Dueling plot lines continue at Sony & Universal Music; Interscope headed to a crossroads?
Big changes ahead?
The action at Sony Music under new leader Doug Morris has been closely followed and well-publicized, after less than two months under his belt at the top spot, with the recent somewhat brackish news consisting of new appointments and promotions as well as layoffs at the label group. Last week saw reporting that two more senior Jive executives who were thought to be heading to the new Epic label group under L.A. Reid, are instead leaving the building. Now it seems time for the dueling plot lines at Universal Music Group under Lucian Grainge to take the spotlight for a moment, with the CEO giving his first “major” interview to the New York Post (whose music biz coverage has continued to ramp up), appearing over the weekend. Grainge’s comments focused almost entirely on his A&R philosophy and conflict-based management style, saying “I’ve always liked to work in a state of creative conflict. It doesn’t mean you fall out with people in your company or an artist; it’s about discussing a song or direction.” Also emphasizing a “completely global approach,” which coincides with the naming yesterday of Andrew Kronfeld to a newly created position of President, Global Marketing. More new appointments include Karen Kwak to Executve Vice President, Head of A&R at the newly forming Island Def Jam Music Group, a promotion from previous senior A&R positions at the label, while Roc Nation producer No I.D. has been handed EVP A&R stripes at Def Jam Records. However, other comments from Grainge might be a different kind of omen, with word of layoffs in the A&R department at Interscope Records coming at the close of last week. Some insiders are indicating that label chief Jimmy Iovine, whose name could be considered synonymous with the Interscope brand, is losing interest in running the label and becoming more and more interested in outside ventures. Observers are curious what Grainge’s move would be if his resident hit-maker were to depart of his own accord, and who might be in line for his seat? Stay tuned…
07.21.11More Exec Shuffling at Sony Music; Gatfield Named Head of U.K. & Rhone Rumored to Revive Portrait
Sylvia Rhone reviving label at Sony?
A number of high-level executive moves at the changing Sony Music structure have shaken out this week, the first on the job for new CEO Doug Morris. We tipped the hotly pursued deal with hit producer/songwriter Dr. Luke for an expanded label mimicking Interscope last week, while this week began with the official naming of Antonio L.A. Reid as CEO and chairman of Epic Records, news that was widely reported in the previous weeks. Assigning of current acts on the Sony roster to Reid’s new domain has already begun, along with new signings underway – it’s also expected that contestants from the X-Factor series will be developed by Epic – Reid is serving as a judge on the American version of the show. On the international front, which is said to be a major focus for Morris, came the revelation yesterday that Nick Gatfield will be taking over Sony’s U.K. operations, replacing outgoing CEO Ged Doherty. Gatfield previously served as head of Universal’s Island Records U.K. from 2001 to 2008 and held an international A&R executive title at EMI until leaving last year. The move to replace Doherty is being deemed as sudden by some, however it seems more likely that Morris was pulling strings well before officially taking his new title. After departing EMI in 2010 toward the end of the troublesome Guy Hands era, Gatfield was believed to likely end up back in the Universal Music fold, under the incoming CEO Lucian Grainge, whom he worked closely with at Island, however it never came to pass. He was also said to have been in talks with Sony late last summer, but a deal was never reached. Then back in February of this year, Gatfield was hired on at Sony U.K. with the somewhat vague title of President/New Music, reporting to Doherty, who he has now replaced. Richard Sanders, the head of Sony Music Interational based in New York, is also out… According to reports, one of the main functions for Gatfield in his new role, will be to maintain relationships with Simon Cowell and his operations under Syco, which Sony owns a 50% stake in… An abutting storyline to the current UMG and Sony rivalry that has some observers intrigued, is the lawsuit filed this week involving a dispute between American Idol’s Simon Fuller and Simon Cowell over the new U.S. X-Factor series – the shows are aligned with Universal Music and Sony Music respectively… And the latest rumor according to a story in Page Six this morning, is that departed Universal Motown prexy Sylvia Rhone will be relaunching the Portrait Records label at Sony. According to the report, the label will work closely with L.A. Reid’s Epic, and Cyndi Lauper, who was on Portrait in the 80’s, will be the first artist signed to the revived imprint… Stay tuned.
