Put out garbage and no one wants to buy it. How hard is that to understand? RMX ----- EMI Cuts Profit Forecast as U.S. Music Sales Slump (Update8) By Aisha Phoenix Feb. 14 (Bloomberg) -- EMI Group Plc, the U.K. record company that signed the Beatles, cut its revenue and profit forecasts for the second time this year as music sales slump in the U.S. EMI shares had the biggest slide in two years after the company said full-year sales at its recorded music division will fall 15 percent and earnings will miss analysts' estimates. London-based EMI last month predicted a 10 percent sales drop. The company, which released albums by Robbie Williams and Norah Jones in the second half, today reported an ``unprecedented level of market decline'' and ``an exceptionally high level of product returns.'' EMI ousted its top two music executives on Jan. 12 after disappointing holiday sales. EMI has failed to produce best-selling U.S. albums and lost revenue to piracy. ``EMI has got an awful lot of work to do in terms of securing its future,'' said Henk Potts, an equity strategist at Barclays Wealth. ``EMI has specific problems related to its company. The artists on its books look as though they are underperforming.'' The shares fell 28.75 pence, or 12 percent, to 210.75 pence in London, giving the company a market value of 1.69 billion pounds ($3.3 billion). It was the biggest drop since Feb. 7, 2005, driving the stock to the lowest since Oct. 27, 2005. Shares of New York-based Warner Music Group Corp. fell $1.27, or 6.6 percent, to $18.12 at 4:01 p.m. in New York Stock Exchange composite trading. They've fallen 11 percent in the past year. `Deterioration' ``This revision to expectations is as a result of the continued and accelerating deterioration in market conditions in North America,'' EMI said today in a statement. Profit for the year ending March 31 ``will be significantly below current market expectations.'' The North American market for compact discs has contracted 20 percent this year, EMI said, citing Nielsen Soundscan figures. ``They have always had a problem in the U.S. in terms of generating artists' sales,'' said Alex Degroote, an analyst at Panmure Gordon. ``This Christmas period the release schedule hasn't worked for them at all.'' EMI, the world's third-biggest music company, said it will give a performance update on April 18 and report full-year results on May 23. Credit-Default Swaps Credit-default swap contracts based on EMI debt rose about 9,500 euros to 181,000 euros, according to prices compiled by Bloomberg. The price is the annual cost in a five-year contract based on 10 million euros of EMI bonds and loans. Credit-default swaps are used to speculate on a company's ability to repay debt. An increase indicates a deterioration in credit quality. EMI has about 990 million pounds of bonds outstanding, according to Bloomberg data. ``There's very high financial risk associated with this company,'' Panmure Gordon's Degroote said. ``I would be very surprised if the dividend isn't cut totally.'' EMI ousted Alain Levy, CEO of the recorded music division, and David Munns, the unit's vice chairman last month. Eric Nicoli, then chairman, was named chief executive officer. EMI also announced a restructuring in January and said the one-time expense of the cost-cutting program will be as much as 150 million pounds. Merger Attempts Slumping sales have led Nicoli, 56, to several attempts to combine with Warner Music Group, the world's fourth-largest music company, as a way to reduce costs. In July, EMI and Warner abandoned $4.6 billion bids for each other after a European Union ruling damped prospects for regulatory approval. In December, EMI ended talks to be acquired by buyout firm Permira Advisers LLP, after failing to agree on a price. The music company has been counting on releases by Norah Jones, Robbie Williams, Keith Urban and the Beatles to boost sales in the second half. EMI had none of the 10 best-selling albums in the U.S. last year, according to Nielsen SoundScan. Vivendi SA's Universal Music Group led all music companies in U.S. album market share last year at 32 percent. It is the world's biggest music company. Sony BMG Music Entertainment was second at 27 percent. Warner Music was the only company with an increase, up 1 point to 18 percent. EMI was fourth in the U.S. with 10.2 percent. Sony BMG is a joint venture of Sony Corp. and Bertelsmann AG. EMI's recorded music unit's artists didn't win any of the top 12 Grammy awards that were broadcast this week. Of the categories shown on television, Sony BMG won the most awards with five. Universal Music Group won four and Warner took one for the Red Hot Chili Peppers' ``Stadium Arcadium.'' EMI has two divisions: EMI Music, the recorded music unit, and EMI Music Publishing, which manages song copyrights. EMI reiterated today that the publishing unit ``continues to perform in line with expectations.'' Loss EMI reported a first-half loss of 30.6 million pounds in November, saying sales fell 6.1 percent because this year's release schedule is weighted to the second half