WHEELS & DEALS: WEASEL WARS—RISE OF THE PRODUCERS

Welcome back. We hope your holidays were filled with drunken splendor. As we crank out our first column of the year, we’re happy to restate last week’s report from Nielsen SoundScan that U.S. music sales exceeded 1 billion (at 1.2b) for the second consecutive year in 2006, up more than 19% from 2005, when sales were at 1 billion. As expected, digital track sales increased to nearly 582 million, compared to 353 million in 2005, a 65% rise. As Borat would say…Success!” However, CD sales continued to decline, for the sixth straight year. Album sales were down 5%, but factoring in digital sales, overall album sales were down just over 1%. Meanwhile, digital music files traded on P2P networks continued to flourish and remain free, as our industry maintains its stance to not monetize such networks. We can expect labels to rely on CD sales to drive primary revenue until levels reach a point where it’s no longer worth it to be in that business. When will we reach that tipping point? Difficult to say? Could be this year? Maybe it’ll be a couple years from now, but it will definitely happen. So what can we expect in A&R in 2007? Based on some of the staff moves we saw in 2006, there seems to be a shift back to producers taking on A&R roles at the majors; that’s how it was way back at the beginning of this industry. And the need for hit-driven songs for radio to drive sales will be more important than ever. The reality is that there aren’t too many hipster indie bands gracing the Top 50 on the album chart these days, meaning the major label world has always been hit-driven and will continue to be so. Big MySpace and YouTube stats are great and all, but don’t forget to have a hit song. Meanwhile, we’ve seen the number of mid-level A&R executives decrease dramatically in the past few years. The major label A&R departments are either top heavy, with veteran record-making execs paired with small scouting staffs, or the opposite—a handful of veteran players overseeing bottom-heavy scouting departments. It’s no surprise that the big albums that fueled the sales chart last year were overseen by veteran record makers. As for the young scouts out there, we’re still counting on you. But the up-and-coming A&R gunslingers who step up with a hit will move up, while those who don’t will be blown out sooner than in the past. We’re already seeing the turnover rate for the lower-level A&R ranks increase dramatically. Unfortunately, it’s a reality check. Again, welcome back. Oh, and Happy New Year!… BUZZIN’: Rob Cavallo, Ron Fair, Jack Joseph Puig, Howard Benson, Mike Flynn and Brian Howes … Hit me up: [email protected]

BUZZ/GIGS:
JAYMAY Fri., Jan. 19, 10:15 p.m, North Six, N.Y.
BRETT DENNEN Fri., Jan. 19, 1:00 p.m, NAMM Show, Anaheim
TO LIVE & DIE IN LA Tue., Jan. 23, 8 p.m., The Echo, L.A.