Music Business 2009 thembj.org All rights reserved http://www.thembj.org/images/head.jpg Music Business Journal http://www.thembj.org en-us Music Business Journal http://www.thembj.org The Music Business Journal (of the Berklee College of Music) is a student publication that serves as a forum for intellectual discussion and research into the various aspects of the music business. Managing A Country Artist: Nashville's Larry Fitzgerald http://www.thembj.org/article.php?article_id=215 One cannot imagine traveling to Nashville without being exposed to country music. And Nashville is indeed a “Music City”. Artists like Garth Brooks, Shania Twain and Vince Gill have made country music universal. This paper will examine the role of a manager of a country artist in Nashville. The management of a country music artist poses distinct challenges at every level, including radio promotion, touring and marketing. The example of Larry Fitzgerald is instructive. He is an experienced manager that began his career at the William Morris booking agency and continued working in the music business in various positions. Eventually Fitzgerald Artists and Their Business: Lady Gaga http://www.thembj.org/article.php?article_id=217 Lady Gaga knows how to write a catchy tune. She is also irreverent and provocative in her choice of fashion while prone to convey serious meaning in her lyrics. Her music videos pass as examples of burlesque, but their aesthetic quality is high and, artistically, they seem fresh and original with a universal appeal. Her overt sensuality draws the viewer in, but crosses genders. She might be the next consummate entertainer, but seems intent on stretching the boundary between craft and commerce, and art. So far, and in one year, she has managed to generate four concurrent Nº1 hits, win two Editorial February 2010 http://www.thembj.org/article.php?article_id=218 Greetings from the MBJ! It is with great pleasure that I introduce you to our first issue of 2010. Many things have changed for the better since the beginning of this year--we now have our own room for meetings in 7 Haviland St. and a great new website. However, one thing that hasn't changed is our interest in digesting the latest goings-on in the music industry, while thinking critically about the issues at hand. MIDEM certainly is a place where many of the most pressing issues facing the music industry are discussed at length Live Music Galore at SXSW http://www.thembj.org/article.php?article_id=228 Every year in mid March, thousands of people descend upon Austin, TX for the South by Southwest Music Conference & Festival. The festival, which began in 1987 with 700 Music registrants, has grown over the years to include both film & interactive segments and now has over 12,000 music and 11,000 film and interactive participants. While the music portion has traditionally been a stomping ground for unsigned and up-and-coming indie acts, mainstream acts are now using the festival to reunite or create buzz about new projects. Last year, Metallica stopped by Stubbs in Austin to promote Guitar Hero: Metallica. Kanye Songwriters’ Mechanicals Since 1976 http://www.thembj.org/article.php?article_id=219 Mechanical collections from sound recordings are one of the key income sources for musicians. In the days when recorded music ruled, and LPs or CDs represented the main cash crop of the music industry, revenues from mechanicals were a reliable source of receipts for songwriters and their publishers. Songwriters, in particular, knew that, by law, mechanicals had to be paid dutifully by the record labels. Whereas artist royalties on recorded music sales were always subject to the record label breaking even with the artist—and the label’s ‘recoupment’ had to be considered before any payment to the songwriter—mechanicals guaranteed immediate Tax Tips for Musicians http://www.thembj.org/article.php?article_id=8 “Voluntary Compliance is Mandatory” It is again that time of year when we must face one of the certainties of life. Income taxes! To most of us, this is indeed, worse than the other certainty. Death! However, it doesn’t have to be that way. Of all the countries in the world that do have some form of taxation, the United States of America impose some of the lowest income tax percentage rates in the world. This fact should not go un-noticed. We are still able to keep quite a bit of what we earn. There are many ways that we, as taxpayers, can Grey’s Anatomy: The New Radio http://www.thembj.org/article.php?article_id=9 Synch Licenses Break Through During this time in the music world where conditions are less than desirable and constantly changing, we, as young student musicians, are surrounded by the same disheartening reports, and the chances of breaking through as an independent artist can seem impossible. But after spending a week around happily satisfied music publishers and bitter record label executives at last week’s Billboard Film and TV Music Conference in Los Angeles, little rays of hope are peaking through and the message is loud and clear: LICENSE YOUR MUSIC! A synchronization license to be exact. At the November 1st & 2nd conference, A Primer on the Top Songwriting Contests http://www.thembj.org/article.php?article_id=10 Songwriting competitions are a very popular way for amateur songwriters to have their music heard. For a writer that may or may not perform, a competition that is not based on performance offers a great opportunity to be judged solely on the writing. But how advantageous are songwriting competitions? What are the pros and cons of entering? Writers are over and over again dismayed when they enter a competition, win, and then realize they have handed over all or part of the song’s rights unknowingly when they neglected to read the fine print in the rules. In this article, I Japan, Land of a Rising Market for Recorded Music http://www.thembj.org/article.php?article_id=11 The drop in annual recorded music sales is nowadays taken for granted in almost every domestic market. Indeed, global music sales, as reported by the International Federation of the Phonographic Industry have been declining steadily since 2001 (1) . Yet Japan, with the second largest economy and music market in the world, seems to be a star performer. The retail value of recorded music has grown by about one per cent a year since 2004. Even though such numbers are not stellar by the standards of most trades, in the current recorded music marketplace they are more than noteworthy (2). There Open Your Umbrellas: Welcome Total Music! http://www.thembj.org/article.php?article_id=12 If a recent October article in Business Week had been published six months earlier, I would have most certainly thought it to be an April Fool’s joke: Business Week had reported that the largest major label, Universal Music, was embarking on a radically different and progressive business model in alliance with all the other majors. The model, supposedly meant to save the record industry, was dubbed “Total Music”. I will elaborate on it below. Total Music is, in essence, a subscription service. A number of experts have recently been claiming that subscriptions will eventually lead the record industry towards salvation. They Recorded Music Sales in the Holidays http://www.thembj.org/article.php?article_id=16 In comparison with last year’s holiday season, recorded music sales revenue has decreased markedly. According to Nielsen SoundScan, volume sales of 1) albums (physical and digital) and 2) physical and digital albums plus track-equivalent albums (any ten digital tracks make another album) are down respectively by 17 and 13 percent.(1) SoundScan’s data, moreover, suggests poorer percentage growth performance for the holiday season than the entire 2007—which is alarming. Much less value was therefore earned by the business. It is curious that Nielsen SoundScan summarizes the data as an overall 6.6% increase in total music sales compared to last year’s season (the NAMM 2008 - A Primer for Music Makers http://www.thembj.org/article.php?article_id=17 A surprise visit from the Santa Ana winds greeted a record-breaking 1,560 exhibitors and 88,128 attendees from around the world to kick off NAMM 2008 in Anaheim, CA last month. The acronym NAMM originally stood for the National Association of Music Merchants, but now has evolved to NAMM, the International Music Products Association. At close of show, NAMM reported a 4% increase in total attendance and a 7% increase in international attendees over last year. Billed as “the largest music products trade show in United States,” the theme for this year’s 106th show was “define your future”—a variation on the most The Billboard 200 Album Chart http://www.thembj.org/article.php?article_id=18 No Longer As Relevant “Compared to years past, the ripple effect of the Grammys was a pimple”, said Alliance Entertainment Corp. (AEC) senior VP Robert De Freitas, as quoted by retail specialist Ed Christman in last week’s Billboard. Although Amy Winehouse and Herbie Hancock are poised to crack the top ten of the Billboard 200 chart following their awards for best new artist and best new album, the rest of the award-winning crowd has not made much of a dent on sales so far. What does it take nowadays, therefore, to move albums of recorded music? Digital single-track sales are, of course, Sound Financials and Economic Bubbles http://www.thembj.org/article.php?article_id=19 In 1636, Holland was one of the world’s wealthiest countries, its ships controlling much of the Asian trade, and its bankers made it a strong financial capital. Then, suddenly, the economy of Holland went crazy. Huge fortunes were made in months, and entire estates liquidated, all in order to invest in….tulips. While the average Dutch person had an annual income of 150 florins, a single tulip bulb sold for as much as 6000 florins, more than a lifetime’s income. A lucky trader or speculator could earn a similar amount each month, and tulips were traded on the stock exchange. “Futures markets” Keeping Classical Music Alive http://www.thembj.org/article.php?article_id=20 The Non-Profit Strategies of Three Orchestral Titans The classical music world has experienced a drop in support from local communities on many levels. Some of the world’s top orchestras have cultivated ways to survive and maintain lasting methods for gaining vital support. They have seen steady growth in terms of monetary and in-kind support, and they have acquired ways to stimulate true interest and involvement from local community members of all ages. For the purposes of this study, three comprehensive organizations have been chosen to illustrate how their efforts have resulted in orchestras that are not only enduring but also thriving with The Last Hurrah - Copyright law as it relates to Performance Rights http://www.thembj.org/article.php?article_id=21 The moment has finally arrived; your first hit song was just played on the radio station! Unfortunately, only the songwriter (if that’s not you) and the publisher will be receiving a royalty payment for the airing of your performance over the terrestrial radio airwaves. This narrow exemption within copyright law exemplifies how important it is for the new artist to understand licensing when negotiating contracts with their publisher and promoter. But change may be in the air – radio airwaves, that is. In 2007 both Houses of Congress introduced legislation that would extend for the first time, protection and a royalty Analysis of 2008 IFPI Digital Music Report http://www.thembj.org/article.php?article_id=22 Is it now a truism to say that the future of the music business lies in the digital realm? Computers and the internet have so permeated our world that it basically goes without saying that almost any given business must either adapt to the reality of the internet age or be left behind. As any passive observer knows, the recorded music business, especially the major labels, are at a low point by many measures. Music sales, the value of music, and public opinion about the labels have all declined. All of that is directly related to the digital music technology Music Meets Big Money in New York http://www.thembj.org/article.php?article_id=23 The music industry depends on private savings, the source of all investment. Some of that investment is channeled into music, allowing the trade to grow and take more risks. Artists get signed. Publishing catalogs fetch higher ‘multiples’. The business of live music expands, for example, to emerging economies, where construction of large-venues may not have reached the over-saturation of North America and Western Europe. Finally, whenever money flows both to the recorded and live music trades, it gives impetus to the business of musical instrument accessories and recording gear. The outlook for music investments would seem predictably skittish, given current events Guerrillas of Marketing - In Our Midst http://www.thembj.org/article.php?article_id=24 Imagine you are waiting at the Park St. Station for the next green line train--and for what seems like an hour. An Alewife bound train has just dumped a flood of businessmen into the station and now they all herd towards the financial district. Suddenly a group of ghostly looking commuters break into a choreographed dance to Michael Jackson’s ‘Thriller.’ Following a five-minute verse and chorus performance, the dancers disperse into the crowd, the music fades away, and it is as if nothing ever happened. The situation is hypothetical. But what would your reaction be if you were there to witness UK Sets Deadline for Action on Internet Piracy http://www.thembj.org/article.php?article_id=25 In a move hailed by the record industry in the UK, the British government is putting pressure on Internet Service Providers to clamp down on illegal downloads. The county’s cultural minister has set an April 2009 deadline for action on the issue. The British push against piracy comes not long after a similar agreement was reached among the French government, music industry, and Internet providers. The three parties signed onto a Memorandum of Understanding, which is a formal legal document describing an agreement. Under the so-called MoU, ISPs will monitor customers and disconnect those who refuse to cease illegal activity. Digital downloads, USA’s Mobile Music Frontier http://www.thembj.org/article.php?article_id=26 In late March, Billboard presented its annual Mobile Entertainment Live conference as part of the larger CTIA wireless conference in Las Vegas, Nevada. Featuring panelists and keynotes from leaders in the mobile phone, digital content, and music industries, the conference focused on finally bringing mobile music to a truly mass audience in the United States. I took a plane from Boston to see it for myself and separate the facts from the hype. Though it may sound surprising to an American, mobile music is actually equal to online music in terms of sales around the globe. In places like Japan and Folk Music - Traveling a Different Road http://www.thembj.org/article.php?article_id=27 If Berklee College of Music is like a microcosm of the music world, there has certainly been a huge influx of young folk musicians when in the past there were hardly any. In 2008, Berklee’s string department boasted over 100 string players, and offered new majors in mandolin and banjo. These instruments, typical of ‘folk’ music, are quickly becoming mainstream with the likes of Bela Fleck, Chris Thile, and Mark O’Connor. These superstars are inspiring, and many young musicians are choosing a path in folk music—and contributing to its revival. Folk music, of course, is truly the people’s music, seemingly appealing Hello Echo: The Online Marketing Guru http://www.thembj.org/article.php?article_id=28 Every unknown artist is on a search to find a way to promote his or herself and build a fan base. On the other hand, well-known artists are trying to keep in touch with large fan bases despite not being able to have personal interaction with every single fan. In the last few years, the emergence of an online company has revolutionized the way artists communicate with their fans, fans communicate with artists, and fans communicate with one another. Echo is a music website development company started by CEO Mark Montgomery that is based around creating a medium and community The Economics of Environmentalism http://www.thembj.org/article.php?article_id=29 In the March 2008 issue of the MBJ, Ashley Griffith wrote “Loggers and Luthiers –the Drama of Not Going Green.” In it, she cited the alarming decline of Sitka spruce trees, the only domestic wood suitable for musical instruments, primarily caused by the export of wood for housing in China. As a response, the Musicwood Coalition was formed by instrument manufacturers and is asking Sealaska, the logging company controlling the Sitka spruce forest, to engage in more sustainable logging. Sadly, the Musicwood coalition faces a curious feature of our economic system: resources are much more valued when they are scarce than Nokia Comes With Music http://www.thembj.org/article.php?article_id=30 Mobile phone manufacturing giant Nokia Corp. is preparing for the October release of “Comes With Music”, a venture into the realm of digital downloading. The new service could change the current subscription model industry-wide and challenge Apple’s domination of the digital music industry. Nokia has received both critical and complimentary reviews about the endeavor. The Comes With Music model is an innovative approach to the existing subscription model, providing music lovers with a year of unlimited access to 2.1 million tracks licensed from the catalogues of Universal, Sony BMG, and Warner Music Group1. Although this is only about a quarter of Is the Competition Getting to Apple? http://www.thembj.org/article.php?article_id=31 If you were to open Google and simply type "Apple subscription model" you would find 195,000 results, almost all of them questioning the future of an iTunes subscription service. The rumors started spreading in 2005, only two years after iTunes launched, each promising a subscription model coming in the next six months. Most recent rumors promise a late October launch of an iTunes $129.99 yearly subscription where users can download 256-Kbps music- a high quality DRM file that will be playable through iTunes, iPods and iPhones. What is most curious about these rumors is the fact that Steve Jobs has never Observing Nashville: A User’s Guide http://www.thembj.org/article.php?article_id=32 A career in the music industry is risky. The random factor always plays a role. Choosing the right location, however, increases the hopes of breaking your act. And there is nothing like moving to a big music capital for exposure—and picking the brains of successful artists. This writer went to Nashville to explore her own future. Words of wisdom were heard there, for instance, from songwriter, Beth Neilson Chapman, who conveyed well the feeling of establishing oneself in a new environment and tackling, in her case, the challenge of songwriting. Hard work, of course, is key. Says Neilson Chapman: “Make a point What’s Happening at Warner Music Group? http://www.thembj.org/article.php?article_id=33 More than four years have passed since Edgar Bronfman Jr. led an investor group to acquire Warner Music from Time Warner Co. Bronfman’s goal for the company was to transform its traditional record label business model into that of a music content company. Though the business has taken many positive strides, Warner Music Group (NYSE: WMG) has continued to struggle as a result of digital piracy, declining CD sales, and a struggling economy. In January, the company’s share price declined to an all time low of $4.57, off over 60% from its initial public offering price of $17. In addition, Beatles For Sale http://www.thembj.org/article.php?article_id=34 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 with the hopes of broadening the influence of the band, especially to younger generations. The acquisition of the Beatles catalog is considered thus far to be the biggest in the gaming world since the Best Buy Enters the Musical Instrument Market http://www.thembj.org/article.php?article_id=35 Best Buy is, of course, well known as a music retailer. In an era when major chains of record stores are a thing of the past, Best Buy is second only to Wal-Mart in physical music sales. However, since CD sales have continued to decline, Best Buy is seeking new ways to stay on top. We reported last issue that the Richfield, Minnesota-based company had purchased digital subscription service Napster, giving them a foothold in the digital music market and a way to compete with Wal-Mart’s digital music store. Now, the company has taken an even bolder step in securing its The Financial Crisis and the Music Industry http://www.thembj.org/article.php?article_id=36 The current financial crisis is proving to make credit markets very scarce throughout the United States. It is becoming increasingly difficult to find loans to use for any purpose let alone the music business. This current crunch spells rocky roads for both the current record label giants as well as anyone looking to start a business. If you take a look at the current financial crisis, it is becoming much, much harder to not only secure lines of credit, but also pay back existing debts with interest. The major record labels may encounter some issues repaying the debt that they Lala: Taking Digital Music to the Next Level http://www.thembj.org/article.php?article_id=37 It's been a long road for Lala.com. The website, which initially started in 2006 as a CD swap-by-mail company, has switched focus a number of times in hopes of creating the next big thing in music distribution. While the company's previous ventures have ranged from inconvenient to idealistic, it seems that founder Bill Nguyen has struck gold. Lala combines the two major models for online music, adds its own charm, and charges its users less than any other online, ad-free service. Here's how it works; create a free account on Lala.com, browse their library of over 6 million fully licensed Copyright Royalty Board Unveils New Royalty Rates http://www.thembj.org/article.php?article_id=38 Meet the new statutory mechanical rate, same as the old statutory rate. The United States Copyright Royalty Board (CRB) has set rates for compulsory mechanical licenses, which will be in effect until December 31st, 2012. The rates, which cover royalties for the reproduction of physical recordings, permanent digital downloads, and mastertone ringtones, were the result of intense lobbying from various interested parties. The board heard from representatives of record labels, publishing companies, online music sellers like Apple, mobile phone companies, and others before reaching its decision. What is most striking about the “new” mechanical rate is that it is identical to Music Industry Business Structures http://www.thembj.org/article.php?article_id=39 In the music industry, there is a fine line between artistry and a solid business sense. In order to preserve artistry in today’s industry, a sound business infrastructure is not a bad idea. When choosing a business structure, there is quite an array of liabilities to keep in mind. Essentially, a liability is a debt or circumstance in which someone is held responsible for by law. Depending on the way you intend on operating your career, this can affect what you are responsible for legally in the future. The most common business structures in the music business are the sole The Dow Jones/ Nielsen Media and Money Conference at NYC http://www.thembj.org/article.php?article_id=40 In the middle of October, courtesy of The MBJ, I traveled to New York City for a special event, the 2008 Media and Money Conference. Organized by the Dow Jones Company and Nielsen Media Research, the conference met at the Marriot Marquis in Times Square. The Dutch group VNU, both owner of Billboard Magazine and Nielsen, was a player too, and understandably the event garnered much attention in the music trade. There were keynote speeches from CEO’s of several top media and entertainment companies and pointed panel discussions with top professionals in the field. The panels, in particular, took the Venture Capital and You http://www.thembj.org/article.php?article_id=41 Giving Traction to Your Business Idea As a Music Business/Management major at Berklee, I have learned how to create a strong professional business plan, how to register my business (as S-Corp., C-Corp., or Partnership), and how to market it to the public. Yet there is a huge step between registering a business plan, and actually starting a business. Funding is needed, and it is daunting for a broke college student to approach total strangers for money. Perhaps this article will help you. I arrived at the college with what I considered a pretty good business proposition: a special online distribution website. During Sirius Problems, Sirius Accusations, and Sirius Solutions http://www.thembj.org/article.php?article_id=42 In the last decade FM radio has declined dramatically, creating a void that promoters, producers, and artists struggled to fill. That is until the inception of commercial DAB (Digital audio broadcasting), or satellite radio, in 1999. Sirius satellite radio was officially launched on July 1, 2002. Unfortunately for advertisers Sirius offers 100% commercial free radio, but for record labels, artists, and publishers, it was the answer to their prayers. It meant uninterrupted music promotion, and as of last December, a constant flow of cash royalties for artists and publishers. The current royalty rate for satellite radio broadcasters stands at 6% Topspin Rolls Out Real Innovation for Digital Music http://www.thembj.org/article.php?article_id=43 Coming out of the shadows of Western Santa Monica, California is small company looking to revolutionize the digital market for artists. Topspin Media is set to release online marking software services to artists in the next couple of months. The idea behind the Topspin mission is to directly connect artists with their fans on their own, focusing on profitability for the artist, and helping them earn their own living. Founder Peter Gotcher, former CEO of Digidesign and creator of ProTools, hopes this new model will supplant the old business models of the music industry that have been under duress since The Value of Live Music: Lies, Dammed Lies, and Statistics http://www.thembj.org/article.php?article_id=44 It is now often argued that the future of music lies in live music. The decline of the record business, the old cash cow of the industry, is one consideration. Another is that live music is strong and festivals are doing well. Clubs and midsize venues seem to offer good opportunities for musicians. For instance, in the last three years, ticket grosses of the venues that seat 15,000 and more were greater in the US than the revenues of the top five stadiums and the top five amphitheaters. Moreover, since 2003 there is a notable increase in the US receipts of Billboard Magazine: Out With a Wimper? http://www.thembj.org/article.php?article_id=45 As a child of the nineties, I could imagine nothing more exciting than one day seeing my name at the top of the Billboard 200. A great deal of Berklee students must have felt the same excitement hoping that they could maybe one day reach that level of success. That being said, I believe most of us at Berklee are disheartened by the waning appearance of Billboard Magazine. It seems that every month a thinner version of the periodical is released. As a publication experiences the shift in both the music industry and the print industry, does a magazine like Hopping on the Brandwagon: Corporate Sponsorship in the Music Industry http://www.thembj.org/article.php?article_id=46 So you’re the business manager of folk-bluegrass group Apples and Oranges. The band’s catchy new single “Pickin’ Two” just aired in an episode of Weeds. Meanwhile, Apples and Oranges Myspace play counts are up, “Pickin’ Two” single sales just spiked on iTunes, and you’ve just talked to a third company who wants to talk with A&O to discuss a brand-and-band relationship. One of them is from Pepperidge Farms and wants the band to write a few jingles for a TV ad campaign, another is from Wrigley’s and just offered to pay for a music video that featured Apples and Oranges The Art of Philanthrocapitalism – What Our Success Can Mean to the World http://www.thembj.org/article.php?article_id=47 In the past, philanthropy was often a matter of simply giving money away. Charity was seen as a privilege and was frequently limited to a very select group of people. Today, the world is experiencing what Mathew Bishop – New York bureau chief for The Economist – refers to in his book Philanthrocapitalism as the Fifth Golden Age of Philanthropy. This new age in charity is being led by "hyper agents" who have the capacity to accomplish critical goals much better than anyone else. Bishop refers to these "hyper agents" as philanthrocapitalists and explains why they serve as an Selling Music in the 21st Century http://www.thembj.org/article.php?article_id=48 Scarcity, Theft, and Evolution in a Digital World Obsolescence of Reality The dawning of the information age has heralded a revolution in consumer power. Producers were once sluggish, opaque, monolithic entities governed only by self-interest, successfully proffering cheaply produced goods at the highest prices consumers could swallow. “Build it, and they will come” was the prevailing creed adhered to by major firms during the era of producer-centric economics. Times have certainly changed. Viable global competition, consumer-centric development and marketing, and above all else, the proliferation of internet access have withered away the fundamental cornerstones of the buyer-seller landscape. Newspapers, magazines, and television Apple’s Abandons DRM and Embraces Variable Pricing http://www.thembj.org/article.php?article_id=49 At the annual Macworld conference last month, Apple announced multiple major changes to its iTunes music store. For music lovers, the most notable of these changes was the removal of DRM restrictions from its music catalog. Starting in April, Apple will also be offering tracks at three different