Wednesday, May 16, 2012

Analysis: Key to Universal-EMI decision: Has music business lost control?

WASHINGTON (Reuters) - On the face of it, Universal Music Group's bid to buy a big chunk of EMI stands to make the world's leading music company an even more formidable force, combining Universal's star lineup of Lady Gaga and Rihanna with the British company's deep library of The Beatles, Pink Floyd and Katy Perry.

Certainly the fierce opposition from rival Warner Music Group, consumer groups and independent music companies makes it seem that way. They have all vowed to fight it tooth and nail, telling U.S. and European regulators that the merger would create a behemoth capable of controlling the future of digital media by withholding content from digital music startups.

But industry insiders say regulators also are looking at a counterargument - that the major recording companies already are weakened giants worn down by the forces of big retailers and piracy that put downward pressure on the price of CDs and digital downloads.

U.S.-based Universal, owned by Paris-based Vivendi, made the $1.9 billion deal in November.

Eight antitrust experts interviewed about the issue were divided about the chances for approval, largely because the music landscape has changed so much in recent years that it is not clear that a deal that would concentrate 40 percent of the recorded music industry in one company would harm competition.

'Ten years ago, the labels had power. Today they don't have any power. If they (the U.S. Federal Trade Commission) block it, it's just because they don't understand the market,' said Daniel Sokol, who teaches antitrust issues at the University of Florida Levin College of Law.

Two antitrust experts who spoke on condition of anonymity to protect business relationships said that Universal faces a tough fight in winning U.S. approval - especially because Warner Music Group, owned by privately held Access Industries, has organized opposition to the deal.

'My sense is that the FTC could take a hard line depending on how good a job Warner does in generating complaints,' one expert said. 'It wouldn't surprise me if it didn't go through.'

Universal is gearing up to begin discussions later this month with the FTC about potential asset sales that could make the transaction more palatable to regulators, said a person familiar with the matter who spoke on condition of anonymity.

Universal also is considering making a request to the FTC in the next two weeks for the agency to decide on approval of the deal within a 30-day period, this source added.

Two industry insiders who have met with U.S. regulators say the FTC is asking about the pricing power of retailers like Apple and Amazon, who use cheap music as loss leaders to attract customers for more expensive goods, and about the pressure of illegal music downloads.

The FTC also is asking about allegations made by consumer groups and others that Universal has been reluctant to license its enormous catalog of must-have music to digital startups, or has licensed the music only on onerous terms, those insiders said, speaking on condition of anonymity.

Universal spokesman Peter Lofrumento said the company is working closely with the FTC and is confident of approval. The FTC declined to comment on the matter.

As the U.S. regulatory review heats up, a Senate Judiciary subcommittee said last week it will hold a hearing on the matter. The panel has no official say over approval, but is able to help shape the debate over the deal.

'AN ANTICOMPETITIVE MERGER'

While the FTC may accept the argument that major retailers push prices down, Bert Foer, president of the American Antitrust Institute advocacy group, dismissed piracy as a defense.

'It's a passing issue and it will eventually get dealt with. It should not be the justification for allowing an anticompetitive merger to take place,' Foer said.

The consumer groups Public Knowledge and Consumer Federation of America have written to two U.S. House of Representatives and Senate antitrust subcommittees to urge close scrutiny of the deal. The groups said Universal's 40 percent market share could make it a bully when innovative startups come up with new ways to sell and stream music online.

'If you control that much of the marquee content, they can determine the fate of new digital business models by withholding content,' Mark Cooper of Consumer Federation of America said.

Universal said those worries are unfounded.

'The future of music also depends on providing consumers with as many legal alternatives to piracy as possible,' Universal's Lofrumento said. 'We have licensed more digital music services than any other music company and will continue to do so to the benefit of our artists, consumers and the overall industry.'

Another critic of the deal is IMPALA, a European organization of independent music companies. It points out that last year 90 percent of the Top 1000 for downloads and airplay were from the big four music companies.

'These results are very revealing, especially as they already factor in independent successes such as Adele. They send a serious warning about the dangers of concentration in music for diversity in Europe,' said Helen Smith, IMPALA executive chair.

British singer Adele is on the independent label XL Recordings.

European antitrust regulators in Brussels are asking many of the same questions that the FTC is asking, according to sources there, and are also asking whether artists would be able to switch record labels easily after the deal.

The European regulators, who are more public about their investigations than their U.S. counterparts, are due to decide by September 6 whether to clear the deal.

