MAC MILLER BLAMES DRUG USE ON MUSIC CRITICS: "I WAS SO F*CKED UP ALL THE TIME IT WAS BAD"

Pittsburgh rapper Mac Miller recently opened up about his past struggles with drug usage and how negative reviews for his Blue Slide Park solo album pushed him to the edge.

According to Miller, he took some bad press to heart and downed his troubles away with drugs.

Mac took the bad reviews to heart. They didn't just piss him off; they sent him into a personal tailspin. His problems got worse once he started the Macadelic Tour in March 2012. For the first leg of the tour, he played nothing but colleges, venues that did nothing to dispel the perception that the young MC was nothing more than a "frat rapper." Over six grueling months he played 53 shows, including 20 in Europe ("Going through customs every day is not fun," said his entourage). To help manage the stress he started using promethazine. Somewhere along the way he became addicted. "I love lean; it's great," says Mac. But during the Macadelic tour things got out of hand. "I was not happy and I was on lean very heavy," he admits. "I was so f*cked up all the time it was bad. My friends couldn't even look at me the same. I was lost." (Complex)

After some tough struggles, Miller eventually conquered his addiction last fall.

As Mac's addiction grew more serious, his inner circle urged him to quit. He tried going cold turkey, but always wound up binging. It was just last November, before he started shooting the reality show, that Mac quit lean for good. "For how much he was drinking," says [childhood friend] Jimmy, "it's unbelievable that he stopped. It's definitely one of the most impressive things he's ever done." (Complex)

In November 2011, the rapper's Blue Slide Park crushed its competition atop the sales chart.

Pittsburgh rapper Mac Miller's Blue Slide Park debuted this week at No. 1. According to Nielsen SoundScan, the rap newcomer's LP has sold 144,500 copies after seven days in stores. (SOHH Sales Wrap)

Shortly after its chart-topping success, Miller spoke out on the accomplishment.

"It's crazy. I've been trying to take it all in," Miller said in an interview. "I've just been in constant motion, so I haven't gotten a chance to really stop and realize how crazy this is that we got the first #1 in 16 years. It's nuts, man. I never really got far enough to see an offer for real -- I got no hatred towards major labels or anything. I never got a chance to hear what they had to say. We just really wanted to stick with our home team and keep it in the family. [The major labels] called [Rostrum Records founder] Benjy and wanted to talk, but Benjy was just on some 'We're not trying to talk right now, we're doin' this independently.' And we just left it at that." (MTV)

Check out a recent Mac Miller interview:

Kylie Minogue Joins Jay-Z's Roc Nation

Kylie Minogue has joined Jay Z's Roc Nation family, the label and entertainment company announced Wednesday. The Aussie singer's U.S. publicist confirms to Billboard that the partnership is for management services, while she is still signed to Parlophone as a recording artist.

"We would like to welcome Aussie singer, recording artist, songwriter, actress and designer Kylie Minogue to the Roc Nation family!" the statement reads. "In a career now spanning 25 years, Kylie has released 11 studio albums, two live CDs, eight live concert DVDs, a greatest hits double album, and multiple video packages. She has released over 50 hit singles worldwide, including the Grammy-winning Come Into My World, and has sold more than 68 million albums worldwide. Needless to say, we’re excited to have Kylie join the Roc fam."

Minogue has already been added to the "Management" section of Roc Nation's site.She joins artists ranging from Rihanna, Solange, M.I.A, Shakira and Timbaland, another recent addition, http://www.billboard.com/biz/articles/community/1536272/timbaland-signs-to-roc-nation on their roster.

Meanwhile, an industry source tells Billboard Minogue will release a new single "soon." She's been at work on a new studio album since at least the spring of 2012, as previously reported.

The forthcoming studio album will follow 2010's "Aphrodite," which debuted and peaked at No. 19 on the Billboard 200 chart and reached No. 1 in the U.K. It generated four No. 1 singles on Billboard's Dance/Club Play Songs chart: "All the Lovers," "Get Outta My Way," "Better Than Today" and "Put Your Hands Up (If You Feel Love)."

She supported the "Aphrodite" album by touring the world with the Aphrodite Les Folies/Aphrodite Live tour in 2011. The 77-show trek visited more than 20 countries. Of the tour's 41 concerts reported to Billboard Boxscore, Minogue grossed $32.5 million and finished 2011 with the No. 21 highest-grossing tour of the year.

