This has been a pivotal year in the record business. For better or for worse, a lot happened this year that will greatly impact the future of the music industry. Regardless of how you see this past year’s events, we’re looking ahead to the future and thinking of solutions. Let’s recap 2006 and see what we have learned…

The year of the million dollar question. The sale of physical CD’s has shrunk yet again, despite the belief that digital downloads serve as promotion for the physical product. With consumers opting to download singles rather than albums, the loss is not being made up digitally. So how do we make up the loss? To be continued…

The year consumers got somewhat smarter. Paris Hilton bombed, Jessica Simpson flopped, Pink flopped and Gwen ‘will’ flop. Consumers didn’t buy into overhyped celebrities cutting albums. Although there is little evidence proving they are turning to more ‘legitimate’ performers, the decline in pop sales has been…surprising.

The year of fuzzy math and friendbots. 30,OOO plays on a myspace page and 10 friends at a gig. Nice try guys……….

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The year everbody thought they were going to be stars. Forgoodness sakes, Time magazine picked “YOU” as the person of the year. The internet created ego monsters. Too many people bought into the propaganda that the internet alone could break an act. WRONG! The internet is too big of an ocean. Most aren’t paying attention.

The year labels began seeking new revenue streams. Universal got into the hardware business. Universal struck a deal with Microsoft’s Zune by getting a dollar for every unit sold.

The year of Youtube. Millions of people turned to the user generated site to watch their favorite videos, however Youtube hasn’t yet proved it can impact sales. Another million dolllar question.

The year of lawsuits. Universal called Myspace and Youtube copyright infringers and sparked a first landmark battle with Myspace.

The year the hip hop died. This year, rap and hip hop became a parody of itself just like 80’s glam metal. The music became so embarassingly bad that it began getting bad press in non-rap outlets. Yes, its dying a slow death. There is hope for this genre as more artists start to speak out against false imagery, however with so much money in the wrong hands, it will surely bottom out before major changes are made.

The year when the entertainment industry was introduced to the long tail. The long tail claims we will see less blockbusters due to a fragmented society and more choices. Naysayers claim too many choices suppress the consumer and they will walk away with nothing. We agree.

The year of ‘absolute’ hype. Hype has inflicted the music industry like no other. We now have 100,000+ releases a year. We have thousands of blogs promoting different bands calling them the ‘saviors of rock n roll’. PR companies send out thousands of emails asking us to check out the ‘buzz’ bands of the moment. Artists send out their own press releases, believing their own hype. Getting tired yet? We are. Do yourself a favor and IGNORE it. When a great band comes along, you will know it.

2006 has been a dark and confusing year, leaving everyone wondering what the future could possibly hold. Although there were some hints toward really great music making a comeback, it was scattered at best. KOAR is on a crusade. Next year we are looking forward to better artistry, better business, and new methods. The KOAR staff is looking forward in discovering artists that deliver a message and delivering songs that challenge the world as well as inspiring future artists. KOAR will continue to search for solutions for the hardest problems. In 2007, KOAR will be adding a message board to further communication among our readers. We will feature a variety of topics intended to work together and pull us all out of this confusing time in music.

Until then, we wish our KOAR readers a Merry Christmas, Happy Hanukkah, and safe and healthy New Year!

-Kings of A&R

• Powerspace who is repped by lawyer Dan Friedman signs to Fueled By Ramen.
• Philadelphia alternative act Liam and Me who KOAR talked about signs to Thrive Records.
• Sparks the Rescue signs to Double Blind Music.
• Warner Music is acquiring a majority stake in Roadrunner . The agreement gives WMG 73.5 percent of the company for $73.5 million. In the U.S., Roadrunner Records will be a freestanding label group within WMG’s Atlantic Records Group.

• Axl Rose has fired his manager Merck Mercuriadis. Read here.
• CBS Revives CBS Records to Make Music for TV, ITunes
  CBS Corp. plans to revive its CBS Records label to produce music for television programs
  Internet sales to tap consumer demand for downloaded songs. CBS music and videos initially will be sold only online at Apple Computer Inc.’s iTunes store and through Web outlets such as cbsrecords.com.
• Facebook Not for Sale
  Facebook another social-networking Web site courted by Yahoo! isn’t for sale, board member Peter Thiel said. “It’s going to remain an independent company,” Thiel said
  in an interview last week. “The plan is to actually build it, maybe at some point take it public, but definitely not to sell it.” (Ruben Ramirez)
• American use 10 Hours of Media a Day
  Americans will spend nearly 10 hours a day watching television, surfing the Internet, reading books, newspapers and magazines and listening to music this year, the U.S. Census Bureau said on Friday.
• David Geffen; a Billion short for the LA TIMES
  Media mogul David Geffen’s $2 billion bid for the Los Angeles Times is about $1 billion short of what big shareholders of parent Tribune Co. want for the storied newspaper. L.A. Times is closer to $3 billion and have said any sale of the paper would have to be done as tax-free transaction, sources said.

Sorry to report that Ahmet Ertegun, who helped define American music as the founder of Atlantic Records has died today at the age of 83. Ertegun remained connected to the music scene until his last days.

• EMIÂ Ends Takeover Discussions; Shares Drop
  EMI ended talks to be acquired by Permira Advisers LLP after failing to agree on a price, the second time this year that takeover plans collapsed. The approach was EMI’s second takeover advance this year. EMI and Warner Music Group Corp. each offered about $4.6 billion for each other in June. Shares of EMI had their biggest decline in almost two years
  after the London-based company said it didn’t get a bid “that fully reflects the prospects for and value of the company.” (Zimri Smith)

“EMI can just about survive on its own, but it’s not a great growth story,” said Alex Degroote, an analyst at London’s Panmure Gordon.

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