more than usual. As part of its restructuring EMI combined its U.S. Capitol and Virgin labels last month to create Capitol Music Group. Jason Flom, head of Virgin Records in the U.S., was named to run the new group. On Jan. 31 the company named Lee Trink president of Capitol Music and Jeff Kempler chief operating officer, reporting to Flom. Both were executive vice presidents at Virgin. EMI traces its history to the earliest days of recorded music, and became known as Electric and Musical Industries in 1931. During the 1950s EMI released Elvis Presley's first records outside the U.S. and bought Capitol Records, gaining Frank Sinatra, Nat ``King'' Cole and Peggy Lee. To contact the reporter on this story: Aisha Phoenix in London at [email protected] . Last Updated: February 14, 2007 16:13 EST Warner Music profit drops on slow sales Published: February 8, 2007 - 9:05 am (AP) Music recording company Warner Music Group Corp. said Thursday its quarterly profit fell 74% due to fewer albums released during the period and soft domestic and European sales. Manhattan-based Warner earned $18 million, or 12 cents per share, in its fiscal first quarter ended Dec. 31, down from $69 million, or 46 cents per share, in the year-earlier period. Revenue fell 11% to $928 million in the latest quarter. Analysts polled by Thomson Financial expected a profit of 24 cents per share on revenue of $944.8 million. The company said the market was challenging, especially for its recorded music business segment, and that it faced difficult year-over-year comparisons. Digital revenue grew 45% to $100 in the first quarter but slid 4% from $104 million in the fourth quarter of 2006. Revenue for the company's recorded music business decreased 13% to $800 million on softer domestic and European sales. The company said Asia Pacific sales were helped by strength in Japanese local repertoire. Michael Fleisher, Warner Music Group's chief financial officer, said 2007 results will be weighted to the back end of the year.
What are your experiences? What is different from what you've read here? I'm not being confrontational (it comes off that way sometimes on the internet), but an genuinely interested in your side of things. I know what I've written about is true from personal experience, but I don't know everyone and every situation either I think it would be nice to get a take on things from someone like yourself.
I only have a minute so I'll probably have to write a more in depth reply tomorrow: What you're seeing is not so much a decline in the music industry but a shift in the way music is sold and distributed. Long gone are the days where fat labels with huge expense tabs and blatant disregard for spending can make money. What's happening now is small labels with top talent but financially savvy spending habits are making up plenty of the volume. Their artists sell less albums overall, due primarily to fewer and smaller marketing campaigns, but make more money. They recoup at lower levels and have great success with the albums they put out. So for someone to say that labels won't make an album and will only sign someone with an album already, that's crap. Do you really think that unsigned artists have enough money to make a quality album? The thing is that the labels won't spend a ton to make an album (something the top independents really kick butt with) and, more importantly, they can no longer do the over the top publicity crap they used to do before. But even more basic than that, it seems like what's lost here is that no one seems to understand how a record deal is structured in regards to what monies are paid out, to whom, and how it's all paid out. If more people knew that, a lot of the BS in this thread would never have been posted.
True. I have worked DIRECTLY with Universal in the past, and I *still* don't know how everything gets paid out. What I do know -- in regards to video in particular -- is that the labels opened Pandora's Box when they didn't make MTV pay licensing for music videos back when MTV first got started. This is causing a MAJOR problem because the labels now want to try and collect on a revenue stream that was never part of their model by applying "old" economics to a "new" distribution vehicle. I only know the video end of things (on the Internet distribution level), so my questions pertain to music videos -- how are the licensing that the labels are just beginning to receive being disbursed to the artists? Is there anything in their contracts regarding payments for music videos? Or is it just lining the pockets of execs, as the $50M sweetheart deal the labels made with YouTube did? None of that money went towards the artists though it was there so that the labels wouldn't sue for licensing... so much for suing websites to "protect the artists". Now that the labels DON'T see music videos as promotion but see them solely as a revenue stream - do the artists see any of that money, besides the ASCAP, BMI, and SESAC stuff? Is the artist getting even a FRACTION of the $5CPM UMG forces website owners to pay to show UMG music videos?
