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bmusic Newsletter No.256 May 7th - May 20th 2007 Less than a decade ago the world music market was essentially split seven ways, the "big six" major labels and the "independents" in another seventh group. Back then it was fairly evenly spread across Universal, Polygram, AMI, Warner, BMG and Sony with the independents actually sharing a very slightly larger market share as a group against the big six. Soon after Polygram was absorbed by Universal and Sony and BMG merged, leaving a "Big Four". In 2005 Universal had driven itself up to near a quarter of the world market revenue (and actually 40% of the world classical market value when broken down into genres, no doubt helping their profits as physical sales of classical are not as prone to the illegal download phenomenon that pop and rock is). Sony/BMG hold around a fifth of the world market, with EMI and Warner sharing a similar chunk and the independents maintaining a slim lead, helped by the European market where independents are more dominant. In the US independents lag well behind the two majors in Universal and Sony/BMG, the US market second to the European market only slightly in terms of market share, the two markets dominating with over 60% of the world market revenue. The US market, however, holds a slight lead over the European market on album sales, but not on the total music revenue (which would include publishing etc. also). EMI have easily the lowest market share in the US, and being a UK based operation this is understandable. Universal and Sony/BMG are controlled by French and German companies respectively, but they were certainly not "home grown" by these parent companies, and Sony is only 50% controlled by the German BMG. But back to EMI, it seems they are really hurting with two earnings warnings already this year and a holding back of April dividends. The value of independents on the EU stage may be having an impact on EMI who were ahead of Warner on the world scene at last count but well behind in the US where the independent share is far less. And it's Warner who have been stalking EMI for some time now, EMI rejecting a takeover bid by Warner as recently as February this year. EMI's fortunes remain less than stellar and there was renewed talk of a takeover late last week. No doubt Warner would still be lurking, but private equity firms have also expressed great interest. So could we be facing a "Big Three" before the year's out? Even if a private equity firm takes the reins, would they keep it as the entity it currently is, or sell off it's various arms resulting in the same thing as if Warner were to takeover EMI anyway? EMI's publishing arm is probably it's strongest and most profitable when looking at the company at a glance. If the scenario played out with Warner getting what they wanted in terms of EMI's record business no matter which way it fell, we would then have a Big Three with essentially around a quarter of the world market each with independents making up the last quarter. This hypothetical Big Three could have an adverse impact on the ability of independents to promote and prosper, either by outgunning them in terms of marketing even more so, or simply buy out those performing well. The absolute reverse of what the technological revolution should have been able to accomplish. You see, piracy affects all labels, even those for which it's a labour of love. I've always maintained that piracy will affect any new money coming into the market from labels, particularly those at the grassroots level. A labour of love is one thing, but when it costs too much due to no return, it costs too much. The internet is a great tool for getting a band out there, but 99% of the time it still costs money to get a band out there and recognised, just as it always has, internet or not. Just as in the days of mp3.com where small bands could find themselves at the top of the mp3.com charts purely on their music, more and more and more artists joined up, and money ended up buying top spots. Myspace is fast becoming the same. It's owned by a company now that want to make money from the enterprise, and plenty of it to pay off the half a billion USD$ they paid for the service less than two years ago. More than three million bands that, in theory, means great networking opportunities. But software exists for such things as garnishing all the "friends" from one of your "friends" to be invited to be yours, with no work to do. So how many of the three million plus bands have thousands of friends they wouldn't otherwise have had, and how many of these friends have hundreds or thousands of friends? You post a bulletin to your friends, how long will it last in the Bulletin Entries list? Not long, sometimes a matter of seconds. So one needs to get on the front page of Myspace, for instance, to really hit the mark. Won't be long (if it isn't already), and you'll be able to buy a spot there, but imagine the cost! Much of the front page advertising for music that now exists on Myspace is major label backed, so we're back where we have always been with that. There still exist phenomenal networking opportunities through Myspace for touring and sharing music with potential bookers and the like, but it's getting harder to get "noticed", so it's now just one site where millions of pages exist under one domain rather than millions of individual domains. And now the site is becoming a haven for "phishing" to promote spam of anything and everything. Something has to give, and no doubt another site will come along in a year or two and it will all start over again. Something does have to give in terms of the opportunities the internet offers artists versus the piracy the very same medium so easily allows for. The RIAA in the USA is not really going about it the right way, but they're a body funded by and representing the record companies first and, it could be argued, the artists second. If you think of it that way the RIAA are doing the obvious thing by taking legal action against those who infringe against the companies they represent. But it's not good publicity. The Future Music Coalition have the right idea, and continue to work toward the ideology they outline on their website at www.futureofmusic.org/: A new Where Are They Now? this week, a one hit wonder blast from the past who's been keeping busy ever since and has a killer back story. Regulars including Feature Article, The Weeks Ahead in Music History, Featured Artist and more are all inside Issue 256 of the bmusic Newsletter. Links in the Table of contents below will launch your browser, so you'll need to be online to view the newsletter. If you are unable to receive html format e-mails then copy and paste the following link into your browser's address bar to view the newsletter: http://www.bmusic.com.au/links/whatsnew/newsletters/archives/newsno256.html Thanks to everyone for reading, we'll see you next issue! TABLE OF CONTENTS (You will need to be online to use the Table of Contents to jump through sections) Events Births Deaths |
FEATURED GUITAR - EXCLUSIVE ESP SV-BMF BLOODBATH
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THIS WEEK'S FEATURE ARTICLE - INFRINGEMENT CLAIMS
THE WEEK AHEAD IN MUSIC
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