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Case study umg vinyl Case study umg vinyl Document Transcript

  • Universal Music Group vs. Cooking Vinyl<br />Corporate Synergy!!! Through vertical and horizontal integration.<br />Corporate synergy occurs when corporations interact congruently. A corporate synergy refers to a financial benefit that a corporation expects to realize when it merges with or acquires another corporation. This type of synergy is a nearly ubiquitous feature of a corporate acquisition and is a negotiating point between the buyer and seller that impacts the final price both parties agree to. There are three distinct types of corporate synergies: Revenue, management and cost.<br />In media revenue, synergy is the promotion and sale of a product throughout the various subsidiaries of a media conglomerate, e.g. films, soundtracks or video games.<br />Vertical and Horizontal Integration within UMG<br />Universal Music Group (UMG) is the world’s leading music company and is comprised of two core businesses: recorded music and music publishing.<br />The company discovers, develops, markets and distributes recorded music through a network of subsidiaries, joint ventures and licensees in 77 countries, representing 98% of the music market. UMG also sells and distributes music video and DVD products, and licenses recordings, encouraging the legal distribution of music online and over cellular, cable and satellite networks.  UMG includes Universal Music Latin Entertainment, the world’s leading Latin music company.  UMG's music publishing company, Universal Music Publishing Group, is the world's leading publishing business; it owns and acquires rights to musical compositions and licenses them for use in recordings and related uses, such as films and advertisements. UMG also includes Bravado, its merchandising company, and Twenty-First Artists, its full service management division; and Helter Skelter, its live music agency.<br />Vivendi Banks On Games As Mobile Music Goes Quiet <br />Video games are shining brighter as the jewel in Vivendi’s crown. The French conglomerate is expecting Activision (NSDQ: ATVI) Blizzard to contribute a boat-load more to this year’s group profit, when two key titles trickle farther down. Its 2009 earnings, out today, show…<br />—Call Of Duty: Modern Warfare 2 shifted $1 billion worth in copies in the U.S. and Europe alone.<br />—World Of Warcraft has 11.5 million subscribers paying about £8.99/€12.99 a month - though this is the same number that’s been quoted for about a year now. <br />Activision Blizzard 2009 revenue of €3 billion is 45.2 percent up from the €2.09 billion Vivendi (EPA: VIV) opened with when Activision and Blizzard merged a year ago, regardless of the industry-wide dip in music game sales like its own Guitar Hero. It’s now forecasting its €484 million 2009 EBITA to reach €600 million in 2010.<br />Vivendi is putting ActiBlizz ahead of its other divisions but, across the group, EBITA is up 8.8 percent to €5.4 billion on 6.9 percent better revenue of €27.1 billion…<br />—Universal Music Group: Revenue down 6.2 percent to €4.63 billion and, despite 8.4 percent more digital income. “Very strong growth in online sales tempered by softening demand for mobile products in the United States and Japan.” EBITA down 14.7 percent to €580 million.<br />—NBC Universal: Vivendi’s share of income from the JV fell from €255 million in 2008 to €178 million, but late last year it agreed to sell its 20 percent stake to GE.<br />—SFR: Revenue up 7.6 percent to €12.4 billion at the French telco on 33 percent more mobile internet income due to data offers. 670,000 iPhones sold April-December.<br />—Canal+: Revenue stable at €4.5 billion at the TV operator. Churn still high at 12.3 percent, but reduced, and average-customer revenue is growing thanks to multi-platform delivery.<br />Vivendi is setting aside €550 million to pay estimated damages in a U.S. case brought by shareholders who say they were given misleading information by the group: “We will continue to vigorously defend the company and its current shareholders against the unfounded claims we and they are suffering in light of the class action proceedings in the United States over the last years.”<br />Horizontal Integration<br />As UMG is a part of a much larger media conglomerate (Vivendi Universal) it depends on this integration to survive in the world of music. <br />Company overview (great site to look over!):<br />http://new.umusic.com/overview.aspx<br />Interscope once a part of Time Warner is now owned partially by UMG. Interscope’s controversial releases are both a curse and a blessing. Interscope merged with Geffen and A&M records creating a much stronger and financial sound business move. 2 labels coming together = horizontal integration. Interscope also expanded through sales in Europe Polydor Records. A great example of Horizontal integration is Interscope-Geffen-AMC. Interscope-Geffen-A&M also encompasses A&M/Octone Records, Aftermath Entertainment, Shady Records, Cherrytree Records, Fontana Records, Mosley Music Group, Star Trak Entertainment, Suretone Records and will.i.am music group.<br />Vertical integration<br />Bravado
