Category / Industry Perspective

Adam Lambert’s Star Power from an industry perspective 61 Single premiere, Sony, Michael Jackson, 2012 trailer, marketing, media snowball, controversy October 30, 2009 at 12:58 pm

I imagine everyone knows that Adam’s excellent first single from the CD premiered this morning on Ryan Seacrest’s show http://blogs.wsj.com/speakeasy/2009/10/30/adam-lamberts-first-single-for-your-entertainment-debuts-on-ryan-seacrest/… great that RCA and Adam decided to have the dance track to go along with the 2012 track as we talked about recently!

In my last message, I talked about how exciting it’s been that Adam has been embraced by the top of not only RCA, but also of Sony — Michael Jackson’s “This Is It” is a Sony motion picture (they also have MJJ’s recordings, but acquisition of the rights to the film was a separate matter; it’s been reported they bid $60 million against other studios for the distribution rights and it was a great deal. That’s one of the reasons I started a Business of MJJ thread in this forum… I knew Sony/RCA was the probable label for Adam so I wanted to explain more about MJJ as a precursor to Adam). With Adam’s trailer preceding the film worldwide, cool how this has all tied in, isn’t it?

Marketing is very much a two way street… fan interest creates media interest and if everything goes well (depending on your point of view) it snowballs. (Balloon Boy was also a snowball and that’s an example of how not every snowball is, well, white :). Frank Rich of the NY Times has an interesting piece about the rise of “instafame” http://www.nytimes.com/2009/10/25/opinion/25rich.html?em: “Richard Heene is the inevitable product of this reigning culture, where “news,” “reality” television and reality itself are hopelessly scrambled and the warp-speed imperatives of cable-Internet competition allow no time for fact checking.” (I’m not taking any political position here, it’s just illustrative of the cultural circumstances going on.)

Someone involved in the online research industry posted here a while back and I wrote a detailed reply about online social networking, the history and challenges of internet music downloads and the changes in promotion and marketing; I think that answers a lot of the questions but overall, we’re in the middle of a seismic shift in consumer marketing and interaction and Adam is in the right place and the right time and that’s awesome. (That’s one of the reasons I mentioned I sincerely believe Adam’s trajectory is as exciting in many ways as Britney’s introduction in 2000 from a marketing, press and fan standpoint).

Adam’s uniqueness and, yes, Star Power, captivated the imagination of people worldwide and as you’ve been here from the beginning I’m sure you’re not surprised to see how it’s grown and blossomed. As I’ve mentioned throughout the journey, the biggest part of course is Adam himself — being true to his creative instincts, having a unique style and presentation, knowing his “character” and, thanks to God and his parents, extraordinary talent. But his management and record company were and are equally important. Clearly Adam became a priority to Sony (and that’s not to take away from any other Artist, I respect and admire anyone who gets a recording contract because that’s so difficult in this day and age) and as a result Adam was given access to the finest people in the industry (which of course he made the most of… introductions only work if there’s chemistry and mutual respect). So if Luck can be defined as “where opportunity meets preparation,” I think Adam is Lucky to the 10th power.

Because there’s such fan/consumer demand for Adam (using the definition of Black Swan is fine, but sounds like an online researcher, I’d just call it tremendous, focused, multi demo interest), media follows (and that includes radio stations). I’ve read about people saying not to contact radio stations etc… while in general it’s true that pestering station managers can lead to taking tracks out of rotation, in this case Adam is a tsunami and I don’t think it’s going to matter: if the music is good (and every indication is it is) it’s going to be played relentlessly. This keeps feeding into the fans (and please keep in mind controversy sells, we’ve discussed that often, so that’s OK too), which feeds into the media and there’s your snowball.

Because the music industry has been in such dire straits, when Sony locked in to Adam I believe that the highest levels of power were directly involved because, ultimately and frankly, they believe he’ll make them a lot of money. And considering everything, I imagine you all would agree he was worth taking the risk/gamble on :). That’s how we’ve gotten to where we are; decisions were made to prioritize Adam and plans that were put in place that are unfolding exactly as we’ve been discussing.

