SAD NEWS: Retailers: Black Friday Music Sales Down

blame this recesssion we are in for this ...

While mainstream media is touting that the Black Friday weekend started the holiday selling season with a bang, music merchandisers certainly didn't have that experience. Music sales were down anywhere from 10% to 30% and hit albums released for Black Friday didn't perform up to expectations, according to merchants contacted by Billboard.

According to sources, Kanye West's "808's & Heartbreak" will sell in the range of 425,000-450,000 units, significantly down from 700,000-975,000 units previously projected.

Guns N' Roses "Chinese Democracy" is expected to clock in at 250,000-260,000, which is also down from expectations that it would sell anywhere from 300,000-784,000 units.

While some press reports show across-the-board retail weekend sales up 7%, music merchandisers point out that in order to accurately measure the holiday, it should be measured the week containing Black Friday this year - which was the last week in November - versus last year, when the day fell in the third week of November. Consequently, some merchants say they doubt the validity of the 7% increase reported by the mainstream media.

At music specialty stores Newbury Comics sales were down 21% on a comparable store basis for the last two weeks of November, while music sales were down 28%, reports the Brighton, Mass.-based chain's CEO Mike Dreese.

In Marietta, Ga., comparable-store sales were down 5%, according to Value Music president Rob Perkins. But the chain had yet to breakdown music sales and other categories at deadline.

At big box retailers like Wal-Mart and Barnes & Noble, label executives report that hit sales were off significantly for the Black Friday weekend, anywhere from 30% to 40%.

On the other hand, as expected, online shopping was stronger than last year, says an executive with a wholesaler that does CD and DVD fulfillment for online stores. But he declined to provide details, other than to say that Friday was better than Thursday, for the first time.

"I hear traffic was high, but overall purchasing wasn't because shoppers were cherry picking the deals," says one senior distribution executive.

[Billboard]

Before The Music Dies documentary

Narrated by Academy Award® Winner Forest Whitaker, BEFORE THE MUSIC DIES is an unsettling and inspiring look at today’s popular music industry featuring interviews and performances by Erykah Badu, Eric Clapton, Dave Matthews, Branford Marsalis, ?uestlove and a wide variety of others. The documentary film has built a passionate following as “the most important film a music fan will ever see” (XM Radio) by providing “a balanced overview of the state of the rock scene of America” (The Wall Street Journal) and adding “passion to the eternal debate about the industry” (The New York Times).

Last year, BEFORE THE MUSIC DIES filmmakers Andrew Shapter and Joel Rasmussen walked away from traditional Hollywood distribution to instead pursue a large-scale grassroots release with B-Side Entertainment. Since its release in November 2006, the film has screened over 200 times in over 130 North American markets with hundreds of additional events anticipated worldwide during 2007. Use this site to learn more about the film, where you can see it, ways you can own it, and - most importantly - how you can get involved in sharing it with others.

www.beforethemusicdies.com

WATCH VIDEO BELOW (then click the image above to purchase the DVD):

To Leak, or Not To Leak, that is the Question

Music industry insiders find upside in album leaks

During the first week of July, Nas' controversial untitled album leaked onto the Internet ahead of its July 15 release date via Def Jam.

But Nas' business partner Anthony Saleh shrugs it off.

"I don't think the leak has hurt Nas in any way," he says, adding that leaks have "helped those who have delivered on their albums with good music ... If (fans) want to support it, they'll go buy it."

Saleh's relaxed attitude reflects a growing belief among some music industry vets that unauthorized leaks of an album before its release can boost sales. Leaks provide a way of generating buzz for an upcoming album. If fans get excited by what they hear, this line of thinking goes, they'll go out and buy the album when it's released.

It's a stance that flies in the face of the conventional wisdom that Internet piracy invariably hurts music sales. In fact, whisper some retailers, labels themselves are sometimes the source of leaks in an effort to stir consumer interest.

Those who believe in the promotional power of leaks can point to recent chart action to bolster their position. During the past year, three of the six biggest debut sales weeks on the Billboard 200 album chart were notched by hip-hop albums that had been leaked: Kanye West's "Graduation," 50 Cent's "Curtis" and Lil Wayne's "Tha Carter III."

MEGA-SCALE LISTENING PARTY

"Graduation" and "Curtis" hit the Web at least two weeks before their intended street date of September 11, 2007. In a much-hyped sales battle over the same-day releases, West's "Graduation" moved 957,000 units in the United States during its release week, while "Curtis" shifted 691,000, according to Nielsen SoundScan. To date, "Graduation" has sold 2.1 million units, and "Curtis" has sold 1.3 million units.

Meanwhile, "Tha Carter III" went platinum during the week following its June 10 release and has sold 1.7 million units to date, even though Universal Music Group estimates that about 1 million people downloaded the album illegally.

"The leak was good for Kanye because he was going against 50 and could show that his album was superior," says Kyambo Joshua, head of Columbia's urban department and co-founder of entertainment company HipHopSince1978, which manages West and Lil Wayne. "It's a give-and-take because if an album leaks before it comes out, you're not losing sales because it's not in stores. It's like having a listening party for 500,000 people and seeing if they go to the stores."

But the leaks-are-good school of thought has plenty of detractors. "I think that it's preposterous to suggest that leaks help," argues Jim Urie, president/CEO of Universal Music Group Distribution, pointing out that the unauthorized release of music wreaks havoc with marketing and release schedules.

"I am annoyed that our labels haven't released albums earlier in reaction to the leaks," Urie says. "Things like Lil Wayne, Fall Out Boy, Weezer -- I would have put them out earlier, but the labels wouldn't. They have held off to honor retailers, particularly the ones who can't sell digitally."

LABEL STRATEGY

But an urban buyer at a leading retail chain who requested anonymity contends that "if an album leaks and the record is good, it will generate big demand and we will usually sell a lot more. (And) if an album is not so good, a leak could hurt album sales because word-of-mouth will be bad."

In fact, the buyer argues, labels commonly leak music from upcoming releases of developing artists.

"They give it to the mixtape guys," the buyer says. "That's how the record gets on the street. They say they don't do it on superstar acts, but who knows if that's true."

Unauthorized leaks have prompted labels to experiment with different ways of releasing new music, such as Lil Wayne's sale of multiple tracks from "Tha Carter III" before the album's release. More commonly, bands and labels have responded by streaming an album online or moving up its release date.

For instance, the Hold Steady posted a stream of its fourth album, "Stay Positive," on MySpace after the album leaked in early June, while the band's label, Vagrant, made the album available on Apple's iTunes Store June 17, nearly a month before its scheduled release date. Without the benefit of physical sales, "Stay Positive" debuted at No. 170 on the Billboard 200 and No. 5 on the Heatseekers chart, and has sold 6,000 copies so far.

