AnitaPeterson
Diamond Member
I apoligize for pasting this huge article, but since it's the Wall Street Journal, the site isn't accessible.
I thought you might like to see where record companies spend the money earned on overpriced CDs, Napster lawsuits and shameless propulsion of mediocrity.
Happy Reading!
Source
The Wall Street Journal
Headline
The $2.2-million CD that went bust: MCA's effort to create 'new Britney' ends up selling 378 copies
Byline
Jennifer Ordonez
Section
Arts
Dateline
MARINA DEL REY, California
MARINA DEL REY, California - Eighteen-year-old recording artist Carly Hennessy is packing up her small apartment. Her promotional posters
will go into storage, and the beige rental couch will be returned. A weight-control message that the slender teen scrawled in marker on the
refrigerator -- "NO, U R FAT" -- will be wiped clean.
For two years, MCA Records paid the rent here while Hennessy prepared for pop stardom. And that's not all: The label so far has spent $2.2
million to make and market her new album, an upbeat pop recording called Ultimate High.
"Some people struggle for years," she says. "I was very, very lucky."
Not lucky enough. Ultimate High was released in stores across North America three months ago. So far, it has sold 378 copies worldwide --none
in Ottawa, it seems, although a few copies are available at CD Warehouse and HMV.
At the suggested retail prices, those sales amounted to less than $5,000. In many other industries, this would be considered an extraordinary
bomb. But in today's troubled music business, it's routine. Of the thousands of albums released in North America each year by the five major
record companies, fewer than five per cent become profitable.
The high failure rate has become the focus of an escalating battle. On one side are big names such as Don Henley and Sheryl Crow, who are
fighting the industry practice of holding top performers to multiple-album contracts that can take decades to fulfill. They complain that labels
unfairly enforce such deals because they need to offset their lavish spending on ill-conceived acts that never make it.
"We're expected to indefinitely fund the record company," says Henley, a solo artist and member of the Eagles, who calls the industry's high
percentage of flops "shameful."
Record companies say they need to keep blockbuster acts on their rosters for as long as possible because they rarely see returns on the huge
sums they sink into new performers, and because it's so hard to predict who will succeed. The companies warn they won't be able to support as
much young talent if contracts are limited, and point out that some of the loudest critics of the current system were its beneficiaries -- before they
were rock stars.
The companies also say it's become harder to launch new acts. Deregulation of the U.S. radio industry in '96 led station owners to consolidate into
a few big companies, which are under pressure to maximize profits and pull songs off the air that aren't instant hits.
Also, superstores such as Wal-Mart, which stock fewer titles than traditional music stores, are the fastest-growing segment of music retailing,
making it costlier and more competitive for record labels to secure prime shelf space.
As a result, industry executives estimate that major-label releases must sell 500,000 copies just to break even. Last year, of the 6,455 new albums
distributed in North America by major labels, only 112 sold that many.
The story of MCA and Carly Hennessy shows the dysfunctional economics of the music industry at work. MCA hooked up with the spunky teen
three years ago because it was trying to get a piece of the great success competitors enjoyed with young pop artists like Britney Spears and 'N
Sync.
Hennessy, a native of Dublin, had released her debut musical effort, Carly's Christmas Album, in Ireland at age 10, after performing all over
Europe as Little Cosette in Les Miserables. Soon, she and her family began hoping for much more, and by 15 Hennessy had dropped out of
school. "The most beautiful voice you'd ever heard -- and she would have ended up singing in the bath," says her father, Luke Hennessy.
He flew to Los Angeles in early '99 and, after several months got a disc of his daughter performing songs by various artists into the hands of music
producer Steve Dorff. He recorded a new demo of Hennessy singing some songs he'd written, and it eventually crossed the desk of MCA
president Jay Boberg, who says he found Hennessy's voice "extraordinary."
Although Hennessy didn't write her own music and hadn't ever performed solo in front of a big crowd, she had charisma, drive and pipes -- three
things music execs say are most difficult to find in a single young performer.
Boberg envisioned starting her off as a teen-oriented pop singer, in the hopes that she could one day develop into a more mature female vocalist
along the lines of Celine Dion.
MCA offered her a six-album contract, under which Hennessy would get a $100,000 advance for her first album, plus $5,000 a month in living
expenses while the album was being made. The label would own the recorded music and cover recording and promotion costs.
