The Record Label's "Seven Years of Silence"

You heard about the iPhone almost every day on the run up to the big day when it went on sale. You hear the AT&T network sucks and hundreds of thousands of people don't care.

They want creative solutions.

In this case, make the telephone do something other than call and do rudimentary texting. Make it intuitive. Forget about cell phone coverage or data speed.

You see Internet streamers fighting for their lives against the big bad wolf -- SoundExchange. The clock ticks. Streamers beg their congressmen to do something. The gun is to their heads with the July 15th deadline for new royalty rates approaching, but the streamers are busy at work trying to win a compromise.

They want creative solutions.

In the case of streamers, they're willing to pay more, but they want to keep it fair. Right now the CRB's new rates are discriminatory against streamers. They are so unfair and burdensome they could shutdown Internet treasures like Pandora and others. Streamers don't want to get into a fight with the labels, they just want to survive.

Terrestrial radio is taking a beating in revenue, in ratings and in its pursuit of younger listeners. Say what you want about them but terrestrial radio people have been fighting hard to turn it around. That they haven't been successful yet is not the point. They are trying. Whether they can ever turn it around is moot. They are trying.

They want creative solutions.

Ways to use their terrestrial signal with the Internet and mobile applications. Everyone in the U.S. it seems has been consumed with WCBS-FM's exciting return to "oldies" (really Classic Hits) in New York. Damn, they're trying.

Record labels.

That's another story.

Billboard reports the global music market is off for the seventh consecutive year in 2006 with ominous signs that the decline is worsening in 2007. Sales are off 5% year-to-year according to the International Federation of the Phonographic Industry (IFPI). The so-called value of physical music shipments are off 11% to $17.5 billion.

There's piracy.

Diminishing CD sales.

No new music trends in sight to stoke the sales fires again.

There's a war brewing with their traditional partner radio over performance fees that will add up to no good.

Hell, The Wall Street Journal reported Thursday that pirated music is now helping radio develop their playlists -- and Clear Channel's Mediabase is leading the way. You read that right. Music pirates are becoming radio's new call out research. Let me get this right, did someone just wake up to discover that the Internet is going to be music's future hitmaker.

Radio did. Not the record labels.

Seven years of decline and what do you hear from the record labels?


No new ideas.


What do you hear from their lawyers -- the same old thing.

Let's screw Steve Jobs and dangle taking our library off iTunes (I'll bet Jobs is shaking in his boots). Betcha the evil in the other labels would love a stupid competitor to drop out of iTunes. Still, it solves nothing.

Cutbacks. When at first you don't succeed, fire the people who could help you. It's the new American way -- thanks to Wall Street.

Whatever happened to all that record label hype we used to hear at radio stations? Radio misses it. At least it was a sign that the labels were trying. There's very little new. Even their hype is weak. What I wouldn't give for some good old fashioned record label b.s. about music -- artists, performing. God, I don't believe I said that.

Radio is hurting so the labels do the only thing they know how. They take out a 44-caliber hand gun, aim it at their foot and pull the trigger. I can imagine the lawyers who are working behind the scenes (billable hours, remember) to litigate, legislate or levitate performance royalty taxes on their old hit-making friends.

Where are the record industry suits? Wait, most record execs don't wear suits. Where are the record industry jeans?

While they twiddle their thumbs and do nothing -- nothing -- their lawyers are finding new ways to sue ten year old music pirates.

DRM -- digital rights management -- is so yesterday -- so gone, yet it didn't make the "A" action list with three of the four majors. Hey, in 12 shorts months they can count yet another year of revenue declines.

If they were good at math they would see that seven years of decline coincides with seven years of silence.

I have my theories why most of the label execs are standing around while their business goes to hell. I also know record execs who are sick over this -- but they are not in the driver's seat and can't do anything about it.

Radio was the record industry.

What I mean is the labels produced the records, pressed them and distributed them to traditional retail chains. But radio stations -- in lock step -- made the artists, the hits, promoted the concerts and sustained their big stars over decades in some cases. Now that the radio industry has fallen on hard times with enough problems of their own it can't fix the record industry. What a great time to saddle them with performance fees.

Record labels are only manufacturers -- with a small cast of "characters" who think they have the ears of a hitmaker.

They don't know where to begin - that's obvious because seven years later we have seen no beginning to stemming their decline.

A few suggestions:

Embrace the Internet. Get over piracy whether it's fair or unfair -- it isn't going away. Use it like promotion which is what it is in our digital world.

Sell what consumers want -- downloads. Invest in selling other merchandise. Put a call in to the surviving members of the Grateful Dead. They've been letting fans plug in and record their concerts forever and all they get for it is -- richer.

Stop trying to tax radio. Help radio. Team up, work with them while stations figure out what, if any, role they will have with the next generation.


And fire all those lawyers except one -- the one to review the next contract Steve Jobs rams down your throat.

If you want to regain control of the record industry, act like a leader.

Do something.

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