The pop star's first single, "The Locomotion," was released in her native homeland of Australia in 1987. In her over quarter-century career, she has issued 11 studio albums and more than 50 singles.

She had been managed by Terry Blamey since her debut, and amicably parted ways with Blamey in January.

"IF I DIDN'T HAVE THAT HAPPEN TO ME, NOBODY WOULD KNOW WHAT FAT JOE WAS TRYING TO EXPLAIN"

[With rap heavyweights like Lil Wayne and Rick Ross making headlines last year for seizures, renowned rapper/producer Erick Sermon reflects on previously getting hospitalized for heart-related complications.]

My hospitaliziation was a blessing because as you can tell, people who know me know I like to speak and have something to say when I am being spoken to or when I'm speaking. So I'm able to be alive to tell people about heart disease, about how big it is, about how for black men the leading cause of death is not cancer, it's not HIV but it's heart disease.

Heart disease comes from having high blood pressure and diabetes. If I didn't have that incident happen to me, I don't think nobody in the hip-hop community would know what Fat Joe was trying to explain because Fat Joe didn't explain it this way. He explained it that his boys were dropping off like flies but didn't know why and so he started losing weight.

He said he had diabetes for so many years and he lost weight. But he didn't get the statistics the way I'm giving them, the way they will scare a person that's walking on the street that doesn't know he or she might have high blood pressure.

So I'm telling them that gunfire, cancer and HIV is not killing you faster than your heart is.

I really can't explain the recovery because people will think I'm crazy. What was supposed to happen to me happened. It was quick and it was fast and I was back into the mix of things. I got out of the hospital on the six day, went to my bed and that night I went downstairs at 12 o'clock in the morning and I made that Jimi Hendrix ["A Way Out"] record.

My studio is in my basement, so I was able to sit down and make it in my home. I didn't have to drive anywhere. I had stayed in the hospital for an extra two days just to make sure I could go home. I wasn't weak at all.

So think about it. I went to the hospital, on the six day got out and went to make that "A Way Out" Jimi Hendrix record. That's how fast it was. It was something that was supposed to be made and my mixtape didn't feel like it was going to be able to come out unless I had that record to go with it.

That was the last song that I did for the [Breath of Fresh Air] mixtape.

Erick Sermon, also known as Erick Onassis, (born November 25, 1968 in Bay Shore, New York) is an American rapper, musician, and producer. Sermon is best known as half of late-1980s/1990s hip hop group EPMD and for production work. He currently resides in Hauppauge, New York.

T.I. SAYS WHAT UP BLOOD: "THERE WAS A SHORTAGE OF GANGSTA SH*T"

Grammy-winning rapper T.I. discusses the motivation behind his latest solo album, Trouble Man: Heavy Is the Head, in the new issue of The Source.

Within his feature, Tip cites a lack of gangsta music in the mainstream for fueling the LP's content.

"The main thing I noticed was that there was a shortage of gangsta sh*t. That's what I came into the game admiring, and that was the genre I wanted to dominate: gangsta rap music. ... I felt like my genre was dying, you know? If not dying, extremely injured, in critical condition like a [motherf*cker]. ... It just made me anxious to get out and do something to re-energize the soul of what we grew up listening to." (MTV)

Back in December, Tip confirmed his "Addresses" gangsta recordtakes a direct shot at a certain hip-hop artist but would identify who.

"Nah, it was direct," Tip told DJ Drama. "Yeah, it was direct. Now the thing about who it was directed to, it benefits them more than me for me to put that out there. So I made it directly to them in a way so only they will know. Therefore, so they cannot get any shine off of it. So I'ma make a prediction here, everybody, on Shade 45, on Drama's show. There shall be a few rappers that feel they will be benefited by accepting that burden and they will step into that line of fire knowing that it is not them but they feel it is better for them to step into that line of fire, be hit and receive the benefits of what comes with being hit by a T.I. bullet. That will be the greatest thing that ever happened to them in their life, man. They mama gonna say, 'Oh, my baby got hit by a T.I. bullet. Proudest moment of my life.'" (Shade 45)

He also credited himself for paving a lane for the real street hustlers from his neck of the woods.

"Had it not been for their just outright disrespect and disregard for the G-Code and what is known to all just to be just real, they just lack integrity," Tip added. "When you just disregard the man, I did this for you, bruh. Trap Muzik is a genre that I created, holmes. Before me, it was Lil Jon, crunk music and OutKast. You don't fit in nowhere. The closest thing to come to what you do is what I created, holmes. So for you to come out your face bad about me dog, when I ain't try to do nothing but help you and lames like you, I ain't try to do nothing but uplift n*ggas like you, and you try to come at me this way?" (Shade 45)

Since dropping in late 2012, the "King of the South's" newest solo effort has sold over 300,000 copies.

