- BMG Half Of Sony BMG Up For Sale (Updated Story Here.)
- Can Subsriptions Still Be The Future Of Music?
- Sillerman Says Major Labels Are History (Lots of great comments with additional comments here.)
- Classical Downloads 12% Of iTunes Sales
- Google And Amazon Music Store Speculation Grows.
- Study Concludes Major Labels Have Themsleves To Blame For Sales Slump
- LA's Indie 103 FM Gains Audience By Being Different
If you don't live in LA and therefore have not experienced Indie 103.1 FM, then check them out online where you can listen live and via archives and podcasts. (WARNING: I lost an hour of my life on the popular music mash-ups page).
In an era of bland radio Indie 103.1 has captured a substantial audience by being different and unpredictable. Its a unique Hollywood-centric mix of celebrity DJ's (Rob Zombie, Nina Blackwood, Steve Jones, Henry Rollins and others) and very eclectic rock with lots of special guests. This is fun "must-tune-into-or-I-might-miss-something" broadcasting. And the station uses it's web site to full advantage. The RAIN newsletter applauded "...a graphic-intensive layout (which) adds interesting design elements to the page, and while the images and ads can be flashy, they add to the overall sense of energy that the site conveys without becoming a real distraction."
Today’s Top Tune will present a song a day that represents a cross section of KCRW’s eclectic format. Tracks selected are chosen from recent and upcoming releases as well as songs performed live on Morning Becomes Eclectic. Each song will be available to download and podcast for 24 hours.
The Buzz is a daily four minute commentary featuring a line-up of music critics and pop culture observers who will talk about the latest music industry news, trends and new releases as well as some entertaining personal reflections. (Find more on The Buzz after the jump followed by the full text of the full press release.)
Each week listeners tune in to over 450,000 hours of streaming and archived audio content on KCRW.com, KCRWmusic.com and KCRWworldnews.com, including upwards of 100,000 hours of video-on-demand and an additional 700,000 podcasts.
The music industry has mostly itself to blame for declining revenues, a new study by research firm Mintel reports. Major labels have been quick to blame consumers, but slow to listen to their needs according to the report. Retail music sales, at $12.5 billion in 2005, are predicted to fall to $10.5 billion by 2010.
"The growing distance between the music industry and its consumer is due to a number of factors," said Justin De Santis, analyst for Mintel. "These include lawsuits against individual consumers, payola, and, most recently, restrictive use of digital rights management." De Santis believes that labels have a negative stigma to overcome, brought on by battles against illegal downloaders, radio "pay-for-play" scandals and homogeneous artist offerings on radio stations. The introduction of iTunes and similar sites has slowed the decay, but not stopped it according to the Mintel study. Even though technology is starting to work for the industry rather than against it, labels still face the challenge of meeting the demands of a diverse consumer marketplace.
In an effort to keep up with the digital marketplace, labels have marketed artists to sell single songs rather than complete albums. The Mintel reports concludes that this strategy has contributed to the lack of strong up-and-coming musical talent in the marketplace that exhibit "staying power".
The report continues that while illegal downloading has hurt the industry, big labels have relied on obsolete strategies for over a decade and have been late in exploiting emerging technologies. As a result, the bond between independent artists and their fans have become stronger. Although the music industry is just starting to use digital distribution to its advantage, overall sales will continue to decline unless companies learn to adapt more quickly to changing technologies.
According to De Santis, "The current renaissance of underground media has further driven the consumer away from the major labels and has contributed to the downturn in their sales."
Read some spirited debate from Hypebot readers on the future of the major labels here and join in.
Even as the rumors of a Google music store continue to grow, Forbes is reporting that at least one analyst is saying that for Amazon "...a digital music service seems to be the company's most pressing need"...this "is a when, not if, proposition," citing "substantial increase in research and development spending and 'ongoing pressure' in music sales offline. Read the full story here.
