The Eminem Show was not only the best-selling album of the year but rewrote the rules of retail by coming out on the Friday before Memorial Day week-end to counteract widespread Internet bootlegging. Despite the piracy (or maybe even because of it), the album racked up 1.7 million in sales during those first 10 days on the street.


While the Music Positively Thrived in 2002,
the Biz Struggled Mightily
THE SALES SLUMP OF 2001-2002: The retail and wholesale communities took some devastating hits in 2001. After enjoying one of its biggest years ever in 2000, the industry looked on anxiously as sales decreased 4% from the previous year pre-9/11 and slid to 6% below the 2000 level afterward. This year, they’re down another 11%, and the comparisons are even worse for the all-important holiday season. Downloading, CD-burning, crappy music, the boom in video games and DVDs and the depressed economy have been fingered as the primary causes of the malaise. Most likely, it’s the combined result of all of them, along with the growing perception that CDs are way overpriced for the value, and this at a time when margins are even smaller than in the past. So, how do we fix it? We have absolutely no idea, but somebody’d better start trying to figure it out—and soon. (BS)

DOUG MORRIS’ UMG MARKETSHARE MACHINE: Anyone wondering what “dominant” means need only look at how Universal Music Group, under chief Doug Morris and team, has steamrolled its way to 30% current-album marketshare, with no signs of slowing down. In a field of five major groups (and dozens of indies), 20% would be a more than fair slice, but UMG’s got half again as much, and is hard at work on a full one-third of the current-album market. With powerhouse labels Interscope Geffen A&M (the single-label marketshare winner for the year) and Island Def Jam hitting on all cylinders, along with the rest of Morris’ label heads, don’t be surprised if they do it in spite of mothership Vivendi Universal’s wobbly knees. (JO)

SO MUCH FOR SYNERGY: It was a bad year indeed for megamerged entities AOL Time Warner and Vivendi Universal, as both stocks tanked. AOLTW shares fell to under 10 from a 52-week high of 34.25 (rebounding recently to the mid-13s), as CEO Gerald Levin and then-COO Bob Pittman both called it quits. Throw in a federal accounting investigation, rumors of a “spinoff” (read: demerger) of the lagging AOL division and calls for Chairman Steve Case’s head, and you’ve got quite a year. For VU, meanwhile, overwhelming debt following the company’s buying spree brought the ouster of chief Jean-Marie Messier, now under investigation himself. Shares fell below 9 after being in the high 50s in January (currently in the low 16s), and spinoff is now a key word for VU’s entertainment assets, including UMG—assuming new guy Jean-Rene Fourtou can outfence Barry Diller. (JO)

A TALE OF TWO CLIVES: It was a great year to be named Clive and work for German media giant Bertelsmann. In a somewhat surprising move, BMG acquired the half of J Records it didn’t already own and anointed industry legend Clive Davis as Chairman of a newly reconfigured RCA Music Group, which will include both RCA Records and J. BMG Chairman/CEO Rolf Schmidt-Holtz told employees the two labels would remain separate “entities” under a single leadership team, with Charles Goldstuck serving as Group President/COO and Richard Sanders continuing as GM for RCA. BMG also completed its purchase of the Zomba Music Group for $2.74 billion. As part of that deal, Zomba’s Chairman/CEO Clive Calder resigned, but will remain on a part-time basis in an advisory role. (MP)

ADULT RECORD SALES COME OF AGE: Maybe it’s because most people over 40 don’t have the time or inclination to download records. Perhaps it’s the Boomer generation vainly trying to recapture its lost youth. Or could it just be that quality records by artists with something to say can still sell? Whatever the reason, the adult demo came alive this year, and not just for heritage artists like Columbia’s matched set of Bruce Springsteen and James Taylor, whose ubiquity on TV and the Internet reached out to old and new fans alike. Sophisticated singer-songwriters and certain Grammy nominees like Blue Note’s Norah Jones and Aware/Columbia’s John Mayer tapped into a multigenerational audience hungry for music of substance and craft, and both came through with efforts that sounded timeless—as the best pop always does. (RT)

