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Business News Week In Five
CMU Digest – 22 Mar 2013
By Chris Cooke | Published on Friday 22 March 2013
The five biggest stories in the music business this week…
01: The Universal Music Group merged Virgin Records UK with Mercury. The first big development on the UK side of the business since Universal acquired the EMI labels last year, the move sees the main British EMI asset that UMG was allowed to keep by regulators, the Virgin label, merged with existing Universal division Mercury, creating Virgin EMI. The new entity will incorporate the existing Virgin and Mercury UK rosters, plus represent over here acts signed to the Universal-owned Virgin and Island Def Jam labels in the US. It’s not yet fully clear what all this means for the staff of the Virgin and Mercury labels, who will be redistributed into two A&R and marketing teams, one called Virgin and one called EMI. CMU report | BBC report
02: The music industry awaited news on the future of HMV. Many commentators have noted that 25 Mar, aka this coming Monday, is the next big quarterly rent day for businesses, the first big rent pay out since HMV went into administration in January. In the ideal world administrators Deloitte would have confirmed a deal to sell the entertainment retailer before that date. That could still happen, though some insiders say the deadline isn’t as important as many in the media have made out, not least because HMV now pays some of its rents on a monthly basis. Despite rumours ASDA was thinking of bidding, it seems that Hilco, which bought up most of HMV UK’s bank debts when the firm went into administration, is still the only serious bidder. Elsewhere a creditors report prepared by Deloitte showed HMV owed £347 million when it collapsed, £237 million of which was to unsecured creditors who won’t see anything back from the administration. Deadline report | Creditors report
03: WPP bought into SFX which bought into ID&T. The mega advertising and communications group said that it was investing in the new EDM-focused music company being built by Robert FX Sillerman because its network of events and websites provided a channel to a “valuable audience for our agencies’ global clients”. Meanwhile SFX confirmed it had taken a 75% stake in Dutch dance music promoters ID&T in a deal thought to be worth $97.5 million. As part of that acquisition, SFX will launch a US version of ID&T’s flagship event Tomorrowland. WPP report | ID&T report
04: An Amazon streaming service was rumoured, while eMusic merged with an ebook company. Word has it that Amazon is now also in talks with labels about launching a streaming music service to sit alongside its existing MP3 store and digital locker, or possibly its film-on-demand platforms LoveFilm and Amazon Instant. Apple and Google, of course, are also thought to be developing streaming services in either a Pandora or Spotify mould, with Apple already notably including full-album preview streams within the iTunes platform with increased frequency. Elsewhere, one of the oldest digital music companies, eMusic, which has moved away from its original ‘subscription download’ model of late, announced a merger with ebooks firm K-NFB Reading Inc and the resulting departure of its CEO Adam Klein. It’s thought the merged entity, to be called Media Arc, will develop a combined music and ebooks platform. Amazon report | eMusic report
05: An EU report played down the impact of piracy, but the IFPI did not concur. The report by the European Commission’s Joint Research Centre said that “digital music piracy does not displace legal music purchases in digital format”, mainly because most file-sharers wouldn’t have bought the tracks they downloaded illegally had they not been available for free via file-sharing networks. Not only that, the report said, the existence of file-sharing networks has resulted in more people going online to find music, which benefits legit as well as unlicensed music platforms. The International Federation Of The Phonographic Industry said “the findings seem disconnected from commercial reality”. EU survey report | IFPI response report
In CMU this week, we found out from Ben Watt why he is winding down his label Buzzin Fly and about his plans for the future, Retro Stefson compiled us a playlist, and Editor Andy Malt reviewed some of the most recent pop-star/brand love-ins. Meanwhile CMU Insights provided an overview of how music makes money in 2013, as well as announcing some new training courses. Approved in CMU quarters this week were Mutya Keisha Siobhan, Beyonce, Mt Wolf and Dark Bells.
