8 May 2007, 17:10
Warner to lay off 400 employees
Warner Music Group is planning to lay off 400 employees as part of a restructuring campaign and “place further emphasis on digital strategy and distribution, sources say” (The Billboard).
In January earlier this year EMI made quite a similar move and announced that it would lay off 900 of its staff (along with a few top executives). This was a sign that the label was not doing very well as later few attempts to sell its catalogue and the label itself followed. Finally, EMI ended up releasing its music in DRM-free format. The latest offer to buy the label for $6 billion was rumored to happen. (Reuters).
Hypebot asks the same question: “Is The End Of The Major Label Near?” and gives the reasons why it might be the case. For example,
• “major labels are no longer controlled by people who care about music. They are owned by stockholders who care about profits.
• l abels can no longer control what gets played on the radio. Thanks to Eliot Spitzer and the FCC payola isn't what it use to be.
• with the internet offering unlimited media sources radio no longer has the clout that it used to anyway.
• free file sharing has forever devalued music.
• single songs downloads have killed the album purchase and thus gutted the profits labels saw from them.
• digital delivery is eroding the labels' gatekeeper status in distribution.
• consumers have more diverse competition for their entertainment $'s and time than ever before” and so on.
Read more:
Warner Music Group To Layoff 400. Is The End Of The Major Label Near? Hypebot
Warner Music Group To Restructure, Layoff 400, Billboard.biz
One Equity the latest EMI suitor, Reuters
EMI's top executives dismissed. Labels consider digital music options, AllofMP3 Blogs
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Comments 8
1. by Nightfly, 9 May 2007, 06:27
Let me begin by saying It is very unfortunate that these 400 people were laid off, it is a testament to a false economy and the accurate statements above made by Hypebot...Management should have taken more creative approaches and looked out for its most valuable assets..its employees...Their demise is eminent and and as in the 60's ..music shall
lead the social revolution..
2. by Larntz, 10 May 2007, 15:15
The industry of radio has been following a path of destruction for years anyway. When some corporation comes along and swallows up the industry it removes the possibility of stations that will give us something different. Are we supposed to cry over an industry that is failing, and make us think it has nothing to do with Clear Channel Communications? It's a corporate world in this industry too, and I agree with Nightfly, thinking myself that they did not care about their employee's, and then will put the blame on us. Long live NPR
3. by alpha, 10 May 2007, 18:13
In the same time that music industry was sinking, Allofmp3 has once doubled its selling prices and again added 50% augmentation without any damage. Guess who was right and who was wrong in its businness model??
I must add that this strategy, in my opinion, was a great subliminal message send by Allofmp3 to music industry. Lower your price, I'll augment mine and we will soon rejoin! Sadly were opponents to Allofmp3 autists persons.
4. by d0b3r, 18 May 2007, 23:46
Regarding radio, for those of you that might not have heard, there was a ridiculous new copyright pay system that targetted internet radio stations asking them to pay royalties for EVERY single time someone opens their streams over the Internet. This would destroy small businesses across USA. This includes public radio sites like KCRW in L.A. that provide cultural and new music content.
http://www.savenetradio.org/
Record labels are desperately going after anyone they can get their hands on. Their purpose of existence is not to record, market and distribute music as it was originally intended, they are now companies in charge of extracting profits through legal actions and government lobbying, music is a distant fourth or fifth business directive, if at all.
Let's not worry, for I am SURE that our children will only have to read about record labels in history books.
5. by DJC, 22 May 2007, 04:27
I listen to KCRW in Los angeles and I used to buy CD's all the time. Now I come to this website and purchase my music. Do I feel weird? Sometimes. Did the record labels make a mistake in not recognizing that technology was way ahead of their old business model. Yes. What they should have done is forge alliances with websites like this one, figure out how to get profits directly to the artists from downloads and get out of the a and r business. Bands make money on the road and stopped making money from record sales a long time ago. It's too bad that the industry was so bloated with employees fighting ways to extract money from people using the updated technology to buy/get their music but now it's too late, the industry has changed. Get with it.
6. by hf, lx ftgv, 15 October 2008, 20:18
vhjl.; hvi;g
7. by Dissagree, 22 January 2010, 05:14
dissagree that record labels have lost control...Not in Miami where Payola is rampant..
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