Out with the old, in with the numbers: 2011 music sales, Sycotic income, into Oblivion, Vice valuation & more
$32 million later, into the oblivion
+1%: Not that 1 percent, this is the predicted lift in music sales for 2011 from the previous year. The tally isn’t totally complete, but according to reports, thanks in large part to Adele and Lady Gaga, last year was the first time in many that overall sales haven’t slid from the year prior.
-5.6%: The decline in UK music sales despite strong growth in digital and the record-busting sales from British native Adele, meanwhile retail chain HMV continues to struggle to stay afloat.
$42 million: What Simon Cowell reportedly made last year via his joint-venture with Sony for his various entertainment properties.
$20 million: The predicted income this year for Cee Lo Green, as the former Goodie Mob member and “Crazy” crooner’s brand continues to expand under the guidance Primary Wave Management.
1/307: Following the acquisition of Napster, 1 out of every 307 Americans are apparently now paying for Rhapsody, who has also now reached 1 millions subscribers in the U.S. Read the how and why on Evolver.fm.
$87 million: How much was invested in Beyond Oblivion, a music start-up with backing from the Wellcome Foundation, Allen & Co. and News Corp. that never got off the ground. It was announced last week that Boinc, who was taking another stab at the music-hardware bundling model, was closing its doors without ever opening them. AllThingsD’s Peter Kafka reports that investors really only lost $32 million, as the rest was contingent upon hitting certain benchmarks.
$1 billion: What Vice Media could be worth if it maintains its current trajectory. Under the leadership of CEO Tom Freston, of MTV fame, the company has grown to more than 800 full-time employees in 34 countries producing video, books, magazines, live events and music in partnership with some of the world’s biggest companies, including Google, Time Warner and a new JV with Warner Bros. Records.
$12.6 million: How much artists have brought in via music and merch sales through Bandcamp.
11.17.11Digital Round Up: Google Music launches
Just about one year after Google had originally planned to unveil Google Music, a service that spent much of the last two years changing in concept and approach, and of course engaging in numerous negotiations with record labels, the (almost) fully-fledged music service was revealed yesterday. Three of the four (soon to be two of the three) major labels are onboard, with music available from Universal, Sony and EMI, while Warner Music is expected to be joining sometime soon. So how does it work? Basically it’s similar to how Google Music Beta worked, with a locker where users can upload up to 20,000 songs for free, regardless of where they originated, but now Google has its own digital music store tied to the Android market as well, where users can purchase music that automatically goes to their lockers. There’s also a tie-up with T-Mobile that allows customers of the carrier to download music and have it included with their monthly billing. And that “twist,” which was teased recently, is indeed a sharing feature. Users can share songs or albums with anyone on Google+, who can then listen to the song or album once in its entirety for free. Additionally there is an Artist Hub feature, a much more interesting twist for independent artists, who can create their own page within the Google Music marketplace, and sell directly to customers without a middleman and collect their 70% cut of each sale… Much of the discussion following the release of the new service has been approached in the Google Music vs. iTunes manner – Apple finally launched iTunes Match last week with less fanfare – but as some observers are astutely pointing out, it isn’t about an iTunes-killer for Google, at least not right now. There are differences – Apple has the ’scan and match’ feature which bypasses the lengthy upload process, but Google Music offers almost the same amount of cloud storage for free – Apple has almost a decade-long head start, but Google is putting links into YouTube music videos that go directly to the song in their music store. But what’s important to each user varies, and more importantly it has to do with what kind of device someone owns. Android-based smartphones hold over 50% of the market currently, and what Google really did, is fill the huge mobile music void on the platform… And when it comes to how all the new subscription music players fit in with the overall discourse, as Evolver.fm points out, they’re two different animals all together. The Spotify’s, MOG’s, Rdio’s, etc of the world put a plethora of music at your fingertips, but they don’t allow users to ‘own’ their music, which is still a problem for many people. However, they’re great discovery or sampling tools, because you don’t have to commit to buying something (or heading to the torrents) before being able to make it accessible across multiple devices. Will something new that is the best of both worlds come along? Time will tell.
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Bits & Pieces: Citi Receives 10+ bids for EMI, KOL Cancel Tour to Tune of $15million, Turntable.fm & more…
Worth more than Warner Music?
