On the other hand, you can see why YouTube would want a page like this: It makes a nice, cleaning landing page to send traffic to and from, just like the “shows” and “movies” pages it has previously set up. You could probably get a nice premium for ads, too, though so far the page is banner-free.

Note that this is separate from Vevo, the “Hulu for Music” joint venture set up by Universal Music Group and Sony (SNE) that YouTube is supporting but not investing in. The YouTube music page ends up linking to a lot of Vevo stuff, but it’s not doing that exclusively. You might get a link to Sony/Vevo’s AC/DC, or you might get one to an oddity like “Jersey Shore” semi-celebrity Pauly D, promoting his new single. (Pauly D has a new single!)

The page is self-explanatory, but in case you’re itching to start hearing something immediately, here’s a sample of what YouTube is currently promoting there–a little “Jersey Shore.”

Now, back to our regularly scheduled programming: I’m seeing more and more evidence that Apple (AAPL) notwithstanding, the industry’s last few months were bad even by the industry’s own terrible standards.

Earlier this week, a music industry exec told me he thinks that the CD sales decline, which started nearly a decade ago, accelerated at the end of 2008: “[Retail] floor space shrank even more, [unsold CDs] came back even faster, everything got worse, faster,” he told me.

The newest data point: Awful results from Sony’s (SNE) third-quarter earnings report, which covers the last three months of 2008. The company’s Sony Music Entertainment label saw sales shrink 22 percent compared to the previous year due to the “accelerated decline in the worldwide physical music market resulting from the worldwide economic slowdown.”

It’s possible that we’ll see a bit of variation in results from the other big music labels–EMI Music Group, Vivendi’s Universal Music Group, and Warner Music Group (WMG)–based on the makeup of their artist rosters, etc. But the worrisome thing is that Sony’s arsenal included three of last year’s biggest stars: AC/DC, Beyoncé and Britney Spears.

So while it’s possible that Warner Music, which reports next Thursday, won’t have equally brutal results, it’s a fair bet that it will.

Sort-of-related point: If you have a couple minutes and are interested at all about what the music business might look like in the near future, check out this New Yorker interview with Muxtape creator Justin Ouellette.

Ouellette achieved a brief bit of Internet celebrity last year when his free music-streaming site caught on with the the Web cognoscenti, but then folded after receiving complaints from the music labels’ trade group. Now he’s back with a legal version of the site, which will have much smaller ambitions.

Last June, a Vornado executive told Reuters that the store would shut down in the first quarter of 2009. The decision to close the store appears related to real estate and the value connected to the location. That executive was quoted as saying that Virgin pays only $54 per square-foot when the market rent in the area is about $700 a square foot.

So, while the store, which does an estimated $55 million in annual volume, is profitable to the tune of $6 million, according to sources, the space would be even more profitable for its owner with a higher rent tenant. Vornado bought the 180,000 square foot retail component of the Bertelsmann building, which houses the Times Square store, in 2006, and will lease the space to Century 21, according to reports.

The closure leaves the Virgin chain with five stores, and one of them, the Union Square store in New York, will now be the city’s premiere record store, with an estimated $40 million annual volume. But the status of that store is also at question as the Related Cos. and Vornado leased the ground floor of the store to Nordstrom Rack for the holiday season, only to have the deal fall through.”

I get that the decision appears to be “related to real estate,” but it’s really about the health–or lack thereof–of bricks-and-mortar music retail. If the No. 1 store in the country can’t make it, and if New York City’s “premiere record store” rented out a floor during the peak sales season, then why is anyone bothering to sell CDs in stores, period?

Plenty of retail executives seem to be asking themselves the same question, and are responding by cutting the small space they’ve devoted to CDs even further. The exceptions: Special promotions for exclusive albums, like Wal-Mart’s (WMT) successful push for the new AC/DC album last year, and Best Buy’s (BBY) unsuccessful gambit with Guns N’ Roses.

[Image Credit: Troshy]

Latest example: Borders Group (BGP), the struggling book chain, has cut its music inventory by 30 percent in the last year, the company said. Music now occupies about seven percent of its floorspace, and the space it used to take up has been given over to higher-margin products like children’s books.

