"There is total corruption in the music industry - it is like Enron. There is a
corporate front end, but at the back end there is all this wheeling and
dealing. It is a rip-off. The amount of money we have made [as the Eurythmics]
compared to the amount of money we have made for the people around us is
minuscule. It happens to every artist."
--- Dave Stewart, Eurythmics
NEWSLINE : January, 2003
HEADLINE : EMI To Offer "Premium" Downloads
FROM : Press Release
DATE : Monday, April 02, 2007
THE LINE : You have to hand it to EMI. It’s fourth and long, and they’re going for it.
Today’s announcement of a new class of unfettered-by-rights management downloads at a higher audio quality will likely be a footnote to history, akin to the premium vinyl favored by so many audiophiles that its impact on the record industry is...well, it’s not much. But what choice do they have at this point?
If it feels like the end of times in the record industry, it’s likely because it is.....
THE STORY : Press release:
EMI Music launches DRM-free superior sound quality downloads across its
entire digital repertoire
Apple’s iTunes store to be the first online music store to sell EMI’s new
downloads
London, 2 April 2007 -- EMI Music today announced that it is launching new
premium downloads for retail on a global basis, making all of its digital
repertoire available at a much higher sound quality than existing downloads
and free of digital rights management (DRM) restrictions.
The new higher quality DRM-free music will complement EMI’s existing range
of standard DRM-protected downloads already available. From today, EMI’s
retailers will be offered downloads of tracks and albums in the DRM-free
audio format of their choice in a variety of bit rates up to CD quality. EMI
is releasing the premium downloads in response to consumer demand for high
fidelity digital music for use on home music systems, mobile phones and
digital music players. EMI’s new DRM-free products will enable full
interoperability of digital music across all devices and platforms.
Eric Nicoli, CEO of EMI Group, said, "Our goal is to give consumers the best
possible digital music experience. By providing DRM-free downloads, we aim
to address the lack of interoperability which is frustrating for many music
fans. We believe that offering consumers the opportunity to buy higher
quality tracks and listen to them on the device or platform of their choice
will boost sales of digital music.
"Apple have been a true pioneer in digital music, and we are delighted that
they share our vision of an interoperable market that provides consumers
with greater choice, quality, convenience and value for money."
"Selling digital music DRM-free is the right step forward for the music
industry," said Steve Jobs, Apple’s CEO. "EMI has been a great partner for
iTunes and is once again leading the industry as the first major music
company to offer its entire digital catalogue DRM-free."
Apple’s iTunes Store (www.itunes.com) is the first online music store to
receive EMI’s new premium downloads. Apple has announced that iTunes will
make individual AAC format tracks available from EMI artists at twice the
sound quality of existing downloads, with their DRM removed, at a price of
$1.29/?1.29/£0.99. iTunes will continue to offer consumers the ability to
pay $0.99/?0.99/£0.79 for standard sound quality tracks with DRM still
applied. Complete albums from EMI Music artists purchased on the iTunes
Store will automatically be sold at the higher sound quality and DRM-free,
with no change in the price. Consumers who have already purchased standard
tracks or albums with DRM will be able to upgrade their digital music for
$0.30/?0.30/£0.20 per track. All EMI music videos will also be available on
the iTunes Store DRM-free with no change in price.
EMI is introducing a new wholesale price for premium single track downloads,
while maintaining the existing wholesale price for complete albums. EMI
expects that consumers will be able to purchase higher quality DRM-free
downloads from a variety of digital music stores within the coming weeks,
with each retailer choosing whether to sell downloads in AAC, WMA, MP3 or
other unprotected formats of their choice. Music fans will be able to
purchase higher quality DRM-free digital music for personal use, and listen
to it on a wide range of digital music players and music-enabled phones.
EMI’s move follows a series of experiments it conducted recently. Norah
Jones’s "Thinking About You", Relient K’s "Must’ve Done Something Right",
and Lily Allen’s "Littlest Things" were all made available for sale in the
MP3 format in trials held at the end of last year.
EMI Music will continue to employ DRM as appropriate to enable innovative
digital models such as subscription services (where users pay a monthly fee
for unlimited access to music), super-distribution (allowing fans to share
music with their friends) and time-limited downloads (such as those offered
by ad-supported services).
Nicoli added: "Protecting the intellectual property of EMI and our artists
is as important as ever, and we will continue to work to fight piracy in all
its forms and to educate consumers. We believe that fans will be excited by
the flexibility that DRM-free formats provide, and will see this as an
incentive to purchase more of our artists’ music."
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HEADLINE : Is There A Place For DIY In The Wireless World?
FROM : Forbes.com
DATE : Tuesday, March 27, 2007
THE LINE : Where do you fit in the wireless revolution?
We hear so much lately about the giants of the entertainment industry and their plans for ringtones, ringbacks, video services, iPhones and other devices. Rarely do we hear about their plans to seamlessly integrate small or individual content providers into their services in a cost-effective manner.
If you think about it, ease of use has always driven the digital revolution. From early AOL through MP3.com to CD Baby and YouTube, it’s always been about the ability to easily upload your content and share it with a worldwide audience. That’s the killer application for content aggregators.
Yet, whenever a big, new honking service arrives on the scene, it’s usually a mystery how a content creator gets in touch and gets their work involved.
Case in point: the mobile services industry, having seemingly exhausted the basic services it can provide like voice mail, is on a new push: get music and video into the options menu for users.
Ringtones, music, video and particularly games are the new hot button issues of the moment, creating a river of wonderful opportunities to share in the revenue created by all those eyeballs.
The digital camera was the early whiz-bang feature, and we’ve already seen how effective it can be when used as a content-generating tool. TMZ.com, which was an unknown service a year ago, is now the fastest-growing news site in the country, thanks to the ability of its user-generated news, which captures everything from Michael Richardson rants to Paris Hilton arrests.
Now, attention has turned to music and video. With the iPhone scheduled to go on sale in June (a combo of the iPod and smart phone), there’s a battle brewing among other big players in the phone market to add ways to make your phone a virtual media playback machine. And there’s room for growth in the market, with music phones accounting for less than one-in-five owned in the market.
Bringing up the rear are new video applications, many which work well in the TV commercials, but less so in real life. Verizon VCast Mobile TV service is already on sale in some markets. More will follow.