Again, because Adam’s not concerned about it, I’d imagine it’s fun for the label and management to have all these somewhat controversial events: the Details photos, the album cover, etc. Fun because it’s provoking reactions, getting attention and generating reactions. So many talent teams (that includes the Artist, management, agents, lawyers and their media partners) are trying to be “politically correct” that it’s, well, boring. And who wants to talk about that? Give people juice and they’ll be talking even if it’s just razzle dazzle with no substance (see Levi Johnston, by the way good for him, he’s made a big Alaskan snowball up there and like it or not you’re talking about him). The best part though is when the juice delivers — that turns Mr. Warhol’s overused “15 minutes of fame” into a lifetime of accomplishments. Adam keeps delivering and the media spigot (which we discussed needed to be closed a bit to prevent overexposure which was the right move) is opening — as Disney says at Splash Mountain, “Prepare to get wet!”

Happy Friday and here’s to a fun Halloween weekend! Best, Michael

Adam Lambert’s Star Power from an industry perspective 60 Bonus Tracks, Digital Editions, Dance Track, SNL, Rob Cavallo, Helping Others October 11, 2009 at 5:02 pm

Been around the world a few times since my last message but have been thinking of you all and excited about your messages and Adam’s tremendous progress!

I’m in the midst of conversations with RCA and others to help answer some of your questions, especially with respect to the different configurations of bonus tracks; as we’ve talked about, the music industry’s been changing so quickly that the traditional CD versus digital download revenue models are constantly being changed so history is not the best guide in this case. One announcement Apple made recently is that there will be “deluxe editions” on iTunes; the idea is to provide additional value with behind the scenes footage, cover art and other “value adds” that will enable record companies to charge more for their digital product. Whether Adam’s “Special Deluxe Edition” will be digital as well as traditional will be interesting to follow; but you can be sure that this project has the full and complete attention of Sony (RCA’s parent company) so I would expect amazing software and hardware opportunities.

From what I’m hearing, RCA is planning a hot dance track that will chart on Top 40 radio as Adam’s first single which will make it complementary with the 2012 track which is more in the Adult Contemporary category. Covering as many areas as possible is vital during the holidays since there is so much competition. I’ve heard he’s booked for Saturday Night Live, and recommend watching some of the Lady Gaga press track for clues on strategy (will he fight Madonna too? ;).

Adam has amazing collaborators; Rob Cavallo, who’s been working on Adam’s album, was just named Chief Creative Officer of the Warner Music Group. One of the most exciting parts of this journey is that Adam is such a unique and versatile artist that in addition to the primary focus of his debut CD, opportunities in television, film and other media are already on the radar and I’d expect to hear more about those around release time.

With respect to other 19 artists and the AI 8 family, it’s clear to see that the group is truly a family. I think it’s a tremendous testament to Adam’s artistic integrity that he’s doing so much to help other artists, and believing in karma I think he will be repaid in abundance. I also think that he is exceptionally smart, and at age 27 extremely knowledgeable about the entertainment industry and there is absolutely no doubt in my mind that he is fully in control of his career and is dedicated and focused on his personal success. For Adam to look out for 16 year old Allison Iraheta is as admirable as the incredible $229,000 Adam’s fans raised for donorschoose.org… there’s so much positive energy that I think this fall and winter will exceed all of our expectations. Go Adam!

Hope you’re having a wonderful Sunday and Happy Thanksgiving to our friends in Canada tomorrow!

Best, Michael

Adam Lambert’s Star Power from an industry perspective 59 AI CD releases, Holiday release timing, Black Friday September 2, 2009 at 4:18 pm

I’m back in the US and will be reading over all the great messages over Labor Day Weekend (can it really be here already?) and posting detailed replies to your excellent questions and comments. I’m heading to San Francisco and Los Angeles the week of September 14 and hope to have some fun news to report upon my return, as promised we’ll have more guests and analysis as we get closer to Adam’s CD release.

