Archive | Gloom And Doom
So now that 2012 is more than half over, the folks at Billboard have crunched some numbers for record sales for the first half of the year. And while last year at this time showed album sales increasing for the first time since 2004, it’s back to business as usual this year. Album sales for the first six months of 2012 are down 3.2% as compared to last year. In fact, there’s only one album that’s sold more than one million copies so far this year – Adele’s 21, of course. For those of you keeping track, this is the first time that there’s only one album that’s sold 1 million copies through the first six months of the year since SoundScan began tracking sales data 21 years ago. While 11 albums have sold at least 500,000 copies, that’s five less than this time last year.
Worse yet, there aren’t even any rock albums in the top ten, although Gotye, Bruce Springsteen, The Black Keys and Coldplay finished in the top 20. If there’s any silver lining, it’s that digital track sales are up 6%, with 698.02 million sold in the first half of 2012, as compared to 660.80 million in 2011. And two songs, Gotye’s ubiquitous “Somebody That I Used to Know” and fun.’s equally inescapable “We Are Young,” both sold over 5 million in six months. This is the first time any song has sold over 5 million in the first six months of a calendar year.
That’s what a recent article on Digital Music News cites a source inside the company as saying. Warner Music Group was acquired for $3.3 billion by Russian billionaire Len Blavatnik’s Access Industries back in May. Now, according to the source, Blavatnik is having a case of buyer’s remorse. WMG chairman Edgar Bronfman Jr. is exiting the company now, and it looks like he’s only first in a line of planned reshuffling.
Allegedly, Blavatnik found out that the glory of owning a label group might not be worth as much as he paid, with recordings being overvalued, the possibility of core artists renegotiating their contracts and the fact that digital music sales are starting to plateau. In fact, fourth quarter revenue fell 7% at the label group this year, and for the full fiscal year, the label lost $205 million or a 4% decrease. What does this mean for WMG, whose labels include Roadrunner and Atlantic? Quite possibly more will follow Bronfman out the door, specifically, the higher-level executives with 6 figure salaries.
If there’s any silver lining in the WMG cloud, it’s that digital sales actually increased this year, up 3.2% from last year to $820 million. Yet as one of the only three major label groups, Warner finds themselves in a distant third. With Universal’s purchase of EMI, that mega-label group had a 46% share of album sales in the United States in a recent week. We’ll have to see how this all shakes out, and hopefully there won’t be too much unnecessary bloodshedding at the label group.
You can now add Vanderbilt University’s WRVU/Nashville to the continuing list of college radio stations getting the axed from the airwaves. Back in September of 2010, the Vanderbilt Student Communications announced they were looking into moving the famed Nashville college radio station from the air to solely online. Well yesterday, VSC and Nashville Public Radio confirmed that WRVU’s license has been sold to WPLN, Nashville’s NPR affiliate. WRVU’s spot on FM radio will be replaced by new classical station WFCL, which began broadcasting programming at midnight CDT. As part of the deal’s terms, WRVU will continue to stream online and will gain control of WPLN’s HD3 channel in the fall of 2011.
The news of the sale comes after months of protests from both WRVU staff and alumni. In addition to vocal out cries, the “Pledge Nothing” campaign, which urged university donors to suspend donating to Vanderbilt until sales discussion were abandoned, was launched. Despite the sale becoming official, administrators of a blog site dedicated to saving WRVU’s FM license claims that the “fight isn’t over” and will continue their efforts.
What makes this news even more disappointing, besides the fact that this marks the end of WRVU’s six decade life span on terrestrial radio, is that the college station apparently averaged 28,500 listeners between July and October 2010. In other words, WRVU was doing considerably well. While online broadcast will keep WRVU alive (somewhat), the station will now have additional operating costs for streaming royalties and bandwidth. Plus, exclusively streaming online and HD3 in the Fall will decrease its audience reach considerably.
As Bram and I have said it before, news like this hits us pretty hard, and not just because we’re both involved with college radio stations in different fashions. College radio remains a vital source for both the music fans and students wanting to gain experience. College radio’s extinction is a scary thought, but with news like this doesn’t sound as unlikely.
