Clear Channel Announces IPO

Today, the Clear Channel Communications radio conglomerate announced plans to spin off their entertainment division as well as 10% of their outdoor advertising business through an IPO. Clear Channel, despite their previous iron grip monopoly of the concert and radio industries, got on the nerves of certain artistic and consumer sectors (let’s call them ‘people of discerning musical taste', shall we?) by inflating concert ticket prices and dictating radio station airplay lists right into the territory of true homogeneity. Of course the ‘American Idol and Britney Spears loving’ pure vanilla crowd weren’t bothered by the shift – you never go broke pandering to the masses – but the name Clear Channel has grown synonymous with mass manufacturing and marketing of watered down musical entertainment.

Be that as it may, Clear Channel is offering a special one time $3 dividend to current shareholders as well as a 50% increase in its annual dividend. At market close on Thursday Clear Channel shares were trading at $32 per share (the company’s 52 week high is $43.44 and during 2000 the pps was closer to $80). The stock dropped 25% in the last year due to a ‘radio advertising slump’, and profits for the first quarter were down 59%. The company also just came off of one of the weakest years in terms of concert attendance revenues, and has begun to revert branding of live music presentations back to local promoters. The popularity of subscription based digital radio services such as XM Satellite Radio and Sirius Satellite Radio, as well as the amazing growth of the iPod and downloadable music solutions can probably take credit for a lot of the company’s decrease in revenues.

File Sharing = Prison Time

"So what are you in for?"
"File sharing..."

A new law (The Family Entertainment and Copyright Act) has just been put into effect stating that file swappers who share even a single pre-release (copies of films that have yet to be released theatrically) copy of a movie can be imprisoned for up to three years. The law was signed yesterday by President Bush after copies of “Star Wars: Episode Two”, “The Hulk”, and Tomb Raider” were shared online before their release to theatres.

Further to yesterday’s Podcasting blog – a new search engine has been unveiled, the first to cater specifically to Podcasting, called Podscope. The engine works by way of an audio and video ‘spider’ which crawls each Podcast using a ‘Speech to Text’ algorithm. Therefore when you search Podscope it trawls through its collection of transcribed texts and then allows you to play the entire broadcast, just the section which mentions your search terms, or to visit the site itself.

Infinity Podcasting and XM Radio Numbers

News just hit the wire that Infinity Broadcasting will be incorporating the Podcasting craze as a lynchpin of their new media strategy. The programs will be made up entirely of listener Podcasts and will launch on May 16th at San Francisco’s Talk KYCY-Am, and will be streamed online at www.kyouradio.com. Good news for those of us who are tired of the Clear Channel monopoly on what passes for musical taste and culture.
Podcasting is now officially the new fashion ‘black’ with thousands of new shows on just about any topic under the sun being published every day by regular people with internet access.
In other news, XM Satellite Radio (Nasdaq: XMSR) announced over 541,000 new subscribers (a 68% increase over last quarter’s additions) along with their first quarter 2005 financial results. The company’s revenues were a 140% increase over those of the fourth quarter 2004. Despite the increase however, the company’s first quarter 2005 revenue results still show a net loss of $119.9 million. The company’s new subscriber forecasts beat analysts' financial estimates, but shares were still down 2.7 percent during morning trading. XM said that they remain on track to reach 5.5 million subscribers by year-end.

Online Music Set For (More) Explosive Growth

According to In-Stat, a research firm in Scottsdale, Ariz., the worldwide online music market is expected to grow 134 percent in 2005, reaching $1 billion for the first time. The report states that, “more than 200 sites offering digital downloads are now available. While Peer-2-Peer (P2P) and piracy issues have not entirely disappeared, consumers are showing heightened awareness and interest in legitimate online music services.”
MusicIndustryStocks.com recently reported that RealNetworks (RNWK) now has more than one million subscribers to its subscription music services. And how many teenagers and people on busses and trains do you see without an iPod?
You do the math.

SLS International News + Steve Vai Update

News just arrived that SLS International (OTCBB: SITI) – manufacturers of loudspeakers using new Planar Ribbon technology – announced that their RLA/2s speakers will be the speaker of choice at the next Naples Winter Wine Festival, to be held in Naples, Florida. SLS also recently announced record breaking first quarter revenues – up 62% over fourth quarter 2004 figures. For those of you not yet familiar with SLS’s merchandise, you can read up on how impressed I was with their HTA Surround Sound System here. They’re definitely worth a spin round the musical block.

