verve downsized

[robert h.]

2006 US sales numbers from an article in yesterday's Philadelphia Inquirer - album downloads- 32 million. Album CD sales 588 million. Don't buy the hype of the inevitability of downloads needing to replace CD's. Downloading is a singles, pop, disposable phenomenon.

It's not "inevitable" that downloading will replace CD's - IT'S ALREADY HAPPENED.

What you are seeing is the transition taking place. The physical product is being sold only to older demographic who are hanging on to the product they have been accustomed to, primarily carrying legacy musics, which they tend to enjoy buying over and over again.

Reality is quite simple. People today do not want product. They want CHOICE and SERVICE. They don't want albums. They want tunes. And they want them delivered to the carrier they choose.

The reason the industry is undergoing this transition is primarily that it has historically viewed itself as a provider of consumer packaged goods - marketed as such. Today, music is not a CPG, it is a service product and the labels have yet to fully come to terms with that.

Verve downsized for a simple reason. Sales could no longer support the staff size. Unfortunately, as the core buyers of physical product continue to age, there is simply not enough to support the staff size. Those that understand the new model will be successful.

Edited January 8, 2007 by robert h.

[felser]

2006 US sales numbers from an article in yesterday's Philadelphia Inquirer - album downloads- 32 million. Album CD sales 588 million. Don't buy the hype of the inevitability of downloads needing to replace CD's. Downloading is a singles, pop, disposable phenomenon.

It's not "inevitable" that downloading will replace CD's - IT'S ALREADY HAPPENED.

What you are seeing is the transition taking place. The physical product is being sold only to older demographic who are hanging on to the product they have been accustomed to, primarily carrying legacy musics, which they tend to enjoy buying over and over again.

Reality is quite simple. People today do not want product. They want CHOICE and SERVICE. They don't want albums. They want tunes. And they want them delivered to the carrier they choose.

The reason the industry is undergoing this transition is primarily that it has historically viewed itself as a provider of consumer packaged goods - marketed as such. Today, music is not a CPG, it is a service product and the labels have yet to fully come to terms with that.

Verve downsized for a simple reason. Sales could no longer support the staff size. Unfortunately, as the core buyers of physical product continue to age, there is simply not enough to support the staff size. Those that understand the new model will be successful.

I dunno. Still feels like when the industry tried to replace LP's with cheaper to produce cassettes in the 70's, using the same argument about portability, etc. LP's didn't go away until a superior archival form (CD's) was rolled out. If people want choice and service instead of product, why did CD's outsell album downloads 18-1 in '06? (and based on that stat, it mystifies me when you state that downloading has already replaced albums. Not sure what you base that statement on, but facts don't seem to be involved). Even single track downloads didn't outsell CD albums - though I grant you downloads make more sense for single track disposable pop for the youth culture catered to by that market. I'll grant you that I'm part of the "older demographic" being so easily dissed in your discussion. Me, I still consider myself People, and I want PRODUCT. I want albums. And I want them on CD. And, based even more on my rock/pop/soul interests than my jazz interest, I have trouble believing I'm all that alone in this. And I thnk there's still many of millions of dollars to be made for the companies who can grasp and properly address THAT reality.

Edited January 8, 2007 by felser

[Guest youmustbe]

How many of you post on this board by faxing in your comments? For that matter, how many of you still HAVE a fax machine?

[robert h.]

=

I dunno. Still feels like when the industry tried to replace LP's with cheaper to produce cassettes in the 70's, using the same argument about portability, etc. LP's didn't go away until a superior archival form (CD's) was rolled out.

Different era and different situation. People WANTED CD's - no more popping and crackling, no more side changes, smaller size, programmability (choice!) and portability were the motivators. To 99% of consumers, it was a very clear improvement with plenty of pentup demand.

If people want choice and service instead of product, why did CD's outsell album downloads 18-1 in '06? (and based on that stat, it mystifies me when you state that downloading has already replaced albums. Not sure what you base that statement on, but facts don't seem to be involved).

