More Bits & Pieces: Blavatnik’s Inside Track at EMI, Bronfman Testifies in Lime Wire Trial & more…
Bidding over before it starts?
An official auction of EMI by owner Citigroup has yet to begin, but a piece in the NY Post hints that the bidding might be over before it starts. Citing unnamed sources, the story indicates that recent Warner Music Group winner Len Blavatnik has already been holding meetings with Citi about a possible EMI deal, which would see it combined with Warners, adding that they see Blavatnik’s Access Industries as the suitor with the deepest pockets. Though there are plenty of other well-funded potential bidders who would likely make a run, including KKR-backed BMG Rights Management, the Gores brothers whose bid for WMG failed, and a number of other private-equity players… Meanwhile, Edgar Bronfman Jr. took the stand in the trial to determine damages owed to record companies by Lime Wire yesterday, in an attempt to add credence to the claim of industry “devastation” caused by Mark Gorton’s P2P service. Appearing as the ‘face’ of an industry that has suffered at the hands of Lime Wire, Gorton’s attorney’s were quick to paint Bronfman’s as one that has not suffered much by the industry downturn – pointing to layoffs under his watch, while his salaries and bonuses have totaled in the millions for the past five years. They also read from a transcript of a 2007 speech from Bronfman, which included the line, “By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result, of course, consumers won.” More coverage on CNET… And the general concesus of those who have been invited to the private beta of Google’s new Music Beta, seems to be that while the features are neat, it could be so much better. What can they do to make it better? Secure agreements with the major record companies of course. The main points of contention between Google and the labels that are being reported, include disagreements over money (upfront advances to labels), piracy (labels trying to use a deal to leverage changes in the search engine’s results relating to piracy sites), and a lack of vision on Google’s part for what they wanted the service to be, combined with the fear by labels of upsetting the Apple cart, by getting in bed with a competitor. For all the talk of needing someone to step up and create a meaningful iTunes competitor, it looks as though Steve Jobs will have the upper hand with labels once again… And in related gossip, there have been rumors of a Lady Gaga tie-in with the public launch of Google Music, including a claim on Fast Company that the singer was recently shooting a commercial for Google in New York, for a promotion that would coincide with the release of her new album later this month. Such predictions might seem highly dubious, considering Universal Music is said to have been one of the main holdouts on a Google deal, however her manager is no stranger to Silicon Valley and gaming company Zynga just announced a major partnership with Gaga this week.
05.10.11Bits & Pieces: More on Warners-Access Deal, Google Revealing Music Beta Today & more…
Google Music unveiled today?
Following the announcement last Friday morning that Len Blavatnik’s Access Industries was the winning bidder in the Warner Music Group auction, late rumors bubbled that rival bidder the Gores brothers were considering an after-the-buzzer increased offer. While it would be possible, though it could create a hefty fine if the Blavatnik deal was broken, most have written it off as billionaire posturing, and expect the deal to finalize as announced. Other fallout from the Access deal seems to include the possiblity of legal action from shareholders, concerned that their best interests were not represented in the accepted bid, with Dallas-based Kendall Law Group leading the charge… Meanwhile, Google is reportedly set to reveal their long-awaited music service today at its I/O presentation in San Francisco, in a ‘beta’ version, which has the company moving ahead without licensing deals in place with the four majors. Very similar to Amazon, Google Music for now will act as a basic ‘locker’ service, allowing users to upload music to a central server (cloud), and then stream music from Android devices. The main difference from Amazon is that Google doesn’t sell music, and most don’t expect any partnership with an outside digital music service to be part of the announcement. And while just as with Amazon, Google is expected to continue its negotiations with the labels in order to release a more robust service in the future, most are already crowning Apple as the winner in the so-called ‘cloud wars’ even though the company has yet to release any specific details. Apple, who is rumored to have already completed at least one licensing deal with the four major music companies, will surely complete deals with all four before stepping out, and the technology for the service is also said to be in place. Will June see an iCloud announcement?… Elsewhere, CKX, parent company of American Idol producer 19 Entertainment, has been sold to private equity firm Apollo Global Management. CKX also has interests in Elvis Presley’s Graceland and the image and name of Muhammad Ali. The deal is said to be valued at around $509 million… And composer Hans Zimmer has signed with William Morris Endeavor. The move is part of a string of defections from the Gorfaine-Schwartz Agency (GSA) that has also included David Newman and David Holmes. Amos Newman, formerly of GSA, is said to have been behind the moves after being recently brought into WME to start up a new division focused on moving touring clients into film, TV and videogames, as well as expanding the business of composers beyond traditional platforms.