price points: $.69, $.99, and $1.29. In addition, iPhone users will now be able to preview and purchase music wirelessly via the 3G network. The announcement came after Apple reached a deal with major record labels, who had resisted the removal of DRM protections from iTunes. Previously, only EMI and independent labels had The Promise of Digital Music: The IFPI Report 2009 http://www.thembj.org/article.php?article_id=50 The International Federation of the Phonographic Industry, which represents record labels worldwide, just released its Digital Music Report 2009. It is available for free at IFPI.org. The Music Business Journal has reported on earlier annual versions of this document, which is the standard reference for an international perspective of the recorded music business and an account unlike any other of new developments in this promising arena of recorded music sales. According to the IFPI, Digital music revenue saw continued growth in 2008, increasing by more than 25% to $3.7 billion globally. Digital platforms now account for 20% of total recorded music sales, The Psychology of Economic Choice http://www.thembj.org/article.php?article_id=51 Richard Thaler and Cass Sunsteain’s book, Nudge: Improcving Decisions About Health, Wealth, and Happiness (Yale University Press, 2008), is ostensibly about “choice architecture,” or how to encourage people to make good decisions. However, Nudge contains analyses of human behavior which will prove valuable for anybody in marketing, advertising, or other areas of business that deal with the public. Imagine that you are in a cafeteria, perhaps the one in Berklee’s dining hall. Take a moment to consider what determines which foods you purchase. Really. Take a moment to think about it. “Taste,” “Price,” and “Nutritional content” seen like obvious factors. Maybe The State of the Music Products Industry in 2008 http://www.thembj.org/article.php?article_id=52 As the world met economic turmoil in October of 2008, no industry tat could hide from the effects of the downturn. Yet, the entertainment trade, of which music is a part, is generally thought to be more resilient to a recession. It is also easy to fall into the trap of characterizing 2008 by its last three months. Indeed, for the music industry, the first three quarters were rather uneventful. There were still as many illegal downloads as before in the recording side of things, and this affected record labels. However, as this article will suggest, sales of music products The Business of NAMM is a Winter Treat http://www.thembj.org/article.php?article_id=53 I am sure a lot of you have heard of the NAMM Show. Primarily, NAMM is held for retailers to make orders from manufacturers. That seems kind of boring right? Well, it definitely is not. Music business professionals from all over the world gather each year to unleash their newest products. These products can be anything from recording software to saxophones and electric guitars. Not only do we get to view and test the products. We also get to witness artist signings, demonstrations and even private performances. So what does NAMM even stand for? It took me a while to BaROCK Obama’s Inauguration http://www.thembj.org/article.php?article_id=54 The inauguration of our Nation’s 44th president, Barack Obama, was met with a spectacle of music the likes of which had never been seen. Artists from across the musical spectrum of genres flocked to the Nation’s capital to perform and take part in this truly historical event. Never before has a president stimulated artists on this level of magnitude. The experience for those artists and promoters involved rewarded them with a great sense of pride, as well as some major monetary boosts. Barack Obama's Presidential Inauguration helped make a big splash for the many artists involved in the festivities. Viewership for Can Topspin Simplify the Artist to Fan Relationship? http://www.thembj.org/article.php?article_id=55 Topspin Media is a music company co-founded by Peter Gotcher (who also co-founded DigiDesign, the company behind ProTools) and Shamal Ranasinghe. The company is in the process of fine-tuning its proprietary software platform that allows artists and their teams to build fanbases and careers more efficiently and effectively than ever before. Though currently working with artists on an invitation-only basis, the company is set to officially release its software platform sometime in the coming months. Anticipation of the software’s official debut has been building, but the company still has not set any specific release date. There is always quite a bit Pirate Bay Dealt a Guilty Verdict in Swedish Trial http://www.thembj.org/article.php?article_id=56 The morning of February 16th, 2009 marked the beginning of a trial in Sweden the likes of which the world had never seen before. The Pirate Bay has been accused of “assisting copyright infringement” and “assisting in making copyrighted content available” by major entertainment enterprises Warner Bros., Colombia Pictures, Sony BMG, 20th Century Fox, EMI, MGM, and Universal. Founders Peter Sunde (AKA Brokep), Gottfrid Svartholm (AKA Anakata) and Fredrik Neij (AKA TiAMO), along with major financial supporter Carl Lundstrom, all pleaded not guilty to the claims. With numerous large entertainment companies asking for 117 million Kronor ($13 million) from four Pandora http://www.thembj.org/article.php?article_id=57 Pandora is an innovative interactive internet radio service created by the Music Genome Project, which in turn was created by Tim Westergren and others in the year 2000. The MGP is a system of organizing music based on more than 400 attributes that describe a song. Those attributes are then used to compare songs to each other and recommend music similar to any given song. This technology was then applied to a new music service called Pandora, which started as a subscription service before moving to a free, ad-supported model. The site, which falls somewhere between regular internet radio and music A New Era of Digital Music http://www.thembj.org/article.php?article_id=58 It is no surprise that the music industry has been in a state of severe tumult the past couple of decades, mostly attributable to digital technology. From 2007 to 2008 alone, the number of CD buyers decreased by 17 million, and while digital download purchases are on the rise, they do not come near to making up for the loss of CD revenue. With today’s media-saturated society, the general public appears to be more interested in popular culture than actual music itself, thus fueling the trend of file sharing and single downloads as apposed to purchasing an artist’s complete album. A Perspective on Apple’s New Variable Pricing http://www.thembj.org/article.php?article_id=59 Bringing an end to the age of ‘one-price-fits-all’ songs on the iTunes Store, Apple launched its long-anticipated three-tiered pricing system earlier this month. As the Internet’s foremost retailer of digital music, iTunes initiated the new model alongside the conclusion of digital rights management (DRM) copy protection on sales from the iTunes Store. It is not generally understood, however, that the labels, not Apple, will in future be in a position to encourage demand by manipulating prices. As the article will explain, the labels will now be able to suggest tiered prices to a retailer (in this case Apple) and expect compliance. Live Nation Entertainment: Savior of the Music Industry? http://www.thembj.org/article.php?article_id=60 Live Nation and Ticketmaster announced their intent to merge early in February 2009. Many questions have been raised about the legality and the effects of the merger. Public hearings and professional panel discussions have been followed. A Senate Judiciary Subcommittee led by Honorables Herb Kohl and Charles Schumer first investigated the proposed union. More recently, at Berklee , the Envisioning Touring panel brought together leading executives of the live music industry to weigh in on the topic, while in a separate event students of the Music Law Group debated the issue. Everyone has questions, but are there any clear answers? I iPhone Applications Open Doors for Mobile Music http://www.thembj.org/article.php?article_id=61 It's been in your pocket since the mid-90s. It's been more of an essential than your home phone since the early millennium. And now it stands to replace your laptop, your library, your mp3 player, and so much more. Gone are the days of tearing apart your home in search of a calculator, calendar or flashlight, cellphones have long replaced these everyday appliances. With the intense popularity of the iPod, most assumed it was only a matter of time until phones doubled as music players. What's truly amazing about Smart Phones is just how much -and what type of things- In China, It’s the Year of the Google http://www.thembj.org/article.php?article_id=62 On March 30th, Google announced the launch of a long-rumored, legal music downloading service available exclusively to mainland China. The service, called Google Music Search, will allow internet users the freedom to search within and legally download files from an online catalogue of over 1.1 million copyright-protected songs. Files located within the expansive database will be proffered through a downloading portal administered by Top100.cn, a Chinese company headquartered in Beijing. Google will not charge users for the service, instead agreeing to split advertising revenue generated by the site with 140 participating music companies, including industry behemoths Universal Music, Sony BMG Anti-Piracy’s Avant-Garde http://www.thembj.org/article.php?article_id=65 A recent law passed by the French Lower House brings the promise of controversy and the possibility of anti-piracy legislation throughout Europe and the United States. Popularly known as the ‘Three Strikes’ Piracy Law, the controversial legislation passed on May 14, 2009 permits a new government agency to interrupt the internet of persons caught pirating. Issuing an electronic warning after the first offense, the agency is further permitted to issue a second warning through the post and, finally, disconnect the user’s internet for up to a year. Though welcomed by many and heralded as good legislation designed at protecting the rights Google China and the Future of Intellectual Property http://www.thembj.org/article.php?article_id=64 The world stands at the precipice of a Chinese century. As has appeared increasingly obvious for several years, the United States, recently at the very pinnacle of its global power, is gradually ceding influence to younger, more dynamic developing economies. Of these rising nations, none stands in better position, or appears more poised to reap the benefits of a decline in US power than the People’s Republic of China (PRC). More and more, all events political, social, economic, and legislative must be viewed in the context of China’s prodigious ascent. As a vital engine of growth and investment for nearly Social Media and the Marketing Mix http://www.thembj.org/article.php?article_id=66 This article addresses the effective use of social media marketing. It presents best practices for leveraging the new technologies, and presents an argument against the use of traditional, top-down, marketing approaches. In the groundbreaking book, The Cluetrain (which can – and should – be read online: HYPERLINK "http://www.cluetrain.com/"http://www.cluetrain.com/)HYPERLINK "x-msg://7/#_ftn1"[1], the authors present the most cogent articulation of the Internet. Not the what of the Internet, but, more importantly, the why of the Internet. I certainly don’t want to spoil the thrill you will have when you read the book, but I will let you in on one critical Strengthening Brand Identity Through Music http://www.thembj.org/article.php?article_id=67 In a decade of declining record sales, only the most enterprising artists survive. Record sales can be an unreliable source of income, and although touring may be lucrative, it is an expensive investment for those without tour support. As a result, sponsorship is becoming a very important revenue source for musicians worldwide. While musicians endorsing products is not a new concept (Coca-Cola has been using big acts like Michael Jackson in their advertisements for years), artists are increasingly looking for creative ways to align themselves with brands. Major industry innovators, among them Pharrel Williams and Cornerstone Publicity, are not simply featuring Ticketmaster Fights the Secondary Market with Paperless Ticketing http://www.thembj.org/article.php?article_id=68 In preparation for a highly anticipated fall 2009 tour, Ticketmaster introduced a paperless ticketing strategy for Miley Cyrus , making it the first exclusively ticket-less effort in live music history for a major artist. Since enacting this strategy, however, tickets have been reluctant to sell, unlike Cyrus’ 2007 tour which sold out instantly. Since tickets went on sale June 13th , more than 40 of the 45 scheduled dates are yet to be sold out. As a result, Cyrus has become the center of a heated discussion revolving around past current ticketing models. While the primary market provider, Ticketmaster, in Interview with Mega-Owner Steven Bensusan http://www.thembj.org/article.php?article_id=72 The Bensusan Restaurant Corporation is responsible for some of the most well known music venues in New York City and beyond. Very much a family business, they own and operate The Blue Note Jazz Clubs (New York, Japan, and Milan), B.B. King Blues Club and Grille, and The Highline Ballroom, as well as coordinating the talent buying for The Regattabar here in Cambridge, MA. After graduating from Berklee in 2006 I was hired by The Charles Hotel (in Harvard Square) to run The Regattabar, and have had the great pleasure of working with Steven Bensusan and his team. I decided Interview With DJ Scott Allyn http://www.thembj.org/article.php?article_id=73 In the early 70’s the disco became the center of urban nightlife. It was not uncommon for people to pour into nightclubs around nine o’clock and party to the soul influenced music of Donna Summer and KC and the Sunshine Band. For some time, disco had become a staple in European nightlife, but eventually impacted the American music played in clubs. Early disco music was a blend of jazz, classical, funk, and soul, not an electronic style. Later on, the innovation of the drum kit would popularize and increase the appetite for beat-based music in the urban club scene. The transformation Dan Carlin, The New Business of Film Scoring http://www.thembj.org/article.php?article_id=74 For the past decade, the music industry has been facing a new digital era. It has generated new outlets for talent, and overturned the familiar stepping-stones for success. The film scoring industry has been affected too. A plethora of new composers are converging on the industry from all angles and discovering new paths to make a livelihood in music—with compositions for major and independent films, synch licensing for TV, and video-games. The music-gaming industry, in particular, is quickly becoming a new avenue for composers. In 