Rhapsody goes DRM Free...

Add Rhapsody to the ever-growing list of digital music retailers who have stripped DRM from their catalogs.

The joint venture between RealNetworks and MTV Networks today (June 30) converted its entire database of five million songs to the unprotected MP3 format, both for music accessible on its client-based application, as well as that on a re-launched Web-based store.

The move is part of a multi-faceted initiative that the company hopes will make Rhapsody the default music provider on the Internet by facilitating the act of streaming and buying music from multiple partners -- such as iLike, MTV, Verizon Wireless and Yahoo.

As part of the announcement, Rhapsody finally laid bare the details of its much-heralded partnership with Verizon Wireless. Under the agreement, Rhapsody will operate the online VCast Music store, where users can buy and downloads music online, as well as Verizon's wireless over-the-air music service.

A copy of any song purchased from a Verizon phone will be available DRM free from the online store, and users will be able to transfer any subscription-based Rhapsody tracks to up to 10 models of Verizon phones. Tracks downloaded to the phone will remain protected with DRM.

Most significantly, Verizon subscribers can opt to upgrade to the Rhapsody subscription service and place the monthly cost on their mobile phone bill.

Users will not be able to download subscription-based music OTA just yet (just a la carte tracks for now), but that capability is planned for the future. About 99% of the Rhapsody catalog will be available for purchase from mobile phones, and Verizon executives expect to finalize licensing deals with the remaining 1% soon.

But this is only the wireless element of the plan. Going DRM free, combined with the existing practice of letting non-subscribers stream 25 songs per month for free, allows Rhapsody to take a wholly Web-based approach to streaming and selling music online.

Without DRM, Rhapsody can now stream and sell music via a new Flash-based player simply, which does not require any software download or customer login. The 25-song limit is tracked by computer rather than individual. The player also offers a "buy this" option to acquire the track (however, users will need to set up an account to buy songs).

The company hopes this combination will allow it to act as a sort of music engine for the Internet, an initiative dubbed "Music Without Limits." Fans browsing partner Web sites will soon be able to stream in full any song listed on those sites (under the 25-song a month limit) and also have the option to purchase the song right there without having to launch a dedicated music store application like iTunes.

Artist Quote of the Week

"In Los Angeles, they don't want you to fail, they want you to die."

--David Geffen

You License Review

“YouLicense aims to gain traction in the growing market for direct music licensing deals.

An online music licensing marketplace, YouLicense enables artists and those seeking musical content to conduct business directly without the need to deal with music companies.

Content is indexed and easily searchable. YouLicense provides standardized contracts so that both buyer and seller immediately know the legalities of a deal, allowing for a quick and easy transaction.

The obvious competitors to this site are the variety of Podcast focused free and paid music marketplaces. Whilst music licensed by YouLicense can be used for podcasts and other forms of web created content, the site aims at the full spectrum of music uses: Film & Television, Advertising Campaigns, Music on Hold, Mobile Phone Content and Audio Projects. Items offered are also not limited by format. Ringtones, sheet music and beats can be listed along with the traditional pre-recorded music.
The goal of YouLicense is to make music licensing and copyright trade a simpler and more direct process. Whilst the service is still in private beta testing, I gained access to the marketplace and it certainly looks like it’s going to deliver on its goals.”

Gas Prices/ Indie Bands

CNN reported earlier this week that the average filling station is charging $3.94 a gallon, with 11 states and Washington, D.C., above $4. This means a much higher overhead for bands.

“If you’re playing smaller clubs, you’re making 100 bucks a night, if that, and you can’t get across the country,” says Rodriguez.

Sarah Cronin, singer of the Boston group Drug Rug, is currently on tour, and having a similar experience.

“More than half of what we make over the course of a tour goes right back into our gas tank,” she says.

Blake Hazard of the L.A.-based Submarines says her band is only playing big cities on their current tour, because they literally can’t afford to have a bad night.

“We drove through Omaha, Nebraska … It’s such a cool city, you know, but we didn’t play there,” she says. “It’s gotten harder to make ends meet in the traditional way through touring and selling records, but we’re doing what we can for now.”

Doing what they can for now seems to be a common mantra among bands. The Syracuse, N.Y., road warriors Ra Ra Riot bring additional nongas-guzzling transport on the road with them.