[UPDATE: TechCrunch has a preview of the new Google Music Beta, which was unveiled this morning as expected.]
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Bits & Pieces: Warner Closes Final Round – Will the Victor Go the EMI Spoils Too?, Radio Staff Grows at Q Prime & more…
Destined to be combined?
The final round in the Warner Music auction closed yesterday, with two primary bidders said to be vying for the company, one being Len Blavatnik’s Access Industries and the other, a coalition of brothers Tom and Alec Gores, whose respective company’s are Platinum Equity and Gores Group – both suitors reportedly tendered bids around $3billion for the entirety of WMG. Attention has begun to drift to the looming sale of EMI by owner Citigroup, and the belief de-jour is that whomever ends up nabbing Warner Music, will also be aggressive in securing EMI as well. The result would likely be a cut and paste job between the various components of the two music groups. In another twist, The Telegraph reported yesterday that KKR-backed BMG Rights Management and Universal Music Group may be teaming up in an attempt to acquire either or both EMI and Warners, having put together a plan to carve up catalogues in an effort to avoid regulatory hurdles… Elsewhere, according to FMQB, Q Prime is expanding its promotion team, with an emphasis on bolstering the undertakings of its premier management operation, with a roster including Cage the Elephant, The Black Keys, Silversun Pickups, Snow Patrol, Muse and many others. Q Prime’s Mom + Pop Records, who has releases from Sleigh Bells, Metric, Freelance Whales among others, should also benefit from the increased staff. The additions include Trina Schaefer (formerly of Island Def Jam), Erin Gellert (formerly of Epic Records), Devin Rosevear, Chris Frank (formerly of Universal Motown) and Michael Fang (formerly of Red)… Meanwhile, the news of a nearly 25 million additional user accounts being compromised in the recent PlayStation Network breach (77 million were initially reported) smacks of the Sony BMG rootkit blunder (and ensuing lawsuits), and it can’t be good news for Sony Corp. CEO Howard Stringer, whose term has recently begun to be put in question more frequently… And for an interesting read about some of what labels are said to be demanding from cloud music, or locker, services (efforts from Amazon, Apple, Google and Spotify being the most widely discussed), check out the guest post from MP3.com and MP3Tunes founder Michael Robertson on TechCrunch.
[UPDATE - Bloomberg first reported yesterday that a last minute joint-offer for Warners was submitted by Sony/ATV Music Publishing and Ronald Perelman and Guggenheim Partners LLC. A winning bidder is expected to be announced on Friday.]
