Commenting on my post on hip hop's transition to digital sales, XXL's Tara Henley summed up 2006 this way:

"I think 2006 will be remembered as the year that The Hustler trumped The MC as the prevailing icon of the culture. The year that rappers became so busy trying to be entrepreneurs and pitchmen and Hollywood actors that they didn’t have the time or the inclination to make dope music anymore. The year that being a rap artist—someone who sincerely aspires to spit mind-blowing rhymes—became, well, kinda corny. The year all your favorite rap stars started adamantly denying they were rappers."

Rappers are not shy about promotion and making money. What separates this year's greed with the chart-topping greed of previous years? Maybe consumers are tiring of rappers ostentatious lifestyles. Maybe they're starting to look for something else. R&B is having a good year -- John Legend, for example, is having a year most rappers could only dream of.

Outside of changing consumer sentiment, what could be behind the fall? I tend to look to radio and promotion, then to distribution and retail. Here's a crazy thought: Part of the sales lag can be chalked up to what is and isn't classified as hip hop. Two huge, beat-driven albums that could technically be called hip hop albums but are filed under electronic at Soundscan, are Gnarls Barkley's St. Elsewhere and Gorillaz' Demon Days (released last year but sold about 500,000 units in 2006). Both were produced by Danger Mouse (pictured), and both are no more or less hip hop than OutKast, for example, a group that is classified as hip hop.

Add Danger Mouse's million-and-a-half 2006 sales -- currently classified as electronic -- and hip hop isn't looking as bad. Those 1.5 million units of St. Elsewhere and Demon Days would raise hip hop's yearly total by about 3.2%. So has Danger Mouse taken a good chunk of hip hop's crossover audience away from more traditional hip hop? It's not a far-fetched idea, and it would fall in line with the theory that consumers are tiring of hustlers. Who is less a hustler than Danger Mouse?

Posted by Glenn at 3:28 PM | Link
|Music Industry|

A thought crossed my mind last week as I looked over last week's album chart: What has happened to hip hop? Diddy's Press Play (Bad Boy) debuted at #1 but has dropped to #7 and then to #20 -- and that's an impressive hip hop showing in 2006!

Lloyd Banks' Rotten Apple (Interscope) has moved only 234,000 in four weeks, with nearly 61% of that coming in the first week. After debuting at #3, Rotten Apple's next three weeks were #15, #33 and #43. The critically loved Lupe Fiasco's Food & Liquor (Atlantic) by Lupe Fiasco has moved a scant 184,000 in seven weeks and has dropped to #94. At #95 is Young Dro's Best Thang Smokin' (Atlantic) with 281,000 in ten weeks. Outkast, which previously crossed over to pop and rock fans, didn't bring their new fans with them: Idlewild (LaFace) hasn't even gone gold in 11 weeks.

The list of disappointments and underperformers is a long one. Method Man's 4:21 The Day After (Def Jam) has been out for ten weeks and has moved only 170,000. It's already off the Top 200 and sold a mere 4,000 units last week. In 15 weeks, Pharrel's In My Mind (Interscope) has sold only 341,000. After a strong first week, it eased right down and then completely off the Top 200. Not even The Roots are having a good 2006. Game Theory (Island) has sold a paltry 148,000 in ten weeks, and 41% of its sales came in the first week.

This has not been a good year for hip hop releases in general, but the issue is much more complex. Hip hop discovered the Internet. Its fans -- and there are fewer of them in the mainstream -- are moving beyond the album format and taking songs one at a time. Hip hop is as much a hit-driven genre as any. Promotion requires radio and club play. Those impressions drive album sales. Now they drive single and ringtone sales as well.

The decline of 2006 can be traced to a slight downward trend that started after hip hop peaked at 13.8% of all album shipments (see RIAA's 2005 Consumer Profile). (Year-to-year swings can occur. The swing from 2004 to 2005 was 1.3 percentage points.) In 2005, hip hop accounted for 12.1% of album scans. In 2004 the number was 12.2%. Currently, hip hop accounts for 10.6% of all album scans in 2006. Even a blockbuster fourth quarter probably won't prevent a year-over-year drop. (And the fourth quarter could be good for the genre. The Game, Nas, Snoop Dogg, Akon, Lil Jon and Young Jeezy have new releases in the quarter.)

For proof of the genre's current lack of staying power, one can look at the length of time a hip hop album stays in the Top 40. In 2006, there are no long-lasting hits at the top of the chart. Each album is a flavor of the less-than-a-month. How many hip hop albums are in the Top 40? Five. How many have been there for more than three weeks? One (Ludacris). A hip hop album makes a big splash in its first week, drops around 60% in the second week, and fades out of the mainstream's attention.

Continue reading "Hip Hop's Transformation Into A Singles and Ringtone Business" »

Posted by Glenn at 9:31 PM | Link
|Music Industry|

What could be better than Malcolm Gladwell writing about music? His article for The New Yorker, "The Formulra," finds him explaining the New York-based company Platinum Blue, which examines music's underlying mathematical structure to predict the hit potential of an album or a song.

