This NY Times article thinks the Mottola ouster heralds a new wind a-blowin’ in the music biz – you’ve heard most of it before, but this article seems to accept drastic change as a foregone conclusion:
- The resignation last week of one of the music industry’s most powerful figures, Thomas D. Mottola, the chairman and chief executive of Sony Music Entertainment, and his subsequent replacement by an outsider, Andrew Lack, a top NBC executive, has brought to the surface a growing sense of fear within the industry. The record business is bracing for a seismic shift and is increasingly reconciled to the fact that the current priorities of senior executives are outmoded.
What the Lack appointment underscores, analysts and industry executives agree, is the notion that the business is in such shaky condition that only an executive schooled outside the industry can come up with the radical approach that may be needed. In the last two years, the industry’s basic business structure – selling music to stores – has taken a blow. The industry is now selling 100 million fewer CD’s and cassettes than it did in 2000. According to Nielsen SoundScan, which tracks album sales, 681 million were sold in 2002, down from 785 million in 2000. At the same time, music-swapping on the Internet, perceived as a major threat, continues to grow.
The industry’s immediate problem is that although costs must be cut, the biggest costs of all – talent and marketing – are the toughest to rein in. And although many analysts and industry executives say they believe that further global consolidation is necessary – perhaps trimming the number of major recording companies to three from five – those financial benefits can go only so far.
Here is my favorite part:
- But most important, one veteran music executive said, is that the industry come to a decision to lower the cost of CD’s to the consumer, a highly charged proposal within music companies these days. “Now if you buy a soundtrack,” the executive said, “you pay more for a soundtrack to a film than you pay for the DVD of that film. It is completely crazy. A soundtrack has to be less expensive so that it is at the same price point or lower than the DVD’s.”
Hilary Rosen, chief executive of the Recording Industry Association of America, which represents the interests of recording companies, cautioned that lowering the price of CD’s would not solve the industry’s problems and that it would serve only to reduce revenue even further. The problems need to be tackled in other ways, she said, by communicating better with music buyers.
No, no, says Hilary, soundtracks SHOULD cost more than the DVD from which they are derived, which has the entire movie in surround sound, bonus material, and will shine your shoes; people should always pay more for less when it comes to music, it just has to be EXPLAINED to them.
This is, of course, idiocy. File-swapping and the rise of DVDs have combined to expose the outrageous rip that are retail CD prices – people will buy more if they think they are getting a good deal: paying more for the soundtrack than the DVD is not what the consumer considers a good deal. Cut the retail price in half and we’ll talk.