"King of the South" T.I.'s Trouble Man: Heavy is the Head fell 14 spots to No. 28 with 15,300. With six weeks in the books, Tip's new LP has pushed out 345,700 records. (SOHH Sales Wrap)

Sylvia Rhone's Vested In Culture Label Names Three Hires

Sylvia Rhone and her Vested In Culture label, a joint venture with L.A. Reid's Epic Records, announced the appointment of three members of her team today.

Margeaux Rawson was named senior vice president of operations, responsible for managing all aspects of the label's day-to-day operations and liaising between VIC and Epic. Rawson was most recently senior vice president of media relations at Universal Motown, where she worked with artists such as Kid Cudi, Erykah Badu, and Akon. In the past, Rawson held editorial posts at Entertainment Weekly, Time Out New York, and Vibe.

Exclusive: Sylvia Rhone Talks New Label Vested in Culture

Amanda Berkowitz, previously an A&R manager at Atlantic Records, was appointed as VIC's vice president of A&R. She was responsible for VIC's signing of Latin singer Kat Dahlia and singer-songwriter Deon Young.

Shaniqua Branch will assist Rhone with overseeing day-to-day administrative duties as the label's newly appointed manager. Branch previously worked as an administrative assistant at Atlantic and Warner Bros. Records.

In an interview earlier this week, Rhone called her new hires "a small but brilliant and hardworking staff that loves music, knows music and comes from various disciplines in the business. Most important, they know how to build bridges in music that can connect to other ventures."

PRODIGY SIGNS ACTOR RICK GONZALEZ TO INFAMOUS RECORDS

Actor Rick Gonzalez may be known for his big-screen appearances alongside Tom Cruise("War of the Worlds") and Samuel L. Jackson ("Coach Carter") but he's about to let his voice be heard under his rap moniker Realm Reality.

According to MTV News, rapper Prodigy signed Reality to his Infamous Records label. "At Infamous, I'm looking for artists that, #1 have their own movement goin', they got their thing goin' already," the Mobb Deep spitter said.

While making the transition from acting to spitting is no new phenomena (see Drake andChildish Gambino), Gonzalez has been honing his spit game since 1998, being heavily influenced by the culture since he was a kid in Brooklyn. His 2011 mixtape The Invisible Man paid homage to the streets he was raised in, ultimately gaining a cosign from Pee.

"The fact that Realm is also in Hollywood doing his thing with movies and all that, it only helps," Prodigy said. "In this day in time you have to be multifaceted. You have to wear many hats."

Ex-Sony Music Chief Tommy Mottola on Life After $120M Buyout, 'Idol' and Ex-Wife Mariah Carey

Veteran music executive Tommy Mottola doesn't hold back in his new memoir,Hitmaker: The Man and His Music (Grand Central). Of ex-wife Mariah Carey, the former Sony Music CEO says their relationship was "wrong and inappropriate." Describing current Sony Corp. chairman Howard Stringer, who effectively served him his walking papers in 2003, Mottola likens his social skills to that of a glorified sommelier. As for his own legacy, the Bronx-born, Connecticut-based college dropout simply credits "a great set of ears."

But Mottola had brains, too. Look no further than the "billion-dollar song," Celine Dion's "Titanic" monster "My Heart Will Go On," which he championed. As a manager, he guided Hall & Oates, Carly Simon and John Mellencamp to early success. And Jennifer Lopez, Gloria Estefan, Ricky Martin and Dixie Chicks are but a few of Sony's marquee artists whose careers hit the stratosphere during Mottola's tenure at the company, where he began as president of CBS Records in 1988.

That's not to say he didn't have stumbles: two high-profile splits (Mottola divorced first wife Lisa Clark, with whom he has two grown children, in 1992; married Carey a year later; then married Mexican actress-singer Thalia in 2000, which has yielded two kids); a nasty battle with Michael Jackson, who accused him of being "devilish"; and an unceremonious sacking after 15 years of service (during which Sony Music saw $65 billion in sales; Mottola pocketed a $20 million severance package and was reportedly offered a $100 million commitment to launch a new label). Now, Mottola, 63, looks back at how far he has come.