For those of you wondering how my rock star stalking went this past weekend – the Steve Vai (ex guitarist for Frank Zappa, David Lee Roth, Whitesnake) show in Seattle was very impressive. As you can see from the photos below, I was fortunate enough to meet Steve. We chatted for a while, he signed every bit of paper I threw at him, and then as if I wasn’t happy enough about the whole ordeal, he let me play "Evo", his personal Ibanez Jem guitar. Yes I was in musician heaven. Afterwards during the show I had to wonder to myself if Steve’s amazing band was indeed human… If you get a chance, definitely catch the Vai band if they come to a town near you, I highly recommend it, if extreme musicianship is your bag.

My thanks to Steve Vai for humoring an old die hard fan for so long!

Brian meets Steve Vai

Brian playing Steve's Ibanez Jem, "Evo"

Virtual Guitar Customization

Will wonders never cease? The originators of the world’s first digital modeling guitar, Line 6 have just released their Variax Workbench customizing software. In conjunction with a Variax guitar or bass it is now possible to design your dream axe on your computer and then to download it into your instrument. Musicians can choose between wood types, pickups, pickup positioning, body and neck type, volume and tone knob tweaking, and all through a USB connection between your computer and instrument. Wow. It all sounds very intriguing, but speaking as someone who loves the smell of sawdust and nitrocellulose lacquer, I won’t be putting away my jigsaw and router just yet. But I can imagine that as a tool for testing out different combinations of components before putting saw to wood, this tool will be invaluable. Click here for the full details.

The blogging on this column will be taking a short break as I’m off to Seattle on Friday for the Steve Vai show – armed with backstage tickets. Let the rock star stalking begin!

Music Products Sales in U.S. Hit Record $7.3 Billion in 2004

Good news for the music instrument manufacturing industry. NAMM (the International Music Products Association) recently released the results of a national survey revealing a record-setting level of musical instrument and product sales in 2004. Last year's sales were an increase of 5.2% over 2003. I would blame the prevalence of cheap home recording software for PCs and Macs (Cubase, Cakewalk, Nuendo, Pro Tools) for encouraging more people to start playing an instrument, and then to record their own number one hit singles as MP3s for use in their PODCasts and to trade on P2P networks (assuming that the RIAA doesn't shut them down first). The peripherals (audio interfaces, microphone preamps, USB controllers) market should also be seeing an upsurge in interest as the technology becomes more mainstream and therefore cheaper.

To read the full report click here:

Creating The MusicIndustryStocks.com Portal

When my boss gave me the go-ahead to work on publishing a portal where stock market investors could research stocks and companies within the music industry I was shocked to find that no such information resource already existed. It was therefore difficult (but enjoyable) to compile the information and resources necessary for an investor to get a good handle on the companies within this industry, and to compile a network of informational sources with which to update such a site on a daily basis. We have however completed what we view as the definitive destination of its kind, with no real competition from any other source. I invite investors to view the site at www.musicindustrystocks.com and to let us know what type of information you as an investor would like to see, which would be helpful in your due diligence efforts. You can contact me at bnoer@investorideas.com

Inaugural Blog!

Good Day and welcome to the inaugural MusicInvestorNews blog spot.

MusicInvestorNews is written and maintained by Brian Noer on behalf of InvestorIdeas, and is published in tandem with news and information that is posted daily to the Web Portal at http://www.musicindustrystocks.com/. The MusicIndustryStocks.com portal (MIS) features information that is vital to those investors who choose to include Music and Entertainment related stocks within their portfolio (InvestorIdeas.com features a suite of Stock Market Investor resource and due diligence portals). MIS is updated daily with stock news and more general news and articles, as well as a comprehensive list of public companies in this sector, which provides savvy investors with a starting point for their due diligence and research efforts. MusicInvestorNews will highlight the important events of the day as it relates to investment in this industry.

I welcome comments and feedback on this column – please address your remarks to me at bnoer@investorideas.com