"We felt like we had to release the album early digitally given the circumstances," Vagrant general manager Dan Gill says. "It's hard to tell if this will impact sales. I do know that we have to protect the music and combat the leaks by offering it for sale."

When labels track traffic on peer-to-peer networks to gauge the extent of unauthorized leaks, they're conducting market research as well, determining the age, gender and location of downloaders and examining which songs are most popular, says Eric Garland, CEO of BigChampagne, which measures peer-to-peer traffic.

"Over the last five years, tracking downloading went from a hush-hush thing to being one of the key indicators in the marketing and promotion of every major label," Garland says. "In a music market where control over distribution is deteriorating, intelligence about the marketplace is the silver lining."

[Reuters]

Handleman Company Exiting Music Business in North America

Biggest rackjobber in the US, supplier of music products to places like Wal-Mart, Costco, etc. is closing it's music operations.

Sale of Wal-Mart Related and Selected Other Assets and Operations to Anderson Merchandisers, L.P. TROY, Mich., June 2

TROY, Mich., June 2 /PRNewswire-FirstCall/ -- In a major step in its continuing efforts to address the rapid and fundamental changes under way in the music industry, Handleman Company (Pink Sheets: HDLM) today announced that it is exiting the music business in North America. Handleman will continue to operate its other businesses as usual as it explores opportunities to maximize value for the benefit of the Company's stakeholders.

In connection with its decision to exit the North American music business, Handleman has entered into a definitive agreement pursuant to which it has sold music inventory and selected other assets related to its Wal-Mart business in the U.S. to Anderson Merchandisers, L.P. ("Anderson"), of Amarillo, Texas. Sales to Wal-Mart stores currently constitute a substantial majority of Handleman's U.S. music sales. Handleman will work with its other U.S. music customers over the next few months to assist them in achieving a smooth transition to other music suppliers.

Separately, Handleman has also agreed in principle to sell substantially all of the assets and operations of its Canadian subsidiary to Anderson. Completion of that transaction is expected to occur shortly after receipt of Canadian regulatory approval, which the parties expect to receive in the near future.

Albert A. Koch, President and Chief Executive Officer of Handleman, said, "Our decision to exit the North American music business was difficult but unavoidable. CD music sales have been declining at double-digit rates for several years both industry-wide and at our customers' stores, resulting in a sharp drop-off in our business. Unfortunately, even the significant steps we've taken over the past two years to reduce our costs have not enabled the Company to return to profitability. We have reluctantly concluded that there simply were not enough further cost reduction opportunities available to offset the margin erosion in future years from continuing sales declines.

"As to the timing of our decision, we took into consideration a number of factors, including indications from existing customers of their reluctance to maintain long-term relationships with multiple music distributors in a shrinking market, a growing question in our minds whether our key music suppliers would provide trade terms sufficient for us to support our customers for the peak holiday shipment season, and uncertainty whether our credit agreements would permit sufficient liquidity to operate normally through the upcoming Christmas season if our suppliers did not return to historical trade terms.

"Taking all these factors into consideration, we determined that exiting the North American music business now, in the transactions announced today, was in the best interest of our customers, vendors, employees, shareholders and other stakeholders. We regret the impact of this decision on many of our employees, and will do our best to assist them at this difficult time. We also will work with our valued customers and vendors to achieve a smooth, seamless and timely transition."

In conjunction with these actions, Handleman will be reducing its U.S.-based work force by approximately 260 positions over the next several weeks. Most of these reductions are expected to occur at the Company's headquarters in Troy, Michigan, and its distribution facility in Indianapolis, Indiana. It is anticipated that some U.S.-based employees, particularly field service personnel, will be offered opportunities by Anderson. Handleman said that in addition to providing severance benefits to affected U.S. employees, it has engaged Right Management, a leading provider of career continuation services, to assist these employees with their career transition. Anderson, which currently has no operational presence in Canada, is expected to retain substantially all of Handleman's approximately 230 Canada-based employees when the contemplated Canadian transaction is completed.

"The support of our lenders means that we have sufficient liquidity to operate while we complete the wind-down of our North American music business and continue to explore opportunities to maximize the value of other assets and operations for the benefit of our stakeholders," Mr. Koch said. "If we are able to generate cash proceeds in excess of what is needed to satisfy the Company's obligations, we currently intend to distribute any such proceeds to our shareholders rather than pursue reinvestment opportunities."

The Company currently anticipates that shareholders will receive a cash distribution. Whether there will be any excess cash proceeds for distribution to shareholders is subject to a number of material risks and uncertainties that may prevent any such distribution from occurring. Accordingly, while the Company believes that a cash distribution is a definite possibility, actual results may differ from current estimates, perhaps materially. The Company will endeavor to provide information about future cash distributions, if any, at such time as it believes that they are reasonably estimable.

Handleman's other operations, which are not involved in or affected by the transaction announced today, include Crave Entertainment Group, Inc. ("Crave"), a leading full-service distributor of video game software, hardware, and related accessories and a specialty video game publisher; Handleman UK Limited, a leading UK-based distributor and store merchandiser of books, music, computer games and other products; Artist to Market Distribution ("A2M"), an independent music distributor that works directly with branded artists and artists' management to streamline the supply chain and deliver new music product to the marketplace at a lower cost; and REPS LLC, a national in-store merchandiser. As previously announced, Handleman has retained the investment banking firm W.Y. Campbell & Company for the purpose of exploring a sale or other strategic options for Crave.

Cautionary Comment Regarding Forward-Looking Statements

This press release contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could differ materially from those contemplated by these forward-looking statements because of factors affecting any of a number of critical objectives, including, without limitation, our reaching a final agreement to sell the assets and operations of our Canadian subsidiary to Anderson and obtaining of all required regulatory approvals, our ability to transition our U.S. music customers other than Wal-Mart to other vendors smoothly, maintaining satisfactory working relationships with our lenders, customers and vendors, retaining key personnel, satisfactory resolution of any outstanding claims or claims which may arise, finding and capitalizing on opportunities to maximize the value of the Company's non-music operations, and other factors discussed in this press release and those detailed from time to time in the Company's filings with the Securities and Exchange Commission. Handleman Company notes that the preceding conditions are not a complete list of risks and uncertainties. The Company undertakes no obligation to update any forward- looking statement to reflect events or circumstances after the date of this press release.

