome of any lawsuit."

COMMENTARY 
While Packman is correct that the proposal is another attempt by Apple to close its eco-system, it IS ironic that the CEO of eMusic would be the first to promise a legal challenge.  After all, another effect of Apple's plan would be drastically lower payouts to labels and artists and eMusic has usually led the charge for lower prices.  In fact, the typical eMusic transaction nets payouts of around 30 cents to labels; less than half that paid by iTunes.

More: Listening Post, cNet

Read Hypebot's commentary on other reasons that "Apple's All You Can Eat Is Bad For The Music Industry" and join the discussion here.

Thursday's Music 2.0 Briefing: HITS vs. Levsetz, BMG Wants Out, EMI "Comes With" & More

            

> HITS vs LEFSTEZ over WMG's Lyor Cohen: "Powerless" Lenny vs. "low-rent sycophant blogger". (Daily Swarm)  Cohen's $3 million yearly contract was renewed yesterday (SEC) Here's my take on the new contracts for expensive WMG execs.

> Bertelsmann says that it would sell its half of Sony BMG, if Sony were willing to offer a similar valuation to the £2.1 billion that paid by Guy Hands paid for EMI last year. (Times UK) Good luck with that.

> EMI is set to join Nokia "Comes With Music" which offers unlimited music with a premium new phone or device purchase. (Reuters)

> SanDisk will promote DRM-free music from 50 emerging artists on a microSD card as part of their launch of the 8GB (gigabyte) Sansa Fuze flash MP3 player. The “Sansa Sessions” microSD card is a collection of songs and music videos from more than 30 labels. Artists include All Time Low, Ladytron, Magnet, Nada Surf, Of Montreal and The Coup. (press release)

> Vodaphone will offer exclusive multi-track preview of Madonna's new "Hard Candy" album. (press release)

> SoundClick, a music social media website which claims 3.3 million members, has a new alliance with MyPRGenie to offer net based PR services. (press release)

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If you want to learn more about reaching this targeted audience of industry decision makers, you'll find ad rates here or contact Hypebot for special ad and sponsorship opportunities.

Apple's All You Can Eat Is Bad For Music Industry

The Financial Times is reporting that Apple is in discussions with labels about a plan to give purchasers of a premium priced iPod unlimited access to iTunes. The plan is similar to Nokia's "Comes With Music" and Universal's "Total Music"; both of which are also in discussion. Nokia reportedly is offering to split $80 between the labels while Apple so far has only offered $20. 

COMMENTARY -
But "pay once and listen forever plans" are bad for music and the music industry.

- How can $20-$80 properly compensate the songwriters and performers of the thousands of tracks that would now fill the typical iPod?

- However creative label lawyers may be, how can this model fit with past or current recording and publishing contracts or government mandated royalty payments?

- Who will decide how the money is divided and when it is paid?

- Will this result in artists receiving less money from those fans willing pay?

- What are the unforeseen consequences of the music industry once again ceding control to device manufacturers and technology companies?

Labels are talking to Apple and Nokia in part because subscription music has failed to gain traction. But with ongoing issues of ease of use, compatibility, and portability; subscription music has not been given a fair chance. Even Apple is looking at iPhone music subscriptions as an add-on to monthly service payments. 

Many argue that getting some money for music is better than no money. But as bad as things seem, this industry still generates hundreds of millions of dollars in sales.  Is this the right time risk devaluing music further?

Instead of offering music as "pay once and hit the buffet table as often as you'd like forever", there other avenues that deserve serious exploration. Ad-supported music may be part of the answer. More broadly, better serving the consumer (aka fan) is central to the industry's future. Marketer Seth Godin wrote about artists building and monetizing their "music tribes" and models like Trent Reznor's multi-tiered pricing and Radiohead's "pay what you want" release have produced impressive results. 

Just as foodies skip the buffet and pay premium for gourmet, real music fans will support their pleasures with their wallets if they are offered to them properly. Until the industry understands and respects the bond that music creates with fans, no price will be too low. 

Songkick Debuts Live Music Recomendation Destination

Monday we wrote about Songkick's web buzz tracking and comparison site, now the company which focuses on resources and recommendations for lovers of live music, has unveiled a much broader live music recommendation destination.

Songkick scans the web, blogosphere and a user’s music library, and alerts users whenever a band that they like or may like is playing in their area. For every concert listed, Songkick provides one-click access to ticket vendors, providing convenient price comparison for music fans.

Features include:

Wednesday's Music 2.0 Briefing: Limewire's Store, Valentino To AEG & More

> P2P software firm Limewire has opened an mp3 store with about 500K songs mostly from IRIS Distribution and Nettwerk. It mixes both an individual song and an eMusic style subscription servce.  Dual purchase options is as smart move but with such slim selection its hard to see how they can compete and this morning when I checked the service was down.

> Former Fantasma Production's respect #2 John Valentino has been tapped by concert giant AEG to open a Florida office.  Fantasma, whose founder Jon Stoll passed away last month, was bought last week by Live Nation.

> Total Starbucks CD sales were 4.4 million CDs in North America last year, up 22%. But that means only 2 CDs per day per store according The New York Times.

> Livewire Mobile has aquired Groove Mobile for $14.5 million. (press release)

> Increasingly indie labels are by-passing iTunes and Amazon and selling direct to fans via their own sites. (ars)

As WMG Renews CEO's Contract, Hypebot Issues $1 Challenge.