In a smart cross-promotion FADER magazine is giving away four VIP tickets to this year's cutting edge Coachella Festival. Entry information is available on the FADER blog. Coachella '06 will once again feature performances from Madonna, Depeche Mode, Franz Ferdinand, Yeah Yeah Yeahs, Tool and others. Entrants in the contest are asked to come up with the names of three bands at this years festival that have appeared on the cover of FADER.
According to paidcontent.org "Google is holding an invite-only music round-table this Thursday at its HQ with 20 of the top executives from the music industry. Not sure what they'll talk about, but I'm assuming it is one of two things or both: Google explaining its plans for a music vertical and/or seeking education about the music industry and how Google fits into it." Digital Music News says that Google claims the event is one of an ongoing series of industry specific gatherings and does not signal an impending announcement.
Google would be a latecomer to the evolving download game, but with it's brand and page views could be just the iTunes alternative that the labels and many music fans are hoping for. Much needed variable pricing could be (and should be) part of Google's plan. But since they are unlikely to manufacture and sell a player as Apple has; Google is unlikely to solve the underlying interoperability issues that are frustrating many non-iPod users.
We're betting Google will take the leap before year's end. Why not? It fits perfectly with their vide o download site and other initiatives. But Amazon - if they manufacturer a rumored player (with or without pre-loaded music) and code in the same ease of use that their book store provides - could still be the most aggressive new competitor.
A couple of weeks ago we got a lot of feedback on our reporting of a keynote we'd attended at Pollstar's Concert Industry Consortium by Live Nation's CEO Michael Rapino. Using survey data Rapino revealed (among other things) that 71% of the population does not attend even one concert each year, 23% goes to only one cocert, 4% go to two shows yearly and a meager 2% attend three or more shows. He went on to chronicle reasons for the lack of interest in live music as well as what might be done about it including a better fan experience and much more targeted marketing via the net.
Now thanks to to a tip off from the folks at Jambase and FanMailMarketing.com plus the producer Pollstar here is a link to a recording of the entire lecture. If you care about the live music industry it's worth listening to.
Thursday the folks at FanMail and Jambase are hosting a free 45 minute webinar that will discuss basic fan-centric marketing strategies as well as take a look at the cool services offered by FanMail. The webinar will be conducted on Thursday, March 30 at 1:00 pm (eastern standard) To join in online go to www.readytalk.com and use the access code 9219500. To join the audio side, dial 1-866-740-1260 and use the same access code.
Hits and others are speculating that Sony is the most like buyer for the BMG half of Sony BMG that is up for sale "...which given the cash savings and consolidation that has already taken place, could turn out to be a bargain."
"Can Sony afford to acquire the other half of the company, which would carry a price tag of between $2-2.5 billion? Could they use their leverage to prevent Bertelsmann from selling? Most observers feel Sony has its hands full trying to right their core business of electronics, and that the recorded music business is still in a slow-to-no-growth state...Still, most insiders feel Sony’s in the best position to make this deal, and that they have Bertelsmann over a barrel. " There must also be a tremendous motivation on the Sony side not to have another unknown partner replacing Bertelsmann and trying to ring additional cost saving out of an already streamlined company just to pay for the acquisition.
If both companies knew about this possible sale why then was Andy Lack moved down the ladder and a BMG insider placed above him? "Those in the know say any proposed deal would be much easier to accomplish without Lack in the driver’s seat, even if the Wall Street Journal suggests the situation could pave the way for his return to power."
Label Pos. ARTIST | TITLE COL 1 GEIGER*TEDDY|UNDERAGE THINKING VRGN 2 HARPER*BEN|BOTH SIDES OF THE G UNIV 3 PRINCE|3121 ANIT 4 CASE*NEKO|FOX CONFESSOR BRINGS EPIC 5 MATISYAHU|YOUTH NWLR 6 SOUNDS|DYING TO SAY THIS TO YO DOMI 7 ARCTIC MONKEYS|WHATEVER PEOPLE VRGN 8 TUNSTALL*KT|EYE TO THE TELESCO UNIV 9 JOHNSON*JACK & |CURIOUS GEORGE COL 10 GILMOUR*DAVID|ON AN ISLAND Click below for the full Top 200.