“We also have all of our bikes with us, which we can use to get around the cities, or to go on quick errands,” says guitarist Milo Bonacci. “The high gas prices definitely affect potential profit. It makes coming out in the positive that much more difficult. … Sometimes guarantees barely cover the price in getting us to the venue.”

The guarantee, what a club promises a band regardless of how many people pay to see them, is a part of the chain reaction of a struggling economy, according to Brandy Hartley, who does the booking at the Philadelphia club Johnny Brenda’s.

“I will say that when working with booking agents now and booking future shows, there seems to be more emphasis on higher guarantees because of the higher gas prices,” she says.
But the buck doesn’t stop there.

“Businesses like ours are also seeing higher costs for operation, so it is very difficult to balance the costs,” continues Hartley. “I am sure it’s the same for bands.”

Some promoters take a harder line.

“I don’t pay bands more money than they are worth; we’d be out of business if that were the case,” says Randi Millman, who books at the Cambridge club T.T. The Bear’s. “[But] I do sympathize with both bands and our customers, in regard to our sinking economy.”

Matthew Prescott Clark, drummer for NYC’s White Rabbits, who seem to always be on the road, says the price of gas hasn’t slowed the band down yet, but it is a concern.

“Due to the current state of the record industry, it has put a hamper on our ability to make a sustainable living off of what we do,” he says. “You have to have money to record, and if you are dropping thousands on gas, it can really put a wrench into your plans.”

Another band who seems to barely be at home, Philly’s Dr. Dog, says they are now playing shows they booked before the price of petrol got so high, but they are trying to keep costs down while keeping their spirits and their body temperatures up.

“The increase hasn’t changed our plans to drive a lot,” they say, “just our plans to use air
conditioner.”

Record Stores Part II

You actually may already be networked enough to at least start your
quest to get your CDs into the physical record stores both to
"scratch that itch" of success and for the profit potential of
having your records sold commercially will bring. But we have to
be realistic about our expectations starting out.


The truth is that the big national retailers are not part of the
"music industry" in a strict sense of the word any more than
Wal-Mart could be considered a dietary specialty store just because
they sell skim milk. These big department store sized venues sell
music for only one reason, to make a lot of money. So they are
going to stock only artists that are extremely well known. Sadly
any more that means that much of what they stock are going to be
artists from ten or twenty years ago who people are aware of and
will buy those recordings from name recognition.

Also we have to understand that the contracts and lines of
distribution through those stores are primarily done by large scale
distributors who are working with the major record labels. It is
all a very carefully refined process in which music is produced as
a commodity to be sold with no more regard for the artistic merit
than they would worry about selling a movie even though it sticks.


Now this doesn't reduce the value of putting your release into one
of those stores but it does make that objective something we should
put at the end of our quest, not at the beginning. You are not
going to be able to walk into your local Best Buy, present your CD
to the manager and expect him to stock it in his store. He has no
control over those decisions and you will get nowhere with that
approach, even if you could get in to see him.


But the big box retailers are not the only record stores in town.
You know from being part of the music scene that there are other
smaller stores who sell Indie records and who are willing to take
chances on new bands or bands who are not going to appeal to the
mass market mentality. So those are the retail venues to target
first. Then once you get some momentum going and your CD is
starting to take off, that will draw the attention of the big boys
of the music industry and you can find your way to the bigger
stores once your "name" is big enough to take you there.


So with our target better known and with our focus on retailers
that are within the grasp of an up and coming act to break into,
the next step is to figure out how to sneak into the Indie record
stores. Getting your CD on the racks even in one of those funky
little stores still scratches that itch to see your release out
there on the racks ready to be sold to interested fans. But it is
also the first step in the long climb to success. And each step
means you are closer so it's a worthwhile quest you are starting
out on.

Artist Quote of the Week

"They were hovering around like buzzards, trying to figure out how they can dominate the space."

Chuck D

Music Into the Record Stores

There are a lot of ways to get your music into the hands of your
fans these days. There is no question that in the last ten years,
the music industry has changed a lot. Many of the "traditional"
ways that bands get well known, land record deals or even sell
their recordings has changed with the rise of internet marketing
and the Indie movement.


But the fundamental "equation" of being a professional musician
remains the same. And that equation is that you make music which
you must sell so you can continue to devote yourself 100% to being
a full time musician. And, as you well know, you are not the only
musician out there with that ambition. So the competition for fans
to buy our releases and attend our shows is intense. That
competition extends to getting the attention of record labels,
getting gigs locally or on tours and getting records "out there" so
people will buy them. But the equation remains that to be a
successful musician, you have to be able to support yourself with
your music.