I had a couple more minutes and I couldn't post my edited changes so I'll post this as a new post. Sucks that it wouldn't let me post the edit. What you're seeing is not so much a decline in the music industry but a shift in the way music is sold and distributed. Long gone are the days where fat labels with huge expense tabs and blatant disregard for spending can make money. What's happening now is small labels with top talent but financially savvy spending habits are making up plenty of the volume. Their artists sell less albums overall, due primarily to fewer and smaller marketing campaigns, but make more money. They recoup at lower sales levels and have great success with the albums they put out. Don't cry for the record industry. To be successful in this business, you need to be able to adapt - adapt to technology, adapt to trends, adapt to the culture. The good labels are doing that. Since I took over these two labels, we're doing a lot more to diversify our cash flow base using the assets that we have - namely the music that we own (both master recordings and publishing). That's how you need to do it. I am in the middle of doing a deal whereby a major non-traditional retailer (aka your favourite Seattle based coffee shop) is signing on to take an entire run of one of our albums in exchange for a period of exclusivity and some promotional consideration for a concert series. Similarly, much of our artists' music appears on popular prime time TV shows (Fox, ABC, NBC all in the last 12 months) and movies. It's business, plain and simple. You need to adapt to survive. And our artists' love it. They're getting their music out there, they're getting checks, but more importantly, they're able to do this in a way without getting into a ton of debt or giving up creative control of their music. So for someone to say that labels won't make an album and will only sign someone with an album already, that's crap. Do you really think that unsigned artists have enough money to make a quality album? Not our artists, unless they've been dropped from a major (we have two that came from Columbia and Arista, respectively, with finished albums in hand). The thing is that the labels won't spend a ton to make an album (something the top independents really kick butt with) and, more importantly, they can no longer do the over the top publicity crap they used to do before. It's about being smart (for a change). And I'll be honest, much of what you hear on the radio is pure ****. Do you know how much "radio promotion" costs? It's all about who has the money to get on the radio and not necessarily who sounds the best. But, in theory, that sells records. Honestly, it's no different than any other business where it's survival of the fittest.But even more basic than that, it seems like what's lost here is that no one seems to understand how a record deal is structured in regards to what monies are paid out, to whom, and how it's all paid out. If more people knew that, a lot of the BS in this thread would never have been posted.
Mike, All I can say is that any mechanical royalites due to be paid to the artist are paid directly from the label who collect through ASCAP. However, I have never seen a single check from MTV for any of our videos and, furthermore, the amount that it costs us to get that stuff on MTV is very high. I cannot tell you that, for my labels, video is any more than an expense for the sole purpose of selling more albums. It is not a revenue driver, at least for us. I'll tell you that if that changes, I'll give the artists all of the royalties that we get. Mechanical Royalties are supposed to go the artists directly from the label and I've never seen or written a contract whereby it goes any other way. Again, music is a wierd business where people structure deals in all kinds of ways. However, this is probably moot as I think that it will be a cold day in Brazil when I see a check from MTV. Most of our videos go to the internet anyway, along with MTV (or MTV2 or MTV U or Fuse) - either on our MySpace page, artists' MySpace Page, our website, You Tube, etc. They get a lot more plays there and they ever do on MTV. Last year, one of bands had their video as MySpace's home page as featured music video for a week. I can tell you that it was seen a ton more then that it was on the TV. While some of our artists make money from the album sales, they really make money from touring. The breakdown is crazy. Lots of these guys view the albums and the videos as ways to promote the tours and, unless the label is also the manager, that money never comes through the label in the slightest. Which, to be honest, is fine as long as the label is being financially savvy with the spending on the album and not going overboard.