<br />Bravado, the only global, 360° full service merchandise company, develops and markets high-quality licensed merchandise to a worldwide audience. The company works closely with new & established entertainment clients, creating innovative products carefully tailored to each artist or brand. Product is sold on live tours, via selected retail outlets and through web-based stores. Bravado also licenses rights to an extensive network of third party licensees around the world. The company maintains offices in London, Los Angeles, New York, San Francisco and Stockholm, and partners with companies in Berlin, Paris, Japan, Australia and South America.  Now under the Universal Music Group umbrella, Bravado is able to leverage a global sales and distribution network from the world's largest record company, as well as the group's significant marketing strength.  Bravado artists include Kanye West, Gwen Stefani, Beyonce, Elton John, Guns 'N Roses, Metallica, Led Zeppelin, Tina Turner, Iron Maiden, Alicia Keys, New Kids on the Block, Nine Inch Nails, Dolly Parton and The Killers, among many others.<br />Music Catalog Management
<br />Universal Music Enterprises (UMe) is the centralized U.S. catalog and special markets entity for UMG.  Working in concert with all of the company’s record labels, UMe provides a frontline approach to catalog management, a concentration of resources, a greater emphasis on strategic marketing initiatives and opportunities in new technologies.  UMe is comprised of several business units and record labels: Universal Chronicles, the unit that manages and markets UMG’s extensive catalog through retail channels; UTV Records, the television marketing unit; Hip-O Records, its independent label that releases CDs and DVDs from outside sources; New Door Records, a label dedicated to producing new music from historically significant recording artists whose catalog is controlled by UMG labels; UMe Digital, the first all digital label from a major music company; Universal Music Media, a company that produces infomercials and long form music programming; Universal Music Special Markets; and Universal Film & Television Music. UMe’s Strategic Marketing unit supports all five areas and is designed to aggressively develop a cohesive and strategic approach to maximizing catalog repertoire by initiating and implementing integrated marketing campaigns, direct to consumer programs, brand management initiatives and strategic partnerships.<br />Outside North America, the Universal Strategic Marketing division of Universal Music Group International works to maximize the profile and value of UMG’s catalogue in international markets. It acts as a service centre adding value through marketing initiatives and coordination of commercial issues through local and international markets.<br />After cutting ties with Death Row, Interscope continued to expand its roster, most notably developing a focus on the increasingly popular Christian bands which appealed to a crossover secular audience. In 1999 the same company that had delivered 'The Chronic' to gansta' rap enthusiasts produced an album from the Christian children's choir 'God's Property,' with impressive financial results. As Interscope moved toward a new millennium, it was joined by popular record labels Geffen and A & M, when Bronfman and the Seagram Co. acquired the holdings of PolyGram Records early in 1999. Under the support of the newly created Universal Music Group (UMG), Interscope management expected that the remaining 50 percent stake in Interscope would be acquired by UMG. Despite its new corporate structure, the company continued to attract the kind of controversy and publicity on which it was founded. In the spring of 1999, for example, Interscope executive Steve Stoute was involved in a melee in Interscope's New York offices which landed him in the hospital and his alleged attacker, Sean 'Puffy' Combs from rival Bad Boy Entertainment, in jail on charges of second degree assault and criminal mischief. In July of that year, the company named a new senior vice-president: Fred Durst, lead singer from the band 'Limp Bizkit.'<br />Distribution
<br />In the U.S., Universal Music Group Distribution has been the industry market share leader for the past ten years and consists of four major divisions: Universal Music Distribution (UMD), Fontana, Vivendi Entertainment (VE), and UMGD Digital.  UMD handles distribution and sales for UMG’s diverse roster of labels as well as a wide variety of associated labels. Fontana is the company’s independent sales, marketing and distribution arm, VE is its theatrical and home entertainment distribution division, and UMGD Digital manages and distributes all of Universal Music Group’s digital assets including mobile.  <br />In some markets outside the U.S., UMG companies handle their own distribution and sales. In other markets UMG companies have sub-contracted services to third parties or entered into distribution join ventures with other record companies.<br />Found right on the UMG site:<br />Vertical and Horizontal Integration within Cooking Vinyl<br />Vertical Integration<br />Vertical Integration for Cooking Vinily works through one company Essential Music & Marketing. Below you will find what this company offers at each stage of creating a successfully marketed album.<br />Essential Music & Marketing<br />THE COMPANY<br />Essential Music’s management bring years of experience in both distribution and label management. Mike Chadwick, formerly Managing Director of Vital Distribution, and Martin Goldschmidt, owner of Cooking Vinyl, founded the Company in 2003 having realised just how much record companies would benefit from a comprehensive one-stop service.<br />In order to offer the best international service, Essential has implemented significant distribution deals across Europe with the best independent distributors in each territory.<br />Record Companies seeking distribution, label management & marketing in the UK & Europe achieve a considerable advantage with Essential as their partner.<br />DISTRIBUTION<br />Through Essential Music’s UK distribution partner, ADA Cinram, we provide an efficient and effective distribution service, giving our clients access to a proven network backed by hands-on support from ourselves.