Industry Rant; Various Issues

Originally written 11/29/7

Ok, so it’s been a while since I’ve done one of these, and there is much to discuss. Just a head’s up this will probably be a music biz intensive post, might not be a lotta yuks. So if you’re looking for that sort of thing, go check out a previous post. I won’t be offended. Really, I’ll be fine.

Let’s start with some good news from the Ivory Castle. A few weeks ago, they let go one of their big wigs. I believe his title was territorial vice president or some such. This is great news for my few cool friends left in the Castle. I don’t know why I feel the need to protect the guilty, but for the sake of this rant, let’s just call him Godd. Yes, 2 d’s like a certain other name. Anywhoo, it is my opinion that things for WEA really took a dive as Godd assumed more power. I don’t recall just where he came from, but he has a brother in a high ranking position in another label. Me thinks there might be some nepotism there. And I hate people getting by on their last name (yea, Dale Jr, I’m looking at you). When he was installed as the head of something for the east, it ushered in the era of corporate speak at WEA. Sure, WEA is a large, generally faceless corporation. But it’s still the music biz, man, there’s still gotta be some interpretation and going by instincts. He would sit in on bore ass conference calls. Some of Team Philly would be on instant messenger, and play the Godd game. Type in DING every time he uses one of his sickingly corporate buzzwords. Heard a “going forward”? DING. “So at the end of the daaay”? DING. It was truly ridiculous we would be talking about a, I dunno, Chili Peppers CD, and you would hear corp speak. Something about that was so opposite what we should have been really trying to do.

The second thing Godd did, and this was almost fatal was increase the amount of pointless and repetitive email. Kids, it was unfucking real how often my Inbox was stuffed with his reports and notions. Godd was a big believer in reports. Word docs. Excel spreadsheets. Ordering systems. Puke. I often said that if someone actually sat down and analyzed all his reports we were supposed to go through, we’d already be at 40 hours. Just doing that, not going to stores, not calling accounts, just sitting on our asses reading largely irrelevant reports. That was just so against what I felt we should be doing. That’s not real life. You can have all the info in the world to back you up, but if it doesn’t float in the real world, it’s pointless. Some further explanation.

Godd was big on sending out reports. On just about everything. Sales numbers. Radio info. Tour dates. Shoe & shirt sizes of our artists. They were big Excel files that clogged our Inboxes. I mean, at that time, I had enough porn taking up room, I didn’t need no stinking reports. The reports were unfiltered. So my poor boss would waste his day just extracting the relevant info to our markets and resend. Now I have 2 copies of the same thing. (Any wonder why the biz is crumbling?) Sometimes, we would get essentially the same report in two different emails. For example, we might get one Soundscan email that was the Billboard charts for the week. It would be concise, informative, highlight any major fluctuations, etc. Then, say an hour later we’d get an Excel of the same basic info. This would happen for many different topics.

Another one of Godd’s babies was the order tracking system. We heard he worked mad hours, late at night in his home lab, tinkering to get this right. At its core, there was a lot of useful, pertinent info on there. It was a fairly large system, and I wish he spend more time on the nav system to make it easier. The order system had all kinds of info in it. I checked it once a week, to make sure all my orders were in, and there were no problems shipping. And it did save my ass a few times. It was great to track down missing/problem shipments. Problem was that there was a lot more irrelevant/excessive info on there as well that Godd wanted us to constantly go through.

For example, there was an application you could run that showed how many copies of a title an account was expected to bring in, and how many you actually sold them. I barely ever checked this. First of all, what is the mystery formula used to calculate these numbers? Was there a monkey with a dartboard somewhere? Actually, sadly, there probably was. Here’s my point why this is unrealistic. No one from WEA goes into my stores but me, so how can I get told how many copies to sell them? The system didn’t take into account any changes that can take place; store personnel changes, Best Buy moves next door, key radio station flips format, square footage decrease, etc. I didn’t pay attention to those numbers, if I missed them I did. After all, the account would always know best.