Officials in Brussels are concerned since the combination of Universal and EMI's recorded music unit would create a player almost twice the size of the nearest European rival.

They also appear to be focusing on the companies' market share in classical music and jazz, compilations and the extent to which Universal dominates hit charts.

In addition to Lady Gaga and Rihanna, Universal's roster of artists includes Nicki Minaj, Jay-Z, Taylor Swift and LL Cool J. In addition to Katy Perry, EMI's list includes Norah Jones, Coldplay, Joss Stone and Lady Antebellum.

PLUMMETING REVENUES

Across U.S. music labels, revenues have plummeted 50 percent from 2000 to $7 billion in 2011, according to the Recording Industry Association of America trade group, which blames piracy for much of the losses.

Employment by record companies in the United States has fallen to less than 10,000 now from about 25,000 people in 1999, the association said.

The situation has not been much better in Europe. British company EMI, which was the first home to the Beatles when they were unknowns in 1962, was heavily indebted in 2007 when British private equity firm Terra Firma bought it with financing from Citigroup.

In February 2011, EMI, unable to pay the loans, was acquired by Citigroup. The bank cleared out the debt, broke the company in two and sold the parts last November.

Sony snapped up EMI Music Publishing, the portion of the company that handles copyrights to 1.3 million songs, for $2.2 billion, and received European approval in April.

The FTC has not weighed in on the Sony deal, but it is not expected to run into antitrust trouble in the United States.

Universal won the rights to EMI's recorded music unit after Warner Music dropped out of bidding. Warner, the No. 3 U.S. music company, has now pursued its public campaign against Universal's deal.

Edgar Bronfman Jr., the former chairman of Warner, said at the Dive Into Media Conference in January in reference to the deal: 'It's dangerous, problematic and has to be stopped.'

Bronfman argued that Universal, with a 40 percent share, would determine not only the future of the recorded music industry but any kind of digital music industry.

Warner Music declined to comment for this story.

Typically that sort of market share would prompt regulators to challenge a deal - and they might despite Universal's cries that they are powerless to raise prices when faced with retail giants and illegal downloads.

Evan Stewart, an antitrust expert with the law firm Zuckerman Spaeder, argued that the FTC could well approve the deal if Universal's lawyers have compelling data to support arguments about Apple and Amazon's pricing power, and the effect of piracy. 'If they're skillful at making that presentation, I think it will be approved,' Stewart said.

(Editing by Karey Wutkowski and Will Dunham)



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Tuesday, May 15, 2012

'X Factor' may be singing "Oops!..." over Britney

LOS ANGELES (Reuters) - Simon Cowell and Fox television are gambling on pop icon Britney Spears and teen singer Demi Lovato to revive 'The X Factor', but for many media watchers it could be a case of 'Oops!...' did they do it again?

Spears, 30, and former Disney Channel star Lovato, 19, are expected to bring in bigger, and more importantly younger, audiences when the singing contest returns for its second season on U.S. television in September after a weaker-than-expected debut in 2011.

But whether viewers will tune in is less certain, and the huge check Fox and the producers wrote - Spears is reported to be getting $15 million for one season - may not pay off, pop culture and TV experts say.

'It's a short term gain for 'X Factor'. There will be a huge amount of PR and when the show premieres there will be huge ratings,' said Lyndsey Parker, managing editor of Yahoo! Music. 'But I think it could be a disaster. I think Britney could make Nicole Scherzinger look like a genius,' Parker said.

Spears, who became a teen sensation with hit records such as 'Oops! ... I Did It Again,' suffered a career and personal meltdown in 2007 but later rebounded. Now, at age 30, the 'Womanizer' mom of two is mostly shielded from the media and rarely gives live interviews.

Andy Dehnart, editor of RealityBlurred.com, said many viewers will likely tune in just to 'see her crash and burn.'

'It's not clear she is really a TV personality and somebody who can give the show what it needs, which is really insightful, concise, witty critiques of these singers,' Dehnart said.

'I really don't think it's going to work, but I am hopeful that Britney will surprise us,' he added.

FACTORING IN THE CHANGES

'X-Factor' came into its first season last year with high expectations but failed to reach them. With former 'American Idol' judge Paula Abdul and ex-Pussycat Doll Nicole Scherzinger on the panel of mentors/judges, Cowell had boasted his new show would oust 'Idol' as the most-watched show on U.S. television.