[PRNewsWire]

Key to Success in Music Biz: Rocket Science

When "American Idol" contestant Eliott Yamin released his eponymous debut disc last March, it sold more than 92,000 copies in its first week. It also was the third-bestselling album in the U.S. that same seven days.

But what makes the feat unique is Yamin did it without being signed to a major label, and he wasn't even an "American Idol" finalist; he had been eliminated 10 months earlier after reaching the top three.

To help market his disc, Yamin used the services of Rocket Science Inc., one of a growing number of companies that offer all the functions of a record label, but whose services are paid for by the artist. The growth of such firms could portend the future of the record business, as an increasing number of artists are favoring the do-it-yourself business model.

"We're seeing more artists leave the major labels to go it on their own," says Kevin Day, industry vet and principal of Encino, Calif.-based Rocket Science. "With our lower overhead, an artist can be profitable with sales of 20,000 units. For a major, they're not even profitable with 300,000 units," he says. The Yamin disc has topped 600,000 units sold since its release.

Execs like Day, many of whom have been downsized from major labels, are starting firms that attract artists who have either fallen from favor with their label or are baby bands willing to forgo a hefty advance from a label in exchange for some control over their destiny and a bigger slice of revenues.

They note that with all the different platforms -- whether it be websites like MySpace, YouTube, Facebook, iMeem, Rhapsody, eMusic and LimeWire, to name just a few, or via niche net radio outlets Live365 or the CBS-owned LastFM -- there have never been more opportunities for artists to find an audience.

And artists can use firms like Day's to marry traditional label functions -- with digital distribution avenues, social networking opportunities and tour sponsorships under one roof -- without every marketing move constituting a deductible expense from the band's sales, as would be the case with a major label deal.

"There is no one single way of doing business these days," Talking Heads frontman David Byrne recently wrote in Wired. "That variety is good for artists; and good for audiences, too, who will have more, and more interesting, music to listen to."

Even conglom EMI has recognized the importance of niche marketing by recently establishing a music services arm designed to maximize the artists' potential and coordinate how their music is sold.

"EMI needs to develop a new partnership with artists to help them monetize the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship," says EMI chief Guy Hands, who also simultaneously announced the jettisoning of 2,000 jobs. EMI partnered with the New York Daily News to offer free downloads of a trio of songs through the paper's website during the first two consecutive Sundays in February.

"Our agreement with the Daily News will help us expose new audiences to the ease and quality of digital music while ensuring our artists are compensated for the music they create," says RonnWerre, exec VP of global sales for EMI Music.

While talk of so-called "360" deals -- where every aspect of an artist's revenue stream is commissioned, such as those inked by Madonna, the Pussycat Dolls, Korn and Robbie Williams -- dominate headlines, and interest is waning in the typical deal where the label bankrolls all aspects and the artist seemingly forever owes the label money, unsigned artists can still tap into licensing deals or manufacturing and distribution deals to get their product into fans' hands. Some well-known free agents can even make exclusive deals with retailers, such as the Eagles, whose album "Long Road Out of Eden" recently joined Garth Brooks' "Ultimate Hits" by only being available at Wal-Mart.

And the accepted digital distribution model recently made new headlines when free agent Radiohead offered its first self-released album, "In Rainbows," as a download through the band's website. It also let fans choose the price they wanted to pay for it. Or pay nothing at all.

"Radiohead took three arguments against why downloading won't work off the table," says industry consultant and former EMI digital czar Ted Cohen. "Format: They offered it in MP3. Cost: They made it affordable by not declaring a price. And for consumers who might have previously said that they would've paid for it but believe the label always screws the artist, this time Radiohead was the label, so fans knew the band would be paid."

But Cohen notes that despite the band's egalitarian move, fewer than "40% of the people who downloaded it actually paid for it."

Cohen suggests the magic bullet for the record business could be as simple as Apple's Steve Jobs announcing an iPod subscription service. "If you get consumers into the habit of paying a flat monthly fee -- say $10-$15 -- to put music on their Apple devices, something like that becomes cool and people want to have that experience."

Industry leader Universal Music Group has been developing Total Music service, wherein consumers would buy a device with a preinstalled subscription to downloadable music. But record biz insiders note that this attempt to crack the iPod stranglehold would likely involve using Digital Rights Management to prevent unauthorized sharing.

As a result, the more limits on the music files, the more likely consumers will seek out illegal file-sharing sites to obtain the tracks.

"Locking things up is actually good for piracy," David Packman, CEO of eMusic, said last year when the Total Music plan was first floated.

Steve Backer, principal in niche marketing and sales outfit Rent a Label, notes that in the current paradigm "the artists that flourish will be those who use old-school artist development theories with modern tools."

To build a better marketing mousetrap while recognizing the increasing number of advertisers who seek to become active partners, marketers and financiers of entertainment, United Talent Agency and branding pioneer Jarrod Moses recently formed United Entertainment Group, a new stand-alone company devoted to building entertainment-based marketing solutions.

Moses says it's a propitious time for both artists and the new breed of label-marketing company hybrid. "At UEG, we'll be working with artists to create businesses with brands," says Moses. "As music is created, simultaneous conversations will be happening with brands to help market, distribute, foster and incubate music."

"What we've learned in this decade is the major labels are becoming ever more irrelevant," says former record exec Bob Lefsetz, author of the Lefsetz Letter. "Not only do they not create what so many are listening to, they've lost their power to dictate the future, and progress in the marketplace has been wrested from them. I doubt these companies will be in charge of the game in the future."

Source [Variety]

Do We Possibly Have The Solution Now to Save the Music Industry

LOS ANGELES (AP) -- When you're not inclined to give your product away for free, make your customers believe they're getting something for nothing.

That's the thinking behind some of the offerings music fans may see this year as the recording industry scrambles to offset losses from plunging CD sales and find new sources of revenue when many consumers simply download music for free.

Among the business models music fans are likely to see more of: music subscriptions bundled with the price of Internet access, and services like Nokia Corp.'s upcoming Comes With Music, which would give users of select mobile phones a year's worth of unlimited access to music, for no extra charge.

Music companies also are expected to license songs for more ad-supported Web sites like imeem, which lets visitors watch videos or listen to full-length tracks posted by other music fans for free.

Major recording labels, long-criticized for being too slow in adapting to changes brought by the Internet over the last decade, are under pressure to explore new ways to get music fans to pay for music, leading to more choices for consumers.

In 2007, the recording industry arguably took the boldest steps yet.

After years championing the necessity of copy-protection safeguards on digital music, three of the world's biggest recording companies agreed to license their music for sale online as unprotected MP3 files. Many analysts expect the last holdout, Sony BMG Music Entertainment, to follow this year.

