I.B. Bad on the Year in the Music Business — Part One

I.B. Bad on the Year in the Music Business — Part Two

To the Swift Go the Spoils

Bulletin Board

Reprinted with permission from Hits Magazine

December 17, 2007

2007—CHANGE FOR FOUR QUARTERS: In a decade of turmoil, 2007 will be remembered as a particularly tumultuous year, as the action spread outward from the Big Four to some new sectors in a radically shifting landscape... The stars came out—literally—as Madonna, Radiohead, The Eagles, Paul McCartney and other big acts thumbed their noses at the major labels, coming up with unprecedented new ways to conduct their careers going into the future... Meanwhile, another star—producer Rick Rubin—came in... Music retail was dominated by nontraditional players, from iTunes to Starbucks... The term "DRM" was on everyone's lips... UMG continued to sell the most product, but #4 EMI generated the most headlines... With artist development on the wane, Monte Lipman bucked the trend in a big way, while American Idol became the de facto artist-development champ... Disney continued to sell truckloads of albums to its hyperactive tweener constituency... While the labels struggled, publishing companies prospered, with many more suitors than sellers... Standing tall in the management area was—who else?—Irving Azoff... Neil Portnow continued to put a kinder, gentler face on the Recording Academy, but this year's Grammy nominations left industry watchers in a state of shock... And now for the pertinent details... UMG: The long-dominant music group increased its slice of the new-release marketshare pie to 34.6% from 31.6% at this point last year, while Doug Morris remained steadfast in his determination to level the playing field in the online retail game, as well as opening yet more new revenue streams in his spare time... Jimmy Iovine's Interscope labels were #1 in label marketshare with 8.1%, led by #5 seller Fergie (1.9m), but Geffen accounted for only 2.0% of the total, lending credence to widespread speculation about an imminent consolidation. L.A. Reid's IDJ (5.2%) snagged the year's biggest debut by a mile with Kanye West's Graduation (#7, 1.8m), whose 930k first week reminded people of the good old days of the 1990s. The label saved millions in fixed costs by parting ways with the respected, highly paid executives Greg Thompson, Paul Pontius and Rob Stevenson. Mel Lewinter's 2007 MVP was arguably Monte Lipman, whose Universal Republic did the unthinkable in this day and age, breaking not one but two new acts in Amy Winehouse (#17 at 1.4m but getting a big sales spike from her Grammy nomination) and Colbie Caillat (800k), and he's now in the process of crossing a third rookie, Big Machine's Taylor Swift—2007's top-selling indie act at 1.6m—from Country to Pop. Meanwhile, Hinder did another 750k, bringing the album to 2.6m. Sylvia Rhone's Universal Motown was paced by another breakout star, Akon, whose 2006 release did another 1.6m, putting it at #9. As a whole, Universal did a solid 4.0%. UMG-distribbed Disney (5.7%) enjoyed its second big year in a row, as the trifecta of the Disney Channel, Radio Disney and Bob Cavallo's music division, paced by Abbey Konowitch, continued apace, resulting in two of the year's biggest sellers: #1 High School Musical 2 (2.5m) and #4 Hannah Montana 2 (just south of 2m), after scoring last year's top two albums... SONY BMG: A solid though distant #2 in new-release marketshare with 21.9% (down from 2006's 24.7%), the joint venture that was so nice they had to approve it twice was powered by American Idol grad Daughtry, the year's #2 seller at 2.3m, Jive's still-active 2006 Justin Timberlake smash (#11, another 1.5m on the year, to Barry Weiss' delight), Carrie Underwood (1.5m), #15 and rising—plus 1.1m on her #22 debut album, as she proved to be American Idol's most consistent seller—and another young Clive Davis-mentored diva, Alicia Keys, (1.5m), #16 and upwardly mobile as well. On the Sony side, which has been morphing ever since the fall of the Mottola empire in 2003, the big story involved the arrivals of Rick Rubin and Mark Didia, hand-picked by N.A. chief Rob Stringer and Columbia topper Steve Barnett to reinvent the storied label's creative core. The company, whose best sellers were Beyonce (#30, 1.0m) and Bruce Springsteen (#45, 775k), continues to morph, with another executive shuffle last week...