The good news is that there are a lot more options not only for
getting recorded but for distributing your original material than
there ever was before. Indie record labels not only are in much
greater abundance than they were only a decade ago, their combined
sales and market impact on the music industry is a serious
challenge to the major record labels.


Often you can find an Indie label that focuses on your genre of
music and/or on your local music scene that will help you get a
release out so you can begin making sales and getting the
recognition you deserve. This is exciting because for decades the
major record labels held the music industry hostage and every band
had only one dream and that was to "get signed" by a major label.

Street Teams Defined...

A marketing or “street” team, simply put, is a group of people (the team members or “marketing representatives”) located in different areas who assist you in executing your marketing plan and expanding its reach to other territories. If your team is large enough, its reach will allow you to take on more sophisticated, expansive, and national promotions than you could handle without a team. Putting a street team together is a very cost-effective way of getting help with your marketing efforts, especially if you are a solo act or a band without a large business team in place to assist you.


In urban music, street teams are a primary part of artists’ marketing plans, and a significant portion of every urban artist’s marketing budget is dedicated to manufacturing promotional tools for street team use. This shouldn’t be surprising, when you take into consideration that “urban” music almost by definition comes from “the streets." It makes sense that initial marketing efforts would be concentrated at these grassroots levels.

In fact, street marketing teams are so important for all developing artists, that almost every major label (and many independent ones) develop street teams in-house, responsible for assisting with the marketing of all their new releases. I created the Alternative Marketing Department at Mercury Records and developed and oversaw its Marketing Team for three years. Our reps’ efforts were integral in assisting several great bands break through or cross over to platinum-level success, including 311, The Mighty Mighty BossTones, Cake, and The Cardigans, to name a few.

Many developing artists assume that they will be unsuccessful at putting a dedicated street team together until they have already achieved some degree of success. Not so. You can-- and should-- start a street team at the very beginning of your career. In fact, that’s when you’ll need their help the most. Even if your team consists of five reps in your hometown, that’s five more people than you had dedicated to your cause before you started the team. If you and your team work hard, you will grow together.

Industry Debates Role Of Online Focus

artists want to break from the record label system and go it alone in today’s digital space, they’d better prepare to work for it, according to today's OnHollywood conference panel called “Breaking Away from the Music Label.”

With Quincy Jones III moderating—and featuring such speakers as rapper Chamillionaire; Sha Money XL, founder of Money Management Group; Kevin Black, from the chairman’s office of Warner Brothers Music; and Chaka Zulu, CEO of Disturbing Tha Peace Records, among several others—the panel agreed that artists and managers can no longer rely on just a few MySpace friends to launch a career.

“Back in the day I had to drive 200 miles to Cleveland to sell CDs,” said Chamillionaire. “Nowadays, you don’t have to do as much work. But people get lazy. They think all they need to do is get on MySpace and you get a hit.”

“You can be hot on the Internet, but not hot on the street,” agreed Black. “You should always hit the Internet, but if you just rely on that, it’s just as bad as just relying on the street, or just radio. You need balance to make it happen.”

But the panel disagreed on whether the Internet was a platform for marketing or monetization of music.

“In order for the Internet to be the channel it can be, we need more success stories,” said Zulu. "It’s more of a marketing thing for now. The Internet is like a new street team. It’s a passive customer. The Internet can pacify to just accepting certain elements of the music, but that’s for us to fix. We have to catch up to what the Internet is offering us."

However, Sha Money pointed to the tremendous success of ThisIs50.com, 50 Cent’s own social networking site. After two weeks, he said the site generated more traffic than all of BET.com.

“It’s both revenue and promotion,” he said. “You have to keep track of your fans. You can feed them content and make money from all the widgets you put on the site. You’ve got ad and sponsor downloads. You can sell mixtape downloads. It’s immediate and direct and you want to get to these people as fast as possible.”

Artist Quote of the Week

"You've got to feel comfortable with people telling you your shit stinks."

