Warner-EMI
This isn’t about music, this is about money. And when it comes to money, the brass at EMI isn’t even in the same LEAGUE as the brain trust running Warner.
EMI is looking at this from a music perspective. How to ultimately compete with Universal and Sony BMG in a three way fight for dominance. Whereas those who are running Warner are laughing hysterically, they stole the music group from Richard Parsons, it’s now worth twice what they paid for it, AND they’ve already gotten all their money back AND MORE!
Just because major labels are in trouble don’t think their value is going to go down to zero. Quite the contrary. The crisis is in NEW music. They’re like the TV networks, they’re going to lose market share. But EMI and Warner have incredible CATALOGS! Hell, insiders know the BMG catalog isn’t worthless, but it pales in comparison to that of Sony. And Sony’s catalog is not in the league of Warner’s. So who’s stupid here?
And, the original PolyGram catalog and MCA wares are not up to par with either Sony or Warner. Combine them with A&M and Island and you reach critical mass and sell Bob Marley discs forever, but Warner has Neil Young and Led Zeppelin and most of James Taylor’s hits and if you think these recordings are going to be worthless in the future, you truly know nothing about the Internet.
We’re in an interim phase. Where sound recordings are sold at the iTunes Music Store for a buck a track, trying to replace lost CD business. But sometime in the future, this ridiculous stranglehold will end. Music will be much more easily acquired and at a much lower individual track price, to the point where people will acquire the aforementioned acts and the Doors and even Aretha Franklin in vast quantities. Probably over and over again. It’s gonna be a goldmine. And Warner is poised perfectly to reap rewards.
EMI? Not quite as good. They’ve got the Beatles. Never discount the Beatles, but EMI’s catalog is not as good as Warner’s by a long shot. But, EMI controls publishing. A cash cow. Which also is going to blow up, not only when recorded music sells on the Net, but when songs are used in all kinds of new ways. Both Warner and EMI are worth a fortune, for slightly different reasons.
The guys at EMI want to continue to play, because, after all, that’s all they know. Not Eric Nicoli specifically, he’s from the biscuit business, but Alain Levy and his troops…you can have their music company when you pry it from their cold, dead hands. Levy got bounced once, he’s not going to let it happen again. He’s convinced he can win in the new era, if only he has the size to compete with Universal and Sony BMG.
But the guys who control Warner could give a fuck about the music, never mind the music business. They’re all about the cash. Why make things easy for Nicoli and end their profitable run when they can continue to own Warner, pay themselves, and watch their stock GO UP! Yes, that’s what’s happened.
It’s pure negotiation. EMI NEEDS this, Warner does not. And he who does not need a deal always wins.
It’s kind of like Jerry Perenchio and Univision. God, the guy doesn’t even speak Spanish. He just saw a great business opportunity, and hired people to run it HIS WAY! Which is exactly what Thomas H. Lee, et al, did with Edgar Bronfman, Jr. If you think this standoff is about Bronfman wanting to continue to be in the business, you know nothing. Sure, he may have that desire, but this is all about the bread, period.