Thanks Julie for the background on AI CD releases; release dates and single drops are a combination of what the finished product contains and what other labels are releasing (like the way movies are scheduled — if a big action film is opening other action films will move out of the way but an adult drama may be “counterprogrammed”. If the Black Friday date is accurate (and I’m just seeing the information, we’ll be in contact with RCA) it’s a sign that they’re really happy with the progress and Adam’s potential. Keep in mind that the US release may not be day and date with international… Black Friday is somewhat of a US phenomenon but as we’ve discussed having these CD’s in stores for the holiday season is the top priority for 19 Entertainment. We’ll definitely take a look at the November release schedule and what other product is coming out, but I think it’s fair to say that RCA wouldn’t go with that date unless they had promo commitments from big retailers to support the release.

They haven’t started updating the website yet (thankfully :) but http://bfads.net/ is an excellent website that for several years has been “leaking” Black Friday ads well in advance. Originally the retailers went crazy, but now they realize how effective it is and most are very cooperative. It’s a terrific site to plan your holiday shopping and I guess it will provide some clues as time gets closer how the retailers plan to promote Adam’s album.

Looking forward to reading the messages and writing over the weekend, in the meantime thank you all so much for your kind comments and I hope you had a great Summer!

Best, Michael

Adam Lambert’s Star Power from an industry perspective 58 Paula leaving Idol, Nigel Lythgoe, Adam on stage, Idol tour review August 5, 2009 at 8:26 am

Hope you’re having a great August, I always look forward to checking in. We’re planning a lot of events for the Fall on nymichael.com with more featured guests and some surprises.

Stunning news about Paula; it’s disappointing they couldn’t work it out but that’s the nature of the business. As we talked about last month, on the one hand, Paula genuinely has been an important part of eight years of the show and she’ll be missed. But on the other hand, American Idol is bigger than any individual (that’s evident from all the international versions of the show). Here’s Nigel Lythgoe’s take:

Now to the Tour: I agree with everyone’s comments about seeing Adam live; it really does go back to the first message that started the whole topic, “Adam’s Star Power from an industry perspective.” From an industry perspective, in some ways it’s not fair to compare Adam with the rest of the group because he has so much theatrical experience. As on the show, his presence is in another dimension; but I do pay tribute to Allison for really showing tremendous growth and range. They’re such a big difference between being 27 years old and 16 years old and while during the series Allison’s age became an old joke, she really is remarkably impressive. While I wasn’t crazy about “Hey Jude” as the final song (both because it didn’t showcase his voice, and the song is pretty overdone), I’ve always liked Kris and thought he had a strong set. His “groove” is smaller than Adam’s, but he makes the most of it with his unique interpretations, friendliness and likability. I’m looking forward to all three of their albums in the fall.

It was my first Idol tour performance, and it was basically what I expected; I would have enjoyed seeing more interaction between the finalists, more creativity on the scenic design and direction (while I wouldn’t expect them to go as far as Britney’s flying rigging, since everyone’s there to get close to the cast, having a runway into the audience or bringing them in from the back of the stadium at points would have been cool), and, since the show is so fan driven, more interaction with the audience (either bringing some fans up on stage, or at least showing some of the fan artwork — my vote would be for St. Adam’s Shrine & Grotto :).

Adam’s set was outstanding and hearing him those notes live was thrilling. I did think the set was a bit ambitious considering he had such a limited amount of stage time; specifically, because Adam is such a unique artist I’m not sure if devoting so much time to David Bowie was as effective building the arc as he did during the series. I would have liked to see a bit of controversy — a “Ring of Fire” element that would generate heat. I could more easily see the Bowie medley in a full Adam concert than in a 15 minute block. But that being said (and there are a lot of cooks in the Idol tour kitchen), I continue to be confident that with the right material, production team, and promotion, Adam will be a global force for many years to come. It was well worth the time to go see the performance; just as we said on the American Idol message board and here, it’s been truly exciting to witness the beginning of a new superstar. In concert, Adam continued to reinforce why he generates such electricity and passion. Go Adam!

