Category: Business

Album Sales Plummet To Lowest Total In Decades
Bad times just got worse.
For the week ending May 30, the U.S. music industry sold a total of 4,984,000 albums, according to Nielsen Soundscan. This figure, which includes new and catalog releases, represents the fewest number of albums sold in one week since Soundscan began compiling this data in 1994.
By comparison, album sales for the week ending May 31, 2009, totaled 5.76 million. The highest one-week tally recorded during the Soundscan era is 45.4 million albums, in late December, 2000.
This week’s record low comes as the major record companies continue to reckon with a decade-long decline in sales, and as other prominent sectors of the industry, such as the touring business, go through sea changes of their own.
And that’s not all: While there’s no exact way to compare last week’s total against imprecise, pre-Soundscan tallies, Billboard estimates that weekly album sales volume could, in fact, be at its lowest point since the early 1970s.
“We think this is the lowest week ever, or at least of the Soundscan era,” says Universal Music Group Distribution president Jim Urie.
According to the RIAA, album shipments in 1973 totaled 388.2 million units, an average of 7.47 million per week. Because Soundscan measures albums sold (i.e. scanned) and not albums shipped, Billboard looked at the relationship between annual album shipments, as measured by the RIAA, and annual albums sold, as compiled by Soundscan, for the years 1992-2009. During that period, shipments exceeded scans by an average of 30%.
By applying that 30% figure to the 1973 RIAA album shipment data, Billboard estimates that weekly album sales volume for that year may have totaled about 5.5 million units. That exceeds this past week’s tally by 600,000 copies. (The RIAA began keeping figures on album shipments in 1973.)
Veteran sales executives caution against putting too much stock into pre-Soundscan record keeping. “Who the hell knows what weekly sales were back then,” says Lou Dennis, who retired as Warner Bros. Records head of sales in 1996.
Whatever the benchmark, industry executives agree that this week’s album sales total of 4.98 million units is “pretty scary,” in the words of Bruce Ogilvie, CEO of leading music wholesaler Super D.
Digital track sales for the week totaled 21.7 million, and are distinct from the album sales tally.
UMGD’s Urie cites this week’s album total as “all the more reason why everyone in the industry should be focused on getting the U.S. Congress to introduce legislation that makes the Internet service providers our allies in fighting piracy. Piracy is getting worse and worse and the government needs to focus on that.”
Like Ogilvie, Urie thinks that the slow release schedule is the main reason for the drop-off. “This week is likely a major aberration with no big new releases out,” he says. “June will be big. Look at all the big records coming out, including Sara McLachlan, Drake, Miley Cyrus, Eminem and Jack Johnson.”

Director quits ‘Hobbit’ film over production delay
WELLINGTON, New Zealand ñ Hollywood director Guillermo del Toro said Monday that production delays have forced him to quit the planned film version of J.R.R. Tolkien’s “The Hobbit,” a two-part prequel to New Zealand filmmaker Peter Jackson’s blockbuster trilogy “Lord of the Rings.”
“In light of ongoing delays in the setting of a start date for filming The Hobbit, I am faced with the hardest decision of my life,” del Toro told a “Lord of the Rings” fan website.
“After nearly two years of living, breathing and designing a world as rich as Tolkien’s Middle Earth, I must, with great regret, take leave from helming these wonderful pictures,” he said, noting the film still hadn’t been given the green light by MGM, the struggling Hollywood studio.
Matt Dravitzki, a spokesman for “Hobbit” producer and “Lord Of The Rings” director Jackson, said del Toro would not be speaking to reporters Monday.
The announcement by del Toro reflected Jackson and del Toro’s “full sentiments at this time,” he said.
Del Toro would continue to co-write the screenplays with Jackson and his wife, Fran Walsh, and Philippa Boyens.
Jackson reached a deal in late 2007 to make two films of “The Hobbit.” He is serving as joint executive producer with Walsh.
Last week, del Toro, who directed “Pan’s Labyrinth,” “Blade II” and the two “Hellboy” movies, told journalists the “Hobbit” films, which have been plagued by delays, still hadn’t been given the go ahead.
“There cannot be any start dates until the MGM situation gets resolved,” del Toro said. “They do hold a considerable portion of the rights.”
Reports emerged late last year that MGM was teetering on bankruptcy and del Toro said those issues had caught the “Hobbit” films in a “tangled negotiation.”
“We have designed all the creatures. We’ve designed the sets and the wardrobe. We have done animatics and planned battles sequences … We are very, very prepared for when it is finally triggered,” he said.
Jackson told http://www.TheOneRing.net: “We feel very sad to see Guillermo leave The Hobbit, but he has kept us fully in the loop and we understand how the protracted development time on these two films, due to reasons beyond anyone’s control, has compromised his commitment to other long term projects.
“The bottom line is that Guillermo just didn’t feel he could commit six years to living in New Zealand, exclusively making these films, when his original commitment was for three years. Guillermo is one of the most remarkable creative spirits I’ve ever encountered and it has been a complete joy working with him.”
He would discuss options for a new director with MGM this week, Jackson told the website.
“We do not anticipate any delay or disruption to ongoing preproduction work,” he said.
Last month, Jackson dismissed rumors that the “Hobbit” movies have been delayed by production problems, insisting the project was still in its early stages.
He told Moviefone.com, “Well, it’s not really been delayed, because we’ve never announced the date. I mean it’s sort of interesting because the studio has never greenlit The Hobbit, so therefore The Hobbit has never been officially announced as a ‘go’ project, nor have we ever announced a date.”

