Music News Bulletin - 05/12/08

AIM Advises Labels On Pinnacle
"U.K. independent labels trade body AIM has called an emergency meeting after independent distribution company Pinnacle Entertainment went into administration. Although calls at the company's HQ in Sidcup, Kent were not answered, accountancy firm BDO Stoy Hayward confirmed it had been appointed as the administrator today (Dec. 3). The move is roughly equivalent to Chapter 11 bankruptcy in the U.S. Following an initial review of the company, 94 staff have been made redundant.

Pinnacle claimed to distribute releases from more than 400 record labels, as well as DVDs and software. It handled releases by Dramatico, including Katie Melua, as well as Bella Union and One Little Indian. "The Katie Melua Collection" is one of the biggest current releases affected." [Billboard]

Pinnacle Collapse A 'Nightmare' For Indies
"U.K. independent labels' representatives have consulted a lawyer through trade body AIM after independent distribution company Pinnacle went into administration on Dec. 3, roughly equivalent to Chapter 11 bankruptcy in the U.S. Around 60 labels were represented at the meeting today (Dec. 4) at AIM's HQ in Chiswick, west London, along with authors' collecting society MCPS, iTunes and Pinnacle's digital management partner Consolidated Independent.

The mood was described as "very serious" by one attendee, although Cooking Vinyl founder and managing director Martin Goldschmidt tells Billboard.biz, "It's a horrible time but the meeting was very productive."
At least 300 physical release labels are affected and even more digital labels; U.S. acts affected include Sub Pop's Fleet Foxes, licensed to Bella Union in the U.K.

Label bosses consulted with barrister Philip Flower, a specialist in corporate insolvency. It has emerged that many labels are unhappy with the terms offered by the administrators BDO Stoy Hayward regarding the return of stock." [Billboard]

Pinnacle goes into administration
"Distributor Pinnacle has gone into administration, with the loss of 94 jobs. The company, which distributes labels such as Dramatico and One Little Indian, reportedly told staff the news this morning. Senior executives are believed to be in meetings this afternoon in an attempt to resolve the situation.

Staff are not answering phones at the company’s Sidcup headquarters and there is no indication on its website www.pinnacle-entertainment.co.uk. However, adminstrators Matthew Tait and David Gilbert at BDO Stoy Hayward confirmed the news this afternoon." [MusicWeek]

Amazon MP3 launches in the UK
"Amazon has soft launched its long-awaited MP3 store in the UK, offering MP3 downloads from all four of the majors and several independent labels at bargain prices. Amazon launched its MP3 store in the US late in 2007 and promised at Midem 2008 that it would roll this out globally by the end of the year.

The launch has been long rumoured, with early reports suggesting that it would launch in September. The site, which operates off the main Amazon.co.uk site, is competing on price, with albums such as Take That’s The Circus available for just £3. Hits such as Girls Alouds’ Promises are available at 59p. Tracks on the site are encoded using variable bit rates for maximum audio quality and smaller file sizes, aiming at an average of 256kbps." [MusicWeek]

Online seen claiming 41 pct share of U.S. music market
"Digital music sales account for 18 percent of the U.S. music market and that figure will grow to 41 percent in five years, Forrester Research said in a report released on Monday. The report titled "U.S. Music Forecast, 2008 to 2013" also forecast that 55 percent of U.S. online consumers will pay to download digital music in 2013.

JupiterResearch, a division of Massachusetts-based independent company Forrester Research, said in the report that growth in digital music sales will not compensate for declining CD sales, with the overall U.S. music market shrinking over the next five years from its current level of $10.2 billion to $9.8 billion.

The report also noted crossover between CD and digital music purchases. In a survey, researchers found that 64 percent of subscribers to digital music services and 57 percent of consumers who download music have bought a CD in a store in the past year.

The Forrester Research report comes as digital music sales have emerged as the main growth sector for the U.S. music industry. While online piracy has long accounted for the bulk of digital music downloads, the Forrester Research report noted that paying for music downloads is increasingly popular. The researchers also credited companies such as Amazon.com Inc with helping propel digital music sales by allowing consumers to buy digital music that can be transferred between different devices without restrictions." [Reuters]

Worst Industry Statement of 2008
"Seymour Stein, VP at Warner Music Group and founder of Sire Records, as quoted by the Globe and Mail: We blew it. The first major music labels were all phonograph manufacturers, but by the time the Beatles came along, most companies were no longer involved in the hardware. Had we remained in control of the hardware, we wouldn't be hurting as much as we are now. And the iPod would be ours.

This is a joke, right? I get his attempt at logic, but the argument is not only quite a stretch, it is a sad combination of wishful thinking and Monday morning quarterbacking. More realistic would be something like, "We should have got into management, ticketing, e-commerce and merchandise when we had the chance." Either way, such exercises are moot. No point talking about what could have been. Just worry about what is possible." [Coolfer]