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Bits & Pieces: WMG Bidding Closes, Citi Keeping EMI United, Dangerbird Downsizes & more…
WMG reviews latest bids; Citi prepares EMI
As the second round of bidding closed on the Warner Music Group auction (the company is said to be reviewing offers this week), a new player emerged in Oaktree Capital Management and publishing company Primary Wave, who reportedly put in a combined bid for WMG’s publishing unit Warner Chappell Music. A total of 10 buyers are believed to have submitted offers that are being reviewed…. The latest development in Citigroup’s looming sale of EMI, comes from reports yesterday that the bank will be seeking to unload the entire music group as a single unit, rather than sell off the recorded music and publishing divisions as was widely believed. Group CEO Roger Faxon has long maintained that the two divisions would remain together, and last week also saw the announcement that record and publishing synchronization and licensing staffs would be combined. Some sources have cited a complex fusion of assets within the two divisions as a reason for Citi to sell the divisions together, while others contend that the reports are diversionary, and that it is still likely that the two will be split in the end, even if they are acquired as a whole… Amazon launched its cloud drive features just over two weeks ago, and according to comments from the company, so far it’s been a big success – though no numbers have been disclosed. The labels, who were apparently left in the dark about the launch, have yet to take any legal action or even publicly decry the brazen move… And has Google taken a cue from Amazon? Reports of Google acquiring Pushlife this week, a mobile content streaming service, were followed by rumors that the company may forgo the elements of its service that would require licenses from the labels, in favor of a pure locker system like Amazon… Elsewhere, Sirius XM has settled with Merlin members and other indie labels to the tune of $3.6 million in what concludes a class action against the satellite radio company that dates back to 2006. Many major labels and publishers previously settled with Sirius XM back in 2007-2008… And Dangerbird Records has reduced its staff of thirteen by five, according to a report from Pop & Hiss. Label head Jeff Castelaz said of the cuts, “While this was a difficult decision, it is necessary for Dangerbird to effectively service our artist roster to the best of our abilities,” adding “Our core staff remains intact, while we will transition some key employees to act as consultants to the company, where they will continue to represent the artist-driven, independent ethos of Dangerbird.” Just over two months ago former major label executive Piero Giramonti was named president of the Silver Lake based operation. Some of the label’s recent signings have included Liam Gallagher’s new project Beady Eye, The Limousines and The Fling…
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Amazon Beats Competition to the Cloud
Plenty of talk today centers around Amazon diving into the digital music cloud-storage arena, by unveiling a new service today known as their Cloud Drive and Cloud Player. The basic concept for the most part is the same as what has been discussed by multiple companies for some time now as a new digital-music “locker” type of feature, which allows users to store their content online, in this case Amazon’s own storage servers, with the ability to access it from multiple devices and locations. To catch up on the central concept, Amazon created a nice little cartoon that explains how it works, watch it here… What has most folks chattering however, is that while Amazon is not the first to offer a service like this, it took the step ahead of Apple and Google, and reportedly without any additional licenses in place with the record companies. A rep from Sony was the first to comment publicly, saying that they were “disappointed” with Amazon’s move… This act first, ask later tactic is one that many digital music services have taken in recent years – many times ultimately surrendering to labels at a high-cost or shutting down completely, but none of them had the stature of Amazon. Furthermore according to comments from the company, they don’t believe they need any additional licenses for the current Cloud service, and would only engage in negotiations with labels if and when it is necessary to introduce more new cloud features, whatever those might be. Amazon is letting their customers decide – after all, user comments and feedback were the genesis of developing the new service, according to a Q&A with Billboard published today. Another interesting twist is that the new feature runs on the Android platform – how that will effect, or play into, Google’s own plans for a music service remain to be seen. The service is not currently available for Apple devices like the iPhone or iPad, and no information released indicates whether or not that will change.
02.17.11Bits & Pieces: Warner/Chappell Losing MJ Admin, Sony Backs Off Anti-iTunes talk, Apple Making More Enemies & more…
A piece on Showbiz411 yesterday, revealed that Michael Jackson’s publishing company MiJac Publishing, which is currently administered by Warner/Chappell Music and includes songs such as “Billie Jean” and “Beat It,” among others, will soon be moving to Sony/ATV Publishing. The shift was reportedly written into the contract with WCM, who has administered the catalog for years. It also comes on the heels of the announcement that Warner Music Group is shopping for a sale, most likely of its publishing arm, putting them in direct competition with Citigroup’s plans for EMI Music. Insiders share that this is one of multiple similar scenarios WCM will face in the coming years… After abundant commentary last week on Sony Music’s possible intention to abandon iTunes, following a report in an Australian publication, a comment from a Sony Network Entertainment executive indicates that is in fact not the case, saying Sony Music has “no intention of withdrawing from iTunes, they’re one of our biggest partners in the digital domain.” Today also saw the announcement that Sony is launching its “iTunes rival” music service Qriocity in the U.S., though still without a mobile component. Currently Sony is focused on Playstation 3 as the primary vehicle for the music service, though it has plans to move into mobile in the future, and most likely on the Google Android platform first… More Google Music talk arose this week, with a Motorola executive tipping that the service will be included on Google’s new version of Android, Honeycomb, which will be tied to the new Motorola Xoom tablet… Following the details revealed this week by Apple for its new content subscription service, music services are upset over the 30% share for each subscription that goes to Apple, in addition to the fees already being paid to content owners. Among them, Rhapsody, has gone as far floating the possibility of legal action… Elsewhere, Topspin has announced a move into offering their direct-to-fan platform for all users… Through a sponsorship effort, Converse has saved the legendary punk enclave the 100 Club in London from closing… And this Death of the Music Industry chart, is getting lots of attention.