<br />DIGITAL DISTRIBUTION<br />The latest addition to the Essential team is their own Digital Sales department. This, along side Essential Music’s partnership with IODA (Independent Online Distribution Alliance) ensures releases achieve the best position in the online marketplace, augmenting our physical distribution activities. Essential deliver presence and availability in ALL the relevant download platforms, supported by creative marketing and promotion.<br />Working with key independent distributors in Europe, Essential are able to offer clients the most appropriate channels for their releases. This structure allows us to offer a simultaneous release of product in every European territory.<br />MARKETING & PROMOTION<br />Essential takes care of more than logistics and is uniquely qualified to plan and implement successful marketing campaigns to maximise the profitability of each release.<br />As a true service provider, Essential Music will propose appropriate marketing strategies, in line with each label’s budget, for each release territory, while advising on release strategy and timing.<br />In addition, Essential Music contracts a number of promotion companies who have been carefully selected for their specific expertise. Campaigns are individually designed to suit our clients’ requirements and budgets and can encompass all forms of print, broadcast and online media.<br />Horizontal Integration<br />A fun fact about negotiating their contract with the Prodigy, which they say is probably one of the most important deals in Cooking Vinyl Records history, is that when it started to reach the critical point, Goldschmidt got a call from Prodigy’s manager said that there were only two problems with their contract... Universal and Warner. The Prodigy however signed in the end saying " We have always had an inbuilt dislike for the way major labels operate, and having met most of them, we did not want to become just part of their machine. Our aim was always to set up our own label imprint Ragged Flag Records and Cooking Vinyl have backed us fully. Staying independent was the most important thing." <br />Cooking Vinyl created a separate label for Prodigy to work under. This gave Prodigy the creative freedom they need as well as the financial and business minded company needed to be successful in a very competitive market.<br />Synergy in the media*<br />Case Study: Lady Gaga as a Commodity<br />The fame and The Fame Monster Lady Gaga’s first and second albums were horizontally integrated through 4 different Labels: Interscope, Streamline, Kon Live, and Cherrytree (very closely linked to Intersope). All these labels belong to UMG. Kon Live (Akon’s Label) was included as Akon provided many background vocals for her Record.<br />Promotions and Cross Media Convergence<br />Promotion first began for The Fame Monster through a performance on Saturday Night Live (owned by NBC Universal), which contained segments of a piano version of " Bad Romance" . Gaga performed the song " Speechless" at Los Angeles Museum of Contemporary Art's 30th Anniversary celebrations. She collaborated with artist Francesco Vezzolli and members of Russia's Bolshoi Ballet Academy. Gaga confirmed that she was going to tour by herself for the upcoming project. The show, called The Monster Ball Tour, had dates starting from November 2009 and finishing in early April 2010. The tour featured opening acts like Kid Cudi and Jason DeRulo.[64] Described by Gaga as " the first-ever pop electro opera" , The Monster Ball began four days after the release of The Fame Monster. <br />On November 16, 2009, Gaga appeared on an episode of the CW's (Owned by Time Warner) Gossip Girl in an episode titled " The Last Days of Disco Stick" . She performed the lead single from The Fame Monster, " Bad Romance" . Other songs that were referenced and played throughout the episode were " Alejandro" , " Dance in the Dark" , and " Telephone" . The song was also performed at the 2009 American Music Awards, The Jay Leno Show and The Ellen DeGeneres Show. On January 15, 2010, Gaga appeared on The Oprah Winfrey Show and performed a medley of " Monster" , " Bad Romance" , and " Speechless" . At the 52nd Grammy Awards, Gaga opened the show by performing a medley of " Poker Face" , " Speechless" , and " Your Song" with Elton John. On 16 February 2010, she performed at the 2010 BRIT Awards in memory of Alexander McQueen, she performed a ballad version of " Telephone" and then performed the song " Dance In The Dark" .<br />Take a look at the ads on her bio page:<br />http://www.ladygaga.com/default.aspx<br />She even has an iTunes app!!!<br />Check out here store:<br />http://store.universal-music.co.uk/restofworld/Artists/ladygaga/icat/ladygaga<br />Promotional Tools<br />Lady Gaga has her own website, twitter feed, myspace page, fan site, last.fm (free music/internet radio) channel, facebook page, and most likely even more.<br />Gaga was recently on the cover of Q magazine. Other magazine appearances include FHM, Billboard, Rolling Stone, Maxim, Elle, Flare, Cosmopolitan.<br />Telephone – Music Video – Produced by Streamline Records (who gave her the money to make it). Streamline Records inturn sent the project over to Serial Records a full service production company who specializes in promotions and music videos.<br />
    • Huge promotional tool – 9 minutes long, over twice as long as most music videos.
    • Vertical/Horizontal Integration
    • Product Placement – Virgin Mobile ad on phone, diet coke used as rollers in her hair, wonder bread and miracle whip used to make sandwich
    • Polaroid Camera used to take pictures
    • Plenty of Fish – dating website.
    • Chanel
    • Hewitt Packard
    • Laptop with a ‘b’ for beats by dre Interscope artist.