For Hennessy to make any more money, the label would first have to recoup its advance, its recording costs and half the cost of any music videos,
as well as her living expenses -- meaning the album would have to sell at least 500,000 copies. At that point, Hennessy could collect royalties
amounting to 15 per cent of sales. But she would still owe a cut to a phalanx of producers and managers, as well as other record-company fees --
leaving her with about 80 cents per album.
Such contracts have drawbacks for both sides. Artists can be unceremoniously dropped if they don't live up to expectations. But if they blossom
into superstars, they can use their new leverage to demand that their contracts be rewritten to pay them much more.
In her Dublin kitchen, Hennessy signed the nearly 100-page document as her mother, Marie, captured the moment on videotape. Soon, she and
her father moved to L.A., eventually settling into a two-bedroom apartment in the beachside suburb of Marina del Rey. Hennessy spent three
months recording eight songs. The total tab, including studio time, musicians' salaries, producers' fees and Hennessy's living expenses, was about
$350,000 -- typical for a first pop record.
Unfortunately, neither Hennessy nor MCA were happy with the results. Dorff, who had produced and written songs for Celine Dion and others,
says he thought the album was "contemporary" and made the best use of Hennessy's talents. But Hennessy thought the music was "old-sounding."
Boberg deemed it "too Barbra Streisand" -- too serious for its target teen audience.
At that point, Boberg could have just shelved the project and sent Hennessy on her way. But he was under pressure to come up with a new star,
and he had already invested in someone he believed had talent. In the fickle music business, he says, a performer's success can only be tested in
the marketplace.
For example, in 2000 Boberg took a chance on another unproven pop singer, Shaggy, whose album, Hotshot, went on to sell 4.5 million copies in
the U.S., the second-biggest album of 2001. "You don't now how something is going to do until you see whether the radio gatekeepers accept it,"
he says.
MCA decided to re-record Hennessy's album from scratch. In early 2000, the company retained Gregg Alexander, who had produced hits in
Europe for former Spice Girl Geri Halliwell, to produce four songs. For the rest of the album, MCA turned to L.A. songwriter Danielle Brisebois.
She had never produced an album before, but that didn't bother Hennessy, who says Brisebois became "like a sister." Both had been child
actresses -- Brisebois, 32, had played Archie Bunker's niece Stephanie on All In the Family -- and both had appeared in productions of Annie.
The women experimented in the studio in search of Hennessy's sound and creative direction. They found the teen sang with more emotion when
the lights were turned off. She also seemed to sing better when she wore high heels -- the angle helped her pitch. They taped some vocals at 2
a.m. so Hennessy's voice would be more raspy.
When she wasn't recording, Hennessy babysat around her apartment complex and enjoyed occasional major-label perks, like the surprise
limousine MCA sent to take her and her friends to a Blink-182 rock concert for her 18th birthday.
In April 2001, with the album still unfinished, MCA decided to get Hennessy some notice by releasing her first single, a bouncy tune called I'm
Gonna Blow Your Mind. Its opening lines:
I really really,
I really really,
I really really,
I really really,
I really really
Want to kiss you,
But much more than that,
Boy, I'm gonna blow your mind.
It was a risky choice. MCA realized the song's implied subject matter -- oral sex -- made it unlikely to get much exposure on youth-oriented
outlets deemed important in launching young artists, like the Radio Disney's stations.
But executives felt it was Hennessy's catchiest song. MCA spent $250,000 on a video that showed her dancing in a disco and jumping around
with pals in their sleepwear. On a call-in show, Nickelodeon asked viewers to rate 30 seconds of the video, but the audience was unresponsive.
The video was quickly shelved.
The label also earmarked about $200,000 to hire independent promoters -- middlemen who use their influence with radio programmers to secure
airplay. In addition, MCA spent about $100,000 on "imaging" for Hennessy, including photos, clothes and makeup artists. It sent her on a
$150,000, four-week promotional tour, where she sang at malls over recorded tapes, backed by two dancers, and at station-sponsored concerts.
She bantered with DJs and participated in promotions.
In Little Rock, Ark., a male listener won a dinner date with Hennessy. She recalls him as "the most annoying boy I have ever known in my life."
But the single wasn't catching on. In markets across the country, program directors who met with Hennessy professed to like the song, but then
didn't play it much. The single, it seems, was in an awkward position: The music was a little too mature for regular Top 40 radio and a little too
pop-sounding for adult Top 40.