His claim rang hollow when 'X Factor' drew only about half the 'Idol' audience over its first season, and critics slammed it for being noisy, stale and over-produced.

Spears and Lovato were hired to fill the slots left by Abdul and Scherzinger, who were fired in January with Steve Jones, a British presenter who was seen as wooden and flustered.

Cowell said the new panel 'will be dynamic and will work really well with the changes we are making to the show,' but he did not spell out what those changes will be.

Hitfix.com music blogger Melinda Newman questioned whether Spears will sizzle on live television the way she does on her highly-produced records and in her well-choreographed concerts.

Spears may flail on a TV show in which the best moments happen when judges speak off the cuff and often deliver harsh news to aspiring singers who don't make the grade, experts said.

'You are saying to someone, 'you may succeed but your dream of succeeding through us ends here.' That is emotional pressure and that is hard to do,' said Newman.

'The public has not seen Britney in an environment where we would know if she is able to withstand that level of pressure and have to think very quickly on her feet,' she added.

Lovato, 19, the former star of Disney Channel's 'Sonny With a Chance', is seen as a draw for Latino viewers because of her Mexican, Irish and Italian descent. She also will be the youngest judge on a U.S. TV talent show, and that is key because broadcast TV networks try to lure younger audiences whom advertisers covet for their spending power.

But TVLine.com writer Michael Slezak said Lovato's resume was 'as light as beaten egg whites' and questioned whether the teen was ready for the spotlight of a high-profile of a TV show after her 2010 stint in rehab for eating disorders and cutting.

Also raising eyebrows has been Spears' reported $15 million salary - more than five times what Abdul was earning - especially since Cowell has yet to find a capable host to replace Jones.

'If that $15 million is an accurate figure, it makes no sense,' said Dehnart. 'To give that to someone who is unproven on a show is really a disaster (and) seems absurd to me.'

Despite some misgivings, Newman felt Spears would be good for the show because Cowell needed a top celebrity who is going to bring viewers. 'He needs someone on the level of Christina Aguilera or Jennifer Lopez,' she said, referring to the judges on rivals 'The Voice' and 'American Idol,' respectively.

Still, Newman said 'X Factor' needed more than celebrities to keep audiences coming back two nights a week for four months.

'The inherent problem with any of these shows it that you are only as good as your contestants. That is catching lightning in a bottle and getting a Susan Boyle,' said Newman.

'If you watch the show, you are watching because you are invested in these acts.'

(Reporting By Jill Serjeant; Editing by Bob Tourtellotte and Christine Kearney)



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Lady Gaga gagged in Indonesia after Islamic opposition

JAKARTA (Reuters) - Pop star Lady Gaga has been refused a permit to perform in the Indonesian capital next month over security concerns, police said on Tuesday, after Islamic groups voiced strong objections to her 'vulgar' style.

Three Islamic groups have expressed their opposition to the concert on June 3, demanding it be stopped, national police spokesman Saud Usman Nasution said by telephone.

Indonesia, a secular state, has the world's largest population of Muslims as well as significant minorities of Christians, Buddhists and Hindus.

'She's a vulgar singer who wears only panties and a bra when she sings and she stated she is the envoy of the devil's child and that she will spread satanic teaching,' said Salim Alatas, the Jakarta head of hardline Islamic Defender Front (FPI). 'This is dangerous.'

More than 30,000 concert tickets from a total of 40,000 tickets had been sold, said the Jakarta Post newspaper. Tickets ranged in price from 465,000 rupiah ($50.35) to 2.25 million rupiah ($240). ($1 = 9235 rupiah)

(Reporting by Olivia Rondonuwu; Editing by Matthew Bigg and Jeremy Laurence)



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Monday, May 14, 2012

Cowell vows to "kick butt" with new "Factor" stars

NEW YORK/LOS ANGELES (Reuters) - Britney Spears and former Disney Channel star Demi Lovato officially joined the U.S. version of 'The X Factor' on Monday, leading creator Simon Cowell to pledge the second season would 'seriously kick butt' when it returns in September.

Spears, 30, the world's biggest pop phenomenon of the 2000s, and Lovato, 19, will fill the judge's slots left open by Paula Abdul and Nicole Scherzinger, who were both fired by Cowell after a disappointing first season in 2011.

Spears and Lovato appeared with Cowell and fellow judge Antonio 'L.A' Reid at Fox television's presentation of its new 2012-13 season programming to advertisers in New York.