Which brings us back to the question – where will the independents fit in? Will you have to align with a MySpace or some other social networking site in order to even get on the browser screen? Will there be many hoops to jump through before becoming an option?
There are some services now available that are working hard to bring the digital revolution to independents at little to no cost. That’s the good news. But middlemen inevitably (and, rightfully) take a cut for providing a service. Unless and until getting on a mobile device is as easy as uploading your content onto a site, the mobile entertainment sector is going to be lagging behind its web counterparts.
THE STORY : But Kern and CTIA’s 40,000 projected attendees will expect to be entertained somehow. Lucky for them, America’s mobile giants have gone Hollywood: Expect lots of hype--again--about music and video services. There is not much growth left for plain-vanilla mobile voice services, so carriers are betting that multimedia and data services, ranging from text messaging and mobile Web browsing to ringtones, games, music and video services, will feed future revenues.
That’s why carriers and handset makers are hoping that MP3 playback has replaced the digital camera as a must-have cellphone feature. And with the iPhone--a hybrid iPod and smart phone--expected to go on sale for $500 this June, handset companies like Nokia (nyse: NOK - news - people ), Samsung and LG are in a hurry to get buyers’ attention first.
At CTIA, virtual carrier Helio, a joint venture of Earthlink and Korea’s SK Telecom, will show off "Ocean," it’s latest handset. The phone, which slides two ways to reveal either a normal keypad or a full QWERTY keyboard, supports over-the-air music downloads in addition to other features like 2-gigabyte expansion capabilities for media storage, stereo speakers and video streaming.
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HEADLINE : The Anti-YouTube Is Born
FROM : Television Week
DATE : Thursday, March 22, 2007
THE LINE : Having learned little from the failed experiments of their music brothers and sisters, big TV is now trying to wall off the garden of their creations from the pirated plunderings of YouTube and other users.
The new venture, which likely will be heavy with corporate ads and very hard for normal humans to use, judging from past efforts in this realm, will try to stop YouTube and other sites from draining away eyeballs.
As witnessed by the numerous failures of music sites that offered content from only a few labels, sites such as this, which offer a limited supply of content and will almost certainly censor user-submitted fare, are doomed from the get-go.
And, as witnessed by the failed sale of MovieLink, which has numerous corporate parents, even the technology they create to get the site up and running will quickly lose its value.
THE STORY : News Corp. and NBC Universal are teaming up to launch a video web site designed to compete with YouTube.
The media companies are allying with AOL, MSN and Yahoo! to create an as-yet unnamed Web site that will launch this summer, the participants said Thursday in a statement. It will feature full-length movies and TV shows including "Heroes," "24," "My Name is Earl" and "The Simpsons."
TV content on the new site will be free, supported by advertisers including Cadbury Schweppes, Cisco, Esurance, Intel, and General Motors. The material will also be accessible via a player embedded on AOL, MSN, Yahoo and News Corp.’s MySpace, which together reach 96 percent of Web users each month, the companies said.
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HEADLINE : Music Sales Continue Steep Decline
FROM : The Wall Street Journal
DATE : Wednesday, March 21, 2007
THE LINE : The most amazing thing about today’s Wall Street Journal article on the decline in music sales is that even a shocking 20% drop in sales is really not a surprise to anyone. The music industry (and, remember, we’re talking the MAJOR music industry, mostly) has been like water swirling down the bathtub drain for a long time in the public’s mind. The latest confirmation on just how bad things have gotten is just that, merely the latest confirmation.
(The good news, of course, is that music will still be here for us and many artists will thrive in the new economic landscape). But wither the big business of selling music?
The real question now is where it will all end.
One possibility is that the multinational corporations who own deep catalogs will maintain the illusion of operating “music divisions,” but will have those divisions focus on licensing, merchandising and other revenue streams that don’t strictly rely on selling collections of the artist’s music. Since there will still ostensibly be “hits,” even with a low revenue stream, the artist can still be leveraged in other ways to feed the worldwide star-making machine of other entertainment divisions at the corporation.
Another possibility is that music becomes increasingly automated. Instead of companies, there will be giant electronic databases of material that can be licensed on demand, with an army of lawyers in back of it to make sure the proper fees have been paid.
And still another possibility is that like-minded artists gather together in collectives to obtain discounted marketing, promotion and publicity services, thereby loosely aligning themselves in a “record label” situation, but retaining all rights and goods for themselves.
One thing’s for sure. The days of huge overhead, large advances, confiscatory contracts and big budgets is fading faster than you can say “Gramaphone.” And as most artists will tell you, that’s not necessarily a bad thing.
THE STORY : In a dramatic acceleration of the seven-year sales decline that has battered the music industry, compact-disc sales for the first three months of this year plunged 20% from a year earlier, the latest sign of the seismic shift in the way consumers acquire music.
The sharp slide in sales of CDs, which still account for more than 85% of music sold, has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry’s salvation.
The slide stems from the confluence of long-simmering factors that are now feeding off each other, including the demise of specialty music retailers like longtime music mecca Tower Records. About 800 music stores, including Tower’s 89 locations, closed in 2006 alone.
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HEADLINE : Byrne Stops Making Sense at SXSW
FROM : Billboard.com
DATE : Monday, March 19, 2007
THE LINE : David Byrne of the Talking Heads was the latest to join the DIY club at South by Southwest when he called on record labels to turn into marketing firms.
Now, I’ve said the same thing for many years, as have other people. But I’ve recently been doing some reflecting on the notion, particularly as the major record industry swirls down the bathtub drain. And I’ve come to the conclusion that the record industry as it exists today is fundamentally incapable of transforming itself into a marketing machine.
Byrne’s talk at SXSW, called “Record Companies: Who Needs Them?” offered the opinion that major labels will soon be faced with a choice – either use music as a way to make money from tours and merchandising, or hope that the sales volume on international superstars a la Britney Spears is high enough to sustain the current system.
Well, let’s presume that the record industry is listening and decides that yes, it will become a marketing machine. And let’s presume it’s an all-digital world, where manufacturing and retail distribution have pretty much ceased to exist.