The first round bids for EMI are in, with multiple reports pointing to more than 10 offers received for either the whole or individual recorded music and publishing arms of EMI Group, from interested parties including Sony, Universal, Warner Music, BMG Rights Management and a host of private equity groups. At least one analysis this week claimed that Citigroup could possibly fetch more than $4 billion for the company based on a similar multiple used in the recent Warner acquisition. An article in FT.com yesterday claims that the current tendered bids range from $3 – $4b, and that between four and six of the submitted offers were for the entire music group. Citi is expected to respond to the opening bidders this week… While less humorous than last summer’s Kings of Leon bird droppings incident, the band’s cancelation of the remainder of their current U.S. tour dates following an abrupt termination of a set in Dallas last week, may prove much more damaging. Rollingstone.com takes a look at other recent tour cancelations with somewhat dubious explanations, and according to reports, the KOL cancellation may cost policy holder, Loyds of London, as much as $15 million in payouts to promoters and others affected… The much talked about Turntable.fm has secured a $7.5 million financing round led by Union Square Ventures, which has some wondering if the startup will next seek licensing agreements with the record labels and music publishers. Lady Gaga and Kanye West are also reportedly among those who contributed to the funding… And The Shins are following fellow former Sub Pop label mates Band of Horse, in moving from the venerable indie to a new imprint-label deal with Columbia Records for their next release.
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Bits & Pieces: Warner Closes Final Round – Will the Victor Go the EMI Spoils Too?, Radio Staff Grows at Q Prime & more…
Destined to be combined?
The final round in the Warner Music auction closed yesterday, with two primary bidders said to be vying for the company, one being Len Blavatnik’s Access Industries and the other, a coalition of brothers Tom and Alec Gores, whose respective company’s are Platinum Equity and Gores Group – both suitors reportedly tendered bids around $3billion for the entirety of WMG. Attention has begun to drift to the looming sale of EMI by owner Citigroup, and the belief de-jour is that whomever ends up nabbing Warner Music, will also be aggressive in securing EMI as well. The result would likely be a cut and paste job between the various components of the two music groups. In another twist, The Telegraph reported yesterday that KKR-backed BMG Rights Management and Universal Music Group may be teaming up in an attempt to acquire either or both EMI and Warners, having put together a plan to carve up catalogues in an effort to avoid regulatory hurdles… Elsewhere, according to FMQB, Q Prime is expanding its promotion team, with an emphasis on bolstering the undertakings of its premier management operation, with a roster including Cage the Elephant, The Black Keys, Silversun Pickups, Snow Patrol, Muse and many others. Q Prime’s Mom + Pop Records, who has releases from Sleigh Bells, Metric, Freelance Whales among others, should also benefit from the increased staff. The additions include Trina Schaefer (formerly of Island Def Jam), Erin Gellert (formerly of Epic Records), Devin Rosevear, Chris Frank (formerly of Universal Motown) and Michael Fang (formerly of Red)… Meanwhile, the news of a nearly 25 million additional user accounts being compromised in the recent PlayStation Network breach (77 million were initially reported) smacks of the Sony BMG rootkit blunder (and ensuing lawsuits), and it can’t be good news for Sony Corp. CEO Howard Stringer, whose term has recently begun to be put in question more frequently… And for an interesting read about some of what labels are said to be demanding from cloud music, or locker, services (efforts from Amazon, Apple, Google and Spotify being the most widely discussed), check out the guest post from MP3.com and MP3Tunes founder Michael Robertson on TechCrunch.
[UPDATE - Bloomberg first reported yesterday that a last minute joint-offer for Warners was submitted by Sony/ATV Music Publishing and Ronald Perelman and Guggenheim Partners LLC. A winning bidder is expected to be announced on Friday.]
