Article by deo2kru

Print this article
Late charges
Hype can get your taste unjustifiably Fuct.

Dolby lab's up for sale

Ray Dolby started his career working part-time for a video company while still at school. But now, the inventor who revolutionised the way we listen to music is about to add another £131 million to his personal fortune. The fortune amassed on a system that allowed as to hear Led Zeppelin, ELP, Yes, Coldplay, classical music and more, as near as artists intended.

Dolby Laboratories, founded in London in 1965, will be worth an estimated £260 million when it floats on the New York Stock Exchange later this year. It all started when he came up with his famous system to eliminate the hiss and noise from audiotape, making the cassette tape a mass-market item.

Dolby sound reduces hiss to create a clearer, crisper recording. Sound has to be passed through an encoder as it is recorded, then played back through a decoder. The early version was used only in professional studios and separated sound waves so noise levels were lowered when there was no audio signal, eliminating the background hiss. At other times, it allowed the music or soundtrack to mask the hiss or crackle.

His company, which has since moved to California but still employs 120 people at Wootton Bassett, Wiltshire, has pioneered a series of sound advances in music, video and movies. More than 850 million Dolby-licensed products have been sold worldwide, 29,000 cinemas show films in Dolby Digital Surround Sound, and Dolby himself won an Oscar©, an Emmy and a Grammy.

Tim Bowern, editor of HIFi Choice magazine, said Dolby was revered as “an extremely clever bloke.” [Ain’t that a bit patronising statement?]

Gadget-gen's choice: legal downloads

Sales of legally downloaded songs have increased more than tenfold in 2004, with the US and Europe buying 200 million tracks online.

The digital music industry has "taken off" in the last 12 months, according to the global music industry‘s body.

The International Federation Of The Phonographic Industry’s (IFPI) boss John Kennedy said: "At last the threat has become the opportunity."

A report by IFPI has revealed that a million songs are now available to buy through legal sites, though the organisation has said that music piracy on the Internet is still "a very significant problem".

This month, there are still 870 million illegal music files available on the Internet, down from 900 million 12 months ago.

According to BBC News, Kennedy said: "The biggest challenge for the digital music business has always been to make music easier to buy than to steal. At the start of 2005, as the legitimate digital music business moves into the mainstream of consumer life, that ambition is turning into reality."

Legal downloads from sites such as Napster and iTunes were worth $330m (£175m) to the music industry in 2004, according to the IFPI’s Digital Music Report 2005.

The US leads the charge ith digital sales of single tracks rising from 19 million in 2003 to 143 million last year. Britain is at the forefront of the revolution in Europe, with 5.7 million downloaded tracks last year, compared with virtually none in 2003.

The report also predicted that the figure is expected to double in 2005, with some analysts saying that record companies could make 25% of their income from digital sales in five years time, compared with 1-2% now.

U2 helped drive sales in Britain: their latest single ‘Vertigo’ was last year’s most downloaded tracks, followed by Gwen Stefani’s ‘What You Waiting For?’ and Destiny Child‘s ‘Lose My Breathe’. The traditional chart for last year is a radically different list, topped by Band Aid 20.

This is partly because, despite the boon in download tracks available, there are still many that cannot be accessed through msot online sites. It also reflects different customers, the online ones are older and richer than the trad-singles buyer.

A repertoire of a million songs is available for download worldwide. The number of legal music sites such as iTunes and Napster have quadrupled to more than 230. Up to 25 million portable players wee sold last year, of which 10 million were AppleMac’s iPods. Ownership of players has usually doubled in every country of the world and now 11 per cent of American population owns a cyber-players, 9% in the UK and Holland, with France on 7, Germany and Japan on 6 per cent.

Look at the Top 10 Singles/Downloads reveal that only one song last year found place on both lists - Band Aid 20.

Top 10 singles 2004

1. Band Aid 20: ‘Do They Know It’s Christmas?’
2. Eamon: ‘F**k It (I Don’t Want You Back)’
3. DJ Casper: ‘Cha-Cha Slide’
4. Eric Prydz: ‘Call On Me’
5. Usher feat. Lil Jon and Ludacris: ‘Yeah’
6. Michelle: ‘All This Time;
7. Anastacia: ‘Mysterious Girl’
8. Peter Abdre: 'Mysterious Girl'
9. Britney Spears: ‘Toxic’
10. Frankee: ‘F.U.R.B. (F**k U Right Back)’

