Zelnick: Internet Will Bring 'Explosive' Growth To Biz

Strauss Zelnick, president/CEO of BMG Entertainment North America, predicted a rosy future for traditional record labels yesterday in his keynote speech for the two-day Plug.In conference in New York. The Internet, he said, will be most important to the music industry as a new distribution vehicle, which will be good for business overall. "New formats generate explosive growth," he stated, adding that the Internet is "an opportunity to broaden the market overall." Zelnick predicted that in the next 10 years, the music business will "more than double," mainly due to Internet distribution but not at the expense of traditional retail.

Zelnick stressed that a limited number of companies will dominate in the digital future and that the winners will likely be content owners--namely, the traditional record labels. Those who create product "will win disproportionately over those that merely distribute," he said.

Following the keynote, in a panel titled "The Future Of Music," Atomic Pop CEO Al Teller painted a less optimistic picture for traditional labels. "The music industry is going to be reinvented from top to bottom," Teller said, predicting that as digital distribution gains momentum, the role of the majors will be significantly diminished. While the majors will be "owners of the biggest catalogs," he stated, they will not be "breakers of new acts." He added that the relationship between acts and labels will change, with artists having shorter contracts, receiving higher royalties, and maintaining greater control of their own masters.

In other news from Plug.In:

--Attendance at Plug.In more than doubled from last year to 1,350. Paid attendance also doubled to more than 800.

-- Trans World Entertainment's e-commerce site www.twec.com has linked with GlobalFulfillment.com for worldwide distribution outside North America. The alliance will roll out in the U.K., continental Europe, and Australia; Asia and South America will follow in the coming months. Twec.com says it will buy all product locally, respecting parallel-import restrictions.

-- Redwood City, Calif.-based download company EMusic.com has formed a strategic partnership with and made an equity investment in Crunch Music Ltd., a U.K. marketer of independent music in the MP3 format. The companies will market and promote their Web sites in the U.S. and U.K. and will partner for label and music deals.

-- Launch.com has inked a deal to use RealNetworks' streaming technology for its music video content. Launch offers more than 1,000 videos by acts that include Backstreet Boys, the Offspring, and Queen.

--Carolyn Horwitz, Ken Schlager, and Don Jeffrey, N.Y.


McCartney Sets Due In October

Paul McCartney's new album of rock'n'roll covers will be titled "Run Devil Run" and will be released Oct. 5 in the U.S. on Capitol and a day earlier in the U.K. on Parlophone/EMI (Bulletin, May 18). Recorded at Abbey Road Studios, the 15-track album features guest appearances by Pink Floyd's David Gilmour and Deep Purple's Ian Paice; it also includes three new unnamed McCartney originals, one of which is expected to be the first single. Also on the album is a version of Elvis Presley's 1958 rocker "I Got Stung," which has been posted on McCartney's Web site (www.mplcommunications.com) as a teaser and was broadcast recently on BBC Radio 2.

Another album, "Working Classical," will be released two weeks later on Angel in the U.S. and EMI Classics in the U.K. The set is a mixture of chamber music reworkings of Beatles and Wings songs and orchestral versions of three of McCartney's short classical pieces performed by the London Symphony Orchestra. The album will be supported with a major concert at Liverpool's Philharmonic Hall in the fall. EMI Classics will also in February or March 2000 release a studio album of new works by John Taverner, Sir Richard Rodney Bennett, and McCartney; the material was premiered Sunday at a charity concert in memory of Linda McCartney at Charterhouse School in Surrey.

--David Stark, London; Irv Lichtman, N.Y.


MTV Online Gets Stake In RioPort

MTV Networks Online has taken a significant equity stake in Diamond Multimedia Systems' RioPort division. Under the deal, RioPort will provide its secure digital download technology to all of MTV's online ventures. MTV is expected to begin digital downloads this fall and will share revenues with RioPort.

--Eileen Fitzpatrick, L.A.


Two-Year Stones Tour Racks Up Big Figures

In just under two years of touring, the Rolling Stones have brought in a staggering $337.28 million, selling out all but 20 of 147 shows, mostly in stadiums. That means an average nightly take of $2.3 million. Worldwide, 5.6 million people have seen the Virgin act live since fall 1997. In a year-by-year breakdown, the band took in $56.6 million in the last few months of 1997, nearly $200 million in 1998, and $87 million in 1999, mostly from U.S. arenas. Toronto-based The Next Adventure (TNA) promoted all of the shows. "It was an unbelievably long tour, and even more successful," says TNA chairman Michael Cohl.

