Universal To Charge For Viewing Online Music Video?

While perusing headlines on Billboard.com earlier this morning after a cleaning appointment with my dentist, I came across an interview with Interscope Records chairman Jimmy Iovine earlier, mostly concerning the decisions made to delay some of the label's biggest expected fourth quarter hit albums into 2009 (as if the music industry needed any more woes).

Other topics were briefly touched on as well, including the increasing trend of major labels/acts offering their new releases exclusively to such big boxes as Wal-Mart and Best Buy, and this interesting little nugget:

I've always felt, and this is just in general, that there's an oil well for the record industry in their music videos, and so does Doug Morris. Universal Music Group had 3 billion views on YouTube and we are so underpaid for those videos. Now, we'll set up an infrastructure, and Doug's in charge of this. We'll make a deal where we really see the value. We have the most perfect content for the Internet. People love to watch them and they watch them over and over again. If Saturday Night Live gets 100,000 views on the Internet, they throw a party. Soulja Boy, on his site alone, got 500 million! It's nuts. The Lady GaGa video has 25 million views.

This is all going to be turned back toward the labels. That value has to be achieved.

Sooo help me out, here: does Iovine honestly think Soulja Boy would have had 500 million views if he charged, say, a buck a view for his video clip? How about Lady GaGa? Or how about those 3 billion views for Universal artists on Youtube? Am I over-reacting or is this the absolute nuttiest thing I have heard from the music industry this year?

Jesus, you guys can't even do catalog reissues right anymore without somebody fucking something up and now you want to start charging people to watch promotional videos that were made exclusively to sell your records and mp3s?

Sorry, MTV, looks like your cool new venture might crash before it ever achieves full flight.

The Comedy Of Errors Continues

It's bad enough for the music industry's long-term health (assuming such a concept still exists) that an ever-decreasing number of people are buying CDs in ever-decreasing amounts, but when record companies seemingly go out of their way to piss off the remaining people who are still actually paying for physical product, you have to wonder sometimes at the point of it all.

The breaking New Order reissue debacle is only the latest in a series of self-inflicted PR black-eyes suffered by what's left of the Big Four distributors over the last few years. What is particularly disturbing in this instance is that the company at fault here is the once-mighty Rhino Records, who were at one time considered the best reissue label on the planet, with a reputation for sonic and packaging excellence recognized by consumers and retailers alike. Granted, the brain trust that made the label great has long since bolted the coop, but for this same label to not only release such a shoddily-created product with no input whatsoever from the band itself is one thing, but to then go ahead and release it in the United States (despite numerous complaints had already surfaced overseas) and then not even acknowledge that there is any problem until most die-hard fans have already impatiently snapped up their copies is simply inexcusable. In effect, what we have here is yet another example of labels seeking to squeeze maximum profits wherever possible while whittling down manpower and tossing previously trumpeted standards of quality and worksmanship right out the window.

It's bad enough that we're being conditioned as a society to accept slapdash plastic doo-dads rushed to market to meet quarterly expectations for their parent multinationals (how often do we pick up buggy cell phones and video game systems that don't always work correctly and accept this crap in order to be among the first to own them), but now this cynical attitude is spreading to "deluxe" reissues of 25 year old records, as well. With catalog departments being systematically pared down to skeleton crews, the job of researching and remastering old recordings has become far more of a major undertaking than it was in headier times, and time-saving shortcuts such as using sub-par quality LP-pressing masters or even vinyl records themselves as source material have become a more common practice as of late, particularly in Europe.


Another victim of this new corporate reality is the hatchet job done by EMI on the Pink Floyd box set Oh, By The Way last Christmas. What was already shaky idea to begin with ("Hey, let's put every Pink Floyd CD ever made -- not including any live albums, bonus tracks, singles or non-album cuts -- into a super-expensive, but cheaply made cardboard box and then market it to people who already own all the albums!"), was made far worse when thousands of irritated customers began reporting mis-printed CDs ("Hey! Why does Wish You Were Here suddenly sound exactly like Obscured By Clouds?"), doubled-up CDs ("Hey! I have two copies of Ummagumma, Disc 1!") , or even completely-wrong pressings ("Hey! This isn't Pink Floyd at all!"). For a list price of $299.99, you might think that some level of quality control was observed somewhere along the production line, but apparently even that is too much to expect these days. Silly us.

