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Monday, November 22, 2010

Could The Major Labels Be Reduced To "The Big 2" Soon?

Now that it's likely that EMI will go bye-bye, that will leave the music industry with the Big 3 major labels. But while the initial speculation was about Warner Music Group buying some of the EMI assets, that idea appears to be far-fetched, since WMG's own financial trouble have been illustrated frequently in this space (like just last week).

You see, WMG itself carries a debt-load of nearly $2 billion, and their share price continues to fall, making it pretty difficult for the company to get another loan, should it need it. And while they're not exactly on the brink, a few more quarters of losses and WMG might find itself in the exact same position that EMI is currently in, as in not being able to make the payments on that debt. That possible scenario could eventually leave the music business with only "The Big 2" - Universal and Sony Music.

That's a scary thought if you're old school, but it's exactly what you want if you the music business is to survive. Wall Street is discovering that there's no money left in the music business, and they're trying to get out. Good riddance. The music business was never a place for big banking in the first place.

The sooner the major record labels either die or re-form into something more in tune with the times, the better everyone in the business will be. We need a new generation of music entrepreneur who loves and is a fan of music, just like in the 50's, 60's and 70's when music was at its peak. And when that next generation of music entrepreneurs emerges, the music industry will prosper again.
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1 comment:

Daniel Keller said...

Amen to that, but with an added comment...I'd love to see the Big 3 reduced to a Big Zero. A bit idealistic, maybe, but in view of what the major labels have evolved into - i.e., mega-corps - they are more a detriment to creativity than ever before. Moreover, most of what they've traditionally brought to the table - deep pockets and wide-scale distribution - continues to become less relevant every day.
How about "and then there were none...."?

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