Will BMG and Warner Music Group Merge?

One-Day Sales: Try to Contain Your Excitement

The Artist As a Free Agent

By Kenny Kerner

According to SoundScan, there has been a decline of 7.9% in album sales this year. With no end in sight, BMG and the Warner Music Group (Bertelsmann and AOL-Time Warner) are discussing the possibilities of combining their recorded music operations. Should this happen, the new joint venture would have a market share that would rival leader Universal Music Group. All this talk the same week that Apple computer's iTunes Music Store announced over 5 million downloads during its first eight weeks of operation. Ironic, isn't it?

The band Boston recently filed suit against their label, Artemis Records and label CEO Danny Goldberg, seeking over $1 million in damages for allegedly failing to execute a marketing campaign for the band's CD, Corporate America. A label spokesperson said that Artemis has never received the suit. Kinda makes them both even, dontcha think?

It didn't take long, but weekly DVD rentals finally surpassed weekly VHS rentals according to the VSDA (Video Software Dealers Association).It was a very close race with $28.2 million for the DVDs vs. $27.3 for the VHS format.

The sixth outing of the Rock Never Stops tour is officially on the road and selling out. The 2003 ticket has Whitesnake, Kip Winger, Warrant and Slaughter. The first RNS tour debuted in 1998. And while we're talking about tours, Dixie Chicks, the package of Journey-REO-Styx and Pearl Jam are tearing it up on the road.

That's about it for now. See you in September. Stay cool.

Top of Page

Reprinted from Hits Magazine

It was fun while it lasted.

Just as the unusual sounds and sights of thunder and lightning brought a respite from the monotony of another Southern California summer this week, so, too, did the midsummer appearance of customers in record sections, picking up gratifying numbers of several new releases. Unfortunately, the thrill was fleeting. Retail won't see another can't-miss title until Aug. 12, when the red-hot RCA Label Group comes with a greatest-hits package from Country superstar Alan Jackson that sports two new cuts.

But, in terms of the releases that hit stores yesterday (7/29), only one—Elektra/EEG R&B group LSG—has a shot to break 50k in first-week sales or threaten the Top 10. The lack of a radio story puts a ceiling on the sales picture for the album.

The lack of new blood at retail means we'll be seeing the usual suspects at the top of next week's chart, with Bad/Boy/Universal's sizzling Bad Boys II soundtrack retaining its hold on #1 for the third straight week. The other recent release with measurable juice is DTP/Capitol hip-hop newcomer Chingy—and its worth noting that both BBII and the Chingster are the beneficiaries of significant spins at radio.

Otherwise, it's hard to suppress a yawn when scrutinizing the picture for the next two weeks. Please join us in a wretched howl for the dog days, because they're definitely here.

HITS magazine is the most powerful information vehicle in the music industry, and is read religiously by all the top executives and everyone else.

Top of Page

Topic: The Artist As A Free Agent

Nobody will deny that the current state of the music industry is bordering on disaster. Too many CDs are being released. Not enough records are being bought at the retail level. And those records that are being purchased aren't selling at the numbers the record companies would like. What to do?

My first suggestion was, of course, to sign fewer acts and release fewer CDs. But that suggestion seems to have fallen on deaf ears. So let me try this one on for size. How about signing an artist for one CD only. Negotiate a fair artist/label deal giving the act a signing bonus, video budget for one video, some tour support and money set aside for advertising. Then, figure out how many CDs that act would have to sell to make a profit for the label.

About a year later, when it's time for a second CD, simply do the math: How many CDs were sold internationally? Did the artist make a profit for the label? Did the label follow-through on promotion, marketing and advertising? Is the artist satisfied with the efforts made by the label? If you answered "Yes" to all of these questions, you try to re-sign the artist for a second CD-giving him/her a little raise in the signing bonus and maybe an additional point on the sales.

If the CD failed miserably, cut your losses and run. Release the artist and let him/her seek another label on which to release his slop. Maybe someone else is willing to develop the act!

This process works for the label because, if the artist and label work together and succeed; if the label keeps adding some more money to the artist signing bonus and ups the points occasionally, then, more than likely, the artist and label will want to stay together. When you get a money hungry act determined to get as much cash as possible-let the act fly and move from one label to another until it begins asking for so much money and so many points that, despite success, nobody wants to sign it!

I believe that letting artists function as Free Agents assures that record companies can make a profit from releasing CDs or allows them to cut their losses immediately. This maverick approach to sagging sales seems good for both the labels and the artists-but that's just one man's opinion!

Top of Page

See How TAXI Works

"I enjoyed and benefited from my TAXI membership for the last year, so I renewed for another."
— Robert Shulze,
TAXI Member

"I received 5 critiques for one song and each one was right on the money. The critiques and this membership are priceless!"
— Tammy Endlish,
TAXI Member

"I signed a publishing deal this month for my song "Downward." Last year I signed two publishing deals with another publisher."
— Mike Newman,
TAXI Member

"TAXI's reviewer showed me what my actual strengths/weaknesses were. I actually felt complimented, not attacked. Thanks TAXI."
— John Trentes,
TAXI Member

"Your dedication and hard work never ceases to amaze me."
— Jimmy Clark,
TAXI Member

"It's refreshing to find an organization such as yours."
— Tom Wasinger,
TAXI Member