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Author Topic:   Music Business
EmilySachs
Director

Posts: 326
From:Studio City, CA
Registered: Apr 2000

posted March 11, 2010 10:25 AM     Click Here to See the Profile for EmilySachs   Click Here to Email EmilySachs     Edit/Delete Message   Reply w/Quote
EMI Group Ltd. said the chief executive of its recorded-music division, Elio Leoni-Sceti, resigned after less than two years on the job, the latest convulsion at the music company that is trying to both stave off default and re-invent its future.

EMI said that Charles Allen, the former chief executive of UK broadcaster ITV PLC who is EMI Music's non-executive chairman, will become executive chairman. With no current plan to replace Mr. Leoni-Sceti as chief executive, Mr. Allen will effectively take control of EMI Music's day-to-day business activities, hoping to leverage his previous experience in the media business.

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fred
A-List Writer

Posts: 8263
From:Redmond, WA
Registered: Apr 2000

posted March 12, 2010 11:27 AM     Click Here to See the Profile for fred   Click Here to Email fred     Edit/Delete Message   Reply w/Quote
Great story. So true.
http://gizmodo.com/5481545/record-labels-change-or-die

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted April 30, 2010 09:15 AM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
So iTunes now accounts for over 1/3 of the music industry sales? Stunning. Just wait until they take over publishing and video as well.

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DavidChang
Director

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From:Toluca Lake, California
Registered: Apr 2000

posted May 01, 2010 07:57 PM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
Yep.

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fred
A-List Writer

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From:Redmond, WA
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posted June 22, 2010 09:06 AM     Click Here to See the Profile for fred   Click Here to Email fred     Edit/Delete Message   Reply w/Quote
Why Digital Music Is a Terrible Business That Google Should Embrace

by Peter Kafka

Digital music is a lousy business. Almost everyone who tries it loses money, and even mighty Apple says its iTunes Store is basically a break-even proposition after 10 billion songs.

But if Google (GOOG) does it right, it makes perfect sense for the search giant to jump in anyway.

As CNET reported last week (The Wall Street Journal followed up yesterday), Google has been talking to the big music labels about launching its own music service and has floated a 2010 launch date. But music sources I’ve talked to say the company has no deals with labels yet and that it’s still unclear exactly what kind of service the company would like to launch.

My suggestion: Start simple. Copy the iTunes pay-per-song model.

That’s not a revolutionary idea, and it’s not a super-lucrative one either, because most people don’t like to buy more than a few songs: Apple (AAPL) sells about two billion songs a year, and if Google launches a competing service, I doubt it’s going to grow the market by much. And given that about two-thirds of every digital download dollar gets passed back to the music labels/artists/publishers/etc., that’s a fairly modest market to fight over.

But a download store is a proven concept. And that may be a better one than trying to get people to pay the $5 to $10 a month fee that services like Napster and Rhapsody have tried with very limited success and that new entrants like Rdio, MOG and Spotify (one day) want to try again. And it’s a much better idea than trying to figure out how to sell enough advertising to pay for free music services (RIP, Imeem; good luck, MySpace Music).

Meanwhile, a viable music store gives Google the following:

* A value-add for Android and a wedge against one-time ally Apple
* An owned-and-operated destination for all the music search traffic Google currently sends out to MySpace Music (via iLike) and Rhapsody, Pandora, etc.
* And just maybe, a reason for consumers to finally sign up for a Google Checkout account, which has had little traction despite years of effort. If Google can get Google Checkout up and running and create the billing relationship with its users that Apple and Amazon (AMZN) already enjoy, then all sorts of other businesses, from YouTube movie rentals to Android app sales, become much more interesting.

So what about the notion of a cloud-based service, wherein Google hangs on to your tunes and streams them to you on demand? Cool. But not crucial.

Apple has expressed an interest in something similar, but from what I can tell, it isn’t close to launching anything like it. So perhaps the Google guys see this as their chance to leapfrog Steve Jobs and company.

But successfully copying them would a fine start, too.

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fred
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From:Redmond, WA
Registered: Apr 2000

posted July 15, 2010 10:16 AM     Click Here to See the Profile for fred   Click Here to Email fred     Edit/Delete Message   Reply w/Quote
Download Me, Amadeus! Sony Set to Open a Classical iTunes

by Peter Kafka

What’s holding you back from buying classical music downloads? Is it because they’re too hard to find on iTunes? Or is it because the tracks don’t sound that good?