Perhaps the worst industry practice that is making even hardened music dorks such as I think twice about plunking down money for new CDs is the ongoing race to create the loudest, most unlistenable CDs possible. There was an infamous quote in Rolling Stone magazine a couple of years ago from no less than Bob Dylan that summed up the state of the art in music in no uncertain terms: "(modern albums) have sound all over them. There's no definition of nothing, no vocal, no nothing, just like ... static."

While it's certainly debatable at what point the loudness wars started in the 1990s, it was The Beatles who initially set the bar for increased volume in 1986 when their early catalog appeared on CD for the first time, with all of their discs mastered nearly twice as loud as any other rock titles on the market.

It took a few years for modern rock to catch on, but it started to happen around 1992-1994, when albums by Metallica, , Nirvana, Nine Inch Nails, Stone Temple Pilots, and Alice In Chains seemed to leap forth from speakers with real, tangible ferocity, especially when compared to the rest of the market at the time. Of course, many of their competitors (or the heads of their labels) heard these records and then asked their producers and engineers why they couldn't make records that sounded just as loud (if not more so) as Metallica, In Utero, The Downward Spiral, Core, or Dirt did, and the race was on.

It was also right around this time that the first "remastered" CDs started to appear in record stores. The argument for the existence of these refurbished albums was that either a.) many CDs of older albums were initially rushed to market in the mid 1980s with little regard to making sure that the original master tapes had been sourced for optimum sound quality (hmm, sound familiar?) or b.) advances in sound reproduction technology since 1983 had made it possible for CDs to sound even "better" than before as a "warmer," more analog-feeling ambience of sound was now becoming possible.

I would be remiss not to mention that the real point to this wave of upgraded classics was, of course, to force die-hard fans to buy their favorite CDs all over again (which some maintain was the true reason for all of this in the first place). Now, it would have been fine and dandy to remaster these older albums once and then let the upgraded, "corrected" copies stand at that, but some records have been now been reissued and remastered multiple times, with differences in sonic quality and mastering on each different iteration. This practice certainly gives credence to those who feel that all of this is just a way to part fools from their money one more time, especially as these same records get progressively shittier sounding with every new appearance on the market.

I had been aware of this loudness war for years, especially since I used to make mix tapes for myself and my friends constantly, and learned early on what recording levels certain CDs from which time periods or musical genres needed to be set at for the best sound quality (and smoothest listening experience) on a finished TDK SA-90 cassette. My frustration with wildly varying levels of output (try making a full-career hits mix tape sourced from old and new Bruce Springsteen CDs to get an idea of where I'm coming from) had me solidly in the "remaster everything!" corner for years, and the first instance where I can recall a new record being "brick-walled" to the point of distraction was Oasis' 1997 release Be Here Now: though I wrote off a lot of my displeasure with that record at the time as being subpar writing and mixing more than anything else. After all, this was the same summer that Radiohead's similarly-mastered classic O.K. Computer had taken over the world, and that record was just great, thank you very much.

My first real animosity against this practice of level compression and peak-limiting came along five years later, when Rush released their absolutely unlistenable reunion album Vapor Trails. After years of earth-shaking build up from sundry rock and pop acts across the spectrum, here at last was a record that was so invasively and unbelievably shrill that it wasn't so much a "listening experience" as a buzz saw to the forehead.

These days, CDs with no dynamic range whatsoever are commonplace, especially at the major label level (indies either can't afford the software, or somehow just know better). Some of the blame is certainly attainable to the race to be as loud as the competition, yet other factors like a sea change in listening habits amongst music buyers away from expensive rack stereo systems and towards iPods, cell phones, and tiny PC speakers also have done their part to alter the way music is presented. While many consumers don't really seem to care that they no longer need volume knobs on their car stereos, enough have banded together in online communities that a whole secondary market of people actively searching out, say, older editions of Led Zeppelin and Genesis CDs has emerged in the underground, claiming that these CDs were actually done right the first time around and have only been marred by any remastering done since the mid-late 1980s. Even younger music fans have noticed recently how much better the video game version of Metallica's Death Magnetic sounds than the actual CD (a graphical comparison can be seen here).

