• Check out this week music releases here.
• Digital sales increasing rapidly.
  “I certainly think that more than half of music revenues will be digital in a relatively short period of time,” Warner Music chairman and chief executive Edgar Bronfman Jr. said during a conference call. “I don’t know whether that’s three years or five years, but it’s coming and it’s coming rapidly.”
• Sirius not solely reliant on Stern (King of All Media)
  “How are we reliant (on Stern)?” Karmazin said at the Reuters Media Summit in New York. “I don’t think we’re reliant in any shape or form. We have 135 channels.”
• Dallas based alternative rock band Kessler have signed to the Your Music America (YMA) label (distributed by ADA); Legal rep: Ben McLane; Mgmt: Albert Smith.
• BBC ‘damaging music industry’- UK
  A stinging attack on the music industry was launched, with the BBC accused of contributing to the mass manufacture of boy and girl bands. Think-tank the Economic Research Council, blames record companies for failing to break UK acts in the highly-prized US market. It says many of the music industry’s problems over recent years, which have seen sliding sales, have been “entirely self inflicted”.

Warner Music home to artists including Madonna and James Blunt, reported a fourth-
quarter profit on a gain from a legal settlement. Revenue fell as album sales declined. New releases from groups including Danity Kane and Mana failed to match last year’s recordings from Blunt and Faith Hill. CEO Edgar Bronfman boosted more profitable digital sales, which almost doubled to 12.2 percent of revenue. Music companies look to sales from downloads, cell phones and online videos to make up for falling CD revenue.

“Revenue was a little lighter than expected,” said Eric Handler, a Lehman Bros. analyst who rates the stock “neutral” and doesn’t own it. “Digital was quite strong — they’re outpacing the market on that,” Handler said. He said CD sales were “quite weak.”

Without the $13 million gain from a lawsuit against online file-sharing service Kazaa, the company lost $1 million

(reporter, Don Jeffrey )

• Doug Morris: The people who write music deserve to be paid for their compositions. The also should have some say about how their compositions are altered. I think that people are very lax about the respect that people should have for other people’s works. I hate…to see these groups work for two years, making an album spend enormous amounts of money, putting their creative juices into something that’s $9.99 in Best Buy and people would rather have it for free. For me, being a music person it’s very hard to watch that. (Read the full Reuters interview with Universal Chief Doug Morris)
• Radio exec gets Sirius again about XM merger
  Surius CEO Mel Karmazin has talked about a possible merger before, noting it could eliminate a lot of duplicate operating costs – not to mention, skeptics say, a lot of programming choice. Here is what to expect if a merger did occur:
  it would shrink music choices, since it would presumably not carry duplicate channels. Since XM and Sirius have different approaches in areas like oldies and popular standards, this could wipe out the sounds that enticed some people to subscribe in the first place. (Biz/Money)
• Russia agrees to shut down Allofmp3.com
  Russia has agreed to shut down Allofmp3.com and other music sites based in that country that the U.S. government says are offering downloads illegally. “AllofMP3 doesn’t expect the Russian government to take any action against the company since it operates within the current law,” said Rory Davenport, an Allofmp3.com spokesman. “The company is fully committed to its business.”

 Russia is known not to act out on its claims.

• Australia: Digital Sales are not filling the void of the loss of physical CD sales. (via Coolfer/The Age)
  “Digital ain’t filling the void,” says one industry veteran who did not want to be named. “While iTunes has made inroads there are still vast illegal markets.”

Sony BMG’s director of digital services, Gavin Parry, was one of the few industry executives to talk publicly this week.

“It has been pretty erratic,” he says of physical sales this year. “Some months have been down 10 per cent and other have been down 30 per cent. Globally there are some indications that digital isn’t replacing the void but for Sony BMG, it is. We are up. If people are sitting back waiting for iTunes to fix it, they’re in strife.”

Read the article in Digital Music.

Steve Gordon the author of The Future of The Music Business and the former Director of Business Affairs at Sony TV and Video has this to say……..

Gordon is skeptical that musicians will ever see a dime of money from Microsoft’s “royalty” payment. He writes, “Although this pattern of not paying artists for digital music sales is dreadful, the chances of artists seeing anything from the royalty placed on Zune is even worse. There is nothing in the standard recording agreement that says the labels must share income derived from licensing digital devices. Labels are only responsible for paying for exploitation of music, not licensing electronic devices. So why would the labels share anything with the artists when they already disregard clauses in the recording agreements that would benefit the artists?”

How do labels survive in the techonoligical transition? First,
technological transitions are great times to make gobs and gobs of money. You need to start thinking about creating new revenue streams.

Universal Music Group chief executive Doug Morris said he may try to fashion an iPod royalty fee with Apple Computer Inc. in the next round of negotiations in early 2007.

Universal was the first major record label to strike an agreement with Microsoft Corp. to receive a fee for every Zune digital media player sold.

“The Zune (deal) was an amazingly interesting exercise, to end up with a piece of technology,” he added.