Music Sales Resumed Decline in 2005
CANNES, France - Recorded music sales resumed their decline in 2005, the industry's leading global body said Sunday, despite high-profile victories against piracy and a surge in online and mobile music store revenues.
Global music retail revenues fell about 2 percent last year, said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industry. In 2004 they remained flat at $33.6 billion, punctuating a four-year slide.
The new downturn, based on data from three-quarters of the global market, underlined major challenges facing record companies as executives assembled for the music industry's largest European gathering, Midem, which is taking place this week in the French Riviera town of Cannes.
The drop in overall sales came despite a threefold increase in digital music revenue to $1.1 billion from $380 million, while illegal file-sharing volumes changed little, according to a separate IFPI market report published Thursday. The federation sees total sales broadly unchanged in 2006.
Record bosses are now having to look beyond piracy to explain the latest decline in revenues, which have fallen about 20 percent globally since 1999.
"Piracy in all its forms has been the major factor in this reversal but not the only factor," said Eric Nicoli, chairman of EMI Group PLC, the world's No. 3 record company.
Speaking at the MidemNet music technology forum, which preceded the main event, Nicoli also cited tougher competition from other categories of consumer goods.
"Twenty years ago there were no mobile phones, no DVDs, no computer games to speak of," he said. "In categories that did exist, like magazines, cosmetics and designer clothes, we've seen a massive explosion of choice and accessibility to consumers. So no surprise, then, that music sales have come under pressure."
EMI and other record companies are also pressing Apple Computer Inc. to allow more pricing flexibility on its iTunes Music Store, which charges the same rate for any song downloaded — 99 cents for U.S. customers. They have argued — so far without success — that they should be able to charge more for the most sought-after hits.
Apple's iTunes accounts for about 70 percent of U.S. and British online music sales and has significant shares of its 19 other markets. Its popularity is widely credited with halting the growth of piracy, but record companies complain that this has come at the price of a loss of control over their own pricing and marketing.
"One of the biggest mistakes we've made is to hand a monopoly to the retailer," said Alison Wenham, chairman and chief executive of the Association of Independent Music, which represents 800 indie labels.
Some analysts see other reasons for the industry's current woes. "Executives have focused so much of their attention on piracy that they've diverted their efforts from developing new talent," said Phil Leigh of Inside Digital Media, a U.S. market research firm.
Entertainment companies won a series of major court rulings against music piracy in 2005, including a June U.S. Supreme Court decision allowing them sue the file-sharing site Grokster for encouraging copyright infringement. Grokster paid $50 million to settle out of court and closed down the site pending a planned switch to licensed sales.
But anti-piracy laws and their enforcement remain patchy in some parts of the world. Record companies, copyright holders' groups and artists are planning protests during Midem against a French move last month to legalize online file sharing.
In a rebellion by lawmakers from the conservative ruling party, the French parliament approved amendments introducing a so-called "global license" — allowing Internet subscribers who pay an extra monthly fee to copy as much music as they like online. The government is seeking the amendments' withdrawal and is expected to announce compromise proposals in coming days.
Despite the music industry's gloomy sales and outlook, almost 9,500 participants from 92 countries are registered to take part in Midem, which runs through Thursday. That's a 7 percent increase from 2005.
ABC Defends Cancellation of Graham Comedy
PASADENA, Calif. - One minute, Heather Graham was the face of ABC. The next minute, she was gone. Her comedy series "Emily's Reasons Why Not" was promoted relentlessly by the network as the linchpin of its post-football Monday night schedule, but was only given one airing before being yanked earlier this month.
ABC committed to the big promotional campaign before even seeing a script for the show, said ABC entertainment president Stephen McPherson on Saturday. The series turned out to be a dog creatively, he indicated.
"Once we saw it was not launching, we felt like unfortunately it was not going to get better and we had to make a change," McPherson said.
A total of six episodes were filmed, and McPherson said no determination has been made about whether they would be burned off.
The quick hook doesn't mean producers of other ABC series with middling ratings — "Invasion," for example — should be shaking in fear.
"That's a great example for us of when to be patient and when to fold them," he said. "We believe in that show."
Vampires Edge Out Box Office Competition
LOS ANGELES - Golden Globe-winning films saw significant boosts at the weekend box office, but the action-packed vampire flick "Underworld: Evolution" was the top earner, debuting with $27.6 million in ticket sales.
The blood-drenched thriller, starring Kate Beckinsale and Scott Speedman, edged out last weekend's winning family fare, according to studio estimates released Sunday.
"Hoodwinked," the animated update of the Little Red Riding Hood story, fell to second place with $11 million in ticket sales, while inspirational films "Glory Road" and "Last Holiday" ranked third and fourth, taking in $9.1 million each.
Horror movies and family films "probably have the biggest built-in audience at the box office," said Paul Dergarabedian, president of box-office tracker Exhibitor Relations.
