In what has to be the most memorable quote about our industry in recent memory, David Geffen -- during an event for the recent documentary about his towering career -- said "I'd kill myself" rather than get into the music business today.
He may not be speaking for all of us, but this is not a place for the faint of heart.
Yep, it's been another exciting and tumultuous year in the music business. But where 2011 was a year of tectonic shifts -- EMI was sold, Spotify launched in the U.S., the cloud wars got underway -- 2012 was a year of consolidation and contention. The new models are starting to take hold, and the battles over who gets how much of what have intensified.
After months of negotiations and even a day of testimony before Congress, the sale of EMI's recorded-music division to Universal and (earlier) its music publishing unit to a group of investors led by Sony/ATV were easily approved, albeit with some significant divestitures.
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Spotify sank its roots into the U.S. and other countries amid a highly skillful PR campaign and growing alarm about its payments -- yet the uncontested whipping boy of the streaming services/royalty issue was Pandora. Its success and popularity were countered by a bruising hearing on Capitol Hill and discontent over its payments, leading to a year-long stock-price rollercoaster ( beginning with a jump; falling hard earlier this month, peaking and dipping in between).
However, Spotify was able to put a happier face on the payment issue at a press conference in December that saw founder Daniel Ek orchestrating a détente between Napster-era foes Sean Parker and Metallica's Lars Ulrich, accompanied by the announcement that Metallica's music is now available on the service (intended subtext: You can trust Spotify). Amid it all, the company says it now has 5 million paying subscribers, with Ek repeatedly asserting that payments will grow as volume grows; and the assertion that Spotify doesn't cannibalize sales was stressed publicly by Universal's Rob Wells and Glassnote founder Daniel Glass, whose latest release from Mumford & Sons smashed Spotify's streaming record and still sold more than 600,000 units in its first week.
Possibly the most optimistic words on the subject came from WME's Marc Geiger at the Billboard FutureSound Conference when he said, "I know there's going to be a billion paying music subscribers at some point like there is for ISPs," Geiger said. "Historically, subscription costs rise... It's an exciting world." Indeed, even diehard digital holdouts AC/DC and Kid Rock caved, finally joining iTunes.
Throughout, multiple rights holders and affiliated organizations have insisted that no streaming services are paying sufficient royalties, and the issue has become so contentious that an editorial by NPR intern Emily White in which she admitted that she and most of her friends had hardly ever paid for music in their lives set off a firestorm of controversy and counter-editorials -- the several that appeared on this site are collected in this article -- to the extent that she practically went into hiding in the weeks afterward. The poor girl truly kicked a hornets' nest.
If there was single growth industry in the music business this year, it was almost unquestionably EDM. The genre underwent a gold rush that's summarized by a tour through some of our headlines this year: Live Nation bought Gary Richards' HARD Events as well as the company that owns the Creamfields festival; and partnered with the Sensation Festival; the Ultra Music Fest expanded to six international sites; the Electric Daisy festival expanded to the East Coast and brought $207 million into Las Vegas during its Carnival there; Swedish House Mafia sold out their farewell U.S. tour in minutes; the Ultra label teamed with Wynn Las Vegas for a series of releases; and, not to be outdone, billionaire/former SFX owner Robert Sillerman plunged into the genre, buying Donnie Disco Presents and Dayglo Productions -- and posing for a truly remarkable Billboard cover.
The genre has been so hot that it was the subject of an investors/promoter discussion panel at the Billboard Touring Conference, with Mark Cuban, Guggenheim Partners' Todd Boehly, SunTrust Robinson Humphrey's Charles Johnson, C3's Charlie Walker and others. If it's a fad -- and trends that rise this high eventually fall -- it's a very lucrative one right now.
Showing a profound confidence that the designer-headphones trend it created is no fad, Beats Electronics this year made big moves by consolidating its business and showing a marketing savvy that even outmatched Spotify's. It ended its partnership with Monster, took over the streaming service Mog (and enlisted Trent Reznor as a creative consultant to help), scored a guerilla marketing coup by getting its headphones on Olympic athletes without being an official sponsor, and threw a glossy press conference and pretty bangin' VMA party along the way. And not only did Dre easily top Forbes' " Hip-Hop Cash Kings" list, the mag named him the year's highest-paid musician as well.