Sure, that's my part of my point - one of the biggest sticking points with copyright infringement on the Internet is on the video end of things. Because of the ease of distribution and the fact that everything on the Internet is pretty much "on demand" as opposed to "programmed", there are bound to be MILLIONS more plays on the Internet. MTV doesn't pay licensing for videos (not sure about the ASCAP, etc royalties, but there's no specific "video license"), but now that video is rampant on the Internet, the labels want a piece. However, they want to charge video websites an extremely high price PER PLAY, which doesn't work with Internet distribution because there could be millions of plays per day, as opposed to the 10 or 20 plays the video might get in a day on MTV. As a reference point, a site I co-owned and developed did 30 million+ music video streams per day at its peak. My issue isn't that they want to collect licensing; my issue is two-fold. First, instead of embracing the technology and trying to profit from the way their listeners WANT to listen to music, they alienate not only the users, but also the distribution channels. The second issue is that - from what I understand about music videos, and what you've confirmed above - the artists are seeing NONE of the revenue. This isn't small potatoes. The labels are making MILLIONS of dollars under the "what-about-the-artists" argument, then never paying the artists at all. Part of the problem is that the labels don't understand the technology. I'm not just throwing out a cliche, they really DON'T understand how this series of tubes that we call the Internet works. Someday, it'll all work itself out, but not anytime in the foreseeable future.
Right, but this comes with a decline of sorts because of the lack of record sales. In the 90's it was good to sell 7+ million copies of an album, sometimes up to 15 million. Today if you sell 3 million you make the top of the years charts. Right, this was part of my point though I didn't state it directly. The majors (I'm only speaking about majors on this thread, smaller indies and such I don't know a lot about) are not spending a lot of money on artists anymore because of the lack of revenue from record sales. This includes not only marketing and radio play, but creation of the albums in the first place. Now there are a few new artists who get good deals, but for the most part the majors are trying to get the max bang for the buck. This is interesting. I find the way smaller labels and indies survive fascinating. I agree, and us Engineers/Producers are having to adapt also. I've become a hell of a Pro-Tools mixer, not because I like it better than mixing on consoles, but because I had to in order to survive. Sounds like you really know what your doing, and I congratulate you on your success. Not really, like I said I was referring to the majors, and it's true that some of them won't sign an artist unless they have a good album finished. See, this cuts their financial involvement down a lot. Sometimes they'll take a decently recorded album and have it remixed by a name guy for marketing purposes, but the days of labels taking on new artists, giving them 1/2 million dollar advances, and paying out the same to have their first album recorded are over for the most part. Yes, I do. I've seen it happen many times. You know who Crossfade is right? They record all their own stuff. Also Alterbridge recorded their album in one of the guy's house. They then get a name guy to mix it (the Alge's or Andy Wallace, maybe Bob Clearmountain, etc) and put it out on the radio. I know plenty of artists who can afford to make their own albums. It doesn't cost a quarter million to make a great sounding record anymore. I know guys who are getting budgets from the majors for $40,000-$80,000 for the entire album, produced, recorded mixed and mastered. Just wanted to clear up my position on this. I probably should have stated things differently. I appreciate your time and the insight from your end has been very enlightning. I look forward to any further discussions you might have on the current state of things. It's undeniably changing drastically.
$80k should buy a top album these days. I guess it depends on the advance, which is what I consider it costs to make an album, since it's irrelevant to me the difference in what the band uses to live on while recording and what a producer like Mudrock or Chris Stamey charges the band to make their album. If the advance is $65k then that's what it costs to make the album in my world, on my spreadsheets, and on my bank account. I would say that $55k is pretty good these days - average maybe. One of the artists that I mentioned that came from Columbia brought an album that cost $250k and a video that was $200k. I can't really see where all that money is. Anyway, my point with that is that there are some great talent out there that can't scrape together the $20k for a decent record. There is a band out of Brooklyn that I love that's unsigned and they put out two good albums (actually one great one) and it turns out that one of the members owns a studio. I do think that it's the exception and not the rule, though. Mike, I hear you when you say that the labels don't understand the technology. However, I think that you'll find smaller labels are more on the leading edge of using new media and majors are way behind. Personally, I have all of my guys combing the hedges for new stuff. I have a high school intern and part of his job is to report on everything that his peers are doing with music (finding, listening, sharing, all the websites, processes, etc.). It's a changing world and these guys need to keep up.
This is very true. If I had the $$ to back these artists I'd pay for their albums myself, but I don't
Absolutely. I was mostly talking about the majors. The indie labels were great - they WANTED the promotion and would send us whatever we needed to get the videos out there. (This was before they could just upload videos to YouTube by themselves...) They'll get it right someday.
