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Rock & roll again reared its head, with the year’s #2 album, Linkin Park, leading the way. Staind and Dave Matthews Band also landed in the 2001 Top 10.

2001: THE YEAR OF LIVING DANGEROUSLY

The Top Music-Biz Stories of the Last 12 Months
TERROR HITS HOME: Sure, there were many “big” stories in music this year, but the Sept. 11 terrorist attacks were the story. The sheer enormity of the destruction brought everything to a grinding halt, throwing many into a state of grief and shock. But in the ensuing weeks, those who had suffered the most began to rebuild their lives, inspiring the rest of us to move on as well. Through the generosity of execs and artists, several benefit concerts raised millions for victims (see below). The economic consequences have yet to be completely felt, but at this point, at least we know we can pull together.

THEY GAVE AT THE OFFICE: The music industry gave of itself for the cause, producing numerous concerts to benefit Sept. 11 victims and their families. Just 10 days after the tragic events, Bruce Springsteen, Stevie Wonder, Billy Joel and Mariah Carey, among others, joined screen celebs for the “America: A Tribute to Heroes” telethon, simulcast on all major networks and cable channels. The Big Five teamed to release the event on CD, DVD and VHS. On Oct. 20, a lineup including rock legends Paul McCartney, David Bowie, the Who and Eric Clapton performed for “A Concert for New York City.” Underwritten by VH1, Cablevision and Miramax, along with Clear Channel, it aired live on VH1. A day later, pop stars Michael Jackson, NSYNC, the Backstreet Boys, and others performed for the “United We Stand” concert held in Washington, DC. That same weekend, country and rock artists put on shows in Nashville, Atlanta and Dallas. The Beastie Boys led two benefit concerts, “New Yorkers Against Violence.”

WINNER AND STILL CHAMP: Universal Music Group has dominated music in the three years since the PolyGram merger under CEO Doug Morris, and 2001 was no exception. This year, the group easily won the marketshare race, hovering at just under 30%. Its labels—Interscope-Geffen-A&M, Island Def Jam, Universal Motown and MCA—have all seen success during the past year with such artists as Shaggy, Nelly, Limp Bizkit, Nickelback, D12, Mary J. Blige, Ludacris, Ja Rule, U2 and DMXDreamWorks also added to UMG’s growing marketshare with Papa Roach, Shrek, Alien Ant Farm, Lifehouse and Nelly Furtado. The label group’s aggressive growth strategy encompassed both development and acquisition, marked by deals with Cees Wessel’s Roadrunner, Barry Hankerson’s Blackground, Master P’s No Limit, Snoop’s Dogghouse, Glen Ballard’s Java and Rick Rubin’s American. And with new albums due next year from Nelly, Limp, Shania Twain, Dr. Dre and Eminem, the momentum shows no signs of slowing.

ROCK ON A ROLL: Even before Sept. 11, the popularity of teenpop and gangsta rap showed signs of waning. Though NSYNC’s “Celebrity” debuted last July with 1.9 million in first-week sales, it was dwarfed by the record 2.5 million garnered by “No Strings Attached” back in February 2000. Rock & roll again reared its head, with the year’s #2 album, Linkin Park, leading the way. Staind and Dave Matthews Band also landed in the 2001 Top 10, while Limp Bizkit, Nickelback, Creed, Lifehouse, Train, Tool, Lenny Kravitz, Blink-182, Sum 41, U2, Crazy Town and Uncle Kracker cracked the Top 50. With promising newcomers like the Strokes, Pete Yorn and Ryan Adams building nicely, it would appear rock is back on the rise.

SIGN OF THE CROSS-PROMOTION: AOLTW offered a new communications paradigm—an offline media empire at the disposal of the world’s biggest online player. Toyota and Burger King cut massive checks to have simultaneous, coordinated access to and promotion via AOLTW’s music, film, broadcast, print and digital properties, with Kevin Conroy’s ascendant AOL Music playing a key role. But AOLTW had no monopoly on “synergy.” Vivendi Universal acquired several prominent netcos, notably the controversial but vibrant MP3.com, as well as GetMusic and EMusic, adding them to its holdings under the Vivendi Universal Net USA moniker. Tapping MP3.com CEO Robin Richards to run the show, VU Net promised to reinvigorate online advertising through the company’s chain of holdings, with music once again front and center.