Best, Michael

Adam Lambert’s Star Power from an industry perspective 57 music clearances, electronic distribution, DMCA, DRM, iTunes, diminishing revenue, live performances, new media, opportunities July 15, 2009 at 2:26 pm

With huge thanks to Stacy Jenel Smith, you’ll see the answers to your questions are posted here at nymichael.com, there are a few others she’ll answer later and we’ll update the message.

With respect to music clearances, as you may have seen in my referenced blog post Adam Lambert’s Star Power from an industry perspective 4 any musical material that is broadcast requires clearance. It’s also true that any visual likeness or copyright references need to be cleared (that’s why you’ll see in the rules that contestants when they audition may not wear T-shirts with celebrity photos and/or corporate logos; that’s also why you’ll see brand names blacked out). Obtaining clearances can be somewhat complex and time-consuming, so my expectation is that because of the number of contestants there are preapproved song lists all along the way. With eight years of history, 19 Entertainment has a pretty clear idea of material that may present an issue (like “One” — you’ve all heard the story about Bono). American Idol is such a powerful brand that most publishers are delighted to participate because of the enormous exposure their material will receive, but there are exceptions. Because the production schedule is so tight, if the contestants can select a song that’s preapproved, it’s one less action item for the AI team.

Welcome to our new members for joining us! Your questions are fascinating, and as a company in the nexus of technology and entertainment perhaps I can provide a bit of insight. My answer is bifurcated because there’s a difference between audio presentation and audio/visual presentation (which is addressed in the previous blog post).

With respect to straight audio, the music industry faced very complex challenges when consumers were first able to copy and distribute music electronically. Two precedents that were invoked were the original Betamax ruling, and the “common carrier” rules. The Betamax ruling (http://en.wikipedia.org/wiki/Sony_Corp._of_America_v._Universal_City_Studios,_Inc.) basically acknowledged the right of consumers to copy intellectual property for their personal use. As modem speeds and technology improved and increased (and we’re talking mid-90s at this point), there was a great concern as to what rights and remedies the music industry had. Simultaneously, online services like AOL, Prodigy, CompuServe and others operated under what’s known as “common carrier” which basically claims that a network is not responsible for individual content as long as there is no arbitrary moderation. This is the stance of, say, AT&T, with respect to 900 services. This concept is integrated into what’s known as “Safe Harbor” and the Digital Millennium Copyright Act (DMCA), which continues to be the basis upon which online services/providers disclaim responsibility (until they are notified as you’ll see in most websites’ terms and conditions, including here at nymichael.com).

At the same time, remember that because the Internet was so new many of the executives in the music industry were not online. Many of the senior officers were older individuals who were steeped in the traditional music industry. I can’t tell you how many times I was told “we wish it will just go away.” But of course it didn’t, and then the bell began to ring that not only was there a important promotional platform, but also revenue potential. The Betamax issue still presented a challenge, so the industry utilized technologies called DRM, or Digital Rights Management, to protect individual files from duplication. Unfortunately, with so many different types of hardware and software, often DRM created more of a burden than a benefit. The result was the proliferation of services like Napster, which using peer-to-peer technology facilitated unauthorized duplication of music. So the question became, “Is it better to receive something or nothing?”

Then along came Apple with iTunes. For the first time, there was a meaningful way to sell musical content in a proprietary environment, allowing control and revenue. This was an astonishing breakthrough that set the stage for the transformation of the music industry. But because of the continuing concern over duplication, iTunes initially was restricted to including DRM on all tracks; this created the same problem of portability and consumer choice (if you buy a song, it makes sense that you should be able to hear it anywhere you want). So now we’re seeing the removal of DRM on musical tracks (on iTunes, Amazon.com and other services). I mention all of this to provide a perspective that this is a moving target — technology improves, download speeds increase, and business models change. What record companies are seeing is that the sale of traditional CDs has been greatly diminished because consumers can cherry pick individual tracks. But as with everything in new media, the Genie does not go back in the bottle, so they’ll need to find creative and innovative ways to supplement revenue. At the moment, revenue derived from the sale of digital tracks is less than the drop in traditional sales, which is why there’s such worry in the industry.

