Time Warner Eyes Executives For Departing Daly, Semel

Following Bob Daly and Terry Semel's surprise announcement yesterday that they plan to leave as chairmen/co-CEOs of Warner Music Group (WMG) and Warner Bros. studios when their contracts expire at year's end, sources say a new WMG head could be named shortly. "I don't think Time Warner will wait until their contracts are up to name their replacements," says a WMG source.

Among the names surfacing as a potential head of WMG is Atlantic Group co-chairman/co-CEO Val Azzoli. Atlantic has been WMG's top label for the past three years, and sources say Azzoli's ability to build a strong team has not gone unnoticed by higher-ups.

Daly and Semel have run the music division since late 1995. Some believe the sluggish financial performance of WMG during their reign was in part responsible for their decision to exit. In the time they have been in power, WMG's worldwide revenue has dropped 4.2%, and its cash flow has fallen 57.2%. However, some believe the division is turning around. Last year, WMG's revenue was up 9% to $4.02 million, while cash flow rose 5.5% to $493 million.

For the first half of this year, SoundScan reports that WMG's domestic total album market share fell to 16.6% from 18.3% in the same period a year ago.

--Melinda Newman, L.A.; Don Jeffrey, N.Y.


Report Sees Growth, Major Hurdles For Digital Music

A forthcoming report on the music industry by Jupiter Communications forecasts strong growth for digital distribution of music through 2003 but emphasizes the hurdles facing the burgeoning sector. The report, to be presented Monday during the Plug-In conference in New York, predicts that 3% of online users in the U.S. will purchase digitally downloaded music in 2003, representing a total customer base of 4.4 million online users and just 5.7% of total online music sales that year. The sector faces such obstacles as the slow rollout of major-label product, limited penetration of digital playback devices, lack of broadband connections, and the appeal of "packaged" CDs. Nonetheless, the slice of the U.S. music business that will be claimed by online sales of mail-order and downloaded music by 2003 will be 14% of an $18.4 billion market, according to the report. By contrast, online sales represented only 1.1% of the $13.7 billion in total U.S. recorded music sales in 1998.

Key to creating mass-market digital distribution of music is portability. Jupiter estimates that 30,000 digital playback devices, such as Diamond Multimedia's Rio, were sold in the U.S. in 1998 and predicts that the number will reach 500,000 by the end of this year and 5.2 million by 2003. However, the mass-market peak for such devices will remain out of reach by 2003, says Mark Mooradian, director of consumer content strategies at Jupiter and the author of the report. "It is going to take a certain number of years for it to establish and to build a real customer base," he says.

For details, see the July 24 issue of Billboard.

--Marilyn A. Gillen, N.Y.


SDMI Hires Bay Area Design Company

San Francisco-based Pentagram Design Inc., whose specialties include graphic and industrial design for corporate clients, has been retained by the Secure Digital Music Initiative (SDMI) to handle at least a portion of its marketing duties, sources say. The SDMI is looking to establish a trademark and logo for placement on SDMI-compliant devices. Representatives of Pentagram, SDMI, and RIAA refused comment.

--James Zoltak, Adweek


CD Radio Inks Deal For Audio Receivers

Digital satellite radio system CD Radio has forged a deal with Alpine Electronics Inc. to design and develop audio receivers, for manufacturer installation in automobiles and for sale directly to consumers.

CD Radio plans to commence its satellite-to-car broadcasts--with up to 100 channels of music, news, and entertainment programming--in the fourth quarter of 2000. The company recently announced a deal to install receivers in Ford vehicles as early as first-quarter 2001.


EastWest Japan Prez Hashizume To Exit

Takeyasu Hashizume will resign as president of Warner Music Japan's (WMJ) EastWest Japan division, effective July 31. Hashizume became president of EastWest in August 1996 after 25 years at Sony Music Entertainment (Japan) (SMEJ) and its predecessor, CBS/Sony. There is no word on a replacement. Hashizume's resignation is the second recent high-level personnel change at WMJ. Keisuke Hamano, another SMEJ veteran, became president of WEA Japan July 1. Hamano replaced Mitsuaki Tsunekawa, who returned to Japanese music publisher Nichion Inc., where he spent more than 30 years before joining WEA in 1995 (Bulletin, June 16).

