Record Labels Are Starting to Scare Me

Universal and Warner within the past few weeks announced that they were making investments in companies that handled artist management or web networking.

The big four labels are not going to turn it around any time soon being a record company. CD sales continue to nose dive.

Warner is spending $110 million to buy more of Front Line Management, an artist management company that represents Jimmy Buffet, Christina Aguilera and others.

Universal bought a position in, a hip-hop social networking site that offers cash prizes and recording contracts.

This scares me.

I know you could say, Jerry, you're always saying the record labels have to get with the current trends being driven by the next generation. You would be right to remind me of that. Yet.



Sponsorships and merchandising?

These are not skill sets of the average record executive I've come to know.

So maybe I'm scared because of comments like the ones made by industry analyst Bishop Cheen: "The Big Four have always been predatory and artist management is a very personal kind of business. With the big majors this has not always been their strongest suit, but diversifying is still absolutely the right strategy".

Okay, someone else is scared, too.

Right move.

Wrong people.

Wrong skills.

I guess the record industry can't win for losing and they're doing a lot of losing these days.

If the majors really wanted to see the light, they have to understand the next generation. I contend they do not.

If the major record labels really think buying new age companies with age old thinking will lead to success, save your dough.

The labels want to arrive at the future without having to earn the right which is why you should not be too surprised if the latest epiphanies coming from record labels are not only too little and too late but too misunderstood -- by them.

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