So we’re still dealing with the business model issues of individual digital tracks. But along the way came part two… increasing hardware storage capacity and bandwidth speeds began to allow video to be downloaded and shared in a short amount of time. On the one hand, media conglomerates knew this was coming, but on the other there was (and is) no clear-cut business model that replaces traditional television advertising revenue. As you’ll see if you search for news on last week’s Sun Valley conference, this issue is paramount in the minds of media companies. Truly, their survival as we know it is at stake. Until there’s a way to induce consumers to pay for content, earnings will be severely impacted, and some companies may not survive (Sony’s Sir Howard Stinger and Fox’s Rupert Murdoch discuss this complex scenario).

Sorry this is so lengthy but it’s the prelude to the question. Because of the complexities of music clearance for broadcast (including, importantly, international clearance — with the internet’s global availability, as has been discussed in several blog entries, straight music tracks are often not available on iTunes America for international listeners), and the lack of a profitable business model, there isn’t enough of an incentive yet. As you’ve seen, most music videos are made available on YouTube and other official channels; but only now are ads beginning to be delivered within and around program content. Until there is a clear path to financial benefit, media companies are going to be hesitant to spend dwindling resources on the creation of digital content.

The final complication in your question is that live performances add yet another layer of complexity, because now you need to deal with the unions that are producing the physical production (as well as the music clearance rights as well as the broadcast rights). Some very cool developments are happening in this area — – for example, an innovative company is producing on-the-fly performances of superstars like Elton John, where you can buy video and audio of that night’s performance before you leave the stadium. We’re moving in that direction, but ever so cautiously, because if you can buy Elton John’s concert, it’s unclear whether you’ll still buy a ticket to the live show. Does that make sense?

I’m totally in agreement with you that there’s an important need to utilize new media more comprehensively in the promotion and sale of audio and visual content. As you mention, the proliferation of new hardware (handheld devices, connectors between PC’s and TVs, remote access to stored content like Slingbox) and convergence present great new opportunities. But the question is, how do you make money? That billion-dollar question is what marketing and production people like yourself need to and are considering. Looking at it from a promotional standpoint, I think we’re seeing a lot of forward motion in the sophistication of new media marketing; but when it comes to that “magic moment” where money changes hands, it’s still elusive, and therefore not at the highest level of priority.

(There’s a great line in the musical “You’re a Good Man, Charlie Brown” — after a long, complex soliloquy by another character, Patty pauses, reflects, and then replies, “We had spaghetti at our house three times this week!” :) My point is I understand this is more complex than many of you are interested in, and as you can imagine it took some time to prepare, but I feel that that’s the mission of this project, and I hope this is of some interest and benefit.

The last point I’d like to make is that I truly believe that Adam presents one of the best possible and most marketable new media opportunities. Between the vast demographic fan base he has, and the global popularity he’s demonstrated, there is huge potential to create and promote exciting and innovative new projects online. I’m eagerly looking forward to watching his online world unfold, and really appreciate everyone’s contributions here in keeping us all posted on new developments.

Congratulations again Adam and everyone on his team for making this so fun and exciting!

Best, Michael

Adam Lambert’s Star Power from an industry perspective 56 Simon Cowell, Publishing, Mechanical Royalties June 30, 2009 at 11:33 am

A quick bit about the business of American Idol… as we’ve discussed, Simon Cowell’s contract doesn’t come up until next year (in 2005, when he settled with Simon Fuller, the creator of AI, in connection with The X Factor, he agreed to participate through AI9 and that’s why his company Syco basically has the first option on recording agreements for Finalists like Adam). But negotiations are well underway apparently. I wouldn’t bet the ranch on these numbers; when figures like these are leaked there’s usually an agenda. The Post is sourcing The Guardian UK but we hasn’t found the original story. But mainstream media is picking it up (the “snowball effect” we talked about last month), has some interesting ballpark numbers, and provides some further insight on the enormous business of American Idol.

http://www.nypost.com/seven/06302009/tv/enormous_money_176757.htm

“Cowell, who reportedly made $36 million last year for judging the hit competition show, has been offered three or four times that amount — between $100 million and $144 million per year — by co-producers Fox and 19 Entertainment to stick with “Idol” when his contract expires next May, according to The Guardian, a London newpaper. … While $36 million may seem like a lot of money for five months worth of snarky comments and eye-rolls, it’s only a fraction of the estimated $900 million that “Idol” rakes in a year. As the lynchpin of the show — without him there would be no one to hate and no dramatic tension with Paula Abdul — Cowell believes he’s due for a raise.”

