Report Says Global Music Sales Will Be Flat in '05

AOL Music/Launch: The New Gatekeepers

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Reprinted with permission from Hits Magazine

January 18, 2005

In a new report titled "Global Music Forecasts," business research company Informa said Monday that global music sales, including video, fell 1% in 2004—to $32.1 billion from $32.4 billion a year before—but that sales in 2005 are likely to make up that ground, leaving the market essentially flat.

Informa says sales of audio recordings fell last year by 2.9% to $29.4 billion, but that video sales rose by 26.3% to $2.7 billion. For the coming year, the company believes that audio sales will remain unchanged, but that video sales, primarily music DVDs will increase by another 17.6%, yielding an overall 1% bump for the global market.

From 2005 to 2010, the report says sales of music video products will likely continue to grow at an average rate of 9.4%, reaching $4.9 billion in 2010. Audio-only products, on the other hand, are expected to see slower growth, driven mainly by online sales.

Online music sales, of course, have yet to make a big contribution, standing at 0.9% of music revenues last year, according to the report. By 2010, Informa expects online sales will account for 8.8% of the global market, which will by that time be worth $38.7 billion annually.

Continuing campaigns illegal file-sharers and the projected growth of the music-video sector are two reasons the company gives for the market's overall growth.

Additionally, the report projects that both China and Russia, currently plagued with high levels of piracy, will see substantial levels of legitimate sales growth by the end of the forecast period.

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

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Reprinted with permission from Hits Magazine

January 12, 2005

Radio and MTV now have company. The marketing and exposure of records is evolving, as it encompasses more elements of the digital world. Over the past few years, AOL Music and LAUNCH/Yahoo Music have established themselves as key music destinations and an important part of the marketing mix that labels must consider when promoting their products. The names of AOL Music's Jack Isquith and LAUNCH's Jay Frank are now being mentioned alongside Tom Calderone, Kevin Weatherly, Rick Krim and Tom Poleman.

"Online is taking its place alongside radio, video and touring as a venue to break new acts," says LAUNCH Head of Label Relations Frank. "Our #1 music site ranking on Nielsen gives us an audience that often surpasses these traditional outlets, with viewership on Artist of the Month and Live@LAUNCH often exceeding MTV audience share for comparable shows."

He cites Reprise's My Chemical Romance as an act whose sales doubled during exposure on Who's Next?, the site's Emerging Artist Program.

"We're seeing an intense migration of music consumers to the web," says AOL Music Executive Director Music Industry Relations Isquith, who claims the site attracts 20 million unique visitors every month. Programs such as Sessions@AOL, First Listen/First View, AOL Music Live, AOL Breakers and AOL Radio Network, with a cumulative audience of nearly 8 million, are helping the music industry get exposure on new and established acts alike.

Labels are turning to Yahoo's LAUNCH and AOL Music to break through the clutter and connect with fans. The interactivity offered by the Web tends to draw a more passionate, active fan base.

"Radio and TV are 'lean back' experiences, while AOL Music tends to be 'lean in,'" says Isquith. "We encourage the audience to talk back to us."

"We analyze our audience user ratings with Yahoo! search mechanisms to find the hot new artists first," says Frank. "This has led to artists like JoJo and Taking Back Sunday to participate in our Emerging Artist program, where they went on to high sales debuts that exceeded industry expectations."

"We were able to predict that Green Day's 'Boulevard of Broken Dreams' would attract a much larger audience than just rock fans after half a million people watched the video on First View within 24 hours," says Isquith.

AOL Music Live, a webcast that takes place week of release, has become a factor in aiding established artists such as Usher and Rod Stewart to #1 album debuts, and in Usher's case, a record-shattering 1.1 million in first-week sales.

"We treat the release of an album like opening weekend for a movie," says Isquith, who adds the performances are then shown on 105k screens at 2,500 Wal-Marts nationwide.

"We're industry-friendly," insists Frank. "We work with promotion and marketing people to make sure label priorities have the proper visibility. We have to work together if the music business is to survive."

"We want to lead, not follow," adds Isquith. "The best thing labels can do is get to us early, with lots of information and nurture a relationship."

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

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By Kenny Kerner

After chilling for much of 2004, Sheryl Crow is set to release two CDs this year—both for Interscope. One will be kinda artsy and the second more in the tradition of pop. The Very Best of Sheryl Crow, released in 2003 is nearing the 3.5 million mark. Her last single, a remake of the Cat Stevens tune that Rod Stewart covered, "The First Cut is the Deepest" was Sheryl's biggest pop hit in some time.

Sirius Satellite Radio has surpassed its goal of achieving more than one million subscribers. Sirius is already a force to deal with. The station recently promoted Steve Blatler Senior VP of Music Programming.

The new 50 Cent CD, St. Valentine's Day Massacre will drop on March 5th... Seventy year-old mogul/legend Don Kirshner is planning to start a new global entertainment company. Kirshner's had enormous success running a label and with his TV In Concert series... Some of the acts who received the Recording Academy's Lifetime Achievement Award include Led Zeppelin, jazz great Art Blakey, country group the Carter Family, Janis Joplin, Eddy Arnold, Morton Gould, Jerry Lee Lewis and the Staple Singers.

UK group Gorillaz (featuring Blur frontman Damon Albarn) is getting ready to release its second CD this spring on Virgin Records... David Sardy is finishing up production and mixing on the new Oasis set... Warner Bros. Records Chairman/CEO Tom Whalley will not be leaving the company when his contract expires this August.

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