There was a lot of cool apps you could run. Sales figures by territory. How many and of what your accounts return. But, at the end of the day, I have limited time to explore. My time was better spent, and the company better served, if I attended to other real world matters. Whenever there was a meeting or conference, or Godd might come to town (which he never did), our boss got on us to “know the ordering system inside and out”. Sure, it’s my boss looking out for us, but it felt to us almost like it was going to be a test or something. We always traveled with a #2 pencil. (Yes, that’s a joke, trying to work some humor in here to keep you awake, yo)Too much info can be a killer. I might only have limited time with an account, and they might not need to know every fucking spin in every fucking daypart. I can come in loaded with all kind of info for Band X. They can be getting monster spins, performing on Letterman and Oprah, giving handjobs in the parking lot and playing the venue right next door. If my store tells me “We got nothing happening on it.” What else can I do? There may be every reason in the world why this band should be selling, but there’s just no reaction. The info I have just doesn’t pan out in the real world. By the same token, I can have a band with absolutely nothing going on, and they can fucking explode out of nowhere. Remember Danity Kane?

Don’t worry too much about Godd. I am sure he got a killer package. I am sure he can fail upwards to some other label. But it is encouraging to see some higher ups who are part of the problem get the ax. The Ivory Castle is getting mighty thin these days. In fact, WEA just had their investor’s conference call today. The last one was where they laid off 400 people, so let’s see how better off they are. Stock price is the lowest it’s ever been. Release sched for the fall was the lamest it’s been in years. Probably coulda used some marketing people for sure. After all, it’s not like Josh Groban can play Oprah ever day
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Last night, WEA announced a deal with the Sinatra family. I’m too lazy to explain it, so here’s some copy:
LOS ANGELES, CA--(MARKET WIRE)--Nov 28, 2007 -- Warner Music Group Corp. (NYSE:WMG - News) and the family of Frank Sinatra announced today that they have established a worldwide partnership to integrate content, rights management and the preservation of the legendary entertainer's inspirational personality and prodigious body of work under a single entity.The partnership will operate under the name Frank Sinatra Enterprises (FSE) and will manage all aspects of Sinatra's artistic contribution to music, film and stage. FSE will also administer all licenses for the use of Sinatra's name and likeness.

I admit to being a Sinatra fan. I think this is good for the family and his fans. It will be interesting to see what WEA does with this. Just note the timing of this. This takes place the night before the conference call. Sinatra is a huge name for sure, but is it big enough to offset the disappointing results of the call? Maybe you didn’t hear about the call? Some more lazy text lifting:
NEW YORK (Reuters) - Warner Music Group, the world's third-largest music company, on Thursday posted a fall in quarterly profit, hurt by an industry-wide slump in sales as more fans choose to buy songs online rather than physical albums.Warner's net profit fell to $5 million, or 3 cents a share in its fiscal fourth quarter, from $12 million, or 8 cents a share, a year ago. Though Warner's revenue rose 2 percent to $869 million from $854 million a year ago, it declined 2 percent when factoring in the impact of the weaker dollar.Sales of digital music at Warner were up 25 percent at $130 million during the quarter but this could not make up for the short-fall in CD sales. U.S. album sales are down 14 percent year on year, according to data from Nielsen SoundScan, as more fans choose to buy music as individual songs through online stores such as Apple Inc's iTunes, or resort to using free file-sharing services to get music.Warner Music stock is down nearly 70 percent since the start of the year as evidence of a faster-than-expected deterioration in music sales has become more clear to investors.Like other major music companies, Warner is trying to realign its business to have a more comprehensive relationship with its artists beyond recording and publishing to include new digital services as well as a share of image rights, advertising, touring and management revenue.On Wednesday, Warner said it has formed a joint partnership with the estate of Frank Sinatra to manage all music, film and stage rights of the late iconic singer as well as administer all licenses for the Sinatra name and likeness.Last month, Madonna, one of the world's top-selling artists, said she would leave Warner Music to sign with concert promoter Live Nation Inc. But Warner retains the rights to all of Madonna's recordings to date and her publishing rights.

