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The Financial Times posted a column titled ‘Music industry looks to internet for revival‘ which talks about the possibility of major record labels creating their own video site.

Major music labels are faced with lack luster revenue streams via YouTube and are looking for new ways to expose their artists and generate revenue.  Labels are quite unhappy getting paid a few tenths of a cent for a streaming video on YouTube and apparently are looking at several options.

Music labels could end up partnering with Hulu, website that offers ad-supported streaming video of TV shows and movies from NBC and FOX.  It seems Hulu remains the most obvious option at this point. Supposedly, advertisers are more comfortable with Hulu’s professional content rather than YouTube’s amateur ‘anything goes’ content.

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Concert Business Posts Record Year: The concert business grossed just under $4 billion worldwide in 2008, the most ever for a year according to Billboard. Bon Jovi’s had the highest grossing tour making over 200 million dollars and drawing nearly 2.2 million fans.

Big Christmas Sales This Week: GNR’s Chinese Democracy sold 55,000 copies this week while Nickelback and Britney Spears are inching towards a million in sales for each of their new releases. AC/DC’s Wal-Mart release is near 2 million copies sold and Taylor Swift has 2 albums on the charts, Fearless sold 330,403 this week and her previous record sold 70,000 copies this week.

Music Labels To Create Video Sharing Site? Sources are saying that major music labels could do a better job creating their own video site ala YouTube. “Sony BMG, EMI, and Universal Music Group are in early talks about forming a joint venture similar in concept to Hulu, the increasingly popular TV-on-the-Web joint venture from News Corp and NBC Unviersal”.

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Don’t worry, we hope to deliver positive news and new artists in the new year but for now, meditate on this:  More than 10 million of the 13 million tracks available on the internet failed to find a single buyer last year.  In other words, a near 90% of digital tracks released in 2008 didn’t sell a copy.

” 80 per cent of all revenue came from around 52,000 tracks and only 173,000 albums were bought out of the 1.23 million available albums.”

This also poses a challenge to ‘The Long Tail Theory’ which suggests “that niche markets were the key to the future for internet sellers and was described as one of the most important economic models of the 21st century when it was spelt out by Chris Anderson in his book The Long Tail in 2006”. (Times Online)

Before you start crying, realize that most digital tracks released are nothing more than digital waste recorded on a mac computer.

Yes, people still purchase music, they just won’t purchase mediocre sound bytes which unfortunately far out numbers great product like Metallica’s  ‘Death Magnetic’.

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Once again, Warner Music has demanded YouTube to pull all music videos by its artists which could include hundreds of thousands of videos clips. Why? Because contract negotiations broke down.

Warner wants a bigger chunk of YouTubes revenue stream.

“The music companies typically get paid a share of any advertising revenue associated with the video and a per-play payment for every video viewed.” The per-play fee is usually a fraction of a penny and with millions visiting YouTube everyday it was all expected to add up to a substantial amount.

A source familiar with Warner Music’s talks said the amounts it has been receiving from YouTube were “staggeringly low”.

Music labels receiving a penny for every click to stream a video is a death bed business model. To illustrate, the label would only make 10,000 dollars after one million video streams from one of their artists.

The return of a labels investment has dropped exponentially from a 10 dollar CD to 99 cent digital track, to less than a penny for a video stream.  Where does it end?

As one insider from MTV said after the ratings drop,“We’re finding out that digital isn’t the holy grail that everyone thought.”

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MTV is facing a near 25% drop in viewership in their core demographic of 12-34 year olds.

MTV is facing the same thing every other traditional media (newspapers, radio, TV) is confronted  with – a dwindling audience. Why? Because young people aren’t watching TV like they use to, instead they are spending the most time with other forms of media such as video games and the Internet.

MTV will launch 16 new unscripted series over the next 4½ months in order to thwart their unprecedented ratings drop.

“I don’t remember a period of ever making as much significant change at once,” says Brian Graden, president of entertainment at MTV Networks

Sean Combs, Matt Stone & Trey Parker, Donald Trump and Nick Lachey will produce the upcoming reality series.

“MTV’s fight for relevance in the digital age has led it to the same conclusion that many others rooted in the traditional media biz have come to: Big broadband traffic is certainly achievable for traditional media companies, but it isn’t easily monetized with ad dollars.”

“We’re finding out that digital isn’t the holy grail that everyone thought,” says one channel insider.

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