"This past spring, for instance, (Platinum Blue) analyzed 'Crazy,' by Gnarls Barkley. The computer calculated, first of all, the song’s Hit Grade—that is, how close it was to the center of any of those sixty hit clusters. Its Hit Grade was 755, on a scale where anything above 700 is exceptional. The computer also found that “Crazy” belonged to the same hit cluster as Dido’s 'Thank You,' James Blunt’s 'You’re Beautiful,' and Ashanti’s 'Baby,' as well as older hits like 'Let Me Be There,' by Olivia Newton-John, and 'One Sweet Day,' by Mariah Carey, so that listeners who liked any of those songs would probably like 'Crazy,' too."

Platinum Blue's Mike McCready explained how people have had similar preferences for hundreds of years.

"If you go back to the popular melodies written by Beethoven and Mozart three hundred years ago, they conform to the same mathematical patterns that we are looking at today. What sounded like a beautiful melody to them sounds like a beautiful melody to us. What has changed is simply that we have come up with new styles and new instruments. Our brains are wired in a way -- we assume -- that keeps us coming back, again and again, to the same answers, the same pleasure centers."

Posted by Glenn at 7:45 PM | Link
|Music Industry|

This makes a good complement to IFPI's global recorded music data that was just released. Year-to-date market shares came out last week.

The title of the The Hollywood Reporter's article, "Digital Sales Shore Up Ailing Music Biz," makes me wonder how many more CDs would have been bought if there were no a la carte downloads. Regardless, there was another drop in physical sales and it's being made up for -- almost -- by digital sales. The article points out a statistic, track equivalent albums, that Soundscan uses to give people a yardstick with which to compare year-over-year sales as consumers shift from digital from physical. The track equivalent album statistic, which converts every ten individual tracks into an album, decreased through September to 434.9 million from 439.2 million.

Using a metric like track equivalent albums does not, of course, reflect the continued changes in music retail. Tower Records was representative of the shrinking middle class, those music specialists that used to lure customers with their deep inventories. The middle class will continue to shrink -- who's next, Virgin Megastore? -- as niche-focused indies and hit-driven mass merchants fight it out with digital stores.

Here are album shares (with digital) of the four majors and indies:

1. Universal Music Group: 31.4% (28.0%)
2. Sony BMG: 26.7% (22.6%)
3. Warner Music Group: 12.1% (11.6%)
4. EMI: 11.8% (10.7%)
5. All indies: 18.00% (26.9%)

Posted by Glenn at 3:59 PM | Link
|Music Industry|

• The IFPI reports global music sales were down 6% in the first half of 2006. Digital sales were up 106% and now account for 11% of total recorded music sales. In the U.S., digital accounted for 18% of recorded music sales. Countries such as Japan and Italy have very high mobile shares (85% and 76%, respectively). In the U.S., online sales account for 64% of digital sales. (Read press release)

• Goldman Sachs lowered its EMI target price. It forecasts a drop of 6.5% for the first half of 2006 and flat sales for the year. (Read article at newratings.com)

• Navarre Corporation announced the effect of the Tower Records bankrupcy on its earnings. The company plans to take an after-tax charge of $0.03 per share for the quarter ended September 30th. Multiplied by the 29,951,497 shares outstanding at the end of June, that charge will be just shy of $900,000. (Read press release)

• The Tower.com website was purchased by Norton LLC, owner of music memoribilia site Wolfgang's Vault. (Read post at FMBQ)

• Columbia Records has asked veteran Steve Ralbovsky to be senior VP of A&R for its Canvasback Music. (Read article at Hits)

• A story on the Froncysyllte Male Voice Choir, which signed to Universal Music after being heard at a wedding by Daniel Glatman, the former manager of boy band Blue. (Read article at The Independent)

Posted by Glenn at 2:18 PM | Link
|EMI||Indies||Music Industry||Tower|

The USA Today's David Liebermann has an article on the music industry that's surprisingly good. (That's because the article is in the Money section of the paper, not the Arts section.)

Liebermann takes a gander at the decline in sales of recorded music and what companies are doing about it. Publishing is the focus here. Universal Music Group's purchase of BMG Music Publishing is mentioned. Newcomers like Primary Wave Music Publishing are mentioned due the lower barriers to entry compared to the recorded music field.

Some hard numbers (from Credit Suisse) help make the article worth reading. Here's a sample:

"Publishing revenue will total about $4 billion this year and swell at least 4% a year through 2013. That's attractive because about 24% of revenue flows to earnings before taxes and depreciation, according to Credit Suisse. Recorded music generates cash-flow margins of about 14%."

Posted by Glenn at 2:53 PM | Link
|Music Industry|

The NY Times' Jeff Leeds has an article today about "how technology is shaking up the hierarchy of tastemakers across popular culture." It's been written before, but Leeds concentrates on music recommendation services, playlists and online radio -- not blogs and Pitchfork.

