John Howell Music Industry Blog

On Demand vs. Redbox

noreply@blogger.com (J Howell) — Thu, 31 Jan 2013 05:16:00 +0000

The digital age has affected all of us, in our private lives, social, and business. The movie industry is no exception the Redbox craze has swept the nation leaving digital cable providers scrambling to compete. The digital age has spoiled us as consumers we have tasted the impact that our voice has on companies and have started a competition to see who can give us the most media on the most devices as fast as we want it.

What started as a smaller war between the Redbox chains of ATM type devices, which showed up all over a few years ago all but bankrupting the longtime number one seeded Blockbuster. The Blockbuster chain not being able to compete with the low rates, seemingly endless supply of movies, and the convenience of the new boxes. The boxes seemed to start sprouting up everywhere next to 7Elevens by the neighborhood CVS stores strategically placed at places where consumers frequent sometimes daily and expect to be in and out in less than ten minutes.

The cable companies have now thrown their hat into the ring trying to capitalize on the money that in home movies generate, while they have not been able to compete price wise they have succeeded in bring you the content much faster. With the Redbox consumer can do a quick search online to find a location that has a movie you like reserve it and go pick it up. However, the cable companies have now offered us the option to chose our favorite movies right from the comfort of our homes up to ten days before Redbox can offer them to consumers. We may pay a couple dollars more but again your paying for convenience and we have been spoiled as I mentioned early, makes you wonder what is next?

Research | Copyright | Trademark

noreply@blogger.com (J Howell) — Sun, 20 Jan 2013 02:05:00 +0000

One Direction Sony Music

Taking care of the business side of your artistry can seem overwhelming and be a daunting task, and we have all heard the warnings to copyright your material, trademark your name and logo while doing your due diligence. It seems that even professionals do not always heed to this advice.

Simon Cowell’s record label home to the UK’s superstar boy band One Direction, has been named in a million dollar lawsuit over the boy band’s name. It seem that the name One Direction already belongs to another US band and has already caused some confusion as it did on NBC’s Today when the UK boy band was shown with accompanied music from the US One Direction band. The US One Direction band has been selling their album on iTunes since February 2011, after the American band One Direction posted their song “2012” to YouTube receiving over 100,000 views but negative post from viewers who landed on their video while expecting to see the UK boy band, they have made quite a case for consumer confusion. The US band is not signed to a record label but has held the name and has been selling records under the name for a longer period of time leaving the new British invasion open to loosing their name.

The UK band’s label was made aware of the US bands claim to the name when they filed an application with the US Trademark offices and the matter is now before the Trademark Trial and Appeals Board. This is just another example of the importance of doing your due diligence before embarking on your business endeavor, whether it is music, entertainment, or any other business venture. With the success of your company, the more scrutiny you could come by and an issue such as a name, which you work so hard, to build up could be taken away from you when this could easily be avoided during the startup phase of your company.

Important Business plan Development Notes

noreply@blogger.com (J Howell) — Sun, 16 Dec 2012 22:03:00 +0000

In learning the art of business plan development and writing the importance of writing a good executive summary has been, repeatedly stated to grab and keep potential investors attention. Wile the writing of a good executive summary is indeed important I have found that the most important aspect of writing a business plan is the financials. Taking the extra steps to ensure your numbers as to forecasting your revenue and creating an honest financial statement will go a long way in showing potential investors true growth potential, startup cost, and your breakeven point. These things are important because the only thing investors really care about is when will they be able to see a return on their investment.

In writing my business plan, I have realized that I must provide accurate information in the financial section of the plan. It is very important not only to display numbers or figures in your financial sheets but just as important if not more to describe why and how you have arrived at your numbers. Excel spreadsheets in this case can be your very best friend making your life much simpler when it comes to constructing your financial section of your business plan.

