[Dixielandjazz] CD Sales Woes - Paul McCartney's response.

[Steve Barbone]

"It's a new world" said Paul McCartney when announcing his new CD album
would be released (June 5th) via Starbucks rather than EMI.

Especially with CD sales down 20% year to date vs. 2006. Besides digital
downloads, file sharing and/or duplicating CDs for one's friends on a
computer is the prime cause of the decline. It appears that 50% of the music
heard or collected by the audience today was acquired at no cost.

It trickles over to OKOM CD sales also. How many band leaders (besides me)
have heard from fans that they copied your CD and sent them to friends?

Cheers,
Steve Barbone



Plunge in CD Sales Shakes Up Big Labels

NY TIMES - By JEFF LEEDS - May 28, 2007

³Sgt. Pepper¹s Lonely Hearts Club Band,² the Beatles album often cited as
the greatest pop recording in music history, received a thoroughly modern
40th-anniversary salute last week when singers on ³American Idol² belted out
their own versions of its songs live on the show¹s season finale.

But off stage, in a sign of the recording industry¹s declining fortunes,
shareholders of EMI, the music conglomerate that markets ³Sgt. Pepper² and a
vast trove of other recordings, were weighing a plan to sell the company as
its financial performance was weakening.

It¹s a maddening juxtaposition for more than one top record-label executive.
Music may still be a big force in pop culture ‹ from ³Idol² to the iPod ‹
but the music business¹s own comeback attempt is falling flat.

Even pop¹s pioneers are rethinking their approach. As it happens, one of the
performers on ³Sgt. Pepper,² Paul McCartney, is releasing a new album on
June 5. But Mr. McCartney is not betting on the traditional record-label
methods: He elected to sidestep EMI, his longtime home, and release the
album through a new arrangement with Starbucks.

It¹s too soon to tell if Starbucks¹ new label (a partnership with the
established Concord label) will have much success in marketing CDs. But not
many other players are.

Despite costly efforts to build buzz around new talent and thwart piracy, CD
sales have plunged more than 20 percent this year, far outweighing any gains
made by digital sales at iTunes and similar services. Aram Sinnreich, a
media industry consultant at Radar Research in Los Angeles, said the CD
format, introduced in the United States 24 years ago, is in its death
throes. ³Everyone in the industry thinks of this Christmas as the last big
holiday season for CD sales,² Mr. Sinnreich said, ³and then everything goes
kaput.² 

It¹s been four years since the last big shuffle in ownership of the major
record labels. But now, with the sales plunge dimming hopes for a recovery
any time soon, there is a new game of corporate musical chairs afoot that
could shake up the industry hierarchy.

Under the deal that awaits shareholder approval, London-based EMI agreed
last week to be purchased for more than $4.7 billion by a private equity
investor, Terra Firma Capital Partners, whose diverse holdings include a
European waste-conversion business. Rival bids could yet surface ‹ though
the higher the ultimate price, the more pressure the owners will face to
make dramatic cuts or sell the company in pieces in order to recoup their
investment. 

For the companies that choose to plow ahead, the question is how to weather
the worsening storm. One answer: diversify into businesses that do not rely
directly on CD sales or downloads. The biggest one is music publishing,
which represents songwriters (who may or may not also be performers) and
earns money when their songs are used in TV commercials, video games or
other media. Universal Music Group, already the biggest label, became the
world¹s biggest music publisher on Friday after closing its purchase of BMG
Music, publisher of songs by artists like Keane, for more than $2 billion.

Now both Universal and Warner Music Group are said to be kicking the tires
of Sanctuary, an independent British music and artist management company
whose roster includes Iron Maiden and Elton John. The owners of all four of
the major record companies also recently have chewed over deals to diversify
into merchandise sales, concert tickets, advertising and other fields that
are not part of their traditional business.

Even as the industry tries to branch out, though, there is no promise of an
answer to a potentially more profound predicament: a creative drought and a
corresponding lack of artists who ignite consumers¹ interest in buying
music. Sales of rap, which had provided the industry with a lifeboat in
recent years, fell far more than the overall market last year with a drop of
almost 21 percent, according to Nielsen SoundScan. (And the marquee star 50
Cent just delayed his forthcoming album, ³Curtis.²)

In other genres the picture is not much brighter. Fans do still turn out (at
least initially) for artists that have managed to build loyal followings.
The biggest debut of the year came just last week from the rock band Linkin
Park, whose third studio album, ³Minutes to Midnight,² sold an estimated
623,000 copies, according to Nielsen SoundScan data.

But very few albums have gained traction. And that is compounded by the
industry¹s core structural problem: Its main product is widely available
free. More than half of all music acquired by fans last year came from
unpaid sources including Internet file sharing and CD burning, according to
the market research company NPD Group. The ³social² ripping and burning of
CDs among friends ‹ which takes place offline and almost entirely out of
reach of industry policing efforts ‹ accounted for 37 percent of all music
consumption, more than file-sharing, NPD said.

The industry had long pinned its hopes on making up some of the business
lost to piracy with licensed digital sales. But those prospects have dimmed
as the rapid CD decline has overshadowed the rise in sales at services like
Apple¹s iTunes. Even as music executives fret that iTunes has not generated
enough sales, though, they gripe that it unfairly dominates the sale of
digital music. 

Partly out of frustration with Apple, some of the music companies have been
slowly retreating from their longtime insistence on selling music online
with digital locks that prevent unlimited copying. Their aim is to sell more
music that can be played on Apple¹s wildly popular iPod device, which is not
compatible with the protection software used by most other digital music
services. EMI led the reversal, striking a deal with Apple to offer its
music catalog in the unrestricted MP3 format.

Some music executives say that dropping copy-restriction software, also
known as digital-rights management, would stoke business at iTunes¹
competitors and generate a surge in sales. Others predict it would have
little impact, though they add that the labels squandered years on failed
attempts to restrict digital music instead of converting more fans into
paying consumers. 

³They were so slow to react, and let things get totally out of hand,² said
Russ Crupnick, a senior entertainment industry analyst at NPD, the research
company. ³They just missed the boat.²

Perhaps there is little to lose, then, in experimentation. Mr. McCartney,
for example, may not have made it to the ³American Idol² finale, but he too
is employing thoroughly modern techniques to reach his audience.

Starbucks will be selling his album ³Memory Almost Full² through regular
music retail shops but will also be playing it repeatedly in thousands of
its coffee shops in more than two dozen countries on the day of release. And
the first music video from the new album had its premiere on YouTube. Mr.
McCartney, in announcing his deal with Starbucks, described his rationale
simply: ³It¹s a new world.²