Recently released numbers by the IFPI (pdf) and RIAA (pdf)
show continued losses in physical formats, varying success in mobile
and slowing digital growth as markets mature. Fueled by a large drop in
CD sales and lower wholesale values, North America led the four global
territories (Europe, Asia and Latin America are the others) in total
trade revenue decline.



North America had a total of $4.98 billion in
recorded music trade revenue in 2008. That represented a drop of 18.6%.
Trade revenue from physical - nearly all of it from CD sales - dropped
31.2%. The drop in trade revenue from physical formats is much larger
than the drop in unit sales. Europe, whose digital market is less
mature than the U.S. market, experienced a 36.1% increase in digital
trade revenues while physical format revenues dropped only 11.3%.
Globally, physical revenue dropped 15.4% and digital revenue climbed
24.1%.



Digital revenue growth is coming almost
entirely from digital downloads. Mobile revenue has dropped slightly
and ad-based services are providing little revenue at this early stage.
Some mobile bright spots have been overshadowed by rops in areas.
According to the RIAA, a 36% increase in mobile downloads and an 18%
rise in ringback tones was more than offset by a 17% decrease in
ringtones.



Overall, there was a 6.5% decrease in mobile unit
shipments (downloads) and 7.3% decline in mobile's retail value.
Another part of digital revenue is subscription services. Mobile
subscriptions continue to mirror PC-based subscriptions in their
limited popularity. The RIAA put the value of U.S. subscription revenue
at $188.2 million, a 6.5% decline from 2007.



Digital has the opportunity to offer better margins
than physical formats. Even though less trade revenue is being
collected, improved margins from digital sales offer hope for a soft
landing as total revenue bottoms out. There are still burdensome costs
to bringing music to market, but losing CD sales for digital sales
means eliminating the high cost of in-store marketing as well as the
obvious costs of manufacturing, storing and distributing physical
product. As the size of record industry continues to contract, it
adjusts to the realities of lower revenues and more efficient digital
distribution.



For the 2008 numbers, the IFPI included revenues from
such new digital segments as ad-supported services, ringtones and
bundles services. To present an accurate year-over-year comparison,
those revenues were retroactively added to the 2007 numbers.

LINK (via Billboard)

North American-based companies will spend $1.08
billion to sponsor music venues, festivals and tours in 2009, a 3.8%
increase from the $1.04 billion spent last year, according to IEG
Sponsorship Report, which tracks money spent on sponsorships. In terms
of spending, that's the highest level of spending on music ever
reported by IEG.

"The fact that music sponsorship spending is holding
its own in today's turbulent economy demonstrates the growing
importance of music to corporate marketers," Bill Chipps, senior editor
at IEG Sponsorship Report, tells Billboard.biz. "The 3.8% increase on
music sponsorship spending outpaces IEG's 2.2% projection for the
overall sponsorship industry, including professional sports,
non-profits and other types of events, further demonstrating the
growing popularity of music."

LINK (via Billboard)

A new study from Heartbeats International suggests that while almost
all respondents agree that music can strengthen a brand, a lack of
resources that companies devote to music remains a major problem.



In the 31-page report, titled "Sounds Like Branding,"
the Stockholm-based brand communication agency asked brand directors or
managers from 70 majors brands for their input. The report begins by
examining the role music plays in the branding strategies of various
corporations. For example, 68% of companies say music is an important
tool in building a brand and 96% of respondents claimed music can
strengthen their brand. Here's a VIDEO LINK to a talk at "Sounds Like Branding"

LINK (via Billboard.biz)

The Rock Band franchise has passed $1 billion in retail sales,
according to the NPD Group. That includes the combination of the game
software and the instrument controllers needed to play it.



In addition, MTV says Rock Band owners have purchased
more than 40 million individual songs via the game, on a base catalog
of over 500 tracks, not including the songs that come with the game.

LINK (via Billboard.biz)

[Rhythm games' full band kits retail for high, high prices -- but
are consumers really buying them? Gamasutra's Matt Matthews checks out
how well they're selling, how much Activision's making, and
implications for Rock Band: Beatles.]