That's an important step for music lovers hesitant about buying digital music because songs are generally tied to specific devices - for example, Apple Inc.'s iPod players can't play copy-protected music not bought at Apple's iTunes store.

"It seems clear there's an accelerated pace of change that comes hand in glove with accelerated decline in traditional business," said Eric Garland, chief executive at BigChampagne Online Media Measurement, which tracks online entertainment.

Recording company executives who once saw new technology as the enemy seem to now see it as a lifeline.

The major labels - Sony BMG, Vivendi SA's Universal Music Group, Warner Music Group Corp. and Britain's EMI Group PLC - declined to comment.

In a recent memo to employees, Warner Music Chairman and CEO Edgar Bronfman Jr. touched on the importance of developing new areas of digital music. The company's stock price has plunged more than 75 percent over the past year.

"There's no denying that WMG and the industry as a whole have been struggling for almost a decade now with the challenges and opportunities that the digital space presents," Bronfman wrote. "The recent trend of dramatic changes in the recorded music market will continue. ... And, though it's a cliche, it's a cliche because it's true: technology will also provide us with new opportunities."

Bronfman alluded that the industry this year would pursue a way to "monetize the unauthorized flow of our artists' audio content on the Internet."

That could involve striking deals with Internet service providers to help compensate labels for the millions of songs swapped online.

Another approach involves Internet service providers offering a pricing tier that comes with unlimited music downloads or faster download speeds that might be attractive to computer users who download a lot of music files.

Last year, Universal Music began testing an unlimited music download service in France offered through broadband provider Neuf Cegetel.

Then there's Universal Music's Total Music, which is expected to extend what Universal is doing with Nokia's Comes With Music to everything from personal computers to digital music players, with the cost of the music built into the price.

Internet users collectively download about 1.1 billion songs from file-sharing networks every month, according to BigChampagne. So the music industry's success could be tempered if those people see little value in digital music without copy-protection strings or services offering feels-like-free music.

Sales of digital tracks at iTunes and elsewhere surged 45 percent last year compared with 2006, according to Nielsen SoundScan. But digital music still accounts for a small portion of overall music sales, and U.S. album sales in CDs and other physical formats dropped 15 percent during the same period.

Combined, the number of albums sold declined 9.5 percent.

"The industry for the last several years had hoped that eventually the pain would subside and they expected that eventually the market slowdown would level off," said James McQuivey, media and technology analyst at Forrester Research.

Instead, he said, the recording industry saw CD sales falling even faster.

In a research note issued in November, Pali Capital analyst Richard Greenfield suggested retail floor space for CDs would probably shrink this year by as much as 30 percent.

Like many other music retailers, Related Cos.' Virgin Megastores North America has diversified its product offerings in recent years, adding clothing, novelties, electronics and other items to help offset CD sales declines.

After two years of moderate declines, Virgin's same-store music sales rose 5 percent last year compared with 2006, while overall sales jumped 15 percent. CDs now represent only 40 percent of overall sales, said Kevin Milligan, Virgin's vice president of product and merchandising.

Despite mixed results trying to breathe life into the CD by adding video and other multimedia extras, the recording industry will roll out a host of new variants to stores this year.

One, dubbed the CD-View Plus, lets customers access a trove of additional content when they go online. Another is digital gift cards, which enable users to download specific albums, something Starbucks already sells.

"There's a lot of experimentation going on," said Jim Donio, president of the National Association of Recording Merchandisers, a trade group that represents hundreds of retailers, record labels and other music-related firms.

Music fans are also likely to see more albums released in multiple versions, such as pricier deluxe or limited-editions, and more albums pre-loaded onto small, portable storage devices such as thumb drives attached to rubber bracelets.

Consumers may also see a bigger push this year for CD singles, dubbed "ringles," that include mobile phone ringtones and other digital content, Milligan said. Universal Music and Sony BMG, which is a joint venture of Sony Corp. and Bertelsmann AG, are among the labels that have plans to release ringles, he said.

"Everyone is looking for a formula that will provide healthy growth for the industry, which I believe will come," Donio said. "The other side of this will be loaded with new kinds of opportunities, for arguably a marketplace that probably doesn't look anything like it looks now."

Source [CNBC]

RIAA on a rampage killing spree - suing over personal use

Despite more than 20,000 lawsuits filed against music fans in the years since they started finding free tunes online rather than buying CDs from record companies, the recording industry has utterly failed to halt the decline of the record album or the rise of digital music sharing.

Still, hardly a month goes by without a news release from the industry's lobby, the Recording Industry Association of America, touting a new wave of letters to college students and others demanding a settlement payment and threatening a legal battle.

Now, in an unusual case in which an Arizona recipient of an RIAA letter has fought back in court rather than write a check to avoid hefty legal fees, the industry is taking its argument against music sharing one step further: In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.

The industry's lawyer in the case, Ira Schwartz, argues in a brief filed earlier this month that the MP3 files Howell made on his computer from legally bought CDs are "unauthorized copies" of copyrighted recordings.

"I couldn't believe it when I read that," says Ray Beckerman, a New York lawyer who represents six clients who have been sued by the RIAA. "The basic principle in the law is that you have to distribute actual physical copies to be guilty of violating copyright. But recently, the industry has been going around saying that even a personal copy on your computer is a violation."

RIAA's hard-line position seems clear. Its Web site says: "If you make unauthorized copies of copyrighted music recordings, you're stealing. You're breaking the law and you could be held legally liable for thousands of dollars in damages."

They're not kidding. In October, after a trial in Minnesota -- the first time the industry has made its case before a federal jury -- Jammie Thomas was ordered to pay $220,000 to the big record companies. That's $9,250 for each of 24 songs she was accused of sharing online.

Whether customers may copy their CDs onto their computers -- an act at the very heart of the digital revolution -- has a murky legal foundation, the RIAA argues. The industry's own Web site says that making a personal copy of a CD that you bought legitimately may not be a legal right, but it "won't usually raise concerns," as long as you don't give away the music or lend it to anyone.

Of course, that's exactly what millions of people do every day. In a Los Angeles Times poll, 69 percent of teenagers surveyed said they thought it was legal to copy a CD they own and give it to a friend. The RIAA cites a study that found that more than half of current college students download music and movies illegally.

The Howell case was not the first time the industry has argued that making a personal copy from a legally purchased CD is illegal. At the Thomas trial in Minnesota, Sony BMG's chief of litigation, Jennifer Pariser, testified that "when an individual makes a copy of a song for himself, I suppose we can say he stole a song." Copying a song you bought is "a nice way of saying 'steals just one copy,' " she said.