I feel I can take much from the article Carl Schramm (Straight Talk on Business) in her statement of the characteristics of an entrepreneur, sometimes in focusing on only the business aspect of the business we forget the reason why we have decided to embark on the venture in the first place. Characteristics like being an outsider because we challenge and ask the hard questions surrounding “Why” regarding the status quo, are what makes us who we are and separate us from the everyday person. Realizing that we should embrace our different nature and our approach to the world of business is something that we should become completely comfortable. This and being as honest as we can in regard to the financial aspect of developing the business plan are things that I plan to implement and practice when drafting my business plan, keeping in mind that no sooner the business plan is complete it will already be outdated.

Expert Views

noreply@blogger.com (J Howell) — Mon, 26 Nov 2012 04:54:00 +0000

Carol Schramm, holds a PhD in economics and has served as both the President and CEO of Ewing Marion Kauffman foundation. I found his characteristics of an entrepreneur’s to be exact when referencing it to myself. As a highly sought after individual who sits on major boards and manages his own personal angel investment his views on entrepreneurs and developing business plans. While universities touch us the importance of developing a good business plan to be successful in starting a new business, Mr. Schram states that this is a waist of time because they rarely work and are outdated as soon as they are completed. His advice is to get on with making or developing your business verses writing about it.

Dr. Steven Gedeon has founded more then a dozen private, public, venture capital and non-profit organizations as well as publishing over 100 articles, reports and patents. With an MBA in entrepreneurship and strategy at the Ted Rogers School of management and views the business plan a little differently stating that the most important element of the business plan is the executive summary the overall business idea and the financials. He believes the key to a successful business plan is ensuring that it is credible and there must be a plausible guide to action, which is based on the companies target audience. (Steven Burhoe, 2012)

I found both of these views insightful though different they each shed light on the difficulties and pitfalls of creating and carrying out your business plan This is great reading for anyone deciding to venture into an entrepreneurial business idea.

Analytics & Digital Marketing

noreply@blogger.com (J Howell) — Sun, 28 Oct 2012 23:23:00 +0000

Picture by http://www.google.com/analytics/

Analytics & Digital Marketing

While digital platforms continue to progress and become a mainstay in changing the way entertainment companies do business, it is now more important than ever to have a vast understanding of how to reach your target market. One of the tools that are available today for all businesses whether it is a small, large or startup is Google analytics. This tools as free and can save a company tremendous time and money when it comes to marketing a product, whether that product be music, artist, games or film. The online platform makes it easy for companies to track visitors to their site.

Google analytics are useful to provide your company with vast amounts of information and reports as well as help you make informed decisions when it comes to designing your web site and the content within your page. Some of the reports that are provided to administrators to monitor their site efficiency are,

Top Content
Average Time on Site
Goal Conversion Data
Site Search
Referring
Map Overlay
In-Page

These reports can provide crucial insight into the efficiency of a companies website bye providing information such as how many visitors in a given period frequent your site the average time they stay on your site or a specific page within your site. These reports also supply demographic and geographic locations of the majority and minority of your site’s visitors. These reports can be extremely useful in planning how to spend your marketing dollars along with finding the best areas to put those dollars. Having a good understanding on how and why to apply this tool to your website or webpage can have a huge impact on the success or failure of your website and maybe ultimately the life of your company

Spotify, Pandora Spur U.S. Digital Music Sales Past CDs

noreply@blogger.com (J Howell) — Mon, 15 Oct 2012 01:32:00 +0000

Spotify, Pandora Spur U.S. Digital Music Sales Past CDs

It is official according to Bloomberg News cd’s have been the largest U.S. revenue source but all of that will change this year. Downloads and streaming services such as Spotify, and Pandora is scheduled to surpass cd sales by the end of the year. According to the Bloomberg research, U.S. digital music sales will exceed 3.4 billion dollars eclipsing the 3.38 billion dollars in revenue that CDs and other physical music products such as records.

What is even more exciting is that record labels have noticed the sharp increase in digital and streaming music and now have begun to license artists catalogs to various streaming services and digital platforms. This is a great opportunity to capitalize on all of the extra revenue being generated through these platforms while the Bloomberg report states sales of digital is expected to only climb to 6.7 percent while the streaming music revenue will climb to 28 percent this year.

This is a blessing for up and coming artist as well as established artist, many of which saw a sharp decrease in revenue while record labels tried to make heads or tails of the new digital media boom. Due to the previous business structures that many companies had come to rely on a serious reconstruction was in order to keep up with the changes that technology had brought us.

