Record labels also baffled over how to make money on social networks

With Facebook and MySpace accounting for two of the top 10 Internet spots in the U.S., the music industry is grappling with how to make money on social media.

Mike Jbara, chief operating officer of WEA, Warner Music Group's domestic sales and marketing company, today told those attending the music retailers' annual conference in San Diego that social networks present an opportunity to reintroduce consumers to the habit of buying music.

"It looks like social media is competing with peer-to-peer (file-sharing networks) and we all have an interest in turning that into an appropriate revenue opportunity, given that it's substantial," Jbara said.

So far, that secret formula has proved elusive. Panel after panel addressed the question of how to monetize social networks, but offered little by way of concrete success stories of bands converting Facebook fans to song buyers.

Many digital media experts extolled the power of social networks as powerful marketing platforms. But that's not exactly what the music industry needs -- new and innovative ways to give away its music online, in the hope of one day cashing in.

"It remains to be seen if it's going to be successful in that capacity," said Adam LaRue of IndieClick, who consults with major and independent labels in developing online strategies for artists.

The most advanced experiment to date, the MySpace Music service started in a joint venture with the major music labels, has yet to live up to its hype as a one-stop shop for music fans.

Alicia Yaffe, director of digital media at Rocket Science, which provides music label services, put it this way: "MySpace's new music service is taking a lot of time to get off its feet."

-- Dawn C. Chmielewski

Universal Music Group has enticed another major label -- Sony Music Entertainment --- to join its planned Vevo music video service.

Sony will contribute professionally created videos from its roster of performers, which includes Bruce Springsteen (aka The Boss), Justin Timberlake, Beyonce and Britney Spears.

Universal is working with YouTube to develop a new music hub, where viewers watch professionally created music videos of, say, Pink performing "Please Don't Leave Me" without having to wade through 80,000 or so cover renditions.

The goal is to imitate the success of Hulu, the red-hot online service that has attracted viewers and advertisers by offering professionally created content -- television shows, movies and short videos. As with Hulu, Vevo would also serve as a syndication platform to redistribute music videos elsewhere on the web.

To succeed, however, Universal still needs to sign on the two other major music labels, Warner Music and EMI, with whom it's reportedly in discussions. Until that happens, half of the pop cannon won't be enough for music fans.

-- Dawn C. Chmielewski

Photo: Bruce Springsteen. Credit: Bill Kostroun / Associated Press

EMI Music said its head of digital music, Douglas Merrill, was leaving the company he joined less than a year ago, and his business unit would be integrated into the label's operations.

The former Google chief information officer's decision to join EMI in April was heralded as a major coup for the music label. In interviews, Merrill talked excitedly about the company's embrace of digital technology and its transformation to a services company that could profit from small bands, as well as giants like the band Coldplay.

Merrill could not be reached Monday for comment.

In announcing Merrill's departure, EMI Music Chief Executive Elio Leoni-Sceti said that digital music sales now account for 20% of the company's revenue and that the business would no longer be run as a stand-alone operation.

Leoni-Sceti announced that the company had promoted Cory Ondrejka to the newly created position of executive vice president of digital marketing. Ondrejka joined EMI in June from Second Live. The company's CEO described him as "a highly talented executive with a passion for music and a unique technology-based skill set."

-- Dawn C. Chmielewski

Photo: Google

There may be no second acts in American lives, but there's always another act for an American idol.

“American Idol’s” first champ, Kelly Clarkson, returned to the top of the U.S. pop charts with her new album "All I Ever Wanted" bowing at No. 1, an encouraging start after disappointing sales of her last 2007 effort, “My December.” The new album sold 255,000 copies in its first week in stores in the U.S., according to Nielsen SoundScan data released to Billboard.

While the new album falls short of the first-week figures of “December,” which bowed with 291,000 copies, “All I Ever Wanted” is in line with Clarkson's first-week sales history, suggesting fans weren’t permanently put off by the rough publicity surrounding her previous work and canceled 2007 tour dates.

"All I Ever Wanted” has been positively received by critics, many who noted it represents a return to lighter pop-rock after the harder, more serious “December,” an album Clarkson released after a public dispute with her record label, RCA, over its direction.