The Hollywood Reporter: You got your start in publishing as a song plugger -- someone who pitches new material to performing artists -- at Chappell & Co. Was understanding the business of songwriting an advantage to furthering your career?Tommy Mottola: Everything starts and ends with the song, and working with writers and really learning their process and craft was an invaluable experience. Like operating on cadavers before you go into the ER -- it's that critical. For me, it was an incredibly rich experience and taught me a lot. And it's where I met Daryl Hall and John Oates.

A part of the book that elicits an immediate gasp is when you recall having dinner with Bruce Springsteen, and your boss, CBS Records chief Walter Yetnikoff, smacked him on the back of his head as if to say, "What, no hello?"I wanted to run out of the restaurant. The last thing I needed was Bruce thinking I was a part of that kind of behavior. It was extreme, but if you know Walter, anything was possible. Still, Walt was one of the kindest guys to come along in this business. Despite the things that brought him down and made him fall apart [alcoholism followed by a stint in rehab], he was a brilliant man, and without him, I would probably not have the opportunities that I did.

Artists often wanted to take a left turn musically -- be it Michael Jackson or George Michael or Terence Trent D'Arby -- even if it meant losing some of their core fan base or radio relevance. It seemed the label always caved. Why?You have to capitulate every single time. At the end of the day, we're nothing more than expediters. We were constantly reminding everyone to understand what your audience just bought -- if you sold them an apple, be careful not to give a mud pie next time, or an album that sounds like alley cats on steroids. But ultimately, they can do what they want, and you have to do the very best getting their art to as many consumers as possible.

You were accused in the press of "trapping" Mariah Carey in an unhappy marriage. In Hitmaker, you describe friction at home as she grew "resentful." Why divulge such details?I came to the conclusion long ago that I gave the [marriage] the best that I could, as did she. The good news is that she went on to have a huge career, and so did I. Our personal life didn't work out, but I continue to be her biggest fan and support her.

And now Mariah is a judge on American Idol, do you think that’s a good career move for her?
It’s funny because Randy [Jackson] worked for me for ten years, Jennifer Lopez we found and developed and the same for Steven Tyler, who was also on the label… so these are all of my friends and associates. You could use [Idol] as a giant shot in the arm. For Jennifer, the exposure took her to a whole other level. She benefited tremendously: she had a number one record, did a big tour and had all these sponsorships.

You were once first in line to option the book that would become "GoodFellas." What made you decide not to pursue a career in the movie business?David Geffen. I used to tell him, "I know I could be good at this!" And he said: "You're out of your mind. It's the worst business in the world." Of course, David was right. I took my shot at it a few times, but trying to get a picture made was like pushing a rock uphill. So I decided to stick with what I know.

There's an open spot at "The X Factor" table …I've been asked, and I'm not sure I could be a big enough ham to look like a TV personality. I’ve always viewed myself as a behind-the-scenes person rather than in front of the camera.

You still live in the New York area. These days, when you walk by the Sony Music offices at 550 Madison, which recently sold for $1.1 billion, what comes to mind?That it was a great time. [CEO] Doug Morris is one of my dearest friends, and I love that when I visit him, it's my old office. But things are different, and six months from now it won't be the Sony building anymore, so even that will change.

Spotify to Pay Rights Holders $500 million in 2013, Chief Exec Daniel Ek Says at Founders Forum Event

Spotify chief executive Daniel Ek on Tuesday said his company expects to pay rights holders to the tune of half-a-billion dollars in 2013.

Ek, speaking at a technology and media event hosted by the Founders Forum in Los Angeles, said the amount Spotify is projected to pay artists, labels, publishers and other rights holders this year -- $500 million -- is equivalent to the total amount that the company had paid out since it launched its on-demand music streaming service in 2008.

By comparison, Pandora Media paid $230.2 million to rights holders in the four quarters ending Oct. 31, the latest period for which it reported its financial performance, and VEVO paid out $200 million since it launched in 2009.

Universal Music Group president of global digital business Rob Wells, who spoke at the same event, acknowledged that Spotify is a “substantial” source of revenue for the record company, making it unlikely that Universal would sever ties with the service when their licensing contract comes up for renewal.

The symbiotic relationship between Universal and Spotify underlines a key theme for the two-day Founders Forum event -- how media and technology companies can work in tandem to forge new business models in a world where traditional distribution methods are eroding.

“It is a moment of unprecedented transition and transformation,” Jeffrey Katzenberg, chief executive of DreamWorks Animation, told a group of about 200 media, entertainment and financing executives who gathered at the SoHo House in West Hollywood.