Digital Downloads & Streaming Data make debut on Billboard Charts

noreply@blogger.com (J Howell) — Sun, 14 Oct 2012 02:19:00 +0000

Digital Downloads & Streaming Data make debut on Billboard Charts

According to Reuters this past Thursday Billboard included sales and streaming data from digital platforms such as Spotify and Rhapsody along with others in their weekly ratings. The entries into the billboard charts included selections from country, Latin and hip-hop music genres but will include all music genres. Billboard also released a statement that confirmed they would be launching a new chart for the R&B genre of music stating that these songs will now be rated separately from the once all inclusive categories as rap and hip-hop.

Billboard uses the data provided by Nielson SoundScan to calculate their weekly ratings for the top albums and singles in various musical categories. Until recently the Latin, R&B and country music singles were determined mostly by rotation on radio station with that play their respective music.

With the huge impact that digital downloads are having on the industry, it seems long overdue, but better late then never. It seems that the industry is finally adapting to the changes in technology and rewriting their old business plans to account for this new digital media platform and it’s great to t=see Billboard is at the front leading this trend.

Startup & Business Plan Consultation

noreply@blogger.com (J Howell) — Mon, 24 Sep 2012 12:54:00 +0000

In consulting my chosen law firm about steps to take in drafting a business plan, I was

given some great advice of which what was shocking to me the majority of the advice was

not about actually writing the plan. I found this to be very informative and have included a

summary of the information below. My business plan and company, as I informed the

lawyer, is based on a company that will include more than one partner and incorporated as

a limited liability corporation.

1. Put it all in writing. If you are partnering with friends, get everything in writing. Meet with

those you are starting the company with and brainstorm all your ideas and then put

someone in charge of managing them (i.e. Business Manager or Chief of Operations) - this

includes everything from company duties, time frames, names of the company, ideas for

products etc. It is important to get everything clearly written down at the beginning so that

everyone knows their duties, responsibilities and what is expected of them. The more

detailed the better.

2. Assign titles, particularly one person should be in charge of all paper work. They should

follow all the financial and complex tax situations as well as documenting everything that

goes on with the business. This person will take the lead in structuring the company and

should administer and maintain all paper work, certificates, fees and taxes.

3. In the beginning your team should meet as often and regularly as possible to insure

productivity. Establish who will lead the meetings and that person should go over the goals

and purposes of the production company with everyone so that you are all on the same

page and revisit these goals on a regular basis to make sure you remain on the same page.

With our company I drafted an Organizational Agreement to clearly state and

determine company work ethic that every partner agrees to as standard policy. After that I

would assign "hats" or titles so everyone is carrying the same load of work during the dayto-

day operation of the company.

4. Up until this point the business manager should have taken lead but now is when the other

hats start taking over regarding their expertise regarding the business. With out company

this was the Music Manager & Visual Media Managers time to take the lead and begin

networking and facilitating options to get business rolling and aware of the company’s

existence.

5. Once the ideas and legal paperwork is in place then you focus on how to make money. If

you need start up loans then you should reach out to bankers and other investors who

routinely invest in production companies. Once this is in place then you can focus on

producing your product and generating a profit.

Once you have taken all of these items into consideration in approaching the business plan you should look to consider items and outline.

• Market analysis

• Competition

• Barriers to entry

• Strategic opportunities

• Products & Services offered

• Operation development

• Marketing plan

• Target market

• Marketing Vehicles

• Sales strategy

• Marketing budget

• Financial plan

• Sales projections

• Capital Expenses & Income statement (financials)

• Cash Flow statement & Capital Investments (financials)

These items should be clearly outlined in preparing your business plan.

Industry Liabilities

noreply@blogger.com (J Howell) — Sun, 02 Sep 2012 19:14:00 +0000

· Price Fixing Lawsuit

· RIAA Announces New Round Of Music Theft Lawsuits

· Beastie Boys Sue Monster Energy Over UnlicensedSongs

These three lawsuits are perfect examples of the current state of the recording industry and even provide a bleak glimpse into it’s future.