But the other part of it - the part that no one talks about - is that having great talent and making tremendous music is only about 5% of what it takes to be successful in the music business.
Here's more shenanigans from the music industry. This is going on where I live. It's hard to feel sorry for an industry that behaves this way. RMX -------- Suit has pub singing the blues Ellenton bar is accused of not paying copyright royalties on music performed on karaoke night By ANTHONY CORMIER [email protected] ELLENTON -- One evening in September, a private investigator brought a pen and a pad to a bar in Ellenton. It was karaoke night at Woody's River Roo, but the PI wasn't there just to hear drunken interpretations of "Margaritaville" or other karaoke classics. Instead, he was there to listen for the playing of unlicensed music -- and, according to a federal lawsuit filed last week, he found plenty of it. A music rights organization, which represents thousands of songwriters and collects billions of dollars in fees from bars and nightclubs across the country, is suing the Manatee County pub for copyright infringement. The suit claims the bar owners didn't pay for the right to play a handful of songs, some of which were sung by karaoke crooners. The unlicensed song titles were recorded by the investigator, who turned them over to the publisher. The case could put Woody's River Roo on the hook for $150,000 in fines and underscores the complex system of song licensing that has led to a simmering feud between the music industry and some small businesses. Lawsuits such as the one filed against Woody's River Roo are becoming more common, observers say, as are the complaints of nightclub and bar owners who say large music groups charge exorbitant rates for song licenses. While the language of music licenses is obscure, the debate centers on two questions that seem simple: How much is a song worth, and who should pay for its use? "It's a complicated issue," said Harvey Reid, an independent guitarist who has written extensively on the licensing lawsuits. "And as music gets more and more prevalent -- it's everywhere -- it's only going to get worse." On one side are songwriters who pen megahits but earn pennies on the dollar compared to the famous artists who perform the songs. To keep some piece of the pie, the composer usually copyrights the lyrics and then joins a music rights group. These organizations act like a union, collecting dues from the songwriters and keeping tabs on where and when the music is played. Industry analysts say a writer may earn only $20,000 on a CD that grosses $15 million. The country's largest music rights groups -- the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI) -- hold the rights to more than 8 million titles. After securing the rights, ASCAP and BMI charge businesses to play the music. The licensee list includes nightclubs, roller rinks, bars, radio stations and movie producers. The fees are paid on a sliding scale; the larger the venue, the bigger the fee. All copyrighted songs played in public -- from the opening credits of a movie, to elevator music, to that bad cover band at the corner bar -- require that the venue owners pay a fee. A small bar such as Woody's, for example, would pay somewhere between $175 and $500 a year to ASCAP, which would allow the owners access to millions of song titles. ASCAP officials say they are looking out for the little guy, and that songs are private property. According to Vincent Candilora, ASCAP's senior vice president of licensing, "the songwriter is the small man in the music industry" and deserves some measure of protection. "If I ask you who wrote 'The Gambler,' most people would think of Kenny Rogers," Candilora said. "But it was actually Don Schlitz. Now, whose T-shirt are you going to buy: Don Schlitz or Kenny Rogers? Whose concert are you going to? Whose CDs are you going to buy?" "But when it comes down to it, Don Schlitz wrote that song -- not Kenny Rogers," so Rogers makes the big money off it, Candilora said. A critic, however, says ASCAP and BMI are "like the mob" because they exact a heavy toll on small business owners who don't pay up. In the past, the groups have gone after children's recitals, summer camps, even the Girl Scouts -- once claiming that a California troop didn't have a license for sing-a-long songs. ASCAP uses newspaper clippings to keep an eye out for new bars that don't have licenses and send undercover private investigators, like they did with Woody's River Roo, to listen for unlicensed songs that are being played. "They're exactly like the mob," said Reid, the independent musician. "They come in, they shake you down for fees and there's nothing you can do. And it's no use to fight them -- they're going to win." ASCAP is leading the fight against Woody's River Roo, and says it sent the bar cease-and-desist letters beginning in November 2003. But manager Pat O'Leary said he didn't know about the letters or the licensing fracas, and that "the whole thing seems kinda silly." "I mean, for five songs they're going to sue us?" asked O'Leary. The investigator, according to the lawsuit, went to the club late last year and wrote down every song that was under ASCAP's umbrella -- some