Archive for March, 2011

WaTunes: Here’s Why Amazon Picked A Fight With The Labels

Source: Hypebot

<img class="asset asset-image at-xid-6a00d83451b36c69e20147e3a4948f970b" title="image from” src=”; alt=”image from” style=”margin: 0px 5px 5px 0px;” /> Some are writing volumes about how the labels are going to force Amazon to license their new Cloud Player and Cloud storage locker. The real story is that Amazon already intended to. But in meetings late last week, they told the major labels that they were about to launch what they believe they already could – a place for people to store digital files in the cloud. Beating Google and Apple to the music cloud certainly felt good, but it's not why Amazon told the labels about the launch, rather than ask for their permission.

For years, Amazon has been a leader in the cloud storage businesses. Frankly, that business is almost certainly far more profitable than selling 99 cents downloads. So Amazon decided to launch this week because of their belief – and willingness to protect that belief in court if necessary – that storing digital files in the cloud doesn't require any different licence than storing them on your computer's hard drive.

Amazon does want to cut licensing deals with the labels. In fact, I'm told that they're working to right now. But their doing it to make their cloud locker and new music player much more robust.  Not, in Amazon's view, to make it legal.

March 31, 2011 at 4:27 pm Leave a comment

WaTunes: $7000 Per Copy Report Says U.S. Digital Sales Will Pass CDs In 2012

Source: Hypebot

You could pay $6999 for Strategy Analytics' Digital Media Strategies report, “Global Recorded Music Market Forecast” or I can just tell you that it says that that digital sales will pass CD sales next year in the U.S.   For you're $7K they'll also tell you:

  • Total recorded music sales in the US declined by 7% to $6.2B in 2010, driven largely by a 16% plunge in CD revenues, to $3.8B.
  • In 2012 consumer spending on CDs will fall further to $2.7B, more than $1B lower than the 2010 level.
  • Online music revenues will continue to grow, reaching $2.8B in 2012, therefore passing CDs for the first time.
  • The report predicts that while single track downloads will remain the single most important digital music revenue model, advertising and subscription models will gain in importance over the next five years.
  • By 2015 online music revenues are expected to come from a mix of single track downloads (39%), album downloads (32%), subscription (14%) and advertising (14%).

I beleive that the streaming revenue percentage will be much higher and ad supported revenue lower.  And that prediction cost you $6999.00 less than the report with some help from Hypebot's great sponsors.

March 30, 2011 at 3:02 pm Leave a comment

WaTunes: UMG Extends Market Lead Over Sony – Remains Dominant Major Label [STUDY]

Source: Hypebot

<img class="asset asset-image at-xid-6a00d83451b36c69e2014e86f5b69a970d" title="image from” src=”; alt=”image from” style=”margin: 0px 5px 5px 0px;” /> Universal Music Group extended its lead over Sony Music Entertainment last year following an increase in its market share of recorded music sales, says new research from Music & Copyright. SMI, while it did lose some share, still remained quite a ways ahead of its nearest rival WMG.

In 2010, UMG increased its market share of physical music sales to 28.7% from 27.6% in 2009. In terms of publishing, however, things are much different. While EMI is the smallest of the four major labels, it increased its publishing share to 19.7% last year from 19.3% to in 2009. Lastly, adding all the revenues received by the major music groups, Music & Copyright has determined the total figure for 2010 stood at $19.8 billion, down by 7.4% from $21.4 billion in 2009.

Revenue Chart:

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Publishing Chart:

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March 26, 2011 at 3:44 pm Leave a comment

PRESS: Soca Megastar Kevin Lyttle Launches Contest on Sony’s Social Network

March 23, 2011 (MIAMI, FL) — Soca artist Kevin Lyttle joins with Sony's social network ACIDPlanet to launch a remix contest of his smash hit single "Nobody Like U" which debuts exclusively on iTunes March 29th, 2011. This will enable ACIDPlanet's host of DJs, producers, and songwriters to remix the song in anyway they choose. For those of you who doesn't know, Kevin Lyttle hails from St. Vincent. Producing his mainstream success hit "Turn Me On".

In 2003, the single was picked up by Atlantic Records and is currently # 25 on the iTunes Reggae Charts. In 2004, Lyttle released his self-titled album which feature songs including "Last Drop", "Mama Mia", and "Drive Me Crazy". In 2009, Lyttle released his new album "Fyah" worldwide after its Japan release through Universal Music Group. Fans are now able to gain the latest on Lyttle through his Twitter.

"Nobody Like U" will be followed by his un-released title "Anywhere", featuring Flo Rida, which is also scheduled to be released exclusively on iTunes April 26th, 2011 through Venzo Music (VMG). Following this release will be his upcoming new single which is already hitting the airwaves called "Losing Control".

March 24, 2011 at 1:28 am Leave a comment

WaTunes: Rihanna + 20 Radio Singles = Weak Concert Sales

Source: Hypebot

March 23, 2011 at 1:23 pm Leave a comment

WaTunes: AT&T acquires T-Mobile USA in $39 billion deal

Source: AT&T

New York (CNN) — AT&T will acquire T-Mobile USA from telecommunications company Deutsche Telekom for an estimated $39 billion in cash and stocks, the companies said in a joint release Sunday.

The acquisition will expand AT&T's 4G network 1.2 million square miles and will be accessible to an additional 46.5 million Americans, the statement said. AT&T also expects to gain enough cell towers to increase its network density by 30%.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," AT&T chief executive Randall Stephenson said in a statement.

The $39 billion purchase will include a $25 billion cash payment; the remainder will be paid using AT&T stock. AT&T can increase the cash portion of the price tag by up to $4.2 billion while cutting the stock portion.