The announcement ended months of speculation over the new faces on the singing contest, which offers a $5 million recording contract to a new star found from tens of thousands of ordinary Americans.

'We've delivered. Rumors are one thing but we've delivered,' a delighted Cowell said. Moments earlier he Tweeted a photo of himself with record producer Reid, Spears and Lovato, saying 'Can't believe it's finally happening. Very exciting!'

Spears found fame as a 16-year-old in 1998 with her debut single 'Baby One More Time' and went on to score multiple hits with songs like 'Crazy', 'Oops I Did It Again' and 'Womanizer.' She had a much-publicized personal and career meltdown in 2007, but made a comeback with her 2008 album 'Circus' and a world tour.

'I'm so excited by this whole experience. It's so different from anything I've ever done,' Spears said in New York.

Lovato starred in the Disney Channel's TV series 'Sonny With a Chance' before launching a career as a pop singer with hit singles like 'Skyscraper'.

'Demi's had an amazing career in music, TV and film for someone her age. She's young, confident and enthusiastic. I think it's really important that she speaks to our younger audience,' Cowell said in a statement.

Fox gave no details of their contracts, but Spears is widely reported to be getting $15 million for a single season, which would make her one of the highest-paid TV reality show judges.

Cowell launched the U.S. version of 'X Factor' last September with great fanfare and boasts that it would topple aging 'American Idol' as America's most-watched TV show.

But 'X Factor' mustered only about 13 million viewers - around half the audience for 'American Idol' - and many critics disliked its brash, noisy production and felt it added little that was new to the crowded TV singing contest field.

'The X Factor' faces further challenges in its second season following NBC's decision to air its hit singing contest 'The Voice' in the fall of 2012, as well as the spring.

Cowell said on Monday that other changes were being made to the show but gave no details.

'This year we're going to seriously kick butt. I'm thrilled 'The Voice' is going to compete with us, but second's not great,' the acid-tongued Briton said in New York.

Fox and Cowell have yet to announce a new host after firing little-known Briton Steve Jones in January. Cowell has said he would like two hosts - a man and a woman - but no names have yet emerged.

(Reporting By Yinka Adegoke and Jill Serjeant; Editing by Christine Kearney and Bob Tourtellotte)

Britney Spears, Demi Lovato are new "X Factor" judges

(Reuters) - Britney Spears and former Disney Channel star Demi Lovato will join talent show 'The X Factor' as judges when the U.S. version of the contest returns to television in September, Fox television and the show's creator Simon Cowell said on Monday.

Cowell said in a Twitter message that Spears, 30, the world's biggest pop phenomenon of the 2000s, will join him on 'X Factor,' which searches for a new pop star from tens of thousands of ordinary Americans.

Spears will be joined by singer and actress Lovato, 19, to fill the judge's seats left by Paula Abdul and Nicole Scherzinger, who were both fired by Cowell after a disappointing first season in 2011.

Cowell announced the news on Twitter, sending a photo of himself with record producer Antonio 'L.A.' Reid, Spears and Lovato and saying 'Can't believe it's finally happening. Very exciting!'

His Tweet landed moments before Fox made the official announcement in New York in a presentation to advertisers of its new 2012-13 season programming.

Spears and Lovato both appeared in person at the presentation, ending months of speculation about the replacements for the show.

Spears found fame as a 16 year-old in 1998 with her debut single 'Baby One More Time' and went on to score multiple hits with songs like 'Crazy', 'Oops I Did It Again' and 'Womanizer'. She had a much-publicized personal and career meltdown in 2007 but made a comeback with her 2008 album 'Circus' and a world tour.

Lovato found fame on Disney Channel's TV series 'Sonny With a Chance' before launching a career as a pop singer with hit singles like 'Skyscraper'.

'Britney remains one of the biggest stars in the world, she's talented, fascinating - and I believe she knows exactly how to spot 'The X Factor',' Cowell said in a statement.

'Demi's had an amazing career in music, TV and film for someone her age. She's young, confident, and enthusiastic. I think it's really important that she speaks to our younger audience.'

Spears said in New York, 'I'm so excited by this whole experience. It's so different from anything I've ever done.'

Fox gave no details of their contracts but Spears has been widely reported to be getting $15 million a year for 'X Factor' gig, which would make her one of the highest-paid TV reality show judges.

Mariah Carey, Janet Jackson, Miley Cyrus and Avril Lavigne were among other names rumored to have been approached or in talks with Cowell about taking part in 'X Factor'.