"As long as someone like Kelly comes back with great material … the story’s a good story,” said Tom Corson, general manager of Sony BMG's RCA Music Group, the label that's releasing the album. "She’s proud of this record and focused on it, and that’s the news -- not what happened a few years ago.”

The release of “All I Ever Wanted” began with a highly targeted online media campaign three months ago. Beginning in December, RCA started posting artwork, song lyrics and audio clips relating to the new album on Clarkson's official website, treating each snippet as a mini event.

Then a bigger, more TV-focused leg of the marketing campaign kicked in last week. Clarkson returned to perform on “American Idol” and was the music guest on “Saturday Night Live.” This upcoming Friday, she’ll take the couch on “The Oprah Show,” a promotion that should help to prevent a major dip in second-week sales.

“All I Ever Wanted” carried a first-week price of $9.99 at mass retailers such as Best Buy, but will increase to $13.99 for its second week. Unlike many major releases these days, the album was not heavily discounted for online sales. Universal Music Group's Interscope Records, for example, sold “No Line” for $3.99 as a digital download during its first week of release earlier this month at Amazon.com.

“We don’t play that game,” said Corson, declining to elaborate.

Clarkson's fans, at least, were certainly eager for the album's lead single, “My Life Would Suck Without You,” which sold sold more than 1.15 million digital downloads and hit No. 1 when it was released in January. The song, slightly reminiscent of her 2004 breakout smash, "Since U Been Gone,” helped tee up album sales for "All I Ever Wanted."

So far, it looks as if RCA Music Group's marketing strategy is working, and sales of "All I Ever Wanted" will not be marred by the underperforming 2007 album.

“She certainly hit our first-week sales expectations,” said Chris Smith, a senior music buyer at Best Buy. “Her second week doesn’t look to be going the direction most records go from a trending perspective. She’s still maintaining a sales base that is higher than our expectations.”

-- Todd Martens

Photo: Ida Mae Astute / ABC via Getty Images

First-week sales of U2’s “No Line on the Horizon” brought the superstar rock band back down to Earth. The album, given the band's stature and sales history, was essentially preordained to debut atop the U.S. pop charts when it was announced last year. The only question was how many it would sell.

The Interscope album sold a brisk 484,000 copies in the U.S., according to data from Nielsen SoundScan. It’s the biggest first-week tally since Britney Spears’ “Circus” sold 505,000 copies during the holiday season last year.

But the number everyone will talk about is 840,000. That’s what U2’s “How to Dismantle an Atomic Bomb” sold when it debuted at No. 1 in 2004. Another recent barometer, the U2-influenced band Coldplay's album "Viva la Vida," sold more than 700,000 units when it was released last year.

Though the 356,000-unit sales gap can certainly be attributed to year after year of double-digit declines in album sales, a closer look at U2’s recent sales stats suggests that “Atomic Bomb” was a bit of an aberration in the career of the Irish superstars.

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

New Universal/YouTube venture gets Britney and 'The Boss'

Universal Music Group has enticed another major label -- Sony Music Entertainment --- to join its planned Vevo music video service.

Sony will contribute professionally created videos from its roster of performers, which includes Bruce Springsteen (aka The Boss), Justin Timberlake, Beyonce and Britney Spears.

Universal is working with YouTube to develop a new music hub, where viewers watch professionally created music videos of, say, Pink performing "Please Don't Leave Me" without having to wade through 80,000 or so cover renditions.

The goal is to imitate the success of Hulu, the red-hot online service that has attracted viewers and advertisers by offering professionally created content -- television shows, movies and short videos. As with Hulu, Vevo would also serve as a syndication platform to redistribute music videos elsewhere on the web.

To succeed, however, Universal still needs to sign on the two other major music labels, Warner Music and EMI, with whom it's reportedly in discussions. Until that happens, half of the pop cannon won't be enough for music fans.

-- Dawn C. Chmielewski

Photo: Bruce Springsteen. Credit: Bill Kostroun / Associated Press

EMI Music said its head of digital music, Douglas Merrill, was leaving the company he joined less than a year ago, and his business unit would be integrated into the label's operations.

