Music’s Sales Slump Slowed–But Not Stopped–By Michael Jackson and the Beatles

beatlesforsaleI don’t normally bother providing you updates on the music industry’s revenues, because the update has been the same for most of the last decade: Each quarter, the industry’s collective sales decline yet again.

But here’s a very slight twist: The sales decline slowed in the most recent quarter. U.S. sales dropped 11.1 percent in Q3, compared to a 14.5% drop in Q2, according to Nielsen Soundscan.

That’s the good news. The bad news is that Michael Jackson isn’t going to pass away again, and that unless they finally do come to Apple’s iTunes (AAPL), there probably isn’t another way to repackage the Beatles again. Billboard:

Renewed interest in the Beatles and Michael Jackson slowed the decline of U.S. album sales in the third quarter, although the industry is still on track to fall for the eighth time in nine years…

Music retailers are hoping that the continued performance of Jackson and Beatles albums and a strong fourth-quarter release schedule will continue to make up lost ground.

During the quarter, Jackson’s June 25 death fueled sales of about 5 million units, and the September 9 re-release of the Beatles catalog has sold 1.3 million units so far.

So far this year 11 albums have topped the 1 million-unit mark, the same number as in 2008. In 2008, the top seller was Lil Wayne’s “Tha Carter III,” at 2.5 million units; this year’s top seller is Jackson’s “Number Ones,” at 1.8 million units.

Music’s Sales Slumped Slowed – But Not Stopped – By Michael Jackson and the Beatles

beatlesforsaleI don’t normally bother providing you updates on the music industry’s revenues, because the update has been the same for most of the last decade: Each quarter, the industry’s collective sales decline yet again.

But here’s a very slight twist: The sales decline slowed in the most recent quarter. U.S. sales dropped 11.1% in Q3, compared to a 14.5% drop in Q2, according to Nielsen Soundscan.

That’s the good news. The bad news is that Michael Jackson isn’t going to pass away again, and that unless they finally do come to Apple’s iTunes (AAPL), there probably isn’t another way to repackage the Beatles again. Billboard:

Renewed interest in the Beatles and Michael Jackson slowed the decline of U.S. album sales in the third quarter, although the industry is still on track to fall for the eighth time in nine years…

Music retailers are hoping that the continued performance of Jackson and Beatles albums and a strong fourth-quarter release schedule will continue to make up lost ground.

During the quarter, Jackson’s June 25 death fueled sales of about 5 million units, and the September 9 re-release of the Beatles catalog has sold 1.3 million units so far.

So far this year 11 albums have topped the 1 million-unit mark, the same number as in 2008. In 2008, the top seller was Lil Wayne’s “Tha Carter III,” at 2.5 million units; this year’s top seller is Jackson’s “Number Ones,” at 1.8 million units.

The New Yorker Takes on Hollywood Power Blogger Nikki Finke

nikki-finkeA treat for those of you who love reading about Hollywood’s inner workings: 6,754 words in this week’s New Yorker dedicated to power blogger Nikki Finke, and those who fear her and/or read her. Which pretty much includes everyone in Hollywood.

It’s a classic New Yorker profile, which means it’s great and thorough read, though there’s not much in the way of news there. Writer Tad Friend mentions Jay Penske’s purchase of Finke’s services in passing, and there’s no update of Penske’s and Finke’s plans to expand the site.

For the record, in late June, Finke said she’d have a New York correspondent hired within three months;  four weeks ago, Penske told me said correspondent was going to be signed within two weeks. What’s the status now? “Not ready to comment right now,” Finke says via email. I’ve also asked Penske for an update.

Back to the story. There’s lots of inside baseball about the symbiosis between the studios and the people who write about them, and some smart reporting about the tradecraft of reporting, and how it’s been altered by the rise of blogging. I also detected at least a whiff of allusion to Janet Malcolm’s famous description of journalism, published in the New Yorker two decades ago:

Finke’s code is the Hollywood code. She is for hard work, big box-office, stars who remain loyal to their agents and publicists, and the little guy—until, that is, the big guy chats her up. Then she’s for that big guy until some other big guy calls to stick it to the first big guy. And this, too, is the Hollywood code: relationships are paramount but provisional. One executive observes that people who heed Finke’s call to snark about their competitors shouldn’t get too comfortable: “The idea is, The lion won’t eat me if I throw it another Christian. It works for a day, but you’re going back to the Colosseum soon.”

The bond between journalists and their sources is always complex—you’re friends with benefits, without being friends—but its contingent nature is particularly apparent in Hollywood. Finke’s sources can hear in her voice when she sounds low or unwell, and will ask if she needs anything. She’s grateful for the solicitude, but determined to maintain the barrier between her and those she calls “these people.” “A veterinarian treats animals—he’s not an animal,” she says.