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Wednesday Bits & Pieces: Who’s Launching First – Spotify, Google, Apple or None of the Above?
Who will get out of the gate first?
In another 2011 industry horse race, contradictory reports and speculation continue to surface about the launch of digital streaming music services from high profile companies like Google, Spotify and Apple. Sony Music recently inked a deal with Spotify, becoming the first U.S. label to do so. And that was quickly followed by rumors of a U.S. deal with EMI being closed in on, however the effects on such a deal by the label takeover this week by Citigroup are yet to be known, but it’s likely not good for the European start up. Even if an agreement was reached, would it be valid when new ownership takes over? Regardless of an EMI deal, or even Warner Music Group, the biggest target for Spotify to get the service off the ground in America is still Universal Music Group, who boasts the largest market share and a significant stable of current hit artists. What will it take to land the other majors? Lots of cash, and most likely a number of concessions in the area of how much free music it offers… Meanwhile, Google has plenty of cash, and reports continue to indicate that it has no problem plunking it down for labels to launch Google Music. While rumored timelines for a launch continue to contract and expand, a possible major stumbling block for Google, and other services in the same cloud, is music publishers. Matt Rosoff wrote a piece this week citing a source that claims publishers want to be paid for every download. Meaning that the key aspect of the locker-based service would conceivably force users to pay multiple times for the same song when downloading at different locations and on multiple devices. Something consumers will surely scoff at… The end of last year saw plenty of anticipation and predictions about a streaming service from Apple, however the talked has quieted this year as the company remains mum. However recent comments from Spotify executives have accused Apple of putting pressure on labels in an effort to keep the service from launching in the U.S., presumably to give themselves more time to finish working on a yet-to-be confirmed streaming version of iTunes. Not unheard of when considering the continued pressure it puts on artists and labels who do business with Amazon… Stay tuned.
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Year In Review: Music Biz Undergoes Big Changes in 2010, Only More to Come
As 2010 winds down, there is plenty of industry action to look back upon and even more still to come with a number of significant changes looming. It all adds up to an end-of-the-year full of more questions than answers, but at least it keeps things interesting…
Home on the Grainge
It was back in the beginning of the year that Lucian Grainge’s assumption of the CEO position at Universal Music Group in January of 2011 was announced, beginning a year long process of reviewing the company structures on both coasts. The fate of current UMG chief executive Doug Morris remained murky until recently as reports began to fly of his likely jump to a rival music group. But what of the new composition at UMG? Still the largest of the remaining major music groups, in both recorded music and publishing, there are no signs of slowing for the Vivendi-owned company, who is positioning itself to streamline operations with new arrangements that will see labels combining some back-office efforts, or as CFO of the French conglomerate put it recently, “a lot of fat can be taken out without hurting muscle and bones.” Looking at the various labels within Universal, it appears that most current heads will stay within the group, at either their current positions or newly created ones, as will most likely be the case with Island Def Jam ruler Antonio “L.A.” Reid. Rumors began circling back in October of an imminent firing, with many claims being made that the IDJ head was as good as out, however as others predicted, a new label imprint for Reid is now the likely outcome. There is talk of an increased dominion within UMG for Universal/Motown and label prexy Sylvia Rhone as well as Universal/Republic under the leadership of CEO Monte Lipman moving forward. And though a title for Barry Weiss, who just announced his move from RCA/Jive to Universal this past week, has yet to be announced, all signs seem to indicate that he will act as Grainge’s primary lieutenant on the East Coast while the new group chief resides in Los Angeles. What roles David Massey and Steve Bartels will take in the new structure remain unclear. Look forward to more changes to come in the new year, including word to spread of a newly inked deal between Universal and a major management firm who sold the label a significant stake in the operation…
Ghost of Epic '10