2007, revenues in the video gaming industry were up 43 percent to nearly US $18 billion, What exactly is sampling and at what point does it become illegal? http://www.thembj.org/article.php?article_id=76 What exactly is sampling and at what point does it become illegal? Sampling is the process of taking a piece of music, whether an instrumental riff or a vocal line, and using it in your own compositions. Some people might insist that the act of sampling is entirely legal under the fair-use doctrine. Others might contend, under the same doctrine, that there is a predetermined limit of how much you can sample from a work, such as four notes or three seconds of a song. In reality, you cannot sample a song at all without the permission of the song’s copyright ISPs held liable copyright infringement throughout EU http://www.thembj.org/article.php?article_id=77 In June of 2007, the Belgian Court of First Instance ordered Scarlet, a Belgian Internet Service Provider, to use filtering technology to purge their network of copyright infringement content. At first the Belgian court was hesitant to enforce the ruling by penalizing the ISP without an indication that there was a practical way to prevent the infringement. The court appointed an expert who promptly filed a report stating that there were eleven technologically feasible implementations that could put a stop to sharing copyrighted content without authorization. The court concluded that ISPs had an obligation to monitor their network content and suggested Buzz Word: Multiple Rights Deal http://www.thembj.org/article.php?article_id=78 As CDs become a thing of the past, record labels have had to find other ways to make a profit. The Multiple Rights Deal, also known as a 360 deal, is one way they are doing this. Instead of deriving all revenue from album sales, these new deals give the record label a cut of the monies from touring, merchandising, and publishing. Clearly, a deal with money coming in from multiple sources is a good thing for the record companies. But artists must now consider whether or not these deals give away too much to their label. With massive competition from Privacy vs. Piracy http://www.thembj.org/article.php?article_id=79 One of the biggest perils that the music industry faces today is the ferocious battle between privacy rights and the violation of copyrights stemming from music piracy. In today’s digital age, the downloading, burning or transmission of copyrighted material is referred to as piracy, and is definitely against the law. Federal law provides severe civil and criminal penalties for the unauthorized reproduction, distribution, rental or digital transmission of copyrighted sound recordings. (Title 17, United States Code, Sections 501 and 506). Music piracy has heavily increased since the beginning of MP3’s and other widely used digital audio formats. Unfortunately, anyone with a Quality of Audio Files http://www.thembj.org/article.php?article_id=80 The music industry has been moving away from CD’s for some time now, and digital music has moved right into the forefront. For a long time, digital music meant illegal downloading from sources such as Limewire, which was a large contributor to the declining CD sales. Now that iTunes has developed and has recently become the largest retailer of music, it is clear that the CD is on its way out, and digital music is where the industry is today. I am not here to delve into whether or not iTunes is a good asset to the industry, but how Digital Freedom Campaign http://www.thembj.org/article.php?article_id=81 “The business model is crumbling” From the piano roll to the VHS, from the DVD to the iPod®, the entertainment industry is a constantly changing and evolving machine of endless innovation to help spread art, information and consumerism. Such has become an inevitable trend in the life of the music and film business. The Digital Freedom Campaign was launched just over a year ago and is comprised of a group of fair use advocates who are exposing the legal persecution of innovators, inventors, artists and consumers in the new digital age. Fair use refers to the doctrine in United States copyright Harvard Law R.A.P. with Berklee http://www.thembj.org/article.php?article_id=82 The Harvard Law R.A.P. may conjure images of iced-out beat-boxers briefing cases in a dusty old library. However, this clinical program offered by one of the world’s best law schools is an enormous opportunity for Berklee students. R.A.P. stands for “Recording Artist Program”, and for several years it has served as a boon for musicians in the Boston area who wish to receive excellent legal counsel and services, free of charge. Many musicians at Berklee seek legal advice and services from Harvard Law School students via the R.A.P. program every year. Some services offered include contract drafting and negotiating with record Time for a DMCA Fix? http://www.thembj.org/article.php?article_id=83 Title II of the Digital Millennium Copyright Act (DMCA) of 1998 introduced new limitations on liability for copyright infringement by online service providers (OSPs). These limitations were put in place to protect OSPs from copyright infringement suits when engaged in standard operational activities based on transitory communications, system caching, storage of information on systems or networks at the direction of users, and information location tools. After almost ten years under the DMCA, a number of issues and limitations have emerged, including conflicts with existing laws, abuse of the notification and takedown provision, and threats to fair use. Title II also establishes Taking on the RIAA http://www.thembj.org/article.php?article_id=84 In the wake of an industry turned upside down, everyone is twiddling his or her thumbs, impatiently awaiting music's next featured product. As Steve Job's steers and extends the Apple Company over and through the market, industry consultants are pondering over ideas that could potentially rival the current digital music explosion. The digital music market has become more relevant in 2007 than ever before. With a 47% increase this year, digital sales have contributed almost 75% of the market value to Apple's iTunes store. This increase in digital sales has provided a little more stability to the music industry. However, Buzz Word: Recording Industry Association of America http://www.thembj.org/article.php?article_id=85 The Recording Industry Association of America (RIAA) is a trade group. The RIAA is a group that certifies sales awards in the industry, and works to protect intellectual property and the First Amendment rights of artists(1). Certain areas that they focus on are piracy online and on the streets, freedom of speech, licensing, and ISRC codes(2). Despite the fact that they protect legal rights in the industry, the RIAA have been known to cause controversy on how they go about it. Since the late 90’s when it sued Napster for copyright infringement, the RIAA has also been suing individuals for illegal Performance Royalties In New Media http://www.thembj.org/article.php?article_id=86 Q: How do artists collect royalties when their sound recordings are performed on digital cable, satellite television, Internet and satellite radio? A: Artists collect their royalties through an independent, non-profit performance rights organization called SoundExchange. It represent over 3,500 record companies and their 6000 labels, and therefore thousands of artists licensing their music for noninteractive streaming services that use satellite, cable or Internet methods of distribution.in the digital age. SoundExchange is the first organization formed in the United States to collect performance royalties for sound recording copyright owners (SRCOs), featured and nonfeatured artists. The latter is important, for sidemen in a record are at Royalty Agreements in New Business Models http://www.thembj.org/article.php?article_id=87 Traditionally royalties are paid to composers, labels, and publishers through music societies like BMI, ASCAP, and SESAC for the public performance of their music on things like the radio, stages, and jukeboxes. With webcasts and new music services entering the playing field, a collection agency called Sound Exchange has surfaced. Sound Exchange acts on behalf of the record companies to negotiate royalties with broadcasters, handle their performance licensing and reproduction rights, and distributing royalties to its members. Unlike the above music societies, Sound Exchange only collects royalties from compulsory licenses for non-interactive streaming services that are distributed through satellite, cable, Buzzword: New Copyright Form--Form CO http://www.thembj.org/article.php?article_id=88 On July 1st of this year the United States Copyright office, a division of the Library of Congress, introduced two new forms to be used to register basic copyrights. Form CO can be printed out and sent in with a fee of $45, and the equivalent online version Form eCO can now be filled out online for a fee of $35. These new forms represent an important change in how Copyrights are registered in the United States. The new forms simplify the process and allow online registration for the first time. Before Form CO was introduced, every type of copyright had Ticket Resale Could Benefit Artists http://www.thembj.org/article.php?article_id=89 The symbol of the secondary ticket market is that umbrageous character standing outside Gillette stadium in a dark overcoat offering tickets for a less-then-modest profit. Now, however, big business is trying to get in on the action of a purported $10 billion worldwide market. Who are these companies, who are the pioneers among them, and how will they help the declining music industry? In America alone, the secondary ticket market has been valued at $2 billion. Twelve states maintain a varying degree of regulation regarding the reselling of tickets. Ticketmaster, Stubhub (recently purchased by Ebay), and Ticketnetwork, are now lobbying state The DMCA: Juggling Copyrights and Unfettered Access For Ten Years http://www.thembj.org/article.php?article_id=90 When the Digital Millennium Copyright Act was signed into law in October 1998, the bill included two important provisions: one surrounding Digital Rights Management (DRM), and the other granting limited liability against copyright infringement to Online Service Providers (OSP’s). For the past decade, Titles I and II of the bill have both seen a considerable amount of criticism. Some have raised the issue that the bill lacks consideration for fair use, while others have argued that DRM provisions have only succeeded in deterring users from paying for content and hampered technological innovation. Nevertheless, despite the DMCA’s imperfections, there is no Avoiding the Copyright War of 2013 http://www.thembj.org/article.php?article_id=91 For all the cultural cache and tabloid-mystique of the record industry, the business boils down to one task: management of assets. Sound recording masters are key, and yet the ownership of this vital asset will soon be challenged. Beginning in 2013, the Copyright Act will allow authors to regain ownership of copyrights transferred to others 35 years after those transfers took place. This means that regardless of what agreement a recording artist originally struck with his record label, after 35 years he could potentially regain ownership of his sound recordings - creating a windfall for artists and depriving record labels Untangling Michael Jackson’s Finances http://www.thembj.org/article.php?article_id=93 Shock and grief were expressed by many this June as the world lost one of its most influential pop-stars, Michael Jackson. Jackson transformed the world of popular music, establishing a new gold standard of global celebrity. However, along with his influence came an extremely garish spending habit. In the wake of his passing, it is important not only to discuss his musical legacy going forward, but also to sift through the financial mess he left behind. In 1984, Jackson, known to be an intense negotiator and savvy investor, secured one of the biggest coups in music publishing history, acquiring the rights Universal and Virgin Launch New Subscription Model http://www.thembj.org/article.php?article_id=94 This June, Universal Music Group (UMG) announced it would be pairing with Virgin Media, the U.K. based telecommunications giant, to offer Virgin Broadband subscribers unrestricted access to UMG’s entire catalogue for a monthly-added fee. While the exact amount of this fee has not been officially disclosed by either company, the BBC has quoted Virgin as saying this fee will likely be near the cost of buying a few albums [1], or according to the Wall Street Journal, around $25 per month [2]. Pricing is also likely to be tiered, with at least one less expensive option for the more conservative The Record Industry: An Orrery of Errors http://www.thembj.org/article.php?article_id=95 A review of Steve Knopper’s Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age The record industry has fallen on hard times. No stranger to adversity, the industry has for many years been plagued with small issues that highlight a larger problem. The difficulty is mostly attributed to the inability of major record companies to see where trends are headed, where people want music to be, and what consumers want to hear. This is the underlying theme of Steve Knopper’s fascinating book, Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age, Interview with Music Business Chair Don Gorder http://www.thembj.org/article.php?article_id=96 CF: Tell me about your career in music before coming to Berklee in 1991. DG: I went into the area of music education in 1983 when I took a job at the University of Colorado at Denver which was the second Music Business Program. Miami was the first and of course that was my first exposure to the discipline of music business and academia when I was a graduate student. I took a couple of classes and my next step was to go to law school but then I got an invitation to teach at University of Colorado. Live Nation http://www.thembj.org/article.php?article_id=97 Live Nation has put considerable effort behind creative promotions, hoping to stop the decline in attendance figures this year. The company began trading on the New York Stock Exchange in December 2005 and since then has set forth their ambiguous mission to maximize the live concert experience. It becomes unclear as to whom the company strives to maximize the experience for. Is it the avid concert enthusiast? Is it any one of the 1,600 artists on its roster? Is it the stockholders? The best interest of each of these three groups may be merged into the Live Nation Club Passport. Introduced Best Buy Plans to Purchase Napster http://www.thembj.org/article.php?article_id=111 Entertainment retailer Best Buy has announced a plan to buy online music service Napster for $121 million dollars. Napster, which is now a subscription service for downloading music, claims to have over 700,000 registered users using their digital program. While Best Buy currently does have a digital download store powered by