What does Finke think? Glad you asked. She has an entire post dedicated to it, of course. The gist:

As I expected, it’s an amusing caricature, only occasionally true but hardly insightful. Still, I’m relieved that The New Yorker didn’t lay a glove on me. I found Tad Friend, who covers Hollywood from Brooklyn, easy to manipulate, as was David Remnick [the magazine's Pulitzer Prize-winning editor in chief] , whom I enjoyed bitchslapping throughout but especially during the very slipshod factchecking process.

No comment from Friend or the New Yorker’s PR staff, who sent me a copy of the article this afternoon.

YouTube Yawns at Letterman’s Extortion Story

In certain circles, David Letterman’s extortion/adultery story is huge news. On YouTube? It’s a yawn.

Don’t get me wrong: Google’s (GOOG) video site still appears to be the only place to see Letterman’s jaw-dropping admission that he has had affairs with staffers on his show, and that a CBS (CBS) employee attempted to extort him with that information.

Those clips aren’t supposed to be there, and CBS and YouTube keep taking them down, but people keep uploading them. Here’s one that appears to come from a Portugese user, for instance.

But I had a hunch that the story, which involves a man who has been on late night TV longer than many YouTube users have been alive, might not resonate with the site’s core demo. And video tracking service TubeMogul’s data makes me think that’s the case. Here’s the report I got from TubeMogul marketing director David Burch:

Pirated versions only racked up 130,624 views throughout the day, mostly because CBS didn’t post an official version of the clip and was issuing take-down orders (they had already removed five versions of the clip by the time we ran our first report this morning). By way of comparison, pirated clips of the UFC Kimbo Slice fight totaled 1,074,531 views in the past 24 hours.

Oddly, CBS News’ channel released four news videos about the story today, but youtube.com/cbs only had Letterman’s Madonna interview rather than the clip everyone actually wanted to see.

Never heard of Kimbo Slice before? Like Fred, he’s yet another YouTube sensation, albeit one that’s graduated to TV.

Wall Street to Comcast: No NBC For Us, Thank You Very Much

Maybe this is why Comcast (CMCSA) rushed to knock down a story that said it bought NBC Universal from GE (GE): It knew Wall Street would hate the idea.

As it is, now that investors and analysts have heard the more plausible deal — instead of buying NBC U for $35 billion, the cable giant kicks in up to $6 billion in cash, plus its cable networks, and gets 51% of NBC U — they’ve decided they hate that one, too.

Here’s the story in the graphic form (click chart to enlarge):

cmcsa ticker

The Comcast-NBC U story broke after the market closed on Wednesday, in case that wasn’t clear. As I’m typing this CMCSA is trading around $15.6 a share – down some 7% since the talks became public.

Pull back a bit and you see that things could be much worse — as recently as March, CMCSA was down below $12, and there wasn’t any multi-billion dollar deal weighing down the shares then.

If anything, investors are much more forgiving to Comcast here than the professional chattering class of writers and analysts, who hate the deal. The conventional wisdom: Comcast’s dream of marrying cable programming with its cable service is misguided, because media conglomerates like Time Warner (TWX) and News Corp (NWS) have already tried it, and concluded that it didn’t work. If the Roberts family spends money on anything, they argue, it ought to be on shareholders, either via dividends or by buying back shares.

Here’s a sampling of today’s sentiments:

Pali Capital’s Rich Greenfield:

“Comcast is trying to become a massive player in content.. a move that investors should be frightened about, regardless of the initial ”math” surrounding the transaction.”

Barclays Capital Vijay Jayant:

Press reports of this potential transaction give credence to investor concerns that management has empire-building aspirations in general or that they may not believe enough in their own distribution business over the long term and therefore need to diversify their portfolio holdings…fundamentally, we believe that Comcast shareholders would be better served if the company were to invest in its own shares.

So if this is a trial balloon, you wouldn’t say it’s been completely shot down. But it’s certainly sagging.

Publishers Like Time Inc.’s “Hulu For Magazines” Pitch. What Will Apple and Amazon Say?

genieEarlier this year, Time Inc. CEO Ann Moore tasked her lieutenant John Squires with figuring out how to put the digital “genie back in the bottle”. Here’s part of his answer: A Hulu for magazines.

Squires has spent the past few months convincing other publishers to join a new joint venture aimed at a market that doesn’t really exist yet — magazine-like publications to be delivered via e-readers like Amazon’s Kindle and Apple’s rumored tablet.