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Spotify Talk Stupefies
#1 source of label revenue in Sweden & Norway
Contrasting speculation continues around Spotify and when the start up will launch in the U.S. as well as whether or not the income it could create would even mean anything significant for artists or labels. Recent reports have anonymous label executives calling the revenue they create “Microscopic,” “Laughable,” And “Pathetic”, while others proclaim the service is now the “second largest source of revenue in Europe for labels”. For what that’s worth. And questions continue to be raised over how the service pays artists, particularly indie acts… Only an actual launch in the U.S. would tell the full story. Where do things sit with such a launch? Sony Music has signed on, and EMI is supposedly “close” – but they have been for weeks, and there’s larger entanglements there with the state of limbo the label is in under the temporary ownership of Citigroup. Warner Music Group CEO Edgar Bronfman Jr. has changed his tune slightly, stating on yesterday’s WMG earnings call “We do see Spotify, and services like Spotify, as ever-more meaningful for our results.” Meanwhile Universal Music Group remains the big prize for the start up getting off the ground in the states. If a letter sent to the current few U.S. users of the service and a job opening in an unnamed U.S. location, are any indication, Spotify will soon be landing here. Or maybe not. As aptly put by @evolverfm “Spotify in the U.S. is the new Beatles on iTunes.”
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Monday Scuttlebutt: EMI Countdown, Hands in the Cookie Jar & KKR’s BMG Wants It All
Handing over to Citigroup?
Less than a month ago, reports were indicating that a deal might see EMI change hands from Terra Firma to lender Citigroup before Christmas, a result of negotiations following Guy Hands courtroom defeat – seen by most as a last ditch effort to maintain control of the music company. Still yet to happen, reports over the weekend are indicating that it may only be a matter of weeks before Hands relinquishes control of EMI to Citi, who is rumored to already be lining up potential suitors for both the recorded music and publishing divisions. In what some see as further corroboration is the disclosure of a £12m dividend taken by Hands last year, which is an amount five times the company’s after-tax profits, though also less than a quarter of the personal funds he told the New York court he had put into EMI… Who is the most likely to bid on EMI if Citi takes control? The Guardian reports that just last Friday it was being heavily rumored that the recorded music arm would be quickly sold by Citi to Warner Music Group, while the publishing would be acquired by KKR’s BMG Rights Management. Though further reports this morning reveal that BMG RM could be interested in both arms of EMI, but not the production or distribution sides. If so, this could create a scenario that harkens back to talks held by EMI with rivals Sony and Universal last year, exploring the option of raising funds by licensing its catalogue for distribution. Depending on how it goes down, everyone could be in on this, one way or another…
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Friday Bits & Pieces: Music Startups Hot at CES, Sony’s Music Unlimited & more…
Music services hot at CES
It’s 2011 and streaming music continues to be a hot topic. Spotify is still getting headlines, but questions now surround not when the service will be launching in the U.S., but if it will ever see life in the states. It appears that labels are continuing to ask for extremely high upfront payments from the startup, due to uncertainty in results from the service’s model. Spotify is betting on a high rate of conversion from free to paid accounts, while content owners remain skeptical. If the company doesn’t go public, is the answer to be acquired, and should Amazon be that buyer?… While the clock ticks on Spotify, not to mention Google Music and a streaming service from Apple, lower profile services that have already launched continue to made progress in the new digital music arena, with a number of key announcements coming out of this weeks Consumer Electronics Show in Las Vegas. MOG will be coming preinstalled on Verizon’s new 4G LTE phones, as well as being included in Toyota connected cars, along with Pandora… Slacker also announced new changes to its service this week, including a new on-demand subscription tier, that sees a third level of access for users, adding to the non-interactive internet radio service it already provides… Meanwhile Sony took the stage at CES to announced the launch of its new Music Unlimited service in America in the coming months. Already live in the UK, the service will be available to users via Bravia TVs, Blu-ray players, Vaio PCs and PlayStation 3 consoles… Elsewhere, in expected news, Lucian Grainge, who officially assumes his CEO seat at Universal Music Group, announced contract renewals for Universal/Republic rulers Monte and Avery Lipman this week – also re-upped with UMG was SRC Records founder and CEO Steve Rifkind… S&P Equity Research adds credence to the talk of a likely Warner Music Group acquisition of EMI, as they make their 2011 media predictions, stating [WMG] could finally be poised to make a successful bid for the recorded music operations of EMI Group… And sales data for music in 2010 comes in with news of continued decline for both physical and digital albums, while single tracks all but flatlined. Last year saw a 12.8% decline from the 2009 level in album sales, while single song sales were up by 1%. More stats including 2010 highest sellers are here…