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Exclusive: New Sony Music Boss in Talks to Expand Label with Hitmaker Dr. Luke
A major restructuring of Sony Music among its label groups and executive ranks has begun, with the news already released of Antonio “LA” Reid’s taking the chairmanship at Epic Records, and the break up of the RCA/Jive label group that has some key executives moving to Epic while others will take up at RCA. But more than a game of musical chairs is needed to compete with Universal Music Group, who holds the top spot in the market and is making aggressive moves of its own under new CEO Lucian Grainge… According to insiders, a top priority for new Sony Music CEO Doug Morris, is completing a substantial label deal with hit producer and songwriter Luke Gottwald (aka Dr. Luke) that will encompass both records and publishing. There’s no word as to whether a deal has been finalized yet (the two sides are said to have been locked in negotiations for months), but from what we’ve learned, it would be a major opening statement from Morris as new label chairman and a key component in the new Sony structure. Luke’s Kemosabe Entertainment label (which Ke$ha is signed to) is already under Sony/RCA, but as it’s understood, the new label (it’s unclear if the name will change), would be put on a similar playing field as Columbia Records, Epic and RCA, including a full staff. Those in the know believe that Morris is positioning to create the next Interscope Records under the Sony umbrella, with arguably the biggest hitmaker in the world right now in a Jimmy Iovine-like role. The most significant component being that Luke comes armed with a entire camp of writers and producers that are developing new talent and already creating chart-topping tracks. Notable emerging producers and writers like Benny Blanco and Bonnie McKee, who are affiliated with Dr. Luke’s publishing companies, have had a number of successful cuts in recent years including tracks with Britney Spears, Katy Perry, 3OH!3 and Wiz Khalifa. Luke himself has been responsible for helping create over 18 No. 1 hits in the last five years, producing and writing for artists like Pink, Avril Lavigne, Katy Perry, Taio Cruz, Ke$ha and many others, since his 2004 Kelly Clarkson breakthrough smash “Since U Been Gone”. All of which makes it a smart move for Sony/ATV Music Publishing to seek a significant stake in Luke’s publishing, as is rumored to be part of the overall Sony deal as well… Will Morris’s bold move prove to be a massive success, pushing Sony past UMG? Or another failure in a recent Sony track record with producer-helmed labels including Rob Stringer’s blunder at Epic with Amanda Ghost and Rick Rubin’s ineffectiveness and lack of presence at Columbia? Stay tuned…
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Bits & Pieces: Morris Move to Sony Music Top Spot Confirmed, Warner Music Gets Bids, Thumbplay Unloaded & More…
Morris takes his talents to Sony
The big news this morning from within the big four music groups (soon to be three?), is the confirmation that outgoing Universal Music Group CEO Doug Morris will indeed take over the reigns as new chief executive at Sony Music on July 1st, as Rolf Schmidt-Holz departs at the end of this month. Sony Corp. chairman Howard Stringer will fill the role in the meantime. Morris held the role of CEO at UMG since 1995, before announcing a successor in Lucian Grainge at the beginning of last year. On the other side of the coin, RCA/Jive label chief Barry Weiss will also leave the building this week, as he takes a top spot in Grainge’s East Coast Universal label operation… Bloomberg reported this week that Warner Music Group, which recently put itself on the block with help from Goldman Sachs, has received ten offers so far including bids on its publishing division Warner/Chappell Music by Sony/ATV Music and KKR-backed BMG Rights Management, while Russian billionaire Len Blavatnik is seeking to acquire most of the company. UMG did not submit an offer, reportedly due to anti-trust concerns – though they may be interested in acquiring parts of the recorded music business… In what could be seen as a preemptive move as Spotify appears to be gearing up for a U.S. launch (including reportedly making hires), Rhapsody is offering a 60 day free trial for its streaming service… Ringtone company Thumbplay, who transitioned into the music subscription arena earlier than most current players, has been bought by Clear Channel. It appears that the new owners of the service intend to transition the service into online radio, utilizing the Thumbplay technology and talent and integrating it into Clear Channel’s current free iheartradio service… Elsewhere, Live Nation California prexy Rick Mueller is reportedly leaving and heading to rival AEG… MTV and Sony/ATV’s Extreme Music are launching Hype Production Music as the result of a new licensing partnership that will focus on emerging and independent artists… And despite continued turmoil in the digital music landscape, investors are once again starting to dump big cash in the chaotic space.
