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NEAR TRUTHS BY I.B. BAD

HITS's Industry Insider Goes Where the Action Is
THE JIMMY FACTOR: For most of Jimmy Iovine’s two-decade-plus reign at Interscope, he was the undisputed king of the West Coast music business, with his only would-be rivals, Capitol and Warner Bros., mismanaged from afar. But by the time he left the company to go to work for Apple earlier this year, the playing field had been leveled, with Capitol and WB experiencing major comebacks under Steve Barnett and Cameron Strang, respectively. Not only that, but Los Angeles has once again become the creative hub for the music business in the latest cyclical shift. L.A. is where top writer/producers like Max Martin and Dr. Luke, among others, as well as the biggest urban and hip-hop hitmakers now choose to live and work. Indeed, the West Coast has once again become a magnet for talent, as it was during the city’s golden age in the 1970s. Is one of the six East Coast major labels considering making a move to the West Coast for this very reason? The New York-based label heads are already spending much of their time in L.A.

Iovine, meanwhile, is diving into his new job. He and Dr. Dre, who have been on a crusade about the sorry state of digital sound dating back to the launch of Beats in 2007, may have reached a major breakthrough in their ongoing efforts. The partners are said to have come close to convincing Apple to undertake a major upgrade in audio fidelity at iTunes. At best, this upgrade could result in a new source of a revenue for the rights holders, provided Apple’s campaign is compelling enough to convince consumers to restock their music collections in discernibly improved sound quality—imagine a hugely popular figure like LeBron James as the pitchman; the tactic certainly worked for Beats.

Almost all publishers and labels dislike the U2 album giveaway—Iovine’s biggest splash thus far at Apple—for the simple reason that it’s bad for their business model and for that of strategic partners like Spotify. Soon thereafter, when the band and Apple drew criticism on the grounds of invasion of privacy, making both appear vulnerable, the bashing from rights holders began in earnest. The fact of the matter is that, at this point in its career, U2’s agenda and that of the recorded-music business have never been more divergent, with record sales no longer representing a significant part of the band’s revenues, while sales remain central to the rights holders’ existence even at this transitional point. In any case, Bono’s contention that 38m people listened to Songs of Innocence during its first week of availability—despite the fact that iTunes isn’t nearly as big a factor outside the U.S. and U.K.—indicates that the giveaway was as successful for U2 as it has been for Apple.

As for that ubiquitous TV spot featuring "The Miracle (of Joey Ramone)," how big an impact will this repeated mass exposure have on U.S. radio, which hasn’t been in the U2 business for years? People are certainly becoming aware of the song given the dramatic jumps it has made on Shazam in the U.S. and U.K.

Whether or not media reports that Apple will shut down Beats Music pan out, which Apple uncharacteristically denied, bear in mind that the tech giant didn’t spend $3.2b on a music service; it shelled out the big bucks for Beats Electronics and for Iovine. That move already appears to be paying off, with Apple selling 10m iPhones the first weekend thanks in part to the campaign Iovine orchestrated. Expect other big acts to contact Iovine and ask, "What can we do together?

THE GUNS OF AUTUMN: With the fourth quarter a week away, the 2014 marketshare competition has turned into a two-horse race, with the remarkably swift rise of Barnett’s Capitol Music Group, which has surged to a stunning 8.8% in frontline share, and the irresistible force that is Monte Lipman’s Republic, which has built its TEA share to 7.9% (.3% ahead of CMG). But the albums that hit during Q4 will play a huge role in determining the final standings, and on that score, it looks on paper like Republic in a runaway, given upcoming releases from Scott Borchetta’s Taylor Swift and Florida Georgia Line, Lil Wayne, the Lorde-curated Hunger Games: Mockingjay, Part 1 soundtrack, Nickelback and quite possibly Nicki Minaj. No other major can come close to such a release schedule, although Rob Stringer’s Columbia will be in the mix with albums from One Direction, AC/DC and T.I. But Lipman and company would get a run for their money from Nashville as a whole, with albums coming from Sony’s Garth Brooks and Kenny Chesney, Universal’s Lady Antebellum, Little Big Town and George Strait, Warner’s Blake Shelton and Broken Bow/RED’s Jason Aldean, which is expected to exceed 500k in its first week.

ALSO: On the face of it, the fourth annual iHeartRadio Music Festival once again offered the most diverse array of stars this side of the Grammys, but behind the scenes it looked like a bona fide music-business convention. The fest has quickly become a destination event for label execs, managers, agents and attorneys, for whom the real action was offstage.

NAMES IN THE RUMOR MILL: Bob Pittman, Michael Rapino, Julie Pilat, Mark Beavan, Jason Iley, Mike Dungan and Ken Ehrlich.
TAGS: nograybox
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