Label Pos. ARTIST | TITLE
COL 1 GEIGER*TEDDY|UNDERAGE THINKING
VRGN 2 HARPER*BEN|BOTH SIDES OF THE G
UNIV 3 PRINCE|3121
ANIT 4 CASE*NEKO|FOX CONFESSOR BRINGS
EPIC 5 MATISYAHU|YOUTH
NWLR 6 SOUNDS|DYING TO SAY THIS TO YO
DOMI 7 ARCTIC MONKEYS|WHATEVER PEOPLE
VRGN 8 TUNSTALL*KT|EYE TO THE TELESCO
UNIV 9 JOHNSON*JACK & |CURIOUS GEORGE
COL 10 GILMOUR*DAVID|ON AN ISLAND
Click below for the full Top 200.
Hypebot has often taken the position that as good as satellite radio is; it will loose it's luster when 10,000 internet broadcast streams can be accessed anywhere via WiFi/WiMax without a paid subscription. Investor site The Motley Fool says we're wrong in a lengthy analysis of the problems and competitors facing XM and Sirius.
I'll even take this one step further by conceding that a music-discovery site like Pandora.com or standalone Internet-radio appliances like the $400 Roku SoundBridge may temporarily quench some of the collective thirst for satellite radio.
Add it all up, though, and it's still not going to get in the way of a satellite-radio industry that has gone from 9 million subscribers to 10 million in the past three months and will top 15 million before the end of the year.
Read the full article here (free registration may be required) and tell us what you think.
XM Satellite Radio has announced a new channel lineup that will expand the total number to more than 170 with the addition of 10 new commercial-free music channels and seven regional news and talk channels coming this spring and summer. Sadly, there is nothing too adventurous here, but more commercial free music choices is always good news. The new music channels are:
-- Big Tracks (XM Channel 49): Classic Rock from the late 70's onward
-- XM Chill (XM Channel 84): Chill Music
-- U.S. Country (XM Channel 17): Country Superstars of the 80s & 90s
-- Flight 26 (XM Channel 26): Modern Hits of the 90's & Now
-- XM Hitlist (XM Channel 30): Today's Hit Music
-- enLighten (XM Channel 34): Southern Gospel
-- XM Liquid Metal (XM Channel 42): Heavy Metal
-- The Heat (XM Channel 68): Rhythmic Top 40
-- Escape (XM Channel 78): Easy Listening
-- Viva (XM Channel 91): Latin Pop Hits
Read the company press release here.
My high school music teacher is probably very upset that we don't write more about the classical music end of the business. And while I'll admit that sadly it excites me about as much as it excites you; we were intrigued by a Guardian UK that read "Big demand for classical downloads is music to ears of record industry".
Surprisingly classical sells much better digitally than on CD. Classical accounts for only 3%-4% of total sales of music in stores but on iTunes it is 12% of sales. One recent release saw 75% of its sales via downloads. The ability to buy single tracks is also attractive to those just dabbling in the classics; and the single track sale may lead new converts to a genre that has been declared dead several times in the last few decades.
Just as the cost savings, universal availability and net marketing of downloads has benefited niche genres; so too may classical music turn out to be a major beneficiary of the digital revolution.
Read the full Guardian UK article here.
Our recent reporting of of former SFX/Clear Channel/LiveNation founder Bob Sillerman's comments to a Billboard conference on the impending death of big record labels has lead to some spirited and well written comments most notably by Glenn from Coolfer who wrote:
Sorry, but he's wrong. Very wrong. What sells the most records? TV and radio.