Katzenberg, along with Universal Music Group CEO Lucian Grainge, William Morris Endeavor co-CEO Ari Emanuel, Sony Entertainment CEO Michael Lynton, and FX Network president John Landgraf all agreed -- making money from content is much more complex than it used to be, and entertainment companies have to go outside their traditional comfort zones.

From left to right: FX Network president John Landgraf, DreamWorks Animation cheif executive Jeffrey Katzenberg, Universal Music Group CEO Lucian Grainge and Sony Entertainment CEO Michael Lynton (Photo credit: Phil McCarten)

“I spend more time thinking about what happens to the IP after its theatrical release than I do before” it is released, Katzenberg said.

It’s not just toy franchises, but also release windows created by new online and mobile distribution channels.

“We’re going through a tectonic shift to mobile now,” Ek said. The good news is that there isn’t as much rampant piracy on mobile platforms as there is on the desktops, allowing the content business to hit the reset button on digital distribution models. “It’s kind of like we get to start all over again.”

Two key advantages to mobile platforms are their simplicity and their immediacy, allowing people to discover content and instantly gratify themselves.

“I want Shazam for everything,” veteran producer and industry executive Rick Rubin said of the convenience that mobile platforms can provide. “If I see a car I like, I want to Shazam it and have it just magically appear for me.”

While traditional media and entertainment companies are twisting themselves in pretzel knots figuring out the shifting landscape, media start-ups are experiencing a “Golden Age,” according to a panel of financing executives at the event.

“We have a perfect storm” of available capital, a deep talent pool that’s willing to take risks again and technologies that enable global reach, Idealab founder Bill Gross said. “There’s never been a better time to be a start-up.”

If Spotify, VEVO, Pandora and other entertainment technology companies continue to pour hundreds of millions of dollars back into the music industry, the environment for collaboration between start-ups and traditional content companies will only get better.

NEW MUSIC: YELAWOLF "WAY OUT"

Yelawolf releases the first single off of his upcoming free album, Trunk Muzik Returns. The Shady Records signee enlisted Will Power for the production on this banger. Check it out below:

MGK: " I'M ONE OF THE MOST HARDCORE ARTISTS IN THE GAME" ( VIDEO )

For the third installation of Road Warriors, VIBE caught up with Bad Boy Recording Artist Machine Gun Kelly. The Cleveland rapper shared some of his favorite moments from the 2012 Hostile Takeover Tour, discussed his friendship and Tech N9ne and explained why he's one of the most hardcore rappers in the game.

"I'm mainstream because mainstream went Machine Gun Kelly, Machine Gun Kelly didn't go mainstream."

Exclusive: Sylvia Rhone Talks New Label Vested in Culture

Last week, Epic officially announced its joint venture with Sylvia Rhone: Vested in Culture. Reporting to Epic chairman/CEO L.A. Reid, VIC chairman/CEO Rhone has already hit the ground running with a roster that includes Latin pop star Kat Dahlia, pop duo Quadron, R&B singer/songwriter Deon Young, pop singer/songwriter/musician Sebastian Mikael and rappers Casey Veggies and Cashius Green. In the following exclusive online interview, Rhone -- most recentlypresident of Universal Motown -- talks about returning to the industry and ramping up New York-based VIC.

Given the challenges facing the industry, what prompted your return?
I’m still passionate about music, inspired by it and committed to it. When I left Universal and began thinking about my next step, I knew I still wanted a footprint in music. I’d also come up with other business opportunities that focused on my passion for film, TV, fashion and art. That’s how the name Vested in Culture originated. It casts a wide net with what I want to do in the future. Hence, I’m starting with the music label. And as VIC starts to develop in that sector, it will also expand into other areas of media.

Early stories reported the label would be called Audacious Music.
I did come up with that name, but I couldn’t get it cleared. Then it took me some time to come up with the right name.  It’s a big responsibility to name a company so that it has personal meaning and meaning as a brand. VIC satisfies both of those.

What are the specifics of your joint venture?
I don’t care to share those details. However, in terms of staff I’ve hired three people: senior VP of operations Margeaux Rawson [formerly senior VP of media relations for Universal Motown], VP of A&R Amanda Berkowitz [formerly A&R manager at Atlantic] and manager Shaniqua Branch. They’re a small but brilliant and hardworking staff that loves music, knows music and comes from various disciplines in the business. Most important, they know how to build bridges in music that can connect to other ventures.