Rhapsody, their aim in purchasing Napster is to become a fierce competitor with Apple and iTunes. Of the $121 million, $67 million will be used immediately for short- term investments. Aside from ownership, not much will change within Napster, as they have ensured that the employees will still hold MySpace Music Launches with Strong Opposition http://www.thembj.org/article.php?article_id=112 Since its formation, MySpace has continued to be profoundly influential in the music industry. Millions of people flock to the networking website daily to listen to music and discover new artists. More specifically, A&R scouts are searching through MySpace religiously to find the most popular unknown artists. However, as the site has continued to grow, it has managed to keep the major record labels at bay and create a forum for all record labels to have a voice. It has not been until recently that News Corporation-owned company decided to make an alteration to its music website and enter into Twitter: Day In A Life? http://www.thembj.org/article.php?article_id=99 Online social networking is quickly becoming a historic phenomenon. Sites like Facebook, LiveJournal, YouTube, Last.fm and MySpace are wildly popular. As the music industry tries to dig itself out of its hole, musicians have had to become more self-reliant in steering a path to their own success. New avenues for promotion become standard, such as a personal MySpace Music page—and a website, where you post your photos, tour dates, bio, contact, and other information. But to build up a following or feed a growing fan base, more is needed: a blog, a Facebook page, a Last.fm account, and Buzzword: Choruss http://www.thembj.org/article.php?article_id=108 Over the past year, Jim Griffin has been working on a collective licensing plan that would allow college students across the country to download an unlimited amount of music, in exchange for a small fee built into the cost of their tuition. The initiative, known as Choruss, is currently being funded by Warner Music Group and has also gained support from Sony, EMI, and Universal, as well as, the National Music Publishers Association and the Electronic Frontier Foundation. Choruss is expected to begin its pilot phase this coming fall, and there are currently five schools said to be on board. In LiveNation and Ticketmaster: Summing the Parts, Making a Dangerous Whole http://www.thembj.org/article.php?article_id=109 Early in February, Live Nation and Ticketmaster decided to merge into one company instead of renewing their previous commitments to working with one another. This decision was made after a $123 million dollar investment by Ticketmaster to hire Irving Azoff as their new CEO back in December of 2008. Neither Live Nation nor Ticketmaster have commented on when or how they plan to merge, but it is known that the name of the combined company will be “Live Nation Entertainment” and include executive chairmen Barry Diller and Michael Rapino, both of Live Nation, and Irving Azoff, of Ticketmaster [Editor’ note: The Recession Compounds The Crisis In Recorded Music Sales http://www.thembj.org/article.php?article_id=110 The current state of our country’s economy is frightening. With the recent $85 billion federal bailout of AIG, the unstableness of the stock market, and the rapid decline of the housing market, one wonders where the entertainment industry stands amid the financial uncertainty. How are the four major record labels fairing? How can people afford to buy music? What must the industry do to adjust, when people are struggling to come up with the money for necessities? I’ve done some research and come up with some facts, and also some opinions of my own, as to what the future may Direct To Fan: Offer, Focus & Acquisition http://www.thembj.org/article.php?article_id=101 Anyone that has been following music business trends for the past few years is likely familiar with the high profile direct-to-fan campaigns (those that focus on the monetization of an artist’s fan base directly) that Nine Inch Nails, Radiohead, Imogen Heap, and others have been involved with recently. As Mike Masnick put it in his , the recipe for effective direct-to-fan campaigns (hereon DTF) can be boiled down to: Connecting with Fans (CwF) + Providing a Reason to Buy (RtB) = $$$. This makes sense, right? The difficulties arise when you consider that there are five million Getting in the Game: The Rock Band Network provides an exciting and inter http://www.thembj.org/article.php?article_id=102 By now, you’ve probably played Rock Band, the music based video game in which you and three friends can play and sing along, using instrument and microphone controllers sold alongside the game. Developed in Cambridge, Massachusetts by Harmonix studios and published by MTV Games, Rock Band has become a worldwide phenomenon, with sales across all platforms grossing well over 1 billion dollars . In the two weeks following the release of Harmonix’s newest game, The Beatles: Rock Band, over 1 million units were sold across the major platforms (Nintendo Wii, Microsoft Xbox 360, Sony Playstation 3). With the A Decade to Remember: Changes in the Music Industry, 1999 - 2009 http://www.thembj.org/article.php?article_id=103 The digital music revolution started with peer-to-peer file sharing late in 1999 and changed forever the terms of recorded music transactions. Consumers suddenly could enjoy unprecedented access to near limitless amounts of music and media. Record companies and some artists decried the wide spread abuse of intellectual property, and lawsuits from the Recording Industry Association of America (RIAA) eventually started in earnest. The RIAA sought to protect not only the integrity of copyright law, but also the revenues of the rights holders (artists and record companies). The Value of Musicians’ Rights and Retail Prices Evidence suggests, however, that the devaluation of Spotify and the New Music Platform http://www.thembj.org/article.php?article_id=104 It has been ten years since Napster fundamentally changed the way people get their music, and the recording industry continues to suffer in the battle against its newest archenemy, file-sharing. The public now expects to get its music easily, on demand, all-you-can-eat, and all for free. File-sharing is now purported to amount to around 93% of all music consumption in the U.S. Physical sales continue to freefall, and it seems record companies are finally beginning to loosen their grip on the stranglehold they have on recorded music. Today most companies are re-aligning their sights on new models for distribution Veoh Networks Lawsuit http://www.thembj.org/article.php?article_id=105 On September 14th, 2009, a Federal Judge in Los Angeles, CA threw out a Universal Music Group (UMG) lawsuit against Veoh Networks when they were found to be compliant with the Digital Millennium Copyright Act. The lawsuit began three years ago, when Universal Music Group alleged that Veoh Networks had committed copyright infringement by pointing to UMG owned material on their website. For those of you unfamiliar with Veoh Networks, they are essentially a much smaller version of YouTube. Users have the ability to upload their own amateur or even professional video content as long as they own the copyright Recording Industry v. Broadcasting Industry http://www.thembj.org/article.php?article_id=106 In February of this year the House of Representatives Judiciary Committee approved a bill that would implement a new royalty fee on terrestrial radio broadcasters (AM/FM) for the public performance of sound recordings. This is a separate royalty from the one paid to performance rights organizations like ASCAP, BMI, and SESAC, who compensate composers and publishers of the underlying compositions. The new performance royalty will require broadcasters to pay for use of the actual sound recordings during their broadcasts, compensating the performing artists, producers, and record companies in addition to the royalties they already pay. This marks the first Clear Channel Pays Up http://www.thembj.org/article.php?article_id=113 A court case between Clear Channel Communications and Grantely Patent Holdings finally came to a close on April 22 when Grantely was awarded $66 million from Clear Channel due to patent infringement. Apparently, Clear Channel invented and sold a revenue management devise called Viero to all the broadcast and cable industries. Billy Shane Fox, founder and co-owner, of Grantely Patent Holdings stated that he had invented and patented four revenue management devices that were similar to Clear Channel’s, Viero. Grantley claimed Clear Channel’s, Viero, to be an infringement of the copyrights. The trial began on April 14 and lasted until April 22 Drink Coffee and Hear Music http://www.thembj.org/article.php?article_id=114 In 2007, Hear Music, previously known as a catalogue company based out of Boston, became a record label under its parent company, Starbucks. With Concord Music Group as its distribution label, Hear Music has grown awareness through the signings of Paul McCartney, Joni Mitchell, and Carly Simon, to name a few. It’s most recent addition, Hilary Mcrae, a Berklee Alum, is Hear Music’s first emerging artist. Starbucks states that signing Hilary Mcrae was motivated by her combination of melodious songwriting as well as her commercial appeal. Hear Music wanted to capitalize on the success of its other CDs, including From Pandora’s Box http://www.thembj.org/article.php?article_id=115 Tim Westergren, founder of Pandora and the Music Genome Project, visited Berklee to give a clinic on the potential future of music regarding radio, internet radio, and streaming. Pandora is a free Internet radio site, which allows you to create your own stations and easily find new music. The Music Genome Project allows people to gain access to unknown and more obscure bands. The genome employs fifty music analysts to listen to songs all day and analyze them using up to 400 different attributes. It keeps a list of these attributes for each song, and compares the similarities between that Jay-Z Joins Live Nation http://www.thembj.org/article.php?article_id=116 A powerhouse was declared on March 30 connecting Live Nation and rapper Jay-Z in a 150 million dollar contract. After announcing the departure from his former record label, Def Jam, Jay-Z has struck a deal with Live Nation which will encompass the financing of Jay-Z’s own entertainment venture, Roc Nation, along with live shows and tours expanding a scope of 10 years. Roc Nation will be the umbrella for all of Jay-Z’s outside projects including his own label, music publishing, and A&R. This news comes shortly after two other multi-million dollar contracts were established with U2 and Madonna; a growing iTunes Weighs Unlimited Access http://www.thembj.org/article.php?article_id=117 Apple’s iTunes store may soon offer unlimited access to its music collection. A flat fee paid with new iPod purchases or a monthly subscription would allow the customer to download as many tracks as they wanted at no extra charge. Estimates indicate that an additional $100 charge tacked onto newly purchased iPods would give customers unlimited access to iTunes for the life of the player. Monthly subscription rates would be about $7-$8. Downloaded tracks would still be subject to the same DRM technology as standard iTunes tracks (presumably excluding those tracks that currently lack DRM). Many aspects of the plan are still The Continuing Story of Qtrax http://www.thembj.org/article.php?article_id=118 As music consumption changes, new business models emerge. One such company, Qtrax is stepping out with one of the first advertiser-supported free and legal P2P file-sharing sites. Currently Qtrax contains DRM-laden music only suitable for Windows PC, but it plans to release a version for Mac OS X in March. However, as of now downloaded songs are only compatible with WMDRM players, effectively excluding Apple’s iPod. Representatives from Qtrax have declared that it is only a matter of months before a suitable iPod-compatible version is ready. Qtrax was set to announce its software at the 2008 MIDEM conference, and did so Last.fm Announce Full Track Offer http://www.thembj.org/article.php?article_id=119 Music website Last.fm announced on January 23rd that it will begin offering full tracks online for free. The website, now owned by CBS, has secured licensing agreements with the four major record labels, as well as thousands of independent labels. Last.fm derives its revenue from advertising and pays out royalties to labels each time users stream a track. Over 15 million unique users from all over the world use the site, which operates as an online community for music fans. Listeners are able to find and discover new music based on their taste and previous selections. Previously, 30-second clips were Pretending To Buy a Latte? http://www.thembj.org/article.php?article_id=120 Internet cafes in Australia have been put on alert after a Sydney cafe was raided by federal police. The cafe, Interville Technology, had been giving its customers access to a vast library of pirated music and movies for a flat fee. Music Industry Piracy Investigations (MIPI), an organization set up by the country's music industry to fight piracy, cooperated with the authorities in carrying out the raid. MIPI claimed that multiple other cafes in the area had been engaged in similar a practice, suggesting that the piracy was not limited to a single location. The raid and its aftermath signal Post Grammy Sales http://www.thembj.org/article.php?article_id=121 The latest issue of Billboard reports on the fact that after this year’s Grammy Awards, the industry did not experience massive sales growth like previous years, which have seen increases “as much as one to two million in incremental sales.”(1) Grammy ratings are down since last year, and there is simply a lack of interest among young viewers.