Top 10 Downloads 2004

1. U2: ‘Vertigo’
2. Gwen Stefani: ‘What You Waiting For?’
3. Destiny’s Child: ‘Lose My Breath’
4. Green Day: ‘American Idiot’
5. Band Aid 20: ‘Do They Know It’s Christmas?’
6. Natasha Bedingfield: ‘These Words’
7. Maroon 5: ‘She Will Be Loved’
8. Eminem: ‘Just Lose It’
9. Kylie Minogue: ‘I Believe In You’
10. Christina Aguilera feat. Missy Elliott: ‘Car Wash’
(19 January 2005)

Universal's top in 2004

Universal Music sold more music than any other label in 2004. At the close of play on New Year's Eve, Universal recorded a 29.59% share for 2004 in the USA according to Neilsen-SoundScan.

BMG was in number two spot with 15.20% of the market but even when combined with Sony Music to create the new Sony-BMG figure Universal was still in front with Sony-BMG combined registering a 28.46% share.

Warner Music had 14.68% of the sales market while EMI had 9.91%. Independent labels accounted for a 17.36% market share, making Indies the second biggest force in US music after Universal in 2004.

Figures quoted are for all CDs sold but Universal also held its position for new music. For current albums (albums released during 2004), Universal had a 32.17% share compared to Sony-BMG's 29.80% share.

Universal's tops with digital downloads too. They had 30.76% compared to Sony-BMG's 30.22%.

Had the aborted Warner/EMI merger had gone through, Warner-EMI would have had 24.59% market share for all CDs, 22.28% for current albums and 24.49% of digital download sales. (10 Jan. 2005)

Tesco's avoidance recipe: VAT

Tesco, Britain’s biggest supermarkets chain, has joined a growing list of businesses to set up CD and DVD distribution in Jersey - a move that will save thousands of pounds in VAT.

Visitors to the Tesco website are encouraged to click on the Jersey-based service if they want to save “at least 10%” on the prices offered on the main site. There they’ll find chart albums and DVDs by artists such as Kylie Minogue usually selling for £1 less than at

The new service takes advantage of the fact that Jersey does not charge VAT on goods sold in the island. These can then be imported into the UK under regulations that allow items costing less that €22 or £18 coming from non-EU countries to avoid duty.

For every 100,000 CDs or DVDs shipper out of Jersey, costing, say, a tenner each, the British Treasury loses out on VAT to the tune of £175,000. Jersey expects to have shipped several million packages to the UK this year.

One question we like to pose is that - if the current VAT rate is 17.5 percent, how come a shopper can only save 10%?

Still, if retail therapy is getting cheaper…
(16 December 2004)

Closer to cyber joy

Record firms are set to enjoy bumper Chrimbo as the recorded music records record sales. Album sales reached a record high of 237 million units in the year to the end of September, signalling that the long music industry drought, blamed on internet piracy and counterfeiting, may be over.

Figures released by the British Phonographic Industry (BPI) on Friday revealed that physical music sales in the UK rose by 3 per cent to 51.9 million albums in the three months to 30 September. The growth lifted total sales in value terms to £1.22 billion over the year, an increase of 2.7 per cent over the same time a year ago, despite strong growth in digital downloads, which analysts had said could lead to the death of albums.

Sales of singles fell by 14 per cent to £68 million. They would have risen by 9 per cent in the final quarter of the 12-month period if internet sales were included. The BPI said that from next year, legal downloads of songs would be included in the weekly singles charts, and added that it “could only be a matter of time” before songs downloaded as ringtones on mobile phones were also included.

Almost two-thirds of all approved downloads for the 12-month period took place in the fourth quarter, the BPI said, bolstered by the popularity of services such as Napster, Sony Connect and iTunes. About 1.75 million tracks were purchased via the I’Net during the Sept. quarter, compared with 7.3 million singles, and the BPI said that download sales were running at up to a quartet of a million unit’s a week.

The pick-up in demand for music reflected fresh investment in artists by record companies after a round of cost cutting and consolidation. In the past year there have been fresh culls, and companies have shed hundreds of artists and thousands of staff in an effort to cut costs. EMI announced 1,500 job cuts this eyar, while Warner Music Group has shed about 1,000 staff and 150 artists. SonyBMG plans similar cuts as part of its recent merger.

The latest industry sales reflect bullish outlook given last week by EMI, which described a “much-improved recorded music market” during the second half of the year. The value of all music sales was second-highest for a 12-month period, behind the recorded £1.24 billion achieved in the 12 months to January 2002, which the BPI attributed to aggressive discounting by high street retailers.

