I.B. BAD ON SWINGING SINGLES & OTHER MIDYEAR PHENOMENA

As we hit the midpoint of the year, the singles business, now the exclusive province of digital downloads, is booming like never before. Two big questions surround this sales explosion. First, how much are these revenues generating in the majors’ efforts to offset the precipitous declines in album sales? The labels are grossing 90 cents on each $1.29 download, with a robust profit margin resulting from the absence of physical goods, so there’s clearly big money to be made in this sector. Second, to what extent are albums being cannibalized by the ready availability of the very hits that once drove album sales? That brings us to Interscope’s Lady Gaga, who has the #2 and #5 top-selling singles for a year-to-date total of 5.2 million-plus, while her briskly selling album is now at 895k. These numbers stand in contrast to those of Atlantic’s Flo Rida and Interscope’s own Soulja Boy, whose massive singles sales dwarf their album totals. But how big a bite have Lady Gaga’s a la carte sales taken out of her album? If her singles were taken off the market, how many more albums would she sell? The same questions can be asked of the other three acts who are high on both the albums and singles leader boards year-to-date: Big Machine’s Taylor Swift, Disney’s Miley Cyrus/Hannah Montana and RCA’s Kelly Clarkson... It’s quite likely that Interscope’s Black Eyed Peas, whose album debuted this week with north of 300k units, will end the year with a double-double of their own; the group’s smash single has passed 2.5 million and shows no signs of slowing down… The Peas’ LP sold a whopping 130k last week at Target, which had a semi-exclusive, getting a “deluxe” version of the album in exchange for a massive ad buy, and pricing it at $9.98. Given the robust sales coming out of the Target promotion—the very antithesis of the company’s disastrous experience with the Guns N’ Roses-Best Buy exclusive—retail watchers expect to see similar deals with big-box retailers on major acts… Thanks in large part to Lady Gaga, Eminem (#3 LP, 1.05m), U2 (#5 LP, 925k) and the Black Eyed Peas, Jimmy Iovine’s IGA is once again on fire, as the label group regains its familiar perch at the top of the new-release marketshare chart with 8.34%, and most attribute the turnaround to Iovine having his head 100% back in the game. While 50 Cent and Dr. Dre remain TBD, Interscope insiders say the label will release a second Eminem album in the fourth quarter... IGA’s closest competitor is Columbia with 6%, as Steve Barnett’s team chalks up its fourth successful year in a row... Meanwhile, UMG retains its Big Four dominance in the U.S., while the U.K. company, headed by David Josephs under Lucian Grainge’s UMGI, has picked up nearly three percentage points to 36%… Warner Music has only one midyear Top 10 album in the #4 Twilight soundtrack, but the company is making a move that many are applauding as extremely shrewd in luring back onetime Warner Bros. staff producer Rob Cavallo to become the ranking creative executive for WMG, helming projects for both Atlantic and WB. Cavallo’s arrival could revive speculation that he’ll eventually replace Tom Whalley, whose West Coast operation is being characterized as “stale” by industry watchers, as the label’s share continues to slide, while the East Coast division is firing on all cylinders. The naming of Independent Label Group CEO Todd Moskowitz as WB EVP in an apparent effort to urbanize the label suggests that Bronfman and Cohen aren’t willing to accept the status quo in Burbank… As Irving Azoff and Michael Rapino returned to Washington this week to continue their testimony on behalf of the proposed Ticketmaster Entertainment-Live Nation merger, the Newark Star-Ledger reported that Bruce Springsteen had wrongly accused TME of holding back tickets for a New Jersey show earlier this year, the responsibility lying instead with Springsteen’s own camp. The fact that the story broke when it did caused some observers to note that the timing couldn’t have been better for the two embattled executives, who are engaged in a high-stakes spinning duel with opponents of the merger… Industry watchers were stunned to hear that Michael Jackson had renewed his relationship with Frank “Tookie” DiLeo, a Yetnikoff loyalist who’d transitioned from running Epic’s promotion department to managing Jackson in the post-Thriller years. There’s much speculation about who brought DiLeo in, and what specific role he’s now playing… Names in the Rumor Mill: Ronn Werre, John Frankenheimer, Gary Stiffelman, Jon Landau, Steve Berman, Ken Levitan and Jim Morey.