With EMI, Warner Music, Sony and Bertelsmann racing to get regulatory approval for their planned mergers – what will consolidation mean for the music industry?
Music companies are in a real spin – battling falling profits, increasing competition and rampant piracy.
A report by IFPI, which represents the music industry worldwide, estimated that in 2002 one in three discs sold was pirated, boosting the value of the global counterfeit music market to $4.6bn (£2.7bn).Physical piracy – illegally copied CDs – meant that in 2001, for the first time in many years, no album sold more than 10 million copies worldwide.
Pro-music, an international initiative to promote legitimate online music – added that internet uploads have soared as album sales have fallen.In one four-month period in 2002, the number of music files available on pirate sites jumped from 500 million to 900 million.
Meanwhile, global music sales in 2002 fell by around 7% – resulting in 250 million fewer albums being sold in 2002 than in 2001, Pro-music said.
There is a race taking place with significant rewards for winning as the cost savings are absolutely vast in proportion to operating profits.
[The remainder of this article gives a good overview of the pros and cons of major label consolidation and how new business models will evolve -ED.] [more @ www.bbc.co.uk]