The beginning of the article reminds me of a similar article about Epitonic.com in the late '90s as the company was burning through money. The company employed music buffs to input data about each band into the download service's database. (It was a kind of "Revenge of the Nerds" article that was so popular before the bubble broke.) Here, Pandora, which is not yet profitable, is using professional musicians to categorize music by their characteristics.

Most interesting yet unsubstantiated item in the article: Pandora founder Tim Westergren claims ten percent of the time Pandora users click through to buy a song or album on iTunes or Amazon.com. That's a heck of a conversion rate.

Posted by Glenn at 11:58 AM | Link
|Digital Music||Music Industry|

The Rock and Roll Hall of Fame's nominating committee is going to get a makeover and, possibly, that element of youth that has long eluded Grammy voters. Hits Rumor Mill quoted an excerpt from a letter from Rock Hall nominating committee chairman Jon Landau that says the committee had expired and will be replaced by a smaller group. Landau is seeking a youth movement.

“'We are particularly interested in recruiting some fresh voices whose taste and love of music was formed more in the Eighties,' Landau wrote, adding that the former committee members will still be allowed to cast their votes once the ballot has been compiled. Under the new regime, the names of Gen X heroes like Joy Division, New Order and Echo & the Bunnymen would appear to be headed for future ballots."

In other Rock Hall news, the museum has hooked up with technology company Music Pilot " to find and identify relationships in music that have previously gone undetected." Phase one will let visitors use kiosks to search a database of music and find relationships, influences and similarities. Sounds fun.

Posted by Glenn at 6:30 PM | Link
|Music Industry|

In 2000 the FTC put an end to the major record labels' practice of minimum advertised price (MAP), which set a floor under which stores could not advertise with labels' cooperative marketing funds. Since MAP's demise, consumers have cheered, a class action suit has filled libraries with B-grade product and mass merchants have taken loss leader pricing to new levels.

But MAP does live on. As an article at Video Business indicates, the FTC never got rid of movie studio's MAP policies. "Navigating Around MAP" tells how retailers are discounting below MAP more and more these days. Coop funds are dwindling anyway, giving retailers less incentive to play by MAP. And some chains, such as Target, rely on slotting fees, not ad reimbursements.

The video world has the same issues that music retailers face. "It hurts the specialty retailers more than anything else," one source told Video Business, "because they can’t afford to lose money on ad [support]."

Posted by Glenn at 6:25 PM | Link
|Music Industry|

Previously Coolfer had wondered how little radio support and huge Internet awareness would do for Gnarls Barkley's St. Elsewhere. The results are in, and St. Elsewhere sold 50,000 in its first week of wide release. (It sold about 3,700 digital albums a week before the CD was released, and had a few hundred street date violations that week as well.)

That's good for #20 on this week's album chart. Color Coolfer impressed. This has been a campagin driven by the Internet, and it proved that the Internet can indeed move the units...as long as the major retail chains are on board, of course.

Terrestrial radio support will be a major factor in sustained chart position. Otherwise expect around a 40% slide in the second week.

Six albums sold over 100,000 last week, four of them debuts. Red Hot Chili Peppers' Stadium Arcadium sold 442,000 and tops the album chart. Nick Lachey's Jive debut, What's Left of Me, moved 171,000 and sits at second. Big debuts by Jagged Edge's self-titled Columbia album and the Isley Brothers' Baby Makin' Music on Def Soul Classics did 114,000 and 111,000, respectively.

New albums by Paul Simon and Neil Young both did 60,000 in their first weeks. Given all the hoopla for Young's Living With War, 60,000 might not look that great but his fans aren't the type to rush out to midnight sales.

People were pretty impressed by Mobb Deep's 105,000 last week. How do they feel about a massive 65% slide in its second week?

Proving that hit singles don't always sell albums to match, Daniel Powter has dropped to 32 from 23 from 18 in the last three weeks (it's been out for five weeks).

A note to hipsters: The Mormon Tabernacle Choir's Then Sings My Soul debuted higher than did Grandaddy's Just Like the Fambly Cat.

Posted by Glenn at 2:15 PM | Link
|Music Industry|

• Have the Dixie Chicks resigned to move on from their old fan base? Hits points out that even though country radio isn't eager to play the single "Not Ready To Make Nice" the song is #1 on the iTunes country chart. The song was co-written by Dan Wilson (Semisonic, Trip Shakespeare) and produced by Rick Rubin -- not household names in country-loving homes. The next single is going to country radio, let's wait and see how that goes over. (Hits Rumor Mill)

• Read the transcript from Sony's fourth quarter earnings conference call held yesterday. (Consumer Electronics Blog)

• DJ Shadow has signed with Universal Records and will have a new album -- with guest vocalists -- out this summer. (Internet DJ)

• Cheap Trick and the Allman Brothers have started class-action procedings against Sony BMG over the royalties formua the company is using for digital music. (Digital Music News)