Wouldn’t the same situation that exists now quickly develop, i.e., that artists are quickly discarded when it’s discovered that their sales won’t mushroom into worldwide megahits? After all, any deal between the partners would be worthwhile only as long as there was sales momentum. If things hit a rocky patch in touring, or the download wasn’t selling, wouldn’t the marketing firm move as quickly on to the next project as it does today with artists?
Let me answer that for you: yes.
How is that an improvement over today’s situation? Frankly, it isn’t. And with YouTube and other sites affording cost-free access to the audience an artist is trying to reach, it makes increasing sense to avoid any long-term ties with a partner that will encumber your revenue streams, whether they call themselves record labels, marketing firms or mom’s apple pie.
So, while Byrne’s lecture title was correct, his vision is still somewhat flawed. No matter what record labels call themselves, it still make more sense for an artist, with the help of a manager, to cherry-pick various firms to manage aspects of her/his career on a contract basis, rather than sign over lifelong rights to master recordings or cut deals for revenue from sources that traditionally did not belong to anyone but the artist.
THE STORY : Former Talking Heads frontman David Byrne called on record labels to remove DRM on digital files and shift from manufacturing and distribution companies to more closely resemble marketing firms in the face of increasing digital album sales. Byrne gave a presentation entitled "Record Companies: Who Needs Them?" at the South by Southwest music conference in Austin, Texas, today (March 15).
Byrne offered a slide show that predicated digital sales would outstrip CD sales by 2012. He said that year will be the "tipping point," much like the mid-to-late ’80s when CDs overtook cassette sales. Once download sales became the norm, Byrne said, it will allow manufacturing and distribution costs to approach zero. "That is a fact," he said.
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HEADLINE : Google To Adopt New Privacy Measures
FROM : Forbes.com
DATE : Friday, March 16, 2007
THE LINE : We can all applaud the steps Google is taking. But keep in mind that when push comes to shove, they can be compelled to turn over what evidence they maintain.
What this story really tells us is the old cautionary tale - we live in a free society, but there are boundaries. Keep that in mind next time you wish to do some, as Pete Townshend might put it, "research."
THE STORY : Google Inc. is adopting new privacy measures to make it more difficult to connect online search requests with the people making them - a thorny issue that provoked a showdown with the U.S. government last year.
Under revisions announced late Wednesday, Google (nasdaq: GOOG - news - people ) promised to wrap a cloak of anonymity around the vast amounts of information that the Mountain View-based company regularly collects about its millions of users around the world.
Google believes it can provide more assurances of privacy by removing key pieces of identifying information from its system every 18 to 24 months. The timetable is designed to comply with a hodgepodge of laws around the world that dictate how long search engines are supposed to retain user information.
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HEADLINE : Tech Turns Average Joes Into Mini-Spielbergs
FROM : USA Today
DATE : Saturday, April 30, 2005
THE LINE : Although the article focuses mostly on film and music, the DIY revolution is indeed becoming mainstream, as this USA Today article attests.
But a crucial part of the revolution still needs to kick in -- mainstream publications have to look at more than the sales numbers when evaluating whether a film, music or book is worthy of critical review. Getting lost in the numbers results in a lot of wasted trees to tell the world that "Gigli" sucks.
THE STORY : Jonathan Caouette was a 28-year-old computer illiterate living a Bohemian lifestyle in New York City until a friend gave him an Apple iMac computer.
Caouette quickly mastered iMovie, the consumer-level video editing software that comes free with Apple computers. He became obsessed with converting into digital files the home video tapes, answering machine recordings and family photos he had been compiling since age 11. He next used iMovie‘s editing and special effects tools to transform two decades of mementos into a bio-documentary, Tarnation, revolving around his troubled mother. The movie got rave reviews at the Sundance and Cannes film festivals, then played in art house theaters across the country. The DVD will be released in May.
"This literally went from my desktop computer to a worldwide distribution deal in less than a year," marvels Caouette. "It‘s really something of a miracle."
One can imagine Gutenberg mumbling something similar as the first printed Bibles rolled off the presses. Just as the German metalworker‘s 15th-century invention democratized the written word, several tech advances have converged to enable the next great leap forward in creative expression.
Processing chips have gotten so fast and cheap that power-hog video and audio editing software can run smoothly on the average home computer. Meanwhile, use of computers and the Internet has become so ingrained in everyday life that most folks are no longer intimidated by the prospect of learning to use new digital tools. Nor are they hesitant to use the Internet to communicate and transact business.
This combination of accessible tech tools and pervasive Internet usage has touched off a do-it-yourself revolution in movies, music and art. Amateurs of all stripes have become adept at using brawny desktop PCs and rich multimedia production software to generate a panoply of digital content. And they are proving to be dexterous at drumming up fans and patrons over the Internet.
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HEADLINE : P.Diddy, Pitbull Form Latin Music Label
FROM : Miami Herald
DATE : Thursday, April 28, 2005
THE LINE : Although the music is important to this deal, what’s really the prime mover is the video. Short-form programming is much in demand for broadband and Diddy’s under-appreciated CoolHunting talents should help make the deal pay off big-time.
THE STORY : Hip-hop power broker Sean ’’P.Diddy’’ Combs is venturing into the Latin music world with Bad Boy Latino, a new label the famed producer has launched with Cuban-American Miami rapper Pitbull.
’’It’s gonna focus on Latin artists and the fusion of what I do marketingwise . . . to embrace the movement and take it to the next level,’’ Combs said. The producer said his label, with offices in Miami and New York, will be about half Latin rap artists, as well as Latin soul and tropical music.
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HEADLINE : Buy.com Makes Buyers Beware
FROM : Los Angeles Times
DATE : Wednesday, July 23, 2003
THE LINE : A company notorious for poor customer service and billing problems decides to get into the most complicated area of e-commerce -- online music. The result is about what you would expect.
An obvious attempt to steal the thunder from Apple’s iTunes, Buy.com succeeds only in re-creating online what’s wrong with most retail music stores -- it has a corporate soul focused exclusively on the transaction, avoiding any attempts at understanding the art, the imagination and the essence of the product they’re selling. Let alone what drives the customer.