Cowell launched the U.S. version of 'X Factor' last September with great fanfare and boasts that it would topple ageing 'American Idol' as America's most-watched TV show.

But the show mustered only about 13 million viewers - about half the audience for 'American Idol' - and many critics disliked its brash, noisy production and felt it added little new to the crowded TV singing contest field.

Fox and Cowell are still yet to announce a new host after firing little-known Briton Steve Jones in January.

'The X Factor' faces further challenges in its second season following news on Sunday that NBC will be airing its hit contest 'The Voice' in the fall of 2012, as well as the spring.

(Reporting By Yinka Adegoke and Jill Serjeant; Editing by Piya Sinha-Roy and Christine Kearney)

Friday, May 11, 2012

Whitney Houston's daughter stars in reality TV series

LOS ANGELES (Reuters) - Whitney Houston's teenage daughter will star in a reality TV show that follows the family of the 'I Will Always Love You' singer as they cope with her sudden death earlier this year.

The Lifetime channel said on Friday that Bobbi Kristina Brown, 19, Houston's mother Cissy, the singer's brother Gary, and her manager and sister-in-law Pat Houston would all appear in the show that will air later this year.

'The Houston Family Chronicles', billed as a documentary series, will follow Pat and Gary Houston 'as they take on their greatest challenge, supporting and guiding Bobbi Kristina as she faces the world alone, without the one person she relied on the most, her mother,' Lifetime said.

Bobbi Kristina is the only child of Houston with her ex-husband Bobby Brown, and she was hospitalized twice for anxiety after her mother was found dead in a Beverly Hills hotel room in February. She is now being raised by Pat and Gary Houston.

Houston, 48, drowned in her hotel room's bathtub in what authorities have said was an accidental death triggered by cocaine use and heart disease. The singer had a history of addiction to cocaine and other drugs.

'The tragic loss of Whitney Houston left a void in the hearts of people all over the world, but certainly none more so than her beloved family,' said Lifetime programming executive Rob Sharenow.

'In this series, the multi-generations of the Houston family will bravely reveal their lives as they bond together to heal, love, and grow,' he added in a statement.

Pat Houston said she had been developing a TV project for herself for some time but the unexpected death of Houston had affected the direction of the show.

'It is my hope that others will be enlightened as they watch our family heal and move forward,' she said in a statement.

Lifetime, whose audience is largely female, said it had ordered 10 hour-long episodes of the series. A premier date has not yet been announced.

(Reporting By Jill Serjeant; Editing by Bob Tourtellotte)

Thursday, May 10, 2012

Hollie Cavanagh couldn't make 'Idol' fans love her

NEW YORK (Reuters) - Hollie Cavanagh was sent home from top-rated TV talent show 'American Idol' on Thursday night after singing 'I Can't Make You Love Me' - a song choice that proved prophetic.

Cavanagh closed out the show by performing Miley Cyrus' 'The Climb,' remaining composed while fellow contestant Joshua Ledet wept as she sang.

Almost 70 million votes were cast to determine Thursday's outcome. Audience voting was based on performances on Wednesday night's episode during which contestants sang songs by artists from California, followed by songs they wished they had written.

Cavanagh first belted out 'Faithfully' by rock band Journey, and the show's judges marveled that she was hitting her stride. Panelist Randy Jackson said her rendition 'did him proud.'

The judges, however, were less enthusiastic about her second selection, Bonnie Raitt's 'I Can't Make You Love Me.' Jackson called it 'the wrong choice at the wrong time.' Jennifer Lopez told her there was 'a little too much vibrato,' and mentor Jimmy Iovine was the most blunt, saying Cavanagh 'crashed and burned.'

At 18-years-old, Cavanagh's failure was chalked up to her lack of real-life experience with heartbreak that was needed to infuse the song with proper emotion.

On Thursday's elimination episode, Lopez rose from the judges' table to perform her new song 'Dance Again.' Season 7 winner David Cook also stopped by to serenade audiences with his 'The Last Song I'll Write for You.'

'Idol', which first aired in on Fox in 2002, has launched the careers of singers Kelly Clarkson, Adam Lambert, and Jennifer Husdon, among many others. Now in its 11th season, the show continues to be the most watched reality show in America.

Audiences vote for their favorite performers by phone and text message each week as contestants are challenged by a variety of musical styles. The winner receives a recording contract following the final episode later this month.

(Reporting By Andrea Burzynski; Editing by Bob Tourtellotte)



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