The former Google chief information officer's decision to join EMI in April was heralded as a major coup for the music label. In interviews, Merrill talked excitedly about the company's embrace of digital technology and its transformation to a services company that could profit from small bands, as well as giants like the band Coldplay.

Merrill could not be reached Monday for comment.

In announcing Merrill's departure, EMI Music Chief Executive Elio Leoni-Sceti said that digital music sales now account for 20% of the company's revenue and that the business would no longer be run as a stand-alone operation.

Leoni-Sceti announced that the company had promoted Cory Ondrejka to the newly created position of executive vice president of digital marketing. Ondrejka joined EMI in June from Second Live. The company's CEO described him as "a highly talented executive with a passion for music and a unique technology-based skill set."

-- Dawn C. Chmielewski

Photo: Google

There may be no second acts in American lives, but there's always another act for an American idol.

“American Idol’s” first champ, Kelly Clarkson, returned to the top of the U.S. pop charts with her new album "All I Ever Wanted" bowing at No. 1, an encouraging start after disappointing sales of her last 2007 effort, “My December.” The new album sold 255,000 copies in its first week in stores in the U.S., according to Nielsen SoundScan data released to Billboard.

While the new album falls short of the first-week figures of “December,” which bowed with 291,000 copies, “All I Ever Wanted” is in line with Clarkson's first-week sales history, suggesting fans weren’t permanently put off by the rough publicity surrounding her previous work and canceled 2007 tour dates.

"All I Ever Wanted” has been positively received by critics, many who noted it represents a return to lighter pop-rock after the harder, more serious “December,” an album Clarkson released after a public dispute with her record label, RCA, over its direction.

"As long as someone like Kelly comes back with great material … the story’s a good story,” said Tom Corson, general manager of Sony BMG's RCA Music Group, the label that's releasing the album. "She’s proud of this record and focused on it, and that’s the news -- not what happened a few years ago.”

The release of “All I Ever Wanted” began with a highly targeted online media campaign three months ago. Beginning in December, RCA started posting artwork, song lyrics and audio clips relating to the new album on Clarkson's official website, treating each snippet as a mini event.

Then a bigger, more TV-focused leg of the marketing campaign kicked in last week. Clarkson returned to perform on “American Idol” and was the music guest on “Saturday Night Live.” This upcoming Friday, she’ll take the couch on “The Oprah Show,” a promotion that should help to prevent a major dip in second-week sales.

“All I Ever Wanted” carried a first-week price of $9.99 at mass retailers such as Best Buy, but will increase to $13.99 for its second week. Unlike many major releases these days, the album was not heavily discounted for online sales. Universal Music Group's Interscope Records, for example, sold “No Line” for $3.99 as a digital download during its first week of release earlier this month at Amazon.com.

“We don’t play that game,” said Corson, declining to elaborate.

Clarkson's fans, at least, were certainly eager for the album's lead single, “My Life Would Suck Without You,” which sold sold more than 1.15 million digital downloads and hit No. 1 when it was released in January. The song, slightly reminiscent of her 2004 breakout smash, "Since U Been Gone,” helped tee up album sales for "All I Ever Wanted."

So far, it looks as if RCA Music Group's marketing strategy is working, and sales of "All I Ever Wanted" will not be marred by the underperforming 2007 album.

“She certainly hit our first-week sales expectations,” said Chris Smith, a senior music buyer at Best Buy. “Her second week doesn’t look to be going the direction most records go from a trending perspective. She’s still maintaining a sales base that is higher than our expectations.”

-- Todd Martens

Photo: Ida Mae Astute / ABC via Getty Images

First-week sales of U2’s “No Line on the Horizon” brought the superstar rock band back down to Earth. The album, given the band's stature and sales history, was essentially preordained to debut atop the U.S. pop charts when it was announced last year. The only question was how many it would sell.

The Interscope album sold a brisk 484,000 copies in the U.S., according to data from Nielsen SoundScan. It’s the biggest first-week tally since Britney Spears’ “Circus” sold 505,000 copies during the holiday season last year.