With the exit of Rolf Schmidt-Holtz from Sony Music on the horizon, talk of his successor has turned squarely on Doug Morris, with sources claiming that it’s as good as done, and that earlier contender Sony/ATV CEO Marty Bandier is uninterested in taking the position. Much has been made recently of Columbia/Epic chairman Rob Stringer’s missteps in the artist-executive hiring of Amanda Ghost, who is departing from her presidential post at Epic, and talk coming from within the building continues to forecast a murky future for the label. Will the label fold into Columbia? What will the future hold for current Epic head of A&R Mike Flynn? What is the future for the younger Stringer at Sony, and is it tied to that of Howard Stringer? The elder Stringer has denied recent reports of his interest in the chairmanship of BBC Trust, though rumors of his time coming to an end at Sony Corp continue. And will Charlie Walk find himself back in the Sony fold?… The handling of EMI by Terra Firma boss Guy Hands, has left many mystified, from the initial timing and price of the purchase, the revolving door of outside executive hires, to the recent courtroom debacle with lender Citigroup. While strong releases from Lady Antebellum and Katy Perry along with the Beatles-on-iTunes coup are all positives steps, and many have praised recent promotions in the upping of Roger Faxon to chief executive of the group and Dan McCarroll’s promotion to oversee the Capitol and Virgin labels, it strikes most as too late. Talk of a takeover of EMI by Citigroup before the year’s end ramped up this week after reports that Terra Firma investors ruled out investing more funds into the company to meet the next debt obligation to Citi. If the bank does indeed take control of EMI, the common belief is that it will sell off the recorded music and publishing divisions to the highest bidders – the two mentioned most often being Warner Music Group and BMG Rights Management… Shifting to the bunny, the company made industry waves in September with Lyor Cohen initiating some top-down restructuring, which started with naming Rob Cavallo as the new Warner Bros Records chairman and CEO, removing Tom Whalley, a move seen as a long time in the making, as Cohen and Whalley notoriously never saw eye-to-eye. The shake up also resulted in Todd Moscowitz and Liva Tortella being named Co-President/CEO and Co-President/COO, respectively. Following the executive shuffling, WBR departments underwent scrutiny, that led to more departures from creative and promotion executives. Eyes now turn to the possibility of acquiring EMI’s recorded music division, which would considerably boost Warner’s market share as well as narrow the major music group field to just three. If it goes down, it has many wondering what changes would be made to the executive team currently being assembled at EMI under McCarroll… Hartwig Masuch, CEO of BMG Rights Management, the joint venture backed by Kohlberg Kravis Roberts & Co and Bertelsmann made his intentions of being counted among the top four publishers well known, and a year of aggressive acquisitions has carried through that goal. Those in the know share that KKR, a global private equity firm specializing in leverage buyouts, is the driving force behind the quick and expansive activity. High profile purchases of independent publishing companies this year included Stage Three, Evergreen and most recently Chrysalis. If the JV is able to acquire EMI Music Publishing in the event of a sale, it would see the new publishing player competing for not only a place at the table with the other major publishers, but as a contender for the current top spot held by Universal Music Publishing…
Meanwhile, onlookers will be waiting to witness what the future holds for MySpace, as the once all-powerful social network continues to slide. Even with a redesign, progress on the mobile front and a new ad deal with Google in place, most believe the writing is on the wall, with more layoffs at the company expected to come down in the new year. And how will this effect MySpace Records? The label was all but shuttered in the first quarter of 2010, only to be resurrected, sort of, over the summer with the hiring of David Andreone and a new ill-defined partnership with Josh Deutsch’s Downtown Music… And with all the reporting and speculation surrounding new cloud-based services from the likes of Apple and Google in 2010, as well as the entrance of Spotify in the U.S., all will have to go on next year’s wish lists. Google has made its plans to launch a music service well known, with the latest reports indicating that they’re willing to pay labels massive sums to get a service off the ground, while Apple continues to remain mum on any plans for a new streaming service… IN THE MIX: Steve Moir, Sylvia Rhone, David Wolter, Sandy Roberton, John Rudolph, Josh Abraham, Foo Fighters, Andrew Brightman, Greg Hammer, Nick Gatfield, Jason Flom, AWOLNATION, Ed Pierson, Cool Hand Luke, Dan Petel, Hurley
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Wednesday Bits & Pieces: Google’s War Chest is Key to Music Service, mSpot Goes Mobile & more…
App Approved
