Netflix Enjoys Strong Streaming Lead But Future Is Cloudy

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According to NPD VideoWatch Digital tracking service, Netflix’s share of digital movie units, downloaded or streamed totaled 61% during Jan. and Feb. 2011. Comcast earned 8% and DirectTV, Time Warner Cable and Apple enjoyed a three-way tie with 4% each. The data for this study was gathered via online interviews with U.S. consumers age 13 and older conducted between Jan. and the third week of Feb. 2011. There were 10,618 completed surveys.
“Sales of DVDs and Blu-ray Discs still drive most home-video revenue, but VOD and other digital options are now beginning to make inroads with consumers,” said Russ Crupnick, entertainment industry analyst for NPD. “Overwhelmingly, digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files.”
NPD also asked consumers to compare satisfaction from the four modes of digital-video acquisition: electronic sell-through (EST), Internet VOD (iVOD), cable VOD, and subscription streaming. EST services like iTunes were credited with having the most current releases, while Netflix was called “Best Shopping experience and value for price paid.”
According to a recent Wrap.com Netflix discussion, “perhaps 5 million or more of its 20 million monthly subscribers are now using the streaming service instead of getting their DVDs in the mail. In the process Netflix saves hugely in its postage and handling charges.”
However, there are clouds on the horizon for this company that streams its content from the cloud. Netflix’s 3-year licensing contracts for the electronic transmission of both movies and TV programs will begin expiring in just 7 months. Because the streaming business is now viewed as a competitive challenge to more mature licensing areas such as cable and satellite, it is expected that Netflix will end up paying much higher rates going forward. This means that either prices for the service will rise or Netflix will need to add a large additional number of subscribers, or both. This impending crunch also comes at a time when other competitors such as Amazon, Apple, Facebook and Google are entering the space.

Bigger Picture Acquires Idea Den

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Nashville’s Bigger Picture Group has acquired online marketing and creative services company Idea Den, which will allow BPG to offer a wider array of services to its clients.
The acquisition also means staff expansion for Idea Den, which has added former Music City Networks partners Jon Wright and Dennis Thompson to the roles of Production Director and Senior Designer, respectively.
Founded in 2004 by Dale Manning, Idea Den has provided web solutions for a roster that includes Casting Crowns, Alice Cooper, Mandy Moore, Christian Kane, Switchfoot, Craig Campbell, The Harters, Steven Curtis Chapman and Jeremy Camp.
“The acquisition of Idea Den has positioned Bigger Picture uniquely amongst entertainment companies,” says Bigger Picture principal William Hein. “We now have a partner and a team that is leading the way in online excellence. Dale has brought an innovative spirit along with an impressive country and CCM client roster.”
In addition to the Bigger Picture roster, Idea Den will continue to provide web and creative services to Christian and Country artists.

Do Artists Need A Combined Sales Chart?

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Grammy fever has cooled, Valentine’s ardor has calmed and [ouch] Top 75 country album sales are down 32% compared with last week. Adding to the somber report, YTD country album sales are off 12.4%. But wait. Are we missing something?
Let’s consider the concept of combined revenue—money an artist earns from both album and track sales. For an individual artist it seems an obvious measurement to sample, but in years past track revenue was dwarfed by albums and therefore made little difference. (Jay Frank discusses this idea with added detail on page 18 of the newly released Feb./March MusicRow print issue. He says, ”We may soon reach a week…when according to SoundScan, the No. 1 track will eclipse the top album in terms of retail value and profitability.”)
While this week’s data doesn’t completely fulfill Frank’s vision, it’s close. The No. 1 all-genre track, Lady Gaga “Born This Way” (286K downloads) is more profitable and has a higher retail value than the No. 1 country album, Lady Antebellum Need You Now (28k). Here’s how the math works:

Needed: A New “Combined Value” Yardstick?
The dollar value of album and track numbers continues to rebalance in our new industry environment. Therefore, a SoundScan sales chart ranking combined value (and/or wholesale profitability) could prove valuable. Frank adds, “Been saying this is needed for years.” And this writer agrees.

A weekly combined value chart which accounted for the retail value of all tracks and albums sold by a particular artist would be a more accurate measure of success than looking at albums alone.

Thoughts comments? Leave them below, please.

Is Digital Music Heading To The Clouds?