After 21 years of playing rock, Portland, Oregon’s KUFO has changed formats. Alpha Broadcasting announced yesterday (March 15) that the channel will opt to simulcast news/talk AM station KXL on channel 101.1 instead of its previous active rock format. Bob Proffitt, Alpha Broadcasting President/COO, had the following to say about the station’s new format:
“Today begins a new chapter in Portland radio as we bring the news and information heard on KXL to the FM dial at 101.1. The future of news is on FM and we are excited to be the first to make the move.”
So there you have it. Portland will go from listening to metal and hard rock programs hosted by the likes of Ivan De Prume (former White Zombie drummer) to hearing Glenn Beck. However, KUFO’s slip in ratings makes this less surprising to hear. According to Radio-Info.com, the station had fallen into a four-way tie for 15th place in the January Arbitron PPM. This, along with KUFO’s demise, is a sad reminder of how barely anyone listens to terrestrial radio anymore.
As part of our farewell to the rock station, here’s a news clip highlighting Ozzy Osbourne’s appearance on KUFO’s The Marconi Show back in 2007.
[via Radi0-Info and KATU]
Looks like Sony isn’t the only one who experienced a poor fourth quarter this year. DigitalMusicNews.com reports that Warner Music Group’s fourth quarter revenue experienced a 13 percent slip to $752 million, while full-year revenues dropped 7 percent to $2.98 billion. This marks the 8th straight quarterly loss for WMG. Music publishing revenue also took a hit, dropping 13% to $142 million. And while gaining 7% to $197 million, digital sales only account for 26% of broader revenue total.
This news certainly doesn’t look good for WMG at the moment. Rumors back in January were spreading that either WMG was possibly being sold or was in the midst of purchasing label rival EMI. However, after seeing these loses, and since EMI has just been taken over by Citigroup, the former rumor might not be so hard to imagine happening. However, if Warner were to purchase EMI at a fire sale price, it could make Warner’s whole portfolio look all the better to possible buyers/investors.
The New York Times is reporting news that you probably already knew if you’re old enough to even remember using one: the car cassette deck is next to non-existent. New research has found that the last new car to be factory-equipped with a cassette deck in the dashboard was a 2010 Lexus. This really shouldn’t come as too much of a surprise seeing as how cassettes’ end pretty much came with the CD’s arrival. So why is this even worth mentioning? Well, for a few reasons:
-This story brings back memories of the 8 year old me forcing my parents to listen to my Use Your Illusion I tape in our Honda car. So yeah, there’s a bit of nostalgia involved.
-This just goes to show you that there’s always something ready to replace and out date the current “top product.”
-But perhaps most importantly, there are still a lot of people that don’t want to let the last generation go. I can’t think of anyone that’s used a cassette player, but as recently as last year, you could still get one in your car. And there are probably quite a few people that still have older cars that only have cassette players, or use them with adaptors to listen to their iPods.
In other words, and as VP for automotive research for the IHS iSuppli Corporation Phil Magney puts it, it’s only a matter of time till we ask how long will it take for the CD to be replaced. Looking at how awful music sales have been lately, the answer to that question might come very soon.
DigitalMusicNews.com is reporting that Sony Music’s sales experienced a huge 14.5% decrease during its last quarter, while revenue slipped to $1.72 billion for the three month period (which ended on December 31st). With illegal downloading still reigning supreme, this major drop isn’t as much of a shock, especially since the latest Susan Boyle album and the posthumous Michael Jackson album didn’t exactly light the cash registers on fire. This news does confirm two things:
- Barely anyone is buying CDs anymore.
- Digital sales aren’t filling the gap left by physical sales.
However, you don’t need Sony Music’s third quarter to remind you that physical and digital sales are taking.
It used to be that the A&R position was one of the key roles within the music industry and to the success of a band. But as the music business has taken more hits and loses thanks to the rise of illegal downloading, the “traditional A&R” process has come, well, close to extinction. DigitalMusicNews.com has found that only 25 A&R execs were hired by labels (both major and larger indie) in 2010, while 40 exited without subsequent rehire. That’s pretty low compared to even 2009, when labels hired 58 A&R execs with 51 exiting. This should come as no surprise as more and more labels are having to make drastic moves to stay afloat. Even Roadrunner Records was recently forced to lay off some of their staff after Warner Brothers fully acquired the metal label.