SLUMP-O-RAMA: The retail and wholesale communities took some big hits in 2001. Sales were off by around 4% pre-Sept.11 and slid to over 5% below last year’s number since. Three major one-stops went belly-up, the biggest being Valley Media, which went from wholesale titan to sunken Titanic. CEO Peter Berger failed to put together a deal to merge with Alliance Entertainment and save founder Barney Cohen’s empire. Two other closures bookended the year, with Simi Valley-based Pacific Coast One-Stop going down, and Albany-based Northeast One-Stop losing a battle to successfully reorganize in Chapter 11. On the retail tip, 70-year-old Pittsburgh-based National Record Mart failed to emerge from bankruptcy and will liquidate after the first of the year. Notable exits included Musicland legend Dick Odette, WEA’s Fran Aliberte and the BMG veterans Rick Cohen and Rick Bleiweiss.

FIRM FOLLOWS FUNCTION: It was a year of consolidation and growth in the music management world, and nowhere was that more evident than at The Firm. Jeff Kwatinetz’s company made some major merger moves during the course of the year, bringing in Andy Gould and Rob McDermott (Rob Zombie, Linkin Park, Powerman 5000, Static-X), Kenneth Crear (Dru Hill, Sisqo, 112), Simon Renshaw (Dixie Chicks) and, of course, former HITS poser Jeff Rabhan (Michelle Branch). The Firm also signed Mary J. Blige, Stone Temple Pilots and Puddle of Mudd, who join a roster that includes the Backstreet Boys, Korn, Limp Bizkit, Enrique and Staind, making them arguably the largest music management company ever.

CLEAR CHANNELING: The Randy Michaels-led radio division continued to streamline its operations, beginning a trend of consolidation by placing multiple stations under a single regional PD, MD and promo staff. The 1,400-station-strong company ramped up its use of “cyber” jocks via its Prophet system and spread the flourishing “KISS” format to several major markets, successfully defending the moniker’s copyright. Its concert promotion arm, Clear Channel Entertainment (formerly SFX), began to take full advantage of corporate synergies by tying in concert promotion with sister stations in the same markets. At the end of the year, Premiere Radio Networks division President/CEO Kraig Kitchin brought in promotion veteran John Fagot in a research capacity. Look for Michaels and company to continue as major players in this brave new world.

SWAP MEAT: As the labels’ suit against Napster dragged through the year, the swapco was sidelined by an injunction in July. The Bertelsmann-supported outfit, headed by Bertie vet Konrad Hilbers, tried to reinvent itself as a copyright-friendly service but had difficulty scoring major licenses. Meanwhile, decentralized swapperies like Morpheus, KaZaA, LimeWire, Grokster, et al., leapt into the breach. Amid criticism from pundits and politicians, the biz attempted to navigate the minefield of digital delivery—and still get paid. Thus were born two subscription platforms, WMG/BMG/EMI/Real-sponsored MusicNet and VU/Sony-bred Pressplay. Will consumers bite? Only time will tell, but these are the baby steps.

CD BURNING GETS BIZ HOT: With record sales down, CD burning became a big topic of concern within the industry. This year, an estimated 1.5 billion recordable disks were sold, with more than 75% of computers bought in the U.S. coming with built-in CD burners. The industry fought back by testing CD copy-protection methods, with BMG and EMI taking the first steps. In December, VU became the first major label to commercially issue a copy-protected CD in the U.S. with the More Fast and the Furious ST. MusicNet announced it wouldn’t allow users to burn downloaded tracks, but Pressplay has decided to allow burning on a limited basis.

STILL FAB: Beatles fans started 2001 in celebration and ended it in mourning. When the year began, the Fab Four were back on top—exactly 30 years after their breakup—as Capitol’s concisely titled 1, a compilation of the group’s 27 chart-toppers, exploded on its release in late 2000 and kept selling well into this year. The record finished #14 on the year-end Top 50 Albums chart, selling 7.8 million to date in the U.S. alone. The spirit of John Lennon emerged on the Sept. 21 telethon, in Neil Young’s heart-wrenching performance of “Imagine.” And Paul McCartney returned to center stage as one of the organizers and performers of “The Concert for New York City,” following that with Driving Rain, his most affecting album in at least 20 years. Its release came just a few days before the death of McCartney’s “baby brother,” George Harrison, after a long battle with cancer. And now there are two.