• Austrailians are complaining about the high prices they pay for digital downloads. Their CDs ain't cheap either. (Sydney Morning Herald, via Slashdot)

• Good news: Rhino is reissuing remastered Jesus and the Mary Chain albums. Finally. Bad news (to the many who are haters): They're DualDisc format. The DVD side of each will contain the album in high-res audio and a paltry three videos. (Pitchfork)

Posted by Glenn at 9:40 AM | Link
|Music Industry||Sony BMG|

• Tapes 'N Tapes, one of the buzz bands of this year's SXSW, has signed with XL Recordings. The band's self-released album The Loon will get a worldwide release this summer. (Pioneer Press)

• Koch has added three labels to its roster: Made Records, REX Recordings and R.N.L.G. (Rob Nonies Label Group). (Hits Rumor Mill)

• A group of prominent Canadian artists, the Canadian Music Creators Coalition, is butting heads with the Canadian Recording Industry Association over copyright, and the media is paying close attention. New members of the group include Avril Lavigne, Broken Social Scene and Barenaked Ladies. (Globe and Mail)

• India.Aria's upcoming album, Testimony: Vol. 1, Life & Relationships, has been bumped to June 27th from May 9th. (Billboard.com)

• There's been another shooting at NYC's Hot 97 radio station. Rappy Gravy was shot, well, he was shot right in the butt. (NY Post)

Posted by Glenn at 8:53 AM | Link
|Music Industry|

• Lawmakers have introduced a bill that would require satellite radio companies to compensate record labels for downloads that arise from their services. The goal, says the RIAA's Mitch Bainwol, is parity among platforms. Satellite radio, he says, should be looked at no differently than an on-demand store. "If someone gets a distribution right without paying for it, that blows a hole in the digital marketplace." XM chairman Gary Parsons calls it "a new tax being imposed on our subscribers." (Reuters)

• Based on one-day sales, Hits predicts Godsmack will top next week's album chart with over 200,000 in sales. Springsteen's We Shall Overcome will be helped by strong sales at iTunes and Starbucks and is on track to do about 100,000. (Hits Rumor Mill)

• Baller Status interviews Draze, who is about to debut something the website calls "he latest concept in buzz creation for an unsigned artist": the mixtape movie. The first is a cover of "Trading Places" with Draze playing Dan Akroyd's character and Jay-Z playing Eddie Murphy's character. (Baller Status) The movie can be seen at Draze's MySpace page.

• If you don't get your fill of Doomsday-for-the-music industry pronouncements from Bob Lefsetz's radio show, this summer you can listen to Marc Cuban on his weekly Sirius radio show. (Seattle P-I)

• It's off to a decent though quiet start, but Sergio Mendes' Timeless (Concord/Starbucks) should finally get a boost and get in the public's eye. Mendes and the Black Eyed Peas (whose Will.I.Am produced the album) will perform on "The Tonight Show" on May 9th. They recently shot a video for the song "Mas Que Nada," and the song will be featurd in Nike commercials during The World Cup.

Posted by Glenn at 9:00 AM | Link
|Legal||Music Industry|

Going against popular theory, a Nielsen/NetRating report claims 75% of UK Internet users call the CD their favored format. Only 8% prefer digital downloads.

"Despite the fact that Internet users are more likely to have purchased music online than from the high street they are actually spending almost twice as much on music in the high street than they are on the web. Again, this indicates that the high street doom-mongerers are perhaps slightly premature - brick-spend still outperforms click-spend for the music surfer."

How can one interpret these findings? Do people not value the convenience of digital downloads? Do they not find value in the ability to cherry pick songs? Here's a thought: most people still prefer the album format over the single download, and CD prices have come down far enough to make a digital album far less valued than the CD. Yeah, sounds old fashioned, but it wasn't fortysomethings who sent Fall Out Boy's last album over the double-platinum mark.

Posted by Glenn at 11:47 AM | Link
|Music Industry|

• Toucan Cove Entertainment has signed a worldwide distribution deal with Universal Republic. The label's next album is by The Muckrakers. T(PR.com)

• eMusic anc Circuit City have teamed up to offer a download starter kit that will be sold in Circuit City stores. The kit has the physical aspect of a gift card but comes packaged in a CD jewel case and includes a "how to" download guide, collector's cards of independent artists and information on eMusic's features. For $14.99 the kit offers 65 downloads per month (which goes for $15 per month) and 25 free downloads for signing up.

• Skype, the web-based phone service, has a deal from Warner Music Group to sell music on Skype's music store. Which music store? This one. (Forbes.com) If you're like me and wondering how this would work, ZDNet has a blog post that explains some scenarios. (ZDNet)

• Warner/Chappel names Bob Bortnick Senior Vice President, A&R. (Press release)

• Phil Walden, an industry veteran and head of Capricorn Records, died on Sunday. (Tennessean.com)

Posted by Glenn at 8:40 AM | Link
|Brick-And-Mortor Retail||Music Industry||Universal Music Group||Warner Music Group||eMusic|

In a lawsuit over Bertelsmann's investment and involvement in Napster, two rulings may give the Justice Department a better case in its investigation into digital music pricing. The LA Times' Joseph Menn detailed the judge's findings in an article today. One ruling had to do with which documents would be turned over by two majors music groups:

"But the Justice Department's decision was influenced by two detailed 'white papers' — one submitted by EMI Group and MusicNet, the other by Universal Music Group and Pressplay. In a ruling made public Friday, U.S. District Judge Marilyn Hall Patel found that those papers were 'deliberately misleading.'"

