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Music Giants Look To Merge
from the hide-the-problem dept
When the business you're in is collapsing around you, one way to hide your head in the sand is to simply merge with competitors. That's what looks to be happening in the music industry as the five major labels are all trying to figure out how to consolidate. There's any number of reasons for this, but mostly, the old guard simply has no idea what to do in the new digital world - and they're hoping by getting bigger, it will make the problem go away. Instead, what's more likely to happen is that in the merger mania, it will allow smaller, nimbler, smarter new record labels to take advantage of new technologies and new attitudes towards music, while making the old guard increasingly obsolete.
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Inventory valuations
The true valuatioons of the former major music companies continues to be inflated. Somehere in the business plans, these companies still list a back catalog value, as if it was still possible to re-issue older songs from a propriatory position. Even if they could re-establish control over music distrbution, at some point some one is going to force them to prove ownership of copyright and distribution rights to the stock of music they are claiming. This point came up momentarily during the first Napster trials, and then was quickly dropped from sight. They have bought and sold contracts and catalogs en masse for so long between themselves, without having a central copyrighth registration, that it is doubtful they could ever actually "come up with a receiept" for what they claim to own. In the past, the point wasn't saliant, because basically .. who else would care? No one else could do anything with pressing plants and distribution channels. Now there are growing internet, and other digital alternatives. With the discovery , and reversal of the "work for hire" ..ahhh.. trick.. their back catlog value continues to errode... and in fact, because of the increasing cost of maintaining a hostile defence over songs they can not sell, is becomming a liabilty.
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The bigger they are...
...the more lawmakers they can buy no?
We've already seen that they have no desire to "understand" the new digital reality...they only want to legislate it into oblivion and guarantee their profits.
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