The Price fixing lawsuit which involved more then 43 states from around the United States bringing lawsuits to music companies accusing them of ultimately increasing the cost of CD’s from 1995 to 2000 by “subsidizing advertisements for retailers in return for their agreement not to sell CD’s below a certain price”. This case has been settled and to the tune of a payout to 67.4 million dollars an additional 75.7 million of CD’s to US organizations and finally an agreement to discontinue these practices. (Raena Armitage, 2010)

The RIAA lawsuit is a great example of the music industry and other companies continued fight to alleviate the illegal download and use of music as well as the illegal use and distribution of music. The Beastie Boys lawsuit against Monster Energy Corporation is a suite in which they are seeking dues in return of the companies illegal use of their music in a promotional campaign with out prior consent from the band.

All of these cases are very important in their own right and although the outcomes may not be known for all these are huge stepping stones for the rights of not only artist producers and musicians but these cases also are a fight for the rights of the everyday person who love these are artist work. The consumer is often not mentioned as heavyweight labels and artist prepare to do battle on the courtrooms, but this is also a step in the right direction to also preserving their rights, and with the current state of the industry and the continued advancements of technology there is sure to be no shortage of lawsuits to come.

CD’s vs. Digital Downloads vs. Streaming

noreply@blogger.com (J Howell) — Mon, 20 Aug 2012 01:53:00 +0000

CD’s vs. Digital Downloads vs. Streaming

This may come as a surprise to many people but the CD’s will officially be surpassed by digital downloads this year. The U.S. music industries biggest revenue source was CD’s, but digital sales this year, which totaled 3.4billion dollars, has surpassed CD sales that only totaled 3.38 billion this year. According to a Boston based analytics strategy company digital music will globally surpass physical sales by 2015. So how is this affecting the major record industries you may wonder, well this has prompted record labels to license artists’ catalogs of music to online platforms and streaming services to compensate for the dwindling sale of CD’s. The Boston based analytics group has also reported that album and digital song sales will increase 6.7 percent this year while streaming sales will increase by 28 percent this year which together account for 41 percent of U.S. music sales versus 22 percent globally.

Streaming music platforms like Pandora and Spotify have been and are the key drivers and are reported to be this why for the next five years, as their growth and sales continue to grow. While the music industry is hoping for digital sales while rebuild the market or at a minimum restore it to something close to it’s past status. With the birth of smart digital devices, which have app. marketplaces to download applications to give them consumer’s access to streaming music platforms, technology does not seem to be on the side of major record labels. On the brighter side this has possible positive implications for the artist and consumers being in a position to dictate and control the music and ultimately cut out middlemen, which in this case unfortunately for them are the major recording labels. This has every implication of record labels changing their current business models to give artist more control and rights with regard to their music and provide them the opportunity to be more of a business partners instead of employees.

More Great News for Recording Artist?

noreply@blogger.com (J Howell) — Mon, 06 Aug 2012 02:37:00 +0000

More Great News for Recording Artist!

The Firm Neilson SoundScan reported a 1 percent growth in the overall U.S. album sales for the first six months of the this year ending what has been a seven year consecutive decline of album sales. While this alone is not a huge feet it is a temporary sigh of relief and promotes hope for the music industry and lively hood of so many artist producers, writers and labels. With all of the controversy in and around the music industry and the need to find a way to survive the dim economic era that is upon us and the advancements in technology this could be a peek at the future life of the industry slowly growing again.

So what now you may be asking, it seems to me that the industry maybe catching up with technology or at least an understanding that the people are where the technology is, and to reach them you have to be apart of and exploit these mediums to engage and reach them. This understanding may have contributed to breaking the seven-year downward spiral of record sales in the entertainment industry.

There is more great news for the recording artist and recording artist hopefuls, with streaming music now accounting for 89 percent of all digital downloads in Sweden there may now be a map to where the industry can find the waters of rejuvenation to salvage and start growing their businesses again. This also should make artist very happy due to the fact that we are talking about “Streaming downloads”, this makes it easier for artist to promote and sell their own music resulting in more creative control and retaining of more profits, which is always a good thing when it comes to the ability of the artist having more control of their careers and music.

