This week's blog is on an interesting article about Warner Music accepting bids to sell the company. Warner Music is a in debt at an astounding $1.9billion and hired Goldman Sachs to seek out investors for purchase of EMI. KKR has previously had discussions about purchasing EMI along with Warner, but soon after decided purchase Warner outright. KKR is involved with Bartelsmann media group and plans to expand business ventures with the purchase of Warner. One option that Goldman suggested was to sell only the publishing division of Warner, Warner/Chapelle. They are hoping to gain capital from the sale in order to purchase EMI who is financed by Citigroup. EMI is in danger of because they were unable to meet the loan agreement from the bank.
This article is evident that the music industry is in serious need of rearranging. Because records sales have plunged in the last 10 years, the investors have opportunities to purchase publishing, which are valuable assets. Because of piracy among teenagers, the music industry is profiting only half of what was a decade ago. As a result of this, music rights are up for grabs and now this article is proves how much danger the music industry faces.
As an independent musician this really opens my eyes to what direction is the most secure for me to venture into. In the past independent musicians flocked to the record labels for potential fame. In the past record labels had all the contacts and exposure needed to create successful artists, but now it is easier than ever for independent artists to market themselves. If independent artists learn proper ways of capitalizing on their music, the industry will fall farther. Youtube and other social media has put control back in the artists’ hands and forced record labels to gain more capital through 360 deals.
I feel that the selling of Warner Music and EMI is only the beginning of what is to come in this rapidly changing industry. In analyzing the market I feel that the major distribution companies will be doing the same thing in a couple of years, putting more control of music in the hands of the artists.
Guardian. (2011) EMI Warner Music Group Goldman Sachs Hired. Retrieved February 19, 2011, from http://www.guardian.co.uk/business/2011/jan/21/emi-warner-music-group-goldman-sachs-hired
Digital Music News. (2011) WMG Leverage. Retrieved February 20, 2011, from http://www.digitalmusicnews.com/stories/111710wmgleverage
This Money. (2011) Warner Music Ready to receive bids. Retrieved February 19, 2011, from http://www.thisismoney.co.uk/markets/article.html?in_article_id=523238&in_page_id=3&position=moretopstories
Warner Music ready to receive bids
By Jon Rees
20 February 2011, 2:01pm
Bids for Warner Music, one of the world's top four music firms, are expected to be submitted this week.
The company, home to artists like Lily Allen and Frank Sinatra, has hired Goldman Sachs to study its options, which are understood to include a sale of all or part of the business.
However, it has also asked the bank to consider whether Warner itself could buy EMI, now under the control of investment bank Citigroup.
Citigroup seized EMI, whose artists include Kylie Minogue and Coldplay, this month from private equity firm Terra Firma.
Citigroup did so after it appeared that EMI would be unable to meet the terms of its loan from the bank.
It is understood that at least 20 companies are set to put indicative bids for Warner, though the leading bidder is likely to be private equity firm Kohlberg Kravis Roberts.
KKR, which already owns music publisher Chrysalis through its BMG publishing joint venture with Germany's Bertelsmann, is likely to be particularly interested in Warner's music publishing arm, Warner Chappell.
This manages the rights to songs including Happy Birthday To You and hits by Madonna and Katy Perry.
A sale could allow Warner chief executive Edgar Bronfman to use the funds raised to make a bid for EMI, which is estimated to be worth up to £2bn, and merge their recorded music arms while keeping EMI's publishing business.
Read more: http://www.thisismoney.co.uk/markets/article.html?in_article_id=523238&in_page_id=3#ixzz1EXK8mJFC
http://www.thisismoney.co.uk/markets/article.html?in_article_id=523238&in_page_id=3&position=moretopstories
Sunday, February 20, 2011
Sunday, February 6, 2011
The Future of Music
This week's blog is from a great article I found called, Industry News: Colbert Enlists Band In “Sell Out” to Madison Avenue. This blog was about Steve Colbert, a political comedian, and who host the “The Colbert Report”. This segment was him filling out a Grammy Nominee form. When he started to vote for best alternative music album, he decided to vote on one of two bands called, “Black Keys” and “Vampire Weekend”. He invited the two bands for a “Showdown” of who had more songs in commercial advertisement. The two started to vocalize diverse commercial that their songs were associated with. Companies like Tommy Hilfiger, Honda, Hewlett-Packard, etc.
This video showcased where music is headed in the near future. Since record sales are at an all-time low, independent artists are starting to find alternative ways to receive income for their music. This is a very important turn in the music industry and is starting to turn the tables in the artists’ favor. Because of these types of avenues, record companies are starting to have artists’ sign 360 deals, where the record companies are making revenue from all sources of income from the artist instead of depending on only CD sales. 360 deals sounds scary for an artist because now the record companies has their hand in all sources of revenue and I feel this could get very confusing and intense later. Independent artists have all the tools needed for effective branding and shouldn’t have to resort to submitting to record companies when avenues like social media and YouTube are available.
Contracting music from independent artists’ evens the playing field when it comes to the music industry. There are so many doors opening for independent artists and this blog proves that contracting your music can be very beneficial when it comes to corporate advertisement.
Music Dealers. (2011) Industry News Colbert Enlists Bands in Sell Out to Madison Avenue. Retrieved February 5, 2011, from http://www.musicdealers.com/blog-entry/2011/1/14/industry-news-colbert-enlists-bands-in-sell-out-to-madison-avenue
This video showcased where music is headed in the near future. Since record sales are at an all-time low, independent artists are starting to find alternative ways to receive income for their music. This is a very important turn in the music industry and is starting to turn the tables in the artists’ favor. Because of these types of avenues, record companies are starting to have artists’ sign 360 deals, where the record companies are making revenue from all sources of income from the artist instead of depending on only CD sales. 360 deals sounds scary for an artist because now the record companies has their hand in all sources of revenue and I feel this could get very confusing and intense later. Independent artists have all the tools needed for effective branding and shouldn’t have to resort to submitting to record companies when avenues like social media and YouTube are available.
Contracting music from independent artists’ evens the playing field when it comes to the music industry. There are so many doors opening for independent artists and this blog proves that contracting your music can be very beneficial when it comes to corporate advertisement.
Music Dealers. (2011) Industry News Colbert Enlists Bands in Sell Out to Madison Avenue. Retrieved February 5, 2011, from http://www.musicdealers.com/blog-entry/2011/1/14/industry-news-colbert-enlists-bands-in-sell-out-to-madison-avenue
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