    Telephone song was initially written for Britney Spears (Sony Music – Jive Records) but she never used it. Gaga was then going to feature her in the video but end up putting Beyonce in it instead (Sony Music). Could this have been a deal made by Sony (who probably owned the Telephone song as Britney was meant to put it on her album)?<br />Telephone can be seen as one major marketing tool – two artists, an up and coming promotions company, several products in different industries being featured. Lady Gaga further marketing herself as attention seeking, edgy, controversial, artsy, fashionista and in your face. Beyonce associating herself with a big name leading artist.<br />Ownership and Global Institutions targeting Local/British Audiences<br />Gaga an American artist reached number one in the UK for her first single Bad Romance, while the song only reached number two on the American Billboards. She has a huge influence on British Youths (sold out concerts), at the top of the charts, on popular music stations and music video channels. <br />Music Videos can be found on Youtube through Vevo which is owned by UMG makes profits for ads place on page and before music videos. (Vertical Integration).<br />Distribution<br />Gaga albums are distributed by Interscope-Geffen-A&M which is and Umbrella corporation to it’s subsidiaries Cherrytree, Interscope, Kon Live, and Streamline. These all fall under the Universal Music Group.<br />Marketing<br />Universal Music Group was responsible for marketing the product and you can see some of the ways it has done this above.<br />Exhibition<br />Lady Gaga/UMG profits from song sales (itunes, HMV, Amazon), concert sales, last.fm, fashion line (supposedly in the works), t-shirt/poster/product sales, television shows and films her music has been included in i.e. Melrose Place, East Enders, Percy Jackson, XFactor and many more. It has also been in videos games (Karaoke Revolution).<br />Definition:<br />In media economics, synergy is the promotion and sale of a product (and all its versions) throughout the various subsidiaries of a media conglomerate,HYPERLINK " http://en.wikipedia.org/wiki/Synergy" l " cite_note-3" [4] e.g. films, soundtracks or video games. Walt Disney pioneered synergistic marketing techniques in the 1930s by granting dozens of firms the right to use his Mickey Mouse character in products and ads, and continued to market Disney media through licensing arrangements. These products can help advertise the film itself and thus help to increase the film's sales. For example, the Spider-Man films had toys of webshooters and figures of the characters made, as well as posters and games.<br />How have these labels combated music ownership issues?<br />File Sharing and Digital Streaming <br />VEVO<br />Is a streaming player run through YouTube and owned by UMG, BMG (Sony) and Abu Dhabi. This site plays adverts or displays adverts on copyrighted material, so that the owner of set material can profit off of a consumer listening/watching their product.<br />YouTube and Universal’s VEVO Launch Party Packed and Star-Studded [PICS]<br />Sometime tonight, YouTube and Universal Music will be launching VEVO, a new YouTube-powered Web site dedicated to music videos. It’ll include content from some of the world’s largest record labels, including EMI, Universal and Sony Music. Oh, and did we mention that it will boast Last.fm integration?<br />To get VEVO off the ground in style, the music labels and Google are hosting an elaborate, expensive and extravagant launch party in New York City. An array of music stars are at the event, including Peter Wentz, Mariah Carey, Adam Lambert and (supposedly) Sheryl Crow. We’re also hearing that Google CEO Eric Schmidt is there, too. However, there is one person that we absolutely know is in attendance: Mashable Editor-in-Chief Adam Ostrow.<br />Adam was kind enough to take a snapshot of the event, and let us tell you: The place looks packed! YouTube and Universal are really pulling out all the stops to make VEVO’s launch a huge event.

We’re going to be monitoring the event and the launch of Vevo. In the meantime, let us know what you think of the VEVO plan and whether it’ll succeed in the comments.<br />Update: Bono just gave the keynote, and now Google CEO Eric Schmidt is speaking at the launch party.<br />Update 2: Eric Schmit stated that it was Bono who suggested the meeting that got VEVO going. In addition, 85 percent of music videos will be on VEVO. However, Youtube will remain as the destination for fan-made videos.<br />SPIRAL FROG<br />SpiralFrog’s target audience – people between the ages of 13 and 34 – is an advertiser’s dream, Kent added. “This is the core audience we will attract by building a music-centric experience and destination that is second to none, legally delivering what the majority of kids want – content they pay for only with their time. It’s content that advertisers are willing to pay for on their behalf.<br />SpiralFrog and Universal Music Group Partner in Advertising-Supported Legal Music Download Service<br />New York, New York– SpiralFrog, the new music download destination, has signed an agreement with Universal Music Group (UMG), the world’s leading music company, to make UMG’s extensive catalog available for legal downloading in the US and Canada via SpiralFrog’s advertising-supported service.<br />SpiralFrog will offer users of its no-cost web-based service the ability to legally download music by many of the world’s most popular and award-winning artists.<br />" Offering young consumers an easy-to-use alternative to pirated music sites will be compelling,” said Robin Kent, SpiralFrog’s CEO.  “SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site.” Kent highlighted some key factors – legal digital files with no viruses or spyware in a controlled client-server architecture, quick downloading, and quality songs and music videos by great artists as among the primary benefits users will gain.<br />Digital rights management technology is built-in to all audio and video content as part of measures the company and its partners are actively taking to address piracy. “We want to provide the best environment for everyone – our partners and the recording artists, as well as consumers,” Kent said. “Piracy continues to be one of the biggest issues facing the music industry where illegal file sharing and unauthorized CD burning are the prime means of music piracy. Digital rights protection will help us combat piracy and provide peace of mind for the record labels and the artists.”<br />For record labels, the service will also be compelling, Kent said. “Offering legally-authorized audio and video downloads in an advertising-supported environment works, as our business model is based on sharing our income streams from that advertising with our content partners like Universal.”