Thursday, February 21, 2013

Warners Makes A Deal With The Indies, Or Does It?

Warner Music Group logo image from Bobby Owsinski's Music 3.0 blog
The record label business as we know it has changed immensely in the last year or so and those changes continue to come hard and fast. Take for instance the fact that when Universal Music Group purchased the assets of EMI last year, they were forced by European regulators to sell off much of the catalog and several labels (including Parlophone, Chrysalis, and Virgin Classical among others) to Warner Music Group in order to make the deal.

Now it looks like WMG is getting the same treatment, as Merlin and IMPALA, two of the most powerful indie label trade groups, have been threatening to raise a fuss again with the EU regulators as they had with Universal/EMI and BMG/Sony before that. So Warners became proactive in the matter and announced an agreement with the two groups to sell or license "a significant portion" of that music to some of the indie companies (which were not specified) within those groups.

Now let's get this straight. WMG tells the trade groups it will help their clients make money, but lays out no specifics on how that will happen or with what companies. Doesn't this sound like a bait and switch where WMG makes a nebulous promise that it can easily forget about as soon as the regulators give their OK? Or, WMG can just give some token feel-good deals that doesn't substantially alter the status quo of either company.

This seems to be a classic deal to make everyone look and feel good, but without much substance. If I were one of the member companies of Merlin or IMPALA, I'd be upset. It looks like more of the same from the majors, but with the seal of approval from the organization that should be helping the indie label's cause. It should be interesting to see how this plays out.


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