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Producer Will Producer Will | 18:45 UK time, Friday, 27 May 2011

CMU is a website aimed at people who work in the UK music industry. Our readership spans from everyone from those running labels and promoting gigs from their kitchens, up to major label execs. Plus, of course, there’s always room for people who are just interested in how this whole music business thing works.

Our main output is CMU Daily, an email bulletin that goes out every weekday morning rounding up everything important that’s happened in the last 24 hours in the music world. I say important, this ranges from all the current changes going on at Warner Music and EMI down to what Justin Bieber has done today. That Bieber boy is always up to something.

We also write about lots of new music, and I was lucky enough to be asked to pick three tracks CMU loves to play on Now Playing @6Music. After much agonising, I chose Push It Away by Seeräuber Jenny, Cramm by Three Trapped Tigers and, because I’m spending the weekend in Denmark at SPOT Festival, Bridges by Danish pop star Fallulah.

But here I’m going to look at the music industry, and the three stories I think you need to know about right now:

Warner Music and EMI
US bank Citigroup repossessed EMI from its former owner, equity firm Terra Firma, back in January – not before an embarrassing lawsuit launched by Terra Firma with a defence that hinged mainly on biscuits. And all immediately assumed that the company would be put up for sale again pretty swiftly. Then rival company Warner Music threw a spanner in the works by putting itself up for sale.

Some wondered why anyone would want to buy a major label these days, but plenty did, with ten making formal bids for Warner Music, including a consortium which featured Napster co-founder Sean Parker. Eventually, it was sold to Access Industries, owned by Russian billionaire Len Blavatnik for $3.3 billion earlier this month. Blavatnik, who already owned a minority stake in the company, had been favourite to take on the company all along.

But what now for EMI? Well, although it’s not officially up for sale yet, many of the bidders who lost out on Warner are likely to be waiting for a second chance. However, Warner Music’s Edgar Bronfman Jr has long wanted to merge his company with EMI – making a new company roughly the size of the two much larger majors, Sony Music and Universal – and it’s thought that Citigroup has already approached Blavatnik about this possibility.

It’s still not entirely clear how all this will play out, but by the end of the year, the top end of the music industry could look very different indeed.

More Warner Music coverage from CMU

More EMI coverage from CMU

The high street is a difficult place to be for a music store these days. Just ask HMV CEO, Simon Fox. In a bid to counteract the drop in revenues brought in from the company’s stores, he began buying up other music companies to diversify and firm up the HMV’s future. As well as shops where you can go and buy the latest JLS calendar, HMV now owns venues, various live events, an artist management company and half of download store 7Digital.

To do all this, Fox borrowed over £130 million from the bank. Which is fine, except when you borrow that sort of money, the bank agrees on the condition that you maintain a certain level of performance and comes knocking now and then to check that you are doing so. This is what did for Terra Firma’s ownership of EMI and, thanks to a dip in revenues from the high street stores last year, HMV is now working hard to get enough cash in its account when the bank comes to look through its finances next month.

HMV already announced the closure of 60 stores earlier this year, and last week sold Waterstones for £53 million to Russian billionaire Alexander Mamut, who already owned a minority stake in the HMV Group and was always favourite to take on the bookshop chain (are you beginning to see a pattern emerge here?). It’s also expected that HMV’s Canadian stores will be sold off in the not too distant future.

Fox had hoped to diversify without having to cut back the retail arm of HMV. It was probably inevitable, though. Still, he remains confident that the company has a future on the high street.

More HMV coverage from CMU

Digital lockers
Digital lockers are big news at the moment, Amazon and Google both having just launched their own versions of these controversial music services in the US, with Apple expected to incorporate something similar into the iTunes store in the near future.

These services allow you to upload all of your digital music into online storage so that you can play it all back via any net-connected device. It all seemed like a great idea in 2005, but since then companies like Spotify and We7 have come along and have superseded lockers in many ways. Why pay for something that requires you to rip and upload all of your music when you could just pay for instant access without any of the hassle?

Still, that hasn’t stopped Amazon and Google – partly, many suspect, because they actually want to build bigger services that the music industry is currently unwilling to let them. The music industry isn’t particularly keen on what they have launched either, arguing that they should be paying money back to the owners of the music when it is played. When Amazon launched its service, it hadn’t spoken to the music industry at all, arguing that because users are playing back music they already own, licences aren’t required. Google, on the other hand, did try to get its service licensed, but when negotiations stalled the web firm launched it anyway.

The record labels are expected to launch legal action at some point this year, and EMI is already locked into a long-running legal battle with an older locker service, MP3tunes. Many expect them to lose, but many also don’t expect lockers to take off in the long term, either.

More digital locker coverage from CMU


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