The other dealt with Bertelsmann's $50 million loan to Napster and the revealing of an "unwritten deal allowing $10 million to be used for the legal defense of the old system." Bertelsmann did not disclose to the court that $10 million legal fund.

The Wall Street Journal quotes Bertelsmann's lawyer, Ken Steinthal, as saying, "There's no impact on the merit of the claims."

Posted by Glenn at 6:25 PM | Link
|EMI||Legal||Music Industry||Online Stores/Services||Universal Music Group|

Rascall Flatts dropped mightily but still held on to the top spot on the album chart. Me and My Gang sold 345,000 in its second week and narrowly beat out Toby Keith's White Trash with Money in that album's debut week. White Trash sold 330,000 while Now 21 moved 293,000 in its second week.

But the normal numbers get a bit boring week in and week out, don't they? Just as pro sports started counting different statistics over the years (assists, sacks, on base percentage), the music business needs look at the chart in new ways. Here are a few:

• Biggest second-week slides: Morrissey's Ringleader of the Tormenters dropped 59%, Lacuna Coil's Karmacode dropped 56%, Flaming Lips' At War With The Mystics dropped 55% and Rascall Flats' Me and My Gang dropped 52%.

• Biggest increase: Kidz Bop 9 rose 125%. (Love that cover of "Feel Good Inc.")

• Country rules: Of the 20 top albums, six were by country artists.

• Soft singer-songwriters are back: Daniel Powter and James Blunt sit at #9 and #10, respectively. They make Jack Johnson, who is at #20, look like Bruce Springsteen sitting on a Harley flanked by pit bulls. Time for that comeback, Dan Fogelberg?

• Like a basketball player who just returned from four seasons playing for a team in Greece to prove he still has some kick left: Check out Buckcherry's 15 debut at #49. Where have you guys been?

• A rivalvy like Sox/Yankees, or probably more like Kings/Lakers (since the Kings never beat them when it mattered): Hawthorne Heights, continues its downward fall. This week it's at #54. Victory nemesis Ne-Yo rose one slot to #14.

Oddly, much of the Top 40 increased substantially over the previous week. Sales for the week were up 6% compared to the previous week, and were up an amazing 20% over the same week last year.

For your reading stack: Billboard.com's recap of the album chart, the Billboard Hot 100 singles chart, Billboard's Hot Digital Tracks chart and StreetPulse's Top 20 charts.

Posted by Glenn at 2:06 PM | Link
|Music Industry|

• It's tax day, so this article had good timing: Fifteen states and DC now tax music downloads (and movies and books, too). People are required to pay their own state taxes on media downloads. This is called a use tax, and it's paid voluntarily. (News.com, via paidContent)

• The NY Post reports on the legal problems of Larry Goldfarb, the financial backer of Irv Gotti's plan to revive Murder Inc. Records. (NY Post)

• A profile on Nashville's Dualtone Records. (Nashville Business Journal)

• Coolfer disagrees with those who say major labels are headed to extinction, and here's an example why: Interscope Records will get a cut of Hasbro's sales of a line of Pussycat Dolls toy dolls. (NY Times)

• A profile of Madison, Wisconson's Sugar Shack Records and its struggle to stay in business. (Madison Commons)

• ARTESTdirect announces its fourt quarter and annual results. The digital entertainment company acquired MediaDefender last year, and so pro forma income was given. For the year, adjusted EBITDA was $7.1 million. (Yahoo! Finance)

• The trend in country music it to collaborate. Nelly and Tim McGraw, Jon Bon Jovi and Annie Bassett. Jack White and Loretta Lynn. Brad Paisley and Dolly Parton. Country stations are embracing collaborations between country and pop/rock artists, and technology allows songs to be recorded without putting the two collaborators in the same studio. (Chicago Tribune)

• How could Michael Jackson use his publishing interests to pay his massive debt? Sony/ATV's music publishing catalog, of which Jackson owns 505, has a valuation of about $1 billion. (NY Times)

Posted by Glenn at 8:55 AM | Link
|Music Industry|

The Guardian's Charles Arthur points to a blog post by Jupiter analyst Mark Mulligan that questions the value the BPI puts on file sharing's impact on the UK music industry.

The BPI puts the value at 1.1 billion pounds over three years. Mulligan puts the loss at 0.14 billion pounds. Why the big difference? The BPI's numbers, he writes, confuses consumer survey data with national market data, and it overlooks the other reasons sales have declined.

