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AXS TV’s audio-visual model threatens life span of CDs

Music for Screens: Summer 2012

Ten years after Steve Jobs promised he would change the music industry forever, Mark Cuban is following in his footsteps. Cuban, co-founder of HDNet, and now the president of AXS TV (a partnership that includes himself, Ryan Seacrest Media, CAA and concert giant, AEG), is launching initiatives he believes are already setting the ailing music industry back on course.

By combining live concerts, pay TV broadcasts and, eventually, a DVD or Blu-ray release, AXS TV is building a different business model. In this scenario AXS TV shoots a live performance, generating revenue from a simultaneous broadcast, while the acts are given the footage to create their own DVD releases.

“We are looking at everyone that we think can bond with a live audience,” Cuban says. “Having a great following certainly helps, but putting on a great show that we think translates to live TV is just as important.”

By allowing AXS TV to broadcast its “CSN 2012” show live and then giving rights to the channel for an abbreviated greatest hits version, Crosby Stills & Nash was given ownership of all the footage and the final program. The resulting DVD/CD combo was released on the band’s own label.

“It was an incredible deal,” says Graham Nash. “They shot it in hi-def and did a brilliant job. What I wanted to do on this DVD was to put you in the best seat in the house.”

“We know that if this is a great deal for the artists — and we think it is — our roster of live concerts will grow and that is exactly what is happening,” Cuban says. “AXS TV is doing more live concerts on TV than the rest of the universe combined. It’s an exciting time for us.”

AXS TV arrives at the music business at a time when the future of the CD format is cloudy at best. Digital downloads have surpassed CD sales (according to Nielsen Soundscan). CD purchases have dropped a staggering 11.3% since January. And while music DVD sales remained flat from last year, the number of titles continues to grow. If and when the CD succumbs to extinction, it will leave the music DVD as the last physical format left for artists.

Others are not so sure the CD is on its death bed, but some retailers admit they are squeezing them out of the marketplace, choosing instead to embrace formats such as Blu-ray DVD. Blu-ray rose 26% in 2012, according to the Digital Entertainment Group, an association of DVD manufacturers.

With more than 80 million U.S. households now with HD TVs, the format is expected grow substantially in the next five years, bringing more music titles with it.

“I don’t think anyone is abandoning CDs any time soon,” says Mike Carden, president of Eagle Rock, a label releasing 80% of its titles as music DVDs. “But it’s getting harder and harder to maintain shelf space for CDs.”

Artists have always relied on a physical retail presence for branding and to drive impulse buying. With retailers shifting to a DVD focus, musicians have been fast to embrace the trend. The Rolling Stones have already released four DVD titles with Eagle Rock in the past two years, including “Stones in Exile” and “Some Girls Live in Texas,” all of which have landed in the Top 10 of DVD sales.

Many heritage artists have shifted to a DVD/ CD format that offers a concert hi-def DVD program, with a free music CD thrown in as a bonus. In addition to the Stones and CSN, Elvis Presley, Duran Duran, Chick Corea’s Return to Forever and Styx are among the combo offerings.

Phil Carson, former Atlantic Records exec now co-managing Foreigner, sees DVD/CD packages that give limited-period exclusivity to retailers like Walmart as a trend that will grow.

“The music DVD/ D package is a combination that is here to stay, but I still don’t think the CD release is going anywhere soon,” he says.

Unlike music clearance for CDs, each deal for DVD publishing requires clearances with the various parties, and sometimes not everyone is willing to cooperate.

“Getting music publishing cleared for a DVD is a nightmare,” says Music Video Distributor’s Ed Seaman. “There is no compulsory rate as with music CDs, and publishers will often say just say no or they charge obscene rates.”

Such was the case for Nashville Pussy, which had to drop an AC/DC cover from its concert video because the band’s self-owned publishing company, says Seaman, “wouldn’t clear it at any rate.”

Similarly, country artist Jason Aldean had to pull his cover of “Sweet Child of Mine,” from his new DVD because Guns N’ Roses’ Axl Rose refused to clear it.

Carden and Seaman concur that contemporary pop artists sell far less music DVDs than classic acts.

“The bands who you see people wearing T-shirts of, have the best DVD sales,” Seaman says. “Metal bands; progressive rock, anything Beatles oriented; these are passionate fans who want to see those bands on their TV sets.”

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