Post EMI Auction Round Up
WMG CEO downplays EMI loss
As was expected by many observers, Edgar Bronfman Jr. announced early last week that he was going to be stepping down as chairman of Warner Music Group, presumably as part of the aftereffects of a failed EMI acquisition. Last week also saw the disclosure of WMG’s recent quarterly report, which showed sizable losses even with continuing growth in digital revenues, along with comments from new CEO Stephen Cooper that the major was not willing to pay a price “that would not have provided an adequate return on our investment,” in addressing the failed attempt to purchase EMI’s recorded music business. Cooper also denied that Warner-Chappell Music, among other assets, are being primed for a sale, contrary to rumors that the new owners of the Bunny are having buyers remorse. Ironically, some are now drawing comparisons between the current situation and position of WMG with that of EMI when it was purchased by Guy Hands and Terra Firma back in 2007. Assuming the regulatory process allows Universal Music Group and Sony Music to take their respective parts of EMI, Warner Music will be significantly smaller than its rivals, and facing increased pressure as both UMG and Sony stockpile executive and artist talent. Others are recalling the mid-90’s action at Warner, when “non-music” executives were brought into the company, amid ongoing changes and power struggles among top executives, though new CEO Cooper is known as a corporate ‘turn around specialist’… The other losing bidder in the EMI sale, BMG Rights Management, continues to put together its creative executive force in the U.S., while chatter persists that co-backer KKR might soon be getting out of the JV with Bertelsmann, whose new CEO Thomas Rabe will take the reins on January 1st… Meanwhile, on the winning side, Sony/ATV head Marty Bandier revealed last week that EMI’s pubco would retain its name, and that it would be controlled as a separate company owned by the investment group that Sony Corp. was a part of. Further details about the new structure haven’t been revealed, but Sony CFO Rob Wiesenthal acknowledged at a global media conference that he sees a focus on music publishing as the real future for record companies, saying the publishing business is “immunized from piracy” – though it should be noted that the company does not wholly own either of its music pubcos. Lots more action is expected, including the fate of current EMI and Sony publishing executives – Bandier and Sony/ATV co-prexy Jody Gerson are both very familiar with the company, having previously held long executive stints at EMI Music Publishing.
12.12.11Out on the Street: Meiko to release new album on Concord, Interscope head scratchers & more
Meiko to release new album on Concord in 2012
While the fourth quarter frequently seems to be a bit slow on the A&R front, it does seem like 2011 has seen an inordinate number of new signings be announced in the waning days of the year, both in the indie and major label worlds. After losing her label home when MySpace Records was shuttered by Fox Corp., much loved singer-songwriter Meiko has reportedly ended up on Concord, with her new album (originally recorded under the guidance of MSR/Interscope) due in the new year… Speaking of Interscope, they seem to be on a signing spree of late. Insiders are scratching their heads at much of the activity, especially due to the fact the major has been steadily stripping back their marketing staff number-wise over the past year, in particular in the rock arena, and the A&R department has been radically pared back. Las Vegas alt-rock crew Imagine Dragons, after being on the radar of label scouts for an extended period, ended up part of the Interscope family, via the KidinaKorner imprint (run by hip hop/R&B producer Alex da Kid). In a deal that seemingly came out of nowhere, NYC trio The Kin inked with the Universal label in early November. Meanwhile Swedish DJ/producer Avicii signed a singles deal, in conjunction with Lady Gaga manager Troy Carter’s Atom Empire electronic label. And of course the controversial and divisive Lizzy Grant – aka Lana Del Rey - was signed by Interscope months before the news officially leaked, as the major tried to employ a strategy that the chanteuse was a hipster newcomer from the independent label world. And if all that is not enough, the label obviously also had a couple of recent much-publicized monster-artist new additions to the roster in Van Halen and Madonna, the latter of which is rumored to have signed for three albums and $30 million!! Another deal being filed under “What the hell?” is the report that former Barenaked Ladies member Kevin Hearn recently signed with LA indie Dangerbird Records… And while info emerged that the hotly tipped Alabama Shakes became part of the ATO Records stable of artists, further digging has revealed that the deal for the foursome may just be a one-off, prompting a continuing frenzy of interest from labels to sign the band for further albums, with a large number of scouts out for their NYC shows this past week… Meanwhile on the publishing front, indie favorites Pains of Being Pure at Heart just inked with Warner-Chappell… Finally, reports emerged over the weekend that legendary UK act The Stone Roses, who announced details earlier in October that they were reforming for a series of shows in 2012, are working on new material – and recording deals are in place! The band have supposedly signed with Columbia Records for North America, and (the least surprising news of the week) Universal Music for the UK.
