British Recorded Music Sales Rise for the First Time in Six Years

Reprinted from the Times Online

Susan Boyle, Lady Gaga and Take That helped the British music industry to grow in value for the first time in six years, according to official sales figures released today.

Record labels, which have faced a slump in CD sales and a long-running battle against internet piracy, experienced a rise in income from music sales from £916 million to £929 million in 2009, the British Phonographic Industry said.

The surprise increase marks the first time that the growth in income from digital services such as iTunes has outweighed the decline from sales of CDs. Income from digital singles and albums leapt by 53 per cent, to £154 million, while physical formats dropped 6 per cent to £740 million.

Album sales, which dropped in value by 7 per cent, would have fallen even farther had it not been for Boyle, the Britain’s Got Talent finalist, whose album - I Dreamed a Dream — became the fastest selling debut album of all time, selling more than six million copies worldwide.

Lady Gaga topped the single sales charts for the year, with Poker Face, helping combined digital and physical sales grow by 40 per cent, to £91.3 million. Another surprise boon for the industry came in the form of Take That. The boyband’s DVD, The Circus — Live, sold more than 570,000 copies, propelling music DVD sales up by 16 per cent, to £33.1 million.

The biggest growth came from advertising supported services such as Spotify, we7 and YouTube, which accounted for a 247 per cent growth in revenue, to £8.2 million. But despite the huge leap in income from the cutting-edge companies, their contribution to the music industry still consitutes less than one per cent of the total income.

Record labels have spent the past six months engaged in furious lobbying efforts to persuade MPs to pass the Digital Economy Act, which creates new measures to temporarily disconnect the internet connections of those who consistently flout piracy laws, as well as take down websites that host illicit content.

The Act was passed this month after a behind-the-scenes deal between Labour and Conservative MPs. But music industry executives are still not certain that the measures will come into force; the Liberal Democrats have vowed to use their influence in a new Parliament to repeal the new laws, which the party says will criminalise teenagers.

Geoff Taylor, chief executive of the BPI, said: “It’s encouraging to see industry revenues stabilise and even show modest growth in 2009. This is testament to continuing investment by UK labels in talented artists despite challenging economic conditions, and the innovation labels have shown in licensing new digital services.

“But let’s put it in broader perspective: 2009’s modest result follows a five-year drop in annual income, and total industry income has not exceeded £1bn since 2006. The CD continues to show greater resilience than many predicted – it is an excellent digital product.

“The pace of growth of new digital services is encouraging, but the size of the market continues to be constrained by competition from illegal downloads.”

Disney to Close Lyric Street Music Label

Reprinted from The Wall Street Journal

By KATHY SHWIFF
Walt Disney Co.'s music division said it will close Lyric Street Records, its label in Nashville.

Lyric Street has produced recordings by artists Rascal Flatts and Shedaisy, as well as Aaron Tippen, Love & Theft, Sarah Buxton, and "American Idol" alums Josh Gracin and Bucky Covington since it opened in 1997.

"Given the changing nature of the music business and the more streamlined priorities of the [Disney] Studios, we need to find alternative ways to create and market new artists and their music to consumers," said Bob Cavallo, chairman of Disney Music Group.

Disney said it will phase out Lyric Street operations while keeping a core promotions team to market and promote the label's current records. Rascal Flatts will be moved to another Disney Music Group label, which will release the group's fall album. Disney Music Group handles all Walt Disney Studios' recorded music and music publishing operations, including Hollywood Records, Walt Disney Records and Walt Disney Music Publishing.

Disney Studios, which for two quarters last year reported its first operating losses since 2005, has shifted its strategy to focus on films that are essentially brands--like a planned Muppets movie--that can be exploited across its network of theme parks, videogames and commercial products.

Chairman Dick Cook was replaced last year by Disney Channel head Rich Ross, whose mandate from Disney Chief Executive Robert Iger was to redefine the studio in much the same way he had rebuilt the company's cable-TV network. Mr. Ross reinvented the cable network--formerly a sleepy outlet for old Disney movies--by creating tween-oriented entertainment like "High School Musical" and "Hannah Montana," that drove profits for the radio, consumer products, recorded music and live-events divisions.

Write to Kathy Shwiff at kathy.shwiff@dowjones.com

Commerce Dept. Backs Radio Royalty Bill

Agencies, Intellectual Property
Thursday, April 1, 2010 5:44 PM
Reprinted from www.nationaljournal.com

By Sara Jerome

The Commerce Department voiced support Thursday for legislation that would require AM and FM radio stations to pay performers a fee when they air their songs.

"In today's digital music marketplace, where U.S. performers and record labels are facing both unprecedented challenges and opportunities, the department believes that providing [incentives for artists and recording companies] is more important than ever," Commerce Department General Counsel Cameron Kerry wrote in a letter to Senate Judiciary Chairman Patrick Leahy, D-Vt.

Performance rights legislation was approved by both the House and Senate Judiciary committees but remains fiercely opposed by broadcasters. Music industry groups argue that musicians are paid by satellite and Webcasters for playing their songs and AM and FM radio stations should have to pay as well.

"The Obama administration is the latest, but not the first to support congressional efforts to close the loophole in copyright law that allows radio stations to earn billions without compensating the artists, musicians and rights holders who bring music to life and listeners' ears to the radio dial," said Martin Machowsky, a spokesman for the MusicFIRST Coalition, which represents a dozen music industry groups. "This is a great momentum builder for our fight to win fair pay for airplay for American artists and musicians in the U.S. and around the world."

Broadcasters say performers benefit from the exposure they receive from free radio airplay and argue the fees would place a big financial burden on local stations that are still struggling from the weak economy.

"We're disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations," National Association of Broadcasters spokesman Dennis Wharton said in a statement. He noted, however, the support broadcasters have from 260 House members and 27 U.S. senators who have signed on to a resolution opposing the performance rights legislation.