Have you formulated a mission statement for VIC?
We’re in the business of creating and curating emerging talent. We’re about great music, great songwriting and artists who also have the ability to engage with fans organically and impact culture. Our roster is extremely diverse; young talent who are all are songwriters, which I love. They have their own point of view and know who they are.

Who’s coming out first on VIC?
There’s a huge buzz on Kat Dahlia, who’s more than just a pop artist. Think pop/Latin urban artist. We dropped her song “Gangsta” right before the holidays in SoundCloud and there are 50,000 downloads. She’s in the discovery phase online as we grow her socials. We’re also creating her assets now including a video and photo shoot, going to radio the first week in March.

Having previously helmed Universal Motown and Elektra, how does it feel to be starting from the ground up this time?
I feel I’m in the best creative zone I’ve been in in a long time. I’m very optimistic about VIC and its success at Epic/Sony. There are a lot of opportunities right now for boutique labels in this environment where there are only three major labels. What really is an advantage and separates us from others is my experience chairing Elektra and Universal Motown. Working with legends and breaking new artists has prepared me for my dream of a boutique label. In this landscape, we can make a major impact and thrive in the marketplace. We can offer services that some of the majors can’t, but we also have the muscle of a major behind us with the Epic/Sony staff. For any artist, that’s the best of both worlds.

And I feel very lucky to be working with L.A. A lot of people are thinking we will be at each other’s throats. But it’s been an automatic love affair. He has impeccable ears, style and vision; our views and tastes are amazingly in sync. It’s great to have a partner with whom you have shared experience and history. I think I can learn something from him and he can learn something from me. 

What does the future hold for the music industry?
The economics have changed radically. But there’s growth in premium services like Spotify, online radio and video platforms. Music has always been popular, but it’s even more popular than it ever was. We will never see the same topline of the past, which demands our constantly adjusting the business model. That said, however, I feel very optimistic about the business.

Postal Service Shipping-Rate Hike Forces Indie Labels to Change Tactics

When he started The End Records in the sepia-toned days of 1998, Andreas Katsambas would often ship albums to fans free of charge. He says shipping rates were so low at the time that he didn’t bother to pass the fee on to consumers.

“When I started mail order, priority [shipping] was a flat rate of $2.10,” Katsambas says. “So back then we would offer shipping for free because it didn’t really matter to us.”

But that was then. Today, a new round of shipping rate increases from the United States Postal Service— which now charges on a sliding, weight-based scale— is putting palpable pressure on indies like The End that still rely on direct-to-fan distribution.

The new rates went into effect January 27 and represent only a small increase for most items that are shipped within the United States. The price of a first class stamp, for instance, is now 46 cents— up by only a penny. But the rate increases for low-weight international shipments are much more pronounced. Global Express Guaranteed, the postal service’s fastest, least-used offering, increased by 9.6 percent; Express Mail International went up by 13 percent; and Priority Mail International rates have increased by 15 percent.

For small independent labels and distributors, the kind of businesses who rely on the USPS as a low-cost shipper, the price hike is more bad news for an already stressed business model.

“It’s a great cause of concern for us and for other retailers who ship internationally via the Web,” says Matt Arsenault of independent hip-hop label and distributor Fat Beats. “An EP that used to cost $11.60 to ship to the U.K. is now up to $15.08. That’s a big deal for our customers.”

Arsenault says Fat Beats ships as much as 50 percent of its orders direct to fans internationally, mostly to the U.K. but also to places like Japan and Australia. On its website, the label has taken to openly encouraging fans to buy in bulk in order to save money. A new shipping calculator in the shopping cart helps customers figure out their most cost-effective options.

“We try and let our customers know that for larger shipments over four pounds, rates haven’t really increased,” Arsenault says. “So by ordering in bulk they can save a little per unit.”

Different labels are responding to the rate increases in different ways. Katsumbas says that The End has started offering specialty packages of its releases that include bonus items like t-shirts— the thinking being that customers will be more willing to pay higher shipping costs if they can get more in the bargain. In some instances, he’s even lowered the prices of records themselves as a response to rising delivery rates.

“We offer 10 percent discounts from time to time, 20 percent during the holidays, and whenever we do it’s unbelievable how many more orders we get from overseas,” Katsumbas says.

Fred Feldman, founder of Triple Crown Records in New York, says he often points customers in the direction of competitors when they’re able to offer better shipping prices on his own records. Triple Crown uses MerchDirect for fulfillment services, which in turn relies upon the postal service for domestic and international shipping.

