Why CDs Are Tanking
By Bob Lesfetz


1. The iPod

After you've got an iPod, why do you need a CD?

CDs are voluminous, not only in size, but content. They take up too much space with too much music you don't want to hear. Better off to cherry-pick, just put what you WANT to hear on an iPod. Which holds the equivalent of more CD booklets than you can pack in a suitcase.

As for the sound...

Sure, CDs sound better than MP3s, but CDs sound like shit compared to vinyl. They're cold, they're brittle... Better to hear a facsimile rather than the tinny, compressed, real thing.


2. Radio

The problem facing the sellers of recorded music is more one of EXPOSURE than theft.

Where do you hear the new music? Terrestrial radio may be the dominant format, but it has burned the trust it had with the listener. Everybody now knows radio is about commercials. People used to think the spots were an intrusion, now they think the MUSIC is an intrusion. The deejays are jive, what they play doesn't touch them, people are DONE!


3. MTV

Music video... A format that exploded and then died. Last time I checked, you HEARD music, you didn't SEE it. So there's nowhere to go with music video. Whereas with movies and television shows you can execute endless plots. In music video you can have the bitches and the ho's and the cash. You can have pretty people. You can have special effects. But you've got no soul.

Music video is dead. Except as evidence of what an act looks like.

But that's not enough to sustain a video channel, just ask MTV. Better yet, VH1.

Music video especially in the eighties, and even up through much of the nineties, was a train-wreck that demanded attention. It was a way to break acts. But the public has moved on.


4. People Don't Know What To Buy

Despite the rags and blogs, music is just not a general topic of conversation amongst the public now. Oh sure, young 'uns are still music passionate. But too often the music is just the grease, what you dance to, make love to. As for the oldsters, they're positively lost. They want to buy, but they don't know WHAT to buy.

You used to trust the deejay.

For a minute there you trusted Starbucks.

Until there's a trusted outlet with some mass and momentum, music sales will remain in the dumper. Rather than wine and dine programmers, labels should develop and support new gatekeepers. Who tell people what to buy!


5. Price

CDs are perceived as a rip-off.

Don't tell me how long you practiced, about your talent, the actual recording costs... When you can buy a DVD of a hit movie for a few dollars more than the CD, sometimes for even the same price, record companies appear to be ripping you off.


6. Lack Of Hit Acts

Most of the country thinks white gone black Justin Timberlake is a joke, not that they have to pay attention, in today's world you can AVOID everything you don't like.

A hit act is one that demands attention, that you want to focus on. There aren't enough of these. And those that are around don't live up to the hype.


7. Availability

There are fewer stores selling fewer CDs. This is a recipe for more sales?

__________________________________________________


Solutions


1. Give Up On The CD

But this can only be done if there's a viable alternative. The iTunes Music Store is not this.

The paradigm has shifted, more people are going to own more music. They already DO! To try to carry over the CD model to the file world is ridiculous.

Sell boatloads of material at a cheap price, it's your only alternative.

DRM? Interoperability? iTMS dominance? All sideshows. The public steals and IM's online and rips friends' CDs. They're getting the music, it's just that no one's GETTING PAID! Monetize reality. Make it easy and cheap for people to buy music online. Everything you can eat, without DRM, as MP3s, for a small amount a month. Let people know you won't sue them, that they've got no liability, and they'll sign up.


2. Jawbone Terrestrial Radio

Top Forty's got to play more music, or labels should move on to Net and satellite. Don't increase the Net license fees, DROP THEM! And do cross-promotions with satellite. You need to know where in the food chain to charge. The labels, the rights holders, want all their money up front. But they're killing their business. You've got to play for the future, you've got to play the long game.


3. Make Peace With The Customer

Lawsuits must end. The adversary relationship between companies and consumers must end. The labels should do a mea culpa, and give away some music for FREE as payment.

Yup, an RIAA site where you can download, FOR FREE, a bunch of tracks a week. Charge in the long run, not immediately.


4. Embrace The Indie Stores

They survive, they're loyal. Boost them because that's where acts develop. I think the CD is dying a quick death, but until it does, play with these guys, not Best Buy. Hell, Best Buy DEVALUED music. Do you buy a Lexus at 7-11? Do you buy Cartier at Costco? Why should someone think the act is worth anything if it's whored out all over TV like some commercial product, and sold with no atmosphere at the big box retailer. Hell, there's no ENVIRONMENT!

__________________________________________________


Conclusion

We're never going back to the past. Major labels will no longer be dominant, there will be fewer blockbusters, niche will rule.