"If, (and this is a highly hypothetical IF) these 3.3 million file sharers are really responsible for 1.1 billion in lost spending, that means that they had to not spend 110 pounds each per year, which puts them above average spending for UK music buyers. If that really is how much they would have otherwise spent, then the music industry has got a bigger problem than it could have imagined – that would mean that all the music aficionados have switched over to file sharing. But of course they haven’t, because that spending simply wasn’t there before file sharing."

The same could be said of the PR trotted out by the RIAA. It has consistently refused to recognize other factors such as competing forms of entertainment and an unhealthy retail climate.

Posted by Glenn at 2:16 PM | Link
|Music Industry||P2P|

• Six labels -- including Nettwerk Records -- have left the Canadian Recording Industry Association because of a disagreement over content rules for radio. (Toronto Star)

• Just as the other majors did last month, EMI signed a deal with Sirius Satellite Radio that give an unspecific compensation to the music group in return for allowing the Sirius S50 to store digital copies of EMI music. The AP's Alex Veiga reports that at least two of the majors' deal gives them a fixed fee per unit sold. (AP)

• Neil Young recorded a new album in just three days, according to Hits' Rumor Mill. There is no release date set for Life In War. (Hits Rumor Mill)

• An interview with an Orange County record store clerk. "People are obsessive. A lot can be elitists. 'Oh, I have the first pressing of that.'" (OC Weekly)

• By the time USA Today catches on, a trend is usually in full swing. "Hyphy pulls a Bay Area breakout," declares the article's title. Steve Jones tracks hyphy from its origins in Oakland to scene leader E-40. (USA Today)

Posted by Glenn at 9:15 AM | Link
|EMI||Music Industry|

• U.S. ringtone revenues will be about $600 million this year. One expert sees the growth of MP3-playing phones as a hinderence to ringtone growth, but a Warner Music Group exec disagrees and predicts healthy growth and continued use as a pre-album release buzz-builder. (CNNMoney)

• Hits covers the story of how the payola probe has scared radio programmers from adding some new artists to playlists. The LA Times had an article on this over the weekend, but Hits doesn't even mention Charles Duhigg's story. C'mon, Hits, how about a tip of the hat, a nod, a thank you? (Hits)

• MySpace is having another contest for unsigned bands, this one for the movie "John Tucker Must Die." The winner will get a $10,000 recording budget and a chance to appear in the movie soundtrack. You know, these kinds of contests really miss the big picture. Bands don't need videos, more money for recording, etc. What they could really use is a better manager. The contest that gives away a contract with a really solid manager is a contest that will really do something for an unsigned band. (Digital Music News)

• Online playlist site Webjay was bought my Yahoo last year, and it's still linking to much unauthorized content by big name artists. (Billboard)

• Music Choice is adding Universal Music Group content to its library. (MarketWire)

• A hint of things to come for "American Idol" contestants? Gareth Gates, who used the British show "Pop Idol" to get a recording contract and four #1 hits, has been dumped by Sony BMG. (Irish Examiner)

• Bands love MySpace. "Talk about the world's best promotion for a band," said the guitarist for Epic's Quietdrive. (Star Tribune)

Posted by Glenn at 8:41 AM | Link
|Music Industry||Ringtones||Universal Music Group|

• The buzz/overused word of 2006 is incubator. Last year it was upstream. This year it's incubator. Now for the story: Warner/Chappel Music has started an incubator label called Perfect Game which is intended to develop artists in the Warner Music house. First signing: Brooklyn's The Lordz, which can only indicate that rap-rock isn't dead yet. (FMBQ)

• Industry folks say the South is no longer the place to break country artists. Where's the finger being pointed? Clear Channel, for one. (Billboard)

• Rapper Proof of the group D12 was shot and killed in Detroit yesterday. AllHipHop.com reports that two men may have pulled guns at a nightclub. (AllHipHop.com)

•

Posted by Glenn at 9:10 AM | Link
|Music Industry||Warner Music Group|

The Hollywood Reporter's Georg Szalai spoke with Jean-Bernard Levy, chairman and CEO of the management board of Vivendi Universal, the owner of Universal Music Group.

"THR: Bertelsmann seems to be looking at selling its music assets. Any interest in BMG's music publishing operation?

Levy: We will be vigilant and ready to make a good bid for any significant assets that would be put up for sale.

THR: Could a spinoff of UMG, an initial public offering, make sense?

Levy: Do we not have the right management and do we need to change that through the stock market? No. Do we need to trade shares of the company because we need capital for acquisitions? No. So, what would the benefit be? Why should we deprive the shareholders of Vivendi of the value that the management of Universal Music is creating every day."

Coolfer's interpretation:

Q: You could stand to get into the music publishing business, couldn't you?
A: Yes, of course.
Q: Are you in such dire need of cash that you would jeopardize UMG's market dominance?
A: Are you nuts?

Read the entire interview here.