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Turn the Music Up in the Headphones
Limited edition?
In a move we tipped back in December, today came the official announcement that Luke Wood is exiting his executive role at Interscope Geffen A&M and DGC Records, to take a new post as COO at Beats Electronics. Those in the know share that the move was a reluctant one for Wood, who spent years working in A&R at the Jimmy Iovine-helmed label, and that the installation of new Universal Music Group CEO Lucian Grainge, who wasted no time in cutting executive staff, prompted the shift. It also follows a large cast off of artists from the IGA roster… Others rumored to be making a preemptive lateral to Beats include A&R player Todd Parker, who worked closely with Wood and was also tasked with liaising between MySpace Records and the label. An arrangement that is believed to be soon coming to an end.
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Wednesday Bits & Pieces: Is it Already the End of Digital Music or Just a New Beginning? More UMG-Sony Music Red Rover & more…
Which way is the river flowing?
Over the weekend The New York Times published what has become an annual gloom and doom report regarding the state of music sales, using the International Federation of the Phonographic Industry’s report as the guidepost. In addition to the continued slump in physical, the recap for 2010 concentrated on the plateauing of digital sales and “not a lot of progress” in digital after a decade. However as Evolver.fm points out, the piece focused heavily on the slowing at marketplaces like iTunes and Amazon, while paying less attention to revenue generated from newer services like Pandora, Spotify, YouTube, etc – which is not the same as digital sales. The IFPI’s report contains various points of optimism, like in the growth of mobile access to subscription services due to new technology and compatibility improvements, as well as the significant expansion in the customers of new “freemium” services… Elsewhere, a Financial Times piece this week adds to the growing reports of Doug Morris seeking an early exit from his contract with Universal Music Group owner Vivendi, although it’s still unclear if he will get released in time for a presumed takeover for Sony Music CEO Rolf Schmidt-Holtz, whose contract is up at the end of March. More red rover continues between UMG and Sony, as Lucian Grainge taps former Sony A&R executive Larry Jackson as EVP of the IGA family of labels…. Meanwhile Guy Hands reportedly will get a last chance to hang on to EMI Music, as Citigroup asks the Terra Firma boss to make an offer to keep control of the music company, which is thought to be valued around £1.6 billion.
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Friday Bits & Pieces: Music Startups Hot at CES, Sony’s Music Unlimited & more…
Music services hot at CES
It’s 2011 and streaming music continues to be a hot topic. Spotify is still getting headlines, but questions now surround not when the service will be launching in the U.S., but if it will ever see life in the states. It appears that labels are continuing to ask for extremely high upfront payments from the startup, due to uncertainty in results from the service’s model. Spotify is betting on a high rate of conversion from free to paid accounts, while content owners remain skeptical. If the company doesn’t go public, is the answer to be acquired, and should Amazon be that buyer?… While the clock ticks on Spotify, not to mention Google Music and a streaming service from Apple, lower profile services that have already launched continue to made progress in the new digital music arena, with a number of key announcements coming out of this weeks Consumer Electronics Show in Las Vegas. MOG will be coming preinstalled on Verizon’s new 4G LTE phones, as well as being included in Toyota connected cars, along with Pandora… Slacker also announced new changes to its service this week, including a new on-demand subscription tier, that sees a third level of access for users, adding to the non-interactive internet radio service it already provides… Meanwhile Sony took the stage at CES to announced the launch of its new Music Unlimited service in America in the coming months. Already live in the UK, the service will be available to users via Bravia TVs, Blu-ray players, Vaio PCs and PlayStation 3 consoles… Elsewhere, in expected news, Lucian Grainge, who officially assumes his CEO seat at Universal Music Group, announced contract renewals for Universal/Republic rulers Monte and Avery Lipman this week – also re-upped with UMG was SRC Records founder and CEO Steve Rifkind… S&P Equity Research adds credence to the talk of a likely Warner Music Group acquisition of EMI, as they make their 2011 media predictions, stating [WMG] could finally be poised to make a successful bid for the recorded music operations of EMI Group… And sales data for music in 2010 comes in with news of continued decline for both physical and digital albums, while single tracks all but flatlined. Last year saw a 12.8% decline from the 2009 level in album sales, while single song sales were up by 1%. More stats including 2010 highest sellers are here…
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Holiday Stew: The New Universal Music Group Taking Shape & is EMI Coming Undone?
