I particulary like the Radio part considering HFS couldn't cut it in the greater DC area:
Music Biz Perks Up
Record sales up, but high ticket prices devastate concert industry in 2004
After three years of massive sales declines, the record industry perked up in 2004 with a 1.6 percent growth in CD sales, fueled by blockbusters from Usher, Norah Jones, Eminem and U2. But is it enough to rally a sluggish industry, still in the throes of layoffs at the major record labels, ongoing battles with illegal file-sharing and the worst summer concert season in a decade?
"We're surviving, but we're clearly not out of the woods yet," says Antonio "LA" Reid, chairman of Island Def Jam and executive producer of Usher's Confessions, which sold nearly 8 million copies in 2004.
Most record executives and artist managers interviewed by Rolling Stone describe 2004 as a year of slow recovery but point optimistically to the increased popularity of digital downloads, music DVDs and cell-phone ring tones. "It reverses the trend of the last few years, so it's very encouraging," says industry veteran Clive Davis, chairman and CEO of BMG North America. "We've had to deal with the wrongful notion that music could be available for nothing. But the good news is that interest in music is stronger than ever."
Adds Steve Barnett, president of Epic Records, "We've put a lot of the bad things behind us. We're going to see slow growth and improvement over the next five years."
But others point out that the sales increase in 2004 was negligible, almost canceled out by disappointing holiday sales, and that despite thousands of lawsuits filed by the Recording Industry Association of America against file-traders, illegal downloading is a bigger threat than ever. Many suggest that 2005 will see further layoffs at the major labels, including the recently merged Sony-BMG as well as the Warner Music Group.
"You know the Wall Street term 'dead-cat bounce' -- when the stock market is going down, it bounces up again, then continues dying?" says Peter Paterno, attorney for Metallica, Dr. Dre, Pearl Jam and others. "Look, the economy got better, which is one reason people were inclined to spend more money [on music]. But I don't think the music business is heading permanently in the right direction."
SALES
Sales in all major genres went up slightly in 2004, but country was especially hot, rising twelve percent, fueled by Top Ten albums from Kenny Chesney, Gretchen Wilson and Tim McGraw.
2004 started strong, with Usher's Confessions selling 4.5 million copies and Norah Jones' Feels Like Home adding 3.1 million in the first half -- leading to an eight percent gain in CD sales over the first half of 2003.
Then the bottom dropped out. Few big records were released during the summer, and sales decreased for fourteen straight weeks into the fall, with disappointing numbers for albums by R.E.M., Ruben Studdard, Good Charlotte and Ja Rule.
The record industry was hoping for a fourth-quarter sweep by bunching up dozens of major releases on two "super Tuesdays" after Thanksgiving. But beyond near-million-selling first weeks for Eminem's Encore and U2's How to Dismantle an Atomic Bomb, holiday titles struggled, with unimpressive numbers for nearly everything outside the Top Ten. Some blamed the strategy of releasing too many blockbuster albums in a two-week period. "A handful of artists did really well, and they made it that much harder for anyone else," says Jim Guerinot, manager of No Doubt and others. "There's a finite amount of dollars for what people can spend on entertainment."
TOURING
Huge tours for Prince, Madonna, Metallica and Jimmy Buffett couldn't save the concert business this year, as sky-high ticket prices kept fans away from amphitheaters and arenas.
Most successful tours kept ticket prices down, with the punk Warped Tour at twenty-five dollars per ticket and Dave Matthews Band at forty to sixty dollars. But overall ticket prices jumped thirteen percent, to $58.71, during the first half of the year. After desperate promoters slashed ticket prices for many summer shows, including for Kiss and Ozzfest, offering tickets for as low as ten dollars, the overall 2004 price average landed at $52.06, a 3.5 percent jump over 2003, according to Pollstar.
Incubus and Norah Jones were among the biggest failures last summer. Van Halen could not sell enough tickets to meet the high guaranteed payments the band demanded and lost money for promoters. Meanwhile, Fleetwood Mac and Kiss, returning to the same markets they've played repeatedly in recent years, had trouble drawing their usual crowds.
"There are too many shows, so they're kind of cannibalizing each other," says Randy Phillips, CEO of AEG Live, which promoted Prince's and many other tours. "People either have the disposable income or they don't, and this summer, the crunch was on for American families."
Still, there were some positive signs in the alternative market, with successful festivals Bonnaroo and Coachella as well as solid tours by up-and-coming bands Franz Ferdinand, Interpol and Modest Mouse. "If you want to say that we're in the first inning of something good, you could point your fingers at fifty punk, emo and indie acts and say these guys are filling 1,000- to 3,000-seaters all around America," says Cliff Burnstein, manager of Metallica and Red Hot Chili Peppers. "There is a tremendous strength at the lower end. And a number of these artists could become the next Metallicas, the next U2s."
LABELS
It was a year of layoffs, mergers and musical chairs at the major labels. In August, the big five became the big four when Sony merged with BMG; thousands more layoffs are expected. The new Sony-BMG -- boasting Usher's 7.9-million-selling Confessions and American Idol's Kelly Clarkson and Clay Aiken releases -- still couldn't catch up to giant Universal, the world's largest label. During Thanksgiving week alone, Universal landed nine CDs in the Top Twenty (including the top three), with a total of 3 million in sales overall. "We were blessed," says Jim Urie, president of Universal's music and video distribution, attributing the strong sales in part to the label's Jump Start program, which dropped prices to $12.98 from as much as $18.98 on some titles.
In March, billionaire investor Edgar Bronfman took over Warner Music Group from Time Warner and quickly trimmed a thousand jobs -- more than twenty percent of the company. The leaner Warner finished third in market share, at about fifteen percent, with strong sellers including the Jay-Z/Linkin Park mash-up Collision Course, Josh Groban's Closer and Green Day's smash American Idiot.
RADIO
Usher was the story of the year at radio. His Number One song "Yeah!" reached more than 4 billion listeners, or thirty percent more than the next most popular song, Alicia Keys' "If I Ain't Got You," and Usher had three other Top Ten hits. In general, urban music continued to dominate the airwaves. "R&B and hip-hop songs accounted for more than sixty percent of radio's top 100 hits in 2004," notes Island Def Jam's Reid. "Eight percent more than in 2003."
In rock radio, a new wave of adventurous bands such as Modest Mouse, the Killers and Postal Service broke through to a mass audience. "It was a different sound that dominated, and it's growing," says Matt Smith, music director of Los Angeles' KROQ radio station. "We played Interpol's first album when they were at a small theater and all the kids had on black eye makeup. Now they play and it's 2,600 guys with backward Abercrombie hats and girls in the balcony flashing the band."
And in a year when Jay-Z and Linkin Park created a Number One album together, there was a sense that fans are willing to embrace a variety of sounds. "The color lines are blurred with today's youth," says Reid. "They may love the Killers, but they may also love Kanye West. You can't put things in boxes like you once could. I think that's a beautiful thing."
DOWNLOADS
Led by iTunes, Napster, Rhapsody and the new Microsoft Music Store, online sales reached 140 million songs last year, seven times what was sold in 2003. In the week following Christmas this year, 6.7 million tracks were sold online -- the biggest week for digital sales ever -- including almost 50,000 copies of Ciara's "1,2 Step," the top-selling song, followed by Green Day's "Boulevard of Broken Dreams" and Snoop Dogg's "Drop It Like It's Hot."
Still, online sales make up only about two percent of the industry's total revenue. And despite the RIAA's ongoing campaign against file-sharers (the label's lobbying group sued more than 7,000 alleged downloaders in 2004), file-sharing traffic stayed high -- about a billion song files are traded per month.