Posted by Glenn at 6:57 PM | Link
|Music Industry||Universal Music Group|

• Downtown Records has a deal with Atlantic Records to market Downtown releases. First up is Eagles of Death Metal's Death By Sexy, which will be released through ADA Distribution today. Next month Downtown/Atlantic will put out two anticipated albums: St Elsewhere by Gnarls Barkley (Danger Mouse and Cee-Lo) and Bang Bang Rock & Roll by Art Brut. Downtown also has a deal with Vice Recordings to help sell its initial releases. (MarketWire)

• Quango, the worldly dance label, has inked a deal with Fontana Distribution. Fontana will get its current releases as well as 17 catalog titles from its early Island Records days (Bomb the Bass, City of Industry soundtrack). (Hits Rumor Mill)

• Universal Music Publishing has signed Chris Brown, who penned the hit "Run It" and so far no other big hits, to an exclusive, worldwide publishing deal.

• Eve is now with Swizz Beatz's Full Surface label, which is now part of Interscope. (Billboard.com)

• Joe Escalante: member of the Vandals, founder of Kung Fu Records and, now, radio talk show host. Escalante, a graduate of Loyola Marymouth Law School, hosts a weekly show on Indie 103.1 and gives legal advice to musicians. The station is in Los Angeles but because people are listening on the Internet, Escalante gets calls from across the country. Great article. (Washington Post)

• CD manufacturer Disc Makers says business is good, though it doesn't go after contracts from big labels any longer. Independent musicians are now its bread and butter. (AP)

Posted by Glenn at 8:48 AM | Link
|Indies||Music Industry||Universal Music Group||Warner Music Group|

The media went crazy when it found out that RCA had signed singer Sandi Thom after her webcasts were heard by a reported 100,000-plus around the world.

Were we taken for a publicity ride?

A thread at the Velvet Rope and a post at Chartreuse explains that Thom wasn't just discovered and signed after building a webcast fanbase.

Thom signed a publishing deal last year with Windswept/Pacific Music Publishing, who has big name clients such as Beyonce, Pete Townshend, Talib Kweli and Craig David. And those 70,000 webcast listeners Thom was said to reach from her basement? Scrutinization hasn't been kind to Thom. Spikes in traffic have been explained to coincide with press releases and articles about her rags-to-riches story. Thom is said to have the financial backing and has her PR done by Quite Great PR.

Same story, different spin.

Posted by Glenn at 10:30 AM | Link
|A&R||Internet||Music Industry|

• The Shoreline Ampitheatre will be in court today with the city of Mountain View. The city is accusing Shoreline of rackateering and theft of public funds. (San Jose Mercury News)

• An article on Optimal, a German company that has picked up where the majors have left off: Manufacturing vinyl records. The workshop produces 4.5 million LPs and singles a year. (Financial Times)

• Sony to introduce a Robbie Williams Walkman phone that will have his music, video clips and links to his website. (Reuters UK)

• Sony BMG's Strategic Marketing Group has a promo comp CD in the next Seventeen. The music is from all sorts of labels. Music from "the independent music scene" says the press release, which isn't completely true. Will young girls be into Iron & Wine, Citizen Cope and the Shout Out Louds? We'll see. (Businesswire)

• Gnarls Barkley's "Crazy" is still atop the UK singles chart. This is being seen as a case that shows that digital sales can drive physical sales. (Financial Times)

Posted by Glenn at 9:22 AM | Link
|EMI||Music Industry||Sony BMG|

In "Vanishing Act," an excellent article by the San Diego Union-Tribune's George Varga about albums versus songs and changes in music consumption, the best insights come from Thomas Dolby, famous for "She Blinded Me With Science" but less famous for Beatnik Inc, his company that has played a role in creating ringtone technologies.

In describing how ringtones and albums are linked, Dolby says, "It's like whistling a song – people are just quoting a melody from a record they like. “But people don't consider it the Black Eyed Peas, unless the ringtone is from the record."

And what about consumers' willingness to a higher price for a download than for the single song they think is overpriced at $0.99? (Coolfer has wondered about this for years.) Dolby thinks people are paying for the ringtone from their fashion budget, not the entertainment budget that accounts for music downloads.

"They pay an extra $10 to get the right logo on their sneakers, when they could get a cheap knockoff, because when you're a kid at the mall, what you're wearing is important. Similarly, when your phone goes off, you can't look like a dork. It's just like whistling the Black Eyed Peas' song – it's not the real thing."

Other than the occasional mention of the mythical $20 CD (sorry, people rarely pay $20 for CDs any more and it's time reporters get some accurate numbers) it's a very well done, comprehensive article that talks to musicians (Neil Young, Jenny Lewis) and labels to see how they approach music formats and what they see for the future.