Perhaps the most darkly amusing (nevermind ironic) side effect of these shenanigans is that a new generation of music buyers have embraced the once-comatose format of vinyl LP records as a superior alternative to compact discs. Once they realized what was happening, labels cynically began cashing in: even going so far as to issue record bags emblazoned with their laughable new catch phrase "because sound matters."

The best part? Out of this vinyl resurgence comes a new ridiculous extreme embodied by the bonus CD packaged with vinyl copies of Lindsey Buckingham's new album Gift Of Screws. Now, the idea of throwing in a "bonus" CD copy of a release with the vinyl LP is a nice idea, sure, but the sticker on this album proudly proclaims:

180 GRAM VINYL + AUDIOPHILE CD

RECORDED MIXED & MASTERED ON ANALOG TAPE. INCLUDES CD OF THE UNCOMPRESSED VINYL MASTER PLATING & PRESSING AT R.T.I.

What the hell? I've heard many times before the old argument that vinyl sounds better than CD, but this is something new. If I am reading this correctly, Warner Bros, Records is now implictly admitting that modern mass-marketed CDs sound like dog shit. Even if you think this reaction is over the line, doesn't the very existence of a specialized "audiophile" pressing (available only when you buy the vinyl copy, no less! ha ha!) make you wonder what the hell the regular version is supposed to be?

One funny thing about modern "brick-walled" CDs: they make average bit rate-quality mp3s sound even worse than they already do (as if that were possible). We used to joke at work that the sudden leap in CD volume across the board in the last decade was actually a deliberate and subtle sabotaging of the mp3 format by the major labels, but in light of recent events, it appears that is giving the suits far too much credit.

Chinese Democracy Is Finally At Hand

Billboard's Jonathan Cohen is reporting the release of the fifteen-years-in-the-making Guns N' Roses album Chinese Democracy, which will (of course) only be available through everyone's favorite neighborhood record store, Best Buy. Oh goody.

The set ... will be available Sunday, November 23, rather than the usual Tuesday.

Gosh, how clever and daring, Axl. Nice to have you back. I hope your shitty new record tanks.

This spring, soft drink manufacturer Dr Pepper offered to send a free can of the beverage to "everyone in America" (excluding ex-GNR members Slash and Buckethead) if "Chinese Democracy" were to arrive anytime during the calendar year 2008. A Dr Pepper spokesperson was not immediately available for comment.

Crap. Dr. Pepper? Ewww. Can I ask for a Pepsi or Mountain Dew instead?

Wal-Mart stirs CD pricing pot with multi-tiered plan

By Ed Christman Sat Mar 1, 9:14 PM ET

NEW YORK (Billboard) - The major music companies have been resistant to lowering their price on CDs, but now they may be dragged to that point: Wal-Mart, the largest retailer of music with an estimated 22 percent market share, has proposed a five-tiered pricing scheme that would allow the discounter to sell albums at even lower prices and require the labels to bear more of the costs.

According to sources, the Wal-Mart proposal would allow for a promotional program that could comprise the top 15 to 20 hottest titles, each at $10. The rest of the pricing structure, according to several music executives who spoke with Billboard, would have hits and current titles retailing for $12, top catalog at $9, midline catalog at $7 and budget product at $5. The move would also shift the store's pricing from its $9.88 and $13.88 model to rounder sales prices.

Executives at the Bentonville, Arkansas-based discounting giant wouldn't comment on the specifics of their promotion, but Wal-Mart divisional merchandise manager for home entertainment Jeff Maas acknowledged the proposal. "When you look at sales declines with physical product, and you have a category declining like it is, you have to make decisions about what the future looks like," he said. "If you have a business that is declining and you want to turn it around, it really takes looking at it from all angles."

Maas referenced the DVD business as a model for tiered pricing. "(It) has been around for years and has worked very well," he said.

While Wal-Mart's negotiations with the labels have yet to take place, the proposal is already causing agita at the majors. Some consider the proposal a non-starter, others say further negotiations might eventually yield a workable solution, and a few see it as appropriate, given the big picture.

"I don't think this is a Wal-Mart discussion," one top executive at a major label said. "I think this is a future-of-the-business discussion. Right now everyone is paralyzed."