In Part Two, which will be posted tomorrow, I.B. looks at the bottom half of the Big Four, artists, managers, publishing companies, retail and the Grammys, along with his year-end Names in the Rumor Mill.

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

EMI: In a year of dramatic transition, it became difficult to tell the players without a scorecard—but that's nothing new at EMI, which has been shedding executives at the ends of their first contractual terms for well over a decade. Employing a plan dreamed up by then-consultant Roger Ames, Eric Nicoli ended the Andy Slater era at Capitol in a restructuring of the North American company that resulted in the creation of the Capitol Music Group under fair-haired boy Jason Flom, while also ousting the ruling tandem of Alain Levy and David Munns, only to be ousted himself after the company's acquisition by Guy Hands' Terra Firma. Not surprisingly, marketshare slipped to 8.2% from 9.3%, with the year's biggest seller Norah Jones' 2006 album (#13 at 1.4m) from Bruce Lundvall's relatively stable Blue Note operation. Along with sending out a stream of not especially revealing missives, Hands added writer/producer Billy Mann and several non-music people to the board as part of an ongoing attempt to shake the long-struggling company out of its malaise. The new boss took pains to underscore the prominence of EMI Music Publishing head Roger Faxon in the new regime, but Hands' plans for Ames, who replaced Munns as the head of North American operations, remain unclear. Hands' interest in the acquisition of Warner Music Group is also the subject of continuing speculation... WMG: Still a mess, and with no prospects for improvement as long as the far-out-of-his-depth Edgar Bronfman Jr. and Lyor Cohen, Bronfman's poster boy for arrogance and self-aggrandizement, remain in charge, WMG got a fervently desired Christmas present from producer/svengali David Foster, as the seasonal album from his deftly developed charge Josh Groban becomes December's hottest seller, moving well over 500k a week, with two more weeks until Christmas, giving it a shot to finish the year at or above 2.5m, putting it in the year's top three. Despite the sales on Groban, the Rubin-produced Linkin Park (#3, 1.9m) and the deal with Roadrunner that included #8 Nickelback (1.6m on the year), Warner's marketshare declined to 14.8% (from 15.3%). Tellingly, none of the above acts was signed by a current WMG executive. Meanwhile, the stock plummeted from the mid-20s in January to the $6 range this week. All in all, it's shocking to observe the current condition of what was once the pride of the music business... ARTISTS: This will go down as the year the artists took more control—and a bigger piece of the revenue pie. Madonna's mega-bucks deal with Michael Rapino's Live Nation, The Eagles' Wal-Mart exclusive (which has the veteran band at #6 and climbing with 1.9m), Radiohead's headline-grabbing, precedent-setting "pay what you like" digi-release, Starbucks' signings of legends Paul McCartney and James Taylor, and Nine Inch Nails' acrimonious split with Interscope were among the year's biggest stories. Already possessing the biggest stable of name artists in the business and eager for more, Irving Azoff sucked up assets like a Hoover, while Barry Diller provided the money to buy out T.H. Lee, thereby becoming a partner in Front Line Management. And Coran Capshaw's Red Light Management is growing into a formidable entity, with respected veterans Will Botwin, Phil Costello and Ron Laffitte in the fold, and Radiohead on the release schedule of the newly formed TBD label... PUBLISHING: Marty Bandier took the reins at Sony/ATV and promptly began snapping up assets such as Famous Music, while Universal Music Publishing finalized the acquisition of BMG Songs, vaulting the David Renzer-led company past Roger Faxon's EMI Music Publishing to become the #1 pubbery. WMG's recorded-music woes began to trickle down to Warner/Chappell, already reeling from several years of mismanagement. At leading indie Chrysalis, longtime holdout Chris Wright finally succumbed to pressure to consider selling the publicly traded company, whose North American operation has become a powerhouse during Kenny MacPherson's five years at the helm... MUSIC RETAIL: As the industry struggled to come to grips with the loss of Tower, the most talked-about players were iTunes, Starbucks and Wal-Mart, which has sold a ton of Eagles records. Apple's dominance continued to grow, as the hardware maker became the #2 music retailer, behind only Wal-Mart. But a potential new powerhouse in the download wars emerged in the familiar form of Amazon, which launched its own digital store, selling only DRM-free MP3s. Going the exclusive route along with the Eagles were the reunited Spice Girls, who slipped into bed with Victoria's Secret, selling an undisclosed amount of CDs. And the most promising potential growth area is as close as your music-enabled cellphone, providing a flicker of hope—or a lifeboat on the Titanic, depending one one's degree of cynicism—to the majors as the decline of CD sales accelerates... GRAMMYS: Amy Winehouse is getting the biggest initial spike, and Kanye West is likely to get a new head of steam, following last week's announcement of the nominees for the Grammy Awards, which will turn 50 in February. But most of the initial attention was on the surprises (Herbie Hancock, Vince Gill, Paramore, the virtually unknown Ledisi) and the key-category snubs (Bruce Springsteen, Daughtry), capping off a wacky year in suitably wacky fashion... Names in the Rumor Mill: Scott Sperling, Steve Jobs, Ron Wilcox, Roger Ames, Russ Solomon, Rolf Schmidt-Holtz, Charles Goldstuck, Paul Kremen, Donnie Ienner and Capt. Edward John Smith.