But lawyers for consumers point to a series of court rulings over the last few decades that found no violation of copyright law in the use of VCRs and other devices to time-shift TV programs; that is, to make personal copies for the purpose of making portable a legally obtained recording.

As technologies evolve, old media companies tend not to be the source of the innovation that allows them to survive. Even so, new technologies don't usually kill off old media: That's the good news for the recording industry, as for the TV, movie, newspaper and magazine businesses. But for those old media to survive, they must adapt, finding new business models and new, compelling content to offer.

The RIAA's legal crusade against its customers is a classic example of an old media company clinging to a business model that has collapsed. Four years of a failed strategy has only "created a whole market of people who specifically look to buy independent goods so as not to deal with the big record companies," Beckerman says. "Every problem they're trying to solve is worse now than when they started."

The industry "will continue to bring lawsuits" against those who "ignore years of warnings," RIAA spokesman Jonathan Lamy said in a statement. "It's not our first choice, but it's a necessary part of the equation. There are consequences for breaking the law." And, perhaps, for firing up your computer.

Source [WashingtonPost]

David Byrne Music Industry Survival Tips [BEST ARTICLE OF THE WEEK]

David Byrne's Survival Strategies for Emerging Artists — and Megastars

By David Byrne

David Byrne.

Full disclosure: I used to own a record label. That label, Luaka Bop, still exists, though I'm no longer involved in running it. My last record came out through Nonesuch, a subsidiary of the Warner Music Group empire. I have also released music through indie labels like Thrill Jockey, and I have pressed up CDs and sold them on tour. I tour every few years, and I don't see it as simply a loss leader for CD sales. So I have seen this business from both sides. I've made money, and I've been ripped off. I've had creative freedom, and I've been pressured to make hits. I have dealt with diva behavior from crazy musicians, and I have seen genius records by wonderful artists get completely ignored. I love music. I always will. It saved my life, and I bet I'm not the only one who can say that.

What is called the music business today, however, is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that's not bad news for music, and it's certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.

Where are things going? Well, some people's charts look like this:

Some see this picture as a dire trend. The fact that Radiohead debuted its latest album online and Madonna defected from Warner Bros. to Live Nation, a concert promoter, is held to signal the end of the music business as we know it. Actually, these are just two examples of how musicians are increasingly able to work outside of the traditional label relationship. There is no one single way of doing business these days. There are, in fact, six viable models by my count. That variety is good for artists; it gives them more ways to get paid and make a living. And it's good for audiences, too, who will have more — and more interesting — music to listen to. Let's step back and get some perspective.

What is music?

First, a definition of terms. What is it we're talking about here? What exactly is being bought and sold? In the past, music was something you heard and experienced — it was as much a social event as a purely musical one. Before recording technology existed, you could not separate music from its social context. Epic songs and ballads, troubadours, courtly entertainments, church music, shamanic chants, pub sing-alongs, ceremonial music, military music, dance music — it was pretty much all tied to specific social functions. It was communal and often utilitarian. You couldn't take it home, copy it, sell it as a commodity (except as sheet music, but that's not music), or even hear it again. Music was an experience, intimately married to your life. You could pay to hear music, but after you did, it was over, gone — a memory.

Technology changed all that in the 20th century. Music — or its recorded artifact, at least — became a product, a thing that could be bought, sold, traded, and replayed endlessly in any context. This upended the economics of music, but our human instincts remained intact. I spend plenty of time with buds in my ears listening to recorded music, but I still get out to stand in a crowd with an audience. I sing to myself, and, yes, I play an instrument (not always well).

We'll always want to use music as part of our social fabric: to congregate at concerts and in bars, even if the sound sucks; to pass music from hand to hand (or via the Internet) as a form of social currency; to build temples where only "our kind of people" can hear music (opera houses and symphony halls); to want to know more about our favorite bards — their love lives, their clothes, their political beliefs. This betrays an eternal urge to have a larger context beyond a piece of plastic. One might say this urge is part of our genetic makeup.

All this is what we talk about when we talk about music.

All of it.

What do record companies do?
Or, more precisely, what did they do?

• Fund recording sessions


• Manufacture product


• Distribute product


• Market product


• Loan and advance money for expenses (tours, videos, hair and makeup)


• Advise and guide artists on their careers and recordings


• Handle the accounting

This was the system that evolved over the past century to market the product, which is to say the container — vinyl, tape, or disc — that carried the music. (Calling the product music is like selling a shopping cart and calling it groceries.) But many things have changed in the past decade that reduce the value of these services to artists.

For example:

Recording costs have declined to almost zero. Artists used to need the labels to bankroll their recordings. Most simply didn't have the $15,000 (minimum) necessary to rent a professional studio and pay an engineer and a producer. For many artists — maybe even most — this is no longer the case. Now an album can be made on the same laptop you use to check email.

Manufacturing and distribution costs are approaching zero. There used to be a break-even point below which it was impractical to distribute a recording. With LPs and CDs, there were base manufacturing costs, printing costs, shipping, and so on. It paid — in fact, it was essential — to sell in volume, because that's how many of those costs got amortized. No more: Digital distribution is pretty much free. It's no cheaper per unit to distribute a million copies than a hundred.

Touring is not just promotion. Live performances used to be seen as essentially a way to publicize a new release — a means to an end, not an end in itself. Bands would go into debt in order to tour, anticipating that they'd recover their losses later through increased record sales. This, to be blunt, is all wrong. It's backward. Performing is a thing in itself, a distinct skill, different from making recordings. And for those who can do it, it's a way to make a living.

So with all these changes, what happens to the labels? Some will survive. Nonesuch, where I've done several albums, has thrived under Warner Music Group ownership by operating with a lean staff of 12 and staying focused on talent. "Artists like Wilco, Philip Glass, k.d. lang, and others have sold more here than when they were at so-called major labels," Bob Hurwitz, president of Nonesuch, told me, "even during a time of decline."

David Byrne in Conversation with Brian Eno

"How the f--k can we get out of this?"

"Cool Tools"

"The people who know how to do this are the ones you fired ..."

"When was the last time you had dealings with a record company?"

But some labels will disappear, as the roles they used to play get chopped up and delivered by more thrifty services. In a recent conversation I had with Brian Eno (who is producing the next Coldplay album and writing with U2), he was enthusiastic about I Think Music — an online network of indie bands, fans, and stores — and pessimistic about the future of traditional labels. "Structurally, they're much too large," Eno said. "And they're entirely on the defensive now. The only idea they have is that they can give you a big advance — which is still attractive to a lot of young bands just starting out. But that's all they represent now: capital."

So where do artists fit into this changing landscape? We find new options, new models.