Anchorman sequel stalled
Anchorman director Adam McKay has blamed financial constraints for stalling work on a sequel – even though the lead actors offered to slash their fee for the follow-up.
Rumours of an Anchorman 2 have been rife in recent months, with Will Ferrell confirming talks had begun to resurrect his comedy newsreader character Ron Burgundy in a sequel to his hit 2004 movie.
Ferrell disappointed fans last month (Mar10) by revealing the plans had been shelved because the other actors, including Paul Rudd, Steve Carell and Christina Applegate, are too busy to commit to the film.
Director McKay reveals there is still hope for a sequel – but only if movie bosses at Hollywood studio Paramount agree to fund it.
He tells MTV.com, “We had an idea and we contacted Steve and Paul and Christina and checked in with everyone and they were all game for it. The stage we’re at now is talking to Paramount and trying to get the money to do it. It’s a tricky movie because everyone went and did really well after it, so everyone’s prices went up and everyone’s time got a little more valuable.
“But at the same time, graciously, Steve and Paul and everyone agreed to cut their price to come and do it, which you don’t see very often in Hollywood – and cut their price substantially. But even with that, it’s just a budgetary thing with Paramount in terms of how much they’ll give us to make it.”

Paul McCartney to reissue catalog on indie label
LOS ANGELES (Reuters) ñ Paul McCartney said on Tuesday he would reissue his extensive post-Beatles catalog through independent label Concord Music Group, dealing a blow to his former distributor, the struggling EMI Group.
Los Angeles-based Concord previously released McCartney’s 2007 album “Memory Almost Full” as well as his 2009 CD/DVD hybrid “Good Evening New York City.”
Both those albums were distributed under the Hear Music brand, a partnership between coffee chain Starbucks Corp and Concord, a jazz and R&B specialist co-owned by veteran TV producer Norman Lear.
EMI Group PLC handled his older material — as a solo artist and frontman of Wings — under an exclusive license. With that arrangement ended, McCartney has turned over his catalog of about two dozen albums to Concord.
Concord said the first reissue, the chart-topping 1973 Wings album “Band on the Run,” would come out in August with bonus material.
“Since the release of ‘Memory Almost Full’ in 2007 I’ve had a good working relationship with Concord and enjoyed our mutual love of music,” McCartney said in a statement.
The announcement coincides with the 40th anniversary of the release of McCartney’s first solo album, “McCartney,” which featured the classic-rock staple “Maybe I’m Amazed.”
The deal does not affect EMI’s business relationship with the Beatles. The British label reissued remastered versions of the Fab Four’s albums to great fanfare last September. By January, those reissues had sold 13 million copies.
EMI, which is owned by Terra Firma, has until mid-June to raise enough cash to get the business back within the terms of its debt.
A representative for EMI declined to comment.
Concord said last week it would buy the roots label Rounder Records, home to bluegrass musician Alison Krauss.