One day, the folks selling music online will realize that music isn’t like toasters...you can’t just line ’em up and push ’em out the door. It’s all about community and communication, too attributes that don’t define most corporate thinking, particularly when it comes to entertainment products. Obviously, it’s going to take a few hundred million more in losses before that lesson sinks in.
THE STORY : Competing against online powerhouse Amazon.com Inc. has been brutal for Buy.com Inc., but it may seem easy compared with founder Scott Blum’s new endeavor: persuading computer users to pay for songs they can download for free.
Today, Blum is scheduled to launch BuyMusic.com, an online retailer offering 300,000 songs for 79 cents to $1.49 per track. A rough approximation of Apple Computer Inc.’s celebrated iTunes Music Store for Macintosh computer users, it will be the first of a wave of new sites selling downloadable songs to the far larger audience of music fans running Windows software from Microsoft Corp.
"We have an opportunity - I don’t know how long it is - to do a good job and win over consumers," Blum said Monday, predicting that the entertainment industry’s crackdown on online piracy would push users of free networks such as Kazaa to paid sites such as his.
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HEADLINE : Indie Book Stores Read Customers
FROM : The Seattle Times
DATE : Friday, October 11, 2002
THE LINE : It’s the difference between haute cuisine and fast food; giant warehouse pricing versus boutiques; and a stadium show versus a nightclub.
In other words, there are differences between people. And by appealing to the right instincts of a particular niche, you can beat the big boxes. Moreover, they can’t hope to copy your efforts, since the one thing a chain lacks is the very strength of an independent: the ability to create a cloistered, intimate environment.
THE STORY : Saws are buzzing and dust flying in Ravenna, where Third Place Books is writing the latest chapter in what might be called The Fate of the Independent Bookstore. Here, on the site of a former PCC Natural Market, Third Place aims to open its mostly used-books operation in time for the holiday season.
Throughout the 1990s, independent bookstores fell by the thousands as superstores and online booksellers thundered onto the scene. Seattle saw the loss, for example, of Kay’s Bookmark and Red & Black Books, while nationwide, the number of independent bookstores dropped to about 2,200, down 56 percent from 5,000-plus a decade ago, according to the American Booksellers Association (ABA).
But leveling out after their free fall from a 33 percent market share in 1991, independents have held strong at 15 percent for the third straight year, according to the ABA, adding to the growing sense among survivors that they’ve weathered the worst of the storm.
There are no firm statistics about the number of independent bookstores in the Seattle area, but Third Place, whose original store is in Lake Forest Park, is one of two independents in expansion mode, and a third has opened in West Seattle. Still others are hanging in there, such as Elliott Bay Book Co., Capitol Hill’s Bailey/Coy Books and mind/body/spirit haven East West Bookshop.
While fewer stores are closing nationally, ABA President Ann Christophersen says, fewer are opening to replace those that do. Still, the organization reported last month that more than half of the 1,200 independent bookstores participating in its national marketing program and coalition called Booksense had higher sales during the first six months of 2002 compared with last year.
"Holding our own has been encouraging," Christophersen says. "When you think about how many stores have closed, it means the existing stores are doing better."
That includes Third Place, where manager Robert Sindelar thinks Seattle has fared better than most regions. Compared with the post-Sept. 11 climate of a year ago, most stores are doing better, he says; Third Place’s sales this summer were 8 percent better than those of summer 2001.
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HEADLINE : The DIY Way
FROM : The DIY Reporter
DATE : Saturday, May 18, 2002
THE LINE : The DIY revolution in film, music and books isn’t just an alternative to the Holy Grail of the last 50 years of show business, i.e., getting a "deal."
Rather, it’s increasingly becoming the only way most artists can hope to control their creative works and ensure that they will be generally available to the public. They are working without the cooperation of the charts, selling units in a way that can’t be tracked, wracking up impressive gains and building long-term careers outside the system.
In this DIYReporter story, we examine the changes in the entertainment industry, which aren’t apparent even to many still working at and for large companies in the sector.....
THE STORY : The major entertainment companies are in extreme flux, as their business models gradually morph from selling products to selling licenses. They are going kicking and screaming into this brave new world, resisting the change much as they have resisted all change wrought by technology.
It’s not surprising that this is happening. From piano rolls to radio to cassettes to compact discs, every new media and medium that has emerged has been a threat to the prior one. And virtually every media or medium that has caught on with the public has proven to enlarge the revenue pie for the content creators.
But the current changes also auger another change in the way entertainment products are sold and distributed. For now technology has also created ways to circumvent the established practices and requirements that allowed big media to thrive and most small companies to wither and die.
The sheer cash requirements for creators have dwindled, and technology has also provided a means of distribution and marketing that essentially creates opportunity where none existed.
An established axiom of show business once held that you can make a killing, but not a living. Essentially, it was the correct one. It was nearly impossible, given the cost of manufacturing, distribution and marketing, for a small entrepreneur to get a toehold.
They had to pray for a major hit, one that would give them sufficient cash flow to continue to create. And oft-times, the first hit would have the opposite effect, requiring even more manufacturing and distribution costs while the collectibles from the initial shipments remained outstanding.
While remnants of that system remain in place and still can trap the unwary, the advent of digital technology and the Internet has created a third possibility for independent entertainment entrepreneurs. They can, indeed, make a living while retaining the possibility of making a killing, growing their enterprise at a slow and steady rate and building up individual companies and catalogs without the necessity of a fire sale to a larger entity in order to survive.
The pioneers of this movement spring from the punk rock movement of the late ’70s and early ’80s. Turned off by corporate radio and record labels that established bands like Journey as the flavor of the moment, the musicians turned to DIY -- do it yourself, creating intricate distribution networks, labels and fan bases that relied on old-fashioned savvy and marketing outside the mainstream.
True, while independent content creators have always existed, this was the first movement to actually give it a name and reject the outside system. And while most of the brands created by the DIY movement either were co-opted or vanished, it was largely through the natural evolution of the marketplace that this occurred, as bands chose to license their material to larger record companies or simply gave up, got too old, or dissolved due to the usual personality problems and creative differences.
Their legacy never truly went away, no matter the changes. And with the commercialization of the Internet and the birth of new digital technologies, the means to realize the purest version of their vision is now at hand.