The six possibilities

Where there was one, now there are six: Six possible music distribution models, ranging from one in which the artist is pretty much hands-off to one where the artist does nearly everything. Not surprisingly, the more involved the artist is, the more he or she can often make per unit sold. The totally DIY model is certainly not for everyone — but that's the point. Now there's choice.

1. At one end of the scale is the 360, or equity, deal, where every aspect of the artist's career is handled by producers, promoters, marketing people, and managers. The idea is that you can achieve wide saturation and sales, boosted by a hardworking machine that stands to benefit from everything you do. The artist becomes a brand, owned and operated by the label, and in theory this gives the company a long-term perspective and interest in nurturing that artist's career.

Pussycat Dolls, Korn, and Robbie Williams have made arrangements like this, selling equity in everything they touch. The T-shirts, the records, the concerts, the videos, the BBQ sauce. The artist often gets a lot of money up front. But I doubt that creative decisions will be left in the artist's hands. As a general rule, as the cash comes in, creative control goes out. The equity partner simply has too much at stake.

This is the kind of deal Madonna just made with Live Nation. For a reported $120 million, the company — which until now has mainly produced and promoted concerts — will get a piece of both her concert revenue and her music sales. I, for one, would not want to be beholden to Live Nation — a spinoff of Clear Channel, the radio conglomerate that turned the US airwaves into pabulum. But Madge is a smart cookie; she's always been adept at controlling her own stuff, so we'll see.

2. Next is what I'll call the standard distribution deal. This is more or less what I lived with for many years as a member of the Talking Heads. The record company bankrolls the recording and handles the manufacturing, distribution, press, and promotion. The artist gets a royalty percentage after all those other costs are repaid. The label, in this scenario, owns the copyright to the recording. Forever.

There's another catch with this kind of arrangement: The typical pop star often lives in debt to their record company and a host of other entities, and if they hit a dry spell they can go broke. Michael Jackson, MC Hammer, TLC — the danger of debt and overextension is an old story.

Obviously, the cost of these services, along with the record company's overhead, accounts for a big part of CD prices. You, the buyer, are paying for all those trucks, those CD plants, those warehouses, and all that plastic. Theoretically, as many of these costs go away, they should no longer be charged to the consumer — or the artist.

Sure, many of the services traditionally provided by record labels under the standard deal are now being farmed out. Press and publicity, digital marketing, graphic design — all are often handled by smaller, independent firms. But he who pays the piper calls the tune. If the record company pays the subcontractors, then the record company ultimately decides who or what has priority. If they "don't hear a single," they can tell you your record isn't coming out.

So what happens when online sales eliminate many of these expenses? Look at iTunes: $10 for a "CD" download reflects the cost savings of digital distribution, which seems fair — at first. It's certainly better for consumers. But after Apple takes its 30 percent, the royalty percentage is applied and the artist — surprise! — is no better off.

Not coincidentally, the issues here are similar to those in the recent Hollywood writers' strike. Will recording artists band together and go on strike?

3. The license deal is similar to the standard deal, except in this case the artist retains the copyrights and ownership of the master recording. The right to exploit that property is granted to a label for a limited period of time — usually seven years. After that, the rights to license to TV shows, commercials, and the like revert to the artist. If the members of the Talking Heads held the master rights to our catalog today, we'd earn twice as much in licensing as we do now — and that's where artists like me derive much of our income. If a band has made a record itself and doesn't need creative or financial help, this model is worth looking at. It allows for a little more creative freedom, since you get less interference from the guys in the big suits. The flip side is that because the label doesn't own the master, it may invest less in making the release a success.

David Byrne in conversation with Mac McCaughan from Merge Records.

"How could an indie label handle a release the size of Arcade Fire's second record?"

"How do emerging acts survive?"

"Major labels aren't doing well because they put out terrible records for years and years and kept raising the price of those terrible records and finally people were like, 'Screw you.'"

But with the right label, the license deal can be a great way to go. This is the relationship Arcade Fire has with Merge Records, an indie label that's done great for its band by avoiding the big-spending, big-label approach. "Part of it is just being realistic and not putting yourself in the hole," Merge cofounder Mac McCaughan says. "The bands we work with, we never recommend that they make videos. I like videos, but they don't sell a lot of records. What really sells records is touring — and artists can actually make money on the tour itself if they keep their budgets down."

4. Then there's the profit-sharing deal. I did something like this with my album Lead Us Not Into Temptation in 2003. I got a minimal advance from the label, Thrill Jockey, since the recording costs were covered by a movie soundtrack budget, and we shared the profits from day one. I retained ownership of the master. Thrill Jockey does some marketing and press. I may or may not have sold as many records as I would have with a larger company, but in the end I took home a greater share of each unit sold.

5. In the manufacturing and distribution deal, the artist does everything except, well, manufacture and distribute the product. Often the companies that do these kinds of deals also offer other services, like marketing. But given the numbers, they don't stand to make as much, so their incentive here is limited. Big record labels traditionally don't make M&D deals.

David Byrne in conversation with Michael Hausman.

"We weren't competing with Madonna, Beyonce or Springsteen, because they weren't doing it."

"There's a way for music to have a life of its own and turn into something bigger ..."

"The labels aren't set up for enlightened, long-range thinking. That's what a good manager should be doing."

In this scenario, the artist gets absolute creative control, but it's a bigger gamble. Aimee Mann does this, and it works really well for her. "A lot of artists don't realize how much more money they could make by retaining ownership and licensing directly," Mann's manager, Michael Hausman, told me. "If it's done properly, you get paid quickly, and you get paid again and again. That's a great source of income."

6. Finally, at the far end of the scale, is the self-distribution model, where the music is self-produced, self-written, self-played, and self-marketed. CDs are sold at gigs and through a Web site. Promotion is a MySpace page. The band buys or leases a server to handle download sales. Within the limits of what they can afford, the artists have complete creative control. In practice, especially for emerging artists, that can mean freedom without resources — a pretty abstract sort of independence. For those who plan to take their material on the road and play it live, the financial constraints cut even deeper. Backup orchestras, massive video screens and sets, and weird high tech lights don't come cheap.

David Byrne in conversation with Radiohead's managers, Bryce Edge and Chris Hufford (Courtyard Management).

"... how it proliferated around the world with such ridiculous speed"

"You've had years of experience with the press ... missing the point."

"It actually physically blew up and we had to replace it ..."

"It's just an art band from Oxford having a bit of a laugh."

