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Jay-Z’s Entertainment Company Makes Music Deal With Universal

April 8, 2013 by Leave a Comment

The deal, described as a multiyear partnership, will bring Roc Nation’s record label under Universal’s umbrella, moving it from Sony Music, where the label last struck a deal four years ago. It also means that Jay-Z’s own records, which recently were released through a deal with Atlantic Records, part of the Warner Music Group, will once again come out on Universal.

Terms of the partnership were not disclosed, but a person briefed on the negotiations, who was not authorized to discuss it publicly, said it was one of the more competitive label auctions in recent years, with interest from all the major record companies. Sony and Universal, the two largest record conglomerates, have been competing intensely to sign deals with top artists and independent labels.

Roc Nation is a joint venture with Live Nation Entertainment that was created as part of Jay-Z’s $150 million deal with that company in 2008. It includes a record label, music publishing division and a growing roster of artists under management, including Rihanna, Shakira, Timbaland, M.I.A. and Kylie Minogue.

As part of the deal, Rihanna will also extend her recording contract with Universal.

Jay-Z’s own albums had long come out through Def Jam — he was president of the label for several years in the mid-2000s — but after starting Roc Nation, his latest solo album, “The Blueprint 3,” was released through a distribution arrangement with Atlantic.

“This agreement presents a unique opportunity for Roc Nation’s artists — being able to continue to operate as an independent label with the strength, power and reach of the best major,” Jay-Z said in a statement. “I look forward to a long and prosperous collaboration with U.M.G. It feels good to be home.”

Article source: http://www.nytimes.com/2013/04/09/business/media/jay-zs-entertainment-company-makes-music-deal-with-universal.html?partner=rss&emc=rss

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Media Decoder Blog: Music Companies Fight Over the Scraps of EMI

February 16, 2013 by Leave a Comment

After the main course, the leftovers.

Such is the state of dealmaking in the music industry, after the breakup of EMI that gave the historic British company’s record labels to the Universal Music Group for $1.9 billion and its huge music publishing division to a consortium led by Sony for $2.2 billion. Music’s corporate landscape was shifted as a result, with the number of major labels shrinking to three from four, and the creation of the world’s largest song catalog controlled by Sony’s publishing arm, Sony/ATV.

Over the last few months, though, there has been aggressive competition for smaller chunks unloaded by Sony and Universal on the orders of European regulators. Last week, the Warner Music Group paid $765 million for the biggest of these side dishes, the Parlophone Label Group, with recordings by Coldplay, Pink Floyd, Radiohead and many others. It must still be approved by regulators, but is not expected to face significant opposition.

One of the bidders that lost out on Parlophone was BMG Rights Management, a five-year-old joint venture between Bertelsmann and Kohlberg Kravis Roberts. But BMG has been successful in several other EMI-related sales. Early Friday it announced it was buying Sanctuary Records from Universal, which includes classic albums by the Kinks and Black Sabbath.

The Sanctuary sale is estimated at about $60 million, and it follows two other BMG acquisitions late last year: the Mute Records catalog (Depeche Mode, Moby), formerly a part of EMI, and a collection of publishing assets from EMI and Sony/ATV. Those two deals were reportedly worth a little more than $100 million.

Warner, now the smallest major, gained some needed bulk in Parlophone. BMG’s various deals will help the company flesh out its business model, gaining a foothold in recordings after an intense focus on publishing assets that have led it to quickly build a catalog of more than one million songs.

The cupboard is not completely empty, though. Universal is still selling EMI’s share of the long-running compilation series “Now That’s What I Call Music!” as well as Universal’s Co-Op Music label. Those are expected to be small deals, but along with the Parlophone deal, they will help to substantially reduce the effective price that Universal will have paid for two-thirds of EMI.

Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/15/music-companies-fight-over-the-scraps-of-emi/?partner=rss&emc=rss

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Universal Unloads European Labels Bought From EMI

February 8, 2013 by Leave a Comment

PARIS — Warner Music Group said Thursday that it had agreed to buy much of the European record label business that Universal Music Group acquired in its recent purchase of EMI.

The deal, worth £487 million, or $765 million, includes Parlophone as well as other EMI labels like Chrysalis and Ensign, representing Coldplay, David Guetta, Tina Turner, Iron Maiden and other artists. The European Commission had required Universal to sell the labels as a condition of its approval for the deal.

The purchase provides a fillip to the global ambition of Warner, which is strong in the United States but has struggled to compete with the other leading record companies — Universal and Sony Music Entertainment — in international markets. EMI, based in London, is strongest in Europe, and Parlophone is one of its flagship labels.

“Having the Parlophone Label Group become part of our family represents a unique opportunity for us to join with legendary record labels and artists that are highly complementary to our existing organization from a creative, geographic and strategic standpoint,” said Stephen F. Cooper, the chief executive of Warner.

