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Apple has been wildly successful in its use of music to re-brand the company, as its market cap has exploded from $8 billion to $80 billion since the introduction of the iPod.
I.B. BAD SLICES INTO THE CORE OF APPLE'S MUSICAL MAKEOVER
What Can the Majors Do to Break iTunes’ Near-Monopoly in the Crucial Online Retail Sector
WINDS OF CHANGE: There’s an imminent shift in leverage between the content holders and Apple, as the Big Four’s deals with iTunes Music Store come up for renewal at the end of April. In the radical reshaping of music retail during the last half-decade, iTunes has morphed from an upstart into a major player, with the online power now accounting for 7-8% of U.S. music sales, putting it behind only Wal-Mart (25%) Best Buy and Target (13% each), and neck-and-neck with Trans World (7%). Apple has been wildly successful in its use of music to re-brand the company, as its market cap has exploded from $8 billion to $80 billion since the introduction of the iPod in October 2001 (the iTunes Music Store opened for business in April 2003). Over that time, Apple’s momentum has continued unabated, as iTunes passed the 1 billion-download plateau in February 2006, hit 1.5 billion last September and is now closing in on 2 billion, while commanding north of 75% of online sales… Unlike its terrestrial rivals, Apple doesn’t make price-and-positioning deals, although, as The Wall Street Journal pointed out earlier this month, there’s intense competition for placement on the iTunes homepage, which can be had by playing ball with Apple and giving it what it demands, starting with exclusive content. By the same token, not playing ball generally leads to a company being penalized…New deals will soon be attempted by the content holders to change the current terms of engagement, with wonderers wondering what the majors can do to level the playing field, i.e., breaking Apple’s near-monopoly in the online realm. Can they empower other online retailers by giving them the range of exclusives that iTunes now gets from the labels? Can they shift their primary focus to the mobile sector of the business, which many foresee as having the biggest upside in the long term? In any case, as long as iTunes is generating those kinds of numbers, Apple will continue to be a force to be reckoned with, especially at a time of transition from the CD to Internet delivery. At the same time, conversations are taking place inside every record company about the possible removal of copy protection—a notion that was viewed as heretical a year ago, but is now gaining traction out of a growing belief that DRM-free downloads will increase online revenues while at the same time loosening Apple’s stranglehold on the market via the interoperability of song files… A concept that’s taking hold in the artist community is the album-by-album deal pioneered by Prince and now being utilized by acts ranging from the White Stripes to Paul McCartney, as numerous well-established acts whose deals are up contemplate a similar course of action. There’s much talk at present about coveted free agent Radiohead, which some believe will opt for the one-off approach, while others predict the band will choose to stay with EMI out of a strong relationship with the company and U.K. chief Tony Wadsworth.... The indie sector continues to gain momentum, as Sub Pop’s Shins and Merge’s Arcade Fire both debuted at #2 in this otherwise lamentable quarter, and expectations are high for the Arctic Monkeys’ follow-up on Domino, coming next month. Not surprisingly, the majors’ appetite for gobbling up available indies for use as farm clubs is voracious; Warner Music and UMG have been particularly acquisitive of late, snagging Roadrunner and Octone, respectively. Among potential acquisition targets are Metal Blade, Equal Vision, Epitaph, Razor & Tie, Broken Bow and Wind-up... Whereas in the past the indies simply couldn’t compete with the majors in controlling the primary avenues of exposure, that no longer holds true in the Internet age. Others, however, view today’s indie resurgence as cyclical, the contemporary equivalent of the mid-’60s, when indies like Atlantic, Motown, Island and A&M showed they could sign cool acts and sell tonnage with all the aplomb of the big boys… Longtime Sony Music gunslinger Michele Anthony has started a new venture said to be a consulting firm for artists and/or artist managers... With her new album, Introducing…, streeting this week, Virgin’s Joss Stone is attempting to manage herself, which few other artists have done successfully. The soon-to-be 20-year-old follows in the footsteps of such acts as Bon Jovi and Prince, who have worked in the past with managers on a for-hire basis, without percentages. Said one skeptical insider, “Would you perform brain surgery on yourself?” Names in the Rumor Mill: Zach Horowitz, Rick Rubin, Simon Renshaw, Nickelback, Chris Hufford and Thomas Hesse.    
AND THE NOMINEES ARE...
The inevitable and the unexpected commingle. (11/25a)
TOP 100 WEEKLY MARKETSHARE:
THE TIGHTENING
Cue Archie Bell & the Drells. (11/24a)
STATE OF PLAY
IN THE U.K.
The first entry from our 2020 U.K. print special is now online. (11/25a)
AMAs TACKLED FOR LOSS BY SNF
Oof (11/24a)
MUSIC ORGS IMPLORE CONGRESS FOR HELP
The gang's all here. (11/24a)
RAINMAKERS 2020
Bring your umbrella.
GRAMMY OUTLIERS
Mulling possible surprises.
ZOOM THANKSGIVING
We're virtually stuffing ourselves.
TRUMP'S LAWSUITS
He's lost 25 out of 26, and so tired of winning!
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