Still leaving the question, though, as to how A&R and labels found themselves in this position, Ritch Esra of the Music Business Registry cited the following reasons:
1. The major labels are hiring fewer and fewer A&R executives because the volume of acts - and more importantly the types of acts – being signed have dramatically decreased.
2. The A&R process used to be about the discovery, signing & nurturing of the act. Today, A&R executives are not looking for talent per se. They are looking for an ongoing business.
3. An artist that has developed some kind of traction and awareness on their own is what I’m talking about. Today, acts need to be “developed” or at least developing in a business sense for any label to have even the slightest amount of interest. The idea that today’s A&R executives will discover an unknown act / artist and develop that artist is an illusion. They have neither the desire, time or money for that matter in 2011.
It’s pretty hard to argue with most of these points. With the lack of music sales and support from labels available, it’s almost next to impossible for new bands to get the proper exposure and development needed to break big. Even concert sales in 2010 (as weak as they were) showed that “developed acts” are some of the few acts that are doing well. Sure, there are a few exceptions, but besides Taylor Swift, Lady Gaga and Justin Bieber, not many other new artists are breaking in (or at least providing the labels money like they or well-established acts are). So when a label needs to make some changes in order to make up the money they no longer are making, it’s the department that’s bringing less to that company. The sad truth: that dead weight is most likely going to be seen in the A&R department. Of course, labels will always be in need of new talent. However, with big labels getting beaten by illegal downloading as they are, don’t expect them to give the next young metal group a shot. So unless music and concert sales spike up in the coming year, it’s more likely that a majority of aspiring music fans will get to “act” as A&R scouts through SignMe To Roadrunner than in the real world. How sad.
What a difference a decade makes. In 2000, there were 942.5 million CDs sold. Of course, that was a pre-digital world, and they’ve been on a steady decline in the years since. So it should come as no surprise that Billboard.biz reports that album sales dropped again in 2010 to 326.2 million, or a 12.8% decline from last year. The doom and gloom doesn’t stop there, though. In 2010, only 13 albums went platinum, selling 1 million units or more, a drop from 22 in the previous year. Even catalog sales fell from last year, although to be fair, they were helped out in 2009 by grieving Michael Jackson fans and the Beatles catalog being reissued.
Again, with the rise of peer to peer networks and decline in actual places to buy music, this should come as no surprise, and it’s not all bad. Digital album sales posted a 13% gain, to 86.3 million. And individual track sales inched upwards 1%, from 76.4 to 86.3 million. Five digital tracks sold more than 4 million copies, which is one more than last year. And vinyl continues its comeback, selling 2.8 million, a 14% increase from 2009. But at the end of the day, with CD sales falling by almost 20% from last year, that’s not exactly the light at the end of the tunnel. And with 46% of all music being sold digitally, 2010 could be the last year where there are more physical sales than digital ones.
CD sales have been taking a hit for years, but they’re about to get even worse. In a recent conference call with analysts, Best Buy Chief Executive Brian Dunn told analysts they’d be significantly reducing the amount of space for CDs before the end of the year. “We’ll have another store reset before the holidays, which will include an increase in the space for higher-growth and, in the aggregate, higher-margin categories, like Best Buy Mobile, e-readers and gaming, with a heavy emphasis on new gaming platforms and pre-owned game titles,” he said. “This will be enabled by our reorganization of the DVD and CD sections. The CD section in particular will shrink in space allotment.”
With Virgin, Tower and Circuit City stores closing in the last few years, one of the easiest places CDs were readily available has been at Best Buy stores.According to industry estimates, about 20% of Best Buy stores have been allocated for CDs and DVDs. With less space will also come less sales, obviously. CD’s were always a loss leader at the chain, something to entice shoppers to come into a store. With the increase in downloading, both legally and illegally, it doesn’t make as much sense to give up all that space. But with one of the main retailers significantly shrinking their space, it’s another death knell for a format that increasingly seems on its way out. Analysts have stated that digital sales will outpace physical sales in 2011, but this might speed things up even more.