(2) A week after the show aired, only certain artists have benefited from the exposure the Grammy Awards traditionally bring. Amy Winehouse, who raked in five Grammy Awards, has seen a jump from number 24 to number 2 on the Billboard 200 with her album Free Music with Nokia and UMG http://www.thembj.org/article.php?article_id=122 Cellphone giant Nokia has struck a deal with Universal Music Group to offer buyers of Nokia music phones free access to Universal artist’s music for a 12-month period. Nokia has signed on with Universal Music Group International for their new “Comes With Music” plan, which will allow Nokia users who have purchased a music phone to download all the music they want, free for 12 months. The plan also allows the user to keep the music after the 12-month period expires. Comes With Music is designed to be a subscription based download service. Using the music phone or device, you will A Supposed Answer to Declining Physical Album Sales: The MVI http://www.thembj.org/article.php?article_id=123 Recently, on a semester trip with MEISA, I had the pleasure of meeting with CEO John Esposito, and others from the various departments of WEA. During our visit, the executives at WEA showed us their newest innovation, the MVI, and asked for our personal opinion of the product. The MVI, short for Music Video Interactive, is a twist to the standard physical album, and is the newest attempt by a major record label to boost physical album sales. Unlike the traditional album that contains audio and a booklet with pictures, the MVI contains interviews, behind-the-scenes footage of the band, an audio Red Hot Chili Peppers Vs David Duchovny http://www.thembj.org/article.php?article_id=124 According to Billboard (billboard.com), The Red Hot Chili Peppers have decided to sue Showtime Networks over the use of the name “Californication.” The title is currently being occupied by David Duchovny’s new Monday night series. The band argues that “Californication,” the title of their very successful 1999 album, is significant to the bands career, citing it as a “signature CD, video, and song” for them. On the other hand, Showtime has a strong case of its own. The term “Californication” was coined long before the Chili Pepper’s 1999 usage, dating as far back as a 1972 Time Magazine article, “The Vinyl’s New Life http://www.thembj.org/article.php?article_id=125 During the last couple of years, there was a spike in vinyl sales. This year, the format is expected to grow 23.4% and Newbury Comics has already seen a 43% increase in vinyl dollar value. Buyers seem to say that their love affair with the lost format stems from its social use. “When Valentine and his friends play music on the laptop, one of them simply gets up to change the playlist. When they spin vinyl, they crowd around the turntable, passing albums around, admiring the artwork and sharing stories about the songs,” wrote Ed Christman and Cortney Harding in A One-On-One With Passman http://www.thembj.org/article.php?article_id=129 Donald Passman is one of America's top entertainment attorneys and the architect of record-breaking "mega" deals for both Janet Jackson and R.E.M. He has authored All You Need to Know About the Music Business, which the Los Angeles Times called "the industry bible" and which has sold hundreds of thousands of copies over the last eighteen years. A completely revised and updated seventh edition is being released this week, and we are happy to bring this interview to our readers. Michael King is a course author and instructor for Berkleemusic.com, Berklee's online school. MK: Congratulations on your revised and Led Zeppelin Rambles On http://www.thembj.org/article.php?article_id=127 According to the music publication NME (nme.com), the newly reunited Led Zeppelin has entered the UK’s Top Forty singles chart with their 1971 classic, “Stairway To Heaven.” Arguably their most famous song, “Stairway To Heaven” had previously never been released as a single. This entrance into the Top Forty is the result of the band’s back catalogue becoming available in digital format, allowing the song to be downloaded as a single. Led Zeppelin has also found recent chart success in the United States. In anticipation of their December 10th reunion show at London’s O2 Arena, the group has released a The Eagles Team Up with Wal-Mart http://www.thembj.org/article.php?article_id=128 For the first time in 28 years, The Eagles, responsible for hits such as “Hotel California” and “Desperado”, released on October 30 their new CD entitled “Long Road Out of Eden”. As reported by Nielson SoundScan, this double disc gem debuted at number one, moving 711,000 copies the first week. While this may make old and new fans rejoice at the thought of the first full-length studio album comprised of completely new material after almost 3 decades, there is a catch. “Long Road” is only available exclusively at Wal-Mart and Sam’s Club stores, Walmart.com, and the band’s personal website. The price Fan-Funded Music Websites http://www.thembj.org/article.php?article_id=130 Since the beginning of the recorded music industry, record companies have been subjected to a constant and bitter recrimination from artists all over the world, who claim that labels should not be entitled to any sort of creative control over their music, nor the right to own masters. Until recent years there wasn’t much being done about this issue, but with the current reliance of the music industry on the Internet, there has been an emergence of a new and simple, yet interesting business model: fan-funded music. Amongst the most popular fan-funded music websites are Sellaband.com, ArtistShare.com and Slicethepie.com. While these Industry Moguls: The Good, The Bad, and The Crazy http://www.thembj.org/article.php?article_id=131 There are countless job positions in the music industry: Managers, Attorneys, Concert Promoters, Publicist, Agents, Producers, Tour Managers, Radio Broadcasters, Business Managers, and the list could go on. Yet the spotlight is placed upon that small group of businessmen that go above and beyond the standard, or just get plain lucky, to work their way to the top of the music industry food chain. These are the “music industry moguls” that wield the power and have great standing in their field. Some of their names have recognition worldwide, others only in their homeland, but their influence has certainly been felt Finding Hits With Modern Technology http://www.thembj.org/article.php?article_id=132 With the advancement of musical technology, practically anyone can create a hit song from the comfort of his or her own home. Audio workstations like GarageBand, Logic, Pro Tools, Reason, and Digital Performer enable musicians to create, record and mix their own songs with ease. Although these products allow for easy access to an artistic medium for many, it’s hard to tell if your song could be a hit. That is, up until now. A website called uPlaya.com caught the attention of many artists globally back in 2005 with its launch. Since then the website has evolved into a sort Redefining Public Performances http://www.thembj.org/article.php?article_id=133 Amid the increasingly liquid landscape of the music industry, there is a constant struggle to re-define the terms used in copyright law. These disputes are often over only a few words, but their impact on future royalty structures and business models is enormous. As we head further into the digital age, performing rights organizations seek to monetize public performances through the digital medium on three fronts: downloads of music, downloads of audiovisual works, and song-samples. ASCAP and BMI have been at the forefront of many of these legal battles, most notably suing Verizon and AT&T Google Music Search: A User's Perspective http://www.thembj.org/article.php?article_id=134 Millions of people use Google to learn about bands as well as find music on the Internet. Considering two of the top ten queries surrounding Google are music related , it’s about time that we hear from them. Google launched its new and potentially titled OneBox, or Google Audio, music service in America on Wednesday, October 28th . While it is not a completely new website, it is “a new set of integrated options to (sic) normal search results.” Partnered with iLike, which was recently acquired by MySpace, iMeem, Lala, MySpace, Pandora, and Rhapsody for streaming The Drama of the Recorded Industry in Numbers http://www.thembj.org/article.php?article_id=136 The following table illustrates the plight of the record companies since the inception of the iPod and iTunes in 2001. The $.99 of a song are typically distributed as follows*: Apple $0.33 Label $0.48 Artist Royalty $0.10 Mechanicals To Songwr. $.045 Mechanicals To Publisher$.045 Total $0.99 Conclusions 1. Buyer shifts to Apple iTunes deprived the labels of any distribution income online. 2. The majors had completely owned the distribution of their products in the physical world, but the loss of distribution revenue online was, at 33 cents to the dollar, catastrophic. 3. As consumers began buying songs rather than Streams Go Mobile http://www.thembj.org/article.php?article_id=140 It has been four years since Lala, a digital music streaming service, premiered. The company will soon be releasing a new iPhone app that will let users stream music from their smartphone. The Lala app provides another fierce competitor in the music app world by offering a set of strengths unique to the Lala platform. First, if you already have the song in your iTunes library there is no need for to sync your iPhone or upload your library. Lala members can use their free Music Mover software to verify the songs you own and synchronize them into your Transforming the Live Experience http://www.thembj.org/article.php?article_id=141 Although it has taken a while to catch on, mobile devices are now beginning to prove themselves as essential tools that have essentially transformed the live concert experience. Venues used to ban the use of cell phones from their shows, but now, the tide is turning, and venues, artists and promoters alike are seeing the benefits of a creatively integrating mobile and live. At a live show, excited fans always have the dire need to get closer to the band and be more involved with the overall concert experience. People constantly are trying to push their way to the front, Do Ringtones Constitute A Public Performance? http://www.thembj.org/article.php?article_id=138 On October 14th, 2009, the performing rights society ASCAP, and all the publishers, songwriters, and composers it represents, suffered a major blow when a federal judge in New York ruled against their claim of copyright infringement when a cell phone’s musical ringtone goes off in public. The ruling stated that, “when a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and [the cellular carrier] is not liable either secondarily or directly." ASCAP argued that when a cell phone’s musical ringtone goes off in public it meets the standard definition of SESAC Faces Class-Act Lawsuit http://www.thembj.org/article.php?article_id=139 On November 4th a group of television broadcasters came together to file a class-action anti-trust complaint against performance rights organization, SESAC. The Television Music Licensing Committee, a non-profit organization that negotiates music licensing fees with performance rights societies on behalf of television broadcasters, stated that SESAC has used price-fixing along with various anti-competitive acts to unjustly raise their fees. Previously SESAC negotiated licensing for local broadcasters through the Television Music License Committee, which represents 1,200 local television broadcasters. However in 2008 SESAC decided to individually license local television stations. The Television Music Licensing Committee stated, “the complaint alleges that essentially Face The Music! Latin America and the Protest Song Movement http://www.thembj.org/article.php?article_id=142 It is somewhat interesting how people sometimes re-analyze the music business and the current social scene only after the death of an important political figure or musician. Tragedy, it seems, can sometimes trigger new ways of seeing life. It may be bold to state that even in an event as big as an artist’s death, people tend to start appreciating what was supposed to be appreciated in the first place. Not the fame, not the money or popularity, but the message that this artist wanted to give to the world: the message behind the music. The recent death of Mercedes Sosa, Editorial November 2009 http://www.thembj.org/article.php?article_id=207 Greetings from the MBJ! It is with great pleasure that I introduce you to our November 2009 issue. Just in time for the release the newly-revised 7th edition of his “All you Need to Know About the Music Business,” Donald Passman has been kind enough to give MBJ contributor Michael King his thoughts on many current issues facing the music industry today. Passman is one of America’s top music attorneys, and we are proud to be able to include his insights in this issue. Elsewhere, Ricardo Gomez uncovers the fruits of fan-funded projects. Large recording advances take Three Strikes Against Illegal Downloading http://www.thembj.org/article.php?article_id=145 Music piracy, in its digital form, has endured now for almost a decade. The Recording Industry Association of America has compared it to shoplifting. “The impact on those who create music and bring it to fans”, it says, “[is] devastating, [and] for every artist you can name at the top of the Billboard music charts, there is a long line of songwriters, sound engineers, and label employees who help create those hits. All of them feel the pain of music theft.” (1) Yet it is possible that anti-piracy efforts are finally paying off. On October 22nd, 2009 France adopted The Topsin Platform http://www.thembj.org/article.php?article_id=151 There are more opportunities for bands to get their music heard than ever. Everyday it seems that there is a new software program, distribution platform, or website designed to help musicians further their careers. Social media websites like Facebook, MySpace, or Twitter help bands engage with a heavily entrenched user base, whereas elsewhere those sites geared solely for musicians and music lovers like ReverbNation, or a website and distribution platform such as Bandcamp, are fast and easy ways of creating a sizable web footprint and online marketplace (Bandcamp recently added the option of physical distribution). With all What Is Up with MySpace? http://www.thembj.org/article.php?article_id=152 Back in early 2007, MySpace began a decline in web traffic that has continued to this day. At that point, MySpace was on top of the social networking mountain- dominating Facebook in users and unique visits, while Twitter remained hovered in base camp. However, the steady migration of users to Facebook’s more mature interface and to Twitter’s novel micro-blogathon has changed the hierarchy of social networks today. MySpace is well aware of this, and seems poised to complete a transition into new realms of media aggregation and content interaction, taking full advantage of the ground it retains Legacy-Artist Management: Bert Holman and the Allman Brothers http://www.thembj.org/article.php?article_id=153 An artist is someone whom by sheer talent has the ability to create intangibles that get straight to our heart. But to succeed, an artist needs a manager to nurture him/her, understand her art, and know how to make it flourish in the public eye. This requires a special set of skills.Moreover, a manager’s duties, for instance, range from providing advice and counsel, to organizing tours and recording sessions, and acting as an intermediary for the artist in the industry. Managers drive the record label, build up relationships with everyone at the label, and push the artist. An Essay on the State of the Music Business http://www.thembj.org/article.php?article_id=150 The Internet has been adapted in our world faster than any other media. It has taken seven years to reach a 25% market share-- as opposed to radio, which took twenty-two years; television, which took twenty six years; and the phone, which took thirty five years to be owned by 25% of the consumers in the market . The PC itself needed 15 years, and even the cellular phone did it in about 13 years. The digital