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Wednesday Bits & Pieces: eMusic Loses Big Indies, Warner Re-Ups with Spotify & UMG Looking to Get Lean
Indies On the Way Out
Last month digital music retailer eMusic announced that they would be adding a quarter-million more songs to its service in a new partnership with Universal Music Group, this following previous deals with Warner Music and Sony over the last year, a move which had some questioning whether the service was getting away from its ‘independent’ roots. While too early to tell the larger effects the new major label partnerships will have on customers, some big indie labels have decided they will no longer make their music available, including Domino Records, Merge and the Beggars Group of labels, which includes 4AD and Matador among others. No small exit, as those handful of labels are home to some of the most popular current and past independent acts including Animal Collective, Arcade Fire, Spoon, Bon Iver and many many others. A statement from Beggars Group made it clear that the split, at least for them, is directly in response to the arrival of the major labels to the service and new terms that they “have found impossible to accept, in our own interests, those of our artists, and ultimately those of their fans”… In the latest Warner Music earnings call, it was revealed that the company has renewed their existing deal with Spotify, which currently covers European markets. And while no update on a agreement covering the U.S., many still suspect that deals with multiple majors for the startup to launch its service in America are in motion. In reference to the continued gap between physical and digital music sales, CEO Edgar Bronfman Jr. made it clear that he (and presumably all the labels) are hopeful for digital increases with the launch of Google’s impending music service among others, like Spotify?… More talk of looming cutbacks at UMG persist after the CFO of parent company Vivendi made recent ominous comments about cost saving needs, including “A lot of fat can be taken out without hurting muscle and bones” – onlookers continue to keep an eye on Island Def Jam as one of Lucian Grainge’s prime targets for restructuring… Elsewhere, Amazon.com is getting into the movie business by launching Amazon Studios… Check Your Pulse songwriter Bonnie McKee talks to Billboard about launching her own recording project after a string of credits on some of 2010’s biggest songs… And inquiring minds want to know, which former major label head has been spotted moonlighting on lead guitar in a Neil Young cover band?
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More Bits & Pieces: Spotify Close to U.S. Launch & is the MySpace Redesign Plagiarized?
Spotify Closing in on Labels with Cash in Hand
It seems that everyone agrees that Apple buying Spotify is not going to happen, even Danielle Ek told TechCrunch, who first reported the possible negotiations, that “We don’t want to sell, we are here for the long term”… But more interesting are reports by MediaMemo and CNET that the European startup is getting ever closer to a launch in the states, and the primary reason is cash. The company is reportedly offering large up front advances or guarantees to the major labels who hold the fate of the service in the U.S. in their hands. Sony is reportedly the closest to making a deal, though Spotify will need at least three of the four major labels onboard to press the button – Warner Music Group would seem like the most obvious holdout if there is one… And MySpace saw a lot of positive reviews of its new design, though users of the early stage and invite-only startup Pinterest are calling foul play, as the site’s new aesthetics are strikingly similar. Apparently a now former technology director at MySpace asked for an invite to Pinterest back in March of this year, shown in an email released on TechCrunch…
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Wednesday Bits & Pieces: Apple’s New iTunes, Sony’s iTunes Rival & Amazon Enters the Fray
As predicted Steve Jobs did not announce a new cloud-based version of iTunes this morning, however the rumored social features were announced in the form of Ping. In the words of Jobs, it’s “Facebook and Twitter meet iTunes,” … “But it’s not Facebook, it’s not Twitter,” adding “it’s a social network all about music.” There is also a new logo that replaces the CD, which Jobs remarked as fitting, as he expects that by next Spring Apple’s music sales will surpass all CD sales in the United States… The update to iTunes 10 will be available today and will include Ping. If you missed the action this morning, head HERE to watch the keynote… In what cannot be coincidental timing, this morning Sony Corp announced Sony Qriocity (“curiosity,” get it), which is the company’s new subscription-based music and video streaming service, the backbone of which will be the Playstation 3 console. It’s expected to launch in the UK before the end of the year… And not to be left out of the race to streaming dominance, Amazon is reportedly gearing up to launch a service similar to Netflix, which will allow unlimited access to movies and TV shows for a monthly fee.
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