<br />Kent noted that the company’s research revealed that consumers are more than willing to ‘pay’ for their content by watching non-intrusive, contextually-relevant, targeted advertising in an online entertainment environment where advertising is already part of the overall experience.<br />Andrew McLean, Chief Client Officer Global at Mediaedge:cia, commented “The challenge is to find ways to integrate messaging and content to engage and add value to consumers’ lives rather than just add to the message clutter out there. Companies like SpiralFrog offer a more direct engagement opportunity and have the potential to be of value to consumers and, as a result, our clients.” Mediaedge:cia is a unit of GroupM, the media investment management arm of WPP Group, one of the world's largest communications services groups.<br />“Our target audience is the driving force behind the changes in how music is created, discovered and consumed,” Kent said. “They are the future of music, but their needs are not being fully met with current business models. We believe SpiralFrog’s differentiated offering will be highly appealing to them as well as to content providers.”<br />SpiralFrog’s target audience – people between the ages of 13 and 34 – is an advertiser’s dream, Kent added. “This is the core audience we will attract by building a music-centric experience and destination that is second to none, legally delivering what the majority of kids want – content they pay for only with their time. It’s content that advertisers are willing to pay for on their behalf.”<br />SpiralFrog will launch in beta later this year.<br />WEB SHERIFF<br />Both Universal and Cooking Vinyl are clients of this Web Sheriff Company who are based out of London. It is a service that monitors blogs and websites for copyright material and then ask the publisher of the site to kindly take down illegally copied material.<br />Web Sheriff is an internet policing company based in the United Kingdom. It acts for the rights of its clients against a wide range of media copyright infringement, privacy violations, trademark infringement and domain name squatting.[1][2][3] The company also generates official content for its clients by designing, building and maintaining websites, YouTube channels, MySpace pages and the like. It produces video edits for several of its household name clients and also manufactures watermarked CDs and DVDs as well as providing individually watermarked streams of audio and video.[4] Clients include record labels and musical artists, media organizations, newspapers, broadcasters, film companies and celebrities.[5][2] It enforces online rights management for record labels and film companies by managing album and movie leaks and is most notable for policing blogs, BitTorrent trackers, file-sharing sites, film-sharing sites and websites that are offering downloads of copyrighted music and film. Web Sheriff initially interacts by sending " take-down" notices to the offending parties.[6]<br />Although most of the company's work relies heavily on the entertainment industry with enforcing copyright and new release protection, it handles all forms of illegal activity on the internet. It has been instrumental in the removal of Ken Bigley execution videos and has closed down terrorist related sites[7] as well as the extreme pornographic strangulation sites at the center of the notorious Jane Longhurst 2003 murder trial at the Old Bailey in London, England.[8][9]<br />Described as " Europe's leading policing specialist" ,HYPERLINK " http://en.wikipedia.org/wiki/Web_Sheriff" l " cite_note-tech.blorge-9" [10] Web Sheriff was founded in 2000 by former music business lawyer, John Giacobbi who acts as managing director.[1][7] Former deputy chairman of G-Cap Media, Steve Orchard serves as chairman of the company, which has operations in two offices in the UK and a work team of 20 patrolling the web 24/7.[5][1][11]<br />UMG CEO: Piracy Will Be Solved By Technology, Not People; Timing on Hulu-Like Music Video Site <br />Universal Music Group CEO Doug Morris can never be accused of being shy, or, putting his foot in, oh well…in an extensive interview with Billboard, he talks about the digital piracy issues, UMG’s efforts in digital music, working with YouTube and its plans for a Hulu-like music video site, and other issues. He has just reupped long term as the CEO with the world’s largest record label.<br />—On a Wired story ridiculing him and generally being considered the enemy: “They were trying to make fun of me because I’m older and because I come from a different era. But…there’s a couple of things that just don’t change..They’re so entranced and enthralled by all the shiny, new technology, they don’t understand that it doesn’t work unless you have music that people want. No one’s going to download music they don’t like.”<br />—On stopping piracy: “My whole point of view is this problem we’re in, which is caused by technology, will be solved by technology. Some genius on the other side will figure out how to stop the piracy that seems very logical to me. So all these people who come up with these opinions that they should have done this and that, it’s all ridiculous.”<br />—On taking equity stakes in music startups like Buzznet and MySpace’s new venture: “No one’s going to build a business off our backs if I can help it without us being part of it. It’s just not fair… It’s better than having a company like MTV, where we gave them our music for very little money and they built a $30 billion company or whatever it was for nothing.”<br />—On a Hulu-like online music video site: If we do that, it will be January. If we renew the [YouTube] deal, we wouldn’t do that. The odds are that we will have a deal with the participation of another label. With YouTube, the quality isn’t great; it gets low [cost per thousand]. On the other hand, more professional [services] get a higher CPM.<br />—Smartest person in music industry: Steve Jobs. “He came back stronger and smarter than anyone has ever done in any industry….We work with him and we try and get what we want with him and I’m sure we aggravate the hell out of him sometimes, but when you look at the whole picture, we make a lot of money through iTunes. We consider him a friend . . . I talk to him about once a month.” <br />Cooking Vinyl signs deal with YouTube rival MUZU<br />Tue Jan 27, 2009 12:42pm GMT<br />MUZU<br />It was purposefully built for the music industry, makes money off of ads. User can either watch music video, listen to songs and embed these things onto social networking sites.<br />LONDON (Reuters Life!) - Cooking Vinyl, the label behind the Charlatans and The Prodigy, has signed a global licensing deal with MUZU.TV, a new music video website.