world is unquestionably the future and offers much hope. But adaptation is required, and the record industry has not fared well yet, Piracy Made Unattractive http://www.thembj.org/article.php?article_id=154 The music business has suffered piracy more than any other media. The past 10 years have been unprecedented with music sales down more than a third in many countries. During this past decade the record industry has also embarrassed itself with desperate attempts to restrict piracy through litigation. Today, however, more consumer friendly efforts to thwart piracy are gaining considerable strength due to legal alternatives and greater cooperation between the music industry and the ISP's. Three Examples The first is Google’s music streaming service. Google has partnered with Rhapsody, Imeem, iLike, and Lala and receives licensing from EMI, Universal, Hulu: Changing the Face of Free Broadcasting http://www.thembj.org/article.php?article_id=155 Rumors have spread like wildfire concerning a subscription-based Hulu. As of late October, the free video streaming website ranked number 36 on the list of most frequently visited sites, with 21.5 million global users making visits each month. The convenience of free, on-demand television with limited advertisements is enough in itself to draw people’s attention and help soften the blow of piracy. Up to this point, Hulu has been a free service funded by advertisements. Despite the fact that large profits have been made by the developers and employees of the site, that income came to a peak back The Innovation Attitude http://www.thembj.org/article.php?article_id=156 “Thus, the task is not so much to see what no one yet has seen, but to think what nobody yet has thought about that which everybody sees.” –Schopenhauer That Schopenhauer quote underlines a key aspect of creativity – the ability to see something new within the familiar – and sometimes the not-so-familiar. Remember: • Light bulbs weren’t invented by exploring candles • Iron ships weren’t made by exploring wood boats • Skyscrapers weren’t designed by exploring bungalows • Walkmans weren’t invented by exploring turntables • Cell phones weren’t conceived by exploring land lines A recent study by the Small Business Administration found that small firms Terry McBride and Nettwerk http://www.thembj.org/article.php?article_id=157 Terry McBride is the CEO of the Nettwerk Music Group, Canada's leading privately owned record label and artist management company. Nettwerk is responsible for managing some of the biggest artists around like Sarah McLachlin, Avril Lavigne and the Barenaked Ladies, as well as many others. Terry McBride is one of the world's leading businessmen in the music industry and has created a music business model empire long before this so called "new" management/label/artist 360 deal. He is an innovator in everything he does. Nettwerk was a 360 company long before the new craze of 360 deals emerged. Terry becomes the ISPs and Music in the US http://www.thembj.org/article.php?article_id=202 On January 20, 2010, CNET news reported that Verizon had acknowledged disconnecting the service of users who had repeatedly been accused of copyright infringement[1]. That same evening, Verizon spokeswoman Bobbi Henson refuted the report, claiming she was misquoted[2]. In the ensuing days, Verizon would claim that its practice of sending warning letters to accused infringers had never resulted in any service interruption. While it is possible that CNET executive editor David Carnoy accidentally misquoted Henson, it is more likely that Verizon balked at the thought of the general public becoming aware of its new policy and never interrupted user Endorsements and the FTC http://www.thembj.org/article.php?article_id=159 After almost thirty years without reforming the regulations that govern the use of endorsements to promote or advertise a product, the Federal Trade Commission (FTC) recently announced the final revisions for the guides regulating endorsements and so far third party testimonials have approved. The FTC works to prevent fraudulent, deceptive, and unfair business practices against consumers. Their “Guides Concerning the Use of Endorsements and Testimonials in Advertising” address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. In the 1980 version of the Guides, it allowed advertisers to describe unusual National Power and Music Sellers: The Case of Sweden and South Korea http://www.thembj.org/article.php?article_id=203 Ever since the days of Napster, the music industry has been combating illegal downloading and file sharing—in the world battlefield. Piracy continues to soar and remains a huge barrier to market growth, as is suggested by the overall decline of about 30% in global music sales between 2004 and 2009 . Music labels have had to trim their budget and the development of new artists has suffered. In the US, moreover, targeted and draconian lawsuits against particular infringers have arguably isolated the labels from their consumers, undermined their lobbying power in Congress, and resulted in high legal costs at a Editorial December 2009 http://www.thembj.org/article.php?article_id=208 Season’s Greetings! I’d like to personally thank you for picking up this December 2009 issue of The Music Business Journal. We feel it contains a number of topics imminent to the current state of the music industry. Our goal is to keep you informed on issues that, directly or indirectly, are sure to affect the lives of music professionals and musicians alike. Music industry analysts have recently noticed that anti-piracy efforts seem to be prospering while legal alternatives to file sharing are more prevalent. Minden Jones and Silvina Moreno, in two separate articles, cover the topic Editorial October 2009 http://www.thembj.org/article.php?article_id=206 With great pleasure, I would like to introduce you to this October 2009 edition of The Music Business Journal. It is tremendously exciting to be surrounded by students and faculty alike who are as passionate about the music industry as I am, and such passion shines throughout the content of this issue. In the pages that follow you will read about a plethora of topics--including a new music company that hopes to neutralize digital piracy, a battle in Washington DC over radio performance royalties, some examples of effective direct-to-fan marketing campaigns, and musings about Kanye’s “Swiftgate”! The issue is The IPad http://www.thembj.org/article.php?article_id=209 After what seemed like an eternity of rumors and release date push backs, Apple has finally announced its revolutionary new tablet, the iPad. This 9.7-inch, one and a half pound device is intended to be the perfect bridge between a computer and mobile phone (ideally a Mac computer and an iPhone). With multi-touch capabilities, an LED-backlit screen and the 3G network of AT&T powering this device, it’s sure to turn heads in any market. The iPad was officially announced on January 27th 2010 by Steve Jobs Live Nation Entertainment: A Cheer for Sellers I of II http://www.thembj.org/article.php?article_id=210 Back in February of 2009, Live Nation and Ticketmaster announced that they were going to merge into one mega company. On Monday, January 25th, after nearly a year of investigation, the United States Department of Justice approved the merger of Live Nation Entertainment. Ticketmaster was founded in 1976 by Albert Leffler and Peter Gadwa, two staff members from Arizona State University. Alongside businessman Gordon Gunn, Ticketmaster sold its first tickets for an Electric Lights Orchestra show in New Mexico in 1977[1]. The small company grew rapidly and soon became the world’s largest ticket vendor in the A Marketplace Like No Other: A Conversation with Allen Bargrfrede http://www.thembj.org/article.php?article_id=201 Over the years, the MIDEM Music Convention in Cannes, France, has been looked upon as a staple for emerging trends and new business deals within the music industry. It is now in its 43rd cycle and this year, between January 23-27, industry professionals from seventy-eight countries discussed the business and networked together. Among the attendees was Allen Bargfrede, a professor at Berklee’s Music Business/Management program. We were able to get some insights from him and gain perspective on the event. Allen Bargfrede Live Nation Entertainment: A Cheer for Sellers II of II http://www.thembj.org/article.php?article_id=211 Now that the Ticketmaster/Live Nation merger, albeit with certain amendments to the original proposal, has received the blessings of the US Department of Justice, the well-publicized and debatably over-dramatized ordeal barrels forward into reality much to the chagrin of industry prognosticators, indie promoters, and consumer advocacy groups. Even before the ink from the DOJ’s approval stamp could dry, the teeth gnashing over the issue reached a deafening level by many of these same industry intermediaries whose professional livelihoods are now in jeopardy of being squeezed out by the new media giant. Much of the criticism being leveled at Haiti On Our Mind http://www.thembj.org/article.php?article_id=214 Haiti, often labeled as one of the poorest nations in the Western Hemisphere, was perhaps most memorable until a month ago for its dire economy. That likely changed when the brutal images of a devastating earthquake permeated our consciousness forever, highlighting unimaginable suffering and reminding us all about our common humanity. On January 12 2010, at 4:53 PM, the Richter scale shot up to an almost absurd 7.0 just 10 miles west of Haiti’s capital, Porte-au-Prince. Mike Godfrey, an American contractor at the US 2009 In Brief http://www.thembj.org/article.php?article_id=212 Music seems to be present everywhere today. We frequently notice iPods, iPhones, Blackberrys, and identify ringtones. However, the statistical record continues to disappoint. The Nielsen SoundScan annual summary for 2009 is a good example. Music transactions appear to have increased by 2.1%, totaling 1.5 billion. But the data only tracks units sold and does not provide information on the total value of music sales. This is likely to fall again in 2009, and should be confirmed when the RIAA releases its numbers in the next couple of months. Like prior years, purchases of single songs and digital albums NAMM--A Student's Perspective http://www.thembj.org/article.php?article_id=213 Founded in 1901, the National Association of Music Merchants (NAMM) is the trade association of the international music products industry and boasts memberships from 9000 companies. The NAMM show is the music products industry’s trade show that is held every January in Anaheim, CA at the Anaheim Convention Center. It is a four-day event that features around 1300 exhibitors and 87,000 registered attendees. The NAMM association works toward growing the music products industry by taking revenue from trade shows and putting it into industry charities like advocacy and market-building programs to increase public awareness, and ultimately increase demand for music Global Touring with Gerry Barad http://www.thembj.org/article.php?article_id=220 On February 26th 2010, Mr. Gerry Barad, Chief Operating Officer of Live Nation Global Touring, delivered the 17th annual Zafris Distinguished Lecture in Music Business/Management at Berklee. Earlier that day, he conducted a Music Business class, in which he discussed how he started out in the business and the recent merger of Live Nation with Ticketmaster. He answered as well many questions about the global touring business. Later, during the spring break, I had the pleasure of interviewing Mr. Barad at length. Prior to joining Live Nation, Gerry Barad was a founding partner of the Next Adventure (TNA), the The Complicated Business of Music Streams http://www.thembj.org/article.php?article_id=221 Currently, there are hopes that music streaming may become an important source of revenue, possibly replacing traditional physical revenue. There are already two types of streaming models. The first is the interactive streaming model, also known as on-demand streaming, which enables users to listen to specific songs they choose. Websites that provide these services are Facebook, MySpace, MOG, imeem, Lala and iTunes. On the other hand, sites like Pandora, Slacker, we7, Last.fm, and Internet radio in general are all examples of non-interactive streaming. A specific play list is created by these services based on the user's Book Review: Allen Bargfrede and Cecily Mak, Music Law in the Digital Age http://www.thembj.org/article.php?article_id=222 The English poet Alexander Pope once wrote that a "little learning is a dangerous thing." The fallacy of that statement lies in the belief that one would cut short an intellectual pursuit just as his interest is piqued. Similarly, Music Law in the Digital Age, by Allen Bargfrede and Cecily Mak, may not make its readers experts in the labyrinthine Copyright Act, but it is an excellent place to start for those getting acquainted with copyright and its complex interaction with digital music distribution. Perhaps the greatest accomplishment of the authors is to take a complex topic, Artist Contracts: What To Look For http://www.thembj.org/article.php?article_id=223 Recently, I visited Nashville and was able to interview Linda Edell Howard, a top music lawyer. Nashville, where Howard has her practice, has a different environment than New York or Los Angeles. There is a large legal community working with many artists and songwriters. The pay, however, is considerably less and there is a real component of artist service in the profession. For Howard, that service involves helping artists avoid mistakes, while taking care of their creative rights and freedoms. This is especially important as the music industry changes. As will be seen, the role of an The Value, Use, and Protection of Mobile Technology http://www.thembj.org/article.php?article_id=224 Take a look at the people in the subway, at college students, or even at businessmen at a Starbucks of a major city. Many will be carrying iPhones or smartphones, on which they will read, listen to music, watch videos, play games, and, generally, stay connected with the outside world. Mobile entertainment is now an integral part of daily life. Indeed, despite the current economic crisis, the mobile industry seems restless in its growth. Motorola’s Droid, via Verizon, was released in November of last year, in an attempt to gain a large foothold of the smartphone market. Recently, Sprint released Book Review: Oxymoron http://www.thembj.org/article.php?article_id=225 Book Review: Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions (Revised and Expanded edition, Harper Collins, 2009) Seldom does a non-fiction book by an MIT professor make the top five on the New York Times bestseller list. Neither is MIT, one of the world’s top scientific and engineering schools, noted for discarding logic and rationality. But Predictably Irrational achieved one and implied the other at its release in 2008 (the revised edition in 2009 looks at the recent banking crisis). The book, in the emergent field of “behavioral economics”, contains valuable insights into Recent Financial News in the Music Industry http://www.thembj.org/article.php?article_id=226 Over the last year, as the economy and the music industry lingered, many asked where the money was . Indeed , a hot topic at Billboard's 9th Annual Music and Money Conference, early in March, was the financial situation of EMI, one of the big four record labels. In 2007, EMI was acquired by the private equity firm Terra Firma for $4.73 billion. EMI had reported a 61% fall in profits, and pinned its hopes for recovery on Terra Firma’s acquisition and restructuring plans. At first, EMI saw small signs of improvement, but progress was slow Editorial April 2010 http://www.thembj.org/article.php?article_id=229 As we emerge from the depths of winter, I hope you enjoy this latest issue of the MBJ. I continue to be amazed at the amount of interest we are able to garner both from students and alumni, always submitting articles, and our readership--which continues to expand outside of the Berklee campus through our renewed internet presence. Our cover article features Caz McCrystal, a Berklee alumnus and attorney, and Peter Alhadeff, our own faculty advisor. It tracks the mechanical rate since the Copyright Act of 1976 and uses economic analysis to suggest why, during much of the time, songwriters lost TV Award Shows: A Young Producer’s Experience http://www.thembj.org/article.php?article_id=230 Producing an event is like preparing a multi-course meal. You have to plan ahead by purchasing all the ingredients, acquiring the right tools and allowing enough time for each course so that you can relax and enjoy the experience with your guests. In the end, the goal is to make all the hours of work spent in preparation invisible, so that guests can truly savor the results. Berklee Canta en Español In October 2009, I produced a music award show in Spanish that was broadcast twice, garnering two million TV viewers across Latin America and Spain. Here is my story. By my junior A 20/20 Marketing Vision-An Interview with Michael King http://www.thembj.org/article.php?article_id=231 Michael King recently authored Music Marketing: Press, Promotion, Distribution, and Retail (Berklee Press, 2009). He is Berkleemusic’s Associate Director of Marketing and co-created, with Ramal Ranasinghe, the course Online Music Marketing With Topspin. MBJ: Please tell us about your history and what attracted you to music marketing. MK:I’ve been a music fan forever. Back in the day, I had about five thousand CDs. Right out of school, I got an internship with Rykodisc, which at the time was a large independent label in Salem, MA. I became their college radio rep. My first project was Medeski, Martin, and Wood’s CD Shack-man, Lollapalooza: An Appreciation http://www.thembj.org/article.php?article_id=236 When I first arrived in Chicago in the summer of 2008, I knew it would be a musical experience unlike any other. I was a second semester student at Berklee soaking music like a sponge. But now, I ended up far exceeding my expectations and living the ultimate rock and roll event. Over the next three days, I watched bands like Radiohead, Battles, Explosions in the Sky, John Butler Trio, Brazilian Girls, Wilco, Gogol Bordello, MGMT, Rage Against the Machine, and Nine Inch Nails. I was in Lollapalooza. Lollapalooza is the world-known music festival that brings the best contemporary bands in Britain’s Digital Economy Act http://www.thembj.org/article.php?article_id=233 On April 9th, the British Parliament announced its approval of the highly debated Digital Economy Act. It was first mentioned in the Queen’s Speech to the British legislature in November 2009, and royal consent followed three weeks ago, on April 8th 2010. The law goes into effect in June. The purpose of the DEA is “to ensure a communication infrastructure that [fits] the digital age.” Along with several provisions that include the regulation of television and radio stations, the DEA seeks to enforce stricter measures and penalties on online copyright infringers. It proposes a method similar to a graduated response: notifications The Cutting Edge of Mobile Music http://www.thembj.org/article.php?article_id=234 Japan has always been known for its forward thinking in electronic gadgets. Most notably, Japanese cell phones always catch the attention of electronics enthusiasts from around the world. This is certainly understandable as by the time camera phones were initially being offered to the rest of the world, many Japanese were already watching television on their cell phones. Keitai Denwas, the Japanese translation of portable phones (aka keitai), have become fully integrated into the everyday life of the Japanese, both young and old. To continue this trend, keitai companies are doing everything they The Greening of the Music Industry http://www.thembj.org/article.php?article_id=235 Escalating greenhouse gases and worrisome climate changes are causing more people and businesses from around the world to address old and shortsighted practices that are environmentally wasteful. For the music business, the focus is on superfluous carbon emissions and staggering energy uses, especially in artist touring, audience travel, venue management, and recorded music sales. In fact, many major artists have been called into question for their extravagance. Madonna’s Sticky and Sweet world tour, for instance, began in August 2008. Madonna flew a team of two hundred and fifty people to thirty-seven venues in less than four months to play Making Music For Music’s Sake--In France and the Rest of the World http://www.thembj.org/article.php?article_id=237 In the current economy, people have to choose where to spend their money and seem to be affording recorded music less and less. There is a need for new and non-traditional markets. More than 30 years ago, while working at the national French radio station France Musique, the American musician Joel Cohen proposed to have music celebrations on both the summer and winter solstices, respectively, the longest day and the longest night of the year. The French Minister of Culture accepted only half of his proposal, and on June 21, 1982, at the summer solstice, the first ‘Fete de la Emerging Business Models: Adva Mobile http://www.thembj.org/article.php?article_id=238 A phone is perhaps the most personal item a person owns. In many instances, it is more valuable than your purse, wallet or keys, and there are very few people who go anywhere without it. Mobile phones are fascinating because they can be personalized, and people continue to spend money customizing, buying and replacing ring tones, wallpapers, and a variety of other features. A customer will pay for something that conveys his/her social identity, and more often than not that involves a music purchase; hence the tremendous opportunity for the music industry. Today’s music industry is producing new business models. Grieving an Industry and Moving On--Steven Day of Skaggs Family Records http://www.thembj.org/article.php?article_id=239 Illegal digital downloads started tearing the recorded music business apart after Napster, but the old model is not yet dead or obsolete. In this essay, I will look back at the history of the business and then look forward towards internet marketing. My source will be, primarily, Steven Day, General Manager of Skaggs Family Records. During my spring break, I visited Nashville and was able to attend a BMI sponsored panel where Day started by correlating the five well-known stages of grief to the recorded music business. Stages of Grief The first stage was denial itself. This happened at the birth of Editorial May 2010 http://www.thembj.org/article.php?article_id=240 Spring is here, just in time for this latest issue of the MBJ. It is my distinct pleasure to introduce you to our current crop of articles. Our cover chronicles a dramatic story. Berklee alumn Javier Samayoa recounts the challenges of producing and running large-scale TV Award shows. The theme of the article, on music and TV, projects beyond the Latin market in which Samayoa operates. Recently, we have added more interviews to our offerings, and in this issue we decided to cover music marketing afresh by focusing on two practitioners: Mike King of Berkleemusic, who has just relased his own Clearing the Music Pipelines: Network Neutrality http://www.thembj.org/article.php?article_id=241 The advent and progress of Internet Technology is one of the greatest things to happen to music since the invention of the phonograph. It is forcing the music business to reevaluate its function and completely change its approach to promoting music and making money. No longer does an up-and-coming act need to put all of their eggs in the “record deal” basket and pray for promotion dollars to build them a career; nor does the average consumer have to sit and listen to Top-40 radio to be told what is ‘hot’ to listen to. The Internet has completely leveled the HELLO MUSIC: THE NEW A&R ALTERNATIVE http://www.thembj.org/article.php?article_id=242
The Internet continues to bud with new web organizations catering to an artist’s needs, making the whole prospect of “doing it yourself” more of a reality for musicians everywhere. A recent addition to the artist’s arsenal of tools is Hello Music (HM). Co-founders Zack Zalon and Brendon Cassidy took their experience at Virgin Digital and used it to create this new “A&R machine.”[1] Basically, HM functions as a digital talent finder, and provides users with connections to its partners, which include: webcasting via Yahoo!Music, digital distribution via TuneCore, booking via GigMaven, and marketing via TopSpin. Clearly, Hello Music Psychographics and Fan Retention http://www.thembj.org/article.php?article_id=243 Overview This article provides guidance on how a musician, label or any other content creator can identify a target audience, encourage the most ardent customers to become evangelists, and develop a varied monetization strategy. The article should be viewed as a general overview with certain specific action items. Ten years ago, The Cluetrain Manifesto was published and became the seminal work on the Internet. Like then, the clues, or answers, are found everywhere around us today. The challenge and opportunity rests in the ability to separate the non-value adding “opportunities” from measurable strategy. This article attempts to focus content Let’s Talk Soccer: Music and the Cup of Life: http://www.thembj.org/article.php?article_id=244 The entire month of June 2010 seemed to be utterly consumed by the 2010 FIFA World Cup. No matter where I went, it seemed like everyone around me had caught this highly contagious sort of “soccer fever,” where having a TV of any kind in the general vicinity would trigger very specific and uncontrollable symptoms: Eyes would glaze over, all work/ conversation would be immediately halted, and random spastic outbursts of cursing and/or applause would periodically ensue. For the few months out of every four years that the tournament comes around, the FIFA World Cup really does capture Friction in Live Music http://www.thembj.org/article.php?article_id=245 Over the last decade, there has been a shift in artists’ revenues. While recorded music sales have dropped substantially, artists are now making more money in live concerts[1]. Live Nation (NYSE: LYV), the publicly held company that now operates as a venue owner, concert promoter, artist manager, and ticketing company, has been a protagonist in the industry since 2005, when it spun-off from the media conglomerate Clear Channel Communications and became an independent company. Now, with the recent US Congress approval concerning the controversial merger with Ticketmaster, the company’s share in the concert business is now larger than ever. Despite Live Touring in China http://www.thembj.org/article.php?article_id=246 Concert touring in China has become a much more important outlet for artists. Popularity in a country of a billion plus population is, of course, the allure, not to mention its potential for sponsorships and endorsements. But government policy in China is often confusing and the rules of commerce are hardly standardized. Consequently, most Westerners, although intrigued by China, are cautious about jumping into this promising marketplace. Major acts that engaged China in the last four years include Avril Lavigne, Linkin Park, Beyonce′, the Killers, Jay-Z, Bjork, Oasis, Kanye West, Celine Dion, and Bob Dylan. Linkin Park was the first stadium Finance and The Majors: Dangerous Times http://www.thembj.org/article.php?article_id=247 Peer-to-peer download sites, coupled with a crippling and consistent drop in physical record sales have left Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI struggling to hold on for dear life. On May 19th 2010, Music & Copyright supplied the most up-to-date financial information on the majors, and made some predictions for the months ahead. While the recording industry still seems to be in an apparent nose-dive, the first quarter of the new decade has revealed a few glints of hope that could keep the industry airborne, at least for the time being. In YouTube: The New Radio Star? http://www.thembj.org/article.php?article_id=248 With the rise of online file sharing and data-streaming, copyright infringement is currently at an all time high. Now, the future of the industry finds itself in the middle of a tug-of-war battle between the conventional methods of media giants, and the progressive ideals of today’s most cutting-edge companies. On June 23rd 2010, a federal judge sided with Google’s YouTube in 3-year legal battle over copyright infringement accusations made by The Viacom (‘Vi’deo & ‘A’udio ‘Com’munications) Corporation. The decision could be prompting a great deal of change in copyright law and the ways in which artist materials are Tom Windish: Live Music’s Indie Player http://www.thembj.org/article.php?article_id=249 Booking Agents in the music business are at a turning point in their development— much like the rest of the industry. Due to the dramatic changes in the economy, as well as shifts in the overall business of selling music, the significance of major agencies as well as the independent ones is much less defined than it once was. The music world has developed to a point where Live Nation and other large music figureheads control such a large share of the market that the small businesses appear to be increasingly irrelevant. But Tom Windish, of The Windish Editorial July 2010 http://www.thembj.org/article.php?article_id=250 As we endure the sweltering heat of these mid-summer days in Boston, I hope you will find this latest issue of the Music Business Journal both enjoyable and refreshing. As a first time collaborator with the talented MBJ team, it is my sincerest pleasure to be introducing a collective work that is as timely and informative as this summer’s edition. The Internet continues to be one of the most influential factors on the changing music industry. On the legal side of things, I will try and offer some history and perspective on the pressing “Network Neutrality” controversy— an