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Despite Gaga, record labels face tough year

Lady Gaga performs on the stage during a concert at the Assago Forum in Milan, Italy (EPA)

By Reuters

When even Lady Gaga can't lift the gloom, you know the music industry is in the doldrums.

Despite a release schedule that includes the reigning queen of pop, Britney Spears, R.E.M., U2 and Coldplay, record labels are bracing themselves for another tough year.

Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI -- the market leaders -- struggled in 2010 as they have for a decade, hampered by online piracy, shrinking retail space and an inability to adapt to technological change.

Global recorded music sales overall slumped by nine percent last year, and figures out last week estimated that some 19 of 20 tracks downloaded from the Internet were illegal.

The scale of piracy and other challenges suggest that no matter which artists are competing for chart supremacy, 2011 sales are virtually guaranteed to extend their long slide.

"I don't see any indication that record sales are going to improve, because it's got nothing to do with the quality of the music," said U.S. music critic Robert Christgau in a blunt assessment of the business prospects.

That does not make release schedules irrelevant, with companies still hopeful their artists will rise to the top and repay their time and investment.

Top of the pile is widely tipped to be "pop provocateur" Lady Gaga with "Born This Way," due out on May 23. Not one to shy away from the hype, the singer has called it "my absolute greatest work I've ever done."

Combined sales of her "The Fame," "The Fame Monster" and a remix album have reached 15 million, a hefty figure even in pre-crisis days, and with more touring planned, Forbes predicts the 24-year-old could earn over $100 million this year.

"She's just hitting her stride artistically and commercially now," entertainment attorney Bernie Resnick told Forbes. "We're only seeing the beginning."


Other established solo female artists vying for attention include 29-year-old Spears, who releases a new album in March. Lead single "Hold It Against Me" has just debuted atop the U.S. singles chart with impressive sales.

Canada's Avril Lavigne is back on March 8 with "Goodbye Lullaby," and there are hopes of new material at last from Amy Winehouse, whose troubled personal life has overshadowed the success of Grammy-winning 2006 hit "Back to Black."

The struggling rock genre is set to get a welcome shot in the arm in 2011 with the first album from The Strokes since 2006's "First Impressions of Earth."

The acclaimed New Yorkers tentatively titled "Angles" is due to hit stores on March 22, and, according to NME magazine's Jamie Fullerton "it's almost make or break time for Julian (Casablancas) and co. with album four" after so long away.

Also falling into the broad rock category are two of the biggest bands in the world -- Coldplay and U2 -- who both expect to release records in 2011.

Foo Fighters and R.E.M. are back, and, in Britain at least, Beady Eye, formed from the now disbanded Oasis, will generate plenty of buzz with debut album "Different Gear, Still Speeding" due out on February 28.

As well as promoting talent, record bosses will be seeking more deals with mobile firms and music websites. Digital sales actually rose six percent to $4.6 billion last year, taking their share of record label trade revenues to 29 percent.

The labels are keen to see the launch of a Google Inc download store in 2011 to rival Apple Inc's dominant iTunes, which would help them wrest some control back over pricing and draw new users to the digital market.

The record company landscape could be in for big changes over the next 12 months, with EMI facing a debt deadline with Citigroup that raises the prospect of the group's assets being sold off.

Shares in Warner also rose nearly 30 percent at the end of last week on news that it was looking for potential buyers.