With the meter running and the album still unfinished, MCA decided last spring to bring in additional management. Miles Copeland, a close ally of
Boberg's who had made a name managing the Police and Sting, signed on as co-manager. Copeland felt the recording process was "out of hand,"
and he exerted pressure to wrap up the album quickly.
By the time the album was done, MCA had spent about $640,000 re-recording it, including Hennessy's living expenses. That brought the total
cost of making the album to $1 million -- high for a first album. But at least, Boberg says, "Everybody thought this was going to be a hit."
Called Ultimate High, it included a few songs from a disc Brisebois had made years before but had never released. The music had a pop sound,
with slightly heavier guitars. The lyrics, mostly written by Brisebois and Alexander, dealt with unrequited young love and sexual themes.
The failure of the first single meant MCA was already behind schedule as the album's Nov. 13 release date approached. While albums in some
genres, like rock, can build slowly in the marketplace, pop releases generally have to hit big fast. To try to build momentum somewhere, the label
got her a Canadian modeling contract and sent her on tour to Toronto, Montreal and Vancouver.
MCA also prepared to release a second single, a feel-good tune called Beautiful You, and spent $500,000 for promotion, bringing its total
investment in the CD to $2.2 million.
But Beautiful You got even less airplay than the first single. With no radio play, MCA decided against a concert tour. Retailers, meanwhile, were
leery of investing much in an album by an artist who seemed to be going nowhere. Music stores had stocked 50,000 copies of Hennessy's two
singles, and sold 7,000. So when it came time to order the album, retailers bought just 10,000. With virtually no radio play or press, there was
little hope for the album as it hit stores.
"It was not rejected by the public," Boberg says. "We just never made it to the public."
In a last-ditch effort to salvage its investment, MCA decided to release Ultimate High in Europe later this year. In January, the label instructed
Hennessy to pack up her apartment and turn in the car they'd provided, and moved her back to Ireland. MCA's European division plans to
reshoot the album's cover and launch a single in March. If the album, due to be released in April, doesn't take off, MCA will re-evaluate.
"If we can't find any market in the world that validates our view she's a talent, then we have to question whether to move forward," Boberg says.
In the meantime, Hennessy is dieting and working out to look good for her European tour. She got a tattoo -- her first -- of an intricate cross on
the small of her back, and has started learning to play guitar.
"This album is going to be huge," she says. "I won't stop until it is."
I thought you might like to see where record companies spend the money earned on overpriced CDs, Napster lawsuits and shameless propulsion of mediocrity.
Happy Reading!
Source
The Wall Street Journal
Headline
The $2.2-million CD that went bust: MCA's effort to create 'new Britney' ends up selling 378 copies
Byline
Jennifer Ordonez
Section
Arts
Dateline
MARINA DEL REY, California
MARINA DEL REY, California - Eighteen-year-old recording artist Carly Hennessy is packing up her small apartment. Her promotional posters
will go into storage, and the beige rental couch will be returned. A weight-control message that the slender teen scrawled in marker on the
refrigerator -- "NO, U R FAT" -- will be wiped clean.
For two years, MCA Records paid the rent here while Hennessy prepared for pop stardom. And that's not all: The label so far has spent $2.2
million to make and market her new album, an upbeat pop recording called Ultimate High.
"Some people struggle for years," she says. "I was very, very lucky."
Not lucky enough. Ultimate High was released in stores across North America three months ago. So far, it has sold 378 copies worldwide --none
in Ottawa, it seems, although a few copies are available at CD Warehouse and HMV.
At the suggested retail prices, those sales amounted to less than $5,000. In many other industries, this would be considered an extraordinary
bomb. But in today's troubled music business, it's routine. Of the thousands of albums released in North America each year by the five major
record companies, fewer than five per cent become profitable.
The high failure rate has become the focus of an escalating battle. On one side are big names such as Don Henley and Sheryl Crow, who are
fighting the industry practice of holding top performers to multiple-album contracts that can take decades to fulfill. They complain that labels
unfairly enforce such deals because they need to offset their lavish spending on ill-conceived acts that never make it.
"We're expected to indefinitely fund the record company," says Henley, a solo artist and member of the Eagles, who calls the industry's high
percentage of flops "shameful."
Record companies say they need to keep blockbuster acts on their rosters for as long as possible because they rarely see returns on the huge
sums they sink into new performers, and because it's so hard to predict who will succeed. The companies warn they won't be able to support as
much young talent if contracts are limited, and point out that some of the loudest critics of the current system were its beneficiaries -- before they
were rock stars.
