You think getting a deal with a major record label will get you some money? Think again.
Interesting post in Gizmodo: “How the major labels cook the books with digital downloads”
No wonder artists aren’t making any money.
– Rich Pulham
Not only are CD sales down for the first quarter of 2009, there are no platinum albums (sales of a million or more). There were only 39 releases that surpased 25,000 during the first week of release.
This brings into question whether the close of major retailers like Circuit City and Virgin Megastores could have a role in the decline. Fewer outlets means fewer stores selling albums.
Not only are CD sales down, prices at popular download sites such as iTunes and Amazon are on the rise. You would think raising prices during a tough recession would be the wrong thing to do. If successful, this would probably be another nail in the coffin of CDs.
– Rich Pulham
After YouTube pulled UK music videos from their site, Warner Music Group has also taken down their music. Financially, YouTube is not profitable. But because Google is flush with money, rights owners seem to think that money should be shared with them.
The fallout has hit the artists. Roadrunner Records is a good example. Warner owns a majority stake in the company.
“It was a bit of a professional blow to me when videos began coming down,” Roadrunner director of New Media Jeremy Rosen told Digital Music News. “I spent the better part of two years carefully building the Roadrunner Records YouTube channel into one of the top ten music channels by subscribers and views on the site; one of the top channels period.”
Rosen built a YouTube channel that brought in 3.5 million views for their bands and a subscriber base of 133,000. How many of those subscribers can be diverted to Roadrunner’s website remains in question.
Perhaps record labels need to decide whether they are selling records or videos. They built their business on free airplay on radio to promote their songs. Now they want to charge for it on the internet? I don’t see any different between radio and the internet. They are both ad-based. So how can they charge for one and not the other?
– Rich Pulham
After Google’s removal of British artists’ music videos, the UK-based Music Publishers’ Association (MPA) is throwing its weight behind PRS for Music. Of couse, they helped broker the deal between PRS and YouTube back in 2007 so they are naturally disappointed.
Last.fm has taken sides with YouTube. “It has been a bold decision for Google but we are all working in a very competitive environment and the fees need to reflect that,” Last.fm cofounder Martin Stiksel told the BBC. “We have to find commercially workable rates otherwise illegal services will win and take over.”
Pandora.com also sits in the same boat. Like Last.fm, they play a customized playlist to an internet audience. They were forced to leave the British market after negotiations broke down with PRS.
Also facing a similar situation is MySpace UK which is a major broadcaster of videos. They are struggling with their negotiations with PRS.
Maybe the result of all this will be no more music videos for the UK audience. That should really help record sales.
– Rich Pulham
Apogee Electronics, makers of AD/DA hardware and recording systems, announced it will no longer be developing products for the Windows platform. I think what they are really saying is that they are struggling in these tough economic times and are trying to conserve resources. (Aren’t we all.)
Their tech support will continue support for products installed on Windows XP Service Pack 2. However, they have already fallen behind. The lastest Windows XP is Service Pack 3. Sounds like they had already dropped Windows some time ago but are just now announcing the fact.
If it were me, I’d be nervous about dropping Windows. Steve Jobs has been the leading force at Apple. Now his health is in question. If he does not return to the helm, what will happen to Apple?
Jobs was treated for pancreatic cancer in 2004. His appearance stunned audiences when he was last seen. He had lost a great deal of weight and looked downright frail. Many observers believe his cancer has returned and that he may never return to work.
Although Apple had a good quarter at the end of 2008, January has not been so good for them. Their market share has dropped from 16.4% to 13.7%. The SEC is investigating Job’s health because it is such an important issue regarding the market value of the company. Has Apple reached its apex and is now on decline?
Apogee’s decision may be a good one. But I always get a bit nervous about putting all my eggs in one basket, especially when that basket has dark clouds on the horizon.
– Rich Pulham
YouTube is in the process of blocking views of music videos in the UK. Negotiations have broken down with the licensing group PRS for Music.