from a DJ, some from a local musician and some from the karaoke machine. O'Leary was unsure whether the bar had paid licensing fees for the music, and owner Bob Woodring did not return phone calls. But ASCAP's attorney, Fred Page, said managers should have known that ASCAP was on the prowl. "They had been contacting the bar for some time," said Page. "There is usually quite a bit of contact with the bar before it reaches the lawsuit stage." While ASCAP contends that many venues ignore licensing fees, some locals say they are trying to do the right thing but are being charged again and again for songs they don't play. Take, for example, Club Escape, a joint on Clark Road in Sarasota that is popular with Latinos. Owner George Abraham says he paid $5,000 to ASCAP, BMI and a smaller group, but still takes nearly 50 phone calls each week from lawyers and other representatives. Each time the club tries to do something new -- a jazz night, for example -- one of the groups says Club Escape needs a new license. But on jazz night, Abraham says he brought in musicians that played original tunes. That didn't convince the lawyers, who immediately sent a letter and said that even one note of copyrighted material needed to be licensed. "It's crazy," Abraham said. "I've got music they've never heard of, and they tell me: 'Oh, we have a license for that.' Yeah, right. These are independent musicians; they're not even signed to labels. "How can they tell me I owe them money for songs that haven't even come out yet?"
Seems this isn't the first time this has happened: ----- "Pop Music's Heyday Said To Be Waning Amid Falling Sales" written by Robert Palmer from the New York Times on August 14, 1982 Pop music's worst business summer in recent years is drawing to a close, and some insiders in the music industry are saying that an era appears to be ending. Summer concert revenues are down drastically from previous years, pop record sales are a fraction of what they were in the 1970's, and music industry executives are increasingly concerned that young people are taping albums rather than buying them and spending their money on video games rather than on records and concert tickets. CBS Records announced yesterday that it was discharging 300 employees - 15 percent of its professional staff -including several vice presidents, and reducing its regional branch offices from 20 to 10. Robert Altschuler, the company's vice president of press and public affairs, attributed the dismissals and branch reorganization to "current and projected market conditions." 'Real Bottoming-Out' Another insider in the record business said that there had been "an almost complete lack of business, a real bottoming-out." The CBS action is the latest and most severe cutback in a wave that has swept the industry and is expected to continue at other companies. Ironically, many of rock's top artists and most rock critics feel that artistically the music is stronger and fresher than it has been in a long time. A number of established artists have just made their best albums in years, and the big-city rock-club circuit has been launching a succession of new bands. But these bands have been spectacularly unsuccessful in attracting audiences. Ever since the beginning of the 1970's, when pop music surpassed motion pictures as America's biggest-grossing entertainment medium, summer has meant big outdoor concerts, big cross-country tours by rock's most popular bands and a full schedule at such rock concert halls as the Asbury Park (N.J.) Convention Hall and the Palladium in New York. The biggest groups used to time their album releases to the beginning of summer vacation, hoping to come up with one of those magical summer hits that blasts from every radio and sells like hotcakes from June through September. As soon as those summer albums hit the stores, the groups would hit the road, where the immense seating capacity of outdoor stadiums and summer rock festivals virtually guaranteed that they would "clean up." But those days are over. "Of 14 shows at the Asbury Park Convention Hall this summer, only four made money," John Scher, New Jersey's major rock-concert promoter, said. "Five years ago we would have called it a bad summer if we'd had three or four unprofitable shows. We also used to put on two or three big outdoor shows every year in Giants Stadium; now we're doing one or two of those shows every one or two years. "The only groups that can fill a Giants Stadium now are a small handful of very, very big acts - the Rolling Stones, the Who and Bruce Springsteen." Dropoff in Sales "It's the 1980's, and the cream is definitely off the top of the business," said Irving Azoff, manager of some of the biggest rock stars. Back in the 70's, five of Mr. Azoff's clients, the Eagles, sold 15 million copies of their "Hotel California" album and broke attendance records across the country. He also manages members of Fleetwood Mac, whose "Rumours" album almost matched the Eagles' sales. Now the Eagles have disbanded, and the band's members are pursuing solo careers, with varying degrees of success. Fleetwood Mac has another No. 1 album, "Mirage," but sales are in such a slump that it is unlikely to achieve more than a fraction of the