But the number everyone will talk about is 840,000. That’s what U2’s “How to Dismantle an Atomic Bomb” sold when it debuted at No. 1 in 2004. Another recent barometer, the U2-influenced band Coldplay's album "Viva la Vida," sold more than 700,000 units when it was released last year.

Though the 356,000-unit sales gap can certainly be attributed to year after year of double-digit declines in album sales, a closer look at U2’s recent sales stats suggests that “Atomic Bomb” was a bit of an aberration in the career of the Irish superstars.

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

Heralded digital music chief at EMI out after only 11 months

EMI Music said its head of digital music, Douglas Merrill, was leaving the company he joined less than a year ago, and his business unit would be integrated into the label's operations.

The former Google chief information officer's decision to join EMI in April was heralded as a major coup for the music label. In interviews, Merrill talked excitedly about the company's embrace of digital technology and its transformation to a services company that could profit from small bands, as well as giants like the band Coldplay.

Merrill could not be reached Monday for comment.

In announcing Merrill's departure, EMI Music Chief Executive Elio Leoni-Sceti said that digital music sales now account for 20% of the company's revenue and that the business would no longer be run as a stand-alone operation.

Leoni-Sceti announced that the company had promoted Cory Ondrejka to the newly created position of executive vice president of digital marketing. Ondrejka joined EMI in June from Second Live. The company's CEO described him as "a highly talented executive with a passion for music and a unique technology-based skill set."

-- Dawn C. Chmielewski

Photo: Google

There may be no second acts in American lives, but there's always another act for an American idol.

“American Idol’s” first champ, Kelly Clarkson, returned to the top of the U.S. pop charts with her new album "All I Ever Wanted" bowing at No. 1, an encouraging start after disappointing sales of her last 2007 effort, “My December.” The new album sold 255,000 copies in its first week in stores in the U.S., according to Nielsen SoundScan data released to Billboard.

While the new album falls short of the first-week figures of “December,” which bowed with 291,000 copies, “All I Ever Wanted” is in line with Clarkson's first-week sales history, suggesting fans weren’t permanently put off by the rough publicity surrounding her previous work and canceled 2007 tour dates.

"All I Ever Wanted” has been positively received by critics, many who noted it represents a return to lighter pop-rock after the harder, more serious “December,” an album Clarkson released after a public dispute with her record label, RCA, over its direction.

"As long as someone like Kelly comes back with great material … the story’s a good story,” said Tom Corson, general manager of Sony BMG's RCA Music Group, the label that's releasing the album. "She’s proud of this record and focused on it, and that’s the news -- not what happened a few years ago.”

The release of “All I Ever Wanted” began with a highly targeted online media campaign three months ago. Beginning in December, RCA started posting artwork, song lyrics and audio clips relating to the new album on Clarkson's official website, treating each snippet as a mini event.

Then a bigger, more TV-focused leg of the marketing campaign kicked in last week. Clarkson returned to perform on “American Idol” and was the music guest on “Saturday Night Live.” This upcoming Friday, she’ll take the couch on “The Oprah Show,” a promotion that should help to prevent a major dip in second-week sales.

“All I Ever Wanted” carried a first-week price of $9.99 at mass retailers such as Best Buy, but will increase to $13.99 for its second week. Unlike many major releases these days, the album was not heavily discounted for online sales. Universal Music Group's Interscope Records, for example, sold “No Line” for $3.99 as a digital download during its first week of release earlier this month at Amazon.com.

“We don’t play that game,” said Corson, declining to elaborate.

Clarkson's fans, at least, were certainly eager for the album's lead single, “My Life Would Suck Without You,” which sold sold more than 1.15 million digital downloads and hit No. 1 when it was released in January. The song, slightly reminiscent of her 2004 breakout smash, "Since U Been Gone,” helped tee up album sales for "All I Ever Wanted."

So far, it looks as if RCA Music Group's marketing strategy is working, and sales of "All I Ever Wanted" will not be marred by the underperforming 2007 album.