Sony Music thinks it has an answer: It plans to open its own online store dedicated to classical music, and perhaps jazz as well. Sources tell me that Sony (SNE) is prepping a specialty store that features high fidelity, “lossless” downloads, and is on track to bring in the other big labels–Universal Music Group, Warner Music Group (WMG) and EMI–for a launch this fall. No comment from Sony.

I don’t believe Sony has formally signed on the other labels yet, but the industry sources I’ve talked to seem confident that all of the majors will be on board, via non-exclusive deals, sooner than later.

That makes sense: This one doesn’t require any label to rethink a business model, and the stakes are fairly low. The labels don’t sell much classical or jazz online, so if they can get any kind of boost here, it’s all gravy.

Do a genre-specific store and higher-quality audio matter? For most digital music, the answer has been a resounding “no”: People seem quite content to listen to severely compressed files on lousy speakers and headphones.

And people–perhaps those very same people!–manage to easily find the newest Kesha single at Apple’s (AAPL) iTunes.

But I’m out of my depth here: My classical collection consists of a couple random Mozarts, some Beethoven and maybe a Handel. I’m not sure, because I never play them.

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HollywoodProducer
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Posts: 2815
From:La Canada
Registered: Jun 2000

posted August 05, 2010 04:26 PM     Click Here to See the Profile for HollywoodProducer   Click Here to Email HollywoodProducer     Edit/Delete Message   Reply w/Quote
Digital income is now only creeping up at Warner Music Group.

For its Q3 ending June 30, group digital revenue grew only two percent since last year, to $179 million, and is a tenth down on the preceding three months.

WMG blames “the timing of releases and the seasonal pattern of digital consumption”.

Indeed, the halo from Michael Buble’s well-selling album (oft cited by WMG in recent months) dimmed in a quarter that was light on big releases, and the quarter-on-quarter decline likely followed a quarter that included post-Christmas buying.

Q3’s net loss came in 48 percent worse from last year’s $37 million to $55 million, on 16 percent lower sales of $652 million, worse than analysts forecast.

—Recorded Music (ie. music sales) down 18 percent: Digital sales up 3.7 percent from last year to 32.6 percent of all sales. But it’s thanks mainly to continuing overseas uptake. At home in the U.S., digital sales grew to 41.3 percent of income. U.S. digital download sales were up five percent from last year’s quarter - the same rate as the previous two quarters.

—Music Publishing (ie. licensing) down 6.1 percent: Digital income fell from $16 million in last year’s quarter to $13 million, “primarily due to the timing of collections.”

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted April 14, 2011 09:10 AM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
Warner Music Group Corp. has decided to pursue a sale of the whole company, rather than entertain offers for parts of the business, and could reach an agreement within weeks, people familiar with the matter said.
[Warner] ASSOCIATED PRESS

Kid Rock, one of Warner Music's most-popular recording artists, performing in Detroit in January.

Warner Music's board reached the decision at a meeting Tuesday after several bidders submitted second-round offers last week in an auction of the company, these people said.

A spokesman for Warner Music declined to comment.

Some of the bids received were for all of Warner Music, which has a market capitalization of roughly $1.1 billion. Other offers were for one or the other of the two major parts of the company: its recorded-music business, which includes the Atlantic and Warner Bros. record labels, and the music-publishing division, known as Warner/Chappell.

The recording business's most-popular acts include Metallica, Kid Rock and Green Day.

Last week's bids for the whole company were around $3 billion, including assumption of debt, the people familiar with the matter said.

Warner Music shares rose 3.4% to $7.61 in 4 p.m. composite trading Wednesday on the New York Stock Exchange.

Among the bidders for all of the company are Los Angeles billionaire Ron Burkle's Yucaipa Cos.; Access Industries Inc., a holding company controlled by industrialist Len Blavatnik; and private-equity firm Platinum Equity, these people said.

Among those bidding for parts of Warner Music were concert giant Live Nation Entertainment Inc., Japanese electronics maker Sony Corp. and BMG Rights, a joint venture of buyout firm Kohlberg Kravis Roberts & Co. and German publisher Bertelsmann AG.

Warner's long-term debt, including bonds, totals just over $1.9 billion, or 5.6 times 2010 operating income before interest, depreciation and amortization.

Terms on some of the bonds require that about $150 million be repaid to bondholders in the event of a sale, according to people familiar with the matter. That could affect the board's calculation of an acceptable sale price.

Warner Music is controlled by a trio of private-equity firms—Thomas H. Lee Partners, Bain Capital Partners and Providence Equity Partners—and the company's chief executive, Edgar Bronfman Jr., who bought the company from Time Warner Inc. in 2004 for $2.6 billion.