The Interview

noreply@blogger.com (J Howell) — Sun, 01 Jul 2012 22:48:00 +0000

In 1993, Carl and his partner Manny co-founded Blackbird Entertainment and Carl handled the entire business aspect of the company. In 1996 they sold an astounding 80,000 copies of Manny’s debut EP “Why” throughout Europe- without any major label backing. However, with the visibility of their success growing, the major labels came calling and this lead to an exclusive contract with Virgin Records in the U.K.in August 1994.

Mr. N’watts was also responsible for brokering a sponsorship for his company with one of Europe’s most exclusive jewelers- Graff- in June 2001. In August 2001, Carl N’watts launched his groundbreaking company November Entertainment Group.

When asked to give an example of how he worked toward mutual benefit when negotiating a deal? He smiled and jokingly replied that he had never considered the other sides feelings then answered seriously that he always made it a habit to find out how a deal would benefit the other person or company in a negotiation he would ask himself what would make him want to agree to this deal if he was in the other parties shoes.

When asked how does he separate the people from the problem when he is negotiating? He replied that this is usually a very difficult thing to do since a lot of times what is being negotiated is an extension of the parties involved and because it is they can get very emotional, but ultimately he says he has to separate the two and if there is someone that he is dealing with who he has had a difficult time with personally he will make it a point to address this at the beginning of the negotiations to get it out of the way and continue on just addressing the issues that are within the contract or deal that they are working on.

When asked about handling positional bargaining tactics?

He replied positional bargaining is something that he hasn’t really had many dealings with because it is not a win or loose situation that he handles in negotiations because the deal has to get done one way or the other if not with them then with another company, but addressing the conflicts that are stipulated within the agreement that is being negotiated is where he keeps his focus.

New Royalty agreement on the Horizon for Labels & Artist

noreply@blogger.com (J Howell) — Sun, 17 Jun 2012 21:01:00 +0000

New Royaltyagreement on the Horizon for Labels & Artist

In the recording industry a large basis for providing income is royalties, while radio stations until recently have been legally bound to only pay these royalties to producers and writers their seems to be a company challenging the status quo. Clear Channel Communications recently has come to an agreement with Big Machine, Taylor Swifts record label that will allow the label to collect royalty checks for songs played by their station and affiliates. This is the first agreement of its kind in decades, which has come on the heels of much heated debate between the labels and radio stations to congress. What you may find interesting is that the United States is actually the only country that currently does not allow the labels to collect royalties on their artist and only pays these royalties to writers and producers. Performing artist have argued that the multibillion dollar industry have long been exempt from paying royalties when they use their recording to fuel their industry. (Ben Sisari, 2010)

The digital age has sent companies into a frenzy scrambling to streamline their company business models in an effort to adapt to the ever-changing marketplace. Companies like SoundExchange, a company that processes online royalties made several deals with foreign countries bringing their total to 22 companies that it will now collect royalties from while companies like Sirius XM radio has opted to avoid SoundExchange in an effort to pursue direct licensing agreements with record labels which has proven to be negative for the company. With the biggest radio group (Clear Channel Communications) breaking ranks to get a deal like this done you can only assume that the others will soon follow suit ushering a new age of possibilities for the recording industry to begin generating revenue, there may be hope yet for the dinosaurs that are the Major Record Labels.

Music Sales Breathes Life Back Into The Music Industry

noreply@blogger.com (J Howell) — Sun, 03 Jun 2012 05:53:00 +0000

Music Sales Breathes Life Back Into The Music Industry

With the declining state of the music industry and record sales many industry professionals have been scrambling to find and answer to the woes of the of continued album sales. According to the RIAA revenue generated by subscriptions to streaming music service such as Rhapsody and Spotify are up 13.5 percent at the end of 2011 that’s from 212.4 million in 2010 to 241 million. This comes on the heels of some backlash the services had been receiving from indie labels and recording artist claiming that streaming services would cause consumers to not purchase actual songs which were made available to them through these sites. Due to the negative press many artist and independent labels pulled their material from these online platforms but after these numbers and new stats from the RIAA many companies may reconsider the impact of having their music on these platforms.