sales of "Rumours." While the group is going on the road this month, it will not be raking in the money at stadium concerts and outdoor festivals. "Fleetwood Mac only had offers to do two outdoor shows in the whole country," according to Mr. Azoff. "One was in a town that doesn't have a large indoor arena; the other was the Us Festival, which is scheduled to take place Labor Day weekend in San Bernardino County in California and is going to be the summer's only really big festival. There's a very good reason why groups like Fleetwood Mac aren't doing more stadium shows - the kids aren't buying tickets." Charts Are Not a Guarantee The kids are not buying records, either. As recently as the mid-70's, the record industry was still enjoying the phenomenal spiraling growth that had carried it through the previous 15 years, when record sales doubled six times. Income from sales last year came to $3.6 billion, but the handwriting was on the wall; the industry shipped 55 million fewer albums and singles than in 1980. Performance on the best-seller charts no longer means huge sales. CBS undertook its cutback in spite of the fact that 24 of its albums are in the top 100. "Most of the executive-level record-company employees I know are being optimistic in public," a CBS employee said recently, "talking about weathering a temporary downswing and learning to live with more modest expectations. But in private they're talking Doomsday." The popular-music industry has singled out several villains to blame for its present ills. The record industry's No. 1 villain is home-taping - the youngster with the cassette recorder who tapes a friend's album or tapes the album's best songs off the radio rather than buy the album. Lobbying for Royalties Stan Gortikov, president of the Recording Industry Association of America, charges that "last year our industry sold the equivalent of about 475 million albums." "But at the same time," he added, "about 455 million albums were home-taped." His figures, he said, were based on an elaborate survey financed and conducted by Warner Bros. Records in 1980. Record-industry leaders are lobbying for national legislation that would require manufacturers and importers of blank cassettes and cassette recorders to pay royalties to the record companies and artists who are ostensibly losing income because of taping. If the legislation were enacted, the cassette manufacturers and importers could probably be expected to pass their increased costs on to consumers. Another likely villain is the sweeping popularity of video games. "I go down to the Asbury Park boardwalk now and see all these kids putting $5 or $10 worth of quarters into a video game," Mr. Scher said. "There are hundreds and hundreds of those games along the boardwalk now, and there's no doubt in my mind that an awful lot of kids who would have spent that money on records or concert tickets a couple of years ago are now spending it in the game arcades. "Add to that the unprecedented number of popular youth-oriented movies that are showing this summer, and it adds up to a lot of competition for pop music." Lack of Promotion No clear-cut connection can be proved, but most youngsters have limited allowances, and as revenues from video games continue to soar, revenues from record and concert sales plummet. Then there is radio. CBS, Warner's and the other major record companies have not been falling over one another to record and promote fresh young performers who might capture the imagination of record buyers and help reverse the slump. The new groups that do manage to win recording contracts get very little air play. Album oriented rock stations, called AOR, have become entrenched and conservative, resistant to new sounds and new faces. "Half the groups you hear on AOR these days are dead," said Rick Carroll, program director at Los Angeles's KROQ, one of the few successful FM rock stations that consistently play new bands and new music. "Radio stinks," Mr. Azoff said. "The stations are making a lot of money, but they just aren't taking chances." The song that gets the most air play and the most requests at FM rock stations nowadays is "Stairway to Heaven," a track from a 1971 album by the defunct Led Zeppelin. Rampant Standardization In recent months, some of the leading AOR stations - WMET-FM in Chicago, WCOZ-FM in Boston and WLLZ-FM in Detroit - have seen their audience-popularity ratings tumble by as much as two-thirds. These and most other AOR stations maintain strict and very limited lists of what records disk jockeys are allowed to play, and in many cases the contents of the playlists are determined by successful programming consultants. Even Lee Abrams, the most successful consultant - his Superstars format is heard on 80 AOR stations -concedes that the standardization has gotten out of hand. "Consultants have taken away the spontaneity and magic of AOR," he added. The ratings success in Los Angeles of KROQ, which is rapidly closing in on the city's entrenched AOR heavyweights, KMET-FM and KLOS-FM, has given supporters of new rock some cause for optimism. Most new-wavers are convinced that their music would inject enough freshness and sparkle into radio to reverse the listener desertions that are