OK, so the Sinatra release was timed to come out before the call to blunt the poor performance. I don’t like how it’s used as a counter to Madonna leaving. The most important thing is that WEA keeps Madonna’s catalog. Madge’s days as a vital, selling artist are over after her initial singe from her next album. But it does lead to another interesting topic that seems to be all the rage with the majors these days.

Before we get to that, we need to understand how bands primarily made money. Ask any band, large or small, and they will tell you the same thing. “Who are you and how did you get past security?” (JK, more humor.) “We make all our money from touring.” For years, bands have paid the bills by getting in the bus and playing shows. They make money from ticket sales, from concession sales, from t-shirts etc sales, any tour sponsorships. They also make money from publishing. Publishing can be a huge source of money for a band. If a song gets used for a TV show, movie, commercial, videogame, etc, it can generate a ton of money for the songwriters (which most times are band members). So let’s just say the Rembrandts will never have to work again for giving us the fucking Friends song. (The sad part is they are a great pop band with strong songs. It’s sad to think that that is the song they will be remembered for, but hey, it bought them their houses.) Unless they were the biggest bands in the world, most bands only get OK income from CD sales.

The Madonna deal above is what is termed a 360 degree deal. 360 deals now mean that when a band sings to a label, the label not only makes money from CD sales, but also ticket sales, concession sales, merch sales and publishing. It’s far too early in this experiment to call it ‘good’ or ‘bad’. Surely, it won’t hurt a superstar like Madonna, but let’s take a look at it from both label and artist.

Label side. People are coming to your show because they heard your song on the radio. They bought a shirt because they saw it in the video. That song got in the movie because of us, so we get a piece.

Artist side. We played Little Rock last night. We have no airplay. 40 people showed up and we sold 4 shirts. We spent more on gas than we made for the show. You want money from us?

Let’s look at it piece by piece. Radio. Most terrestrial radio are owned by giant corporations like Clear Channel, Emmis, etc. They can own many stations in a given market. Most of those station’s playlists are extremely tough to get a song on. The corps don’t care about fostering new bands, they care about selling ad time. To labels’ credit, most have thinned the ranks of people who go to radio stations to get songs played. But radio is less and less of a factor these days. Most radio stations suck, and play the same shit over and over, regardless of format. Kids today can get hip, new music from YouTube, MySpace, internet radio, satellite, digital radio, friends’ iPod. I just don’t think radio is the impact it once was.

Venues. Most venues are owned/booked by similar giant faceless corporations. Names like Live Nation (cough Clear Channel, cough) or TicketMaster or Comcast Tix. So if you want to play the TLA in Philly, you have to abide by Live Nations rules, and how much money they charge per ticket, service charge, etc.

So you’re kinda stuck for radio & tour. Most bands management’s take care of booking. What can a label bring to the process? Doesn’t it kinda sound like the label is taking money for no real new services? Doesn’t it sound like certain execs are trying to hold onto their courtside seats? Unless a label wants to kick in money for the costs of a tour, I don’t see the win here. That leaves us with money from playing live. Should a label get a cut from every hat, hoodie, lighter sold? Are they willing to kick in some money to cover production? It’s a touchy issue for sure. And without knowing all the facts, I wouldn’t want to be a band these days. Especially when WEA will only sign a band to a 360 deal now.

Will 360 turn the biz around? Will WEA get their stock price out of the basement? Would WEA have made more money if they held onto a few marketing peeps? I was in one of my fave FYEs a few weeks ago, talking to MVPete. He said how no reps ever come in. It was sad. What was even sadder was the shrinking stock of CDs. Instead, there’s more DVD, games and trend. So maybe WEA was right? Maybe they did see some writing on the wall? Maybe those Walmart titles by Garth Brooks and the Eagles are opening artists’ eyes.

Things are tough all over, I get that. I know WEA will ride the Golden Goose of Groban for the rest of the year, while cooler bands like Eisley and Airboune rot on the vine. It’s really a golden era for music. Never before have such amounts of music been readily available, and it still feels fucked up.