"Johnny’s doing his gay boy sort of pretty look"

Radiohead adopted this DIY model to sell In Rainbows online — and then went a step further by letting fans name their own price for the download. They weren't the first to do this — Issa (formerly known as Jane Siberry) pioneered the pay-what-you-will model a few years ago — but Radiohead's move was much higher profile. It may be less risky for them, but it's a clear sign of real changes afoot. As one of Radiohead's managers, Bryce Edge, told me, "The industry reacted like the end was nigh. They've devalued music, giving it away for nothing.' Which wasn't true: We asked people to value it, which is very different semantics to me."

At this end of the spectrum, the artist stands to receive the largest percentage of income from sales per unit — sales of anything. A larger percentage of fewer sales, most likely, but not always. Artists doing it for themselves can actually make more money than the massive pop star, even though the sales numbers may seem minuscule by comparison. Of course, not everyone is as smart as those nerdy Radiohead boys. Pete Doherty probably should not be handed the steering wheel.

Freedom versus pragmatism

These models are not absolute. They can morph and evolve. Hausman and Mann took the total DIY route at first, getting money orders and sending out CDs in Express Mail envelopes; later on they licensed the records to distributors. And things change over time. In the future, we will see more artists take up these various models or mix and match versions of them. For existing and emerging artists — who read about the music business going down the drain — this is actually a great time, full of options and possibilities. The future of music as a career is wide open.

Many who take the cash up front will never know that long-range thinking might have been wiser. Mega pop artists will still need that mighty push and marketing effort for a new release that only traditional record companies can provide. For others, what we now call a record label could be replaced by a small company that funnels income and invoices from the various entities and keeps the accounts in order. A consortium of midlevel artists could make this model work. United Musicians, the company that Hausman founded, is one such example.

I would personally advise artists to hold on to their publishing rights (well, as much of them as they can). Publishing royalties are how you get paid if someone covers, samples, or licenses your song for a movie or commercial. This, for a songwriter, is your pension plan.

Increasingly, it's possible for artists to hold on to the copyrights for their recordings as well. This guarantees them another lucrative piece of the licensing pie and also gives them the right to exploit their work in mediums to be invented in the future — musical brain implants and the like.

No single model will work for everyone. There's room for all of us. Some artists are the Coke and Pepsi of music, while others are the fine wine — or the funky home-brewed moonshine. And that's fine. I like Rihanna's "Umbrella" and Christina Aguilera's "Ain't No Other Man." Sometimes a corporate soft drink is what you want — just not at the expense of the other thing. In the recent past, it often seemed like all or nothing, but maybe now we won't be forced to choose.

Ultimately, all these scenarios have to satisfy the same human urges: What do we need music to do? How do we visit the land in our head and the place in our heart that music takes us to? Can I get a round-trip ticket?

Really, isn't that what we want to buy, sell, trade, or download?

David Byrne is currently collaborating with Fatboy Slim and Brian Eno. Separately.

Chart Sources: Jupiter Research, Recording Industry Association of America, Almighty Institute of Music Retail, Wired Research

Source [Wired]

MTV (2007): "The Year The Music Industry Broke"

Madonna Ditches Label, Radiohead Go Renegade: The Year The Music Industry Broke

In the first installment of our three-part series on the future of music, we take a look back at what went wrong and when.



In April, Trent Reznor released Year Zero, a concept album about a future society teetering on the brink of apocalypse. It was supposed to be a grand work of fiction, but it could just as easily have been about the music industry in 2007 — a bleak, burned-out world where the sky fell on a daily basis and the rivers ran red with the blood of record execs. (That the album didn't sell well only furthers the analogy ...)

Make no mistake about it, 2007 was a b-a-a-a-d year for the industry. According to Nielsen SoundScan, album sales were down 15 percent from 2006 (a trend that's continued for eight straight years now); big-name artists jumped ship in increasingly complicated — and messy — ways; and the powers-that-be seemed to get even more heartless and disconnected, thanks to a series of lawsuits, feuds and terrible decisions.

In the first installment of our three-part series on the future of the music industry that is rolling out this week, here's a blow-by-blow recap of just how bad the year was ...

January 14: The "Dreamgirls" soundtrack tops the Billboard albums chart with sales of just over 60,000 copies. It's the lowest sales total for a #1 album in SoundScan's 16-year run, beating the record set the previous week, when the soundtrack landed at #1 with sales of 66,000 copies.

January 30: Sony BMG announces that it has reached a proposed settlement with the Federal Trade Commission that would allow consumers to trade in CDs with the controversial self-installing "rootkit" antipiracy software — which the company had included without consumers' knowledge — "through June 31," according to a press release (of course, in keeping with the less-than-forthright spirit of the whole rootkit issue, there are only 30 days in June). The company also agrees to pay up to $150 to repair any damage to computers caused by users trying to remove the digital-rights-management software, which was revealed to cause serious security risks. The settlement also calls for Sony BMG to disclose any limitations on consumers' use of the music CDs, and prohibits the company from collecting user information for marketing purposes and from installing software without users' consent. Sony is also required to provide a way for users to easily uninstall the rootkit software.

March 5: In a blow to small Internet radio, the Copyright Royalty Board — made up of three copyright-royalty judges appointed by the librarian of Congress — significantly increases the royalties paid to musicians and record labels for streaming digital songs online, ending a discounted fee for small Internet broadcasters. Under the ruling, the current rate of $0.08 each time a song is played will more than double by 2010. In April, a coalition of webcasters, including National Public Radio, attempts to request a new hearing, but the Royalty Board rejects the appeal, and on July 15, the royalty hike goes into effect. In November, both AOL and Yahoo contemplate shuttering their Web radio services due to the increased royalties.

March 21: Paul McCartney leaves longtime label EMI to sign with Starbucks' new record label, Hear Music. His album, Memory Almost Full, is released in June through both traditional retailers and more than 6,000 Starbucks locations in the U.S., and sells more than 160,000 copies in its first week. "For me, the great thing is the commitment and the passion and the love of music," McCartney tells an audience of Starbucks shareholders. "It's a new world now and people are thinking of new ways to reach the people, and for me that's always been my aim."

June 11: In a move that would have seemed unimaginable in the label-driven industry of old, Kelly Clarkson feuds openly with the head of her label — Sony BMG head Clive Davis, for decades one of the most powerful industry executives — and parts ways with her management company, the Firm, amid controversy about her upcoming album My December. Three days later, concert promoter Live Nation announces that Clarkson's summer tour in support of the album has been canceled due to underwhelming ticket sales. My December hits stores later in the month, and sells more than 290,000 copies in its first week, giving Clarkson the #2 album in the country — behind the "Hannah Montana" soundtrack — but shows little staying power. Clarkson later apologizes for her remarks.