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

December 20, 2007

This has been quite a year for young singer-songwriter phenom Taylor Alison Swift, who celebrated her 18th birthday this week (12/18) with a just-received Grammy nomination for Best New Artist, a CMA Horizon Award, a hit Top 40 single in "Teardrops on My Guitar" and a double-platinum album in her self-titled debut for Scott Borchetta's red-hot Big Machine label.

Born in Reading, PA, Taylor began to perform as a child, in part inspired by her grandmother, an opera singer. By the age of 10, she was already performing at karaoke contests, festivals and fairs, as well as writing her own songs. By 11, she went hat in hand with her demos to all the major record labels on Nashville's Music Row, inking a publishing deal with Sony/ATV before Borchetta spotted the 15-year-old and signed her to a record deal. One of the reasons Swift went with the newly formed indie label was Borchetta's belief in her songwriting, as he encouraged her to cut her own material.

Swift's album was released last October, after the first single, "Tim McGraw," went to Country radio, five months after she'd introduced it at the Academy of Country Music Awards. She also opened for Tim McGraw and Faith Hill on their Soul2Soul tour, and has toured with Brad Paisley, George Strait and Rascal Flatts.

Tall, willowy and blonde, Taylor Swift is at once a wide-eyed teenager and a young veteran, but she was giddy with joy on-stage upon hearing Dave Grohl announce her Grammy nomination, delighting the crowd by hugging him and fellow Foo Taylor Hawkins and then everyone in sight. With the support of Universal Republic's Joel Klaiman, "Teardrops on My Guitar" is rapidly turning Swift into a crossover star. She'll perform on Dick Clark's Rockin' New Year's Eve Show on Dec. 31, and just played at the national prime-time telecast of the annual Christmas tree lighting ceremony at Rockefeller Center.

HITS spoke with Swift just as she was ready to board a plane to L.A. for the Grammy nominations press conference.

It's been quite a year for you.

Unreal. Awesome. My 18th birthday is next week, so it's just crazy to look back. I think, if you asked me a couple of years ago if I'd be flying out to L.A., announcing Grammy nominations, performing on Dick Clark's Rockin' New Year's Eve Show and for the tree-lighting ceremony at Rockefeller Center... I just didn't think this was going to happen. And the album just went double platinum last week, so I'm buzzing.