<br />LIFESTYLE<br />Cooking Vinyl said on Tuesday it had chosen to partner with Irish firm MUZU because it was purpose-built for the industry. Music labels are looking to develop their digital businesses as physical sales of CDs fall.<br />MUZU, which has also signed up EMI, Sony BMG and the Ministry of Sound, pays artists through advertising when their music is played. Users can either watch music videos on the MUZU site, on artist sites or embed them into their social networks.<br />" To date, we have resisted doing deals with a lot of online video platforms because we didn't feel their offering fairly compensated our artists and had the right focus," said Martin Goldschmidt, founder and managing director of Cooking Vinyl.<br />" MUZU.TV is different from other online video sites -- it was purpose-built for the music industry and we believe it holds great revenue potential." <br />CROSS MEDIA CONVERGENCE<br />Many Bands/labels are now licensing their music to Video games like Guitar Hero (owned by Activision who is in turn owned by Vivendi (who owns UMG)). This is a great way to advertise an artist as as well as a way to make money.<br />Feist and Apple Ipod<br />Great exposure for Feist and a catchy melody for apple to market it’s products with.<br />Outside example<br />Iron Man 2 – Sountrack <br />AC/DC will be providing the soundtrack to Iron Man 2, being released by Columbia Records on Monday, April 19, 2010[44]. There are at least three different versions: basic, special, and deluxe. The basic edition includes just the CD and can only be bought at Walmart (in USA). The standard edition comes with the 15-track CD, a 32-page booklet, and a DVD featuring exclusive interviews, behind-the-scenes footage, and music videos. The deluxe version is available at Amazon.com and includes a reproduction of one of Iron Man's first appearances in a comic book.<br />The original score for the film was composed by John Debney. Tom Morello, who previously worked with Ramin Djawadi on the first movie, returned to work with Debney on the sequel.[45] According to an article on Hollywoodreporter.com, Sony Classical will release the Iron Man 2 Original Motion Picture Score album separately from the AC/DC album. John Debney confirmed via Twitter that the score will be released July 7, 2010.<br />[edit]<br />Radiohead has success allowing audience to pay what they like to download new album<br />Radiohead reveal how successful 'In Rainbows' download really was <br />Facts for pay-what-you-want release finally made public<br />October 15, 2008 | 13 Comments<br />Radiohead news RSS feed<br />More Radiohead news, reviews, videos and tour dates<br />Post this on Twitter or Follow NME<br />The statistics behind the pay-what-you-like release of Radiohead's 'In Rainbows' album, released on October 10 last year online, have been revealed today (October 15).According to reports most fans chose to pay nothing to download the album. However, it still generated more money before it was physically released (on December 31) than the total money generated by sales of the band's previous album, 2003's 'Hail To The Thief'.According to Music Ally, Jane Dyball, head of business affairs at Warner Chappell (the publishing company that oversaw the release of 'In Rainbows'), refused to reveal the average price people were downloading the album for.However, Dyball, set to speak about the release at the Iceland Airwaves conference later, explained that Warner Chappell and Radiohead's management were monitoring the average price daily, and was prepared to cancel the download facility if the average price became too low.The download facility was taken down after three months, and the album went to Number One in the UK and USA after being physically released.Statistics revealed that most fans downloaded the album through file-sharing service BitTorrent, but that this had been anticipated before the release.The band sold 100,000 copies of the 'In Rainbows' box set, which contained extra songs not available on the standard download or CD release.Warner Chappell concluded that the new release style was a financial success, but did not reveal whether Radiohead plan to release an album in a similar way in the future.<br />Technological Convergence<br />Technological convergence and the proliferation of hardware are hugely important for both of these institutions (UMG and Cooking Vinyl) to consider. It is also a great new revenue stream for these companies. This is true as consumers are becoming more diverse and ever changing. As technology changes at a rapid rate, consumers are less likely to pay money for a physical CD. Many people, especially young people who make up the largest part of the market tend to find their music in creative or less traditional ways. Computers are no longer data processors they are media players. Close to 80% of teens have their own computer or are the main users of home computers. So teens are free to download files illegally/legally (iTunes, Amazon). Teens are also free to stream music and create playlist on such sites as YouTube, Spotify and Last FM. As many of these services are provided for free, music companies have to be creative in trying to make money off of their products. Most labels and music groups have joined either MUZU or VEVO, both of these services are ad driven – consumers must watch or listen to ads in order to access copyrighted material. These services were specifically created for the industry as VEVO is an extension of YouTube and MUZU is a rival of YouTube – a rival that brings in significant income for its clients. Another major aspect of the industry to consider is the iPod and the iPhone in particular. 54, 000,000 iPods/8.7 million iPhones were sold in 2009. Apple has become a leader in digital portable media and many consumers are reliant on the company to provide them with music, games, apps, etc. Almost all record labels sell their music through iTunes. It is almost a requirement for survival in the industry to have your music available iTunes as it is a convenient service for all iPod users to easily get their music from. <br /> Iphone sales below.<br />Issues with global institutions targeting local and national British audiences.<br /> “Global institutions dominate media production. These institutions sell their products and services to national audiences.”<br />To what extent do you agree with this statement?<br />4 major conglomerates own the record industry UMG, Sony (BMG), Warner Music Group, and EMI. UMG owns 12 major labels and within these major labels there are smaller labels totalling to 45. These global industries tend to top the charts in many countries not just Britain. <br />Cultural globalization, driven by communication technology and the worldwide marketing of Western cultural industries, was understood at first as a process of homogenization, as the global domination of American culture at the expense of traditional diversity. However, a contrasting trend soon became evident in the emergence of movements protesting against globalization and giving new momentum to the defense of local uniqueness, individuality, and identity, but largely without success.