The animated family friendly film "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe" and the horror flick "Hostel" also retained spots in the weekend top 10.
Last week's Golden Globe Awards provided a big box office bump for its winning films, most notably "Brokeback Mountain," which ranked fifth in weekend ticket sales.
The film, which follows the 20-year forbidden romance between two rugged ranch hands, won four Golden Globes, including best motion picture in the drama category and best director. It earned $7.8 million, an increase of 35 percent over the previous weekend.
"The Golden Globes gave more validation and importance to the film, and the box office shows it," said Jack Foley, president of theatrical distribution for Focus Features. "It's created a whole new level of momentum."
The Johnny Cash biopic "Walk the Line," also gained newfound spunk. The film didn't climb into the top 10, but its weekend earnings jumped 77 percent after Golden Globe wins for stars Joaquin Phoenix and Reese Witherspoon. The film also won the trophy for best motion picture in the musical or comedy category.
"I've never seen a boost of this magnitude," said Chris Aronson of 20th Century Fox. "It has to be Golden Globe-oriented."
"Capote," which earned Golden Globe acting honors for its star Philip Seymour Hoffman, and "Transamerica," which won an acting award for star Felicity Huffman, also saw weekend box office boosts.
"The Golden Globes are now a force to be reckoned with in terms of the box office bump they provide," Dergarabedian said. "We've never really seen a Globes bump like this."
Overall, the top 12 films grossed an estimated $97 million, up nearly 17 percent from last year's $82.9 million.
Here are the estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Exhibitor Relations Co. Inc. Final figures will be released Monday.
1. "Underworld: Evolution," Sony, $27.6 million.
2. "Hoodwinked," Weinstein Co., $11 million.
3. "Glory Road," Disney, $9.1 million.
4. "Last Holiday," Paramount, $9.1 million.
5. "Brokeback Mountain," Focus, $7.8 million.
6. "Fun With Dick and Jane," Sony, $6.1 million.
7. "The Chronicles of Narnia: The Lion, the Witch and the Wardrobe," Disney, $6 million.
8. "Hostel," Lions Gate, $4.3 million.
9. "The New World," New Line, $4.2 million.
10. "End of the Spear," Rocky Mountain, $4.2 million.
NBC Cancels 'West Wing' After 7 Seasons
PASADENA, Calif. - The new president on "The West Wing" will be a real short-timer: NBC announced Sunday it was pulling the plug on the Emmy-winning political drama in May after seven seasons.
NBC, struggling to regain its footing after the worst season in its history, also outlined several midseason schedule changes — including the moves of popular dramas "Law & Order" and "Las Vegas."
"The West Wing" announcement wasn't much of a surprise. Although this season's story line with a presidential campaign involving a Democrat played by Jimmy Smits and Republican portrayed by Alan Alda has been strong critically, ratings have sunk with its move to Sunday nights.
The decision to cancel it was made before actor John Spencer, who played former presidential chief of staff Leo McGarry, died of a heart attack Dec. 16, said Kevin Reilly, NBC entertainment president.
"There's a point when you look at the ratings and say, it feels like it's time," Reilly said.
The series finale will be May 14, preceded by a one-hour retrospective. The campaign to replace the fictional Josiah Bartlet as president will be settled, NBC said.
Producers Aaron Sorkin and Thomas Schlamme, who created the show and guided it through its early years, will not be involved in the finale, Reilly said.
"The West Wing" won four Emmy Awards for best television drama in a row for its tales of political intrigue. At its prime, it also offered NBC two valuable benefits: critical acclaim and the most upscale audience on television, an important drawing point for advertisers.
NBC's revamped schedule offered veteran "Law & Order" producer Dick Wolf good and bad news. NBC is putting Wolf's new drama "Conviction," about young prosecutors in New York, on Friday's schedule starting March 3. But it is moving "Law & Order" up an hour to Wednesdays at 9 p.m. ET — competing directly with ABC's blockbuster "Lost."
Wolf, who has had at least one show on NBC's schedule for 21 years, shrugged when asked about the move.
"It's like a long-term marriage," he said. "There are stresses and strains intermittently, but we are kind of stuck with each other."
NBC is also moving "Las Vegas" from Monday to Friday starting in March. Donald Trump is changing addresses again, with "The Apprentice" moving to Monday where it will be preceded by the Howie Mandel-hosted game show "Deal or No Deal."
The network has two more midseason shows: "Heist," a cops-and-robbers drama from the director of "Mr. & Mrs. Smith," and "Teachers," a comedy about a high school English teacher.
"The Office" will go off the air at the end of March so star Steve Carell can film a movie, Reilly said. He said he also hasn't figured out what to do with the ill-fated "Friends" spinoff "Joey," which has 12 new episodes done but no place on the schedule.
"NBC is stable and our vital signs are encouraging," Reilly said. "Most predictions were that we were going to go from bad to worse this year, and that hasn't happened."