“In the States you have options because you can always do things like Media Mail, which takes longer but will save you money,” Feldman says. “For overseas you don’t have that. So if Amazon has a deal or if we know a wholesaler in the U.K. or Germany that has some of our stock, we’ll put a post up on the band’s Facebook saying ‘Hey, go here and you can buy this.’ We’re not exclusive that everything has to be sold through our merch store.”

As ever, hope for the survival of physical distribution rests on the shoulders of a niche audience of passionate music fans still willing to part with their dollars for the privilege of owning hard goods.

“The sort of broad, mid-tier customer who will just buy a CD from us is disappearing,” Katsumbas says. “But I think the diehards who want exclusives, who want to get something cool— I think they’re still out there.”

As they did during the advent of the 99-cent download, small shop owners have to hope that these customers will continue keep the faith— even when it hurts.

“We did a nine-LP box set last year [for the band The Dear Hunter] and that was certainly expensive to ship overseas,” Feldman says. “But the fans wanted it, they knew it was limited edition, and you know what? They bit the bullet.”

LEBRON JAMES & DR. DRE COVER ESPN'S MUSIC ISSUE

Dr. Dre and LeBron James smile side by side on the February issue of ESPN. The West Coast king and basketball star talk about the Beats by Dre partnership and share their favorite workout playlists. The issue hits stands February 8th.

Check out behind the scenes footage from the shoot here:

Big Machine Cuts Deal With Beasley Broadcasting to Share 'Certain' Revenue

Big Machine has cut a deal with the Beasley Broadcast Group, which will bring terrestrial performance royalties to its artists in exchange for more predictable rates for its digital broadcasting.

Terms of the agreement were not announced, but this represents the third radio network that Big Machine has cut such a deal with. Last June, Big Machine announced a deal with Clear Channel, and then in September it did a deal with Entercom. The latter two radio networks have also done deals with Glassnote Records.

According to sources, these deals call for the radio stations to pay the label's artist their pro-rated share of 1% of advertising revenue for terrestrial broadcast, and 2% of advertising revenue for webcasting. The latter terms allow radio stations to predict payments as opposed to a per play/per listener rate that the Copyright Royalty Board has imposed on internet radio. That rate currently stands at 0.22 cents per listener/per play for NAB members. Since stations can't predict how many listeners they will have, they can't control their digital transmission royalty payouts, but the rate set in the Big Machine allows for rate predictability.

Big Machine benefits because it has artists like Taylor Swift, who gets a lot of terrestrial radio airplay, and who are now receiving payment for being played. While the music industry has been fighting for performance payments when master recordings are played on radio for years for its recording artists and labels, so far the radio industry has been successful in holding off that demand, even when a Congressional mandate to negotiate such a rate ended in failure 18 months ago. Terrestrial radio does, however, pay performance royalties, but only to songwriters and publishers.

Yet in making this deal, Beasley seems to accept the inevitability of performance rates for master recordings eventually becoming law and, like Clear Channel and Entercom, is getting in front of it by extracting favorable terms to help it grow its webcasting business.

"In our 50-plus years in radio, Beasley Broadcast has witnessed many changes in the way broadcasters deliver music to listeners, Beasley Broadcast chairman and CEO George G. Beasley said in a statement. "More importantly, we have put our money where our mouth is by participating in technological advancements and adjusting our business when we felt it benefited our company and industry."

According to its website, Beasley is mainly a southeast radio group running 44 stations in 11 markets, but it also has stations in Boston, Las Vegas and Philadelphia. Beasley said the new agreement represents forward-thinking in doing business and added, "Working together is consistent with one of our core beliefs ­ that to maintain relevancy, radio must continually adapt to the current environment."

In addition to bringing Big Machine artist a royalty stream that there were previously not getting, Big Machine Label Group CEO Scott Borchetta says his label share's the mission "to help support and grow online digital broadcasting."  

KANYE WEST'S AIR YEEZY 2 KICKS SELL FOR NEARLY $100,000

Grammy-winning rapper Kanye West's signature is worth nearly $100,000, especially on a pair of Air Yeezy 2 sneakers as they sold for a couple thousand dollars shy in a recent Hurricane Sandy benefit auction.

According to reports, Ye's Air Yeezy 2 kicks and other special celebrity goodies were auctioned off to help raise money for Hurricane Sandy relief efforts.