After collecting a series of dividends and management fees, the ownership group long ago recouped more than its $1.25 billion equity investment. It borrowed the other $1.35 billion used to buy the music company from banks. That means that after making any required debt repayments, such as the $150 million due to bondholders, those investors' share of any proceeds from the sale would be profit.

Warner Music began telling bidders Wednesday of its decision to seek a sale of the entire operation, the people familiar with the matter said. But one of those people added that the company may reopen bidding for the separate halves of the business after they assess offers for the company as a whole.

The company's owners are trying to close a sale soon, before rival music company EMI Group Ltd. goes on the block. Citigroup Inc., which backed a disastrous leveraged buyout of EMI by British financier Guy Hands, seized the record company in February, following a loan default.

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DavidChang
Director

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From:Toluca Lake, California
Registered: Apr 2000

posted May 06, 2011 09:12 AM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
Access Industries to Acquire Warner Music Group for $3.3 Billion
Published: May 06, 2011 @ 8:17 am

Len Blavatnik's Access Industries won the auction for Warner Music Group in a $3.3 billion deal that includes WMG's entire music and music publishing business.

Blavatnik, who previously bid unsuccessfully for MGM [1], was already a Warner investor and served on its board. He is also a friend of Warner CEO Edgar Bronfman.

"I am excited to extend my longstanding involvement with Warner Music," said Blavatnik. "It is a great company with a strong heritage and home to many exceptional artists. I look forward to working closely with the many talented people within the company."

At the closing of the transaction, WMG will become a privately held company and its stock will no longer be traded on the New York Stock Exchange. The company will keep the Warner Music Group name and continue to operate out of its current facilities.

WMG's stockholders will receive $8.25 per share in cash at the closing of the transaction. The purchase price of $8.25 per share represents a 34.4 percent premium over the volume-weighted average share price of $6.14 over the previous six months.

"We believe this transaction is an exceptional value-maximizing opportunity that serves the best interests of stockholders as well as the best interests of music fans, our recording artists and songwriters, and the wonderful people of this company," Bronfman said.

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DavidChang
Director

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From:Toluca Lake, California
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posted September 11, 2011 02:36 PM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
Music is the biggest growth business I see right now. Seriously.

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted October 06, 2011 04:43 PM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
Steve Jobs basically saved the music industry.

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted November 28, 2011 02:35 PM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
This business is rising - film is falling.

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted February 16, 2012 09:12 AM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
The Grammys were entertaining but, let's face it, the music industry is dead.

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DavidChang
Director

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From:Toluca Lake, California
Registered: Apr 2000

posted March 21, 2012 05:29 PM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
'Hunger Games' Steps In to Save the Soundtrack
By ETHAN SMITH
As fans wait impatiently for "The Hunger Games" to open in movie theaters on Friday, an accompanying collection of music is already burning up the iTunes sales chart, thanks to strategies that haven't been seen much since the 1990s.

The soundtrack—"The Hunger Games (Songs from District 12 and Beyond)"—includes 16 songs by big-name acts from the worlds of alternative rock and country, including Taylor Swift, Arcade Fire, the Decemberists and Miranda Lambert.

The songs were written and recorded for the album, but only three of them actually play during the science-fiction film targeting teens—and even those come during the closing credits.

Officially, the collection is a "soundtrack companion album." A separate album of the movie's score comes out on Tuesday.
Collections of songs "inspired by" a given film were common during the 1990s, when soundtracks were a huge part of the music business.

Sales of soundtracks have declined 79% since reaching a peak of 61.5 million in 1998, according to Nielsen SoundScan. As a result, the collections are much less of a priority for movie studios and record labels alike.
Soundtracks from the four "Twilight" teen-vampire movies were successful but didn't come close to older movie soundtracks like "The Bodyguard" or "Dirty Dancing." The "Twilight" soundtracks, which feature a variety of popular rock bands, have sold a combined 5.1 million copies, according to SoundScan.

While "Twilight" and "Hunger Games" share an aesthetic and fan base, the soundtracks reflect different approaches to film music. Nearly all the songs on the "Twilight" collections played during the films, and numerous fan websites offer indexes of the scenes where the songs appear.
"Hunger Games," like "Twilight," can tap into an existing audience. The film is based on a series of young-adult novels that has 23.5 million copies in print.

"Just when you're ready to give up on the soundtrack business, something like 'The Hunger Games' comes along and you've got to move all the chips to the middle of the table and go all-in," says Monte Lipman, chief executive of Universal Republic records, the label distributing the album.
One cut from the album, Ms. Swift's "Safe and Sound," went on sale online in late December and has sold 735,000 copies, according to SoundScan.