THE DIY WAY
For musicians, the DIY way remains somewhat closely aligned to the former means of distribution. There are still record stores that cater to this largely niche audience, and a majority of product is still sold creator to fan at shows and through mail order. But the Internet also allows a connection with fans who may never have had the ability to access a live show or recorded physical product, bringing them into the fan base and creating new opportunities in previously unaccessible markets for the savvy entrepreneurs.
In film, the new wave of content creation is just starting. The rise of a hybrid of professional and consumer cameras (the pro-sumer models) has eliminated one of the great barriers to content creation, the cost of film and prints. It is now possible for a single person to film, edit and distribute a film, and the opportunities to doing so will only increase as more digital distribution avenues open and higher-speed networks proliferate.
In books, the advent of print-on-demand services has ended another huge cost for the writer and independent publisher. No longer is it necessary to spend large sums printing up 5000 books, the usual minimum order, and then eliminate the stock by either (a) dispersing it to retail stores or (b) selling it slowly, a rate of return that guarantees most business propositions will end.
Now, publishers need only print a small quantity of books and then wait for the demand to dictate the supply. Thus, they are free to concentrate on marketing and promotion, the part of the job description most creative types are best suited to sustain, and less on the actual distribution. Further, the need to take back most of the book stock in oft-times damaged "returns" has eliminated a financial pitfall that has sunk many small publishers.
Thus, the world of content creators is gradually morphing into two sectors, each servicing a specific clientele.
THE MAJOR MODEL OF THE FUTURE
The established major system is becoming the province of superstars. A small, select handful of acts will be carefully nurtured through this system, given enormous marketing and promion money and attention, and blessed with the resources of a worldwide distribution and publicity network. The resources of the multinational corporations that comprise this elite club will concentrate on taking the select group of acts and crossing them into various media ventures, each with a separate yet synergistic revenue stream, gradually growing the licensing opportunities in each.
The revenues streams created will rely less and less on the physical distribution of goods, although that will surely remain a part of the overall operation for the foreseeable future. Rather, the artists who are chosen for this path will sign over an ever-broad array of rights, including the rights to names, photos, creative endeavors and any potential sources of revenue that could be derived from a name or likeness. In essence, the artists who choose this path will be giving up their humanity in the name of superstardom, turning from physical beings into brands that will be created and nurtured well past their physical existance. It’s likely that such brands will be used and digitally twisted as icons of sexuality, art or other forms of niche consumerism, much as today film stars of the past are seen dancing with vaccuum cleaners or endorsing beer brands.
The interesting aspect of such choice, however, is that the artist indeed has a choice in the matter. No longer will creative people have a choice between laboring in obscurity or signing over their works in perpetuity in order to keep on creating.
The reason behind this is the opportunity to join the evolving middle class of artisans created by the digital and DIY revolutions in technology and marketing.
If an artist is appalled by the prospect of signing away their rights to a larger entity that may abuse the privilege of working with their creations, they can choose to keep things on a smaller scale, building an audience and actually making a living from the sale of their products and services. The changes of worldwide impact will be lessened, but the artist will be able to sustain a creative living and have the option at any point to license any or all of their content to a larger entity at their choosing.
They achieve that by carefully plotting and articulating a vision for their creative work and envisioning a market niche that they hope to cultivate with their work. Such activity may seem antithetical to the creative lifestyle, but, in fact, are just a separate form of creativity and can be parceled out to independent contractors at any point, with the artist or her/his representatives retaining control over the most important aspects and having veto power over the implementation of any tactics or strategies that they deem improper.
This is what the world of DIY is becoming. It is a change little recognized and under-utilized, but it is a rapidly growing one. And while the mass media remains fixated on finding a superstar spawned by this growing phenomena, it is missing the larger picture of the growth of this middle class, one which will support the 99% of the artists who are not the flavor of the moment. Those that are making a comfortable living without the charts.
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HEADLINE : Judge: Major Label Ventures "Smell Bad"
FROM : New York Times
DATE : Saturday, February 23, 2002
THE LINE : There’s not much hope that evidence will be uncovered about collusion between the five dominant distributors to lock up the digital music market.
Conspiracies are almost impossible to prove, unless a Jeffrey Weigand-like executive emerges from the shadows with documents and testimony. There are few industries more unlikely to spawn such a turncoat than the incestuous old-boy network of the record industry, where sons, fathers and fellow travelers of all stripes predominate. That’s particularly true in the increasingly-consolidated and synergistic world of entertainment.
Now that the blanket licensing rules for webcasting have eliminated all but the biggest players from entering that field with major label music, the question arises as to who really controls cyberspace? Is it truly locked down?
The answer, of course, is no. The world of music has always been about marketing. But with satellite radio and the broadcasting of independents on the Net now fertile soil for savvy marketers to attack, it should be interesting to see who puts their money where their mouth is. Do consumers love the music they love because it’s what’s presented, or does cream really rise to the top? FM radio, now virtually locked down by the Big Five, attracted its initial audience as an alternative to AM, which was locked down by bigger companies.
It’s time for entrepreneurs to stop whining and start doing. No matter what conspiracy theories are being floated, nothing beats a hit.
THE STORY : America’s major record companies, which successfully sued to shut down the online music-swapping service Napster, suffered a setback today as the judge in the case allowed Napster to seek evidence that the record companies colluded to monopolize the digital music market.
In her ruling, Judge Marilyn Patel of Federal District Court in Northern
California wrote that while the evidence before the court had thus far been
limited, she found reason for concern given that the five major record labels
have created two joint ventures to distribute music over the Internet
themselves.
"These ventures look bad, smell bad and sound bad," Judge Patel wrote. She
added, "If Napster is correct, these plaintiffs are attempting the near
monopolization of the digital distribution market."
Judge Patel wrote that if Napster shows the record labels were involved in
illegal collusion, it could invalidate their lawsuit. But, underscoring the
complexity of the legal doctrines involved in the case, she added that even if
that were to occur, the record companies could modify any anticompetitive
activity and become eligible again to sue Napster.
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HEADLINE : Listen..Do You Want To Know A Secret?
FROM : CNET News.com
DATE : Monday, January 28, 2002
THE LINE : This is an odd story of an odd company that is defying the odds. And this saga of one online company’s struggle to beat the big boys makes an odd point -- as Pogo used to say, "We has met the enemy and he is us."
