Sunday, February 7, 2010

Headed For Only 3 Majors

With EMI in a death spiral due to a huge debt burden that it can't possibly pay, it looks like the 4 major labels (dubbed "The 4 Ugly Sisters" by former EMI exec Rupert Perry) will soon be 3.

If you think that the other majors are right behind EMI though, think again. Sony Music just had a great sales year thanks to Michael Jackson's untimely demise and ultimate huge boost in sales. Warner Records, for all the predicted doom and gloom (including from yours truly), is actually gaining market share and their stock price is rising, and Universal Music Group is still the king of the music world in terms of sales and ancillary income streams.

The venerable EMI was a special case among the majors in the last couple of years. Private equity investment group Terra Firma bit off more than they could financially chew at the peak of the market, thinking that if nothing else, EMI's enormous catalog would see them through. With the stock market tanking last year, major talent like Paul McCartney and Radiohead leaving in droves, and with the label's decimated staff not capable of bringing in new acts with hits, this once great and well-run label became a shell of its former self.

At this point, it looks like a long shot that EMI will survive as a label, although its enormous catalog is worth a lot of money (just not enough to allow it to prosper). Still, sometime in the near future, the major label ranks will shrink to 3.

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