The companies also say it's become harder to launch new acts. Deregulation of the U.S. radio industry in '96 led station owners to consolidate into
a few big companies, which are under pressure to maximize profits and pull songs off the air that aren't instant hits.
Also, superstores such as Wal-Mart, which stock fewer titles than traditional music stores, are the fastest-growing segment of music retailing,
making it costlier and more competitive for record labels to secure prime shelf space.
As a result, industry executives estimate that major-label releases must sell 500,000 copies just to break even. Last year, of the 6,455 new albums
distributed in North America by major labels, only 112 sold that many.
The story of MCA and Carly Hennessy shows the dysfunctional economics of the music industry at work. MCA hooked up with the spunky teen
three years ago because it was trying to get a piece of the great success competitors enjoyed with young pop artists like Britney Spears and 'N
Sync.
Hennessy, a native of Dublin, had released her debut musical effort, Carly's Christmas Album, in Ireland at age 10, after performing all over
Europe as Little Cosette in Les Miserables. Soon, she and her family began hoping for much more, and by 15 Hennessy had dropped out of
school. "The most beautiful voice you'd ever heard -- and she would have ended up singing in the bath," says her father, Luke Hennessy.
He flew to Los Angeles in early '99 and, after several months got a disc of his daughter performing songs by various artists into the hands of music
producer Steve Dorff. He recorded a new demo of Hennessy singing some songs he'd written, and it eventually crossed the desk of MCA
president Jay Boberg, who says he found Hennessy's voice "extraordinary."
Although Hennessy didn't write her own music and hadn't ever performed solo in front of a big crowd, she had charisma, drive and pipes -- three
things music execs say are most difficult to find in a single young performer.
Boberg envisioned starting her off as a teen-oriented pop singer, in the hopes that she could one day develop into a more mature female vocalist
along the lines of Celine Dion.
MCA offered her a six-album contract, under which Hennessy would get a $100,000 advance for her first album, plus $5,000 a month in living
expenses while the album was being made. The label would own the recorded music and cover recording and promotion costs.
For Hennessy to make any more money, the label would first have to recoup its advance, its recording costs and half the cost of any music videos,
as well as her living expenses -- meaning the album would have to sell at least 500,000 copies. At that point, Hennessy could collect royalties
amounting to 15 per cent of sales. But she would still owe a cut to a phalanx of producers and managers, as well as other record-company fees --
leaving her with about 80 cents per album.
Such contracts have drawbacks for both sides. Artists can be unceremoniously dropped if they don't live up to expectations. But if they blossom
into superstars, they can use their new leverage to demand that their contracts be rewritten to pay them much more.
In her Dublin kitchen, Hennessy signed the nearly 100-page document as her mother, Marie, captured the moment on videotape. Soon, she and
her father moved to L.A., eventually settling into a two-bedroom apartment in the beachside suburb of Marina del Rey. Hennessy spent three
months recording eight songs. The total tab, including studio time, musicians' salaries, producers' fees and Hennessy's living expenses, was about
$350,000 -- typical for a first pop record.
Unfortunately, neither Hennessy nor MCA were happy with the results. Dorff, who had produced and written songs for Celine Dion and others,
says he thought the album was "contemporary" and made the best use of Hennessy's talents. But Hennessy thought the music was "old-sounding."
Boberg deemed it "too Barbra Streisand" -- too serious for its target teen audience.
At that point, Boberg could have just shelved the project and sent Hennessy on her way. But he was under pressure to come up with a new star,
and he had already invested in someone he believed had talent. In the fickle music business, he says, a performer's success can only be tested in
the marketplace.
For example, in 2000 Boberg took a chance on another unproven pop singer, Shaggy, whose album, Hotshot, went on to sell 4.5 million copies in
the U.S., the second-biggest album of 2001. "You don't now how something is going to do until you see whether the radio gatekeepers accept it,"
he says.
MCA decided to re-record Hennessy's album from scratch. In early 2000, the company retained Gregg Alexander, who had produced hits in
Europe for former Spice Girl Geri Halliwell, to produce four songs. For the rest of the album, MCA turned to L.A. songwriter Danielle Brisebois.
She had never produced an album before, but that didn't bother Hennessy, who says Brisebois became "like a sister." Both had been child
actresses -- Brisebois, 32, had played Archie Bunker's niece Stephanie on All In the Family -- and both had appeared in productions of Annie.
