Doing More With Less — A Key Theme at NARM 2012
— The theme at NARM’s Music Biz 2012 conference was forced austerity.
“We’re doing more with less,” one major label executive said when asked how his company was doing.Outsourcing is one way to do more with less. Outsourcing lets labels and management companies build a team around an artist or project without hiring full-time staffers. The industry is filled with former record label staffers plying their trade as consultants. There are numerous startups — RootMusic, Official.fm, Moontoast — trying to help music companies market and sell music efficiently. Music Reports wants to help companies outsource their royalty accounting. A company like Mtheory provides marketing, strategic and back office services to artist managers, effectively freeing up managers to manage. The list goes on and on and gets larger and larger.
In a sense, the traditional music business has outsourced its search for revenues to other players. Brands have emerged as important sources of revenue and promotion. Multi-rights deals effectively outsource revenue generation outside the record label — rather than directly earn touring revenue as a promoter or manager, for example, a label may share in that revenue by contract.
Smaller companies need to work smarter, so it seemed more than appropriate that NARM got analytical this year with presentations and panels on how data and analytics can transform the music business. DigSin founder/CEO Jay Frank described an example of paying attention to the right metrics to gauge success (or lack of success). In a panel titled “Predictive vs. Reactive Metrics: How Data Can and Should Drive Sales,” Frank described a campaign that got a 3.5% click through rate at three cents per click. However, he was unable to get people to complete the desired action — signing up for a mailing list — and his cost per acquisition was $1.
Working with data can definitely help a company work smarter, but data means only as much as the people working with it. On the same panel, Concord Music Group’s Jason Feinberg urged companies to think about the results before collecting the data. “You have to know the question you’re looking to answer,” he said.
Mergers are a familiar way to do more with less. The Orchard announced its acquisition of digital distributor IRIS Distribution during the conference, bringing financial synergies to a type of company that depends on scale due to its relatively low margins. Universal Music Group’s acquisition of EMI Music’s recorded music division was less of a topic than one might have suspected, Katy Perry’s comment notwithstanding. People are taking a “wait and see” approach with European regulators, although nobody seemed to have the impression the deal wouldn’t get done.
Investors, Analysts React Well To Live Nation Q1 Earnings
— Investors and analysts have reacted positively to Live Nation’s first quarter earnings. The company’s shares rose 6.6% Thursday (the Dow rose 0.2% and the S&P 500 rose 0.3%) and another 0.7% Friday (the Dow the S&P 500 both fell 0.3%).
Analysts at Maxim Group reaffirm its buy rating on the company. “Given the changes in the ticketing and concerts business over the last three years, we are being conservative and are maintaining our FY12 revenue estimate of $5.4B (up 1% y/y), vs. the consensus estimate of $5.5B,” the company wrote in a note to investors, according to StreetInsider.com. “Our adjusted operating income (AOI) estimate is $477M (up 9% y/y) vs. consensus EBITDA estimate of $475M.”
Stifel Nicolaus analyst Benjamin Mogil maintained his “buy” rating and improved his estimate of full-year loss to 17 cents per share from 57 cents per share, according to CBSNews.com.
( StreetInsider.com, CBSNews.com)
EMI Proceeding With MP3tunes.com Lawsuit
— MP3tunes.com has filed for bankruptcy, but that won’t stop EMI from proceeding with its lawsuit against the company, according to CNET. The company explained its reasoning in a statement to CNET:
“While Robertson may believe that MP3tunes will be able to escape liability in the upcoming trial through this bankruptcy, Robertson himself is still a named defendant in the case and the Court has already determined that both he and MP3tunes have infringed EMI’s copyrights. As such, he is facing personal liability both for infringements that the Court has already determined have occurred and for the further alleged infringements that will be addressed at trial.”