This week's announcement for The Beatles: Rock Band and its $250 price tag got me thinking about the exorbitant prices we've already seen for the full band packages of Guitar Hero: World Tour and Rock Band 2 (and Rock Band before that).

Are consumers really buying the full band kits? The Guitar Hero: World Tour full band package retails for $190, a full $90 more than that guitar bundle and $130 more than the standalone game.

Consumers have to really want the full band to jump up that much over
the other versions. What do the sales figure say about this?

According figures from Michael Pachter of Wedbush Morgan
Securities, based on data from the NPD Group, we can estimate the
following about Guitar Hero: World Tour sales in the United States from October 2008 through January 2009.

I'll confess that I was impressed with just how well the full band kit
is selling, especially given its premium price, economic conditions,
and the sheer number of plastic guitars that are already out in the
market.

Of course, the situation is more dynamic than the picture
above shows. The full band kit was exceptionally popular at launch and
then lost some of its importance through November. December and January
saw increases in the popularity of the full band kit, with nearly half
of all packages sold in January being the full band.

From Activision's perspective, the full band kit is even more
of a money maker. We can get a measure of this by making a coarse
revenue estimate based on $190 for the full band, $100 for the guitar
bundle, and $60 for the standalone game.

Guitar Hero: World Tour Revenue by Type

The standalone game has been reduced to a mere 11 percent of the Guitar Hero: World Tour revenue stream, while the full band has jumped to over 60 percent.

What does this mean for The Beatles: Rock Band? That's
hard to say. We don't know precisely what kind of hardware will be
bundled with the $250 version, and that may well determine how
attractive it is to consumers.

At this moment, however, we can see that a $190 full band package is
not only the dominant choice for music game consumers, but is also the
lion's share of the revenue for such a game.

LINK (via gamasutra)

This track from Kid Cudi is a perfect example of how remix culture helped an indie artist go from relative obscurity to having a mainstream hit. Italian underground club artists The Crookers remix of "Day and Night" is what tipped the scales and glued this track onto club turntables around the globe.

Click to see the YouTube:

Google’s VP of content partnerships David Eun may be softly-spoken,
but his message for the music industry was loud and clear in
yesterday’s MidemNet interview: “Allow innovation to thrive, encourage
it… you have to iterate, you have to keep on experimenting. And unless
the music industry allows that to happen, we’re still going to be
scratching our heads looking for new music solutions.”

The clear implication was that this isn’t happening. “There is a
culture of ‘here’s my interests - meet them. And if you can meet them,
maybe you can have access to our content’,” said Eun. “And in that
approach, there’s often not really a consideration of the other
person’s business - ‘If you can’t make it work, that’s your problem’.”

Eun was keen to stress that there are plenty of people within the
major record labels who “get it”, but that also there are plenty who
don’t. “There are a lot of people who who are still very defensive,” he
said. “Sorta protecting business models, protecting what they know.”

But he returned to his theme of advising the industry not to
suffocate or slow down innovative startups later in the interview. “If
you know you’re in the business of harvesting tomatos, allow them to
grow and become ripe. Don’t just pick little green ones off the vine.”

LINK (via Music Alley)

Artists have plenty of options when it comes to partnerships, a
reality strongly reaffirmed at Midem this year.  The reason?  Everyone
wants a piece of the energy that surrounds music, often through
relationships with established or promising artists.  That includes
big-name brands, a group that can enhance its demographic appeal and
sales by partnering with the right groups.

One of the leading examples is Bacardi, a brand that announced a partnership
with Groove Armada in March of last year.  The alliance followed a
breakup between the band and Jive, part of Sony Music Entertainment. 

The Bacardi alliance has now gravitated towards an EP release, according to
details shared Tuesday at Midem.  The EP, or "mini-album" as described
by Bacardi, is being released as part of the Bacardi B-Live music
initiative.  The Groove Armada deal traverses touring and recording
aspects. 

LINK (Via Digital Music News)