Manage for Success: Random Comments, Newsletter #62, June 2006

"Manage for Success" is a free monthly newsletter for record label executives who want to operate their companies efficiently and successfully. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industrry.

Copyright 2006 by Keith Holzman, Solutions Unlimited. All rights reserved.

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Many of us recall with fondness the great graphics capability of the LP jacket. Remember LPs? The front cover was 12-1/4 by 12-1/4 inches. That's a total of 150 square inches of marketing space. Including the back cover doubles that to 300 square inches (just over two square feet!), and double again for those wonderful gatefold jackets. Imagine 600 square inches for graphics -- not including what might be printed on a booklet, inner sleeve, or other insert.

Compare that to a typical CD front cover -- 4-3/4 by 4-3/4 inches -- just under 23 square inches of usable space! Cardboard configurations such as Digipaks are slightly larger -- 5-1/2 by a bit less than 5, which totals 27-1/2 square inches, but still extremely small.

Considering only the front cover, we've lost 125 square inches per title -- or about 83% of formerly available space.

So in this respect, we've suffered a severe loss in point of sale marketing capability, not to mention the pure aesthetic beauty inherent in a great many LP jackets.

When was the last time you were truly thrilled by exciting graphics on a CD? I can't remember a single one, and I buy and receive a great many CDs containing an extremely wide variety of music.

Buyers of downloaded albums suffer even further, because very few labels include graphics with their online downloads. There's no excuse for this. Making a PDF file of all the printable material of a CD is easily accomplished and costs practically nothing. Apple's iTunes Music Store even makes it possible to include album graphics with an album download. So why don't more labels do so?

Labels should also include lyrics when possible in their packaging and for downloads. And please make them readable. A pet peeve of mine is trying to read lyrics and other text when they're printed in such tiny type as to make them extremely hard to see. For example, the new Dixie Chicks' "Taking the Long Way" prints the lyrics so small -- about the equivalent of the tiniest type on my eye doctor's readability card -- and then compounds the problem by using a screen of black instead of 100 percent!

Some CD graphics aggravate this further by reversing tiny type out of a dark color. What's the point?

If for some reason a label can't afford to print lyrics they have the legal rights for, they should post them on the artist's page of their website.

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By the way, I devote a fair amount of space to graphics in my book "The Complete Guide To Starting A Record Company" available as an eBook in PDF form, and as a printed, spiral-bound volume. Read the complete Table of Contents and download the Introduction at <http://www.recordcompanystartup.com/>. You can obtain your very own copy at the same site.

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Recently Mitch Bainwol, CEO of the RIAA, was quoted as saying that digital music sales are "rising at a value that is larger than the decline in physical sales." And that because of such trends there is a "new optimism" in the music industry.

This statement was promptly challenged by a number of commentators, among them Marc Freedman, Digital Media Analyst at The Diffusion Group, a strategic research and consulting firm focused on new media and digital home markets. He sites a Pali Capital report, "US Digital Track Trends Weakening" which "finds that while paid music download sales continue to grow year-over-year, sales have declined each week during the second quarter and are below last year's year-to-date average."

<http://www.thediffusiongroup.com>

<http://www.digitalmusicnews.com/data/pali_download_q2_2006.pdf >

He continues, "the Pali report states that over the past nine quarters (since Billboard started tracking digital music sales) growth has never been less that 8% sequentially. That is, until now. In other words, for the first time since digital music download tracking was initiated by Billboard, average weekly sales are declining....Pali's findings are quite significant and are indicative of a market that may be encountering it's first 'glass ceiling'....The S-curve appears to be flattening and a demand asymptote has been reached." Dictionary.com defines asymptote as "a line whose distance to a given curve tends to zero."

Assuming it's not anomalous, this is unfortunate news indeed. The sizable growth of the last few years may be over and "the buzz that drove digital music sales to new heights has essentially run its course." Download sales may not be offsetting the decline of physical product.

The RIAA also recently stated that P2P filesharing had flattened out. This is despite figures released by Big Champagne (which tracks filesharing) that show more people than ever are, in fact, sharing music files. Their figures indicate that there's been a year-over-year increase of around 15% from 8.7 million in May 2005 to around 10 million in May 2006.

<http://www.BigChampagne.com>

 

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For many years I've tried to stay on top of events affecting the music industry. As a result I've gained vast experience that many clients have found useful. Enlist my assistance if you need help starting a label or solving business or administrative problems that your label may be experiencing. As a trusted advisor to many record companies over the years, I treat all clients and all assignments confidentially. I look forward to hearing from you.

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On a final, and very sad note, BBC News this week reported that "a computer program has been developed that the makers claim can dramatically increase your odds of scoring a hit." In fact the complex program, Platinum Blue Music Intelligence, looks at music and turns it into mathematics. Songs are broken down into "30 or so component parts including rhythm, melody, harmony, beat, cadence, timbre, pitch, and gives each a number." It appears that "just about all hit songs, no matter what genre, fit the same pattern. Match that pattern and then promote the songs right, and you have an 80% chance of success."

It's reportedly already being used by SonyBMG, which might in part be responsible for their poor market performance of late.

As clever as many computer programs may be, they can never replace the creativity of a real artist, composer, musician, or songwriter.

So what, as an independent label, can you do about all of this?

You can record and release the best music you possibly can, package it with care, and then market it as creatively, intelligently and as effectively as possible. Be persistent and don't give up trying.

Until next month,

Keith Holzman -- Solutions Unlimited

Helping Record Labels Manage for Success.

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Copyright 2006 by Keith Holzman, Solutions Unlimited. All rights reserved.