The full "Hunger Games" album sold an estimated 150,000 copies on Tuesday, its first day on sale, putting it on track for a No. 1 debut when weekly rankings come out next Wednesday.

People in the entertainment business estimate that Universal Republic, part of Vivendi SA's VIV.FR -0.29%Universal Music Group, spent as much as $1 million to produce the album, including paying movie studio Lions Gate Entertainment Corp. LGF +2.62%for the rights.
Mr. Lipman says the label's outlay for the project was "competitive—on the high end of what you'd expect for a soundtrack." He adds: "The franchise was so incredibly valuable, it was a very easy deal to justify. "

Tracy McKnight, Lions Gate's head of music, called the estimated figure "speculation."

In the boom years, there was a feeding frenzy. "Before you could finish saying the title of the movie, a record label executive was asking, 'Can we do the soundtrack?'" recalls Robert Kraft, president of Twentieth Century Fox's music division. Fox is part of News Corp., NWSA +0.45%which also owns The Wall Street Journal.

The "Spider-Man" films spawned a trilogy of "Music From and Inspired By" albums. The first, in 2002, reached No. 4 on the Billboard 200 album chart. The third one, however, didn't fare so well, topping out at No. 33 when it was released in 2007.

That downward trajectory mirrors a broader reality. The dynamics of the industry have shifted in ways that hurt soundtrack sales even more than overall album sales, which have declined 58% since 2000, according to SoundScan.

On iTunes, fans can buy only the songs they want from a soundtrack. The same is true for all albums, of course. But soundtracks often include older songs that many fans already own. The popularity of "inspired by" soundtracks also waned as fans started to feel burned when they bought albums that included music that wasn't from the movie.
"The Hunger Games" is set in a dystopian future where 24 randomly selected young people must fight each other, gladiator-style, in an annual televised battle to the death. The heroine of the novel and film hails from the fictitious District 12, which resembles Appalachia.

Mr. Lipman says that the theme of soundtrack meetings was "What does music from the Appalachian mountains sound like 300 years from now?"

To that end, director Gary Ross enlisted music producer T Bone Burnett, whose "O Brother Where Art Thou?" soundtrack was a smash hit in 2000—an unlikely feat for a collection of old-time favorites like "Keep on the Sunny Side" and "In the Jailhouse Now."

A Lions Gate spokeswoman said Messrs. Burnett and Ross were unavailable for interviews.
The resulting album ranges from the Secret Sisters' traditional, acoustic-guitar backed ballad "Tomorrow Will Be Kinder" to rapper Kid Cudi's dissonant "The Ruler and the Killer."

"We wanted to make a record that was a good listening experience and that was true to the vision of the books and the films," says Lions Gate's Ms. McKnight.

"We have to stand behind the storytelling," says Mr. Lipman. "If it makes sense to save the songs for the closing credits, so be it."
Mr. Lipman believes "Hunger Games" fans will gravitate to the album. "The two and a half hours in the theater, it's not enough," he says. "They want something to help remember the experience, whether it's a T-shirt or a lunchbox or the soundtrack."
Write to Ethan Smith at ethan.smith@wsj.com

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DavidChang
Director

Posts: 882
From:Toluca Lake, California
Registered: Apr 2000

posted March 26, 2012 11:23 AM     Click Here to See the Profile for DavidChang   Click Here to Email DavidChang     Edit/Delete Message   Reply w/Quote
The fight between performers who work on music videos for artists such as Lady Gaga and Justin Timberlake and music labels escalated Saturday.

The national board of the American Federation of Television and Radio Artists voted to give their representatives authority to issue a do-not-work-order against music labels or producers if the parties are unable to reach an agreement in contract negotiations.

For more than a year, AFTRA has been trying to secure a union contract deal with music companies that would provide minimum pay and benefits to dancers and others who perform in music videos. The union argues that the need for such an industrywide contract has increased as the music video industry has grown, thanks to the popularity of performers such as Madonna and Beyonce and online video services such as Vevo. But the talks, which were last held in January, have so far been unsuccessful, leading to the current standoff.

Earlier this year, dozens of members of the Los Angeles dance community held a rally and a flash mob performance, set to the tune of Aretha Franklin's hit "Respect," outside the offices of Sony Music Entertainment in support of efforts by music video performers to secure a union contract.

The vote comes just days before members of AFTRA are set to vote on a merger agreement with the Screen Actors Guild.

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