GUESS WHO’S BACK…BACK IN TOWN? Whatever you call him, he’s rap’s bad boy made good, star of stage and screen, a cultural phenomenon who turned playground dissing into an art form. Eminem’s The Eminem Show (Aftermath/Interscope) was not only the best-selling album of the year but rewrote the rules of retail by coming out on the Friday before Memorial Day weekend to counteract widespread Internet bootlegging. Despite the piracy (or maybe even because of it), the album racked up 1.7 million in sales during those first 10 days on the street and is now up to more than 7 million sold OTC. Throw in his critically acclaimed (and maybe even Oscar-nominated) performance in the #1 box office smash 8 Mile and the current hit soundtrack, and we can even forgive the guy for trying to punch out Triumph the Insult Comic Dog at the MTV Video Music Awards. (RT)

ROCK ’EM, SOCK ’EM RADIO: The industry’s behemoths underwent changes in their upper echelons during 2002. At Clear Channel, powerful radio chief Randy Michaels was abruptly shoved from his throne and exiled to the company’s New Media division by CC big cheese Mark Mays, who installed John Hogan as Michaels’ successor and moved the radio operation from Cincinnati to company HQ in San Antonio. Concurrently, new Infinity ruler John Sykes began reshaping the company, naming Andy Schuon and John Fullam his top lieutenants, while giving Dan Mason his walking papers, causing wonderers to wonder whether Infinity would begin consolidating programming, a la the Clear Channel model. Independent promotion became a hot-button issue, as the Big Five, fed up with shelling out big bucks to do-nothing toll-takers, started slashing lists and rates, while Radio One principals Alfred Liggins and Mary Catherine Sneed brought the issue to primetime TV with their appearance on ABC’s 20/20. (BS)

TEENPOP POOPED, BUT POST-TEENS POPPED: The eternal pop cycle continued. As teenage fans matured, their tastes turned from the slick, manufactured spectacle of the Backstreet Boys and NSYNC to the no-less-slick, but more self-contained, “genuine” sounds of post-teenpop tunesmiths like Maverick’s Michelle Branch, A&M’s Vanessa Carlton and Arista sk8te-punk phenom Avril Lavigne—perhaps the biggest new artist breakthrough of the year. Mainstays Britney Spears and Christina Aguilera tarted up their images to good chart effect, and newly solo Justin Timberlake surprised skeptics with a soulful debut, though his opposite number Nick Carter’s effort wasn’t nearly as successful. In the wake of Lavigne, Carlton and Branch’s success, expect a steady stream of post-teen grunge grrrls slinging guitars to a pop beat. (RT)

REVENGE OF THE OLD-TIMERS: Older rock fans partied like it was 1969 this year, as a parade of legends staged massive tours in front of packed houses. After the death of his bandmate George Harrison, Paul McCartney opened up his entire songbook on a triumphant tour. The Who rebounded from the death of John Entwistle with speed and pragmatic determination. Bruce Springsteen and the reunited E Street Band staged a TV blitz the week of release on The Rising, resulting in the Boss’ biggest sales week ever. James Taylor used the same formula for his biggest album in years. The Rolling Stones showed off a triangle offense far more effective than that of the 2002-03 Lakers (so far), hitting a stadium, an arena and a concert hall in several major markets. The tour began as the band’s entire ’60s catalog was reissued, with stunningly improved sound, followed by Virgin/EMI’s two-CD career retrospective Forty Licks, which has an excellent shot at being the biggest record ever for the World’s Greatest Rock & Roll Band, and that’s saying something. (BS)

COUNTRY POPS WIDE OPEN: Country superstars like Arista Nashville’s Alan Jackson and DreamWorks Nashville’s Toby Keith hit the sweet spot with post-9/11 songs that turned into pop anthems. Monument/Columbia’s Dixie Chicks launched their new Open Wide label with an album that bowed at #1 in September, racking up one of the year’s highest first-week sales totals at more than 750k. WB’s Faith Hill debuted in the top spot in October, with a hefty 463k in sales, while hubby Tim McGraw later came in at #2, notching more than 600k in sales for his new Curb album. But it was Mercury Nashville’s Shania Twain who made the biggest impression. UP!, the country-pop diva’s first album since ’97’s 14 million-selling Come On Over, stormed the charts last month with a whopping 862k its first week, the second-largest total of the year to Eminem, and looks poised to continue as the top seller through the end of the year. (RT)

