TR 2:25 p.m. Review Material for Exam #2

Sound Recording Overview

Phonograph and Edison - Phonograph is a record player made on a metal cylinder format. Thomas Edison invents phonograph in 1877; earliest uses thought to be for dictation and other business needs.

Gramophone and Berliner - Gramophone is a spiral track recordings on flat disc. Berliner patents the idea of the gramophone and owns it.

Nickelodeons -  1890s amusement arcade device that plays back a two-minute recording

for five cents; immensely popular. Demand for “entertainment cylinders” grows

Cylinders vs. flat discs -  Originally sound recordings were produced on metal cylinders for phonographs. Flat wax discs were used on the gramophone but weren’t as durable, though the format still caught on. The industry switched to vinyl, which was sturdier but could shatter, and finally to shellacked vinyl, which is durable and does not shatter. Vinyl records was the standard from the mid-1920s to the mid-1990s.

Berliner’s Victrola - the first disc player designed to look like the furniture. He forms the Victor Talking Machine Company (the trademark is the famous picture of a dog peering into the bell of a gramophone with the logo, “His Master’s Voice”). The superiority of his device essentially ends the intense business rivalry going on in the recording industry between him, Edison, and the Columbia Phonograph Company.

Impact of radio on recording industry - By 1924 record player sales drop 50 percent from 1923, largely due to the popularity of live music delivered via the new radio medium. Record companies counter in 1926 by introducing electronic recording which much improved sound quality, and the marketing of radio-phonograph combination devices. Audiences soon identify radio as the home of “live” music compared to the “canned” music of records. RCA and Victor merge in 1929 to dominate the radio and recording industry.

Importance of the jukebox during the Depression - With a hard economy imposing record low profits on the industry, a new coin-operated music device called the juke box helps rescue the industry during the Depression years. Installed in bars, diners, and drugstores, juke boxes help boost record sales nearly 500 percent by 1939.

Rock n’ roll’s importance - At a time when the music industry was really suffering, the popularity of Rock n’ Roll helped save the music industry

RIAA - Recording Industry Association of America

• Represents the US recording industry and its interests
• #1 Lobbying group for the recording industry

New business models

• Recording industry has moved away from a focus on selling records, cds, physical copies and now puts more emphasis on streaming, digital copies, and concert ticket sales.

Organization of industry—talent, production, distribution, retail

• Talent:
• Consists of all the singers, musicians, songwriters, arrangers, and lyricists who want to make money by recording songs.
• Few make it big, most perform locally until they gain some recognition. If they’re lucky they will get noticed by an artist and repertoire scout
• Production:
• A group/ artist records an album at a recording studio and audio engineers use sound mixing technology to perfect the sound.
• Once the song is released promotion, publicity, advertising, merchandising, and packaging expertise take effect.
• Retail:
• The two major trends in retail distribution are consolidation and online selling.
• Many music stores that used to dominate the industry have now closed because of competition from online retailers like Amazon and iTunes.
• Today, most music comes from either WalMart (CDs and online downloads) or iTunes.

Types of distribution

• Direct retail stores
• Most have gone out of business in the past five years
• Rack jobbers
• They serve department stores and major discount chains (WalMart, Target, etc.)
• One-stops
• Buy CDs from industry, then resell to CD stores and jukebox firms
• Direct consumer sales (a.k.a. packagers)
• Sales from TV promotions and record clubs
• Online sales
• The consumer deals directly with an online retailer (iTunes, amazon.com, etc.)

Ownership of industry

FOUR companies accounting for more than 87 percent of all sales

_ UNIVERSAL MUSIC GROUP -> 35.12 percent market share in U.S.

Labels include: Geffen Records, Island Def Jam Music Group, Motown Records, Verve Music Group, Decca Music Group.

Artists include: Gwen Stefani, Elton John, Jimi Hendrix, Kanye West, Shania Twain.

_ SONY MUSIC ENTERTAINMENT INC -> 22.79 percent market share.

Labels include: Arista Records, Columbia Records, Jive Records, RCA Records.

Artists include: Carrie Underwood, Alicia Keys, Usher, Chris Brown, AC/DC, Leona Lewis.

_ WARNER MUSIC GROUP CORP-> 21.12 percent market share.

Labels include: Atlantic Records, Warner Bros. Records.

Artists include Madonna, R.E.M., Green Day, Eric Clapton.

_ EMI GROUP PLC -> 8.35 percent market share.**

Labels include: Capitol Records, Virgin, Blue Note.

