Music Business News January 14, 2012

Music Business News January 14, 2012

Big changes in the music industry took the spotlight this past week as the music industry filed suit against the Irish government and Billboard changed the format of its Top 200 for the first time in almost 60 years. Also, Dave Grohl talked candidly about the state of rock and why he believes record sales have been down.



Irish Government Embroiled in Music Industry Lawsuit


The Irish government is currently being sued by the music industry for failing to comply with the new SOPA-like EU copyright law that requires websites suspected of illegal file sharing to be blocked, according to an article on the TechEye website. And if the industry wins, Ireland will be the first country sued into insolvency over music piracy.


The suit has its roots in a 2010 lawsuit brought about by EMI that claimed Irish law did not hold up an order against an ISP for a music piracy site. The music industry stated that since the State had not held up copyright law, it could be held responsible for all the file sharing that goes on in Ireland, worth several trillion dollars.


Ireland has agreed to put a “statutory instrument” that would block websites and help them comply with EU copyright law as soon as possible. However, the music industry is planning to use the legal principle – already used in Italy – that allows a government to be sued for damages for failing to follow an EU directive.


Getting a conviction will be difficult, however, because the industry would have to prove that blocking websites actually stops piracy, then also show that the Irish government did not implement a system fast enough.


The New Billboard Top 200


2012 will mark the year Billboard finally made changes to its Top 200 list, which has had the same format since its inception in the mid 1950s. Now, deeply-discounted albums will not be counted, which could make promotion more difficult for labels, according to an article in the Los Angeles Times.


As an example, Lady Gaga’s Born This Way song hit U.S. pop charts last June, selling 1.1-million albums in its first week, marking the best debut sales since 2005. However, 440,000 copies of the song were sold by Amazon for 99 cents to promote its online storage service. And according to the new chart set up, these would not count as regular sales.


On January 13, Billboard posted an article about chart changes, stating that albums sold for less than $3.49 – selected because it represents half the wholesale cost of an album – will no longer be included as sales.


Billboard is a 117-year old institution and first began its “Billboard 200” chart in 1991, when it started using sales data from Nielsen SoundScan. And since its inception, this chart has been the most reliable music-purchase-tracking system in the U.S., providing an inside, “hype-free” look at sales and giving consumers and retailers raw numbers about an album’s popularity.


Of course, digital music has entirely changed the landscape of the industry, as album sales began their decline with Napster and then iTunes, which drove fans further online. And now, there are many more factors to consider besides just sales when gauging a band’s popularity, including YouTube views and Facebook friends. However, until this past week. Billboard has continued to present the raw sales numbers, digital and physical.


One of Billboard’s arguments for changing its system is inherent in the question of how inexpensive an album can be before it counts as essentially free and thus cannot really be called a real “sale.” However, the policy of not counting albums below $3.49 is only in effect for the first four weeks of their release. Proponents of this new system have noted that finding a new album for under $3.49 is uncommon, though Amazon has been known to offer new albums for under $2.99 in order to improve site traffic.


Because this new chart rule will alter the way album sales are calculated, it could actually change marketing. If the rule had been enacted in 2011, there would not have been a million-selling album debut. Lady Gaga would’ve only sold 660,000. Of course, no real money will be lost by artists or labels, because any money lost through deep discounting is lost by retailers. However, the new system could change the way emerging artists use digital and lower price points to increase sales and gain traction in the industry.


While some artists, managers and labels have had harsh words to say about the new system, others agree with Billboard when it claims to just be trying to accurately represent the changed the industry. Small label head Jeremy DeVine said, “I’ve been waiting for Billboard to crack down on these Amazon sales since they were first introduced …the sales are great for consumers and the artists, but from a chart perspective it treats a $10 album and a $1 with equal legitimacy … These kinds of quick sales paint unrealistic pictures of success for everyone involved.”


Dave Grohl, on the Loss of the “Good” Record


In a recent Q&A with Billboard, music innovator Dave Grohl of the Foo Fighters talked about the current music climate and what he believes to be the real reason behind low music industry sales:  a majority of the music just isn’t good enough.


The Foo Fighters had a great year in 2011, releasing their critically-acclaimed seventh album Wasting Light, earning six Grammy nominations and embarking on a successful worldwide tour. And while Grohl admitted to having “the best year of his life,” he did have some choice words to say about why the music industry might be failing:


“Someone asked me recently, ‘What do you think the problem with the music industry is?’ I said, take the Adele record, for example. It’s an amazing record and everybody’s so shocked that it’s such a phenomenon. I’m not … You know why that record’s huge? Because it’s f–king good and it’s real. Now imagine if all records were that good. Do you think only one of them would sell? F—k no! All of them would. If all records were that good the music business would be on fire, but they’re not.”


But the focal point of the interview was a question has been cropping up for decades:  “Is rock dead?” And Grohl’s response was that, while he believes most rock is not making the cut, he is not going to be joining so many other of the world’s best musicians by answering that question “yes:”  For years, usually about once a year, you have a rock band that comes out and says, ‘We’re gonna save rock’n’roll,’ and then you’ll read an article asking, ‘Is Rock Dead?’


Grohl adds, “There’s always gonna be rock’n’roll bands, there’s always gonna be kids that love rock’n’roll records, and there will always be rock’n’roll. I travel all over the world and play music, and it’s easy to think rock’n’roll has gone away when you’re in a country like America. We just got back from a trip Down Under, we did a tour of Australia and New Zealand where we were pulling 40,000-50,000 people a night, selling out stadiums. To me, that means rock’n’roll is alive and well. The thing that will never go away is that connection you make with a band or a song where you’re moved by the fact that it’s real people making music.”

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