Digital sales have also shown a significant increase over the past few years with singles increasing 13 percent and digital albums up 25.1 percent so you can clearly conclude that the impact that digital platforms along with the streaming music site is undoubtedly helping revive record sales. Although the sale of physical albums continue to steadily decline now with the increase of digital sales their should be some record executives breathing a little easier and streamlining their business models to adapt and suit an ever changing digital technology environment. This should also easy some tension on the artist royalty issue with the RIAA revealing digital performance royalties have also increased from 249 million in 2010 to 292 million in 2011 their certainly seems to be more hope for the future of the recording arts industry going forward the question is will they be able to adapt to the digital environment in time to keep from sinking in the meantime.

TED TALKS & The Internet The Universal Equalizer?

noreply@blogger.com (J Howell) — Sun, 13 May 2012 16:54:00 +0000

The first TED TALK that I reviewed was by Chris Anderson whose presentation was very easy to follow along with and kept my attention with the use of the visual aids that he used and well placed humor so to keep my mind from drifting during his speech by tricking my mind into not registering his presentation as a lecture, he made his points very well and backed them up with proof by the video at the end of his lecture with the TED group from Kibera Kenya Africa ,that literally almost brought me to tears by seeing the influence not just TED talks has but technology and the Internet on all corners of the world. We have many examples of how the internet is used negatively and I have been guilty of highlighting some of these here on this blog but this TED TALK provides a great example of the great things that the growth of the Internet has provided and made possible another example is that it has made it possible for me to work toward my graduate degree and write this blog and make it available to the entire world. This I believe makes the internet a less scary place for presenting your ideas and reminds me of how great this platform can be when used in a positive and productive way.

Another of the most interesting TED TALKS BEST OF THE WEB I have seen was a brief presentation by Bobby McFerrin gave at the World Science festival in 2009 to be amazingly insightful and visually appealing, not that the other TED Talks are not. The way he engaged the audience and got them involved in the process with integrating music was very refreshing and providing proof that music, as I have long expected is a universal language.

The RIAA and the Fight for the Future of Music

noreply@blogger.com (J Howell) — Sun, 06 May 2012 16:58:00 +0000

The RIAA (Recording Industry Association of America) is an integral part of the music industry, acting as support, promoter and protector for major labels of which their members create manufacture, and distribute almost 90% percent of officially recorded music and that is produced commercially here in the United States.

The RIAA also works to help protect many rights for labels and artists along with certifying Gold Platinum multi-Platinum and Diamond sales. They have been very active and instrumental in both the fight and education on music piracy. The RIAA instituted the lawsuit program which was aimed at educating consumers about the consequences of breaking the law and shine a light on the legal ways and sites there are to obtain music, rather then the peer 2 peer sites. While educating they also are responsible for sending out pre-litigation documents and copyright violation notices to inform illegal downloaders that they are breaking the law and may be subject to more serious consequences.

While piracy continues to be a problem for the music industry there is solid evidence that the steps taking by the RIAA has had a positive impact on the decline of these numbers and has breathed some life back into music sales and digital downloads, but this is not at all the wining of the battle. They continue to be at the forefront of the anti piracy fight monitoring ISP’s and going after illegal peer 2 peer file sharing sites and although the numbers are staggering when it comes to the amount of money they music industry is loosing, their efforts have leveled and even started declining in regard to the comparison of illegal and legally downloaded music which I think is a great accomplishment within itself. There is no doubt that the RIAA is a great friend and fighting on the behalf of the music industry.

Technology & Music Today

noreply@blogger.com (J Howell) — Wed, 18 Apr 2012 20:40:00 +0000

Photo by Christopher Polk/Getty Images for Coachella

If you have been anywhere near a television, radio, computer, or smartphone you have no doubt heard about the rebirth of Mr. Tupac Shakur, although not in human form but close enough to it that the crowd was left speechless at Coachella last weekend as he made an appearance on the stage along with Rappers Snoop Dogg and Dr. Dre.