Some executives raised the question of whether the Federal Trade Commission would take issue with such a program were it rolled out only to Wal-Mart. But one executive said, "Making it legal is not the difficult part. The difficult part is coming to terms with it."

Another top executive said, "The decision might come down to: Do we give up 20 percent of our business (i.e., Wal-Mart) in order to not lose the entire business?"

That question assumes that Wal-Mart would either penalize or stop doing business with a major that decides not to participate in the pricing program. Moreover, if all majors take a pass, some speculate that Wal-Mart could pull music entirely from the store.

This type of speculation abounds, although the Wal-Mart proposal was presented only as a starting point. One label executive said, "This sounds like the Hail Mary pass, and if it doesn't work, they could be out of the music business; or maybe they reduce music down to a couple of racks" from the 4,000 titles carried by Wal-Marts with larger selections.

Maas declined to rule out those possibilities, but said he'd rather look at how Wal-Mart can help a declining category. "The customer votes every single day in our stores, and based on what they want is how we merchandise our stores."

Reuters/Billboard

Ruh roh, Raggy ...

Dear Music Industry,

Don't you just love it when the 800 pound gorillas you helped create start throwing their weight around and now have you bent over the proverbial barrel? Looks like your biggest customer is gonna start a whole new game of hardball and dictate terms to you, the very people whom they pay to supply them with their music stock. Funny old world, isn't it.

I can see you all sitting in the meeting rooms, throwing up your hands and crying poverty and maintaining to anyone who will listen that Wal-Mart is asking for the moon and stars, yet at the same time I can hear the wheels turning upstairs as you try to think of how this idea might .... just might ... bail your asses out of the frying pan, at least for the short term. We all know how seductive short term thinking is for you guys, but before you pick up the pen in desperation and sign on to this agreement, try just for once to think beyond the next quarter and walk this thing through. I'm not saying "NO! DON'T DO EET! EET'S TOO SEXY!!", but asking in effect how you're going to handle the rest of your business if you give in to your rampaging pet monster once again. What next? Will an almost certainly enraged Best Buy get the same pricing consideration when they angrily demand it? How about Target? One-stops? Independent accounts?

I guess we'll just have to wait and see how all of this falls into place. Depending on how serious Wal-Mart is with this idea (and whether they use it as a "either you are with us or against us" tactic to get their way), I get the impression this deal will not get off the table in its present form, but I can't rule out the idea of a compromise reached by all parties, especially as Sony/BMG and Universal are already experimenting with deep-discounting their lower-priced catalog tiers in a pricing fashion similar to what is in this article. If these new promotions are tied into the proposal reported above, it's not very difficult to imagine WEA and The Company That Was Once Respectfully Referred To As EMI falling into line.

I'd be delighted to see an across-the-board re-figuring of pricing strategies from the label, but I want to see these new prices offered to everyone, not just the one or two companies who can scream louder than all the others combined. That said, remembering how Universal caved in to these guys in the wake of the JumpStart kickoff, I'm also bracing for bad news.

I guess this is where Matt Drudge would say "developing ..."

Spinning Into Oblivion

The following article was shamefully ripped off wholesale from the New York Times.

Op-Ed Contributors
Spinning Into Oblivion

By TONY SACHS and SAL NUNZIATO
Published: April 5, 2007

DESPITE the major record labels’ best efforts to kill it, the single, according to recent reports, is back. Sort of.

You’ll still have a hard time finding vinyl 45s or their modern counterpart, CD singles, in record stores. For that matter, you’ll have a tough time finding record stores. Today’s single is an individual track downloaded online from legal sites like iTunes or eMusic, or the multiple illegal sites that cater to less scrupulous music lovers. The album, or collection of songs — the de facto way to buy pop music for the last 40 years — is suddenly looking old-fashioned. And the record store itself is going the way of the shoehorn.

This is a far cry from the musical landscape that existed when we opened an independent CD shop on the Upper West Side of Manhattan in 1993. At the time, we figured that as far as business ventures went, ours was relatively safe. People would always go to stores to buy music. Right? Of course, back then there were also only two ringtones to choose from — “riiiiinnng” and “ring-ring.”