The current ‘recovery’ could also be a sign of the technology push of iPod-type gadgets and once we are over the novelty - it may start down-sliding again. The truth is that we don’t produce enduring stars anymore and it is only a question of time before Robbie joins George Michael in the wings of stardom.

Among the best selling albums of the year are Dido’s ‘Life For Rent’, Will Young’s ‘Friday’s Child’ and The Darkness’ ‘Permission to Land’. More than half the top-selling albums were by British artists, BPI proudly pointed out.

The BPI said that music DVDs were driving growth with sales soaring 52 per cent year-on-year during the third quarter. The format now accounts for 4 per cent of the music market, almost as big as the singles sector. (27 Nov. 2004)

EMI's recovery

Shares in EMI surged by more than 14 per cent on Friday after the world's third [out of four] largest music group reported strong underlying first-half profits and predicted "explosive growth" in digital demand.

The UK company said a four year decline in global music sales could end in 2005 amid a slowdown in piracy and signs of a rebound in the US, Japan and Britain, the three leading music markets. Eric Nicoli chairman said: "The legitimate digital music market continues to expand rapidly and we remain confident digital represents a key driver for future industry growth."

EMI's confident outlook matched forecasts last week from Vivendi Universal, which reported stronger third-quarter profits at Universal Music Group. Warner Music of the US, sold by Time Warner to a financial consortium this year for $2.6 billion, has also returned to profit. In London, EMI shares rose 30p to 238.5p, buoyed by operating profits up 8.1 per cent to £80.1 million ($148m) on an underlying basis in the six months to 30 September.

Adverse currency factors, fewer first-half releases and a weak performance in mainland Europe, however, contributed to a 7.3 per cent decline in pre-tax profits to £36.9m on sales down 11.4% at 851 million. On a constant currency basis, EMI said pre-tax profits would have been up 9 per cent year-on-year.

Mr Nicoli predicted a strong second half as the company released 'Greatest Hits' album from artists such as Robbie Williams, Kylie Minogue, Tina Turner, Placebo and Blue, along with a live Rolling Stones album and studio releases from A Perfect Circle and Chingy. He refused to comment on rumours that the company could renew merger talks with Warner Music. He said, "We have the scale to deliver excellent result as a standalone company."

Industry analysts at Numis Securities, predicting full-year profits of about £168 million, said it was EMI's most upbeat statement in three years. "It's an age since we've been positively surprised by them," said Lorna Tilbian.

The company promised further savings of £25 million this financial year and £50 million next. It has also benefited from higher sales of online or digital music. A number of artists will be released next week on digital memory cards. Thus, to be enjoyed via your mobie!

Operating profits rose 12.4 per cent to £40.8 million in recorded music and by 2.2% to £54.7 million in music publishing, both on a constant currency basis.

Although basic earnings per share, after amortisation, financing and other charges showed a loss of 0.1p, EMI vowed to maintain its interim dividend at 2 pence.

Year-on-year, the global record industry has seen a sharp pick-up with sales down only 1.3% in the past six months against a 9.6% fall in the same priod last year. Music piracy finally appears to be coming under cotnrol with legitimate downloads from EMI increasing sixfold.

Mr Nicoli concluded, "We are confident we will see a substantial and very welcome full-year improvement in the preformance of the recorded music market." (20 Nov. 2004)

u2Pod - final byte in music industry's coffin?

Apple shares soared by 1 billion over its special edition iPod and digital box set for the Irish superstar rockers, U2. The new album by the band is called ‘How To Dismantle an Atomic Bomb’ but its subtitle may as well be ‘How to Kill the Compact Disc and Make Two Billion Dollars’.

A week ago the Dublin quartet signed an unprecedented joint marketing and licensing deal with Apple, the Silicon Valley firm behind the iTunes online music shop, and the iPod digital music player.

Shares in Apple shot straight up to an all-time high after a week of excitement on Wall Street about the deal. That means Bono, The Edge, Adam Clayton and Larry Mullen Jr effectively added $2 billion (£1.1 bn) to the stock company market value of the company.

It also makes their online music deal by far the most lucrative signed by any rock band in history, and that includes the master of the veterans, Sir Mick Jagger’s Rolling Stones. The deal will see Apple release a black, U2-branded edition of the iPod player and offer an exclusive 400-track “digital box set” of all the band’s albums. The U2 iPod is expected to be released mid this month. The new U2 album that is due in shops on 23 November.

