We are asked all of the time why we require an artist investment on initial projects. Our main reason is that we need the artist to have some skin in the game. I've said it before and I will say it again "Free has no value". When a person doesn't have anything to loose they generally don't give 100%. This business is way to hard for someone not to give it everything they have.
Case in point EMI just released their annual numbers and they reported a net loss of $800 million. They LOST almost a billion dollars. EMI has some of the largest artist in the world and a portfolio to go along with it. But once again, the old way of doing things is not the way the industry works today. The large labels used to own everything therefore all of the money would filter back to them. That is not the case in today's market. More money is being spent but it is divided to many more ententes than ever before.
Take a look at EMI's annual report on Billboard.com
Thursday, August 19, 2010
Friday, August 13, 2010
Warner Music to Negative
Associated Press
S&P cuts outlook on Warner Music to 'negative'
Associated Press, 08.13.10, 12:38 PM EDT
NEW YORK --
Standard & Poor's Ratings Services lowered its outlook on Warner Music Group's rating to "negative" from "stable," citing a continued decline in revenue and profit due to light album releases and ongoing challenges with the music industry's shift to digital distribution.
The company's "BB-" rating is three notches into junk status.
Standard & Poor's said that despite Warner Music Group's vigilant cost-cutting measures, it will be less confident about the company's outlook "until there is an indication that digital sales can resume at healthy growth rates and eventually offset physical CD sales declines."
The ratings agency said that even though Warner Music Group's album release schedule is weighted toward its fiscal fourth quarter, ending Sept. 30, it believes the company's fourth-quarter revenue could decline by a high-single-digit to low-double-digit percentage. It added that visibility into fiscal 2011 is uncertain.
Warner Music last week posted a wider loss as digital download sales growth slowed further in its fiscal third quarter. Revenue from digital sales of recorded music grew just 3.7 percent to $169 million. Sales of downloads from Apple Inc.'s iTunes store are slowing as the market matures, especially in the U.S. Sales of physical CDs and vinyl records declined 25 percent to $350 million.
Warner also suffered from fewer big releases, as its top-seller, the soundtrack to the latest in the "Twilight" movie saga, compared poorly to prior-year releases such as Green Day's "21st Century Breakdown."
Shares of Warner Music Group were down 2 cents at $4.28 on Friday afternoon.
S&P cuts outlook on Warner Music to 'negative'
Associated Press, 08.13.10, 12:38 PM EDT
NEW YORK --
Standard & Poor's Ratings Services lowered its outlook on Warner Music Group's rating to "negative" from "stable," citing a continued decline in revenue and profit due to light album releases and ongoing challenges with the music industry's shift to digital distribution.
The company's "BB-" rating is three notches into junk status.
Standard & Poor's said that despite Warner Music Group's vigilant cost-cutting measures, it will be less confident about the company's outlook "until there is an indication that digital sales can resume at healthy growth rates and eventually offset physical CD sales declines."
The ratings agency said that even though Warner Music Group's album release schedule is weighted toward its fiscal fourth quarter, ending Sept. 30, it believes the company's fourth-quarter revenue could decline by a high-single-digit to low-double-digit percentage. It added that visibility into fiscal 2011 is uncertain.
Warner Music last week posted a wider loss as digital download sales growth slowed further in its fiscal third quarter. Revenue from digital sales of recorded music grew just 3.7 percent to $169 million. Sales of downloads from Apple Inc.'s iTunes store are slowing as the market matures, especially in the U.S. Sales of physical CDs and vinyl records declined 25 percent to $350 million.
Warner also suffered from fewer big releases, as its top-seller, the soundtrack to the latest in the "Twilight" movie saga, compared poorly to prior-year releases such as Green Day's "21st Century Breakdown."
Shares of Warner Music Group were down 2 cents at $4.28 on Friday afternoon.
Labels Shut Down Street Teams
Rock label Epitaph Records recently sent out an email announcing that its street team would cease to exist on August 24. This closure comes a few months after the somewhat abrupt closure of Warner Brothers Records Street Network. Both labels gave no reason for the closing and didn't respond to media requests for answers as to why they would shut down.
In the music market we are currently in the internet is king. Social networking is where an artist or a "Street Team" has to be savvy these days. The labels didn't respond as to why the street teams were shut down but I assume we can all come to a conclusion it was based around money. Your typical label still doing business as they did 10, 20 or even 30 years ago is loosing money. The top 4 will tell you that people aren't spending as much money on music these days and that simply isn't true. Consumers are spending more if anything it just isn't all going to the same 4 places it used too. The money these days is spread out to so many different vendors most labels feel the pinch big time.
In the music market we are currently in the internet is king. Social networking is where an artist or a "Street Team" has to be savvy these days. The labels didn't respond as to why the street teams were shut down but I assume we can all come to a conclusion it was based around money. Your typical label still doing business as they did 10, 20 or even 30 years ago is loosing money. The top 4 will tell you that people aren't spending as much money on music these days and that simply isn't true. Consumers are spending more if anything it just isn't all going to the same 4 places it used too. The money these days is spread out to so many different vendors most labels feel the pinch big time.
Monday, August 9, 2010
1,000 True Fans
"The long tail does not raise the sales of creators much, but it does add massive competition and endless downward pressure on prices. Unless artists become a large aggregator of other artist's works, the long tail offers no path out of the quiet doldrums of minuscule sales.
Other than aim for a blockbuster hit, what can an artist do to escape the long tail?
One solution is to find 1,000 True Fans. While some artists have discovered this path without calling it that, I think it is worth trying to formalize. The gist of 1,000 True Fans can be stated simply:
A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True Fans to make a living.
http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php
Other than aim for a blockbuster hit, what can an artist do to escape the long tail?
One solution is to find 1,000 True Fans. While some artists have discovered this path without calling it that, I think it is worth trying to formalize. The gist of 1,000 True Fans can be stated simply:
A creator, such as an artist, musician, photographer, craftsperson, performer, animator, designer, videomaker, or author - in other words, anyone producing works of art - needs to acquire only 1,000 True Fans to make a living.
http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php
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