Dre made headlines onstage as well, at the cornerstone event of another company that made big strides in 2012, Coachella. The festival successfully achieved the logistical nightmare of featuring the same lineup on two weekends (a feat they will do next year as well) and grossed more than $47 million in the process. They'll launch the first " S.S. Coachella" cruise later this month. And Dre scored headlines all over the world by bringing out Tupac -- albeit in digitally rendered form -- during his set at the festival, setting off all kinds of unpredecented business conversations and issues. Despite all that, at the Billboard Touring Conference in November, Paul Tollett and the other principals talked mostly about how financially disastrous their first festival was.
In the label world, the CEO-swapping that went on in 2011 brought with it some ripple effect, but there were changes all over. Particularly busy was Warner, where recorded-music chief Lyor Cohen and WB label president Todd Moscowitz stepped down and Joie Manda left to become president of Def Jam, but Cameron Strang stepped into a sweeping publishing/label role and longtime EMI publishing titan Jon Platt came as head of creative for Warner/Chappell. The Elektra tag-team of Fueled by Ramen founder John Janick and Mike Caren was split, with Janick leaving to become president of Interscope and Caren becoming Warner's worldwide head of A&R. The Elektra vacancy was soon filled in the wake of a coup at indie Dangerbird, which saw Jeff Castelaz leaving the company he cofounded and taking the Elektra helm in short order. Roadrunner was seriously downsized, with both founder Cees Wessels and longtime president Jonas Nachsin departing; Roadrunner promo head Mike Easterlin took over the operation of that label as well as Fueled by Ramen.
And that was just Warner! Over the past few months, Sony and Universal have been playing a tit-for-tat game of exec-swiping -- the latest officially announced moves have been Steve Barnett leaving Sony to take over Universal's new Capitol Label Group and Joel Klaiman leaving Universal to take some of Barnett's responsibilities as VP/GM of Columbia -- but the year's executive moves are neatly summed up in Ed Christman's article. Don't forget that the second annual Billboard Power 100 -- possibly the biggest topic of music-biz water-cooler conversation in the weeks before the Grammys -- is on track for early next year. Live Nation CEO Irving Azoff -- who took part in a memorable Q&A with Billboard editorial director Bill Werde at the Touring Conference this year -- topped the list, but in 2013 anything's possible.
Artist empowerment was one of the key themes of Azoff's talk at the conference, and it was also one of the key themes of the year. Many thousands of artists are learning to take greater control of their careers, but the year's poster children were singer/artiste Amanda Palmer (who raised a record $1 million for her next album on Kickstarter), comedian Louis CK (who sold more than $4.5 million in concert tickets on his website), and, surprisingly, Metallica, who gained control of their masters this month and immediately licensed them to Warner (for North America) and Universal (internationally).
And one of the most powerful avenues for artist empowerment is unquestionably YouTube. While he was an established artist in his native South Korea, PSY became a global phenomenon in a matter of weeks. His "Gangnam Style" is now the most-watched video in YouTube history and was singled out by Google CEO Larry Page during an earnings call as a glimpse of the future. While his association with Justin Bieber manager/ Schoolboy Records chief Scooter Braun certainly helped PSY Stateside, that didn't diminish Page's point. "Just flip a switch and get worldwide distribution, almost without doing any work," he said. "That's how we see the future. YouTube is going to be available everywhere."
Of course, ubiquity is exactly what Adele -- the person, currently on maternity leave, who not only had this year's biggest-selling album but is the reason why 2011 was the first positive album-sales year since 2004 -- is avoiding. But that certainly wasn't the case with just about everyone else on that chart, particularly Taylor Swift, who scored the year's biggest debut -- selling an incredible 2 albums every second for a 1.21 million debut week -- with " Red ," as well as Gotye, Drake, One Direction, Rihanna, Mumford and many of the other artists at the top of the year-end charts.
Adele had a characteristically classy sendoff by winning all six of the Grammys for which she was nominated and delivering a stellar performance of "Rolling in the Deep" at the show -- one that helped spur the biggest sales gain in SoundScan history -- but the Grammys were marred by the death of Whitney Houston on the night before the ceremony.
Nippy wasn't the only person we lost in 2012. Along with far too many artists, we lost industry figures like Dick Clark, Don Cornelius, Frank Barsalona, Frances Preston, Chris Lighty, Chris Stamp, Pete Fornatale, Pete Bennett, Tunc Erim,
Jim Marshall, George Marino, Donna Hilley, Alan Mintz, Brent Grulke, Steve Pokorny and far too many more.
We will miss them, but the music and the business will carry on long after all of us are gone. As I said at this time last year, music and its business are more present, more ubiquitous, and more available than ever before. Nothing breeds innovation like disruption, and we're seeing plenty of both. Anything goes.
We can't wait to see what 2013 will bring, and we can't wait to bring it to you.