Apparently, in trying to differentiate itself from the major-label dominated Pressplay and MusicNet, Listen.com is going to offer music from three....major labels.
Now, we understand the need to offer music that people want to hear. But clearly there are ways to make people want to hear certain sounds. It’s called spotlighting, highlighting, bond-building, whatever you want to term it. We prefer marketing.
That’s how you build a brand that matters. And how you differentiate yourself from other services offering the same music. Anything else is a wolf in sheep’s clothing, no matter how you try to spin it.
THE STORY : Like a junkie pulling through rehab, Listen.com is glad to be alive.
Echoes of wilder days still ring through the company’s hip, brick- and glass-walled offices here in San Francisco’s once hot multimedia gulch. Black-and-white photos of snarling punk and new wave musicians still hang on the lobby wall. Music still floats through the air, and a trio of framed Fillmore concert posters hangs on the office walls of the company’s 33-year-old chief executive.
But the dot-com blowout has clearly left its mark. Most of the local musicians who once dotted its payroll are gone, the victims of three rounds of layoffs; employees no longer gather around beer kegs for Friday night jam sessions; and sponsorships of local bands and concerts are history. In hushed halls that once pounded with live guitar riffs, the message comes through loud and clear: Listen.com is on the dot-com 12-step program.
"I told people, it’s like Cortez saying the first thing you do when you get there is burn the boats," says CEO Sean Ryan, looking back on a year of painful transformation. "There’s no going back."
Listen.com’s forward march will help define a new industry. As on of the last start-ups standing in the once-crowded digital music business, the company is poised to carve out a role apart from the major recording labels that have quashed most of their competitors. Listen.com’s success or failure will be a measure of the control wielded by the massive entertainment conglomerates online--and the room that remains for outsiders.
Not that there’s space for many independents. Many of Listen.com’s peers disappeared after their dreams of revolutionizing the music world vanished along with their venture funding. Most of those that haven’t died are now owned by a technology giant or a major music label.
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HEADLINE : Mariah Dumped By EMI
FROM : Reuters
DATE : Friday, January 25, 2002
THE LINE : It’s hard to feel sorry for someone who is beautiful, talented, wealthy and an international icon. So if you lament not at the news that EMI has terminated the contract of Mariah Carey after just one album, weep then for the music industry.
In case there was any lingering doubt that the music business is strictly about business and not about art, then it had the last shovel of dirt thrown on it with the announcement that Carey will receive a buyout from EMI Music on the alleged $80 million deal she signed just a short time ago.
What is the message being sent? That EMI will no longer support anyone who doesn’t pull their weight on the sales side. Despite selling two million albums worldwide for her latest effort, Carey was terminated because her upside was not perceived to be worth the huge advance for each album and promotional effort it will take to justify the front money. This for an artist who has sold over 100 million albums worldwide before her stumble.
Carey will go on to join another label, have a "comeback" that will be loudly applauded, and then likely settle down into a middle-level diva career as a pop icon on the order of Diana Ross, someone who generally flies beneath the radar but occasionally surfaces when the right team of writers finds a vehicle.
But EMI will now have to sit across from each act it signs and let them know that they will have one shot to develop a career with the company’s backing. Some will grab for the lottery ticket of a deal. Others may wisely realize that they want to make music for the rest of their lives and seek a company that will help them sustain a career.
THE STORY : Pop diva Mariah Carey was axed by record company
EMI on Wednesday with a $28 million pay-off, as the British music group
decided it could not justify her huge contract after a dismal year for the
company.
EMI severed its ties with the Grammy-winning American vocalist after signing
her to its Virgin Records label only last year in one of the most expensive
recording contracts ever. Carey’s first album for Virgin, ``Glitter,’’ fell
well short of her previous hits, selling just two million copies worldwide.
EMI’s shares fell 0.72 percent to 344 pence in early trade in London, as the
market braced for a higher charge on EMI’s books to account for the huge
pay-off and 18.5 million pounds ($26 million) of other write-offs linked to
her contract.
EMI’s new recorded music boss Alain Levy has been trawling through EMI’s
business for cost savings after the group warned in September that full-year
profits would dive 20 percent as the music industry suffered its worst year
ever as CD sales slowed and piracy increased.
EMI was criticized last year for paying so much to sign Carey, a 31-year-old
seen by critics as a fading star. At the time, the group justified the deal
as building much-needed U.S. market share with the top-selling female singer
of the last decade.
Carey’s contract was worth an estimated 57 million pounds ($81.6 million)
for four albums. However, ``Glitter’’ failed to cover huge marketing and
video costs agreed in her contract.
EMI had gone to great efforts to kill recent speculation about her contract
and denied earlier this month that it had paid or agreed to pay Carey a lump
sum to get rid of her.
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HEADLINE : Grumpy Old Man Says Biz Is No Fun
FROM : Salon.com
DATE : Monday, October 29, 2001
THE LINE : What’s surprising is not that record industry pioneer Sam Phillips feels that the system has locked out small companies -- he probably could have said the same thing any time in the last 20 years -- but that we, the people, are so sanguine about it.
Think about it -- as Phillips notes, music is the greatest form of communication in the world, and the independent voices of American companies are all but locked out at 99.9% of the marketplace’s main promotional outlets. Instead, we have a world dominated by companies born in Germany, Japan, England and France.
Remember that next time you read about another attempt to limit digital transmission over the Internet of music by one of those companies.
THE STORY : QUESTION:
In the 1950s, you broke half a dozen national stars from a storefront
studio in Memphis. Today, with the corporate takeover of radio and the
prevalence of independent promotion and other pay-for-play schemes, do
you think a small record company can hope to duplicate your feat?
SAM PHILLIPS
There’s not an opportunity for the people who can do it. Payola, that is
real bad, but it’s a symptom of the problem and not the problem itself.
Today, the greatest form of communication in this world does not matter
one iota to the record companies, the big ones. Most radio is programmed
by someone who has never talked to a creative person. Even the
manufacturers won’t gamble on something different.