Weinsteins to take back Miramax
It looks as if the Weinsteins have managed to fashion a winning bid in the Miramax auction and will take back operating control of the company they founded in 1979 and sold to Disney for $80 million in 1993.
Running the process internally, the Burbank studio for months has been soliciting offers for the recently shut specialty-film unit and its 611-title library.
Miramax founders Harvey and Bob Weinstein had been building enough financial muscle to put together an offer of $600 million or thereabouts, seeking to top bids from such rival suitors as businessmen Alec and Tom Gores and a more controversial one from Hollywood wheeler-dealer David Bergstein.
Harvey and Bob Weinstein have been kibitzing with billionaire financier Ron Burkle throughout the auction process. In addition to Burkle’s Yucaipa group, the duo’s backers include hedge funds Fortress and Colbeck Capital. In effect, Burkle and friends would be the official buyers, but the Weinsteins effectively would run the operation.
No word yet on when an official announcement of the deal will be made, as Disney lawyers apparently were still going over the financial details provided by the Weinsteins on Thursday.
“No deal has been reached,” a Disney spokesperson said Thursday night.

Music group EMI in dire straits
LONDON ñ Struggling music group EMI faces being taken over by its bankers after failing to clinch a deal to sell the North American distribution rights for its artists to Universal Music Group or Sony Music.
EMI, which has the Beatles, Coldplay, Lily Allen and Pink Floyd on its books, had hoped to raise around 200 million pounds ($304 million) by offering its rivals a five-year licensing contract.
A source close to both sets of talks, who requested anonymity because the discussions were private, said Thursday that they fell apart after a failure to agree on price. EMI declined to comment.
The collapse of talks leaves EMI battling to raise 120 million pounds by mid-June to meet its commitments on loans from U.S. bank Citigroup.
If funds can’t be raised from investors and the loan goes into default, Citigroup could seize EMI and cause it to be sold or broken up.
EMI has been struggling to stay afloat since it was bought by private equity firm Terra Firma Capital Partners for 4.2 billion pounds on the eve of the credit crunch in 2007, saddling the company with debt.
Several big-name acts, including Radiohead and the Rolling Stones, quit the label amid the cutbacks and restructuring that followed.
Terra Firma, led by British financier Guy Hands, still owes some 3 billion pounds to Citigroup because of the deal and relations between the two have soured.
Hands is suing Citigroup in New York, alleging that the bank falsely claimed there were other bidders for EMI, encouraging the private equity firm to raise its own offer. Citigroup has denied the allegations.
EMI has fared worse than the three other major labels ó Universal, Sony BMG and Warner Music Group ó amid the decline of CD sales and the rise of digital music downloading.
Analysts have blamed Hands’ relative inexperience in the music business for exacerbating the company’s decline.
EMI earlier this year put its iconic Abbey Road studios up for sale after reporting a pretax loss of 1.7 billion for the year to March 31, 2009.
However, it shelved those plans after a public outcry led to the site being put on a protected list by English Heritage and said it would instead seek an investor to help rejuvenate the loss-making studios.
Adding to the company’s woes, Pink Floyd successfully sued the company for selling individual tracks digitally and Chief Executive Elio Leoni-Sceti quit the group last month after just 18 months in the job.
Like Hands, Leoni-Sceti, who joined the company from consumer products group Reckitt Benckiser, had found his music industry experience questioned.
Charles Allen, the former chief executive of broadcaster ITV PLC, who was EMI’s non-executive chairman, filled the vacancy by taking over as executive chairman.

‘Trailer Park’ bar out of business
HALIFAX, N.S. – It’s back to wrangling shopping carts for Bubbles and his crew.
Bubbles’ Mansion, a Halifax bar owned in part by the actor who portrayed the bug-eyed character on the “Trailer Park Boys” TV show and movies, has gone out of business.
Brad Hartlin, manager of the nightspot that opened in 2006, blamed the decision in part on a municipal ban on cheap drinks.
“We decided that … if we have to make a change, the business became not viable,” he told the CBC.
In an effort to combat public drunkenness, the municipality brought in regulations a while back to ban $1 drink nights. The minimum charge for a drink in the city is now $2.50.
Hartlin said the move resulted in smaller crowds and revenues.
“I bet you sales will be down for most people by 50 per cent since that happened,” he said. “People aren’t out like they used to be.”
Actor Mike Smith, who portrayed the myopic Bubbles in the cult show, was a part owner of the bar.