As it was previously announced, Re/Create and a number of celebrities aimed to help with the devastation caused by Hurricane Sandy by auctioning off a number of personal items. Amongst the celebrities and items put up for auction were Julianne Moore's special effects breast-plate from the forthcoming remake ofCarrie, a vintage Miu Miu dress from Les Misérables star Anne Hathaway's wardrobe, a Marc Jacobs Mini Stam Bag, signedKate Moss book, a bottle of RC Reserve Syrah from Roman Coppola, and a signed pair of Kanye West's Air Yeezy II. It can now be confirmed that the winning bid for the aforementioned sneakers from the always-buzzed-about artist fetched a whopping $98,900 USD via eBay. It seems that "watching the throne" isn't nearly as enjoyable as owning a piece for some individuals. (Hype Beast)

G.O.O.D. Music's Hit-Boy admitted he did not yet have his own set around the kicks' release last summer.

"Man, [Kanye] told me he was going to give me some, but I didn't really press the issue. So I don't have none as of now," Hit-Boy said in an interview when asked about getting laced with a pair. "[$90,000 eBay bid?] Yeah, I know. That was ridiculous, right?" (Vulture)

Reports of a $90,000 bid for the Air Yeezy 2 kicks circulated online in mid-June.

Bidding for one pre-ordered pair of Kanye West's Air Yeezy 2 sneakers have reached $90,100 on eBay. Though hip hop artist, Kanye West, has been wearing the shoes for months, the official release date for the Nike shoes is June 9, 2012. They retail for $245. (ABC News)

Last year, music producer Dow Jones hit up SOHH and boasted about snagging a pair of the hard-to-find sneakers.

"Oh yeah, I've been a Nike child since day one, man," Dow told SOHH when asked if he indeed is a sneaker head. "Henny is more into those fly shoes with the tips but I'm definitely rocking with that street wear. Look for us to do some commercials with Nike in the future. That's what we're working on now. Nike has always been a way of life, it's not always just Jordans, man. ... the Air Yeezys are perfect. They're like pillows for your feet, man. That's why you see them reselling for a couple stacks. It's well put together. -- Ye takes the time to do things right when he's putting his name on something and that's the same thing that we live by." (SOHH)

Sirius XM Posts Record Revenue, Talks About Upcoming Internet Radio Service

Sirius XM Satellite Radio reported record revenue and earnings Tuesday as it opened the door on a new product: Internet radio. The company's 2012 revenue grew 13% to a record $3.4 billion while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 26% to $731 million. Net income ballooned to $3.47 billion because of a $3 billion income tax benefit.

As previously announced, Sirius XM added 2 million subscribers in 2012, the best year since 2007, the year before Sirius and XM merged. The company ended the year with 23.9 million subscribers. To put that in perspective, Sirius XM is not far behind Netflix, which ended 2012 with 25.5 million paid U.S. subscribers to its streaming service (it had another 8.2 million subscribers to its DVD rental service). On the other hand, on-demand music subscription services like Spotify and Rhapsody have about 1 million subscribers apiece in the U.S. 

Sirius XM subscribers will soon get a Pandora-like listening option in addition to the satellite radio service. During Tuesday morning's earnings call, CEO Jim Meyer gave an overview on the overdue Internet radio service that previous CEO Mel Karmazin first announced last year. Called MySXM, the service will allow users to create personalized versions of existing Sirius XM music stations. Subscribers can start with channels they already enjoy and fine-tune the music using "unique slider controls."

MySXM will be available on all platforms, such as iOS, Android and the web. Meyer did not offer a timeline for its launch, saying MySXM is "upcoming" and is now in consumer beta.

Sirius XM is intent on keeping the customers it has. Meyer believes the service will keep the customer engaged in the home and will be a "defensive play" in the automobile, where Sirius XM satellite radio competes with Pandora and Clear Channel's iHeartRadio Internet radio services. Meyer doesn't think two services would be overkill. He added that Sirius XM believes it can deliver a better experience with lower churn in a true connected car.

Sirius XM ended 2012 in good financial shape. To reduce some of its long-term debt, the company paid down more than $1 billion in high-coupon, short maturity debt last year and replaced it with $400 million of 10-year, 5.25% debt and a $1.25 billion credit facility. After paying a special dividend of $327 million in December, the company has $523 million in cash reserves, and it's sitting on a $1.2-million deferred tax asset.

But don't expect the same subscriber growth this year that put Sirius XM's balance sheet is such a good position. Sirius XM reiterated its previous guidance of 1.4 million total net subscriber additions, down from 2 million in 2012.