OUT WITH THE OLD: Beloved Warner Bros. Records Chairman/CEO Russ Thyret says, “That’s all, folks”… Quincy JonesQwest is folded into WB, which also buys out Irving Azoff’s Giant, downsizes Maverick and shutters London-Sire… As Vivendi Universal buys MP3.com, founder Michael Robertson steps down… Howie Klein bids Reprise adieu… Bill Bennett exits Maverick… Beleaguered Napster “interim” CEO Hank Barry steps down… Priority founder Bryan Turner exits as the label is folded into Capitol…  Ken Berry is squeezed from the top of EMI Recorded Music, with ex-wife Nancy Berry following soon after… In a pair of surprising moves, AOLTW CEO Gerald Levin and VU Vice Chairman Edgar Bronfman Jr. step down… Again with the surprise, IDJ Chairman Jim Caparro resigns.

IN WITH THE NEW (AND OLD): Following the untimely death of Rudi Gassner, Rolf Schmidt-Holtz is named BMG CEO… Kevin Conroy is tapped as head of AOL MusicBob Jamieson becomes President/CEO of BMG Entertainment North America and Jack Rovner is upped to President of RCAHelen Murphy leaves Martha Stewart for the CFO gig at WMGAndy Slater ascends the Capitol Tower… Interscope’s Ted Field takes over ArtistDirectAndy Schuon leaves the Farmclub to head up Pressplay (ne Duet)… Ex-Warner Bros./WMG co-head Terry Semel becomes Chairman/CEO of Yahoo!Andy Gershon is named President of V2Michael Smellie joins Schmidt-Holtz as BMG COO… Tom Whalley finally takes over Warner Bros., where former Virgin co-chair Jeff Ayeroff joins him… Alain Levy returns, replacing Ken Berry as head of EMI Recorded Music… Following the surprising resignation of AOLTW CEO Gerald Levin, Co-COO Richard Parsons is named as his replacement.

LOSSES: Rudi Gassner (Dec. 23, 2000)... John Phillips of the Mamas & the Papas (March 18)... Joey Ramone (April 15)... Perry Como (May 12)… John Lee Hooker (June 21)… Ron Townson of the 5th Dimension (Aug. 6)... Betty Everett (Aug. 19)… Aaliyah Houghton (Aug. 25)… Norman Granz (Nov. 22)… George Harrison (Nov. 29)... Rufus Thomas (Dec. 15)... Stuart Adamson (Dec. 16)

 LOOKING AHEAD TO 2002
Industry Turnaround:
Last time there was a slump this bad, MTV and CDs saved the day… Hey, it’s nothing a few new superstars can’t cure.
Keys to the Grammys: Clive should be centerstage again—or will Dylan/U2 steal his thunder?
Remake/Remodel: Ames and Whalley have WMG back in the game. Can Levy and Schmidt-Holtz do the same for EMI and BMG?
Subs Surfacing: Can MusicNet, Pressplay and, yes, Napster, succeed in a post-Napster universe?

JUST DO YOU, BOO: A PRIDE SPECIAL CONVERSATION WITH BILLY PORTER
He has a few thoughts. (6/22a)
UMG IPO OK'D
See you in September. (6/22a)
JEFF HARLESTON:
IT'S A NEW WORLD, MOST DEF
Wit and wisdom from a renaissance man (6/22a)
LEADING OFF:
X FACTOR
Out and proud (6/22a)
PRIDE SPECIAL:
ON THE COVER
An inspiring success story (6/22a)
RHYTHM, BLUES AND THE FUTURE
The musical tapestry we know as R&B.
WHO'S NEXT?
Predicting the next big catalog deal.
JUST THE VAX, MA'AM
Once we all get vaccinated, how long before we can party?
WORLDWIDE GROOVE
How is globalization bringing far-flung territories into the musical mainstream?
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