-Andre Harrell, Uptown Entertainment

Role of a Business Manager Part I

The role of a business manager is not to be confused with that of a personal manager. A personal manager is more like the CEO (Chief Executive Officer) of your company, who helps GENERATE INCOME by setting up recording deals, publishing deals, and tours. A business manager, on the other hand, is more like the CFO (Chief Financial Officer) of your company, who helps MANAGE THE INCOME from these deals once they're in place. A business manager handles all financial issues such investments, financial planning, bookkeeping, tour account services, asset administration, tax services, insurance monitoring, royalty examination, and in some cases publishing administration.

Wal-Mart or Bust?

The occasion that brought this all-star line-up together? Not a festival or cause but Wal-Mart Stores’ annual shareholders meeting. Wal-Mart was the largest music retailer in the country last year, so musicians (and their labels) are eager to maintain good relationships, appearing in the special concerts for the chain, which are also open to the public.

During her performance, Ms. Underwood volunteered that a Wal-Mart had recently opened in her hometown, Checotah, Okla., and Keith Urban changed his lyrics from “Goodbye, city, I’m country-bound” to “I’m Wal-Mart-bound.” And the retailer is using its leverage to aggressively pursue new deals.

On Tuesday Wal-Mart started selling on an exclusive basis a three-disc collection by the popular 1980s band Journey called “Revelation.” The difference, however, is that there is no middleman: the album was bought directly from the band without the help of a record label. Journey went right to Wal-Mart and kept most of the money a record company would normally take as profit for the group. Last year Wal-Mart made a similar deal with the Eagles, who like Journey are represented by Front Line Management, the nation’s largest music management company.

The deals highlight the changing dynamics of the music industry as once-powerful labels decline because of the migration to digital downloads. To fill the gap, musicians are scrambling to connect with fans, and Wal-Mart is using these exclusive deals to assume a new role: hit maker.

The Eagles’ double disc, “Long Road Out of Eden,” sold 711,000 copies in its first week and three million since its release, according to Nielsen SoundScan, impressive numbers at a time when CD sales are declining. Journey sold 45,000 albums in its first three days on sale, and Irving Azoff, founder and chief executive of Front Line Management and a music industry veteran who ran MCA Records in the ’80s, predicted that it would sell more than 80,000 copies in its first week. That is probably enough to debut in the top five, and significantly more than its last album sold in total.

“With the downturn, the labels couldn’t match the marketing commitments that Wal-Mart could make,” Mr. Azoff said. “It was well in excess of anything a label could do.”

Front Line took on some of the traditional work of a record label, producing a video and promoting songs to radio. But most of the marketing was done at Wal-Mart itself. The chain ran print, radio and television advertisements that promoted the exclusive availability of the Eagles album. Stores display the Eagles and Journey albums in several locations, not just the music department, and this week some stores had the Journey DVD playing on their big-screen televisions.

In some ways, the arrangements that Wal-Mart has made with Journey and the Eagles represent the mainstream equivalent of the path that artists like Radiohead and Nine Inch Nails have taken by releasing albums on the Internet without a traditional label.

“It just goes to show you that fewer artists need to be associated with record companies,” said Larry Mestel, chief executive of Primary Wave Music Publishing and former chief operating officer of Virgin Records. “They don’t need to give up a big chunk of money to the record companies when they’re iconic. They can go direct to Wal-Mart and make four to five dollars per CD.”

It’s hard to tell how much traditional labels are threatened by the prospect of artists’ selling directly to retailers. New albums from more established acts can be less profitable if they have negotiated a higher royalty rate. And although the Eagles are reliable sellers, Journey is what industry executives delicately refer to as a “heritage act,” a steady summer concert attraction that sells relatively few albums of new material.

One reason the Eagles and Journey albums have sold so many copies is their price: $11.98. That’s an unusually low retail price, especially for “Revelation,” which consists of one CD of new songs, one CD of new renditions of Journey classics and one DVD of a recent concert performance. But one of Wal-Mart’s goals in promoting such releases is drawing customers into stores with a bargain they can’t find anywhere else.

Last.fm Loses Warner Music Group

Warner Music Group has pulled its music from Last.fm’s free on-demand music streaming service in an apparent dispute over compensation rates.

Last.fm began removing Warner artists from its service earlier this week at the label’s request, according to a source familiar with the situation.

In a statement, Last.fm parent CBS said, "We are currently negotiating a new agreement with Warner Music Group and are working hard to build the most comprehensive music service on the Web."