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Look up! Is it a bird or a plane? No. It’s the clouds.
The music industry waters are set to begin rippling again later this year, possibly as early as summer when, according to Financial Times, Apple, Google and Spotify jump into the cloud with music. Exactly what this will mean, may be a bit different for each of the companies involved and those that inevitably will follow. [“Cloud” is a simple metaphor to describe information and files placed on a server accessible from anywhere via an Internet connection.]
Spotify’s approach is clearest since its free and/or paid plan already is very popular in Europe. Users get free music streamed from the cloud in exchange for seeing ads or pay and get the music without ads. Google and Apple’s strategy is still unoffical. However, according to FT.com, Apple is planning to use the cloud resources it acquired last year from Lala, “mainly to allow users of its iTunes store to back up their collections and access them from any Apple device.” This method would support the paid download approach that Apple’s iTunes store has pioneered and popularized.
Google is anxious to launch a download store of its own, but is also interested in using the cloud to offer a digital locker where songs could be stored, much the same as the Apple plan, “to keep copies of their media in the cloud,” says FT.com. (Amazon already has its own digital store, but even with discounted pricing has been unable to steal appreciable market share from iTunes.)
Perhaps the most perplexing of all is the delay that Spotify has faced in trying to secure its U.S. launch which was supposed to begin in 2010. Sony and EMI have reportedly signed onto the service, but Universal and Warner Music are still in negotiations. Labels are concerned about how many free tracks users will be able to enjoy and if/how that might impact download sales. Many execs believe that Spotify will have a negative impact on sales without offering a large revenue stream in return.
With Warner and EMI both in play and up for sale, it is unclear how/if negotiations with Spotify might affect each company’s valuation.

Sales: Thank You Edition

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Jimmy Fallon’s late night show has a Friday feature where he thanks various people and explains why. So on behalf of MusicRow and record label stakeholders everywhere, we’d like to extend the tradition to this week’s column. So let me say…
“Thank You,” Valentines Day. “You bring so much heart to the SoundScan chart by reminding people to give gifts. After chocolate, flowers and jewelry, music is high on the list.
“Thank You,” Grammy Awards. For the last three years you have highlighted Nashville’s musical contributions resulting in nice ‘week after’ numbers. (PS: You didn’t deserve that ‘sore loser’ letter earlier this week.)
Yes, this week’s SoundScan report was heavily influenced by the Grammy telecast (2/13) and the holiday of hearts. Country album sales climbed 10% over the previous week, all-genre sales jumped 12%. But it can all be summed up in three words, “Need You Now.”
Lady Antebellum’s TV trophy romp resulted in the album and single of that name rising to No. 1 on the Current Country Albums (85k) and Country Digital Singles charts (105k) respectively. The album has now sold almost 3.3 million units and the single almost 4.8 million. Taylor Swift is the trio’s only competition for  totals this lofty on the country charts. Swift’s “Love Story,” leads Lady A slightly with over 4.9 million downloads and her Speak Now album trails by about 100k units.
Lost Highway’s Hayes Carll debuts in the No. 12 position on the country chart with sales over 10k of his album Kmag Yoyo. Chris Young’s “Tomorrow” crashes into the digital download chart in the No. 8 position downloading over 30k tracks. By way of comparison, Lady Gaga’s “Born This Way” performed on the Grammy show debuted with over 508,000 downloads!
Some careful number crunching shows that YTD country digital album sales as a percentage of total country album sales now total 20.3% (33% all genre). Last year the number  for this period was 15.3%. In line with that number, digital country album sales are up 16.35% this year which shows that country consumers are continuing to catch up to all genre consumers which download more and purchase physical product less—but still have a way to go.
“Thank You SoundScan,” for helping us to track industry sales.

Two-Screen Viewing Enhances TV Experience

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How many nights a week do you sit in front of the TV with a mobile device in your hand or a notebook computer in your lap? Well, marketers are on to you—and they’ve named it “two-screen viewing.”
A new study by Deloitte’s media and entertainment group shows that three-quarters of television viewers are also either online, on the phone or texting.
“The initial fear was that Internet and mobile video and entertainment would slowly cannibalize traditional TV viewing,” says Nielsen Company media product leader Matt O’Grady. “But the steady trend of increased TV viewership alongside expanded simultaneous usage argues something quite different.”
Instead of detracting from program viewing, marketers say the two-screen experience can enhance it. They believe viewers feel more connected to the show when they are discussing it online, turning the shared viewing experience into an event. Engaging with other watchers of the program before, during and after the show via Facebook, Twitter and other sites creates a sense of camaraderie. This trend also encourages live viewing of an episode or awards show, instead of recording it on DVR.
“We know people are multitasking while they’re watching TV,” ABC-TV exec Albert Cheng told the New York Times. “The question is, how do we tap into that and create a whole different consumer experience? We don’t have all the answers, but we are definitely trying different things and seeing how people are reacting.”
ABC is the broadcast home to this Sunday’s (2/27) Academy Awards. The network is teaming with Oscar.com to live stream behind-the-scenes video of the big night. Through about 30 strategically placed cameras, viewers will get to see all the action on the red carpet, in the theater, backstage and at the post-awards Governors Ball. There is a free ad-supported version, or a $4.99 all-access pass. Also available is an Oscar Backstage Pass app for the iPad, iPhone and iPod for 99 cents.
In recent years, awards shows and other programs have been experimenting with ways to enhance viewing through social media. The CMA has hosted Twitter Viewing Parties and live streaming feeds for its awards. At fan-voted awards ceremonies, fans can often vote while the show is airing live.