Our intention was to offer a haven for all kinds of music lovers and obsessives, a shop that catered not only to the casual record buyer (“Do you have the new Sarah McLachlan and ... uh ... is there a Beatles greatest hits CD?”) but to the fan and oft-maligned serious collector (“Can you get the Japanese pressing of Kinda Kinks? I believe they used the rare mono mixes”). Fourteen years later, it’s clear just how wrong our assumptions were. Our little shop closed its doors at the end of 2005.

The sad thing is that CDs and downloads could have coexisted peacefully and profitably. The current state of affairs is largely the result of shortsightedness and boneheadedness by the major record labels and the Recording Industry Association of America, who managed to achieve the opposite of everything they wanted in trying to keep the music business prospering. The association is like a gardener who tried to rid his lawn of weeds and wound up killing the trees instead.

In the late ’90s, our business, and the music retail business in general, was booming. Enter Napster, the granddaddy of illegal download sites. How did the major record labels react? By continuing their campaign to eliminate the comparatively unprofitable CD single, raising list prices on album-length CDs to $18 or $19 and promoting artists like the Backstreet Boys and Britney Spears — whose strength was single songs, not albums. The result was a lot of unhappy customers, who blamed retailers like us for the dearth of singles and the high prices.

The recording industry association saw the threat that illegal downloads would pose to CD sales. But rather than working with Napster, it tried to sue the company out of existence — which was like thinking you’ve killed all the roaches in your apartment because you squashed the one you saw in the kitchen. More illegal download sites cropped up faster than the association’s lawyers could say “cease and desist.”

By 2002, it was clear that downloading was affecting music retail stores like ours. Our regulars weren’t coming in as often, and when they did, they weren’t buying as much. Our impulse-buy weekend customers were staying away altogether. And it wasn’t just the independent stores; even big chains like Tower and Musicland were struggling.

Something had to be done to save the record store, a place where hard-core music fans worked, shopped and kibitzed — and, not incidentally, kept the music business’s engine chugging in good times and in lean. Who but these loyalists was going to buy the umpteenth Elton John hits compilation that the major labels were foisting upon them?

But instead, those labels delivered the death blow to the record store as we know it by getting in bed with soulless chain stores like Best Buy and Wal-Mart. These “big boxes” were given exclusive tracks to put on new CDs and, to add insult to injury, they could sell them for less than our wholesale cost. They didn’t care if they didn’t make any money on CD sales. Because, ideally, the person who came in to get the new Eagles release with exclusive bonus material would also decide to pick up a high-speed blender that frappéed.

The jig was up. It didn’t matter that even a store as small as ours carried hundreds of titles you’d never see at Best Buy and was staffed by people who actually knew who Van Morrison was, or that Tower Records had the entire history of recorded music under one roof while Costco didn’t carry much more than the current hits. A year after our shop closed, Tower went out of business — something that would have been unthinkable just a few years earlier. The customers who had grudgingly come to trust our opinions made the move to online shopping or lost interest in buying music altogether. Some of the most loyal fans had been soured into denying themselves the music they loved.

Meanwhile, the recording industry association continues to give the impression that it’s doing something by occasionally threatening to sue college students who share their record collections online. But apart from scaring the dickens out of a few dozen kids, that’s just an amusing sideshow. They’re not fighting a war any more than the folks who put on Civil War regalia and re-enact the Battle of Gettysburg are.

The major labels wanted to kill the single. Instead they killed the album. The association wanted to kill Napster. Instead it killed the compact disc. And today it’s not just record stores that are in trouble, but the labels themselves, now belatedly embracing the Internet revolution without having quite figured out how to make it pay.

At this point, it may be too late to win back disgruntled music lovers no matter what they do. As one music industry lawyer, Ken Hertz, said recently, “The consumer’s conscience, which is all we had left, that’s gone, too.”

It’s tempting for us to gloat. By worrying more about quarterly profits than the bigger picture, by protecting their short-term interests without thinking about how to survive and prosper in the long run, record-industry bigwigs have got what was coming to them. It’s a disaster they brought upon themselves.

We would be gloating, but for the fact that the occupation we planned on spending our working lives at is rapidly becoming obsolete. And that loss hits us hard — not just as music retailers, but as music fans.

Tony Sachs and Sal Nunziato own an online music retail business.


NP: The Best Of D.A.F.