From acquisitions to ad-supported services, from retail to the road, a dozen headlines we’d bet the farm on in 2008:
Every Major Latin Label Tries A Revenue-Sharing Model
As music sales continue to decline, Latin labels are dramatically changing the way they do business, signing acts to deals that include some kind of revenue sharing. Already, Sony BMG Latin has launched Day 1, a talent development company that is part of its in-house operations and whose duties include concert promotion, while Universal has launched Global Talent Service, which will provide specific services tailored to each artist’s needs. By the end of 2008, we can expect all major Latin labels will either have similar structures in place or require that their artists sign deals that give the label a piece of the sponsorship, touring or endorsement action. —Leila Cobo
Facebook Unveils Ad-Supported Music Service
Subscription music services have yet to take off because most music fans just can’t wrap their head around the concept of paying a monthly fee for music they can no longer listen to if they end their contract. An ad-supported version could work better—but so far, ad revenue has been unable to support the cost of licensing. Enter Facebook. The social networking phenom is in dire need of a unified music strategy, and is taking a headstrong approach to monetizing its network with advertising. It could easily leverage its subscriber base for lucrative ad revenue and negotiate workable licensing fees with the labels. —Antony Bruno
Guy Hands Sells Off Part Of EMI Group
Six months after buying EMI Group might seem early to contemplate a sale, but the current credit squeeze might just force Terra Firma’s hand. CEO Guy Hands—since July, chairman of EMI—recently criticized EMI’s previous senior management for excessive non-core spending, particularly in the recorded-music division. That, on top of previously set targets for cutting £110 million ($223 million) from costs annually, could help prep a leaner, more attractive EMI for sale. And with music publishing delivering 70% of group profits from only 23% of revenue in the year ending March 31, 2007, which part of EMI would you keep? —Tom Ferguson
Urban Acts Opt For Digital Distribution
Traditionally the urban industry has been behind the curve in terms of understanding and taking advantage of the digital revolution. But with hip-hop clearly the champ of 2007’s ringtone race and with social-networking- savvy teenager Soulja Boy able to pick up 1 million-plus listeners and a major-label deal from his bedroom, a change is coming—and artists can be counted on to take it to the bank. Already, such forwarding-thinking chart-toppers as T-Pain are fashioning their own digitally distributed labels, following in the footsteps of pioneers like Prince and Public Enemy’s Chuck D. —Hillary Crosley & Gail Mitchell
For the full list of predictions, including some educated guesses on internet ad spending, Nashville’s indie scene, iTunes policies, the secondary ticket market and more, click here.
