What’s transpired over the past 24…
Bertelsmann is now planning to assume full control over BMG Rights Management, according to multiple, unconfirmed reports. Private equity firm KKR has a controlling interest, and according to the Financial Times, Bertelsmann is prepared to pay upwards of 500 million euros ($660 million) to wrestle back the stake.
Spotify is now negotiating through renewal terms with the major labels, according to a recently-published piece in the Verge (authored by ex-C|Net writer Greg Sandoval). Spotify is apparently seeking ‘substantial price breaks’ from the three remaining majors, an attempt to ease a licensing burden estimated at 70 percent of revenues. That could be granted, especially since majors have ownership stakes and seem less interested in starving promising startups these days. Spotify is also seeking the ability to offer free streaming on mobile devices.
The resulting deals could have a massive impact on Spotify’s long-term financial health, according to Sandoval, who also pointed to continued losses amidst customer acquisition and maintenance costs. Perhaps the broader narrative here is that the ‘dying’ majors still exert massive control over the startup ecosystem, with the ability to ‘play God’ and selectively bury, promote, or life-support any license-dependent company.
Which brings us to another doggedly-entrenched behemoth, Live Nation. The heady, Ticketmaster-killing elixir was being passed around at SF Musictech Summit once again this week, though significant Live Nation venue ownership and resources makes this a costly deathmatch for even the most insanely-financed disruptors. For example, Eventbrite, which was trumpeting lots of big stats (40,000 gigs ticketed in 2012, $1 billion in gross ticket sales, not to mention a range of big festivals, for example), but admitted to Digital Music News that ‘chipping away’ and a ‘steady march’ were the better descriptors of its disruption.
Which brings us to another doggedly-entrenched behemoth, Warner Music Group. Just like Live Nation, Warner has money-hemorrhaging tendencies and obese executive compensation packages, but is also poised to exert lots of market control. Which is why the company has just inked an agreement with indie consortia Merlin and Impala to sell or license bits of its soon-to-be-acquired Parlophone Label Group. Which is a bone that may go a long way towards explaining why these indie groups supported the purchase from UMG+EMI in the first place.
Which brings us to another doggedly-entrenched behemoth, the major label of the 1990s. Or more specifically, Sony Music Entertainment, which helped to catapult Pearl Jam into the stratosphere and is still reaping the rewards. Just this morning, the band’s seminal Ten was crowned with the RIAA’s Diamond Certification, which certifies sales of 10 million copies (in the US alone).
Call it a pioneer, call it a survivor, but Rhapsody is definitely stretching outside of the US. The first landing spots look to be the UK and Germany, according to a just-inked licensing backend deal with HFA. The specific licenses are purposely being kept opaque, though mechanicals and cross-border arrangements with collection societies like GEMA seem core to the deal.
More ahead! Written while listening to A$AP Rocky, DJ Drama and 2 Chainz.