iTunes now accounts for 28 percent of all music sales in the US, up from 4 percent from last year according to NPD Group. Amazon and Walmart are now tied for second at 12 percent apiece.

The show that lifted her to fame is not even broadcast in the US, yet her album is doing gangbusters in the week it has been available.

Without a service like YouTube, this doesn’t happen, period. True, the rising average age of US music buyers and our love of the underdog likely helps create an environment where Boyle is the top seller of the year.
So I guess I’m qualifying for you: compelling back story and performance + online clicks combined with demographic realities + an imploding industry = the confluence of events that is the Susan Boyle Phenomenon. Best of luck to her!

Anybody buy the record? Is it any good?

Internet sensation Susan Boyle failed to win the top prize on “Britain’s Got Talent,” but the 48-year-old singer is poised to post the biggest one-week U.S. album-sales tally so far this year.

Ms. Boyle’s debut album, “I Dreamed a Dream,” has likely sold more than 650,000 copies since it went on sale on Nov. 24, according to estimates by people in the music industry. Nielsen SoundScan is to release a definitive tally Wednesday.

A great interview in The Wrap with one of the founders of the best music stores in the country. I want them to stay in business! I was particularly interested in their version of the internet revolution. We’ll have to watch and see if that palpable passion that one feels in-store can be translated to their online store. I have faith and wish them the very best of luck.

Since its inception in 1990, Amoeba Music has established itself as the mecca for independent music in L.A. Located in the heart of Hollywood on Sunset Boulevard, it offers a massive collection of diverse new and used vinyl LPs, CDs and DVDs. It also doubles as a popular live performance venue, hosting the likes of Paul McCartney and Elvis Costello for in-store concerts. Co-owner Marc Weinstein talked to TheWrap about how Amoeba has stayed in business, the place it serves in the L.A. community plans for its own online digital independent music store.

So are record stores really in as much trouble as everyone says?

Obviously, we are statistically. Big chains went under because of big corporate greed. They lost track of core customers and grew too big and expected to make a certain amount of profit. Virgins were almost like banks or something. They didn’t showcase the product. It was always just so sterile. But we feel like we’re strong in the L.A. market for many years to come.

What makes Amoeba different from other stores in L.A.?

We have so many people who love music on both sides of the counter. We don’t have a real corporate hierarchy. People really get the passion when they come in the store. It’s an infectious feeling.

Another thing is that L.A. is so unbelievably diverse, you can go into the store and see a diverse scene of music. A lot of collectors come in and buy hundreds of records off the wall, and lower-income families come in and buy VHS tapes. All kind of culture is being recycled.

Have sales dropped at all?

None in L.A. In San Francisco a little bit. Obviously if they stop manufacturing CDs, we’d be in trouble.

Do you sell a large portion of your music online?

We sell select titles on our website, but we keep it to recommending and suggesting at this point. That’s all the capability we have in terms of our mail-order department.

Any plans to expand on the Internet?

Yes. We’re launching our own digital store probably early next year. What we’re hoping to do is create ultimate indie version of a digital store with a lot of data and ways to look things up. I’ve had artists thank me for printing a bin card with their name on it so they look legit compared to other bands. In this case with digital, there’s an opportunity for independent artists to have their own store within Amoeba’s site. What makes me sad is that a lot of indie stores don’t have the ability to develop digital stores because it’s so darn expensive.

We’re also digitizing old artifacts and articles. Every single will have an original 45 sleeve. Eventually, there will be far more music online than is represented in our retail store. And we will also have a marketplace where you can not only hear stuff digitally, but buy a hard copy as well.

All of us are record collectors and the records on wall represent what we love.

As music sales continue to drop like they’re not so hot throughout the industry, Island Def Jam Music Group is jamming on a new business model: integrating brands into artists’ CD booklets.

The first deal, created for the Mariah Carey release Memoirs of an Imperfect Angel on Sept. 15, is a 34-page co-production with Elle magazine that includes lifestyle ads from Elizabeth Arden, Angel Champagne, Carmen Steffens, Le Métier de Beauté and the Bahamas Board of Tourism.

Providing the experiment goes well, the label is eyeing bigger brand deals for booklets of CDs by Rihanna, Bon Jovi, Kanye West and other artists.

The mini magazine contains Mariah-centric editorial (“VIP Access to Her Sexy Love Life,” “Amazing Closet,” “Recording Rituals”) and lifestyle advertising along with lyrics and other CD booklet elements. Elle contributed the editorial and designed the layout.

The booklets were created for the first run of U.S. CDs (1 million) and the first 500,000 overseas, said Jeff Straughn, svp-strategic marketing for Island Def Jam Music Group. It will also be available in a digital format for those who buy music online. A condensed version of the Mariah mag, sans the 14 pages of CD-specific material, will be inserted into 500,000 subscription copies of Elle’s October issue, which arrives mid-September.