I'm thinking you're going to receive some Grammy nominations yourself tomorrow.

I'm not expecting anything because I want to have a good day regardless of whether I get nominated or not. I'm just trying to think real positively about it because I'm the only person in Country music who's been invited out there, which is a big deal to me. To be out there with all these other performers from different genres. I think if I'm nominated for something, I would start hyperventilating...and all that good stuff. I'm really excited to see what happens.

You've been working towards this for a relatively long time for such a young performer.

I've been recording demos since I was 10 and 11. I flew to Nashville with my mom, drove up to record labels in our rental car and, while she waited outside, I'd knock on people's doors, walk in and introduce myself. "Hey, I'm Taylor. I'm 11. I want a record deal. Call me."

You were self-motivated in that regard?

I pushed my parents. They're not musically inclined. They were happy in Pennsylvania. I was just so obnoxious about wanting to move to Nashville. I asked them so many times, they eventually agreed, thinking it might be a cool thing to have a change of scenery and get me closer to where I needed to be if I was going to make this crazy dream happen. I have such an amazing family. They are a blessing.

What are some of your earliest musical memories?

Seeing my grandmother get up and sing in front of people in church every single Sunday kind of made me feel that singing wasn't all that out of the ordinary. I was conditioned to do the same thing. I never had stage fright.

What was it about country music that attracted your interest?

I grew up with amazing influences, these strong female power voices on the radio like Faith Hill, Shania Twain and the Dixie Chicks. That was a golden age of country music in the '90s. I grew up with that period. It was really cool music, and it also crossed over from Country to Pop.

Was LeAnn Rimes someone you looked to as a role model?

When I was 6 or 7, she was a big inspiration to me because she showed you could do it at a young age. You can't have aspirations without basing some of it on the fact it could happen.

What did you start writing about when you were 11, 12?

Heartbreak, even though I hadn't experienced a lot of it. The second song I ever wrote, when I was 12, I put on the album, "The Outside," which was about not fitting in at school. Writing's always been my way of expressing myself and getting things off my chest. And I'm so thankful that I could turn that into something productive.

Were you isolated from your peers in school by being involved in music so intensely?

There was a period of time in middle school when I was friends with this clique and, all of a sudden, they didn't want to be friends with me anymore. I didn't know why. Maybe it was because, on the weekends, they were all starting to party and I was playing at singer-songwriter nights. All of a sudden, I found myself really, really alone. I would go to school and not know who I was going to talk to that day. And that's a really, really scary thing for someone at that age, or any age, for that matter. Music, for me, was the reason I never resorted to something harmful to make myself feel better, or ease the pain. I never got into drugs or alcohol because I always had this thing I could lean on and put every bit of pain I was feeling into.

What was your first big break?

My life has been a series of big breaks, including last month's CMAs. That was huge for me. They're all milestones. There wasn't one thing that did it for me because there were so many stepping stones in between. Meeting certain people, doing certain events, meeting contacts that led to this and that. My first big break came when I got a record deal. I was 15 and had been a signed songwriter for Sony/ATV for a few years at that point. I was doing a songwriters' showcase at the Bluebird Café and Scott Borchetta happened to be in the audience. At that time, he was still with Universal Records Nashville, but I got a call from him a week later and he told me he was starting a new record label.

How did you feel about going to a brand-new record company?

It was scary. The label didn't even have a name or an office. I had a choice between the majors that were offering me deals or taking a huge chance, and it's obvious what I chose because my record label let me write every song on the album. They let me stretch out and do things differently than a major label might. I think I totally made the right choice.

What was it that attracted you to Big Machine?

I was a writer first, so I got to hear about the industry though that perspective. I've always been motivated by trying new ways of doing things, being different. And there's nothing more different than being on a record label literally from the ground up. Seeing it start, loading furniture into the office, and watching it grow. I felt like I will never, ever get that kind of experience anywhere else.