I applaud this infusion of technology and music; with the current and recent state of music sales and the music industry this is an example of artist utilizing technology to breathe some life back into some of the musical monotony and while this is far from an answer to declining record sales and folding major record labels, with the price tag for the short resurrection exceeding one hundred thousand dollars. What has not been talked about in all of the commotion is the planning, project control and execution that went into making this spectacle a success.

According to Rolling Stone the image of Tupac that is being refereed to as a hologram it is actually a 2 dimensional image that is projected onto a reflective surface that is located on the stage and then it is bounced from their onto a piece of Mylar which ultimately produces the image that we see. While this show grabbed major headlines for the “Hologram” but what you may not know is this is not the first time it has been done in fact in June of 2009 Musion, the company behind the technology conducted the first ever transmission of “live interactive 3D holograms from London and Montreal to Orlando Florida”.

I can honestly say that I do not envy the production manager of the possible tour that there have been talks about, while Snoop and Dre work out the logistics of what the show would entail to find out if it is worth the effort, I am positive that there is no shortage of companies trying to get in on the action.

Music Industry Sales Trends (What's The Big Mystery)

noreply@blogger.com (J Howell) — Wed, 28 Mar 2012 19:39:00 +0000

Record Sales continue to decline, and I find it hard to believe that there are still disputes over the reason for the decline in revenue. The IFFP or International Federation of the Phonographic Industry has determined that” U.S. sales were 10 Billion dollars less in 2003 then 8 years prior”, and have declined 10 percent overall since the year 2000. What I cannot understand is why they are spending money on researching why record sales have declined when it is very obvious that there are a couple of simple explanations for this that I can provide for free.

First you have the internet that has made music accessible to everyone for download through multiple platforms, via smart phone apps, iPods, mp3 players, game consoles etc., this has also opened the door for illegal downloads and pirating that has caused the loss of millions of dollars in the music and entertainment industry. With record labels unsure of how to approach this growing market with their old business models they have been forced to prosecute the very same people who they depend on to sale their material too, which caused backlash from internet savvy consumers and increased illegal downloading and gave way to peer to peer download sites.

Secondly the record labels are still granting large budgets for recording artist to record a large number of songs for an album and hire a large entourage of personnel to support these artists. At the end of the day only about 10 percent of artist signed to major labels sale enough albums to be successful while the remainder end up owing the labels. There is also the extinction of the album; consumers today rarely purchase entire albums they are more interested in downloading their favorite song, which mean labels should be focusing much more on single records rather than full albums.

-J

Industry Related Blog Post

noreply@blogger.com (J Howell) — Sun, 11 Mar 2012 20:44:00 +0000

Sony Music is joining in the digital app. revolution offering an offline playback App, in line with MOG, and Rhapsody. The app offers consumers the ability to gain access to music while not having access to their mobile network or WIFI.

Billboard.biz explains how much of an impact these apps have on smart phones and tablet consumers due to mobile phone providers restricting the amounts of data user can stream. Consumers having access to their music offline is a simple answer to the data cap some mobile companies have implemented.

This is a big deal for Sony Music adding this app to their portfolio embracing technology and using it to adapt their business model to a digital age where consumers are not looking to buy physical cd’s so much as download single mp3’s is a step in the right direction. This also provides them with a relevant platform to expose their artist, and in a sense provides a bit of encouragement for the music industry streamlining their old business models to adapt to the current state of technology.

ASCAP is also embracing the digital revolution. Expanding their old business model to embrace new multimedia platforms by extending music licenses to established outlets such as Hulu and Netflix, and in 2011 media outlets such as Spotify along with thousands of others signed blanket license agreements. As a result ASCAP has increased their overall revenue and decreased operating expenses.

I expect blanket licensing to online platforms to become a standard across the music industry. While the film industry has already expanded to these platforms; the music industry seems to be just catching on and finally acknowledging that technology will only continue to grow and change. It seems apparent that for labels to survive these advances, they really must continue to streamline their business models to account for the advancement's in digital technology and leverage these new media platforms to reach their fans.

-J