“She certainly hit our first-week sales expectations,” said Chris Smith, a senior music buyer at Best Buy. “Her second week doesn’t look to be going the direction most records go from a trending perspective. She’s still maintaining a sales base that is higher than our expectations.”

-- Todd Martens

Photo: Ida Mae Astute / ABC via Getty Images

First-week sales of U2’s “No Line on the Horizon” brought the superstar rock band back down to Earth. The album, given the band's stature and sales history, was essentially preordained to debut atop the U.S. pop charts when it was announced last year. The only question was how many it would sell.

The Interscope album sold a brisk 484,000 copies in the U.S., according to data from Nielsen SoundScan. It’s the biggest first-week tally since Britney Spears’ “Circus” sold 505,000 copies during the holiday season last year.

But the number everyone will talk about is 840,000. That’s what U2’s “How to Dismantle an Atomic Bomb” sold when it debuted at No. 1 in 2004. Another recent barometer, the U2-influenced band Coldplay's album "Viva la Vida," sold more than 700,000 units when it was released last year.

Though the 356,000-unit sales gap can certainly be attributed to year after year of double-digit declines in album sales, a closer look at U2’s recent sales stats suggests that “Atomic Bomb” was a bit of an aberration in the career of the Irish superstars.

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

Kelly Clarkson new album sales are OK but not great

There may be no second acts in American lives, but there's always another act for an American idol.

“American Idol’s” first champ, Kelly Clarkson, returned to the top of the U.S. pop charts with her new album "All I Ever Wanted" bowing at No. 1, an encouraging start after disappointing sales of her last 2007 effort, “My December.” The new album sold 255,000 copies in its first week in stores in the U.S., according to Nielsen SoundScan data released to Billboard.

While the new album falls short of the first-week figures of “December,” which bowed with 291,000 copies, “All I Ever Wanted” is in line with Clarkson's first-week sales history, suggesting fans weren’t permanently put off by the rough publicity surrounding her previous work and canceled 2007 tour dates.

"All I Ever Wanted” has been positively received by critics, many who noted it represents a return to lighter pop-rock after the harder, more serious “December,” an album Clarkson released after a public dispute with her record label, RCA, over its direction.

"As long as someone like Kelly comes back with great material … the story’s a good story,” said Tom Corson, general manager of Sony BMG's RCA Music Group, the label that's releasing the album. "She’s proud of this record and focused on it, and that’s the news -- not what happened a few years ago.”

The release of “All I Ever Wanted” began with a highly targeted online media campaign three months ago. Beginning in December, RCA started posting artwork, song lyrics and audio clips relating to the new album on Clarkson's official website, treating each snippet as a mini event.

Then a bigger, more TV-focused leg of the marketing campaign kicked in last week. Clarkson returned to perform on “American Idol” and was the music guest on “Saturday Night Live.” This upcoming Friday, she’ll take the couch on “The Oprah Show,” a promotion that should help to prevent a major dip in second-week sales.

“All I Ever Wanted” carried a first-week price of $9.99 at mass retailers such as Best Buy, but will increase to $13.99 for its second week. Unlike many major releases these days, the album was not heavily discounted for online sales. Universal Music Group's Interscope Records, for example, sold “No Line” for $3.99 as a digital download during its first week of release earlier this month at Amazon.com.

“We don’t play that game,” said Corson, declining to elaborate.

Clarkson's fans, at least, were certainly eager for the album's lead single, “My Life Would Suck Without You,” which sold sold more than 1.15 million digital downloads and hit No. 1 when it was released in January. The song, slightly reminiscent of her 2004 breakout smash, "Since U Been Gone,” helped tee up album sales for "All I Ever Wanted."

So far, it looks as if RCA Music Group's marketing strategy is working, and sales of "All I Ever Wanted" will not be marred by the underperforming 2007 album.

“She certainly hit our first-week sales expectations,” said Chris Smith, a senior music buyer at Best Buy. “Her second week doesn’t look to be going the direction most records go from a trending perspective. She’s still maintaining a sales base that is higher than our expectations.”