Jackson in $200M-plus recording deal
LOS ANGELES ñ The estate of Michael Jackson has landed the late King of Pop the biggest recording deal in history: a $200 million guaranteed contract with Sony Music Entertainment for 10 projects over seven years, according to a person familiar with the deal.
The record-breaking contract through 2017 could be worth up to $250 million if certain conditions are met. One of the albums will be of never-before-released Jackson recordings that will come out in November, the person said.
The person spoke on condition of anonymity because the official announcement is expected Tuesday.
Future projects may also include a DVD compilation of videos and a re-release of “Off the Wall,” Jackson’s fifth studio album, which first came out in 1979, accompanied by some unreleased material. Before his sudden death in June at age 50, the pop star had wanted to re-issue the album, people familiar with the deal said.
One of the projects already counted in the contract was the two-disc album that accompanied “This Is It,” the film based on footage of concert rehearsals for what was to have been Jackson’s comeback at London’s O2 arena.
Including the more than 5 million copies of that special release, Jackson has sold some 31 million albums since his death in June, about two-thirds of them outside the United States.
“During his life, Michael’s contracts set the standard for the industry,” said John Branca, the co-administrator of the Jackson estate, in a statement prepared for release Tuesday. “By all objective criteria, this agreement with Sony Music demonstrates the lasting power of Michael’s music by exceeding all previous industry benchmarks.”
Rob Stringer, chairman of Sony Music’s Columbia Epic Label Group, said in prepared remarks, “We’re dedicated to protecting this icon’s legacy and we’re thrilled that we can continue to bring his music to the world for the foreseeable future.”

News Corp to net $350-400 million from “Avatar”: report
(Reuters) ñ Rupert Murdoch’s News Corp will earn $350 million to $400 million from James Cameron’s blockbuster “Avatar,” once the movie is released on pay television and DVD, Bloomberg said, citing two people with knowledge of the financial performance.
The amount represents News Corp’s about 40 percent share of as much as $1 billion that the film is expected to earn for its Twentieth Century Fox and “Avatar” investors, the people told the agency.
News Corp’s share amounts to almost half of its average quarterly operating profit in the past year, according to the agency.
Fox’s “Avatar,” which ended up with three Oscars, fell two places to No. 7 with $6.6 million in its 13th week. Its North American total rose to $730 million and its worldwide tally to $2.6 billion.
In February, News Corp had said 50 percent or more of the profit from the James Cameron-directed film would show up over the next two or more quarters.

EMI says wants to hold on to Abbey Road studios
LONDON (Reuters) ñ Music company EMI wants to retain ownership of the Abbey Road recording studios, immortalized by the Beatles album of the same name, though it is talking to other parties about revitalizing the site, EMI said on Sunday.
A source familiar with the situation told Reuters last week that loss-making EMI had put the studios up for sale and was talking to a few interested firms, although no deal was imminent.
“EMI confirms that it is holding preliminary discussions for the revitalization of Abbey Road with interested and appropriate third parties,” the company said in a statement, without elaborating on what exactly the talks were about.
EMI said it had been in discussions since November 2009 to find ways to regenerate the studios, which have been losing money for years, but had rejected an offer worth 30 million pounds ($46 million).
“We believe that Abbey Road should remain in EMI’s ownership,” the company said.
Millions of Beatles fans around the world are sentimentally attached to the studios, which are also popular with tourists who pose for souvenir snaps on the nearby pedestrian crossing where the Beatles are pictured on the album cover.
EMI said it welcomed reports that the architectural preservation body English Heritage planned to list Abbey Road, a step that would make it very hard for any developer to do anything radical to the site.
Such a listing could potentially lower the price EMI could get for Abbey Road if it did end up selling it.
The firm, owned by private equity group Terra Firma, said any plan it agreed for Abbey Road would involve “a substantial injection of new capital.”
“When Terra Firma acquired EMI in 2007, it made the preservation of Abbey Road a priority,” EMI said.
Last week’s reports the studios were up for sale attracted a lot of interest, including from ex-Beatle Paul McCartney, who said the studios should be saved, and musical theater maestro Andrew Lloyd Webber, who signaled he was a potential buyer.
Lloyd Webber, the man behind blockbuster musicals “Cats,” “Phantom of the Opera” and “Jesus Christ Superstar,” has recorded some of his works at Abbey Road.
The 4-billion-pound acquisition of EMI has come to symbolize the difficulties caused by expensive buyout deals struck at the height of a private equity bubble. EMI’s high debt and poor performance have become a burden for Terra Firma.
The private equity firm recently launched a lawsuit against Citigroup, claiming the U.S. bank had inflated the price of EMI during the sale process by failing to reveal that another bidder had withdrawn. Citigroup denies the allegation.