Hot Schatz PR and Noise New Media Join Forces

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Hot Schatz PR and Noise New Media are teaming up to expand their service offerings. The new partnership will combine Hot Schatz PR’s 18 years of experience in traditional media with Noise New Media’s web design, social media and fan engagement campaigns.
The companies say it will help clients bring a consistent message to fans and traditional media, and cross-promote these campaigns. The companies will utilize video and file-sharing strategies, which they say will help keep costs affordable.
Schatzi Hageman is owner and president of Hot Schatz PR. Steve Richo co-founded Noise New Media three years ago, and has since worked with RODEOHOUSTON, Steve Azar, and Phil Vassar.
The two companies will share office space at:
1024 16th Ave. S., 2nd Floor
Nashville, TN 37212

New Smartphone Apps Connect Consumers To Artists

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The booming smartphone market is providing new opportunities for fans to connect with artists, and tech-savvy companies are leading the way with cool new apps.
Kenny Chesney has partnered with digital syndicator Qello for the release of his 2009 concert film Kenny Chesney: Summer in 3D. The Chesney App is Qello’s debut product and gives fans with iPhone and Android smartphones interactive access to the film in 2D-HD format, including behind the scenes footage. Qello will also soon release the film and app to the gaming market to have it available on as many devices as possible.
“Kenny Chesney is one of the most popular performers in the world and a perfect partner for the launch of the exciting Qello platform,” says Qello President Bob Frank. “Just as Netflix did for movies, Qello is a first-mover, changing the way music fans will consume live concerts.”
The Qello app, available now, can be found here.
Red Light Management and AT&T have announced a mobile barcode program to allow fans more ways to connect with the company’s artists. Red Light has used this program in campaigns for its artists like Dave Matthews Band, Steel Train and Tim McGraw. Fans are encouraged to use smartphones to scan a barcode on an artist’s promotional materials, which will open up a world of special content including free apps, videos, fan club access and more.
“Our artists are continuously looking for new ways to connect with their fans and get the word out about their latest activities,” said Evan Cooper, Red Light Management. “By using AT&T’s mobile barcode program, we can effectively promote our artists and give fans the opportunity to keep up with their favorite musicians on-the-go.”
Check out the mobile barcode program here.

Sales Chart—Music Biz's Fickle Mistress

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Thompson Square


Highlights:
• Cupid helped Country music sales jump a respectable 25% from last week, but remain down 16.5% YTD
• Thompson Square and Jana Kramer had notable debuts
• Lady Gaga, Lady A and Mumford and Sons got digital download bumps from the Grammys
• • • • •
Valentine’s Day shoppers wooed the music biz with a one-week rendezvous, but the romance is fleeting for SoundScan watchers eyeing the big picture. All-genre album sales are up 17% (6.4 million) over last week, but the YTD tally is down 14.9%.
Cupid helped Country music sales jump a respectable 25% from last week to a total of 814K. But YTD Country album sales are down 16.5%, having sold only 4 million units in 2011. One bright spot is that digital album sales are up 11.3% over 2010.
Real-life country couple Thompson Square (Stoney Creek) felt the love when its first album debuted at No. 3 on the Country charts with 30K, including 16% digital. Jana Kramer may be new to music, but the actress reaped rewards by debuting her song on her show One Tree Hill. It helped make the WB single “I Won’t Give Up” the highest debut on the Country tracks chart, entering at No. 6 with 40K.
Early impact from the Sunday night (2/13) Grammy Awards was digital download icing on the V-day sales cake. Fans love the instant gratification of hearing a song and turning straight to the computer. Lady Gaga debuted “Born This Way” on the Grammy telecast and it ended as the top-selling track of the week with 448K. Leading Grammy winners Lady Antebellum climbed back to the top of the Country digital tracks chart with 59K downloads of “Need You Now” (a 150% bump). Mumford and Sons’ performance helped push the band to the top of the Digital Album charts with 34K.

Grammy Ads Feature Growing Number of Celebs

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Nearly one out of four advertisements during last night’s (2/13) Grammy Awards featured a celebrity endorsement, according to a report by Greenlight, a company specializing in licensing and rights clearance.

Among the other findings of the GreenLight Ad Gauge:
• celeb ads were up 47% over last year, and up more than 250% from 2009
• 23% of ads featured licensed pop music
• 35% of ads featured either a celeb endorsement or licensed music, up from 26% of ads in 2010
MusicRow’s Bobby Karl noted the numerous celeb spots during this morning’s column about the awards. He said:

Even if you weren’t on the show, you had a good chance of being seen. Just about every commercial break featured a music star – Taylor Swift for Cover Girl, Carrie Underwood for Olay, Jennifer Hudson for Weight Watchers, Justin Bieber for CSI, Alicia Keys for HP, Taylor Swift for Target, Keith Urban for Target, Ricky Martin for the American Cancer Society, Jennifer Lopez for Venus razors, Eminem (in cartoon form) for Brisk beverages, Queen Latifah for Cover Girl….

GreenLight’s full report can be downloaded here.
AdAge has recently weighed in on the pros and cons of celebrity endorsements.