“The idea was really simple thinking: ‘We sell millions of records, so you should advertise with us,’” said Antonio “L.A.” Reid, chairman, Island Def Jam Music Group, a unit of Universal Music Group. “My artists have substantial circulation—when you sell 2 million, 5 million, 8 million, that’s a lot of eyeballs. Most magazines aren’t as successful as those records.”
Carey was “very open” to the concept when Reid showed her a mock-up of the booklet in a magazine format that included brand imagery synonymous with her lifestyle.

Labels are looking for ways to eke out extra bucks, borrow equity and cut costs anywhere they can today. Year-to-date album sales were down 13.9 percent for the week ending July 19, 2009, compared with the period last year, according to Nielsen SoundScan (227 million units vs. 195.5 million units). Of those 2009 sales, 18.9 percent, or 41.9 million, were digital.

Ad revenues are subsidizing 100 percent of Island Records’ costs for the Carey booklet, but label execs also see the alliance as a way to expand distribution.

“We don’t have music retailers any more, so a smart consumer products company that understands the value in distributing music is going to restore the vitality of our business,” Reid speculated. “If we distribute music properly and if it’s done tastefully, it could be a huge profit center for all of us. That is the missing link—we need partnerships.”

To underscore the point: At one large retail establishment, partner Elizabeth Arden is allowing the label to cross-promote the release. The CD Memoirs of an Imperfect Angel will be merchandised directly outside Walmart’s music aisle with Carey’s new signature Arden fragrance, Forever, which has its ad on the booklet’s back cover. The CD and scent will also be displayed together in the beauty department.

Chris Brown’s people couldn’t have asked for better PR. Here’s hoping it doesn’t make people forget why he’s been shunned in the first place.

Over the last ten days (July 30, 2009), 12 million people have watched Jill Peterson and Kevin Heinz’s funky wedding march on YouTube, demonstrating the video site’s enduring viral power — and that (at least some) people from Minnesota have some pretty good dance moves.

Now YouTube, which is owned by Google, is pointing to the video as a sign that it is forging a positive and profitable relationship with the music industry. In a blog post this morning, the company said that the amateur video, set to the Chris Brown song “Forever,” had sent sales of the year-old song skyrocketing to #4 on the iTunes chart and #3 on Amazon’s MP3 store.

In the past, labels like Warner Music have sometime objected when people (or their cats) used copyrighted songs in homemade YouTube videos. Sony Music, Chris Brown’s label, used YouTube’s content management tools to claim the song and overlay a click-to-buy ad on the video, which directs viewers to download the song from either iTunes or Amazon (earning YouTube a commission).

YouTube is not specifying exactly how many sales the video is responsible for, but says the number of users clicking through to buy the song is twice the average of other videos on the site.

Anybody else notice that the video at the end now has a tag to encourage people to donate money to end violence? When I first watched the video on July 24 (and I will it admit, it brought tears to my eyes) there was no tag (and no “buy this song” overlay either.)

From the kids at NPR…

The Posies: How Do Bands Make Money Now?

July 29, 2009 – The Posies’ members were barely out of their teens when they got a major-label record deal and saw their power-pop records storm commercial radio. But that was 15 years ago, and they’ve been absent from the airwaves for a while now. Still, they’ve managed to continue making a living with music, even through fluctuations in the industry and in their own careers.

It might have been hard, a decade or so ago, to imagine The Posies’ Jon Auer and Ken Stringfellow hawking their own CDs behind a merch table before a show. They’re mingling with devoted fans at Brooklyn’s cavernous warehouse turned nightclub, The Bell House. Like Auer and Stringfellow themselves, the fans are approaching middle age.

“Do you sell T-shirts?” one fan asks dryly, before pulling out an incredibly ratty old Posies T-shirt for the musicians to sign.

That relic dates from an era defined by the music of Kurt Cobain, from the days when major labels raided Washington state’s nightclubs in search of the next Nirvana. The Posies were snapped up by Geffen slightly before Nirvana’s ascent, and they scored a few ’90s hits: “Dream All Day” and “Golden Blunders.” The Posies had songs in two definitive ’90s movies: Reality Bites and The Basketball Diaries.

“We made a lot of money,” Auer says. “I mean, I think we had a $250,000 publishing advance, and I think just off those two movies, we managed to recoup that entire advance and make money on top of that.”

But the band still owes Geffen money. At the time, Auer says, he was having too much fun being a rock star to pay attention to all the expenses label reps charged to the band’s account.

“If you look at what they send you — eventually — these amazing itemized statements, you’re gonna find every hotel room they ever stayed at,” Auer says. “I mean, if [an A&R guy] went and bought baseball cards, they probably put it on your account. It was amazing to sit down and look at and realize it was all on your dime, basically.”

Back To The Beginning

The Posies left Geffen in the late 1990s — not over money, but a lack of promotion. They went back to PopLlama, the small independent label where they’d first recorded an album called Failure, and released one called Success. It was made very cheaply, and Auer estimates it sold about 25,000 copies.

“I actually saw a check for that record that went in my pocket,” Auer says. “I never saw a check from the sales of any of the records I’ve made on the major labels.”