People will gravitate to what is popular, and they'll continue to use TV and radio to discover new music. Yes, the Internet is going to be the key marketing channel in the next decade, but who's to say the majors won't dominate Internet marketing just as they've done with TV and radio.
Then Squashed of Another Record countered:
The big record companies (are) milking the last wave of audiences. that's about it.
The new generation of audience doesn't even take MTV seriously anymore. The most cutting edge music (ie. the next stars that make music scenes 5-8 years from now) are not on MTV or clearchannel radios. Yeah yeah yeahs, clap your hands, gogol bordello, etc are all local, indie labels, festivals, internet driven. ...
Music scene is still about good music. And the good musics are not on Radio and TV anymore...
We stand somewhere in the middle. Major labels will still survive to milk catalogs and create some of the next wave of mass market mega-stars. But a lot more artists than ever before will take different paths and find longer, more creative and satisfying and reasonably profitable mid-level careers due to the power provided by new technologies to help them create, distribute, and market their art.
Read the article and full comments here and tell us what you think.
Hoobastank has followed Fall Out Boy's lead and formed an alliance with live music fan site mylocalbands.com for an upcoming CD release tour. But Hooby smartly takes the promo two steps farther playing all the shows for free (fans can sign up for tickets on both the band's web site and mylocalbands) and encouraging local bands to contact them about opening. So far the move appears to be garnering more than enough noise to offset any loss in revenue and by doing under-plays in smaller venues Hoobastank should be able to go back to these same markets for larger concerts after the ne CD takes hold.
From CelebrityAccess MediaWire - Robert F.X. Sillerman (the man who brought us concert giant SFX/Clear Channel/Live Nation) has once again shaken up the entertainment industry, this time with a simple statement: “The music industry distributors cling to a business model that not only doesn’t make sense, frighteningly, it’s now not necessary.”
Sillerman’s comment, made earlier this month at the Billboard Music & Money Symposium at the St. Regis Hotel in New York, stopped short of declaring the death of the major labels, but came close enough to spook them.
“The myth of major distributor muscle is going to end,” he said, according to New York Newsday. “Tomorrow’s creators won’t seek or need traditional label or radio support because they and their audience never wanted it needed it for validation. If that next generation’s star – from a generation reared on the power of the Internet, peer reviews, downloads and online communities, etc. – wants to sell music, they may be able to do that without a traditional record deal and they know it.”
(Editors Note: Sillerman is currently rolling up a multi-faceted media company including such assets as the Elvis estate and American Idol.)
So far the numbers are low, but several executives at Digital Hollywood believe that music subscription services like Yahoo! Unlimited and Napster are the wave of the future, according to Digital Music News. "Subscription is the future of this business," Ted Cohen of EMI said. "It is a much better business model." And Richard Conlon, a vice president at BMI, pointed to subscriptions as "an intuitive next step",
Despite some technical glitches most who have tried the services enjoy having access to a vast library for only $5-$10 per month. Others like Steve Jobs of Apple/iTunes have reject subscriptions all together believing that consumers want to own their music. It will not be until more portable devices that seamlessly manage the music come to market and the services deepen their catalogers and improve the online experience will we really know if subscription services have mass market appeal.
Even as music profits slump, more and more brands are getting creative about utilizing and even monetizing the power of music to bring new life to their products. Today World Wrestling Entertainment jumped into the field in a big way with the formation of the WWE Music Group. The WWE (formerly WWF) brand has long had credibility problems and the goal of the new effort is to link the WWE brand with popular music via film, TV radio, the internet, ring tones, video games, and other emerging digital technologies. They will work with in-house talent as well as established recording artists and to create new music for WWE television and pay-per-view programming, WWE Superstar albums, entrance theme collections, and a variety of initiatives. The WWE already has exiting relationships with Kid Rock, Korn, Staind, Fat Joe, P.O.D., Shinedown, Lifehouse, Creed, Alter Bridge, and others. Read the full press release here.