Analysts said the sale included about a third of the overall business of EMI, which was the smallest of what used to be four major record companies, before EMI was taken over by Universal. The commission was concerned that a combined Universal and EMI, without significant divestitures, would have exercised too much control over certain music markets, potentially limiting choice.

Analysts said the deal could help Warner, which is controlled by the investor Len Blavatnik, develop existing artists in European markets where, until now, they have struggled.

The agreement means Warner is finally getting a large chunk of a company, EMI, that it had long pursued as an acquisition target or merger partner. Universal outbid Warner for EMI. In the auction of Parlophone and the other EMI assets, Warner trumped a handful of other bidders, including a partnership of Sony Music and BMG, a joint venture of the German media company Bertelsmann and the private equity firm Kohlberg Kravis Roberts.

Universal, meanwhile, will recoup a sizable portion of the £1.2 billion it paid for EMI.

“Following this transaction, we will continue with our global reinvestment program that is rebuilding EMI and ensuring that the company is able to reach its full potential,” Lucian Grainge, the chief executive of Universal, said.

Ian Whittaker, an analyst at Liberum Capital, wrote in a note to clients that the sale also represented a “mild positive” for Universal’s parent, the French conglomerate Vivendi, which could use the proceeds to help pay down debt.

Article source: http://www.nytimes.com/2013/02/08/technology/universal-unloads-european-labels-bought-from-emi.html?partner=rss&emc=rss

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Media Decoder: Deals Move Apple Closer to Streaming Music

June 3, 2011 by Leave a Comment

Apple has nearly completed its negotiations with the major music publishers over rights for a new cloud music service.

Of the four big publishers, two have signed deals with Apple, and the others will most likely complete their deals in coming days, according to several people involved in the talks.

The agreements will allow Apple to unveil the service at its five-day Worldwide Developers Conference in San Francisco, which begins Monday.

Universal Music Publishing and Sony/ATV, a joint venture between Sony and the estate of Michael Jackson, have completed their deals, these people said. They spoke on condition of anonymity because the deals are confidential.

The publishing division of EMI and Warner/Chappell, owned by the Warner Music Group, are still in talks.

Apple, as well as the labels and publishers, declined to comment.

Publishers, which represent songwriters and control the music and lyrics underlying songs — as opposed to recordings — have been Apple’s last hurdle in setting up its new service, which will allow users to store music files on remote servers and stream or download them over the Internet.

Apple recently closed its deals with the four major record labels. The labels also own the major publishers, but they are operated as separate divisions and sometimes have divergent interests.

Amazon and Google recently introduced cloud music services, but without special licenses from the labels and publishers.

With those licenses, Apple’s system would have some advantages, like being able to instantly scan a user’s iTunes library and match the songs to a master library on Apple’s own servers; with the services of Amazon and Google, users must upload each song, which can take many hours.

In addition, Apple’s service is expected to have features like streaming songs in high-quality audio, even if the version a customer owns is lower quality.

To offer those additional functions, Apple needs licenses from music publishers, because the creation and matching of a master audio library is considered a reproduction, and therefore the owner of the music is owed a royalty. (With the services of Amazon and Google, the music file is treated as a backup, with each user’s songs stored separately.)

On Tuesday, Apple announced that it would be unveiling a program called iCloud at the conference next week, describing it only as a “cloud services offering.”

Analysts and media executives have said that iCloud may offer cloud storage for an array of media, including music, video and photos.

According to several people involved or briefed on the talks, revenue from subscriptions to the service would be divided among Apple, the publishers and the labels, but exactly how that money would be split was unclear. Apple generally keeps 30 percent of such revenue. The publishers had been offered 10.5 percent but were able to negotiate their rate up to 12 percent, these people said.

Whether the 1.5 percent difference would come out of Apple’s share or the labels’ share for the recordings was not known. But the deals are also said to be short-term, and may be superseded when the Copyright Royalty Board, a federal panel, next sets digital royalty rates, a decision that is expected in the next two years.

Article source: http://feeds.nytimes.com/click.phdo?i=0085d1ca3b5c80f78173f36d9d9853ee

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Apple Is Called Poised to Offer ‘Cloud’ Music

May 21, 2011 by Leave a Comment

Apple has entered the final stages of negotiations with the major record labels and music publishers for a service that will allow people to upload and store their music on the Web and listen to it on smartphones, tablets or computers — so-called cloud-based music.

Amazon and Google introduced similar services weeks earlier. Apple’s service, though, is expected to be easier to use, and to find a ready market in the 200 million people who have iTunes accounts.

The company has signed contracts with Sony Music Entertainment, EMI and the Warner Music Group to license those labels’ recordings for its new service. It is still negotiating with Universal Music Group, the largest of the four labels, but that deal could be finished as early as next week, according to several people briefed on the talks who spoke on condition of anonymity because the deals were private.

Analysts said Apple might announce the new service as early as next month, when it hosts its annual developer conference in San Francisco.

Apple declined to comment, as did the record labels.