July 10: Canadian indie outfit Stars make their new album, In Our Bedroom After the War, available for download just 10 days after completing it — and some three months before its scheduled release date. The move is done with the blessing of their label, Arts& Crafts, and the album becomes a mainstay on the iTunes Music Store's most-downloaded list.

July 15: Prince ticks off his U.K. record label and Britain's Entertainment Retailers Association when he decides to release his new album, Planet Earth, for free with the Sunday edition of the British newspaper The Mail. It's estimated that 2.27 million people receive the album, which helps boost sales of tickets for his 21-night stand at London's O2 arena. "It's direct marketing, and I don't have to be in the speculation business of the record industry, which is going through a lot of tumultuous times right now," Prince says.

September 19: Kanye West's Graduation sells nearly 957,000 copies to claim the top spot on the Billboard albums chart. 50 Cent's Curtis bows at #2 with sales of more than 691,000. Both are the best first-week numbers of 2007 (besting Linkin Park's Minutes to Midnight, which scanned 623,000 copies in May), and Graduation notches the biggest first week in nearly two years — beating, interestingly, West's Late Registration, which sold more than 860,000 copies when it was released in September 2005.

October 1: Radiohead shock fans by announcing on their blog that not only have they completed their much-anticipated new album, In Rainbows, but that "it's coming out in 10 days," via download — leading to reams of "this is a taste of the future of albums"-type commentary. The bandmembers, who have been free agents since the release of 2003's Hail to the Thief, decide to release the album by themselves in two formats: download-only, which allows fans to name their price for the album, and as a deluxe "discbox" version (priced at approximately $80).

October 4: The Recording Industry Association of America wins its first case against file-sharing, when a jury finds 30-year-old Brainerd, Minnesota, resident Jammie Thomas guilty of copyright infringement. In question were 24 music files she allegedly posted on the peer-to-peer site Kazaa. Thomas is ordered to pay $220,000 in fines — or $9,250 per song file. Her lawyers appeal the ruling, on the grounds that it is "unconstitutionally severe," but in December, the U.S. Department of Justice intervenes, urging the courts not to rule on the constitutionality of the damages, as "Copyrights are of great value, not just to their owners, but to the American public as well."

October 8: Trent Reznor announces the end of his 13-year relationship with Interscope Records, writing on his site, "As of right now, Nine Inch Nails is a totally free agent, free of any recording contact with any label. ... It gives me great pleasure to be able to finally have a direct relationship with the audience as I see fit." He then goes on to write that there are "exciting times" ahead. And he's not kidding: Within a week, he promises (threatens?) to scuttle Interscope's release of a Year Zero remix album by leaking tracks from it to the Internet, then announces that he's partnering with Saul Williams to release The Inevitable Rise and Liberation of Niggy Tardust! via download, and gets into a public argument with the Universal Music Group over the legality of a proposed fan-only remix site, before deciding to launch the site himself.

October 9: One day before downloads of In Rainbows are scheduled to begin, Radiohead send an e-mail to those who've ordered it, stating that the album will be encoded at 160 kilobits per second, a rate far inferior to their other LPs, which are all available for download at 320 kbps (or most MP3s floating around file-sharing sites like OiNK, for that matter). This angers many fans, who feel that the band duped them by not announcing the encoding rate upfront, and the bad feelings are only furthered when Radiohead's managers give an interview to a British trade mag, in which they suggest the download version of In Rainbows is a promotional tool for the actual CD.

October 10: In Rainbows is made available for download. Over the next two months, much speculation ensues as to just how many people downloaded it and exactly how much they paid to do so: Early reports have more than 1.2 million fans downloading it at an average price of $8, though later findings by comScore, a company that measures consumer activity online, adds that more than 60 percent of downloaders paid nothing for the album. Neither Radiohead nor their publicists discuss the financial aspects of the download experiment, though the band does issue a statement dismissing comScore's findings as "wholly inaccurate."

October 16: Madonna finalizes a massive 10-year deal with Live Nation, believed to be worth $120 million. It's the largest so-called "360 deal" in history, involving not only Madge's future studio albums but her tours, merchandising, film and TV projects, DVD releases and music-licensing agreements. "For the first time in my career, the way that my music can reach my fans is unlimited," Madonna says in a statement. "The possibilities are endless. Who knows how my albums will be distributed in the future?" The deal brings to an end the singer's 25-year relationship with Warner Music Group, which has released all of her albums to date.

October 23: OiNK, "the world's biggest source for pirated, pre-release albums," is shut down after a two-year criminal investigation led by Interpol (the international police organization headquartered in Lyon, France ... not the band). Officers raid the apartment of OiNK's creator, a 24-year-old Brit named Alan Ellis, and seize the site's servers in Amsterdam. Ellis is arrested on suspicion of conspiracy to defraud and copyright infringement, and the e-mail addresses of the site's more than 180,000 users are made available to police — though it is not known whether they could face criminal prosecution as well. Ellis' trial is scheduled to begin in February.

November 7: Thanks to a last-minute rule change by the folks at SoundScan, the Eagles' Wal-Mart-only LP, Long Road Out of Eden, debuts at #1 on the Billboard albums chart with sales of more than 711,000 copies. The total nearly triples that of the country's #2 album, Britney Spears' Blackout, and gives the group — which hadn't released an album of new studio material in 28 years — the second-highest debut of 2007.

November 27: Universal Music Group CEO Doug Morris gives a disastrous interview to Wired magazine, in which he compares the music industry to a character from the comic strip "Lil' Abner," calls college students who download music "criminals" and explains the industry's inability to keep up with the Internet by saying, "There's no one in the record company that's a technologist. ... It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?"

November 28: Reigning "American Idol" champ Jordin Sparks' self-titled debut lands at #10 on the Billboard chart with sales of 119,000 copies. It's the lowest first-week sales total for any "Idol" winner — by more than 180,000 copies.

December 3: Island Def Jam lays off nearly 6 percent of its staff. Rumors of axings at major labels like Sony BMG and the Universal Music Group begin to swirl — and at press time, it looked like they may have begun. The Warner Music Group announces that it has cut bonuses for employees, and Terra Firma, the private equity group that owns EMI (home to Capitol Records), reportedly makes "cutbacks a core part of its strategy." There are also reports of massive reshuffling at labels like Epic, RCA and Arista.

December 31: In Rainbows is set to be released to retailers in the U.K. through XL Recordings. The U.S. release will come one day later, through TBD Records, an offshoot of the Dave Matthews-founded ATO Records.

Check back on Tuesday, when the second installment of our Future of Music series rolls out.

Source [MTV]