In every case of a tecnological replacement, the obsolete format experiences it's HIGHEST level of sales when it has been replaced and is obsolete! Think about it - VHS players hit their sales peak in 2003 - when it was obvious to even the most jaded that the VHS format had been replaced by DVD. Why? Because at that point the obsoleted product is a cheap commodity and all barriers to purchase are gone.

Even single track downloads didn't outsell CD albums - though I grant you downloads make more sense for single track disposable pop for the youth culture catered to by that market.

Again, LP's WAY outsold CD for at least the first 5 years after CD was introduced! You know as well as I do that replacement doesn't happen all at once - but that doesn't mean that it's not fully underway.

I'll grant you that I'm part of the "older demographic" being so easily dissed in your discussion.

You are perhaps a bit too sensitive. It wasn't dissing, but simply stating the truth - the CD buying demographic has skewed very heavily 40+ male, and is getting older all the time. Those folks are simply not buying new releases - they are buying the same older stuff they bought 30 years ago, and buying it over and over and over...until they get off that wagon.

Me, I still consider myself People, and I want PRODUCT. I want albums. And I want them on CD. And, based even more on my rock/pop/soul interests than my jazz interest, I have trouble believing I'm all that alone in this.

Unfortunately, the sales numbers tell the truth. You're not alone, but there's not enough of us to make for a very viable market.

And I think there's still many of millions of dollars to be made for the companies who can grasp and properly address THAT reality.

Unfortunately, there are not. That is why those companies are exiting the business and going where the dollars are.

[Dan Gould]

Let me suggest that you use

[felser]

Let me suggest that you use

so that people can easily tell what your comments are and where Felser's comments end.

Then

at the start of the next comment your responding too will keep everything clear.

I will grant, quotes or no, that Robert H.'s comments were well thought out and did address my previous comments. We'll see what shakes out. DVD's were a clear advantage over VHS, as CD's were over cassettes and LP's. I just don't see it with downloads. But then, I'm a 40+ male who doesn't often buy newly recorded releases

[The Magnificent Goldberg]

Nice thread. I keep seeing it and meaning to read it, but haven't until now.

One thing that was immediately noticeable about that article on 2006 sales was that Gospel and Latin music sales INCREASED.

I think that actually matches with Robert H's comments about sales of obsolete tech in the past. In the '60s, I recall a Billboard article about a record company that had a Latin hit and had to search around for a 78 press, because in the Barrio, where this single was selling, they didn't have too many 45 players and NEEDED 78s. The same has been true in Gospel - K7s and LPs remained the rule in that market for a lot longer than for other types of music.

But what that means is that if a section of the public really rejects a tech, then the industry has, does, and will provide in some other way. Of course, they may not do it for Jazz because its market isn't clearly located in a section of the community in the way that Gospel and Latin musics are. (And maybe that's part of the economic problem.)

MG

[The Magnificent Goldberg]

If it's a fantasy to hope for people to use their money to encourage and reward certain behaviors, then so be it. "Socially responsible investing" is not a fantasy. It's a means of empowerment.

Remember - it's your money to do with what you want. That gives you power, power to direct the course of society. Money is power, definitely. Certainly not the only type of power we have, but an immediately recognizable and difficult to deny power nevertheless. To surrender that power to the easy allure of an easy return that may have negatives social consequences (and this has damn little, if anything at all, to do with record companies and reissue programs, let me make that clear), is to give up your power, your voice, your leverage, just for the quick money. It's kinda like being a ho'.

And if you think your pimp is gonna care for you once he's gottten out of you all he can get, well sir, that's a fantasy.

Well, I suppose, but when you look at how markets actually move -- mostly through the transactions of truly enormous pension funds, university portfolios, mutual funds and hedge funds, there really isn't that much that concerned individuals can do to swing the market around, although one can invest responsibly at a personal level. Interestingly, there have in fact been lawsuits that ultimately forced all public universities to invest like "everybody else," rather than in a socially responsible way. I'd like to get figures on what the proportion of socially responsible mutual funds are compared to the entire market -- one recent estimate is it is about 3% of the value of the US market, but growing slightly. Here's a website to start you on your way: Socially responsible investing

Yeah, I know it's an uphill climb, to put it mildy. No illusions here. But it's a climb worth making. More unlikely turnarounds in public consciousness have happened.