The band drifted apart and soon officially broke up. Income from the sale of Posies albums was not enough to live on. To this day, the money from sales from those Geffen recordings goes right back to the label. The band does get some performance royalties — when the two movies with their songs play on TV.

Better Living Through Diversification

Auer and Stringfellow began to support themselves by diversifying. They became producers, recording engineers and backup musicians for other bands — in Stringfellow’s case with R.E.M. and Snow Patrol, among many others.

Stringfellow says he makes a little more than $100,000 a year, although he’s paid mostly in euros. He lives in Paris and works with bands in Belgium, Holland and Norway, when he’s not with The Posies, who reunited four years ago.

“I’m the tour accountant and tour manager and travel agent and all that stuff, all the time, for all of these bands,” Stringfellow says. “It’s so insane.”

A Blur Of Work

The Posies never produced the kind of tune that gets played on classic rock or used in commercials — the kind of song that sends a stream of songwriting royalties back their way. So their lives are a blur of work: producing, managing and, of course, performing. Auer estimates that this three-stop tour will net each musician about $500 a day.

“We don’t tour with a bus these days,” he says. “We don’t have four-star hotel rooms. We’re not above rooming with each other if we have to.”

And they’re not above exploiting social media. Stringfellow basically runs a cottage industry for Posies fans from his laptop.

“I log in to Facebook, and in like 30 seconds, I have like 50 people in my chat windows,” he says. “And I answer their questions: ‘Oh, yeah, you wanna get that record? I’ve got a couple of those in stock.’ That kind of stuff.”

The Posies are signed now to a midsize label owned by Warner Music. But to a large degree, they’ve cut out the middleman. They sell their own recordings, manage their own tours. They have more control. This may be about money, Auer says, but what’s most important to him is making music.

“I love what I do and I get to do what I love,” he says. “That’s amazing currency in my estimation.”

From the NYT:

There was a time when most aspiring musicians had the same dream: to sign a deal with a major record label.

Now, with the structure of the music business shifting radically, some industry iconoclasts are sidestepping the music giants and inventing new ways for artists to make and market their music — without ever signing a traditional recording contract.

The latest effort comes from Brian Message, manager of the alternative band Radiohead, which gave away its last album, “In Rainbows,” on the Internet. His venture, called Polyphonic, which was announced this month, will look to invest a few hundred thousand dollars in new and rising artists who are not signed to record deals and then help them create their own direct links to audiences over the Internet.

“Artists are at the point where they realize going back to the old model doesn’t make any sense,” Mr. Message said. “There is a hunger for a new way of doing things.”

Polyphonic and similar new ventures are symptomatic of deep shifts in the music business. The major labels — Sony Music, Warner Music, EMI and Universal Music — no longer have such a firm grip on creating and selling professional music and minting hits with prime placement on the radio.

Much of that has to do with the rise of the Internet as a means of promoting and distributing music. Physical album sales fell 20 percent, to 362.6 million last year, according to Nielsen, while sales of individual digital tracks rose 27 percent, to 1.07 billion, failing to compensate for the drop. Mindful of these changes, in the last few years marquee musicians like Trent Reznor, the Beastie Boys and Barenaked Ladies have created their own artist-run labels and reaped significant rewards by keeping a larger share of their revenue.

Under the Polyphonic model, bands that receive investments from the firm will operate like start-up companies, recording their own music and choosing outside contractors to handle their publicity, merchandise and touring.

Instead of receiving an advance and then possibly reaping royalties later if they have a hit, musicians will share in all the profits from their music and touring. In another departure from tradition in the music business, they will also maintain ownership of their own copyrights and master recordings — meaning they and their heirs can keep earning money from their music.

“We are all witnessing major labels starting to shed artists that are hitting only 80,000 or 100,000 unit sales,” said Adam Driscoll, another Polyphonic founder and chief executive of the British media company MAMA Group. “Do a quick calculation on those sales, with an artist who can tour in multiple cities, and that is a good business. You can take that as a foundation and build on it.”

The third Polyphonic principal is Terry McBride, founder of the Vancouver-based management firm Nettwerk Music Group and manager of Barenaked Ladies.

The Polyphonic founders, who have provided the company with $20 million in seed financing, say they plan to invest around $300,000 in each band. The company will then guide musicians and their business managers — who will function a little like the band’s chief executive — to services like Topspin, which helps manage a band’s online presence, and TuneCore, a company that distributes music to online services like iTunes, Amazon and Napster.

The partners say they have been thinking about such a venture for several years. They recently tried to raise money for the company from venture capitalists in Silicon Valley, but met with initial skepticism.

“Returns on entertainment products when portfolios are small are typically very erratic,” said David Pakman, a partner at venture capital firm Venrock, which passed on the deal. Mr. Pakman doubted that Polyphonic and similar firms could produce the kind of returns on investment that venture firms typically look for.

Polyphonic, which will be based in London and in Nettwerk’s offices in New York and Los Angeles, says it plans to approach private investors again after it has proved its model works.