But you can get rich by aggregating the niches. This is the majors' way out, not that they're taking it on their road to consolidation, to cutting costs.

Not that you need to combine niches. One act can be its own business now. It has its own showroom on the Net, its Website and MySpace page, and it sells at its gigs. The niche doesn't need the major, never mind Top Forty radio or MTV.

There's a larger demand for recorded music than ever before. More people already own more music than ever before. So why are the powers that be crying? Because they never owned up to the changed reality.

You've got to establish trust with the consumer, a bond. You've got to nurture the relationship. You've got to let them pull rather than pushing. You've got to let them do the work for you.

But this is too slow, too organic for the oldsters, who think selling music is no different from moving appliances.

It costs essentially nothing to duplicate a file. Own that, don't call it theft. To do so is to try to charge for a new Magic Slate every time somebody lifts the plastic to create a new picture.

Demonstrate that you understand the new reality, build bridges to the consumer, don't have contempt for him. He's got computer savvy you'll NEVER have. And he's using this computer savvy to ruin your business model.

Payola & the State of Hip Hop/Urban Radio

http://odeo.com/audio/9203553/view (the audio version of this article)

by Davey D

The other week we alerted you about an urban music director in Chicago being arrested and fired from her job for allegedly taking payola in the form of a porshe from a local artist. We promised to follow up that story with a more indepth story/interview about payola and the state of urban/ Hip Hop radio.

What you will be listening to is conversation that took place in Memphis, Tn last month (January 2007) at the Media Reform Conference. We caught up with longtime radio urban radio programmer Paul Porter of Industryears.com and Professor Jared Ball of Freemix Radio. Both gentlemen participated in the conference’s payola panel.

We talked to Porter about the role corporate media plays in keeping this practice alive and how it impacts urban radio and the urban community at large. He feels like th practice is too far gone and that the FCC caved into the big media giants.

Porter also talked about a couple of well publicized incidents including the beat down that Game and his crew were accused of giving to a Washington DC disc jockey (Xzulu) at Radio One headquarters). He feels that payola played a big role in keeping Game’s record on the airwaves in spite of the severity of what occured.

Porter also talked about the racial make up of many of the nation’s popular urban stations including the fact that in many places you do not have Black programmers. He explains how that can have an impact on the African American community at large. He also talks about how what few Blacks they do have in key positions have sold out and not been responsive to community concerns.

We also spoke with Professor Jared Ball who gave an insightful historical breakdown about the current state of Hip Hop radio. He feels that its no mistake that mainstream Hip Hop has been suspended in state of adolesence. He connected current urban radio policies and practices with the Cointel-Programs that the FBI launched against Black leaders in the 60s during the Civil Rights era.

We kicked off our show with an excerpt from an interview we did with Quest Love of the Roots where he explains in great detail how the Roots went about getting their Grammy Award hit record ‘You Send Me’ on the radio. he says they had to pay almost 3/4 of a million bucks and the record label had to make abunch of behind th scenes deals.

Radio Deal Aims to Curb Payola
By THE ASSOCIATED PRESS


WASHINGTON (AP) -- Radio listeners weary of hearing the same songs over and over may have something to cheer about: Broadcasters have tentatively agreed to anti-payola settlements that could shake up music playlists at some of the nation's largest radio chains.

Four major broadcast companies would pay the government $12.5 million and provide 8,400 half-hour segments of free airtime for independent record labels and local artists, The Associated Press has learned.

The agreement is aimed at curbing payola -- generally defined as radio stations accepting cash or other consideration from record companies in exchange for airplay. The practice has been around as long as the radio industry and was made illegal after scandals in the late 1950s.

Two Federal Communications Commission officials, who spoke on condition of anonymity because final language has not been approved by the full commission, said the monetary settlement is part of a consent decree between the FCC and Clear Channel Communications Inc., CBS Radio, Entercom Communications Corp. and Citadel Broadcasting Corp.

The settlement was reached at the same time as a separate deal designed to lead to more airtime for smaller record companies and their lesser-known artists as well as local musicians.

The American Association of Independent Music, a group of independent record labels, has received a commitment from the same four broadcasters for the free airtime, the officials said.

In addition to airplay, the broadcasters and the independent labels have also negotiated a set of ''rules of engagement'' that will guide how record company representatives and radio programmers interact.

The free airtime would be granted to companies not owned or controlled by the nation's four dominant music labels -- Sony BMG Music Entertainment, Warner Music Group, Universal Music Group and EMI Group.

Payola, or ''pay-for-play,'' can be difficult to track.