If the principle that collective individual monies can be used to reward/punish certain "behaviors" is a fallacious one, then I recant. But I don't think that it is. And if it's not, then the rest, as a techno-futurist buddy of mine likes to put it, is "just a matter of engineering".

Yes, it IS an uphill climb. But I've banked with the Co-op - the UK's pioneer in socially responsible investment - for over 30 years now and I've never regretted it. But the Co-op's the smallest of the UK clearing banks. And I don't see it moving to #1 any time soon.

What would be a bit less of an uphill climb would be a more level playing field in terms of international trade. It can, indeed, be shown that free trade benefits the parties at both ends. But that is based on an assumption that ain't true - that the third world end of the trade is not operating on an exploitative (either personnel- or environment-wise) model. But third world governments have no interest in operating under the same rules about child labour etc as we do, partly because they fear it would mean the end of such investment as they're getting now (probably true) and partly because those who run the governments are corrupt and in the pockets of the multi-nationals. This is a situation that western politicians have allowed to go on unchecked because supporting these corrupt governments seemed a good idea, particularly in the cold war, but also because they, too, have been suborned by the multinationals.

MG

[The Magnificent Goldberg]

But how does socially responsible investment get Verve to reissue the stuff? Well, it doesn't. It STILL depends on there being a Jazz market out there which can produce returns which can command a share of non-infinite investment moneys. Now, insofar as that Jazz market is served by half a dozen or more different producing divisions (US/Canada, Europe, Japan, other Far East, South Africa, Australasia etc), each of which has to produce a return on their particular fraction of a small fraction of a total market, then it looks extremely difficult for Verve (or any of the other multinationals' jazz arms) to win the internal competition for investments. The move towards a non-product thing must improve the prospects, if companies like Universal can get the regional thing out of their systems - for example, profits would be higher without any extra costs for Universal, were they to start making their downloads through emusic available in Europe, instead of just the US. Obviously Universal Europe doesn't want that to happen (yet?). (GRRRR!)

MG

[felser]

But how does socially responsible investment get Verve to reissue the stuff? Well, it doesn't. It STILL depends on there being a Jazz market out there which can produce returns which can command a share of non-infinite investment moneys. Now, insofar as that Jazz market is served by half a dozen or more different producing divisions (US/Canada, Europe, Japan, other Far East, South Africa, Australasia etc), each of which has to produce a return on their particular fraction of a small fraction of a total market, then it looks extremely difficult for Verve (or any of the other multinationals' jazz arms) to win the internal competition for investments. The move towards a non-product thing must improve the prospects, if companies like Universal can get the regional thing out of their systems - for example, profits would be higher without any extra costs for Universal, were they to start making their downloads through emusic available in Europe, instead of just the US. Obviously Universal Europe doesn't want that to happen (yet?). (GRRRR!)

MG

Jazz CD reissues seem to still be flooding out in Japan, for whatever $ reason.

[Teasing the Korean]

I forgot to mention the Oliver Nelson Verve album featuring The Sound of Feeling. Something from that would be great for the "Verve Downsized" series, although we may want to reserve that one for Volume 2. I'll have to think about it.

[BruceH]

If you think Verve's a mess now, you should have seen it 30-35 years ago...

If this is indeed the end of a cycle, I can only say that things have been left immeasurably better than they were found.

Verve may have been a mess then, but I've always liked those double-LP re-issues they came out with in the 70's.

[JSngry]

Me too. That was the beginning of the upsurge. Before then, the label was a disoriented mess.

[robert h.]