By the way, Paramount picked up his project, a movie about the life of Paul Potts, the amazing cell phone salesman who won Britain’s Got Talent (http://www.guardian.co.uk/film/2008/jun/24/news.culture).

Best, Michael

This follow-up post is from July 1, 2009 at 2:18 pm:

With respect to musical compositions, once songs are registered with the performing rights agencies (most commonly ASCAP or BMI, for example Michael Jackson’s song are BMI) anyone can record them, no permission is specifically needed as long as the record company pays for a “mechanical license.” The procedure is generally to simply request a license at a mechanical rate which is affordable. The rate today is 9.5 cents up from 9.2 and it’s not unusual to request a ¾ rate for all audio uses of the recording (that requires permission, paying a reduced “statutory rate”). That means that when a track is sold, the publisher receives 9.5 cents from the sale of the track. Search for Dina LaPolt in blog post 35 on the home page for more about iTunes royalties breakdowns. Most of the larger publishers are represented by Harry Fox Agency and they require that you use their form of mechanical license.

What that means is that Sony or anyone else can record published compositions by Adam, they just need to pay the mechanical rate (and other rights, including live performances, new media, etc… I’m trying to answer as simply as possible :). So there wouldn’t be a restriction about performing compositions, Sony wouldn’t even need approval as long unless they want a discount from the “statutory rate.” Not to dwell on Michael Jackson, but this is what caused the rift with Paul McCartney - Michael outbid Sir Paul on the ATV catalog. As Sir Paul put it, “You know what doesn’t feel very good,” McCartney said as recently as 2006, “is going on tour and paying to sing all my songs. Every time I sing ‘Hey Jude,’ I’ve got to pay someone.” Here’s a recent ABC News story about this matter: http://abcnews.go.com/print?id=7952215

If you have an interest in the music industry, by far the best resource is called “This Business of Music” http://www.amazon.com/gp/product/0823077233/ref=pd_lpo_k2_dp_sr_1?pf_rd_p=304485901&pf_rd_s=lpo-top-stripe-1&pf_rd_t=201&pf_rd_i=0823077284&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=1AC5DMJMT6RA8B8NGJXN - it’s the definitive guide to the recording industry and while technical it’s a must read for anyone interested in the industry.

Have a great day! Best, Michael

This follow-up post is from July 3, 2009 at 2:06 am:

A mechanical royalty is for recordings, a different set of rights/permissions are involved for television. (Please see my Blog post 4, http://nymichael.com/2009/03/27/adam-lamberts-star-power-from-an-industry-perspective-4-music-clearances-publishing-rights-show-production-entertainment/, I cover the five rights of copyright and provide some specifics from AI — the Blog search feature is so helpful and I can’t thank the team enough! :) Basically, 19 clears compositions for broadcast (that’s why you read about lists of songs that have been cleared that the contestants need to pick from). Releases of live recordings from the TV show are with the broadcast licenses (plus mechanical), the “studio only” tracks are straight mechanicals.

Publishing is the most lucrative, and most complex, part of the industry. Now Artists are more savvy, but the recording companies have huge leverage. In the past, Artists had to sign away their publishing to get a deal — that’s why you’ll see so many people who didn’t really write songs being credited as writers (many Motown Artists among others were affected). With respect to the publishing history of the Beatles, my understanding is this is basically correct: http://ask.yahoo.com/20031210.html.

An overview of publishing and its importance is in this week’s Time Magazine http://www.time.com/time/arts/article/0,8599,1908185,00.html; that’s why I’ve been tying Michael Jackson into the discussion here — Sony is also Lady Gaga’s publisher and most likely will have Adam’s catalog as well.

Hope this is helpful.