ARTISTS GET THE SEVEN-YEAR ITCH: This year saw the tenuous relationship between artists and labels reach the breaking point, with politics—and politicians—coming into play. Artists and managers joined together to mutiny against recording contracts, accounting practices and the so-called seven-year statute, forming the Recording Artists Coalition. California Sen. Kevin Murray made a name for himself by publicly siding with the artists and seeking to repeal the 1986 amendment to the bill. The Big Five defended themselves behind the RIAA’s Hilary Rosen, and the two sides flirted with a compromise. Murray later withdrew the proposed legislation before it had been voted on, but vowed to push the issue again next year. (MP)

GARAGE-ROCK REDUX: NEXT BIG THING OR LAST BIG HYPE? With mope-rock and teenpop on the wane, A&R types and hipper-than-thou journos helped raise an array of garage-rocking “The” bands to phenom status. But while The Strokes, The White Stripes and The Vines scored significant gains among fans and The Hives became an instant cult sensation, some wondered if the entire “movement” was a little too cool for school. More alarmingly, the signing frenzy that followed the hype—where weasels roamed the planet’s garages, waving their checkbooks at every Nuggets knockoff in sight—was reminiscent of the profligate post-Nirvana ’90s. Is this a bona fide movement, or a critic-fueled fad? It’s too early to say. But as with any other genre, the bands with hit songs will survive and the rest will probably be relegated to the pop dustbin. (SG)

ONLINE MUSIC: THE EMPIRE STRIKES BACK: With the once-mighty Napster neutered and being sold for parts, peer-to-peer services like KaZaA, Morpheus, LimeWire and Bearshare continued to proliferate. The biz continued its litigation assault on the P2P renegades, but also ramped up sub-service offerings; by year’s end, pressplay, MusicNet and Rhapsody had licenses from all five of the Big Five. Some in the biz got squarely behind copy-protection technology designed to prevent computers from playing tracks—or severely restrict what could be done with them from users’ desktops. But others saw the versatility of the CD as a chance to give consumers more rather than less, including video, links to unreleased tracks, ticket giveaways and other goodies. (SG)

MUSICAL CHAIRS: Following the merger of RCA and J Records, Clive Davis is named Chairman of a newly reconfigured RCA Music Group, with Charles Goldstuck named President/COO… EMI Deputy Chairman David Munns taps Ivan Gavin as COO EMI N.A. and Phil Quartararo as Exec. VP EMI N.A… Matt Serletic and Roy Lott are brought in to replace Ray Cooper and Ashley Newton as leaders of the revamped, New York-based Virgin… Former IDJ Chairman Jim Caparro named CEO of WEA, while Julie Greenwald and Kevin Liles are upped to Presidents at Island and Def Jam/Def Soul, respectively… Tom Whalley boosts Warner Bros.’ A&R department by tapping Rob Cavallo and Perry Watts-Russell as key executives… Daniel Savage segues from Hollywood to MaverickSteve Backer is back in the saddle with a GM appointment at V2… And former label chiefs Gary Gersh, Steve Rifkind and Bryan Turner are all back in business with new gigs. (MP)

Next Year’s Model: Did EMI’s deal with Robbie Williams, which prioritized revenue-sharing, set a precedent for major-artist contracts?
Merger Mania: With the EU relaxing its merger criteria, can we expect more moves toward consolidation in 2003?
Seeing Pink: Not even the most relatively successful operations in the music biz are immune from cutbacks. Unfortunately, we’ll be seeing more pink slips handed out in the coming months.
Burning Revenue: Did Q4 sales of CD-burners erase the gains of Q4 retail, and will this trend continue to erode the bottom lines of the Big Five?
Clive Alive, Jive Revived at BMG: How will Clive Davis shape the combined RCA and J labels, and what will Rolf Schmidt-Holtz do with onetime teenpop stronghold Jive?
Neil & Norah at the Grammys: Expect a short speech from new NARAS head Neil Portnow and a long list of nominations for adult-pop princess Norah Jones.
Seven-Year Redux: What’s on Sen. Kevin Murray’s 2003 agenda?

Writers: Simon Glickman, Jon O’Hara, Marc Pollack, Bud Scoppa, Roy Trakin

ATL legend (6/17a)
High times in Inglewood (6/20a)
Collect 'em all (6/20a)
Sloshing through the fun (6/20a)
Black Music Month in the ATL (6/18a)
Who's already a lock?
Three chords and some truth you may not be ready for.
The kids can tell the difference... for now.
The discovery engine is revving higher.

 First Name

 Last Name


Captcha: (type the characters above)