But how does socially responsible investment get Verve to reissue the stuff? Well, it doesn't. It STILL depends on there being a Jazz market out there which can produce returns which can command a share of non-infinite investment moneys. Now, insofar as that Jazz market is served by half a dozen or more different producing divisions (US/Canada, Europe, Japan, other Far East, South Africa, Australasia etc), each of which has to produce a return on their particular fraction of a small fraction of a total market, then it looks extremely difficult for Verve (or any of the other multinationals' jazz arms) to win the internal competition for investments. The move towards a non-product thing must improve the prospects, if companies like Universal can get the regional thing out of their systems - for example, profits would be higher without any extra costs for Universal, were they to start making their downloads through emusic available in Europe, instead of just the US. Obviously Universal Europe doesn't want that to happen (yet?). (GRRRR!)

MG

Jazz CD reissues seem to still be flooding out in Japan, for whatever $ reason.

YES! This is for several very interesting reasons:

1. CD's are much higher priced in Japan - higher margin.

2. CD's in Japan are produced in very small quantities - 3,000 to 5,000 usually - hence, they don't need to see as much (particularly given the higher margin).

3. The Japanese have figured out that they can sell these high quality reissues worldwide, because of the perceived higher quality and because they are limited - so selling 5,000 at a relatively high price is not a problem.

4. Since the Japanese don't need to sell high numbers , they can aim at niche markets that American companies economically can't hit.

The other sad fact is - American companies can't and won't produce to the same quality level as the Japanese. Remember a few years ago Verve tried to do mini-LP's domestically - they failed, first because they couldn't get them done to the same quality level as the Japanese, second, because they couldn't do it profitably.

Final reason - the Japanese music fan is simply much more intellegent and discerning than the average Amercan buyer! It is a sad truth that great American music is much more popular in Japan and France than it is in America. There is simply a much bigger market for American music in Japan than there is in America, and more knowledgeable buyers. Even jazz fans - the jazz market in America, small as it is, is also stiflingly limited in range - why has Sonny Rollins' Next Album been wonderfully remastered in Japan and not in Amerca? Quite simply - because the bulk of Amerca's small cadre of jazz buyers get off the boat around 1965 or so. Regrettably, jazz in America has not done a great job of creating a market or promoting a wider range of it's music.

[JSngry]

why has Sonny Rollins' Next Album been wonderfully remastered in Japan and not in Amerca?

How much better is the Japanese remaster? Do you have the LP to comapre it to?

I ask because the American CD is "ok", but David Lee's cymbals & George Cables' Rhodes on "Poinciana" sound "clean", but dull and lifeless. I still go back to the LP for that album, simply because those two sounds have a "life" there like few things on record, ever. Lee's cymbals in particular still give me the goosebumbs.

[BruceH]

How many of you post on this board by faxing in your comments? For that matter, how many of you still HAVE a fax machine?

Never had one.

[Guest youmustbe]

Maybe, but if you talk to ALL of the folks that here this week at the IAJE in NYC, that are still in the 'record biz', ALL of them say that within 2 years it will be ALL downloads.

I personnaly don't give a shit, I still don't have a cell phone, but that's just the way it seems to be going.. Enjoy!!!

[robert h.]

why has Sonny Rollins' Next Album been wonderfully remastered in Japan and not in Amerca?

How much better is the Japanese remaster? Do you have the LP to comapre it to?

I ask because the American CD is "ok", but David Lee's cymbals & George Cables' Rhodes on "Poinciana" sound "clean", but dull and lifeless. I still go back to the LP for that album, simply because those two sounds have a "life" there like few things on record, ever. Lee's cymbals in particular still give me the goosebumbs.

The Japanese K2 is tons better. Next Album is a great record, unjustly neglected.

[king ubu]

Maybe, but if you talk to ALL of the folks that here this week at the IAJE in NYC, that are still in the 'record biz', ALL of them say that within 2 years it will be ALL downloads.

Maybe they're overreacting a bit because they slept on the whole www thing much too long?

On the other hand, it might in fact be them who have the power to actually fulfill their prophecy, too...

[Guest youmustbe]

I see that Tower online is still in biz.