| Posted in Uncategorized | No Comments »
Bits & Pieces: BMG Sets Sights on WMG & EMI Publishing Assets, MySpace + Vevo & Twenty First Republic
Eyeing Warners & EMI publishing arms
Outside of the explosive announcement from Amazon this week that left a music-cloud hanging over the industry, other developments include the news of KKR-backed BMG Rights Management being back in the bidding action for Warner Music Group, after recent reports of the JV being on the outs in the sale. CEO Hartwig Masuch denied such rumors, saying “I can state that we are in the second round of bidding and are on very friendly terms with the main shareholders,” while executives at BMG RM’s other backer Bertelsmann claimed this week that the company is “ready to invest into the right business, at right price, and at the right time,” with the right business apparently being publishing, as Warner/Chappell and EMI Publishing are key in their sights. More reporting can be found at The Guardian, The Telegraph and Music Week… As News Corp. continues to look for a way to unload struggling MySpace, word that the parent company is in talks with online video hub Vevo began to surface. The accuracy of such claims continues to be debated, while a piece in the WSJ yesterday points out that the complex ownership anatomy of both companies might make a deal difficult. For now it seems an unlikely scenario… And a new partnership that links Universal Republic Records, Universal-owned Twenty First Artists and producer management firm Worlds End, forming Twenty First Republic, was announced yesterday. Primaries in the deal include Uni/Republic executives Monte and Avery Lipman, Twenty First Artists CEO Colin Lester and Sandy Roberton, CEO of Worlds End.
| Posted in Uncategorized | No Comments »
Bits & Pieces: Grainge Crowned UMG Chairman, Bids for Warner Narrowing, Spotify Hits 1mil & more…
Beyond believable funding
Today Vivendi announced that Lucian Grainge will now be taking the title of Chairman along with CEO of Universal Music Group, this comes ahead of the original timeline for assumption of the title, a result of Doug Morris exiting his contract early to head to Sony Music this summer. Grainge will report to Vivendi CEO Jean-Bernard Levy, and will also take a seat on the board of gaming company Activision Blizzard… Warner Music Group is reportedly narrowing the field of offers it has received, for both the entire company as well as just the publishing unit Warner/Chappell Music - conflicting rumors have current WMG investors wanting to sell the entire lot, while most believe CEO Edgar Bronfman Jr. is still eying EMI and has no intention of exiting the recorded music space…Elsewhere, Spotify revealed that its music service now boasts 1million paying customers, which represents roughly 15 percent of its overall active user base. A good sign for a U.S. launch soon?… File-sharing service LimeWire, which was recently shutdown by court order, has settled legal action brought by music publishers for an undisclosed sum. Action brought against the company by the record labels has yet to be resolved… And a News Corp-backed digital music start up called Beyond Oblivion made waves this week with a reported $77million in new funding. The company’s model has a twist in that it is a device-based cloud music service, which will pay content holders a royalty every time a song is played on a device, regardless of where the song originated.
| Posted in Uncategorized | No Comments »
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.
| Posted in Uncategorized | No Comments »
Bits & 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.