Borders makes up a relatively small portion of U.S. music sales, but most big retailers have been doing the same thing for more than a year. If you don’t believe me, try to find the CD section next time you visit a Target (TGT) or Best Buy (BBY) this month.

The big stores will embrace individual albums–if they have an exclusive, like Best Buy’s deal with Guns N’ Roses, or Wal-Mart’s (WMT) recent AC/DC promotion. (That’s Best Buy’s GNR promotion, pictured above. Lonely, isn’t it?) But beyond that, they are basically telling music shoppers, who bought some $7 billion worth of discs last year, to take their business elsewhere.

[Image Credit: Idolator]

Did you buy the “Only by the Night,” the newish album from Kings of Leon? If so, Sony would like to thank you.

Everyone else, though, is going to have to pick up the pace or Sony’s new investment in its music business isn’t going to pay out.

Footnoted in Sony’s Q2 earnings release today are the details on the performance of Sony BMG, the music label it used to own in conjunction with Bertelsmann AG.

This summer Sony (SNE) bought out its partner for $900 million and now owns the label outright.

But the newest results make it hard to understand why it made the investment: Sales dropped 11 percent, to $762 million, and the company lost $57 million, up from an $8 million loss a year ago.

Those results aren’t out of the ordinary for the label, which has been struggling along with the rest of the industry for many years.

The now-boilerplate language to describe the results blamed the “continued decline in the worldwide physical music market not being offset by growth in digital product sales.”

Okay. So what about the Kings of Leon? MediaMemo confesses that it has yet to hear the new album, but Sony says it one of the best performers of the quarter.

Other winners: AC/DC’s “No Bull,” which MediaMemo believes is actually a concert DVD, and “One Chance” by Potts, which I’ll confess I’ve never heard of, period.

The deal is an interesting one, and for a number of reasons. Unlike Brooks–or The Eagles or Journey, who have similar pacts with Wal-mart–AC/DC is still under contract to Sony (SNE) BMG’s Columbia Records. By inking such a deal, Columbia almost certainly risks alienating other retailers, who can’t be happy to see AC/DC’s first album of all-new material in eight years become a Wal-Mart exclusive. Among those retailers: Apple’s (AAPL) iTunes Music Store, where AC/DC has so far refused to distribute its music.

The deal also comes at a time when Wal-Mart and other big retailers are reducing their CD shelf space. It’s been estimated that Wal-Mart, Circuit City (CC) and Target (TGT) have cut between 5 percent and 23 percent of their CD inventory in the last two years. Which means that retail exposure, which was once a given for many bands, is becoming increasingly dear. So much so that it’s a negotiating point, and–in Wal-Mart’s case–enough of one for big-name acts to justify allowing the retailer to sell their new releases on an exclusive basis.

“Shelf space has shrunk so much over the last five years that for anyone to give you shelf space and exposure is a big deal,” Terry McBride, chief executive of Nettwerk Music Group, recently told the New York Times. “Should the labels be worried? There’s been a move away from the labels for a number of years now. And it’s not necessarily their fault. The shelf space to have those records sell just isn’t there. That’s the market reality.”

Announced this morning, the deal gives Verizon exclusive rights to sell the band’s entire back catalog through March 2008–but not in the way you might expect. Verizon is selling AC/DC’s 18-album catalog, not as wireless “over-the-air” downloads, but as straight-to-PC downloads through its V CAST service. And with the exception of one song, “You Shook Me All Night Long,” the band’s music is available only in full-album format. Oh, and Verizon’s priced the albums at $11.99 and the single as $1.99–a bit steep considering that Apple’s iTunes charges $9.99 for a typical album and $.99 for a single.

Even with AC/DC riffs as firmly embedded in the rock subconscious as they are, it’s hard to imagine fans storming V CAST to overpay for full-album digital downloads. “Who’s advising AC/DC?” asks JupiterResearch analyst David Card. “How many things are wrong with this deal?

• Albums are overpriced–$11.99;
• Only one single is available, everything else is album only;
• It’s an eight-month exclusive with a phone company;
• But that’s a U.S. phone company;
• I’m not sure, but I don’t see any ringtones or other bundles.

… I hope they got some serious coin upfront.”