Artists include: Coldplay, Katy Perry, The Rolling Stones, Lenny Kravitz.

_ ALL OTHERS-> 12.61 percent.

Source: Nielsen SoundScan, company Web sites.

**EMI Group PLC is now a subsidiary of Universal Music Group, so its effective market share is 43.47%.

Departments within typical recording company

Seven Departments:

artists and repertoire (A&R) at times industry talent scouts; also administrative duties. YouTube and Vimeo have effectively eliminated A&R departments. While they still exist, their numbers and duties have changed drastically. Today, most artists are 'discovered' online.

. sales and distribution sells products, makes sure inventory gets to targeted markets

. advertising and merchandising aids sales by planning media ad campaigns

. business lawyers, accountants, researchers, financial analysts, secretarial staff

. promotion get releases played on radio stations

. publicity tries to get press coverage and reviews for new performers in trade press

. artist development helps further artist’s career with tours, concerts, and TV appearances

Economic State of Music Sales Worldwide (IFPI Digital Music Report)

Nielsen Music Report

Radio

1. Key figures:
   1. Hertz - proved that electromagnetic waves existed
   2. Marconi - pioneering work for long distance transmission
   3. Fessenden - first to study/send voice and sound transmission via radio waves
   4. de Forest - 3 element grid audion
   5. Conrad - established KDKA (original radio station)
   6. Sarnoff - Founded the RCA (Radio Corporation of America)
   7. Armstrong - invented FM Radio transmission
2. KDKA - original radio station - made no money - combined with “toll broadcasting” to create radio with advertising.
3. “toll broadcasting” - people paid to send messages through radio
4. Radio Act of 1927, FRC(Federal Radio Commission) restrictions on who could use what frequencies
5. Communications Act of 1934, FCC - government organizing radio
6. FM radio - popular frequencies generally for music. capped at 40 miles
7. Television’s influence on radio - television took over entertainment and radio adjusted to sports, music, and talk
8. Telecommunications Policy Act of 1996 - lifted restrictions on access to media
9. Three AM radio channel classifications (clear, regional, local)
10. Three FM radio channel classifications (C, B, A)
11. Popular station formats - pop and country
12. Voice-tracking and compression - take away pauses from people on air to create more ad time
13. Sources of revenue (network ads, national spot ads, local ads) also sponsoring events
14. Arbitron - Nielsen version for radio - (radio ratings)
15. General radio audience characteristics - People driving to work and home from work

The underbelly of the movie industry: (some of the dark things the big 6 do to make money)

what do studios do

1. Tricky accounting
1. studios offer minimum scale (aka a percentage of the profits) so you succeeded when the movies do. but studios will give say that the movies aren’t making money, because of fees like “distribution” which in reality doesn’t cost studios anything.
2. Studios are making profits but pretend they’re not, so it looks like they’re losing money on paper
3. BASICALLY: Movies lose money, but studios are making money
2. Extort theaters
1. Studios have extorted theaters into showing movies for free by threatening to take the movies away big movies from them. There are also laws that prevent theatres from unionizing for their protection.
2. BASICALLY: Studios bully theaters to do whatever they want
3. Fake reviews
1. Studios write fake reviews to save a movie, if they aren’t doing well.
2. BASICALLY: Studios are so fake.
4. copyright issues
1. What they are trying to accomplish by lobbying congress, is to keep the rest of the world from their copyrights. They have lobbied congress several times, to where the length of a copyright is 70 years+ the life of the creator.
2. BASICALLY: People just keep lobbying congress about copyright laws, cause disney keep f*cking around.
5. stealing scripts
1. This is when studios steal uncopyrighted ideas. If a studio is approached about a movie idea, they will sometimes, steal the idea and produce their own scripts.
2. BASICALLY: Write your sh*t down so no one steals your ideas.