The idea: The new company, which will operate independently from the publishers that invest in it, will create a digital storefront where consumers can purchase and manage their subscriptions that can be delivered to any device. The pitch: Control a direct relationship with consumers, while gaining leverage with heavyweights like Apple (AAPL) and Amazon (AMZN).

Industry executives briefed on Squires’ plan say it has been well received by Time Inc.’s peers, and that several major publishers, including Hearst and Conde Nast, are expected to sign on for the JV, which isn’t scheduled to debut until 2010. No comment from Hearst, Conde Nast or Time Inc., a unit of Time Warner (TWX).

Many of the venture’s big details have yet to be hammered down. At one point, for instance, Time Inc. had explored the idea of including newspapers in the new company’s offering, sources say. The JV may also want to include a non-content partner as an investor, as Hulu did with Providence Equity, and Vevo, the “Hulu for music” JV that Universal Music is creating with Google’s YouTube (GOOG), plans to do. That approach is supposed to appease antitrust regulators’ worries about a group of content companies banding together.

But the rough outlines of Squires’ plan are attractive enough to publishers, who are hopeful that mobile devices like the Kindle will create a new market for them. And if that market does show up, they want to make sure they’re the ones in charge of sales and distribution. That’s been a huge problem for the music industry, whose digital sales are essentially controlled by Apple. And it’s already cropped up as point of contention with Amazon, which currently handles sales for all content delivered via its Kindle reader.

Other selling points for the JV: The ability to set standards for mobile content, and the ability to integrate advertising into the publications. One thing the company isn’t supposed to do: Create an e-reader itself.

The takeaway, via a Time Inc. presentation that has circulated among publishers: “our destiny with readers, advertisers and distributors … in our hands.”

Of course there are plenty of hurdles facing the joint venture, starting with the fact that media joint ventures have a checkered record at best (though Hearst and Conde, for instance, have already partnered on Comag, a wholesale distribution company). But there are bigger problems for Squires and company. For instance:

  • They’ll have to convince consumers that already have billing relationships with Amazon, Apple and other vendors to sign up with yet another service.
  • They’ll  have to convince device makers to play along with the strategy, which runs counter to many of their own plans. Both Amazon and Apple, for instance, have intentionally created closed systems that give them control of both devices and distribution.
  • They’ll have to create content that consumers will want to buy. The new product can’t simply be a digital version of the magazines they’re already printing: That’s already available on the Web, and consumers have shown almost no interest in paying for it, and advertisers haven’t fully embraced it either.

So what exactly will the JV be selling? That’s probably the most difficult question for the publisher to answer, made even more difficult because they don’t know what capabilities the e-readers of the future will boast. Apple for instance, refuses to even acknowledge to Time Inc. executives that it plans to produce a tablet device, let alone provide them with specs.

But publishers feel they’ve got nothing to lose by trying. “We know that traditional magazines are going away, and that magazines on the Web don’t work,” says a publishing executive working on the plan. “But this gives us a chance to serve the reader who will pay for content, and provide advertising that really works. Can you think of a better idea?”

Now on YouTube: David Letterman’s Amazing Extortion Video

This is the way the Internet is supposed to work: Something amazing happens on TV on Thursday night, and everyone talks about it, and watches it, on the Web on Friday.

Today’s example: David Letterman’s startling admission, broadcast on his CBS show last night, that a network employee had tried to extort him, using evidence that Letterman had sex with women who worked on his show.

That’s something you’re going to want to watch, right? And sure enough, the world’s largest video site obliges. Google’s YouTube (GOOG) is packed with clips of Letterman’s statement, which runs about 10 minutes.

None of them are supposed to be there, of course. And since CBS (CBS)  has a partnership with YouTube (that it doesn’t like to talk about but which is apparently a success for the network), YouTube will be playing whack-a-mole with uploaders for the rest of the day. They’ll throw the clips up, and the site, using its Content ID program, will hunt for them and take them down.

At some point it’s possible that CBS itself will put up an authorized clip on YouTube. But given that it hasn’t done so on its own Late Show site already, and that the network tends to be reluctant to put its best stuff on the Web under normal circumstances, I wouldn’t hold my breath.

Anyway, here’s one of the many clips, which tend to feature crummy video but acceptable audio. If it goes away, you’ll be able to find more here.

It will be interesting to see how this plays on the site. My hunch: Given that Letterman is 63 years old, and that the clip only involves him talking about the extortion attempt (as opposed to, say, jumping up on stage in the middle of an awards show) this may not be one of YouTube’s biggest hits. But we’ll see.