You seem to be a fan of the music, as well as other artists, like with your song "Tim McGraw."

At the time I wrote that, I was just composing songs for my publishing deal. This was just another song. I didn't see anything special about it. I literally wrote it in 15 minutes.

What was the inspiration for "Teardrops on My Guitar"?

I had the biggest crush on a guy in my class in school, and every single day he would come in and tell me about his girlfriend. He had no idea I liked him. I kept that secret at school, but when I went home, I wrote a song with his name in it. Whereas, in my personal life, I couldn't be blatant and come out with the truth, I was able musically to be very obvious about it.

Do you have any time for your own relationships?

I could, if I wanted to, but I don't. What happens if I'm on a phone call with a potential boyfriend and my publicist tells me I have to do an interview? I don't want that situation to happen. I don't want that conflict. I love what I'm doing too much.

How do you feel about working with Universal Republic in terms of crossing over to Pop radio without alienating your country fans?

I'm a country singer. I wear cowboy boots to radio stations, whether it's Pop or Country. I feel like there's been a great deal of headway made in being open-minded about my music. When I first came out with "Tim McGraw," I was 16 years old. If people can accept that, they can pretty much accept variations on what we're doing. I just look at it as more people hearing my music, which is always a positive for me. I try to think of it as spillover rather than crossover. I'm not leaving anybody... I'm just giving more to everybody.

Do you enjoy doing live shows?

Performing my songs has always been comfortable for me because I wrote them. It would be harder for me to try to sell a song I didn't write. That would be a little bit of a stretch for me. Singing songs I've written about people I've met and feelings I've had, that comes naturally for me. I don't feel any long as you're being completely honest.

Do you write while you're on tour?

I've been writing on the road like crazy. There are so many songs we wanted to put on the first album, which we'll put on the second instead. There's a lot of material because I spent so much time as a songwriter. There's a lot of stuff that I can't wait for people to hear.

So there's spillover.

There's spillover in a lot of aspects of my life right now.

What do you listen to for your own pleasure?

I don't listen to rock, pop or country—I listen to good music. If a song is good and it's by Kanye West, I'm going to listen to it, just as I would a good song by Faith Hill. That's how I've always been about music. I try not to pigeonhole things. If it's good, I like it, especially if the lyrics pertain to my life.

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

It's a brand new year and we start things off by looking at some high points. SoundScan released their comprehensive listing of the Top 200 CDs compiling them by the lifetime sales of the CD. Here are the Top 5 releases and the total sales to date:

1. Shania Twain Come On Over 15,442,458
2. Metallica Metallica 15,018,348
3. Alanis Morissette Jagged Little Pill 14,548,348
4. Backstreet Boys Millennium 12,097,025
5. Various Artists Bodyguard Soundtrack 11,796,050

As far as the best-selling artists go, we have:

1. Garth Brooks 66,046,362
2. Beatles 55,160,703
3. Mariah Carey 49,783,910
4. Celine Dion 48,606,969
5. Metallica 48,484,012

Although the new Eagles CD Long Road Out of Eden (selling 711,000 copies in week one alone) didn't take long to shoot right to the coveted Number One spot on Billboard, band members have said this was a hard one to complete and admitted they don't feel there's another album in them. Hope this isn't the real Eagles farewell.

Arbitron, the barometer for measuring ratings for radio, recently tested a new electronic measurement which they are calling the Personal People meter which monitors exposure to radio stations throughout the entire day The results of a series of tests seems to indicate a decline in the ratings of stations appealing to minorities. The results also indicated a decline in TV programming geared toward minorities. In Arbitron's New York test, radio station WPAT, a Spanish language AC station, was ranked at #7 in the Summer Arbitrons but fell to #19 in October's Personal People Meter test among 25-54 year-olds. Sister station WSKQ dropped from #4 to #7 and WBLS from #1 to #12. Because advertisers on radio buy ads based on ratings points, declines could have serious financial effects on the station income. More to come on this controversial new development.

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