WMG RENEWS BRONFMAN THRU 2013

An SEC filing yesterday revealed that WMG has extend CEO Edgar Bronfman Jr.'s contract thru March 2013. His annual base salary is l"at least $1,000,000, subject to discretionary increases (and) a target bonus of 300% of base salary, with...a maximum of 600%." He also get 2,750,000 stock options and 2,750,000 performance-based restricted shares at the current $5.29 price. 

Total compensation over 5 years should range from $5 million to as much as $35 million plus more than $30 million in options.  Based on previous awards and targets, $15-$20 million over 5 years appears likely.

$15-$20  MILLION FOR WHAT?

Perhaps it takes multi-million dollar contracts to retain top executives. But don't those executives have a responsibility to make shareholders money and lead the company forward?

Bronfman runs a faltering company in a battered industry. Under his leadership WMG has failed to be at the forefront of a single major industry initiative to reverse that trend. WMG was next to last on DRM-free, conceded the Madonna 360 battle to Live Nation and continues to rely on the leadership of last generation execs like Lyor Cohen.  BullDog, Bronfman's failed foray into high end concerts lost $18 million in a single year.

A $1 CHALLENGE TO LABEL EXECS

Apple's Steve Jobs works for a base pay of just $1 per year. But stock options and bonuses awarded when the company soared have made him a very rich man.

Label executives are fond of telling us "its all about the music". It's time they put their money where their mouths are.

I challenge Edgar Bronfman (whose family and previous deals have assured his personal fortune) and other major label execs to follow Steve Jobs' example and re-set your base pay at $1. Come on Lyor, Doug and Jimmy. Come on Rick, Roger, Jason and a dozen more. You've made millions from music. Now give something back. I'll even pay the dollar.

Net Radio + Social Networking = Powerful Marketing

• A new Arbitron and Edision Media Research study shows that weekly US online radio listenership has grown to 33 million for those 12+
• Among web listeners, 63% have their own social networking page compared to 24% of the general 12+ population
• Reflecting just how much net radio is listened to in the office, they ranked Linked-In #2 at 24% just under MySpace's 28%

A cost-effective new release campaign can now bypass traditional media entirely and focus  on web radio, social networks and proven to be effective music blogs.

ISP P2P Crackdown Spreads Globally: Sweden & Japan

Even as talk grows of licensing music via a flat monthly fee paid at the ISP level, legal actions and legislation are expanding around the globe aimed at enlisting ISP support for a crackdown on P2P use. New examples:

• Swedish lawmakers are asking local ISP's to identify heavy P2P users. (AP)
• In Japan, four major ISP's have vowed to shut of the accounts of users who use their services to "steal content" (Variety)

This follows similar activity in the UK, Germany, France and Australia as well as growing sentiment supporting a crackdown in the US and Canada.

Video: Eddie Vedder's New Anti-Iraq Song "No More"

From the new documentary "Body Of War"

R.I.P. Mikey Dread

Here he is with UB40.  (more info)

Jon Topper Dinner Report: Why Not A Gas Fee?

OCCASIONAL MUSINGS FROM A BAND MANAGER

This summer is going to really suck for bands on the road with buses and trucks.  Especially for the smaller bands on that end of the spectrum who play for a small ticket price.  Promoters always hit artists and fans with fees they cannot touch.  Maybe it is time for the artist to do the same thing.  A gas fee.  $.50 a ticket that goes right into the artists' pockets to cover travel costs. Neither promoters nor Agents would be able to touch this fee.  It would help cover exactly what it says.  After all, there is no show if the artist cannot get there.

For Dinner tonight I had small mixed green salad a cup of vegetable beef soup and scallops, mussels, tomatoes and  spinach in an asiago cream sauce tossed with penne.

Enjoy Your Dinner

Jon Topper
moe.
Cornmeal

Songkick Measures Artist Net Action

With radio airplay and retail sales both rapidly becoming nostalgic concepts. how do you measure a band's popularity?  Songkick, best known for helping fans track tour dates for bands their listening to thinks they have the answer with a a tool that looks at MySpace activity, the number of blog posts and Amazon and Songkick rankings to measure an artist's internet activity.  Songkick them allows you to compare up to three bands side by side using graphs.

"We created this to demonstrate how the web is changing music. We wanted reliable way to see who the hottest artists are, so we could recommend tours. Album sales and radio play don't tell you enough anymore," states Songkick.

The site should consider adding a broader range of net activity. But brief test drive found a broad selection of artists and viewing comparisons surprisingly addicting as well as informative.  Try it out.

Monday's Music 2.0 Briefing: R.I.P. HARP, Pepsi Amazon Flack, Thumplay's $18M & Much More

R.I.P. - Another music magazine HARP is reportedly going out of business due to declining as revenue. As one blogger wrote, "Another log on the Pitchfork fire". No Depression and Resonance each announced they would end publication just a month or so ago.

> Pepsi is catching flack from its largest retailers Target and Wal-Mart for teaming with Amazon - who does not even carry Pepsi product - for a massive mp3 giveaway program. (FT) Maybe if Target and Wal-Mart had credible mp3 stores....

> Mobile content retailer Thumbplay has grabbed another $18 million in 5th round funding. (moco)

> Sheryl Crow is joining Fleetwood Mac. (AOL) Why do I find this sad from every angle?

> Chinese video sharing site Youku has teamed with MySpace to try to become the YouTube of China.  (Reuters)

> Kazaa downloads cost one poor fella $750 per song. (ars)

> Non-techies have yet to embrace music via the web. (WSJ)