Last.fm's on-demand service still carries music from Universal Music Group, Sony BMG Music Entertainment, EMI Group and other labels. In addition, songs by Warner artists can still be heard through Last.fm's Internet radio service.

Last.fm has been one of a growing number of online services to offer consumers free, ad-supported access to music with the blessing of the majors. CBS acquired Last.fm in May 2007 for $280 million.

In February 2007, Warner became the first major to sign a content deal with Last.fm. In recent months, the label had been continuing to provide music to the site on a month-to-month basis.

But since joining Last.fm, Warner had grown increasingly disenchanted with the service’s compensation rates, a source familiar with the situation says, arguing that they were “completely out of whack” with competing services like imeem and News Corp.'s forthcoming MySpace Music joint-venture music service with Warner, Universal and Sony BMG.

Moreover, Warner has been frustrated by Last.fm’s failure to proceed with its plans to launch a music subscription service, the source says.

Artist Quote of the Week

"I am owed. I've never got paid," he said. "A dude with a pencil is worse than a cat with a machine gun."

-Bo Diddley

Business Aspect of the Music Business

What is called the music business today is not the business of producing music. At some point it became the business of selling CDs in plastic cases, and that business will soon be over. But that’s not bad news for music, and it’s certainly not bad news for musicians. Indeed, with all the ways to reach an audience, there have never been more opportunities for artists.

What is music?
First, a definition of terms. What is it we’re talking about here? What exactly is being bought and sold? In the past, music was something you heard and experienced, Nana Kwame Ampadu, Teacher and his band etc it was as much a social event as a purely musical one. Before recording technology existed, you could not separate music from its social context because what ever these legends talk about in their music those days reflects the realities of the society then. Music was an experience, intimately married to your life. You could pay to hear music, do we still do that? Or we listen for free.
Technology changed all that in the 20th century.

Music or its recorded artifact, at least became a product, a thing that could be bought, sold, traded, and replayed endlessly in any context. This upended the economics of music, but our human instincts remained intact.
We’ll always want to use music as part of our social fabric: to congregate at concerts and in bars, even if the sound sucks; we Bluetooth music to our friends sometimes burn them unto CD’s so we can play them in our cars but we all pretend as if we don’t know that, by doing that we killing the business aspect of the music.

to be continued...

Legal Forms of Ownership for your Label

Sole Proprietorship

In order to have a business (any kind of business), you must have a legal entity. Now, this legal entity can be you. By this I mean if your name is Joe Smith, and you want to start up Joe Smith’s record label, no one can stop you (unless there’s already someone named Joe Smith running a label). What you have created, in the eyes of the law, is a sole proprietorship. The issue is that if you go this route, in the eyes of the government (read IRS), any money you make from your record label is going to be viewed in the same way as any money you make any other way (your job, for instance). This is because all of your income from your label will be tied to the same social security number that all your other income is tied to, and that your bank accounts are tied to. This can really complicate things for tax purposes. Additionally, it can make you look sort of unprofessional. When you go to sell your compilation, either online or in stores, you’re going to have to tell people to whom they should make the check out. You really don’t want to have to say, “…uh, just make it out to me.”

d/b/a

There is a way around this unprofessional issue. You can start your label using your existent social security number, while still having a name for your label that’s a little snappier than your own name. The way you do this is by establishing what’s known as a “doing business as” or d/b/a. This means that you can have a legal form of ownership that might be something like: Joe Smith d/b/a Snappy Record Label. By going through the simple procedure of visiting your local town hall, filling out some forms, and then opening a business bank account, you can then have people write checks to Snappy Record Label, as opposed to Joe Smith. You can even have some checks made up with “Snappy Record Label” on them, so that you can pay your bills in a more professional manner.

While the outward appearance is significantly different between Joe Smith and Snappy Record Label, it’s real important to remember that in the eyes of the law there is NO difference; each are sole proprietorships. Snappy Record Label is no different than Joe Smith; same tax ID (social security number), same liabilities (if Snappy Record Label gets sued for whatever reason, its Joe Smith’s money that is risked), etc. For these reasons, most people determine that while a d/b/a may be a good way to start (because of its simplicity and cost-efficiency of formation), it’s not a good long-term solution.

