DeathHammer

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One thing the RIAA really tried a few years back was to argue the point that anyone who buys a used CD should pay a small fee for royalties. I don't have a problem with greed, but stupid greed that will only serve to alienate your consumer base for a few nickels makes absolutely no sense.

http://www.signonsandiego.com/news/busines...b14usedcds.html

Royalties proposed for booming used market as new-CD sales stagnate

By Frank Green

UNION-TRIBUNE STAFF WRITER

June 14, 2002

What's the difference between a shiny new compact disc and one that's been unwrapped and played a few times?

To Lucy Estrella's ear, none. To her pocketbook, a lot.

"It's cheap to buy used discs. . . . They sound just the same as new ones," said Estrella, who browsed through the stacks at Off the Record in Hillcrest earlier this week. "I can buy two used ones for less than the price of a new one."

Such sentiments have struck sour notes in the recording industry, which is concerned about the growing retail presence of used-CD stores and Internet businesses such as Amazon.com, which sell both new and used recordings.

The industry worries that the expanding used market is cannibalizing new-CD sales, as well as promoting piracy by allowing consumers to buy, record and sell back discs while retaining their own digitally pristine copies.

One proposed remedy being debated by record label executives is federal legislation requiring used-CD retailers to pay royalties on secondary sales of albums.

A cover story in last week's issue of the music trade publication Billboard quoted several executives who said they favor the establishment of an agency that would exert a flat royalty rate – say, 6 percent or so – on retailers' sales of CDs sold over and over again.

The Recording Industry Association of America has not taken an official position on the issue.

You can see the boom in less-than-mint-condition merchandise in at least 40 record stores in San Diego County, including 17 Wherehouse Music outlets and 13 Music Trader shops. That's more than double the number of used-CD stores in the area in 1992.

Even music retail giant Tower Records has begun test-marketing the sale of used discs in Seattle, Berkeley and 11 other markets where it operates, although not here.

"We're responding to the competition in college towns," said Stan Gorman, Tower's chief operating officer.

Used-CD shops typically pay customers between $3 and $5 for their old discs, then sell them for $8 to $10. New CDs can be priced as high as $18 apiece.

The focus on the used-CD market comes at a time when new-CD sales continue to stagnate in the United States. Total sales last year were about $13 billion, unchanged from 2000.

Sales have been hurt largely by a surge in piracy, which the National Federation of the Phonographic Industry estimates has cost the music business $4.2 billion in lost revenue last year.

It is unclear how big the used-CD market is because many retailers are mom-and-pop entrepreneurs who do not report sales. There also is a large market in used product at swap meets.

A spokesman for the Recording Industry Association of America, which represents the major record labels, said it is especially concerned that many used CDs are being bought by people who "rip" the music using widely available CD-burner devices, then sell the used CDs back to the secondhand stores where they were originally purchased.

"That's an example of why labels are experimenting with copy-protection technology" that blocks duplication, said RIAA spokesman Jonathan Lamy.

But the idea of labels assessing part of the proceeds of used-CD sales is already drawing the wrath of independent record shop owners.

Phil Galloway, co-owner of Off the Record, said the proposal is another example of the record industry "shaking down" consumers for all it can get during a time of decline.

"On the first-time purchase, the label and the musician made their profit," noted Galloway, who with his business partner opened the first used-CD stores in San Diego County at the advent of the CD format in the mid-1980s. "You don't see royalties collected on used cars."

Galloway said royalty payments would force store owners to pass on the costs to customers.

Likewise, an executive at CD Warehouse Inc. – the Oklahoma City-based owner of the Music Trader chain – said the used-CD market helps to spur consumers' interest in artists' new releases.

"When Alanis Morissette's new album was released, we had a lot of customers in our stores looking for her (catalog album) 'Jagged Little Pill,' " said Matt Allen, the company's vice president.

CD Warehouse franchises and operates 289 used-CD shops in 35 states under the names Disc Go Round and CD Exchange, among other brands.