plaguing more and more of the conservative, rigidly formatted AOR giants. New-Wave Arena Fare The way things are going in the rock-concert business suggests that this could be true. The promoters of an Aug. 21 concert at the John F. Kennedy Stadium in Philadelphia, one of the summer's handful of big outdoor shows, beefed up a bill topped by the venerable British progressive band Genesis with two new-wave favorites, Elvis Costello and Blondie, rather than with standard arena-rock fare. The country's leading rock promoter, Bill Graham, is leaning heavily toward new-wave groups in booking for the Us Festival, which is scheduled to include an elaborate computer and video fair and is the only really ambitious outdoor festival of the season. Groups that have agreed to perform include the Police, the Talking Heads, the English Beat and the B-52's as well as the more established and conservative Fleetwood Mac, Santana and Jackson Browne. Many insiders feel that the record industry's ills boil down to a simple lack of consumer interest and that most of the music that CBS, Warner's and the other big labels have been recording and releasing in recent years has not been engaging. Problem of Boredom Rock critics tend to agree; albums made by young groups with strong local followings and released by small independent labels have placed at or near the top of most critics' annual 10-best-albums lists. Some of the small labels that have been releasing consistently vital music are Sugarhill of Englewood, N.J., which has popularized rap records, a black, inner-city phenomenon, and the punk-oriented Slash label, which built the popular Los Angeles club bands X and the Blasters into nationally known acts. The critics feel that many of the rock fans who seem bored with the latest superstar product would take to the music of the younger performers if the fans were exposed to it. But AOR stations do not play the new material, and only record stores that sell imports and independent releases to a relatively small and discriminating audience stock it. Some established artists whose records do get played on radio and sold in the major chain stores feel threatened by the new wave of youngsters. But a surprising number of stars agree with the newwavers and critics that AOR radio is boring and that the major record companies are not signing enough younger performers. In recent conversations, Rod Stewart, Mick Jagger of the Rolling Stones and Peter Wolf of the J. Geils Band criticized radio and the major labels for playing it safe and praised a number of younger bands and independent record companies for taking chances. 'Hard to Keep Up With Them' "Anybody who thinks this is a lousy period for music just isn't listening," Mr. Wolf said. "Every city has good bands playing original songs and clubs where they can play, which is something you didn't see back in the early and middle 1970's. There are so many new bands coming up with fresh ideas and playing with the kind of fire that rock-and-roll is supposed to have that it's hard to keep up with them. "We all listen to all the new music we can get our hands on, and we pay particularly close attention to college radio stations, which are the only stations consistently playing the new, adventurous stuff. Fortunately, we live in Boston, where there's great college radio. People out there in Middle America don't get a chance to hear much new stuff, if any. No wonder they're not listening to the radio or going to as many concerts or buying as many records as they used to." If so many insiders agree on the causes and dimensions of the crisis, why is not more being done to combat it? "Our business just isn't reacting," Mr. Azoff said. "Actually, the big companies have reacted by cutting back, trimming their staffs and their budgets. I think there's going to be more of that. "And, of course, that means it will take even longer for the industry to get healthy again, because what's going to be cut first? Who's going to suffer? "The new acts, the future of the industry."
I can't sing the blues for the music industry. Like South Park shows it is because of illegal downloads that XYZ artist has to get a G3 instead of a G4 with multiple DVD players.... When CD'***** the scene they were around $16-18 per CD. That was projected to come down to around $10. The only thing that is around $10 is Vanilla Ice - the golden years. If they were not so greedy, there would be more people willing to buy the music. I buy the CD used and just burn that to my Itunes. I can't stand the way Itunes / apple seem t o work so hard at making their system not work with intel products so they can sway you to the fruity side. Very little consideration of the consumer in this whole industry. Staind / Nickelback are the mainstay of rock today. UGH! No wonder nobody is buying this music. I'll stick with my Wolfmother and Zappa, thanks. BT
Come on....99% of the music people hear is freaking rap. What, you don't expect people to "check out" when all we hear are a bunch of uneducated idiots talking about wheels and hos all day long? It's just old. Ten years ago you could switch on a radio station and hear rap, rock, dance, etc. all together in one place. I'm telling you, people don't care anymore. RMX
