THE BUSINESS OF MUSIC
www.musicweek.com
NEWS 03
Peers, associates and fans remember the great Hal David
ANALYSIS 14
Music Week takes an in-depth look into the UK’s most-streamed tracks from the first half of the calendar year
BMG TELLS BRUSSELS: LET US COMPETE WITH WARNER, SONY AND UNIVERSAL
Major ambitions B
LABELS n BY TIM INGHAM
MG is ready to take on the mantle of the recorded music industry’s
fourth major if it can successfully purchase juicy assets related to Universal’s buyout of EMI. The rights management
company is understood to be keen to acquire divested record catalogues such as Virgin Records or Parlophone. A final behind- closed-doors decision from EC regulators on Universal’s £1.2bn bid is expected this week. BMG believes that a
significant acquisition haul would allow its masters model to become a weighty alternative to the likes of Sony and Warner for artists across the globe. Unlike a traditional major
label, BMG’s model does not pay artists a standard advance. Instead, it offers them a revenue split of around 75% of net receipts, with both parties agreeing a shared budget for outsourced manufacturing, marketing and promotion. BMG CEO Hartwig
Masuch told Music Week that if the firm completes Universal/ EMI-related acquisitions, it could double its UK headcount. “If we get what we want out
of the [Universal/EMI] options discussed in the press, we will outperform our mid-term plan by three years; by the end of 2013 we will be where we thought we would be by the end of 2016,” he said. “It would be a tremendous step-up for us and extremely exciting.”
Coldplay could soon find themselves on BMG if it makes a bid for Parlophone this month
“If assets which fall out of the Universal-EMI deal end
up with one of the two other majors, the best you can hope for is more of the same” HARTWIG MASUCH, BMG
He added: “Our aim is to be
a solid No.4 in the world of master catalogues. There will be a long way between No.3 and No.4, but we would create a new kind of choice for artists.” The exec urged the EC not to
dismiss the potential recorded music market growth that could arise from a strengthened BMG: “Does it make sense simply to penalise Universal? Or do we
INDEPENDENT THINKING
The most high-profile album on BMG’s masters model so far is Dexys’ One Day I’m Going To Soar, distributed via Absolute. The LP, released in June, hit
No.13 in the Official UK Chart and has sold just over 22,000 units to date. Hartwig Masuch claims that far from depriving the independent label sector of opportunity, a BMG acquisition of Universal/EMI divestments could boost their business. “The way we work will
empower a lot of players in the indie sector,” he said. “We work with independent
marketing companies and distribution companies on our releases. Indirectly, that could be a much better support for the indie scene than forcing them to come up with money to buy catalogues at a time when banks are reluctant to lend.”
07.09.12 £5.15 17 FEATURE
How the PR sector is coping with doing more with less resource than ever
Raymonde reveals his Bella-vision
want to create a genuinely new competitive environment?” He claimed potential earnings
of artists switching to BMG's masters model could be three times that of a conventional deal. Masuch said that “if assets
which fall out of the Universal- EMI deal end up with the two other majors, the best you can hope for is more of the same”. He explained: “If you look at
the history of the industry over the past 30 years, every integration of an independent label into a major resulted in a new combined output that didn’t exceed the output before the integration. “We all remember majors
saying they were buying companies for their creative momentum and then closing them down shortly afterwards. We are not in that business.” Masuch dismissed criticisms
of BMG being an aggressively acquisitive company. He told Music Week that BMG had recently completed its 200th signing of 2012. The firm owns more than a million publishing copyrights - but Masuch’s current attention is clearly focused on recorded music expansion. “All the major labels come with
infrastructure costs of nearly one third of their total revenue,” he said. “We are substantially leaner. Majors drown artists in financial burden from the very start. We give them time to develop.” Assets expected to be
divested if Universal’s bid is successful include Parlophone UK, EMI Classics and Co- Operative Music, plus Pink Floyd’s catalogue.
Bella Union founder Simon Raymonde is sick of his artists not getting opportunities on UK television – and is taking the matter into his own hands. Speaking exclusively to Music
Week as part of a special interview celebrating 15 years of his much-loved label, Raymonde said: “For the last five years, all I’ve done is moan about how shit music is on television and that there’s nothing other than Jools. It drives me mad. “So I’m developing a live
music show. I’ve got a team of about ten people who I rate as passionate and clever and we’re slowly making progress. I’ve got a meeting with the production company very soon. “A TV programme doesn’t
have to cost £100,000 per show. It doesn’t need to cost more than a couple of grand if you do it smart and guerilla.” Raymonde said he was keen
for the show “not to become a pipe dream” and hoped to create a weekly format which aired on a broadcaster throughout the year.
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Read the full Simon Raymonde interview on page 10
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