Two interesting twists on the rapid evolution of broadcasting reported via the RAIN newsletter:
First from Billboard Radio Monitor, in the UK "internet radio is more popular than digital downloads with 90% of radio listeners having accessed radio through digital/mobile devices...". According to a new UK study "...4,000 radio listeners ages 16 and over (were polled). It reports that digital platforms are encouraging more people to listen to the radio and that there is a trend away from FM radio toward digital. Those polled indicated significant interest in using iPods and MP3 players to listen to digital radio."
And satellite radio which is also proving to be a significant threat to broadcast radio is experiencing their own threats. In addition to free re-broadcasts of Howard Stern's paid subscription service via P2P, the net and in NYC on pirate radio stations, both XM and Sirius are now fighting software and web developers who have found ways to access the XM Satellite and Sirius web sites to stream music via Windows 'smartphones' and other devices according to WIRED. They are giving their software away for free and thus trumping the satellite companies own efforts to monetize cell broadcasting in the future.
Using the net and new technologies to circumvent the old boy/payola/corporate system and bring new music straight to the fans is a long held dream that to some degree is finally coming true with the success of bands like the Arctic Monkeys. But with every breakthrough comes a downside and the potential for over-hype and fan burnout is becoming a concern.
This topic - a problem many music marketers can only dream of having - and the issue of fan loyalty in an era where hot new sounds are just a click away - were brilliantly explored in a piece by Joan Anderman in last weeks Boston Globe.
"Hype is as old as entertainment. In the pop music business, generating buzz has largely been the domain of a record label's marketing department and involved a time-tested triptych of tools: radio, reviews, and video rotation..."
"Today, thanks to the confluence of Internet file-sharing technology, online blogs, and social networking websites such as MySpace, the grassroots community has swelled, quite literally, to global proportions..."
"...(But) Instant stardom is not what the (Arctic Monkey)bandmates, or the British indie label they've signed with, had in mind...The vanishing act is generally as swift and startling as the rise, which is why Kris Gillespie -- who runs the US operations of Domino Records -- met with programmers at high-profile radio stations across the country in January and delivered an uncharacteristic request: to stop playing Arctic Monkey's music."
''The job over the last three months has been to keep a lid on things,' says Gillespie. 'To not let the hype build up...'
"...We're living in the age of disposability. The culture, the computer file, the tastes and trends move at hyper-speed in cyberspace...But that artist is competing with every other artist online, vying for the attentions of an audience ..fluent in the high-tech entertainment marketplace, where there's always another band to discover, another song to be the first to tell your friends about."
Read the full Boston Globe article here.
The buzz is deafening with rumors that Bertelsmann is shopping its music properties which include a large publishing arm and half of Sony BMG. The Reuters, The International Tribune, Forbes and others weighing in with news and possible outcomes. Apparently the privately held company is considering the sale to raise cash to buy out an investor who has a 25% stake in parent Bertelsmann and is trying to force the company to go public.
It's hard to believe that the sale of the record division will come easily particularly with traditional label revenues declining, a business model that is under attack by changing technologies and buying patterns, and a complex and often troubled partnership with Sony. This has led to speculation that BMG may seek to dissolve the Sony partnership to make a sale easier.
Sony could of course exercises their option and buy, but most sources seem to think that is unlikely. That leaves as possible buyers one of the other major label groups - also unlikely if it still means dealing with the entanglement with Sony - or private equity firm.
One can only imagine that the best and the brightest at Sony BMG are once again looking for ways to exit the company. And as any insider whose been involved in the constant shake-ups at Sony BMG and in recnet years will quickly tell you; none of this is good for the artist.
Radiohead is hinting on their web site that they may release some new music as single song downloads rather than wait for a full album cycle. Not only would the practice make sense creatively, (Who really believes that an artist's best work only comes in 10-14 song batches?), but in the age of single song downloads is may also make economic sense. Expect to see more artists following suit.