--Steve McClure, Tokyo


Diane Warren Renews EMI Publishing Deal

EMI Music Publishing has renewed its sub-publishing deal with hit writer Diane Warren for the world outside North America. Peter Reichardt, managing director for the U.K. and president for continental Europe, secured the new three-year deal in L.A. Warren continues to be represented in North America by her independent Realsongs company.

--Paul Sexton, London


U.S. Nightclubs Link For Live Music Streaming Site

Nightclubs in major markets have banded together to form the Digital Club Network (DCN) to webcast performances from the venues. The creators of the site, at www.dcnlive.com, say it is the first devoted exclusively to streaming live music online 24 hours a day. DCN is expected to debut Tuesday to coincide with the 1999 Digital Club Festival in New York.

Confirmed as DCN participants are New York clubs the Knitting Factory, the Bottom Line, Arlene Grocery, Brownies, Wetlands, and Tramps; San Francisco's Great American Music Hall; Las Vegas' Legends; Washington, D.C.'s 9:30 Club; and Seattle's Showbox. New York-based DCN is headed by chairman Michael Dorf (owner of the Knitting Factory) and CEO Andrew Rasiej (of New York club Irving Plaza). New shows are expected to be webcast nightly, free of charge. Archives will be accessible for a fee; DCN says it will allow artists to choose the price, from $2 to $100.

--Carla Hay, N.Y.


IFPI Ups Copyright Lobbying

The IFPI plans to step up its lobbying of the European Commission and Parliament on copyright issues following the appointment of a new Commission--six months ahead of schedule--and at the same time as the election of a new Parliament.

IFPI European affairs director Frances Moore says more than half the members of Parliament are new, and one-quarter of those re-elected didn't vote for the Copyright Directive. "We had lots of friends in the Parliament. I'm afraid most of the new [members] don't know anything at all about copyright," says Moore. The Copyright Directive--amended by the last Commission in May to remove industry-backed clauses--is due for a second reading in Parliament this year; adoption is expected in early 2000. The new Commission was appointed July 9, after the previous incumbents resigned en masse following allegations of corruption.

--Emmanuel Legrand, London


1st-Half Sales Down In Sweden, Up In Norway

The market for prerecorded music declined slightly in Sweden in the first half of the year, according to figures published yesterday by the local IFPI affiliate. Sales volume was down 1.2% to just over 11 million units, for a value down 1.5% to 606.9 million kronor ($70.7 million). The value of CD sales dipped 2.4% to 550.6 million kronor ($64 million), and singles sales increased 21% to 45.6 million kronor ($5.24 million). Cassettes slid 30% to 4.6 million kronor ($535,000).

Meanwhile, in Norway, sales volume rose 2% to 5.8 million units in the same period, for a value up 3% to 394.3 million kroner ($49.4 million). The value of CD sales grew 3% to 390.5 million kroner ($48.9 million).

--Kai R. Lofthus, Stockholm


Contract Up For V2 U.K. A&R Chief

Jeremy Pearce, London-based CEO of V2, tells Bulletin that the label's U.K. head of A&R, Dave Wibberly, who abruptly left the company last week, "was not dismissed." He adds, "There were no complaints with Dave at all, his contract simply came to an end." Wibberly was closely associated with V2 act Stereophonics, whose second album, "Performance And Cocktails," is nearing double platinum (600,000 units) in the U.K. and 1 million worldwide, according to the label. It is due Sept. 14 in the U.S.

Meanwhile, V2 has signed singer/songwriter Kirsty MacColl to a global deal. An album, "Tropical Brainstorm," is due in the U.K. in October. She was on ZTT.

--Paul Sexton, London


Farm Aid Plows Ahead

Farm Aid '99 is set for Sept. 12 at the Nissan Pavilion outside Washington, D.C., in Bristow, Va. The show will be telecast on CMT from 2-10 p.m. ET. Performers will include Farm Aid founders Willie Nelson, Neil Young, and John Mellencamp, with Steve Earle, Trisha Yearwood, the Dave Matthews Band, the Mavericks, Susan Tedeschi, and Sawyer Brown.

--Chet Flippo, Nashville


What's On

Late-night tonight: Pretenders (on Leno), Gillian Welch & David Rawlings with Emmylou Harris (Conan O'Brien), Live's Ed Kowalczyk and Robbie Robertson (Politically Incorrect).

Beverley Knight plays BBC1's "Top Of The Pops" tonight.

Afro-Cuban All Stars play "Sessions At West 54th" tomorrow.