The women experimented in the studio in search of Hennessy's sound and creative direction. They found the teen sang with more emotion when
the lights were turned off. She also seemed to sing better when she wore high heels -- the angle helped her pitch. They taped some vocals at 2
a.m. so Hennessy's voice would be more raspy.
When she wasn't recording, Hennessy babysat around her apartment complex and enjoyed occasional major-label perks, like the surprise
limousine MCA sent to take her and her friends to a Blink-182 rock concert for her 18th birthday.
In April 2001, with the album still unfinished, MCA decided to get Hennessy some notice by releasing her first single, a bouncy tune called I'm
Gonna Blow Your Mind. Its opening lines:
I really really,
I really really,
I really really,
I really really,
I really really
Want to kiss you,
But much more than that,
Boy, I'm gonna blow your mind.
It was a risky choice. MCA realized the song's implied subject matter -- oral sex -- made it unlikely to get much exposure on youth-oriented
outlets deemed important in launching young artists, like the Radio Disney's stations.
But executives felt it was Hennessy's catchiest song. MCA spent $250,000 on a video that showed her dancing in a disco and jumping around
with pals in their sleepwear. On a call-in show, Nickelodeon asked viewers to rate 30 seconds of the video, but the audience was unresponsive.
The video was quickly shelved.
The label also earmarked about $200,000 to hire independent promoters -- middlemen who use their influence with radio programmers to secure
airplay. In addition, MCA spent about $100,000 on "imaging" for Hennessy, including photos, clothes and makeup artists. It sent her on a
$150,000, four-week promotional tour, where she sang at malls over recorded tapes, backed by two dancers, and at station-sponsored concerts.
She bantered with DJs and participated in promotions.
In Little Rock, Ark., a male listener won a dinner date with Hennessy. She recalls him as "the most annoying boy I have ever known in my life."
But the single wasn't catching on. In markets across the country, program directors who met with Hennessy professed to like the song, but then
didn't play it much. The single, it seems, was in an awkward position: The music was a little too mature for regular Top 40 radio and a little too
pop-sounding for adult Top 40.
With the meter running and the album still unfinished, MCA decided last spring to bring in additional management. Miles Copeland, a close ally of
Boberg's who had made a name managing the Police and Sting, signed on as co-manager. Copeland felt the recording process was "out of hand,"
and he exerted pressure to wrap up the album quickly.
By the time the album was done, MCA had spent about $640,000 re-recording it, including Hennessy's living expenses. That brought the total
cost of making the album to $1 million -- high for a first album. But at least, Boberg says, "Everybody thought this was going to be a hit."
Called Ultimate High, it included a few songs from a disc Brisebois had made years before but had never released. The music had a pop sound,
with slightly heavier guitars. The lyrics, mostly written by Brisebois and Alexander, dealt with unrequited young love and sexual themes.
The failure of the first single meant MCA was already behind schedule as the album's Nov. 13 release date approached. While albums in some
genres, like rock, can build slowly in the marketplace, pop releases generally have to hit big fast. To try to build momentum somewhere, the label
got her a Canadian modeling contract and sent her on tour to Toronto, Montreal and Vancouver.
MCA also prepared to release a second single, a feel-good tune called Beautiful You, and spent $500,000 for promotion, bringing its total
investment in the CD to $2.2 million.
But Beautiful You got even less airplay than the first single. With no radio play, MCA decided against a concert tour. Retailers, meanwhile, were
leery of investing much in an album by an artist who seemed to be going nowhere. Music stores had stocked 50,000 copies of Hennessy's two
singles, and sold 7,000. So when it came time to order the album, retailers bought just 10,000. With virtually no radio play or press, there was
little hope for the album as it hit stores.
"It was not rejected by the public," Boberg says. "We just never made it to the public."
In a last-ditch effort to salvage its investment, MCA decided to release Ultimate High in Europe later this year. In January, the label instructed
Hennessy to pack up her apartment and turn in the car they'd provided, and moved her back to Ireland. MCA's European division plans to
reshoot the album's cover and launch a single in March. If the album, due to be released in April, doesn't take off, MCA will re-evaluate.
"If we can't find any market in the world that validates our view she's a talent, then we have to question whether to move forward," Boberg says.
In the meantime, Hennessy is dieting and working out to look good for her European tour. She got a tattoo -- her first -- of an intricate cross on
the small of her back, and has started learning to play guitar.
"This album is going to be huge," she says. "I won't stop until it is."
