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March 07, 2008

PBT: Bon Jovi guitarist on the effect of iTunes


Philadelphia Business Today, 3/6 - On Philadelphia Business Today: Bon Jovi guitarist Richie Sambora complains that iTunes has hurt the music business; Urban Outfitters is looking good; and a big banking transaction is "Deal of the Week

PBT Transcript (3/6/2008)

MIKE ARMSTRONG: Coming up: Retail’s down? Don’t tell that to the folks at Urban Outfitters. Guitarist Richie Sambora talks about the business of music. And we’ll have our deal of the week. Philadelphia Business Today starts now.
MIKE ARMSTRONG: Philadelphia’s Urban Outfitters had another impressive quarter at a time when many other retailers have suffered. Earnings for the fourth quarter rose 50%. Sales at stores open at least one year were up 11%. Company CEO Glen Senk acknowledges that the retail environment is challenging, but he says the chain has gotten positive feedback about its spring fashions and remains optimistic about Urban Outfitters prospects. The company says it plans to open at least 45 new stores this year.
Oil keeps barreling higher. The price of a barrel of crude topped $105 after an unexpected drop in U.S. stockpiles. Couple that with OPEC’s decision to maintain its current output and the commodities markets needed little prodding to push the price higher. These higher crude prices are trickling down to the gas pump. In southeastern Pennsylvania, the average price of a gallon is $3.17. That’s up $.03 from a week ago. Last year, we were paying $2.54. The average price is still below $3 in South Jersey.
Richie Sambora. He’s the lead guitarist of Bon Jovi, part owner of the Philadelphia Soul, and he recently bought an apartment at 2 Liberty Place in Center City. Inquirer reporter Michael Klein sat down with Sambora this week. He asked him whether new technologies such as iTunes has made it easier or harder for new artists to succeed in the music business.
RICHIE SAMBORA: It comes from a lot of different areas. I think as an artist- as a new artist coming out in today’s landscape, business landscape, with- you know- as a new artist, it definitely makes it harder. ‘Cause there’s less revenue to run your business. You know, touring and traveling around the world, if you want to break in a band or an artist on a worldwide basis, not having that kind of revenue coming from album sales. And, you know, obviously iTunes and downloading had make it- has made it a singles market. And, so, the album experience, from an artist standpoint, selling to a consumer at that point, obviously diminishes their chances of revenue by drastic amounts. So basically it gives less artists a chance to get out there and have a successful business.
MIKE ARMSTRONG: An established band like Bon Jovi hasn’t taken as much of a hit, but Sambora still has strong feelings about the industry as a whole.
RICHIE SAMBORA: &hellipNot caught up with itself yet. They haven’t figured out how to combat the piracy and also, you know, have a revenue stream for all the downloading and stuff that’s going on. It just hasn’t happened. So, I think it’s going to have to really bottom out before it gets better. Because the egotists- the egos of the CEOs and the business model has to break before it’s gonna get fixed.
MIKE ARMSTRONG: You can read more about Sambora in Michael Klein’s column in the Sunday Inquirer.
It’s time once again for our deal of the week. Inquirer reporter Joe DiStefano tells us about a Philadelphia banker’s new venture.
JOE DISTEFANO: The deal of the week is an agreement between Jay Sidhu and some other major players to start a new $150 million company up the road in Reading. Who is Jay Sidhu? What’s the company? Sidhu is a big name in Philadelphia finance. He built Sovereign Bank into the biggest bank in eastern Pennsylvania before he was forced out in a shareholder rebellion two years ago. The company is Sidhu Special Purpose Capital Corporation. What’s it gonna do? Officially that’s a secret, but I think we can figure it out. Sidhu is putting his old Sovereign Bank team back together. It’s probably safe to guess he’s going to start buying shares of&hellipyou got it: local banks. Sure, bank shares are going down the tubes. These guys have seen that cycle before. They know the time to buy the best bargains is when everyone else has given up and all they have to do is figure out when that will be.
MIKE ARMSTRONG: Thanks, Joe. That’s it for today. Tomorrow: is there a condo glut in Philadelphia? We interviewed condo king Alan Domb and you may be surprised at his answer. At the Inquirer, I’m Mike Armstrong for Philadelphia Business Today.

Posted by riesambo at March 7, 2008 07:11 AM