Hands tied over EMI?
2010 is speeding to a halt in the coming weeks and there’s no shortage of hubbub within the industry, as a number of big changes are looming on the heel of a year already fraught with tumult. Just last week came confirmation of Barry Weiss’s rumored departure from Sony Music to take a top level position within Lucian Grainge’s new blueprint for Universal Music Group, with all signs indicating that he will act as Grainge’s primary lieutenant on the East Coast while the new UMG chief resides in Los Angeles… The news of Weiss’s move was followed, almost immediately, by buzz that Doug Morris is now the likely shoe-in for the top spot at Sony, taking the place of outgoing Rolf Schmidt-Holtz. Recent times have seen bigger problems at Sony than Coca-Cola coming through the faucets, leaving many to wonder if the veteran executive could help turn around the struggling operation… And reports over the weekend are indicating that EMI Music might be headed for a takeover by Citigroup before the end of the year – a result of Guy Hands courtroom defeat and being stonewalled by investors in his recent fundraising efforts… It all leads to an outlook filled with questions and ripe with speculation. Stay tuned…
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Wednesday Bits & Pieces: Tip of the UMG Change-Over, Yahoo Music Head Departs, MTV Funding Videos & More
Changes afoot @ UMG
The departure of longtime Universal Music Group vice chairman and CFO Nick Henny was announced this week, the first high-level executive to exit under new UMG ruler Lucian Grainge. Seen as only the tip of what will be a massive restructuring at the largest of the four major music groups, chatter continues about the fate of executives and the labels themselves including Island Def Jam, Mercury and both Motown and Republic labels. Stay tuned… After a relationship lasting almost four decades, Queen has officially parted ways with EMI, signing with UMG in a deal that will see the release of remastered albums next year… In more exits, Yahoo Music chief Jeff Bronikowski is reportedly leaving to join AOL Music - AOL has also been named among those recently interested in acquiring Yahoo, other names on the list include BMG Rights Management backer KKR… Though no longer “Music Television” in name, MTV has announced the launch of a new series of videos called Supervideos, that will see the company funding the videos themselves – a move spawned by the return of music video popularity online, and possibly the rise of a new rival in Vevo. The first video project is for the LCD Soundsystem song “Pow Pow”… Elsewhere, Warner Music is launching an archival project dubbed Sight of Sound, which will focus on the integral role that visuals played in the pre-Internet age, and to document the rich history of the label… And after two years of running as an ad-funded streaming service, the UK company We7 is refocusing as an online radio service similar to Last.fm and Pandora.
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5 Questions Surrounding EMI
1. All eyes are on Guy Hands’ upcoming courtroom face off with Citigroup; will the two sides reach an 11th-hour agreement, possibly with the US Bank getting a stake in EMI in exchange for writing down debts?
2. Does executive shuffling by Roger Faxon inside EMI’s recording and publishing divisions signal a return to longtime speculation of a whole or partial break up of the company’s more valuable assets?
3. Where will recently departed Nick Gatfield land? Word on the street is that after talks with Sony Music dried up, the likely play at Universal Music Group is also out of the picture because of a strained relationship with new UMG boss Lucian Grainge.
4. Will more artists being leaving EMI? Rumors of more big name artists with little time remaining on deals eyeing the door are circling.
5. What will Rob Stevenson’s role be in the newly dubbed Capitol & Virgin Label Group? After exiting his senior A&R post at Island Def Jam, Stevenson was brought in by the now unseated Gatfield in 2008 to take the Presidency at Virgin Records.
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