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Warner Music and EMI Set to Merge
morn writes "After the AOL-Time Warner merger, it's now being reported by BBC News, amongst others, that EMI and Warner Music are planning a merger too. How large can a 'media' company get?" I don't know, but I think we're going to find out.
ok.. everyone here is simply thinking of this in simple terms of a company getting really large. that isn't really how you look at it. this is a _music industry_ merger. Music industry mergers are VERY BAD things. they are BLOODY things.
Mergers usually contain downsizing, but you cant look at downsizing in the music industry the way you can look at it other places. Remember this is maybe the only industry left that is selling a mass-produced artistic product created by individal artisans (as opposed to the massive centralized committeework that produces movies.. you could maybe claim movies are still an artistic, but i wouldn't say so. you don't often have a person or a small group of persons making a movie with total artistic freedom, and you certainly can't ahve a movie that was made by one person working alone..).
If, say, warner cable and TCI cable merge, you're probably going to see a bunch of accountants and managers and people who do whatever it is you do if you work for a cable company lose their jobs. Well, whatever. One accountant is the same as another; any accountant can do the same work as any accountant.
Music doesn't work that way. When the label drops a musician, they're losing something specific that only that musician can do.
When Universal bought Polygram last year, there was a _lot_ of bands getting dropped and a _lot_ of pain. I can't remember the number that lived and the number that stayed came "bloody thursday" (the day they released the list of who got pink slips) but it was fairly sickening.
This bbc article kind of irritates me for its lack of considering what effect this is going to have on non-mainstream artists. "The company would unite artists like The Spice Girls, Madonna, Robbie Williams and the Rolling Stones - and hits might be made available on the internet. " ?? please. This is NOT a good thing.
i would insert something here about hoping that they make up for a small amount of the lost artists by firing all the management at Neglectra records.. but i doubt it would really be appropriate here.
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Vertical integration leads to some nasty second order effects. For example, the Japanese have integrated the beef industry from feedlot to shipping to wholesalers leaving minimal profits at earlier stages and consolidating all real profits in their home country. Guess what this does to developing countries? Maybe Finnish music or Spanish pop is not your thing but those guys would seriously love to get the same prices that the admittedly sometimes mediore talent that passes for mainstream.
The other problem is that it doesn't expose them to market forces (good form their point of view) but it means that their system can become rather stratified and slow to react to changes. Perhaps this is good in the long term in that really new talent could emerge somewhere but in the short term it denies airspace to new groups when media companies are interest in creating star-packed franchises (another Beatle) feeding frenzy so they can sell merchandising rights and future revenue from relicensing fees.
Is it good for a company to completely dominate the music tastes for generations? Economists have always noted the negative effect when an elite group holds on to all the productive assets, whether land or (in this case) mindshare/branding.
LL
But Universal bought Polygram and it looks like we have EMI/Warner leaving only these:
The music industry keeps getting smaller and smaller. Together these 4 control over 90% of the music industry.
Three Companies for the record industry on TV,
Seven for the Browsers in their halls of stone,
Nine for smaller ISP's doomed to die,
One for the Dark Lord AOL on his throne.
In the land of Wall Street, where the shadows lie.
One Company to rule them all, one Company to find them,
One Company to bring them all and in the darkness bind them.
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