This deal may as well mark the beginning of the end of CDs although the entire legal downloading market is still only 3 per cent of the total. U2’s deal with Apple is yet another byte in the coffin of the traditional music industry, which suffered a steep 7.1 per cent decline in CD sales last year.

The band’s total CD sales, including such classics as ‘The Joshua Tree’ and ‘Achtung Baby’, stand at 120 million. According to Apple, more than 5.7 million iPods - viewed as the ‘XXI Century Walkman’ - have been sold since they were released two years ago.

The company holds 2/3 of the market despite a huge competition of other players. The digital market is forecast to reach $9 billion (£5 bn) by the end of next year.

Well, all the dosh is fine but it may actually backfire on the band known for their Christian-inspired lyrics and outspoken views on everything from Aids in Africa to Third World debt. Some fans will feel cheated that the group is getting so corporate. Apple’s latest iPod advertising campaign, meanwhile, features U2 performing their new single, ‘Vertigo’ - in what could be constructed as the band’s first commercial endorsement.

The band’s manager has refuted such idea claiming that it is the same kind of co-joint venture as if had been done with Tower Records. But, the ‘Vertigo’ video was broadcast exclusively for 24-hours on AOL’s ‘Music First View’ service. On the Slashdot website one fan called the $349 U2 iPod - “the most expensive U2 album yet.”

Perhaps, but us, poor Euro-denizens will have problems getting out Chrimbo mitts on it as the retailers claim that only 10 per cent of orders are being fulfilled; Apple explains it by the worldwide shortage in iPod hard discs.

Commercial crisis, if you ask us! [06 Nov. 2004]

CDs and DVDs to remain... for time being

Compact Discs are due to remain the main sound carrier… Until the end of the decade, at least. It is expected that in 2009 the format will be overtaken by online sales.

Consumers in EU will buy £570 million worth of music in the form of digital downloads, said technology consultant Jupiter Research. But, they added, this level would account for only 8% of the market. The survey concluded that the UK will be the top online music market in EU by the end of the period.

If CDs are to survive for another five years, and we’ve seen how quickly VHS tapes are disappearing - what future for DVDs? Well, the format is to be succeeded by MODS - Multiplexed Optical Data Storage.

This optical disks have a capacity of up to one terabyte - that is 1,000 gigabytes or more than a trillion bytes - enough to hold 472 hours of film on a disk the size of a CD or DVD. For instance, a Simpson fan, owning all 350 episodes, all 8,080 minutes of Homer’s life on a single super-disk.

Physicists are developing a challenger that could render DVDs obsolete. The one terabyte disc would be double-sided and dual-layered. But, even a single layer MODS with half the capacity could hold the ‘Lord Of The Rings’ trilogy - 13 times over, or all 238 ‘Friends'’ episodes.

The disks would cost roughly the same to make as DVDs, say researchers at Imperial College, London, who are working with experts in Switzerland and Greece. Under magnification, the surfaces of CDs and DVDs appear as tiny grooves that include ‘pits’. But instead of one bit per pit, researchers say they can now encode and retrieve up to ten times the amount of information from a single pit.

BluRay disks, with five times the capacity of a DVD, are expected to be released towards the end of 2005. But MODS would hold ten times more data than a BluRay.

Physicists say the first super-disks could be on sale by 2015, if there is enough demand from the market. (01 October 2004)

Extinction is nifty

The first nail in the last coffin of music industry was knocked in when the majors licensed and sourced out individual songs to downloaders. Augmented by MP3 and digital mega-players - who would want to buy a whole, or traditionally packaged, album, then? It was almost as the momentous event as the introduction of the first-ever recording button.

As propaganda-hype-goss continue to eliminate star-system, the accessibility will continue to negate yearning. Until familiarity breeds that proverbial contempt and nostalgia flips a Phoenix, again. By then it will be too late to save the damned.

The best-case prognosis for music industry is three more years for CD singles and [this is official] within six - there will be no CDs at all. Yes, for the first time since Thomas Alva Edison bellowed ‘Mary had a little lamb’ into the transformatory giant horn, the world is going off the record as the premier means of sound carrier.

Digital future is the way and currently only a small percentage is legal while 92 per cent are - illegal. British Phonographic Industry research suggests that eight million people in Britain regularly download music. One-fifth of all downloads are taken by kids in their late teens. Almost half these younger users collect more than 10 track a month.

Freeloading, claim the industry, has provoked a catastrophic fall in annual record sales, down globally from $40 to $30 billion since the turn of the millennium. This has wiped out the CD single and may lead to the extinction of CD as the format before the decade’s end. It may well be the nemesis that could bring down the music industry itself.