-- Todd Martens

Photo: Ida Mae Astute / ABC via Getty Images

First-week sales of U2’s “No Line on the Horizon” brought the superstar rock band back down to Earth. The album, given the band's stature and sales history, was essentially preordained to debut atop the U.S. pop charts when it was announced last year. The only question was how many it would sell.

The Interscope album sold a brisk 484,000 copies in the U.S., according to data from Nielsen SoundScan. It’s the biggest first-week tally since Britney Spears’ “Circus” sold 505,000 copies during the holiday season last year.

But the number everyone will talk about is 840,000. That’s what U2’s “How to Dismantle an Atomic Bomb” sold when it debuted at No. 1 in 2004. Another recent barometer, the U2-influenced band Coldplay's album "Viva la Vida," sold more than 700,000 units when it was released last year.

Though the 356,000-unit sales gap can certainly be attributed to year after year of double-digit declines in album sales, a closer look at U2’s recent sales stats suggests that “Atomic Bomb” was a bit of an aberration in the career of the Irish superstars.

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

U2's 'Horizon' sales bring band back to Earth

First-week sales of U2’s “No Line on the Horizon” brought the superstar rock band back down to Earth. The album, given the band's stature and sales history, was essentially preordained to debut atop the U.S. pop charts when it was announced last year. The only question was how many it would sell.

The Interscope album sold a brisk 484,000 copies in the U.S., according to data from Nielsen SoundScan. It’s the biggest first-week tally since Britney Spears’ “Circus” sold 505,000 copies during the holiday season last year.

But the number everyone will talk about is 840,000. That’s what U2’s “How to Dismantle an Atomic Bomb” sold when it debuted at No. 1 in 2004. Another recent barometer, the U2-influenced band Coldplay's album "Viva la Vida," sold more than 700,000 units when it was released last year.

Though the 356,000-unit sales gap can certainly be attributed to year after year of double-digit declines in album sales, a closer look at U2’s recent sales stats suggests that “Atomic Bomb” was a bit of an aberration in the career of the Irish superstars.

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

Digital music downloads set record but fail to make up for decline in CD sales

Digital music downloads reached a milestone in 2008, exceeding a billion songs purchased online, according to a newly released report from Nielsen SoundScan, which tracks music sales. That represents a 27% gain over a year ago.

But the soaring popularity of the 99-cent download is not enough to offset continued declines in CD sales, which still account for the bulk of the music industry's revenue. Physical disc sales fell nearly 20% to 362.6 million, the seventh decline in eight years, according to SoundScan.

Overall album sales -- including CDs and the digital equivalent -- dropped 8.5% compared with 2007. Every musical genre, from alternative rock to Christian and gospel to new age to rap, reported across the board declines in album sales. Holiday sales -- hello recession -- were off by a steep 19%.

In an effort to cope with changing technology and the threat of Internet piracy, the recorded music industry has been exploring new sources of revenue. Royalties from satellite and Internet radio and so-called 360 deals with artists, in which the label shares in concert ticket and merchandise sales, contribute to the labels' bottom line. Video games such as "Rock Band" and "Guitar Hero" also generate licensing fees.

Nielsen doesn't track those alternative revenue streams

Universal Music Group remained the industry's big dog, with a nearly 32% share of the album market, followed by Sony BMG Music Entertainment at 25%. Warner Music Group claimed 21% of sales, and the smallest of the major labels, EMI Music, saw its market share drop slightly to 9%.

Lil Wayne's "Tha Carter III" was the bestselling album of the year, and country crossover artist Taylor Swift was the top solo artist. The '70s heavy-metal rock group AC/DC -- a group that long labored in the shadow of such contemporaries as Led Zeppelin -- was the bestselling group.

--Dawn C. Chmielewski

AC/DC lead singer Brian Johnson performs on the "Black Ice" tour at Madison Square Garden in New York. (AP Photo/Jeff Zelevansky)

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

Digital music track sales surpass 1 billion

Annual sales of digital songs will surpass 1 billion downloads this year, a first for the struggling music industry.

Nielsen SoundScan predicted in April that music downloads would reach this milestone, and with two weeks remaining in the year, that forecast appears to be proving accurate.