Posted by Glenn at 1:20 PM | Link
|Music Industry|

• Napster expects its fourth quarter top and botton lines to exceed the company's prior guidance. What's that mean? The net loss is projected to be "in excess of $26 million." If that doesn't strike you as particularly good news, this might do the trick: year-to-year revenue growth is expected to be about 100%, and the company's subscriber base is over 600,000 worldwide. (PR Newswire)

• Album sales were down 3% in the first quarter of 2006. Universal Music Group had the biggest share at 30.7%, a number that includes Fontana's sliver of the market. (The Hollywood Reporter)

• Touch and Go Records is celebrating its 25th anniversary and is throwing a three-day celebration with bands such as Calexico, Pinback, Shellac and Black Heart Procession. (Touch and Go 25)

• Times two: The Capitol Records Tower is celebrated its 50th birthday yesterday, and there's even a blog filled with history on the building and the label. (Pop Culture Fanboy)

• Sprint is crowing over reaching the two million over-the-air download mark. (The first million milestone was reached a bit over a month ago.) Wonder how many of those were freebies... (Wireless Week)

• MTV Networks' Van Toffler calls the mobile phone "the holy grail of electronic devices" at the CTIA Wireless convention, the discussed his company's mobile programming. (Digital Music News)

• Has he been reading Coolfer's posts on the Cult of Bronfman? Analyst Michael Savner of Banc of America Securities dowgrades Warner Music Group's stock to "neutral" from "buy." (New Ratings)

Posted by Glenn at 9:00 AM | Link
|Digital Music||Music Industry||Napster||Warner Music Group|

Irv Gotti, the Murder Inc. hip hop executive who was cleared of money laundering charges in December, is planning a comeback. The NY Times' Jeff Leeds reveals that Gotti has lined up private financing and will enter into a partnership with Universal Music Group.

"After months of searching for an avenue back into the music business, Mr. Lorenzo is finalizing a deal to secure financing from Larry Goldfarb, the managing partner of the San Francisco-based hedge fund BayStar Capital, said these executives, who declined to be identified because the deals are still being negotiated. As part of the arrangement, which may be completed in the next two weeks, Mr. Goldfarb's newly formed LRG Records is expected to commit up to $30 million to operate the label in its first three to five years, these executives said."

Last year Goldfarb and Quincy Jones attempted to buy Vibe Magazine for $100 million. Goldfarb reportedly disappeared before starting negotiations and the deal fell through.

Posted by Glenn at 8:10 AM | Link
|Music Industry||Universal Music Group|

Music industry hatred will never go out of style. The latest to bash: Broken Social Scene and Radiohead.

After winning a Juno on Monday night, some members of the Toronto-based collective let loose on the Canadian Idols...who went home empty handed.

"I feel really sorry for those kids in Canadian Idol because they’re going absolutely nowhere," said BSS singer Kevin Drew. "It’s a trick … It’s a Canadian music industry downfall because in three years no one is going to remember them."

Not to be outdone, Radiohead singer Thom Yorke bashed the music industry in the new issue of NME, saying it's filled with "a bunch of fucking retards." It's always fun to see what musicians will say when they're between contracts. Coolfer wonders if Yorke is that down on the execs and worker bees at EMI who played an integral part in turning an unimpressive group of U2 clones into the biggest rock band on the planet. Or maybe he's talking about those labels who go cold on a band when it turns in a challenging album like OK Computer. Hopefully we can get a clarification after the band inks what is sure to be a huge multi-million-dollar deal with another fucking retard major label.

Posted by Glenn at 11:39 AM | Link
|Music Industry|

• Warner Music Group has named Todd Moscowitz president of its Independent Label Group, a recently formed to oversee Asylum Records, East West Records and Cordless Recordings. (MarketWire)

• Take That, the UK boy band that helped launch the career of Robbie Williams, has reportedly signed a deal and are working on a new album. Williams is not taking part in the album, nor was he in on the recent Take That one-off gig. Brits, enjoy. Yanks, go back to sleep. (MTV UK)

• Sony BMG has licensed its catalog to Motorola for its iRadio service. (Yahoo! Finance)

• Based on first day sales, Hits predicts Rascal Flatt's Me and My Gang will sell 800,000 in its first week. (Hits)

• BMI puts the 2006 U.S. ringtone market at $600 million. Also, are performance rights organizations getting a cut of the money? (Digital Music News)

• The Orchard has signed a deal with Amp'd Mobile to deliver its catalog of music to Amp'd Mobile's U.S. customers. (PR Newswire)

• Kansas City's Recycled Sounds will close its doors this Sunday. (Kansas City Star)

• RIP: Gene Pitney. (The Herald)

Posted by Glenn at 8:45 AM | Link
|Music Industry|

From an email from Lala.com, the overpublicized online used CD swap that will soon be open for business:

"Thanks to you, 'la la' is adding 30k CDs per day to create the largest music store on Earth."

That's quite the bold claim. Surely that isn't audited. The skepticism grows. But Coolfer is in the minority. Most of the dozens of articles on the company are enthusiastic about the business model. One should keep in mind that these are the same journalists who touted The Sun's DVD album as a breakthrough...right before next to nobody bought it.

Previously on Coolfer: