Music Business/Management DB

Month: November

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Since the merger, Sirius XM radio has been struggling. They are a few months away from having to pay down over $1 billion in debt in 2009, while the prospects of new subscribers and income is dwindling. Wall Street is pessimistic and are cutting new subscriber forecasts by 50,000, which would be a 51% smaller increase from the same period last year. The fall of auto sales is also a big problem because half of current Sirius XM customers and 80% of new subscribers get their satellite radios when they bought new cars. The music industry has even a bigger stake in this dilemma because they not receive a percentage from the adjusted gross earnings from performance royalties for sound recordings. It is currently 6% and will raise a half a percentage until 2012 when it is 8%. This revenue for the industry will take a serious hit if satellite radio goes under. Sirius XM is hoping to offset this by placing the radios in more cars than before, as they are now in 90% of Mercedes-Benz vehicles. This has caused their stock price has hit record lows and prompted lawsuits from investors to remove the CEO. It was $3.94 last year and is currently at around 30 to 20 cents. If successful, satellite radio could be very useful for bringing in additional revenue for the music industry, but don't get your hopes up quite yet.

Month: November

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There will be a full block of rock this holiday season. AC/DC and Metallica's albums have sold with descent success. And retailers are expecting releases from Fall Out Boy, Guns n' Roses, Nickelback, and the Killers to be potential blockbusters. While U2, Dr. Dre, and Jay-Z's albums have been pushed back to next year, also due out are Kanye West, Beyonce, 50 Cent, Britney Spears, David Cook, and possibly Eminem. But most retailers do not believe that this will improve the state of the grim sales that have been going on the the record business. Sales have fallen 36% from 2000 to 2007. Industry decline along with the current economic situation make for a bleak outlook. Walmart is downsizing its shelf space for music. Circuit City is closing down 155 stores. There is still hope with the mild success of AC/DC and Metallica's albums, the people still want to rock.

Month: November

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Booklets with art and lyrics came with CDs to help bring fans closer to the artist, but when digital downloads came on the market there was no longer any of that. It was just the music until now. iPhone has a new application out that allows artists to have interactive booklets that fans with the phone can access. This is a great step up from the PDF that some labels used with downloads on iTunes. This new way to connect with fans is a great leap forward, but it is an expensive way that labels can go and because of this they have to be very selective with what artists they choose to use the new application with. There are only 7 million iPhones being used so labels have to figure out what demographic has the phones and match their artists to that. Fall Out Boy’s is one of the first to try and use an application like this, and many are sure to follow. Pink, Snow Patrol, and David Cook are three examples of other artists that have released applications on the iPhone that are interactive and similar to what Fall Out Boy’s have done to this point. This new application with its features could help attract more people to digital music.

Month: November

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The economy in the United States has taken a hit, and even though people may still be buying the expensive concert ticket they may not be buying anything else. Because disposable income is down for the average American, once the fan is in the venue they may not look to spend on merchandise or concessions, which has become one of the best ways to generate revenue on a tour especially for the promoter and venue itself. Amphitheaters are the most vulnerable in this situation to feeling the pain because ticket grosses are smaller and to make money they have to focus and depend on money brought in from the concession and merchandise. As of right now, things have not slowed down noticeably for the larger tours, but there are worries for the future. The biggest problem is that a lot of concession owners already have contracts out with buildings and it’s hard to cut back costs. As far as merchandise goes, it will be a shame to see its sales slow down when that area has become such an important part in industry growth.

Month: November

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For the past two quarters, Universal Music Publishing group has been on top of airplay for United States radio. Its share of 20.58% for this period that ended at the end of September was even higher than the quarter before by almost 2%. Right behind Universal was EMI Music Publishing with 18.29%, which was up from the prior quarter. The way that shares are calculated for radio airplay is based on the top 100 songs determined by Nielsen BDS. The Harry Fox Agency takes and researches the information that it is given to find the market share for those those songs. Universal had 34 songs in the top 100, while EMI had 43, Sony came in third with 31, and Warner/Chappell stayed in fourth with 28 songs. Publishers among the top ten were Kobalt Music Group, Bug Music/Windswept Holdings, and Walt Disney Music.

Month: november

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Even though the country is going through an economic crisis, the dollar’s value has managed to go up. While this may sound good in general, it is not bringing anything good to the touring industry. Artists and promoters are finding that the strength of the dollar is hurting their profits when touring internationally. The change in value is big given the short amount of time that it happened in, and deals that were made a while ago aren’t looking so good now. One example was with Celine Dion. When touring in Canada, the settlement was off by 20% because of the dollar change. There have also been issues with other artist’s earnings like Tom Petty. The strong value of the dollar is causing artists to reconsider touring in other countries and causing them to cancel shows or at least postpone their tours over seas until the second part of next year. Tour negotiation is going on hold for the most part to see how this currency issue plays out, because even though bands would like to tour in other countries its too hard to set out payment until the dollar is more stable.