Corporations

The alternative is to create a legal form of ownership that is separate and distinct from yourself. In this way, you have a tax ID that is different from your social security number, and you limit the amount of risk that can be directly connected to you. The way to do this is by forming a corporation. There are a number of different types of corporations, but I’m only going to cover two of them here. As stated at the beginning of this section, while I’m 100% for DIY, this is an area where you really do need to consult a qualified attorney in order to make sure you set everything up in the proper manner. That said there’s a lot you can do on your own prior to bringing an attorney into the picture. In this way, you’ll save yourself a bundle in legal fees.

LLCs

The first type of corporation I want to briefly examine is what is known as an LLC. LLC stands for “limited liability corporation.” An LLC does just that: it limits the amount of liability you have, should you run into problems. For instance, if a band you signed ends up crashing their van into an antique store and destroys a couple hundred thousand dollars worth of furniture, you can bet that the antique store’s owner is going to go after anyone and everyone that she might be able to recover money from. If your legal form of ownership is simply a d/b/a, your personal assets are very much at risk. However, if you’ve established an LLC, you’re liability is limited. In short, the antique store owner can’t go after, say, your house or savings account. The antique store owner can go after assets owned by the LLC (the label’s assets), but there’s a wall between the LLC’s assets and your personal assets. This is a good wall!

In order to establish an LLC, you must create articles of incorporation which detail exactly what it is you do, and you must file these articles with your state. You must then fill out the appropriate IRS forms. There is an initial fee, and then a yearly maintenance fee. If this all sounds a bit much, it’s because it is a bit much. Basically, the government wants to discourage people who aren’t really serious about starting businesses. However, for those who are serious, going through the process of creating articles of incorporation can be a very beneficial thing. As mentioned, it’s helpful to have an attorney work through this process with you.

While an LLC is great for the reasons listed above regarding liability, as well as for tax reasons that are too in depth for this article to go into, it does have one major drawback: an LLC cannot issue stock. This may not seem like a big deal (and there are ways around it, though they’re a bit unwieldy), the ability to issue stock can be very beneficial not only for the obvious money-raising reasons, but also because stock is currency that can be utilized, for example, to attract artists to your label.

S-Corporation

Fortunately, if you want to issue stock, there is a way for you to do it. It requires another layer of complexity as compared to an LLC, but by forming an S-Corporation, you can establish a value for your company, and then issue shares to reflect that value. These shares can then be utilized to attract potential artists, employees, or investors. Of course, you are diluting your own interest in your own company when you give out these shares, but, for some, there is simply no other way to attract the necessary “talent” to the team.

While I stressed the importance of using an attorney should you choose to form an LLC, I’m insisting that you use an attorney should you determine that an S-Corporation is the way you’re headed.

I’m not going to spend more time on this here, because I imagine that the vast majority of you will begin with a d/b/a, and that a smaller percentage will opt for an LLC, thus leaving a teeny number interested in an s-corporation—and those people need to get an attorney.

Handleman Company Exiting Music Business in North America

In a major step in its continuing efforts to address the rapid and fundamental changes under way in the music industry, Handleman Company (Pink Sheets: HDLM) today announced that it is exiting the music business in North America. Handleman will continue to operate its other businesses as usual as it explores opportunities to maximize value for the benefit of the Company's stakeholders.

In connection with its decision to exit the North American music business, Handleman has entered into a definitive agreement pursuant to which it has sold music inventory and selected other assets related to its Wal-Mart business in the U.S. to Anderson Merchandisers, L.P. ("Anderson"), of Amarillo, Texas. Sales to Wal-Mart stores currently constitute a substantial majority of Handleman's U.S. music sales. Handleman will work with its other U.S. music customers over the next few months to assist them in achieving a smooth transition to other music suppliers.

Separately, Handleman has also agreed in principle to sell substantially all of the assets and operations of its Canadian subsidiary to Anderson. Completion of that transaction is expected to occur shortly after receipt of Canadian regulatory approval, which the parties expect to receive in the near future.

Albert A. Koch, President and Chief Executive Officer of Handleman, said, "Our decision to exit the North American music business was difficult but unavoidable. CD music sales have been declining at double-digit rates for several years both industry-wide and at our customers' stores, resulting in a sharp drop-off in our business. Unfortunately, even the significant steps we've taken over the past two years to reduce our costs have not enabled the Company to return to profitability. We have reluctantly concluded that there simply were not enough further cost reduction opportunities available to offset the margin erosion in future years from continuing sales declines.

red the entire article@http://www.congoo.com/news/2008June2/Handleman-Company-Exiting-Music-Business