--Ray Waddell, Amusement Business


New President For EastWest In Japan

Haruhiko "Harry" Yoshida will become president of Warner Music Japan (WMJ) division East West Japan on Aug. 1. Yoshida, currently a director of WMJ imprint Dream Machine, replaces Takeyasu Hashizume (Bulletin, July 16).

Yoshida was VP of Sony label Quun Records until last year. He is the latest in a string of former Sony Music Entertainment (Japan) execs to be appointed by WMJ chairman Hiroshi Inagaki, a former SMEJ deputy president.

Meanwhile, Takeo Nakanishi, president of production company Disk Garage, will join East West Japan as executive chief producer Oct. 1.

--Steve McClure, Tokyo


Strong Quarter For MTV

Viacom Inc. reports strong second-quarter earnings for its MTV Networks division. Earnings before interest, taxes, depreciation, and amortization for the three months to June 30 were $188 million, up 28% from the same period last year. Revenues rose 22% to $507 million. The company says MTV's household ratings are up 20% and that the channel has more viewers than ever before. Viacom stock closed yesterday down 1.26% to $44.19.


Cherry Lane In Venture With Tech Firm OneHouse

Cherry Lane Music, the New York-based independent music publisher/music print company, has formed a new company in alliance with technology consultant OneHouse, which helps music companies make the transition to the digital era. OneHouse was established last year in L.A. by CEO Jim Griffin, Cherry Lane founder Milt Okun, and entertainment lawyer and former PolyGram CEO David Braun. The new company, Cherry Lane Digital LLC, is headed day-to-day by president Liz Dubleman, who reports to Griffin.

"Initially, we'll act as a consultant to entertainment companies--not necessarily only those associated with us--to help develop plans to market products and services via digital delivery," says Peter Primont, CEO of Cherry Lane Music. Clients include the RIAA, Beastie Boys' Grand Royal label, and Counting Crows' E. Pluribus Unum label.

--Irv Lichtman, N.Y.


Executives Form Dance Bootleg Coalition

Executives from Epic and RCA Records have formed a dance-music industry coalition to combat the problem of bootlegs. Frank Ceraolo, senior director of marketing/A&R at Epic, and Vince DiGiorgio, VP of A&R with RCA Records, formed the coalition during a panel on bootlegging held Saturday at the Billboard Dance Music Summit in Atlanta. Thirty-three conference attendees signed on to participate. The coalition is planning its first meeting.

--Susan Nunziata, N.Y.


Dr. Dre Sues Priority, Death Row Records

Rapper-producer Dr. Dre (real name Andre Young) filed a suit yesterday against Priority Records and Death Row Records, alleging that the recent Priority-distributed Death Row album "The Chronic 2000" infringes on a trademark held by Dre. "The Chronic" was the title of Dre's 1992 album. The suit seeks an injunction against the use of the "Chronic" trademark, the seizure of any products utilizing the trademark, damages, and profits realized from the products.

A spokesman for Priority said the company had not yet been served. Representatives of Death Row could not be reached.

--Chris Morris, L.A.


V2 Closes Office

London-based V2 Records has shuttered its office in Santa Monica, Calif. As a result, soundtrack supervisor Howard Paar and West Coast publicist Eileen Thompson have been let go, but are expected to work as consultants. West Coast promo head Doug Ingold and an assistant will now work out of the L.A. office of V2 distributor BMG. An assistant and indie retail rep in New York were also let go.

--Melinda Newman, L.A.


BBC DJ Recovering From Shooting

BBC Radio 1 hip-hop DJ Tim Westwood was in stable condition in a London hospital yesterday after being injured in a drive-by shooting Sunday evening in the city. According to Metropolitan Police, two men on a motorcycle fired into a car containing six people, striking two. Other passengers sustained minor injuries. The police are appealing for witnesses.

--Mark Solomons, London


What's On

Late-night tonight: Sixpence None The Richer (on Kilborn), Edgar Winter (Politically Incorrect).

TNN's Music City News Country Awards air live tonight at 8 ET.