[32]<br />Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a " world culture" . Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture. <br />Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and, to a lesser extent, Bollywood movies). Some consider such " imported" culture a danger, since it may supplant the local culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote peace and understanding between people. A third position gaining popularity is the notion that multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single culture. Thus not mere cultural assimilation as mentioned above but the obliteration of culture as we know it today.<br />Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television, leaving out a substantial segment of the Earth's population.<br />Incorporation of multinational corporations in to new media. As the sponsors of the All-Blacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete.<br />Globalization: Who benefits from it? <br />by Allan Watson<br />The success of London's music industry is due to fundamental causal processes operating in a globalised music industry.<br />In a globalising industry, a large component of the knowledge inputs to local production must come from outside London, and indeed the UK. They must be global. The clustering of firms in global cities such as London must be understood not only in terms of localised social interactions, but also with reference to the city's advantageous position within global flows of transport, communication, information, and capital. World cities are defined by their strategic location in the intensified circuits' of the global space economy. At the same time as the media multinationals located in cities interact locally with the small specialist producers and service providers, they run global networks of branch offices and subsidiaries that permit global linking of cities through established global networks. Therefore directly or indirectly, London's music industry firms are not only embedded locally, but also integrated more widely through the international networks of the majors. It's certain that every music industry company would value opportunities for learning that stretch far beyond the spatial limits of the city to the corners of the globe. The development of trust, respect, and mutual understanding is certainly not a process that can only occur within the limits of the city.<br />Each territory has a different market context of its own. Therefore, in order for London music companies to be able to deal in foreign markets, they must develop organisational forms that allow them to cross the cultural and economic boundaries that exist between different cities in different countries. As global distribution and cultural links are selective, musical releases have the potential to be a success in one territory and a failure in another if appropriate marketing strategies are not implemented. Strategies must be adopted accordingly that will work in each territory. There are two common strategies adopted by London's music industry companies. Firstly, there is expansion into a new territory, which allows direct learning of each market by the staff based at a company office. Secondly, there is the development of relationships with agents' who have local knowledge of the territory. The benefits of expansion or the use of agents are however not only limited to learning about, and access into, wider markets. They also allow for the development of communities' of learning, containing many music industry companies and also companies specialising in other areas, that stretch knowledge transfer beyond London's geographical limits. As these links are established, London's music industry becomes more and more linked into global networks. It is certain that the integration of London's music industry firms into global music industry networks is crucial to the global success of London's music industry clusters. It appears that high degrees of firm-level integration into the wider global music industry confer major advantages on London's music industry. Because of cultural differences in context, many marketing strategies and technologies from abroad may not be able to be appropriated in the UK. However, there will be those that can, and this can help improve the way business is undertaken in the UK. Therefore, music industry firms that are part of global networks of learning will be those that are the most successful. Of course, the future competitiveness of London's music industry also depends on the capacity of creative labour for innovative thinking.<br />Universal Music Group Reports 8.4% Growth In Digital Sales For 2009<br />by Robin Wauters on Mar 1, 2010 <br />French media conglomerate Vivendi this morning reported financial results, posting a decline in full-year profit but beating estimates because the net loss was much narrower than expected. You can read more analysis of the media and entertainment giant’s performance elsewhere, but there was a particular passage in the press release regarding Vivendi’s music subsidiary, Universal Music Group, that caught my eye.<br />UMG, the world’s largest music company with artists like U2, Amy Winehouse, Lady Gaga, Taylor Swift, Black Eyed Peas, Rihanna, Eminem, Lil Wayne under contract, as expected finds its revenue from physical product sales (CDs) in a seemingly unstoppable decline. Last year, the company’s revenues were €4,363 million, a 6.2% decrease compared to 2008.<br />Still, Universal Music Group’s digital sales grew 8.4% in 2009, which the company attributed to strong growth in online sales yet “tempered by softening demand for mobile products in the United States and Japan”.<br />UMG says it will “continue to encourage and support innovation”, citing Spotify’s iPhone application and MusicStation’s presence on the Android Market as examples. Universal is also a major shareholder of VEVO, a service launched in December, 2009 that quickly rose to become the number 1 music property in the United States. <br />We should note that UMG is also largely responsible for the demise of video sharing site Veoh, and has sued or threatened to sue companies like YouTube, MySpace, Bolt, Grouper and many more to date.<br />Universal Music Group recently appointed Lucian Grainge as Chief Executive Officer of the company, succeeding Doug Morris who remained as Chairman. When the promotion was announced, Jean-Bernard Levy, chairman of the Vivendi Management Board, said:<br />“I am delighted that Lucian Grainge has agreed to move to New York to take on the Chief Executive role. His track record speaks for itself, finding stars, growing revenues and building new business models. He has the right combination of experience and innovation to take UMG forward as the migration into the digital era accelerates.”