Allen said the industry's target audience has changed in recent years from college students trying to build inexpensive record collections to mostly male music fans between the ages of 18 and 34 looking for out-of-print and hard-to-find copies.

"We largely carry niche music that the Best Buys of the world don't have on their shelves anymore," Allen said.

Several customers shopping at the Music Trader on University Avenue this week said that although the prices for discs may be good, there are drawbacks to rummaging through the bins.

For one thing, the stores don't stock many new titles. And some major artists aren't represented at all.

"The program booklets are worn and torn a lot of times from overuse," said one shopper.

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Not sure how this news affects Heroes but all this upheaval can't be good. NBC was leaning heavily on Aaron Sorkin's Studio 60 to do well but I don't think it's ratings are great. This could also have a ripple effect on BSG.

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http://www.ibcnews.com/articles/viewarticle.jsp?id=75484

Update: NBC 2.0--Staffers Get Sugarcoated Spin

By Anne Becker, STAFF

(Broadcasting & Cable) _ Top-level NBC staffers convene in the new Today Show studio today for a 1 p.m. town hall meeting about the impending company-wide cuts. The meeting, which lasted about a half hour, was telecasfor lower level employeeon NBC's internal channels, the "JerrolChannels."

Bob Wright kicked it off with minimal comments before ceding the floor to Jeff Zucker for what one insider described as "sugar-coated" comments of his own. Questions that had been e-mailed in before or during the meeting were then read off by a young, male staffer and answered by ZuckerTV Group COO Randy FalcoTV Stations President Jay Ireland and NBC News President Steve Capus. The quartet gave little information, declining to name who was going and staying and how many would be cut from any given division.

Struggling under weak ad sales and profits, NBC Universal set a structuring plan to slash annual expenses by $750 million in part by cutting 700 jobs. The moves, which have been in the works for more than a year, were announced today by GE Vice Chairman and NBCU Chairman/CEO Bob Wright.

The plan, which the company is calling "NBCU 2.0," will streamline NBC U's news operations and drop pricey scripted dramas from the 8 p.m. hour on the network as NBCU redirects resources from analog to evolving digital businesses, according to the company and published reports.

Talk in New York is that the layoffs will begin as buyouts to interested parties.

Restructuring that will touch all of NBCU's divisions - broadcast, cable, movies, theme parks and others - is aimed at cutting annual administrative and operating expenses by $750 million by the end of 2008 and cutting the company's workforce by 5% in the same period. The company says reallocated expenses will lead to digital revenues that top $1 billion by 2009.

NBC U profit dropped 10 percent during ththird quarter, pulled down by lower ratings at NBC, parent company General Electric reported last week.

"Success in this business means quickly adjusting to and anticipating change," said Wright in a statement. "This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century."

Affecting the TV Group, cable network MSNBC will shutter its Secaucus, New Jersey operations and the channel will move to production facilities at NBC's 30 Rockefeller Plaza New York headquarters, and New Jersey--a move that has been talked about for years. The company is also consolidating news operations in California, creating a central facility in Burbank to house news ventures from NBC and Telemundo KNBC, KVEA and KWHY.

In its entertainment TV division, the company says it will reduce its "dependence on traditional content distribution methods and advertising models." That includes delivering programming on various digital distribution platforms, including its own broadband websites and iTunes. NBC also looking to ease off of scripted dramas, that can cost several millions of dollars per episode, in the 8 p.m. time slot in favor of less expensive game shows and other fare, according to the Wall Street Journal.

The network has struggled since falling from first place after losing top-rated shows Friends and Frasier. The network invested heavily in new programming this season and, despite bright spots which include the new drama Heroes, NBC has placed a solid third so far this TV season behind CBS and ABC most nights during primetime.

"We have to recognize that the changes of the next five years will dwarf the changes of the last 50," said NBC U TV Group CEO Jeff Zucker in a statement.

Changes elsewhere include a increased focus on Hispanic network Telemundo, consolidation of marketing departments within movie studio Universal Pictures, and cost cuts at the NBCU's theme parks in L.A. and Orlando, Fla.

Copyright The Associated Press 2006. All Rights Reserved

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