In case anyone had forgotten about Google’s plans to unleash a music service, a reminder comes in the form of new reports that the company is still in the process of negotiating with the labels for a launch next year, and their biggest, and most obvious bargaining chip, is lots of money, tens of millions in fact according to recent speculation. While it was originally thought that Google would first unveil a paid download type of service by the end of this year, similar to iTunes, ahead of moving toward the primary goal of a online music locker, indications now are that they’ll bypass a download store in favor of cloud-based streaming right out of the gate. Reasons for the delay in launch may include infighting over control of the music project, and failure to acquire an already built infrastructure in the form of Spotify or Rhapsody, rather than building something completely new. Matt Rosoff has the scuttlebutt at SAI… Speaking of music streaming, start up mSpot has gotten approval for their free iPhone app, which essentially provides the same desktop-to-mobile music synching feature that everyone is waiting for Apple or Google to launch, though as MediaMemo points out, the company currently has no licenses with the labels. A situation that seems to leave the company in a position to either be targeted for legal action or acquisition… The crux of the digital music dilemma is most often that technology innovators and content holders find themselves at an impasse, with the new distribution system, telecommunication companies, keeping their distance from the wrangle. Looking to the future, comments this week from Jean-Bernard Lévy, CEO of Vivendi, parent company of Universal Music Group among many others, could be seen as revealing. In discussing the company’s expanding umbrella and concentration on new businesses, Lévy said, ”The worlds of telecoms networks and content are merging,” – “And we are in the middle.”… Elsewhere, Yahoo has confirmed the already well documented layoffs, that total 600 staff members, or roughly 4% of its workforce… NBC is planning to launch their own American Idol rival, The Voice of America, which will start airing next spring, well ahead of the planned fall launch of Fox’s other Idolesque series, The X Factor… And MTV in partnership with The Echo Nest has launched a new algorithm-based music discovery site called MTV Music Meter, which puts focus on emerging artists alongside those already established, and is being seen as another step to maintaining the recently achieved online music dominance over Vevo…
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Wednesday Bits & Pieces: BMG Buys Chrysalis, Myspace on the Block & more…
BMG buys Chrysalis
Heading out of the holiday weekend, industry chatter continues over the acquisition of Chrysalis by BMG Rights Management. One of the world’s largest independent publishers, Chrysalis publicly announced that it was in early-stage talks for a potential sale or merger just less than one month ago. Others bidders said to have been in serious talks include Imagem and Bug Music, though BMG RM came in with the winning offer at just over $168million. The purchase is the latest in a series this year from the joint-venture backed by Bertelsmann and private equity firm KKR – who is being seen as the driving force behind the publisher’s aggressive acquisitions – which also includes Cherry Lane, Adage IV and Stage 3. Following the acquisition, CEO Hartwig Masuch made comments indicating that he believes BMG is now the world’s largest independent music publisher, and is just behind the top four major music publishers. EMI Music Publishing continues to be another likely target in the event of its break up, which would easily make BMG a rival for the top spot… Following the quick deflation of any excitement over the relaunched Myspace last month, comments by News Corp. COO on Monday seem to all but spell out the likelihood of a sale for the beleaguered social network. Though Myspace did release a new mobile site and iPhone app this week, a direction some see as the most sensible one for the site who has seen its numbers drop even more drastically over the past year. Likely bidders for the site being mentioned include the usual digital media giants like Yahoo and AOL, though others see Google (who is also in the midst of discussions to acquire the red hot startup Groupon) as an interesting candidate as well… Elsewhere, the L.A. Times takes a look at the recently overhauled MTV and its focus back on music… Sony Music mistakenly takes action to pull songs offline from Bradford Cox, whose musical projects include Deerhunter and Atlas Sound… And PC Magazine has responded to the letter it received from a group of industry executives last week, which included signees from organizations such as the RIAA, Harry Fox Agency, Sound Exchange, ASCAP, BMI and SESAC, criticizing the publication for a recent article naming file-sharing service alternatives in the wake of LimeWire shutting down…
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