As part of the acquisition, Deutsche Telekom will have an 8% equity stake in AT&T and a company representative will join the AT&T board of directors.

The agreement has been approved by the boards of directors at both AT&T and Deutsche Telekom.

CNNMoney: AT&T to acquire T-Mobile for $39 billion

The new entity would be the biggest in the US, combining AT&T's 95 million customers with T-Mobile's 34 million users for a total of 130 million subscribers.

AT&T said the transaction would quickly provide "the spectrum and network efficiencies necessary … to address impending spectrum exhaust in key markets" due to the exponential growth of traffic on its network.

The telecom giant added that it expects to gain enough cell towers through the deal to increase its network density by 30%.

As part of the merger, AT&T committed to expand its 4G network 1.2 million square miles, making it accessible to an additional 46.5 million Americans, mostly in rural and smaller communities, the statement said.

The AT&T release notes that its 4G expansion would help achieve the Federal Communications Commission and President Obama's goals to connect "every part of America to the digital age."

The $39 billion purchase will include a $25 billion cash payment; the remainder will be paid using AT&T stock. AT&T can increase the cash portion of the payment by up to $4.2 billion while cutting the stock portion.

AT&T didn't directly address how the merger would affect the new company's pricing. But on the website it built to announce the deal,, it notes: "Historically, during periods when carriers combined to achieve efficiencies, U.S. wireless prices fell."

The company also cites a 2010 report from the U.S. General Accounting Office which found that the average cost of wireless services (adjusted for inflation) "declined 50 percent from 1999 to 2009, during a period which saw five major wireless mergers." The agreement has been approved by the boards of directors at both AT&T and Deutsche Telekom, but will be subject to regulatory approval.

Fortune: Regulatory hurdles await merger

Charles Golvin from Forrester Research said: "AT&T's acquisition of T-Mobile, if approved, brings good news and bad news. The good news: high-speed mobile broadband service will improve in quality and coverage, including ? in the long run ? those in rural communities outside the reach of terrestrial broadband today.

"The bad news: the cost of that service won't come down nearly as fast as customers would like, since AT&T and Verizon Wireless combined would own nearly three out of every four wireless subscriptions in the US. While clearly troublesome for Sprint and other mobile smaller mobile competitors, It's also bad news for cable operators, whose incipient mobility products will suffer in comparison to what AT&T and Verizon can offer."

March 21, 2011 at 12:54 am Leave a comment

WaTunes: The Elimination of the Major Label Model

Source: Hypebot

image from The four major labels have a far more profound problem which is that they can no longer sustain their business model.

Last year, around this time, writer Paul Rogers' published an article in the LA Weekly that discussed the demise of the major label A&R profession.

Here we are a year later, continuing to witness the decimation, if not outright elimination, of the major label model. It's now apparent that, in the face of new economic realities, the model that flourished for years cannot be sustained in its current form. Universal Music Group has already announced cuts for 2011 of over $138-million in a massive restructuring plan even after several rounds of layoffs.

I imagine that one of the first orders of business for Doug Morris, the new CEO of Sony Music, will also be trying to reposition Sony to deal with the new market realities facing the entire music industry that have put both Warner and EMI on the selling block. There are currently TEN interested parties in Warner Music's assets (that also includes several inquiries into Warner/Chappell). At no other time over the last forty years have two major labels been for sale at the same time. The more interesting question rather than who purchases these companies is what will they do with them and what business will they actually be in.

Over the last several years, I've often wondered which major label would be the first to abandon the front-line business altogether (i.e. the signing and marketing of new recording artists that was once the heartbeat of any record label).

There is a belief in the industry that if BMG Rights Management purchases the assets of EMI from Citibank that EMI will no longer function as a 'front-line label', but will be limited to only marketing the existing music assets and catalog. The economic model of what we once knew as the major label system – worldwide infrastructure, large number of highly paid executives, the signing of talent to long and fully encompassing 360-deals, the marketing of their music to the widest possible audience via mainstream media outlets – may no longer make sense.

We now live in a world where none of that can be sustained. Yes, I'm aware of the normal responses that major labels are good for the so-called 'Pop Superstar Acts' of the world such as Lady Gaga, Black Eyed Peas, and Beyoncé, but the reality is that there are simply not enough of these kinds of big sellers today to justify the continuation of the major label model. It's also very important to note that what constitutes success today is counted in singles sales and not album sales (where labels have traditionally made the majority of their money).

It's a sobering statistic to note that despite having five top-five singles including two #1 hit singles, Lady Gaga's album only sold 3.4-million copies in the U.S. The Black Eyed Peas, who also had five top-five singles including three #1 hit singles, only sold 3.6 million copies of their album. What's never spoken of in these situations is, 'What did it cost to sell each one of these +3 million copies?'

Labels used to be able to rely on big-box retailers for sales of albums. Those same big-box retailers have for some time now effectively declared music just another loss leader to get their customers into their stores. When those retailers continue to drive down the price of music to unsustainable margins for the labels, what then? The retailers simply move on to other loss leaders and drop music altogether (we've already seen the shrinking of space retailers have allocated to physical product). Have the labels effectively made albums the loss leader for singles, and will singles simply become the loss leader for touring or merch?

It's like the great line by Jack Nicholson's character in the film "As Good as it Gets" spoken to a room full of patients waiting to see their therapist:

'What if this is as good as it gets?'

The brutal answer staring the major labels in the face is that if this is as good as it gets, then it's simply not enough. There's no more real payoff left for the majors when they hit these massive home-runs — certainly NOT THE KIND of payoff they need to sustain the major label model, which is why they may abandon it.

March 9, 2011 at 8:34 pm Leave a comment

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