“Our previous license from PRS for Music has expired, and we’ve been unable so far to come to an agreement to renew it on terms that are economically sustainable for us,” YouTube stated. “We value the creativity of musicians and songwriters and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright. But PRS is now asking us to pay many, many times more for our license than before.”
Apparently, PRS feels that since views on YouTube have increased, so should their fees.
It seems strange that music videos were created to promote performers and increase record sales. Now licensing groups want that to be a source of income?
I wonder how many groups have music videos on their site that can be viewed for free. So why charge YouTube?
– Rich Pulham
The top selling album last week was Taylor Swift’s Fearless. To reach that, you would think it requires selling tons of CDs. Not so, according to Soundscan.
Swift’s album only sold 62,000 copies. The number two spot was 58,000 by Charlie Wilson’s Uncle Charlie. And third was The Fray at 53,000.
The top selling Swift album was the fourth lowest sales number since Soundscan started in 1991. But Swift has been number 1 for 10 weeks.
There are two ways to look at this.
If you are an optimist, it’s a lot easier to become number 1. You don’t have to sell nearly as many albums.
If you are a pessimist, selling albums has gotten tough even for the best of them. Year-to-date sales are down 12%.
Or maybe none of this really matters. Are you really competing against Taylor Swift? In other words, do you sound like Taylor Swift? Are you singing the same songs? Are you even in the same genre?
Too often we think of ourselves as in a race with other artists by comparing ourselves with how they are doing. Who will be the winner?
A race has a specific number of entrants participating on the same course. There can be only one winner, the one who crosses the finish line first. But are you in the same race?
Comparing ourselves to others always puts us in a bad position. There are always someone who is better. We should be comparing ourselves to our ourself.
It reminds me of a summer I started playing tennis against a friend of mine who I hadn’t seen in a long time. I’m not much of a tennis player and didn’t realize he was the university’s captain of the tennis team.
You can guess how the matches went. It was a slaughter. His serves were so fast I couldn’t even return them. He suggested I stand farther back. It gave me more time to return the ball.
My friend kept asking if I wanted to continue. I did even though I was losing every game. How would I get better except by competing with someone who was better?
Soon I was returning more serves. Then I would score a point occasionally. After a while, my friend had to work at winning.
By the end of the summer, most of the games were spend going from his advantage to my advantage. He made fewer mistakes so eventually he came out on top. But I had a few victories as well.
What kept me going when he was so obviously superior to me? He was asking if I wanted to continue because most people are looking at whether they won. I was looking at my performance to see if I was getting any better. And I was.
Artists should be doing the same. So what if Taylor Swift was number 1 by selling 62,000 albums and you only sold 100. Remember the time you only sold 10? And then 50? That shows you are getting better.
The business is not about becoming better than someone else. It’s about becoming better than you. If you do that, you will become successful. You’ll do what you love and make a living at it. What more could you ask for?
You can have a number 1 album. Just sell more of your latest album than you did for the last one. And keep on doing that for every album you make.
– Rich Pulham
The iTunes Pass is greared towards the superfan. It is a premium access plan where fans receive exclusive content. The selected artist will have immediate delivery of new songs, remixes, video, and other content. The first selected artist will be Depeche Mode at a cost of $18.99.
Independent artists should take note of this. It is a way to gain additional income on their websites.
Instead of just releasing an album, announce the coming of the album but maybe 12 weeks before the album’s release, offer the superfan pass. Members will get songs in advance of the album, maybe even extended versions and extra songs not found on the album. Offer videos, photos, discounts on concert tickets, special merchandise, etc.
You can turn more fans into superfans who will create a buzz about your upcoming album and concerts. You should sell more albums and your fans will become more devoted.
– Rich Pulham
On Monday, the Dow Jones Industrial Averages dropped more than 250 points to $7,114.78. This is the lowest point since 1997. And the record companies fell with it. Warner Music Group, for example, dropped 9.27% to a value of $1.86. If this trend continues, Warner’s value will be so low as to risk being delisted.
Some analysts think this huge drop is an indication that the bottom may be a lot farther down.
– Rich Pulham