Record Clubs Take Another Step Toward Extinction
-- Once a major force in music sales, the record club has taken another step toward extinction. CD and DVD mail order company Columbia House and book-of-the-month club Doubleday Canada (not to be confused with Doubleday Canada Publishing Group) closed their doors in Canada on Tuesday. The entire staff was laid off after the parent company, DB Media Distribution Inc., filed for bankruptcy. The company's U.S. operations were not affected.
According to the website of the trustee, the bankruptcy "was taken in response to poor economic conditions." Anyone who even occasionally follows the music business over the last decade knows there is probably more to the story. More believable are the comments of a former employee to the Toronto Star: "People like to get it for free on the Internet" and the media Columbia House sold is now "obsolete."
DM Media is part of New York-based Direct Brands. In July 2008, Bertelsmann AG sold Direct Group North America, which included BMG Music Service, Columbia House and Book-of-the-Month Club, to private investment group Najafi Companies. Najafi renamed the group Direct Brands.
In the U.S., Columbia Music Club merged with BMG Music Club in 2005 and BMG Music Club closed in 2009. Direct Brands still markets videos in the U.S. under the Columbia House name. (Toronto Star, Billboard.biz)
A Unique Approach to the Pay-What-You-Want Model
-- Digital distribution allows all sorts of ways to sell products -- such as a donation-only videogame bundle that's reminiscent of Radiohead's "In Rainbows" giveaway. One gaming company has a unique and effective take on the "pay what you want" model. And they do it as well as any artist or label has done with MP3s.
On Tuesday, indie gaming company Wolfire Games brought back the Humble Indie Bundle, a package of five games for which consumers can download and pay what they wish. The consumer gets to decide which portion of the proceeds go to Wolfire and two nonprofit organizations, the Electronic Frontier Foundation and Child's Play Charity. Like the first bundle, released earlier this year, this second bundle contains DRM-free games that work with PC, Mac or Linux. Sold separately the five games would cost $85.
As of Wednesday morning, 64,099 people have paid $456,719 for the Humble Indie Bundle 2, an average of $7.13 per person. Linux users gave $13.56 each, followed by Mac users at $8.03 and PC users at $5.93. The bundle got off to a quick start on Tuesday by raising $200,000 in the first six hours.
Billboard spoke with Wolfire in March while the first Humble Indie Bundle was being offered. "We had a lot of scenarios in mind before we launched it, but the reality is better than we dared hope," co-founder Jeffrey Rosen said.
The first bundle ended up raising $1.27 million from 138,813 consumers, an average of $9.18 (just over $2 better than the $7.13 per person donation currently being received by the second bundle). Not only was Wolfram pleased with the money the first bundle raised, it greatly benefitted from a surge in awareness due to media coverage.
The fundraising page Wolfire puts together for its Humble Indie Bundle packages may not be within the reach of all labels or artists, but it should inspire them to think differently about ways to raise awareness and generate revenue. This is really an excellent case study on how to use direct-to-consumer channels. (Wired, Billboard.biz)
Lady Gaga Is Spotify's Most-Played Act of 2010
-- Lady Gaga topped Spotify's list of its most-played artists in the U.K. in 2010. Her song "Telephone" was the top song and her album "The Fame Monster" was the top album. She also landed "Bad Romance" at No. 3. The No. 2 track was "Airplanes" by B.o.B., featuring Hayley Williams. The No. 2 album was "Lungs," by Florence and the Machine, and the No. 3 album was "Sigh No More," by Mumford & Sons. (Spotify)
Another Record Store Closes
-- Record stores continue to close and leave consumers with fewer options for purchasing music. Nashville's f.y.e. store is closing to make room for a hotel. The building hosted Tower Records before it closed in December 2006. f.y.e. obtained a five-year lease on the location at auction. Now an area of Music City that had a thriving record store scene just a few years ago is reduced to three: Grimey's New and Pre-Loved Music and two downtown, Ernest Tubb Record Shop and the Lawrence Record Shop. (Nashville Post, Nashville Cream)
Said co-owner Doyle Davis to the Nashville Cream blog, "The only stores hanging in there and/or thriving are indies and I can't for the life of me imagine anybody opening a new record store but some delusionally passionate music fanatic, i.e. one of us." (Nashville Post, Nashville Cream)
'Tron' Soundtrack Lands In Top 10 with 70% Digital Share
-- It's not often that an album lands in the top 10 with a 70% digital share. But that's what the soundtrack to "Tron Legacy" (by Daft Punk) did this week. The soundtrack got only 30% of its 71,000 sales from the CD format. Its digital sales were helped by high visibility at the two major MP3 outlets. iTunes highlighted the pre-order last month. Upon its release, "Tron Legacy" was a Daily Deal at Amazon.com.