Individual song downloads will reach about 1,040,000 for the year, with the top 200 tracks accounting for 17% of sales. The best-selling digital song of the year is Leona Lewis' "Bleeding Love," which sold 3.3 million downloads.

Still, that's not enough to offset the decline in CD sales. This year's album sales are off 45% from the same time in 2000. A recent Forrester Research report projects that disc sales will continue to fall by an annual rate of 8% a year over the next five years.

-- Dawn C. Chmielewski

Chart Source: Nielsen SoundScan

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

'The Big 10': Who needs a Hollywood bailout?

Forget the Big Three automakers -- who's going to help Paris Hilton?

Uncle Sam's been pretty free with his pocketbook in the past few weeks. Banks and insurance firms have already gotten hefty sums to keep their boats afloat in the current economic crisis. Now the Big 3 automakers are asking for some cash. It seems everyone has an idea for who should get some green goodness: Can Las Vegas casinos, movie studios and TV networks be far behind?

We surveyed the entertainment landscape and hit upon some other bloated, creaky entertainment franchises that once bestrode the world like Colossus but now are desperately in need of some outside assistance (whether they want to admit it or not). Luckily, our crack team of experts has words of wisdom for each of them. Take a look.

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

MySpace Music (finally) names president

MySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.

Holt, whose appointment has been the subject of online speculation for weeks, has had a career that bridges music and technology. As executive vice president of digital music for MTV Networks, he oversaw digital initiatives for MTV, VH1 and CMT channels. Before joining MTV, he was senior vice president of new media for Interscope Geffen A&M.

"He was the first person that we really found that had the music experience, both from a marketing perspective and from a music programming perspective, the technical knowledge, and the relationships with all the major labels as well as independent labels," said MySpace co-founder Chris DeWolfe, who said 40 candidates were interviewed for the job. "He’s the only one out there that had all those variables that we could check off."

DeWolfe said he first met Holt in 2005, when he worked for Interscope. Holt was the first label executive to use MySpace's social network as a launch pad for new singles and albums from such major acts as Black Eyed Peas, Weezer and Audioslave, he said.

"In each case, each of those bands sold more albums than they’d ever sold before," DeWolfe said. " He was a visionary."

Despite a career working for a major label and MTV, DeWolfe said Holt brings an appreciation for the independent artists who have long used MySpace as a launch pad. Holt owns The Echo, which DeWolfe characterized as one of the largest venues for independent artists on the West Coast.

Inside image-conscious L.A., Courtney even scored fashion points.

"If you look at Courtney, from the clothes that he wears to the glasses that he may wear, he’s got a very eclectic style to him," DeWolfe said. "A very unique style." 

--Dawn C. Chmielewski

Photo credit: Nicole Bengiveno

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images

New report: EMI lost $1.2 billion, revenue declined

To paraphrase one of its late great former acts, when EMI was 77, it wasn’t a very good year.

According to new figures just released, the underdog of the four major labels suffered losses of $1.2 billion in the financial year ended March 31, far deeper than the prior year’s $455 million. Revenue declined to $2.3 billion from $2.8 billion. 

The report came from Maltby Capital, owned by funds managed by Guy Hands' private equity firm Terra Firma, which purchased EMI -- home of Katy Perry and Coldplay -- last year.

The loss stems from “poor" operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.

Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.

“EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music,” the report states.

And, the report suggests, the company may not see solid returns from signing those great artists, either. The report notes that EMI artists’ marketing and production budgets generously estimate likely sales. In the end, marketing and production eat up on average 81% of sales; nearly 9 in 10 EMI artists aren’t profitable.

Still, the report states that a change in strategy and operations, pursued out of the public-company spotlight, could turn the company around, if slowly.

“[T]here should be no false expectations,” the report reads. “EMI cannot be turned around overnight.”

EMI spokesman Neil Bennett noted also that since the end of the financial year, much of EMI's restructuring has moved forward.

"An awful lot has happened since then," he says. "EMI is a company going through radical change." 

--Swati Pandey

*Photo: Katy Perry. Credit: Kevin Winter/Getty Images