What do you think? BMG? They don’t give a shit what you sound like, they
ain’t going out knocking on doors.They ought to be beating the bushes
for entrepreneurial the talent out of the trees. Hasn’t even entered
their minds. All they want to do is build bigger studios and get more
synthesizers and all this shit. I have nothing against improved sound;
in fact I’m for it. But my God, let’s don’t substitute sound for soul
and feel.
They think that they can get an artist and build them up. Now I believe
in promotion. But deliver music that can revolutionize, whatever
category it’s in. Do it unselfishly. I realized early, that if I had
gone into what I was doing for the wrong reasons, it never would have
happened for me. That is what worries me the greatest thing that we will
ever be exposed to, and that’s music.
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HEADLINE : Alain Levy Back In Biz
FROM : Hits
DATE : Monday, October 15, 2001
THE LINE : Proving once again that no one is ever completely banished from the music industry, former PolyGram CEO Alain Levy has risen from the ashes and taken over struggling EMI Music.
Ken Berry, who began his career at Virgin Records during Richard Branson’s reign before seguing with that company into EMI’s corporate world, is out as a result of the shake-up.
The personal style of the two executives provides a stark contrast. Berry is widely regarded as one of the nicest people in the business, a warm, personable man who is extremely artist-friendly. Levy is a brusque Frenchman whose personal clashes with such industry legends as Chris Blackwell led to his ouster at PolyGram.
Regardless of personalities, Levy enters at a time when EMI’s fortunes couldn’t be lower. Having failed to merge with AOL-Time Warner and Bertelsmann thanks largely to regulatory concerns, EMI remains one of the few entertainment companies that relies on its revenue from music to support an international infrastructure. At a time when sales have flat-lined or shrunk, depending on whose calculations you believe, prospects are dim that a turnaround is imminent.
Many questions arise from Levy’s installment. It must be a foregone conclusion that he’ll want his own executive team in place. That leaves executives like Nancy Berry and Andy Slater wondering when the axe will fall. As they say in baseball, don’t send out your laundry.
The other huge issue is how EMI can be salvaged. It now looks like off-loading separate components of the company is probably the only hope of getting past two European anti-trust regulators. Could Microsoft be interested in bringing aboard some classic digital content via EMI Music Publishing?
THE STORY : EMI Recorded Music Worldwide CEO Ken Berry has left the company and will be replaced by former PolyGram President/CEO Alain Levy.
Berry was informed of the change in London Saturday by EMI Group Chairman Eric Nicoli, who made the decision, according to sources, then informed his label heads on Sunday (10/14).
Levy, whose title will also be Worldwide CEO, will report to Nicoli. Joining him as Vice Chairman will be David Munns, onetime Senior VP of Pop Marketing worldwide at PolyGram, EMI veteran and manager for the rock band Bon Jovi. Levy is expected to be in EMI’s London office this morning (10/15).
"In these challenging market conditions, Alain brings a unique blend of creative, commercial, strategic and leadership skills to take the business forward to the next level," Nicoli said.
Levy commented: "No other job is as attractive as this in a time of enormous change and challenge for the music industry. I am excited about the possibilities and I am delighted to be joining Eric’s team. It is an honour to be part of EMI with its long history of great artists, music and people."
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HEADLINE : RIAA Mid-Year Numbers In - Piracy Up
FROM : OFFtheCHARTS.com
DATE : Monday, October 08, 2001
THE LINE : The Recording Industry Association of America released its anti-piracy statistics for mid-2000 late last week. The results, like many a corporate financial picture, say much and reveal little.
Predictably, piracy -- the act of illegally reproducing a sound sound recording -- was touted as being thwarted in increasing numbers by the RIAA. Whether it’s CD-recordables, digital downloads, plain old compact discs or cassettes, that’s never going to change.
What the press release fails to address -- and likely never will -- is the stark reality that even as arrests and confiscations rise, so, too, do the number of people creating illegal works. That’s a number that never fails to stay ahead of the actual number of enforcements, making the RIAA akin to Sisyphus, who rolled the rock up the hill each day, only to see it roll to the bottom each night, creating an endless circuit of struggle.
A more important question that is left unaddressed by the press release is whether the record companies that make up its membership are happy about its efforts. Our hunch is that what happens on Capitol Hill is more important to them than whatever happens during a seizure in a flea market in Iowa.
But, then again, it’s not as easy to measure the success of dinner and drinks than a haul of illegal cassettes.
THE STORY : The Recording Industry Association of America (RIAA)
announced today that its anti-piracy efforts in the first half of 2001 led
to record arrests, illegal product seizures and guilty pleas and
convictions. Of particular note, seizures of illegal compact
disc-recordables (CD-Rs) increased significantly in comparison to CD-Rs
seized in the first half of 2000.
"As part of a stepped up effort to significantly curtail the
continuing growth of CD-R piracy, we have increased our solicitation of law
enforcement, prosecutors, legislators, the retail community, and consumers
to assist us in our fight against piracy," said Frank Creighton, RIAA
senior vice president and director of anti-piracy. "We recognize that in
order to keep up with the expanding CD-R piracy problem, we need to work
hand in hand with those charged with enforcing Intellectual Property laws
and those hurt most by sound recording piracy."
The industry credited expanded training and lobbying efforts
nationwide, improved law enforcement cooperation, and increased education
efforts aimed at retailers and consumers for the record numbers.
Specifically, the RIAA has worked this past year, with its member
companies, to create and distribute educational materials to retail stores,
regional sales representatives, and consumers.
Consisting of pamphlets, information booklets and window slicks to display, these materials educate retailers and consumers about illegitimate sound recordings and ways in which illicit material can be detected and reported to the RIAA. The RIAA
has also expanded its training programs with federal, state, and local law
enforcement agencies, giving them the tools needed to identify piracy
activity and take appropriate action without the need to have an RIAA
investigator on sight. Additionally, meetings have taken place at high
levels within prosecutors’ offices in key problem regions, to encourage
stiffer penalties that create the necessary deterrent against CD-R piracy.
SEIZURES AND ARRESTS
Record Number of CD-Rs Seized
The RIAA Anti-Piracy Unit assisted in the seizure of 1,257,796 illegal
CD-Rs at mid-year 2001. This number is up 133 percent from the 539,130
CD-Rs it seized by mid-year 2000. Additionally, RIAA investigative
personnel assisted in the execution of search warrants at 72 illicit
distribution locations and 34 manufacturing operations, seizing a total of
604 CD-R burners in the process. This number is approximately equal to the
total number of burners seized in all of 2000.