"theres a lot of baggage about the old way of doing things that is hard to get over...
all the 'album' crap..just this level of pressure that is ridiculous..
we're just going to do what feels right at the time
quite intothe idea of singles at the moment(that dont get on the radio)"
"no grand design... wherever we are at. some of the random stuff we have at the moment
could be the most exciting... trying to figure out how on earth we will be able to play some of it."
A cell phone that stores and plays music is the great dream of techies everywhere and the device that may create the final tipping point towards mass market acceptance of music as a download rather than physical purchase.
Several cell phones particularly from Motorola have been touted as the next big thing ,but thus far none has lived up to the hype by combining ease of use as well as sufficient storage and fidelity in a small affordable package. That may be about to change if Apple enters the market with a much rumored iPod phone. Pacific Rim tech blog Smarthouse and others are reporting that Apple has been actively shopping Taiwanese manufactures (some say even chosen one) to produce a device dubbed the iPhone.
According to Smarthouse, Bill Shope of J.P Morgan believes Apple will introduce the phone by the fourth quarter. Piper Jaffray analyst Gene Munster told clients last week that he estimates there to be a 75% chance that we'll seen an iPhone in the next 12 months.
Founded by Don Rose in Salem, MA as a CD only re-issue label, the catalog now includes Restless Records titles by the Flaming Lips, the Replacements and Soul Asylum. Ryko's own recent roster has included Big Star, Sugar, Morphine, Medeski, Martin & Wood, and Mickey Hart. But the label has floundered after an ill fated takeover by former Island and Palm head Chris Blackwell who divested himself of the label several years ago.
Waner Music tech director Ethan Kaplan recently lectured at USCB and as chronicled in his blog BlackRimGlasses during some "show of hands" surverys found that:
- About 1/3 had a MySpace profile.
- Roughly 90% had FaceBook profiles.
- Five people, all guys had heard of digg
- No one had heard of BoingBoing, Delcious, memorandum or NewsVine.
- About 15 had the Arctic Monkeys CD. None had paid for it.
- Only a few had actually bought music in the last month
- About 20 had heard about the Sony DRM scandal
Talk and music stream Dailysonic may have created a new revenue model for internet radio. Their system allows listeners to remove advertisements from their online radio show by purchasing "Subtracts". Each Subtract costs a few pennies, and results in one less ad heard by the listener.
Unlike subscription-based online radio, listeners can purchase as many or as few "Subtracts" as they want. There is no contract or minimum cost, and unused subtracts automatically roll over to the next month. When a listener's subtracts run out, advertising gets re-inserted into the show without interruption of service.
Click below for more on Dailysonic.
Concert industry giant Live Nation (formerly Clear Channel) has been making noise about getting more creative and targeted with it's live music marketing in this new age where old media is loosing it's impact. They seem to be walking their talk with the appointment of alt-rock label/management guy John Loken as the Senior Vice President of Tour Marketing.
Loken’s duties will include efforts to create marketing programs for tours that energize fans and maximize ticket sales. “Live Nation is constantly in search of new ways to reach consumers, to understand their needs, and to create a better concert experience. As a life long music fan and career marketer I look forward to adding to that value chain,” said Loken.
John Loken comes to Live Nation from Ride Management where he oversaw a team that represented the Yeah Yeah Yeah's, Trail of Dead, Unwritten Law and others. He concurrently served as COO of Fearless Records and acted as a strategic advisor to punk-related merchandising website Smartpunk.com. From 1998 until 2003 Mr. Loken was GM of Ultimatum Music, the William Morris Agency's alternative rock label, where he signed Sugarcult and J. Mascis. He was also GM at China Records where he was instrumental in establishing trip hop pioneers Morcheeba in the U.S. market. Mr. Loken began his career doing international marketing at Warner Bros. Records and later Motown/PolyGram International.