Concert, recorded music sales crashed in 2010


Christopher Morris/ Variety 12/22/10

The U.S. music business closes 2010 in an atmosphere of continuing uncertainty and decline, as the events of the last 12 months evince more questions than answers about the industry’s future.

All four major music firms find themselves in transition as the year closes, but the longest shadow hangs over EMI Music.

Purchased in 2007 by U.K.-based Terra Firma Equity Partners, the company has been staggering under its crushing bank debt ever since. In what many saw as a desperate maneuver, Terra Firma sued its principal creditor, Citigroup, late last year, alleging the lender fraudulently inflated the sale price of EMI.

A federal jury rejected Terra Firma’s claim last month, and EMI — helmed by a succession of three CEOs over the past year, with publishing chief Roger Faxon taking the reins in June — must now brace for the possible sale of its label and publishing assets if Terra Firma defaults and Citigroup takes control.

All three of EMI’s competitors, meanwhile, have witnessed or will soon see major changes in their executive suites.

In January, former Universal Music Group chairman-CEO Lucian Grainge, who has served as co-CEO of UMG with Doug Morris since his February elevation, will take solo control amid predictions of layoffs at the long-running industry leader.

It is rumored that the 72-year-old Morris may move to Sony Music Entertainment, where CEO Rolf Schmidt-Holtz is expected to exit when his contract expires next year. A top Sony creative exec, RCA/Jive Label Group chairman-CEO Barry Weiss, ankled the division for a job at UMG.

At Warner Music Group, Tom Whalley was swept out as chairman-CEO of flagship Warner Bros. Records after almost a decade, succeeded by an exec team led by new chairman Rob Cavallo, WMG’s former chief creative officer and a top producer.

Album plunge

The latest round of musical chairs comes as recorded music sales continued a plunge that began in 2004. Moving into the fourth quarter of 2010, album sales were down 13%, according to Nielsen SoundScan; if holiday purchases don’t generate an uptick, this year’s drop could beat the 12.7% downturn of 2009.

The bottom fell out of the CD market years ago, but digital downloads, a growth market in recent years, began to stall in 2010. Total track sales are virtually flat to date this year vs. a gain of 12% last year, according to figures recently published by Billboard.

Piracy continues to plague the industry despite action like the court-ordered shutdown of LimeWire’s peer-to-peer service in November. As torrent sites proliferate, an illegal download of virtually any hit track is still just a mouse click away.

In terms of music’s valuation, it was a case of “how low can you go” this year, as’s Daily Deal pricing of hot new albums at $3.99 lofted some titles like Arcade Fire’s “The Suburbs” to the top of the charts.

In one case, online availability of one prominent catalog thrust CD prices into the basement: After the Beatles’ music was finally offered digitally via an Apple iTunes exclusive, Amazon offered remastered CDs of the group’s titles — launched in September 2009 at a full price of $18.98 — for just $7.99.

Concerts wobble

The concert business, which boomed in 2009 despite the country’s ongoing economic instability, was looked upon as the one area of the music sector that would be recession-proof in 2010.

It was amid a confident afterglow that the long-pending merger of concert promotion, venue and management giant Live Nation and ticketing behemoth Ticketmaster was completed in January.

Within months of the formation of the new Live Nation Entertainment entity, the touring market collapsed, as major treks by acts including U2, Christina Aguilera and the Eagles were either postponed or scaled back.

Year-end figures cited by Billboard’s live music editor Ray Waddell tracked a 26% decline in North American concert grosses and a 12% decrease in attendance.

At one point in July, Live Nation’s stock, which reached a 52-week high of almost $17, had fallen below $9.

Something ‘Glee’-ful

Could anything be counted on as a sure thing in a business filled with disarray? Yes, if it had the word “Glee” attached to it.

Fox’s top-rated musical comedy series proved the most reliable sales in 2010. On last week’s domestic album chart, “Glee” titles took two slots in the top 10 and seven in the top 200; two of those sets had been on the chart for more than a year.

Otherwise, the landscape was dominated by a mixture of rap, country and pop. Eminem had the biggest album of the year with a strong comeback, “Recovery” (3.1 million sold to date, according to Nielsen SoundScan). Country trio Lady Antebellum logged the second-biggest seller with its sophomore release “Need You Now” (2.9 million), while teen dream Justin Bieber’s second collection “My World 2.0” shifted 2.1 million.

The end of 2010 is playing out like a rerun of 2009, as Susan Boyle’s Christmas album “The Gift” dueled with Taylor Swift’s “Speak Now” at the apex of the chart.

The matronly, TV-bred Scottish singer’s “I Dreamed a Dream” and the young country-pop vocalist’s “Fearless” faced off during the last holiday shopping season.

Possibly the most troubling symptom at year’s end was the quick burnout of releases by acts with platinum track records.

By their fourth week in stores, fresh titles by Keith Urban, Rascal Flatts and Kid Rock — all megamovers in years past — were delivering weekly totals hovering just above the mid-five-figure range. Coming off one of the biggest albums of last year, the Black Eyed Peas found themselves in similar straits.

Rock is dead?

Pop (and its hyphenate relation country-pop) ruled the charts. There were no new rock acts to speak of with any significant sales. Television was the dominant medium for the exposure of new music (with a big assist from its Internet-based relatives Vevo and YouTube).

And, as it was before Elvis Pres-ley and the Beatles took the stage, the professional songwriter — in a new-millennium incarnation as songwriter-producer — dominated as a commercial force.

Listeners snapped up songs by Katy Perry, Ke$ha, B.o.B., Lady Gaga, Cee Lo Green and Mike Posner, but Dr. Luke, Red-One and Bruno Mars were the true powers behind these musical thrones.


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