Drama and Storytelling

Dramatic Formula:

·      Exposition/Introduction – state of normalcy, establish characters and settings

·      Inciting Incident – sparks conflict that leads to the rising action

·      Rising Action – most of the story, conflict, character revelations, plot twists, romance, subplots

·      Climax – point of no return

·      Falling Action – further character development

·      Dénouement – new state of normalcy, characters are different

Stock Characters: stereotypical characters with specific traits, repeated throughout storytelling

·      Reluctant hero (Sam from LOTR)

·      Comic sidekick (Donkey)

·      Nerdy girl (Hermione Granger)

·      Wacky neighbor (Flanders)

·      Wise old man (Mr. Miyagi)

Stock Situations:

·      Bitter rivals (Tom & Jerry)

·      Dysfunctional nuclear family (The Dunphys)

·      Middle child (Malcom in the Middle)

·      Team of three (Powerpuff Girls)

·      Ill-fated lovers (Hazel and Augustus)

Plot – the core of the story, events that occur

Theme – idea or concept that is emphasized throughout the story

Genres – category of media based on certain criteria

·      Tragedy

·      Comedy

·      Mystery

·      Action

·      Horror

·      Reality

Sports as drama – has a storyline centered on the game

·      exposition – players warming up

·      inciting incident – beginning of the game

·      rising action – most of the game

·      climax – point where you know that one team is going to win

·      falling action – rest of the game

·      dénouement – winner is declared and everything returns to a new normal

IFPI Digital Music Report

• the industry's revenue is roughly 6 million dollars
• and slightly less 40 percent comes from digital channels
• performance rights are way up and crossed a billions dollars
• performance rights- when license the rights to music for commercial purposes
• 50% increase in subscription streaming revenues
• downloads still account for majority of the revenue
• #1 album from 2013 One Direction Midnight Memories
• Global recording artist One Direction Eminem Justin Timberlake Bruno Mars and Katy Perry
• Blurred lines by Robin Thicke sold 14.8 million units
• the general trend is a rise in streaming and subscription services with that trend being partly driven by smartphones 36% by 2016
• surpassed 30 million of paying subscriber worldwide
• Spotify 38 new markets (countries)
• Vevo 13 countries 2013
• 28 percent total growth digital average since 2010
• vinyl is making a comeback  

Who Owns the Radio in the U.S.

• ABC Radio is a subsidiary of Walt Disney Company
  • headquarters in Dallas/NYC
  • 4600 affiliated stations

• Beasley Broadcasting has been around since 1961
  • 42 radio stations
• Buckley Radio, 20 stations in 7 markets
• CBS Radio / Infinity Broadcasting is one of the largest major-market radio operators in the US
• Clear Channel, 240 radio stations in different countries
• COX Radio is one of the largest radio broadcasting companies, 80 stations in 18 markets
• Cumulus, largest radio broadcasting company in the US, owns and operates FM and AM radio station clusters in the U.S.
• Emmis, owns and operates stations in major U.S. cities
• Entercom, owns and operates across the U.S.
• Greater Media, parent company of 19 AM and FM stations
• Lincoln Financial, based in NC.
• Regent Broadcasting, 64 stations in 13 markets

What TV Ratings really mean (Nielsen)

• Who is watching tv? What are they watching?
• What’s the difference between ratings and shares?
  • Ratings: the number of people who are watching a program
  • Shares: the percentage of people watching a given program out of everyone watching tv at that time
  • Shares are a better indicator of how popular a program is
  • If a low amount of people are watching tv at a given time, but a majority of the people watching are tuned into the same show then the share ratings of that show will be high
• Key demographics
  • Entertainment: 18-49
  • News: 25-54
• Nielsen Media Research Families: The Nielsen Media Research families are a cross-section of the households with television sets all across America.
• Sample Selection: homes that are selected by chance to report what they watch
• Representative Samples: If every member of the population has an equally good chance of being in the sample, then this makes it a representative sample.

Understanding TV Ratings

• Common terms:
• TV HHs: number of TV households in the US
• PERS 2+: number of people aged 2 and over in the US
• LIVE+SD: number of people who watched a program as it was broadcast or via DVR on the same day
• LIVE+7: number of people who watched a program within a week of its broadcasting
• Ratings: 1 ratings point=1% of Nielsen universe
• A18-49 Ratings: demographic advertisers are most interested in

Disney sets revenue record:

• The record yearly revenue for Disney is $52.5 Billion
• Analysts believe that Star Wars the Force awakens could make $500 Million in merchandise alone in 2016
• CEO Bob Iger admitted that less young people are subscribed to cable, but that Disney will continue to move forward in the field of online distribution
• Brought ABC and ESPN to Playstation Vue
• The cable business as a whole was still up in revenue by 12%

2014 Studio Profitability:

Disney- Disney Profits increased by 101%

21st Century Fox- Profits went up by 33%

Warner Bros- Profits went down 6%

NBCUniversal- Universal stock went up 47%

Sony- Sony profit went up 66%

Paramount- Paramount profit went down 27%