The year will get off to a fast start as early 2010 will contain important events for numerous segments of the music industry. In retail, the holiday performance of Trans World will show whether or not the company has started to turn a corner. In ticketing and promotion, the Department of Justice's decision on the Ticketmaster-Live Nation merger will help decide the shape of the next decade. And in digital music, Apple will integrate Lala into its music products and unveil a product that could continue to transform how people experience music. Here's what to watch:

Record labels and distributors should be listening when Trans World shares its holiday season performance in early January (the company released its 2008 holiday performance on January 7, 2009). The company retains an important footprint in the CD business, but, the entertainment retailer has been a consistent money loser for the last three years. In the five-week period that ended 2008, the company suffered a 12% drop in comparable store sales. And in the quarter that contained the 2008 holiday season, Trans World lost over $9 million as sales dropped 24% to $344 million. The losses have mounted since then. The company lost $53 million in 39-week period ended October 31, 2009. The company operates the f.y.e., Coconuts, Spec's and Wherehouse chains and labels are, obviously, better off if Trans World finds its footing and keeps its hundreds of stores open. In any case, there will be fewer Trans World stores selling CDs next year. The company previously announced it plans to cut 125 underperforming stores by the end its fiscal year (end of January 2010), dropping its store count to 565 from 786 at the end of Q3 2008.

Live Events
Live Nation and Ticketmaster will get a decision from the Department of Justice in early 2010 on their proposed merger. The U.K. Competition Commission gave its approval for the merger last week. As tends to be the case, regulators are taking a close look at competition in the ticketing market. While regulators tend to worry about mergers' impact on competition and prices, what we've seen in the latter half of this decade is slightly greater competition and increasingly higher prices. Given the dynamics of the music industry, prices are not likely to drop. The shift from recorded music toward live events has given artists an opportunity to extract more value from live attendees. In other words, the higher cost of talent has helped drive ticket prices higher. That won't change even with greater ticketing competition. And because Live Nation's ticketing operations were so young, the merger will not add much to market concentration. What regulators seem less concerned about is the vertical integration of a ticketing and artist services company (Ticketmaster, with its Front Line artist management division) with a promoter (Live Nation). One thing the Department of Justice looks at in vertical mergers is whether the merger would require a company to enter one market (ticketing) in order to enter the other (promotion). It will also consider expected efficiencies (cost savings) of the merger, although there appear to be few in this case. Lastly, even though this is a new administration with new appointments at regulatory agencies, it should be noted that the Department of Justice rarely issues second requests (for additional information) and challenges very few mergers. Of the 1,726 mergers reported in 2008, the Federal Trade Commission challenged only 21 and the Department of Justice's Antitrust Division challenged only 16.

Two important items in early 2010 are about Apple: when will the company unveil its tablet PC and how the company makes use of Lala? The importance in Apple's interest in Lala is that it signals a shift in how Apple views downloadable media's role in its products and services. For six years, iTunes has sold downloads (most recently, some movie downloads are merely rented). In 2010, Apple may integrate streaming media into its product offerings. That would be a big step forward that would change how mainstream America stores, organizes and consumes media. Also, there have been ample reports in the media over the last two weeks that indicate Apple is preparing to unveil a touch screen tablet PC in early 2010. Such devices are usually heralded for the potential they hold for books and movies, but music should benefit from a new type of device. Enjoying music on a larger portable device would be as different to an iPod as a CD sleeve is to a gatefold album.