The End of 2006

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This is Celia Hirschman with On the Beat for KCRW.

The music industry ended on a sad note, with the passing of two great icons. Ahmet Ertegun, the longtime Atlantic Records co-founder and producer, died in mid December. Mr. Ertegun helped build the Atlantic Records powerhouse, borrowing $10,000 from a family dentist to start the label with a friend. Under his direction, Atlantic Records went on to sign The Drifters, The Coasters, Ruth Brown, Big Joe Turner, Ray Charles, Roberta Flack, Aretha Franklin, Led Zepplin, Cream, The BeeGees, and many others. Mr. Ertegun was known for his graceful style, keeping both artists and executives content, which is not an easy to do in the music business.

His death coincides ironically with the end of an important era in music, that is, the end of the major-label stronghold. With media conglomerates like T-Mobile, Google, AT&T, Apple, Microsoft, Sprint, Verizon, and MySpace taking a far more active role in selling and distributing music, the major labels are quickly becoming out matched and out muscled. The label business will continue on, but 2007 will begin a new period of big business squeezing record label's profits with their distribution aptitude and marketing scope. After all, when you control the distribution, you control the money.

The second and far more surprising loss in December, was of course that of James Brown. Mr. Brown was an artist -- fearless in music and dancing, single minded in his vision of how it should be done, and masterful in his commitment to fulfilling it. Now, with the Godfather of Soul gone, the African American-music community mourns a particularly heavy loss. James Brown was a true original, and his passing marks a clear void in great black male entertainers. Some things cannot be replicated.

The Christmas season kept the cash registered ringing. In fact Apple had a difficult time keeping up with the demand on iTunes, prompting long delays and error messages. As our digital universe continues to grow, it remains to be seen if consumers will continue to tolerate the Digital Rights Management software found on iTunes. EMusic, with their "no DRM" policy is rapidly gaining traction, holding the #2 position and in April, Amazon, the online megastore, will launch their own digital music-downloading site. They too have vowed "no DRM" files. It's hard to believe that if eMusic and Amazon both offer "DRM-free files", why anyone would go elsewhere?

In other news, Eliot Spitzer continued to press the hammer down on radio payola, this time forcing Entercom, the radio giant, to pay $4.25 million to end Spitzer's payola investigation. The four major label conglomerates along with CBS Radio have already agreed to pay sizeable settlements. Spitzer's tactics are certainly working -- radio programmers will now only play hits that have been proven successful elsewhere. Unfortunately, the upshot of all this good work is that commercial radio has never been more predictable and boring than it is now. If only station owners would hire visionary programmers, perhaps commercial-radio listenership would increase.

This is Celia Hirschman with On the Beat for KCRW.