The Record folds as publisher struggles to find business case for multimedia organ

The publisher of a Canadian recording industry magazine says reluctance by the industry association to embrace digital delivery is responsible for the publication’s suspension earlier this month. After 20 years in business, one of those as an online concern, The Record closed its doors March 12 with uncertain prospects for re-opening. Wolfgang Spegg, president of Toronto-based musicmusicmusic inc, which bought the publication one year ago, says a decision by the Canadian Recording Industry Association (CRIA) to spend its advertising dollars with a competing print-only publication stymied Spegg’s hope of turning The Record into a multimedia delivery vehicle, complete with streaming audio. Without crucial advertising dollars, and stung by the poaching of its top music journalist, Spegg says the venerable organ had no choice but to close. The magazine was founded 20 years ago by music journalist David Farrell, who was its proprietor until one year ago when escalating print costs led him to the belief that the publication needed to be electronic to succeed. At the time, Spegg’s company was struggling to advance its Canadian music industry relationships as it pursued a strategy of streaming audio for corporate clients and Internet radio stations. The two ventures seemed a fit. Spegg initially purchased the publication as a way to cement industry ties and create a multimedia delivery vehicle for industry news and streaming music. But recent industry consolidation has led to a shrinkage in the base of advertisers as independent labels are acquired by larger entities. The other revenue option for publications is subscriptions. Spegg provided subscriptions in return for marketing commitments, a strategy that would have paid off, he maintains, had CRIA members played ball. He says CRIA’s reluctance to commit advertising dollars took away 80 per cent of the potential advertising base in this country, thus removing the possibility of a viable business. CRIA’s decision not to support The Record was motivated, Spegg says, by a reluctance on the part of president Brian Robertson’s to embrace an online model for the delivery of music – a direction in which Spegg was taking the publication as part of an enhanced service including email and a web portal to complement a bi-weekly print magazine. For example, he envisions streaming newly signed artists as an information service for the industry. "I think (Robertson) thinks he has the mandate to keep the future from happening for the record industry. I’ve been up against Brian with (musicmusicmusic), trying to get licensed in Canada to deliver webcasting services. "We had to move the company to the United States because CRIA refused to license us and sent us cease and desist letters. We then promptly got licensed by the Recording Industry Association of America (RIAA)." The company continues to house its production and technical facilities in Toronto. Still some revenue possibilities Spegg says he still harbors hopes the publication can be resurrected, or continued in some scaled-back form. Radio stations, he points out, have lost access to popular chart information that they used to cull from his magazine, and that they may now be willing to pay for this data. Meanwhile, The Record’s parent company musicmusicmusic is still in business. He says legal injunctions to end Napster’s free sharing service and MP3.com have revived hopes of creating a business case for delivering music off the Internet. For example, his company has just signed a contract with the BBC in the U.K. to stream 30 years of concerts including top acts such as U2 and ABBA. He notes that musicmusicmusic has paid RIAA over $300,000 in copyright fees since launching its streaming service.

The Record folds as publisher struggles to find business case for multimedia organ

Broadcast | March 22, 2001

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