Label chiefs are acutely aware that they face imminent annihilation unless they get to grips with the virtual music world. The problem is that companies have become monolithic and thus self-righteous: they do not listen to their customers and thus - a gap between music providers and purchasers. The situation has not been helped by the industry that hoped - where do these bosses live? - that the Web-phenomenon may just disappear if ignored.

When the suits finally cottoned on - polyester ain’t cool - it was too late. They leased and licensed songs outside, to companies they have no control over. They simply had to as the prices these companies charge are lower than what it would cost a major label doing it itself. Furthermore, with current overheads and expenses, selling a song at the time is not a profitable way for a conglomarate.

Having undermined the control the industry so craves, record companies have turned themselves from creators into librarians. They are a middleman now and not the source of music… How long before artists realise that they can submit songs to Online shops and the service provider realise the need to employ A&R people? Of course cult-quantities of CDs, as well as vinyl versions, will continue to be issued but record emporiums of Megastores size are passé. Recorded music will only be one floor of an electric-electronic store, alike the German example.

But, it could have been completely different: we’ve propagated streaming of new material for years; as soon as something is recorded, perhaps - even demo’d, make it available for listening and fans will be happy. If a track is continually updated as versions are completed, kids would quickly discover that it is a rather tedious process and only the die-hardest fans will keep on revisiting. For majority, after a while, it will be just a normal occurrence and not something worth ‘going criminal’ for after all.

Alas, the industry has chosen to go the way it’s been trekking over the past several years, using television to launch inferior and contrived stars-de-jour. These ‘short-termers’ are funded from variety of sources and thus less burden on the music industry’s dwindling finances.

And yet, the disco-industry needs to be even more flexible: continue to set release dates and hope that there will be no leaks although so many parts of the producing and manufacturing process are contracted out… What are they, optimists from a re-fi* dominion?

EMI chief Alan Levy admitted few months ago that the industry had, in recent years, made “the cardinal mistake of totally ignoring consumers.” And, certainly abusing and alienating them. An outraged US industry issued 261 writs against individual users towards the end of last year, claiming as proof of victory a modest Christmas upturn in CD sales. But any victory in this ongoing struggle can only be Pyrrhic. An industry that criminalizes its customers cannot bet on eternity.

Then, they are deaf to the market demands. A few months ago there was all this interest in Danger Mouse’s fusion of ‘The Black Album’ (Jay-Z) and ‘The White Album’ (The Beatles) to create ‘The Grey Album’. Did the inventive hybrid see the lasers of CD-players? Nope, EMI - owner of the ‘Fab Four’’s back catalogue - ordered ‘cease’n’desist’ or a lawsuit. We downloaded it, it can still be found online - all possible sales withered…

So, why didn’t EMI issue it? There were two reasons and the key is the fat music cats being distrustful of the ‘Net - originally viewed as a chapter for piracy - and its speed: the fact is that a major label is slower than an ocean liner and it would take months to have the product ready. ‘The Grey Album’, as a novelty, has had a short interest spell and releasing it three months later is underlining the system’s failure.

The Top 5 [quickly becoming 4] labels could never deal in club culture because it is too fast for them. Its lack of pace - walking with dinosaurs? - to react to market fluctuations is another reason the CD singles sales are disappearing: the turnover is so incredible they can’t really work on weekly based-promotion. With less resources - the majors have to cut workforce to maximize profits - the remaining employees can’t cope with the workload. Yossarian’s dilemma is alive and well.

The second, the more practical reason, is that The Beatles music is not available for the Web-users and there is hardly ant possibility getting it Online legally.

The industry still flogs and supports formats that have become passé: downloaders’ MP3 and iPod have replaced the Walkman, and its less-successful bro - Discman, as the player of choice.

Just the other day, Clive Davis - chief executive of BMG North America/J Records founder/discoverer of Alicia Keys and many more - said at a music industry conference that “Seismic shifts in music consumption” are being caused by the popularity of digital music players, such as Apple’s iPod. He’s urged the industry and retailers to change in order to halt the industry’s downturn. The US music giant, Tower Records, had to close its EU-operations in the past year.

It looks like we are back in the pre-Edison days when sheet-music and memory were the providers of music. At least we have cyber-memory to store it for us at little, or none at all, cost to a listener.

After all, even if music biz is to vanish like coal industry in Britain - songs will endure in an accessible form, forever.

A word of wisdom: either learn or leave, if not too late...
(23 Aug. 2004)
(* = Religious fiction)