Month: November

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Smaller bands are likely to feel the crunch of the credit crisis just as the larger arena acts. As consumers try to spare as much cash as possible, the touring acts that typically play the middle-range venues could see smaller crowds. Fans could be hesitant to see these buzz bands more than once every several years. Smaller, regional bands may be in the clear. These groups that sell $5-$15 tickets will likely have the same attendance at the small clubs that they play, especially since gas prices have dropped significantly. But the developing acts that sell $20-plus tickets will suffer. One issue is that a $20 ticket is not really $20, but more like $28 after service charges. Presales suffer because people want to save a few bucks by going to the venue to get walk-up tickets at the window. Ticket agents have reported a severe slow in ticket sales following Labor Day. One said a check bounced for a club, the first time he had ever seen such a thing. Cutting ticket prices is the only option for many acts. Unlike major touring bands, indie bands typically take a cut of the door, so the price directly relates to how much they make. The problem with cutting ticket prices is how it will affect the quality of the show. But at the same time, if the fan does not buy a ticket then none of the rest matters.

Month: november

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Recently, Irving Azoff who built Front Line and Barry Diller of Ticketmaster sat down together to discuss options for the two companies to join. After round the clock negotiating, the two companies came to an agreement, which turned Ticketmaster into Ticketmaster Entertainment and put Azoff as CEO of the new combined company. People in the industry are predicting that this is a move that will make waves, and with Azoff leading this company is in a position to exceedingly well. This move helps to put Ticketmaster in a better position to go up against its competitor Live Nation, and will allow the company to be involved in more aspects of business than just ticketing and distribution. Azoff see this merger as a way to help and serve both the artist and the fan, and with Front Line’s success and Ticketmasters data they have the potential to know and really understand who their artists fans are.

Month: October

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A new Beatles release is coming! Only this time it’s coming to a gaming console, rather than a record player. In late October, it was announced by MTV Networks and Harmonix, the developers of “Rock Band,” that they are working with Beatles’ Apple Corps Ltd on their own game. This would be an all-new interactive video game based on the music of the entire Beatles catalog. These details came out on October 30th, 2008 and the executives behind the project are still very stingy on providing many specifics in regards to the game. The project is still in early development. Rumors of the Beatles getting involved in the video gaming industry have been circulating for some time. More speculation occurred this past June when representatives of the band met with Activision, of “Guitar Hero,” and MTV. They are looking to broaden the licensing of the band’s catalog. Little is known about the structure of the deal. It has been implied that all involved with the project will essentially “own” a part of it. This appears to be anything but a typical licensing deal, but then again, it is the Beatles. The title has yet to be determined, but a release date in the fourth quarter of 2009 has been projected. It is not under the “Rock Band” name, but will be based around that type of game-play. Several departures from the core “Rock Band” style of play have been discussed. Chief Executive of Harmonix Music Systems, Alex Rigopulos, says this will be a “full-blown custom game from the ground up.” It will include “new creative exploration” and a “music-making game” based on the Beatles music. The game is designed to take players through a journey of the band’s career, music, and vision. MTV has gotten the go-ahead from practically every individual and company involved with the Beatles. Surviving members Paul McCartney and Ringo Starr have made input on the direction and vision for this game along with Yoko Ono Lennon and Olivia Harrison, widows of John Lennon and George Harrison. All have given their blessings towards the project. Giles Martin, son of original Beatles producer George Martin, will serve as the music producer for the game. The tracks used will be the original UK master recordings and will not be remixed or remastered. Sony/ATV Music Publishing, EMI Music, and Apple Corps Ltd all have given their approvals, as well. Choosing MTV/Harmonix over Activision could have been due in part to the “Rock Band” developers introducing the idea of a full-band interactive game, as well as MTV’s history of working with artists. This deal comes at a time where more bands are looking to the video game industry to reach fans in new ways. “Rock Band” recently secured the catalog of rockers AC/DC in a “Rock Band Track Pack.” Guitar Hero has raised their competition by creating games featuring Aerosmith, as well as their new release, “Guitar Hero World Tour,” which adds a microphone and drums. This puts Activision’s game in more direct competition with “Rock Band.” Licensing the Beatles music to video games raises questions about why their music remains to be available on digital music retailers such as iTunes, Amazon, and others. You would imagine that if the Beatles are looking to find new and creative ways to reach current and newer fans using this new technology, wouldn’t they want their catalog to be available for purchase online?

Month: november

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A political win by Barack Obama and Joe Biden may be a great help to those in the music industry when dealing with intellectual property and copyright. Even though the views of these two people vary in certain areas on the issues, they definitely could help. Joe Biden has been a strong voice in Congress, and while some of the issues that he has tried to push for have not made it all the way through his activism has caught attention. He has been on the committee that all bills regarding intellectual property must pass through, has stood behind the Perform act, and was the first member of congress to hold a full committee hearing which looked at issues of piracy. He has published articles on piracy and also tried to bring amendments to the table to help in fight against it. While Biden is for copyright protection, Obama believes in Net Neutrality laws, and if elected may have Lawrence Lessig as the CFO who holds beliefs that are on the other end as Biden. Over all for the music and entertainment industry as a whole, a win by this team could help more than it could hurt.