Yeah, just the theft of cds from stores, 70 a day according to the manager of the HMV that used to be in my neighborhood. I was at Tower Lincoln Center when they finally caught this guy, the manager claimed that he had stolen more than a 1000 cds over a six month period...cops booked him on misdemeanor, no jail time,....even the small stores, Downtown Music Gallery, Academy, Norman's, that I dealt with had theft.

I'm actually losing money as NYC Distributor of Fresh Sound with Tower closing. But still, when I'd go there, and besides 'No, I don't want any of those', they'd order 100 titles, 1 copy each! And if it sold that copy, they MIGHT reorder...if that copy was stolen, it would stay in computer system as unsold, and eventually be deleted as Unsaleable...could not be returned, since it wasn't there.

And finally, the Lincoln Center Tower's space is being offered at 3 times the rent Tower paid. Like HMV on 34th Street which was laways packed. even with large theft, manager always claimed that the guards were in on it, it was more profitable for HMV since they had a long term lease, to sublet it at twice the rent to Victoria's Secret.

Showbiz is a bitch!

[Niko]

It's not "inevitable" that downloading will replace CD's - IT'S ALREADY HAPPENED.

What you are seeing is the transition taking place. The physical product is being sold only to older demographic who are hanging on to the product they have been accustomed to, primarily carrying legacy musics, which they tend to enjoy buying over and over again.

Reality is quite simple. People today do not want product. They want CHOICE and SERVICE. They don't want albums. They want tunes.

well, actually i had intended to buy albums until 2050 or 2070...

[king ubu]

It's not "inevitable" that downloading will replace CD's - IT'S ALREADY HAPPENED.

What you are seeing is the transition taking place. The physical product is being sold only to older demographic who are hanging on to the product they have been accustomed to, primarily carrying legacy musics, which they tend to enjoy buying over and over again.

Reality is quite simple. People today do not want product. They want CHOICE and SERVICE. They don't want albums. They want tunes.

well, actually i had intended to buy albums until 2050 or 2070...

same here... but even if CDs disappear, we can switch to vinyl in 2040 or so!

[Niko]

It's not "inevitable" that downloading will replace CD's - IT'S ALREADY HAPPENED.

What you are seeing is the transition taking place. The physical product is being sold only to older demographic who are hanging on to the product they have been accustomed to, primarily carrying legacy musics, which they tend to enjoy buying over and over again.

Reality is quite simple. People today do not want product. They want CHOICE and SERVICE. They don't want albums. They want tunes.

well, actually i had intended to buy albums until 2050 or 2070...

same here... but even if CDs disappear, we can switch to vinyl in 2040 or so!

[Big Beat Steve]

Or we might all have to switch EUROPEAN jazz for good.

Take Caprice or Dragon for Swedish jazz, Riviera for reissues of Italian jazz, and Czech jazz has quite a few reissues going too, and there are others elsewhere, etc. etc.

And what is more - if European collector labels just were to focus on reissuing EUROPEAN jazz then none of the Americans who seem so terribly concerned about the 50-year limit of the Public Domain issue (yet buy the discs) won't have to complain anymore at all.

No, seriously - and while I won't want to start the P.D. debate over again (it's all been said), aren't the European laws just that - laws? And whatever is done in accordance with (!) those laws is therefore perfectly legal, and we Europeans have no need to come up with excuses. And besides, how many U.S. jazz records would NEVER EVER have been reissued anywhere if no Europeans had ever taken the initiative?

I've said it before and am going to say it again: Somehow I wonder how labels such as Document or Ace or Krazy Kat manage to make nicely done CD reissues happen that are produced and remastered (to the extent possible) anew and are not just recyclates of remastered tracks from other CD's released shortly before (the main argument brought up against companies such as Proper and Membran as it discourages legit sources from producing NEW reissues for fear that they will be cannibalised by those cheapo labels immediately after their release).

And where would all those recordings on all those independent labels end up if nobody took care of them? The big conglomerates couldn't care less anyway ...

[Guest youmustbe]

It is not very expensive manufacturing and packaging compact discs now. It's all the other stuff in getting them in your hands, that is. That's why the price is artificially high.

BTW I was told that European retailers no longer will carry box sets.