| Posted in Uncategorized | No Comments »
More EMI & WMG: Hands Won’t Give Up & Warner Racing to the Block
In his first public appearance since the turnover of EMI Music to Citigroup, Terra Firma’s Guy Hands said he is considering buying EMI, according to a report in Bloomberg, but that it is a “question of price,” adding, “They are going to auction it, and we will see if they can get more for it than we offered.” Addressing the split of EMI’s two divisions, Hands declared, “You’ve really got to keep the two together so that you have the stability of publishing’s earnings versus the volatility of the recorded music division.” Following the bank’s takeover of the music company, much of the publicity has shifted to EMI CEO Roger Faxon, and his rumored stealth efforts to save the label, being credited with leading a behind the scenes effort without Hands’ knowledge. Others in the know share that the spin has been well orchestrated leading up to Citi taking control, to keep Faxon’s place at the table moving forward… Meanwhile, the New York Post reports that Warner Music Group is trying to beat Citigroup to the finish line, hoping to get a sale in place before EMI. Particularly in light of the presumed interest in selling off its publishing division Warner/Chappell before EMI Publishing, as it would be hard pressed to compete. Interested bidders named include Zomba founder Clive Calder, Russian investor Leonard Blavatnik, Universal Music, Sony Music, KKR and music publishing giant Imagem. While whether or not WMG backers Thomas H. Lee Partners, Bain Capital and Providence Equity Partners are looking to cash out or just unload WC is unclear, the article claims CEO Edgar Bronfman Jr. is anything but ready to get out of the music business.
| Posted in Uncategorized | No Comments »
In Case You Missed It: Hiring Recap
Broitman
Several new label and pubco hirings have been announced over the last week… They include former Warner/Chappell Music CEO Richard Blackstone, who has been tapped by BMG Rights Management to oversee the publisher’s U.S. operations as new Chief Creative Officer, reporting to CEO Hartwig Masuch… Warner/Chappell has a new head of sync in Ron Broitman, who comes to the pubco from Sony/ATV and BMG Publishing before that, reuniting him with current WC prexy Scott Francis… Universal Music Group has upped Rob Wells to president of Global Digital Business from his role as SVP digital… And in more digital shuffling Warner Music Group’s head of digital legal affairs, Elliott Peters, is reportedly preparing to leave his post for a new position at Apple overseeing iTunes European legal team…
| Posted in Uncategorized | No Comments »
Publishers Weigh In on 360 Deals at AIMP Confab
Some interesting commentary regarding 360 deals coming from publishers on a panel at the recent Association of Independent Music Publishers (AIMP) luncheon held at the House of Blues on the Sunset Strip. Panelists revealed that more and more the deals they make hinge on an artist bringing them all of their rights, often so that so-called “sister” labels can have the option to up stream the artist. What about publishers signing artists who’ve already done a deal with a major record label? More and more those deals look less attractive to publishers, with comments even indicating a deciding factor may be renegotiations to include the publisher in multiple rights. This also points to why writer-producers continue to be an attractive prospect to publishers, as Warner Chappell SVP Greg Sowders, aka The A-Team’s “Hannibal,” commented, “A home run for us is signing a writer who is a producer and has direct access to artists. The self contained singer/songwriter is still possible but difficult.” But does that speak to what should be a larger concern for major labels and publishers, as they sign and develop fewer and fewer self-contained artists, increasingly in any genre not just pop, only to rely on a shrinking stable of “hit-making” outside writers? More quotes and commentary on the AIMP panel HERE…
| Posted in Uncategorized | No Comments »
Friend Request Accepted: David Andreone to Head MySpace Records
Photo Taken Off Facebook; Sorry David
David Andreone has been appointed the new head of MySpace Records, reporting to MySpace Music’s Courtney Holt (President) and Sam Wick (SVP Music). Andreone was formerly an A&R executive at Columbia Records and Warner Chappell Publishing - where his signings included Disturbed, Michelle Branch and Hoobastank… Those keeping score will remember the exit of nearly the entire MSR staff earlier this year, leaving many to wonder what the future would hold for the label. Stay tuned for more clues…
| Posted in Uncategorized | 1 Comment »
| Posted in Uncategorized | No Comments »