<br />Do you think Universal Music Group can offset the decline in revenue from physical product sales with a continued increase in digital sales revenue in the foreseeable future?<br /> HYPERLINK " http://www.musicglobalization.com/2009/11/next-big-music-markets.html" The Next Big Music Markets <br />The world is changing, the industry is changing, and the music giants of today will no longer be industry titans tomorrow. In the last five years there has been an explosion of emerging artists popping up from the most unlikely of places. At one point 25% of the musicians on the American Billboard Top 100 music chart weren’t American born, which clearly reflects a huge shift that the music marketplace once controlled by the United States is no longer. The United Kingdom and Latin American countries have exploded onto the scene, and in many cases/genres are controlling the American market. As these countries continue to strengthen, there are several countries that are quickly approaching the same status. Musicians, both domestic and international, scramble to new venues around the globe to capture their piece of an audience, however it’s important to realize there’s a specific rhyme and reason to global expansion. Some countries are on the up and up with their music industry, while others are only perceived to be successful. It is important to have a plan, a plan that incorporates industry statistics, buying trends, music festivals, intellectual property law, emerging artists, genres, and demographics. Most people don’t take the time to evaluate these aspects. Lucky for you I do. Stay ahead of the game, and if you’re looking to expand your career, label, or market to international areas, there are two countries that will blindside the global market in upcoming years. Please meet: Australia and South Africa. Stay ahead of the curve and learn where/why/and how to capture these markets immediately.WHERE: AustraliaWHY: Industry scholars are already aware that Australia is the ideal music market unfortunately musicians do not. If you monitor the Australian Billboard music charts you’ll notice an eclectic mix of musicians from around the globe. Even though a majority are American A-listers, if you dig a bit deeper you’ll notice Australian acts cluttered throughout. Australian musicians may not be the in the global mainstream yet, but they will be. The musicians are unique, they have their own style, and because everything is recorded in English, the likelihood American labels will begin cherry picking Australian talent is inevitable. If you incorporate Australia’s rising tourism numbers coupled with the countries low piracy rate, talented musicians, new genres, and solid buying market, their music industry expansion is a no brainer. HOW TO CAPITALIZE: North American musicians will have a difficult time expanding their careers into the Australian market from a touring standpoint simply because of the economics. Traveling to Australia for a tour, shipping product, or jetting over for promotion is unreasonable from a money perspective, however getting radio airplay isn’t. There is a hug radio market in Australia, and because English speaking musicians (more so North American musicians) are already popular in the area, there is an existing demand for good product. As nice as an Australian tour may be, focus on getting radio exposure first, as it will be your best shot to slowly build a fan base. For European artists the opposite is true. Traveling to Australia is reasonable, and with Australia’s strengthening music festival season, getting some face time with fans will prove beneficial. As for focusing on radio efforts, wait until you establish a fan base by touring first, as the chances you’ll trump a North American or Australian band for radio time is unlikely. WHERE: South AfricaWHY: The African music market in general is booming. Matter of fact, the entire continent is becoming a self sustained, self contained entertainment ecosystem. For the same reasons as above, the explosion of new/unique genres, steady tourism numbers, musicians, festival, language and buying trends in South Africa make it ideal. Even though the American music market is still the controlling industry force around the globe, major labels will adapt to global change very carefully. Careful for U.S. majors mean signing English speaking artists who have sexy/exotic/international appeal, but not TOO sexy and exotic. Tracking down European acts still proves financially risky for American labels, however South Africa fits the bill. The country adds extra incentive because of international trading routes, laws, and market potential that make the country attractive. If you’re thinking there are many other countries that the U.S. has great trading relationships with that would also fit the bill, you’re right -so why South Africa? The South African music market is gaining a closer relationship with the Nigerian movie industry, which essentially means licensing deals, added global exposure, cross promotions, and a huge revenue stream. The Nigerian film industry (ie: Nollywood) produced a 2.3 billion dollar industry in 2008, and is still rising. Believe it or not, Nollywood ranks #2 in the world in terms of films produced each year, ahead of the United States and behind India. Combine a possible Nollywood relationship, South Africans sense of community development with its artists, and rise of popularity for Nollywood films in Johannesburg and Cape Town, not to mention the 2010 World Cup in which the countries artists will be exposed to the world, and you’ve got a potential recipe for success. HOW TO CAPITALIZE: Without sounding totally repetitive, the same steps that apply in Australia also apply to South Africa. North American artists should focus all efforts on radio, while European artist build a fan-base by touring. RUNNER UP: The NetherlandsWHY: Quickly speaking, The Netherlands is packed with unique musicians. The country is a nice central European hub especially from a touring standpoint. However the strongest asset of The Netherlands is the fact piracy isn’t as widespread as it is in other European countries. Matter of fact the annual report put out by the International Intellectual Property Alliance, which monitors widespread piracy in each individual country, doesn’t even categorize The Netherlands as a “potential threat.” The likely emerging European markets of Italy, Sweden, Germany, and France, along with a majority of the Asian countries plagued the IIPA’s “piracy watch list” (ie: not good) which makes the likelihood their music markets will explode into the global mainstream rather difficult. <br />