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"The Internet is the biggest, baddest listening post in the history of the record business, and is perfect for catalog sales."
THIS BYTES: WEASELS TALK WEB 2
And This Time It’s Profitable!
Despite the uninformed grousing of certain online prima donnas, it’s clear there are quite a few upper-tier label folks with real insight into the digital sphere’s true relevance to the health of the biz. Once again this week, we hear from some.

"It’s an exciting period because nobody has figured out how to maximize the effectiveness of the Internet," notes Universal chieftain Monte Lipman. "It’s valuable, but nobody’s come close yet. Right now it’s more of a marketing and promotion tool than a distribution outlet. With the invention of Napster, we saw some of the biggest-selling records of all time come out during that period. It’s just like the radio—you can hear all you want, but there’s something about having a collection, something you can call your own. You share that piece of art with other fans."

For Tom Corson of J Records, the post-Napster period presents opportunities as well as challenges: "Are we thrilled about file-sharing? No, but we’re learning from it about audience activity."

Atlantic EVP Craig Kallman tempers the smaller scale of direct online sales of new releases with the possibilities for reaching older and more eclectic demos. "The raw numbers would indicate that an entire year's worth of Internet sales of a current album doesn't amount to much more than a week's worth of Top 20 store sales," he relates. "But the Internet is the biggest, baddest listening post in the history of the record business, and is perfect for catalog sales. Now that mall-based discounters make up 40% of recorded music sales, (and discounters avoid stocking too much catalog), the Internet should be well suited to make up that shortfall. There's plenty of anecdotal evidence that targeted Internet marketing makes incremental sales happen."

Agrees DreamWorksJohnny Barbis, "The Net certainly has a promotional and marketing impact, as it allows a true marketing gauge. It’s quantifiable."

We’ll pick up some of these threads next week. Stay tuned…

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