In recent years, independent record promoters have acted as middlemen to deliver payments to radio stations in exchange for airplay. Other forms of inducement include lavish prizes meant for listeners that wind up going to station employees, promises by record companies of concerts by well-known artists in exchange for airplay, and payments for promotional expenses and station equipment.

Under the FCC consent decree, broadcasters would agree to closer scrutiny in their dealings with record companies, including limits on gifts, a promise to keep a database of all items of value supplied by those companies, the employment of independent compliance officers to make sure stations are following the rules and a new ''payola hot line'' for employees to report infractions.

Broadcasters would admit to no wrongdoing under the three-year settlement, which would end an FCC investigation into payola practices.

Under the separate agreement, the new ''rules of engagement'' are aimed at requiring equal access to radio music programmers for all record companies as well as transparency in their dealings, said Peter Gordon, who has been leading the negotiations on behalf of the independents.

Gordon is president of Thirsty Ear Recordings, an independent record label, and has been in the music business for 31 years.

''It's absolutely the most historic agreement that the independent community has had with radio,'' he said. ''Without a doubt, nothing else comes close.''

Commissioner Jonathan Adelstein, himself an amateur musician, has been in the forefront of the payola fight and has been credited with working out the settlements. ''I love music and I want radio to sound fresh, dynamic and real. But payola gets in the way of authenticity because money drives the music, not its quality,'' he told the AP.

Pay-for-play scandals have not been a high priority for the FCC. The last time it took action was March 2000 when Clear Channel-owned stations KHKS-FM in Denton, Texas, and WKQI-FM in Detroit, Mich., were assessed fines of $4,000 each.

Most of the recent headlines regarding payola have been generated by former New York Attorney General Eliot Spitzer, now governor, who has criticized the FCC's inaction. He made settlement deals with the four major record labels totaling $30.1 million, as well as with two broadcasters, CBS and Entercom, for another $6.25 million.

Federal law and FCC rules require broadcasters to inform listeners if a station is being paid to play a song. The FCC can fine its licensees, but any criminal investigation would be undertaken by the Department of Justice.

When finalized, the consent decree will result in the second-largest fine ever issued by the FCC -- if a recently reported $24 million settlement with Univision Communications Inc. regarding children's television obligations is also approved.

The broadcasters represent four of the six largest radio firms in the U.S. and own a combined total of 1,653 stations. The cash breakdown on the settlement is Entercom, $4 million; Clear Channel, $3.5 million; Citadel, $2 million; CBS, $3 million.

Representatives of the companies could not immediately be reached for comment Monday.

FCC Chairman Kevin Martin was widely credited with pushing through the large cash settlement. Speaking generally, FCC spokeswoman Tamara Lipper said of the payola issue that ''the whole point is that people should know when they're being influenced and by whom.''

In a statement Monday, Commissioner Michael Copps said pay-for-play ''cheats radio listeners and will not be tolerated.'' Radio, he said, is ''supposed to be our pipeline to exciting, local undiscovered acts -- not more nationalized pablum from big media companies.''

NY TIMES March 5, 2007

Four Radio Companies Agree To Payola Settlement

CLEAR CHANNEL, CBS RADIO, ENTERCOM and CITADEL have tentatively agreed to pay the government $12.5 million as part of a consent decree with the FCC, the ASSOCIATED PRESS reports. The four radio firms will not be admitting any wrongdoing under the three-year settlement.

The companies will also provide 8,400 half-hour segments of free airtime for independent record labels and local artists; labels that will get the free airtime cannot be owned or controlled by SONY BMG, WARNER MUSIC GROUP, UNIVERSAL MUSIC GROUP or EMI GROUP.

As part of the separate agreement with the AMERICAN ASSOCIATION OF INDEPENDENT MUSIC, a set of "rules of engagement" will guide how label reps and radio programmers interact. Broadcasters will more closely monitor their dealings with labels, including setting limits on gifts, promising to keep track of all items of value supplied by those companies, hiring independent compliance officers to make sure the rules are followed, and establishing a "payola hot line" for employees to report when rules are broken.

"It's absolutely the most historic agreement that the independent community has had with radio," THIRSTY EAR RECORDINGS Pres. PETER GORDON told AP; GORDON has been leading the negotiations for AIM. "Without a doubt, nothing else comes close."

FCC Commissioner JONATHAN ADELSTEIN told AP, "I love music and I want radio to sound fresh, dynamic and real. But payola gets in the way of authenticity because money drives the music, not its quality. Taking payola out of the system will lead to more interesting programming."

Thanks to Michael London for sending this to me. I am uncertain where it came from...