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With all the talk about the iPhone, it was almost easy to forget Apple’s product portfolio is one of the treasure chests of industry.  They make great returns on the entire iPod line.  They do a robust business with iTunes.  And of course, there’s the computer line which has a devoted, loyal fan base and a solid profit margin.

Today after the close of market, to the legions of Apple fans, and hungry investors anxious for a benchmark to measure performance of technology and consumer products, Apple announced their earnings for their fiscal third quarter.  The numbers were strong, and buried in the guidance there were hints of new products to come.

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(Metue Celebrity Endorsement Lists are now live on the site. Read the article below or follow the links at the bottom of this article  for more information)

You can’t legally download a Beatles song online yet but you can hear “All You Need is Love” play on TV in support of Luvs diaper sales.   Put off by that? Change the channel but beware, across the channels, TV and radio, famed songs, and new releases from Janis Joplin (Mercedes) to Queen (Bohemian Rhapsody) to John Mellencamp (Our Country) all play in marketing campaigns.   The song Our Country even debuted in advertising months before it was available as a single.

We live in Billboard Nation; a consumer culture.  Celebrities looking to stay in the public eye can do it by selling products. They can market themselves and get paid to do it at the same time. Popular songs can be soundtracks to a sale.   Turn on the TV and that voice selling cars may be one you know (Kevin Spacey, Gary Sinese). Similarly open a magazine and chances are you’ll see a recognizable face on the pages promoting a product.  The guitar riff in a commercial? Not necessarily a jingle.

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The music industry is not a vision of health.  Global CD sales have fallen for seven straight years and debates about how to transition to a digital download world are raging; especially regarding Digital Rights Management technologies.

One of the few success stories among labels has been the Disney Music Group.  As previously reported by the LA Times, under the leadership of Disney Music Group Chairman Bob Cavallo, the one-time joke of the music industry has been on an upswing while the rest of the industry has been spiraling downward.

Disney’s Hollywood Records has found success by staying true to its roots: family entertainment and cross promotion with their other entertainment products.  Among their successes, the soundtracks for Disney Channel’s High School Musical sold 3.7m copies.  The Lizzie McGuire TV Soundtrack has sold more than 10.8m CDs since 2002. Soundtracks from the Hannah Montana series are on track to do just as well.

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In May, private equity firm Terra Firma put forward a bid to buyout and privatize "Big Four" music label EMI.  That bid was supported by EMI’s board but has been slow to gain shareholder approval amidst anticipation of rival bids from either Warner Music or a partnership assembled by former EMI CEO Jim Fifield.  (As of Tuesday Terra Firma said it had secured only 3.82% of shareholder approval for its $4.88b (GBP2.4b) bid for EMI Group, according to published reports)

The UK Takeover Panel, which oversees and regulates these transactions, set today as the put up, or walkaway, deadline for counteroffers.  It was extended from July 12.

With the deadline looming, and a bidding war not materializing, it’s looking like the deal with Terra Firma will go through after all.

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What a difference two months makes.

Two months ago, Palo Alto based social media network Imeem was being sued by Warner Music Group for copyright infringement.  Now two months later, all is forgotten.  The suit has been dismissed.  The two are partners.

Warner Music and Imeem announced Thursday they would offer the entire Warner music and video catalog for free ad-supported streaming through imeem.  Imeem, which has about 16m active users, is focused on letting its subscribers share playlists and discover content.

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In part one of a two part article published June 19th, subtitled, “Record sales are tanking and there’s no hope in sight: How it all went wrong ” Rolling Stone magazine indirectly decreed the end of the music labels (the Big 4 at least) and the end of the music business as the world has known it.

Quoted in the article, industry attorney Peter Paterno said unequivocally “the record business is over.  The labels have wonderful assets – they just can’t make money off them.”    The numbers presented support his, and the article’s, claim. In 2000, for example, the top ten albums in the US sold 60 million copies combined.  In 2006, the top ten sold only 25m.  Digital sales (of both songs and ringtones) meanwhile, while booming, are largely in single song increments where revenues and the margins are much lower.

It’s for certain, the industry, as it once was, is on life-support.  The Big 4 (Universal, Sony BMG, Warner, and EMI) control nearly 70% of music distribution but they’ve been caught between a mess of conflicting needs and ideologies: the competing demands of traditional retailers (who themselves fear the loss of their business), the interests of the artists, and, of course the entrenched thinking of the labels themselves.    It’s been a struggle to balance those interests and adapt to the changing dynamics of the music marketplace – particularly online sales. 

The question is, is Peter Paterno correct, and is the inference in the Rolling Stone article right?  Click to Read More

With sales numbers for the opening weekend of the iPhone expected to read like the returns of a summer blockbuster, today should be a good day for Apple but an article in the Wall Street Journal may cast a small cloud over what should be the start of a good week.

The Journal is reporting that Vivendi’s Universal Music (the biggest of the Big 4 record labels by some metrics)  is “considering notifying” Apple that they aren’t interested in a long-term renewal of their iTunes contract.   The article carefully uses the word “considering” and it cites its source as “a person familiar with the situation.”   With such phrasing, it’s not so much news as rumor and innuendo but it could still be enough to dampen the start of the week.

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