Caught In the Act
Working closely with federal, state, and local officials, the RIAA
Anti-Piracy Unit aided in 932 arrests and indictments of individuals
selling illegal CDs or CD-Rs in the first six months of 2000. At mid-year
2001, there were 1,762 arrests made?an 89 percent increase over the
previous year.
ONLINE PIRACY
Online Physical Piracy
Due to improved automated processes, and working with online auction
houses, the RIAA Anti-Piracy Unit was able to focus much attention toward
online physical piracy activity. In the first half of 2001 8,716 online
auctions offering illicit sound recordings on their sites were removed from
online auction sites. This number is a 418 percent increase from the 1,682
online auctions removed at mid year 2000.
Online Digital Piracy
The first half of 2001 saw a slight decline in the number of notices
sent to ISPs in relation to infringing ftp sites, web, and hotline type
sites. However, this in not necessarily an indication that online piracy
has declined. Instead, the reduction in notices sent reflects a consumer
migration to centralized and decentralized file sharing services, an
increased focus on enforcing against open nap servers, and a reallocation
of internal resources to support the critical online litigations that have
been brought this past year.
Civil Litigation Activities
On behalf of its member companies, the RIAA initiated civil suits
against seven individuals or corporations during the first six months of
2001. These suits were directed against various types of illegal conduct,
including illegal file-sharing activities and unlicensed webcasting
services.
In May, suit was filed against AbovePeer, Buddy USA and Johnny Deep,
the entities and individuals that run Aimster, the file-sharing service.
Additionally, suit was brought against Wings Digital, a CD manufacturing
plant in New York responsible for hundreds of infringements. The suit also
asserted claims against the plant’s president.
The RIAA also intervened in a civil suit brought by the broadcasting
group Bonneville International Corp. in April of this year. The suit
sought a judicial declaration that traditional broadcasters should not have
to pay sound recording holders in order to broadcast their works on the
Internet. The court dismissed the case. Suits were also filed in May and
June 2001 against the following groups for unauthorized webcasting
activity: Launch, MusicMatch, MTVi, and XAct.
The RIAA continued to handle the Napster litigation that is pending in
the Northern District of California. A preliminary injunction has already
been issued in that case.
The RIAA is a trade association whose members create, manufacture
and/or distribute approximately 90% of all legitimate sound recordings
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HEADLINE : No Love Lost, Says Court
FROM : Los Angeles Times
DATE : Wednesday, October 03, 2001
THE LINE : This is the case that really can change the way the record industry is run.
Backed by an attorney who has taken down oil companies in anti-trust actions, Courtney Love is taking on the record industry in an attempt to end the various long-term loopholes that effectively tie up an artist from cradle to grave, and, in most cases, even beyond.
There have been attempts at bucking the system before. Some have even gone to court -- witness George Michael’s failed attempt at ending Sony’s stranglehold on his career in the 1980s. But most artists are either daunted by the possibility of a career backlash and shy away from confrontation, can’t spend the enormous sums necessary to battle multinational corporations, or are bought off well in advance of the trials.
Love has been rumored to have turned down enormous amounts of money in order to bring her case. This one, much to the record company’s chagrin, appears to be headed to a judicial ruling. That will be followed by years of high-powered appeals which are likely to stretch on into the future.
In the end, that factor is the reason why Courtney Love isn’t doing this for herself. Her career in music will likely be nearing its end by the case’s conclusion. Yet her descendants -- the next Hole and Nirvana -- may benefit enormously from being able to avoid signing deals that require indentured servitude for long periods of time.
In other words, Courtney is telling them: live through this.
In a procedural victory for rock star Courtney Love, a Los Angeles judge
Tuesday allowed the majority of the claims in her contract termination suit
against Vivendi Universal to move forward to trial.
The action follows a ruling in June in which Superior Court Judge Fumiko
Wasserman initially appeared to side with Vivendi Universal, denying 11 of
the 15 causes of action listed in Love’s complaint. That ruling stemmed from
a motion filed by Vivendi Universal to strike the suit’s 15 claims,
contending they were irrelevant and should be disallowed.
But after reviewing new evidence presented in an amended complaint last
month by Love and her lawyer, A. Barry Cappello, the judge decided to
reverse herself and overrule Vivendi on six of those counts. The judge is
now granting Love the right to proceed with 10 claims against Vivendi,
including her challenge to a provision in California’s seven-year-statute
that could open the door on free agency for recording artists. "The music
industry scoffed at Courtney Love when she first filed her cross complaint,
blasting it as ludicrous and frivolous," Cappello said in an interview. "It
seems the judge disagrees with them. And by the time we’re done, I believe
the jury will disagree with them as well. This is a case that will affect
the record business for many years to come."
Mark Hefflinger
Editor
Digital Media Wire
323 654 9473 (WIRE)
323 654 9483 (fax)
mark@digitalmediawire.com
www.digitalmediawire.com
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THE STORY : In a procedural victory for rock star Courtney Love, a Los Angeles judge
Tuesday allowed the majority of the claims in her contract termination suit
against Vivendi Universal to move forward to trial.
The action follows a ruling in June in which Superior Court Judge Fumiko
Wasserman initially appeared to side with Vivendi Universal, denying 11 of
the 15 causes of action listed in Love’s complaint. That ruling stemmed from
a motion filed by Vivendi Universal to strike the suit’s 15 claims,
contending they were irrelevant and should be disallowed.
But after reviewing new evidence presented in an amended complaint last
month by Love and her lawyer, A. Barry Cappello, the judge decided to
reverse herself and overrule Vivendi on six of those counts. The judge is
now granting Love the right to proceed with 10 claims against Vivendi,
including her challenge to a provision in California’s seven-year-statute
that could open the door on free agency for recording artists.
"The music industry scoffed at Courtney Love when she first filed her cross complaint, blasting it as ludicrous and frivolous," Cappello said in an interview. "It
seems the judge disagrees with them. And by the time we’re done, I believe
the jury will disagree with them as well. This is a case that will affect
the record business for many years to come."
Click here to discuss this story with other readers.
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