Like Amazon’s Cloud Drive and Google’s Music Beta, Apple’s new service will provide access to remote servers that can store digital music files and stream them to users’ computers, smartphones and other devices. But since Amazon and Google did not get licenses from record companies, their music programs are essentially storage systems, which require users to upload the music they already own before they can play it, a process that can take hours.

Having label licenses would allow Apple to design a more elaborate and efficient system. For instance, Apple’s service is expected to be able to scan people’s iTunes libraries and match their songs to a single master collection on the company’s servers, eliminating long upload times.

Apple might also introduce features like sharing songs with friends, and the ability to listen to a song on different devices without having to connect them first to a computer.

“For most of us who have multiple devices, it is annoying to have to tether them to our computer every time we buy a new song,” said Dave Goldberg, who in 1994 founded Launch Media, an online music start-up that was later bought by Yahoo.

Although Apple has nearly finished its talks with the labels, it still must obtain licenses from music publishers, who control the copyrights for a song’s underlying composition, as opposed to recordings, and who also represent songwriters. Most of the major publishers are owned by the labels but are operated separately, and their permission is essential to offer the more advanced features.

In 2003 Apple opened its iTunes store, which transformed the music business, selling more than 10 billion songs. Now the music industry is eagerly awaiting Apple’s entry into cloud-based music. The company has been expected to release a cloud service since at least 2009, when it reportedly spent $80 million to buy Lala, a start-up that allowed users to play music they already owned from the Web. Shortly after the deal closed, however, Apple shut down Lala.

Apple also built a large data center in North Carolina, which company officials said would handle music and other services.

The exact timing of the announcement of the service may depend on when Apple closes the publishing deals and whether the technology is ready to go.

“Apple doesn’t announce anything until it is ready,” said Tim Bajarin, an analyst with Creative Strategies, adding that Apple could also wait until next fall. “We know that the data center is online, but we don’t know whether the software components and the service pieces will be ready by next month.”

Analysts also said Apple was likely to pass on the cost of the new contracts with the music labels and publishers to consumers by charging for the streaming service. While some consumers may balk at having to pay extra to listen to music they already own, many will pay for convenience, they predicted. And the cloud music service could be somehow integrated with a new version of MobileMe, Apple’s online subscription service that offers storage and other features. Apple is widely believed to be working on a revamped version of MobileMe, which has long been considered a flop.

“I don’t think it is something they will have to give away for free, at least initially,” said Gene Munster, an analyst with Piper Jaffray. Mr. Munster said the service could be bundled with MobileMe.

Article source: http://feeds.nytimes.com/click.phdo?i=162b2b7bf33887e0b73a2aa30cc0ce9b

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DealBook: After Stellar Year, Bertelsmann Thinks Deals

March 30, 2011 by Leave a Comment

Bertelsman

3:43 p.m. | Updated

BERLIN — Bertelsmann, the German media conglomerate, said Tuesday that it was interested in buying the music publishing arms of the Warner Music Group and EMI, adding that a surge in profitability and a reduction in debt had made it eager to invest again.

For the most part, Bertelsmann got out of the music business less than three years ago, when it sold its 50 percent share in Sony BMG, one of the four major record companies, to Sony. Since then, however, the company has been building a new music rights management operation with the private equity firm Kohlberg Kravis Roberts.

Warner Music was recently put up for sale. EMI has been taken over by Citigroup from its private equity owner, Terra Firma. The takeover followed a failed lawsuit by Terra Firma against the bank, its main lender and adviser in the EMI deal. Citigroup has not put EMI up for sale, but analysts say the bank is unlikely to want EMI for the long term.

With sales of compact discs continuing to fall, the record industry’s prospects have not improved since Bertelsmann sold out to Sony. Thomas Rabe, Bertelsmann’s chief financial officer, said the company was interested only in the publishing and rights management operations of EMI and Warner. Those businesses, which own the companies’ back catalogs, continue to generate steady income.

“We are on the right track to become one of the biggest and best-managed music rights businesses in the world,” Mr. Rabe said at a news conference. “We are on the right track to do this through organic growth and further acquisitions.”

Bertelsmann said it was ready to consider acquisitions again because it had reduced its debt to 1.9 billion euros, or $2.7 billion, from 2.8 billion euros over the past year. Meanwhile, the company, which is privately held, benefited from a rebound in the media sector, with profit surging to 656 million euros last year from 35 million euros a year earlier. The company’s European television and radio broadcasting business, RTL, and its German publishing arm, Gruner Jahr, posted particularly strong gains.

“Bertelsmann, ladies and gentlemen, is ready to invest — in the right business, at the right price and the right time,” said Hartmut Ostrowski, the company’s chief executive.

The Bertelsmann/K.K.R. venture is not the only party interested in Warner. Other potential bidders reportedly include Len Blavatnik, a Russian-born investor, and Ron Burkle, an American supermarket owner. And EMI executives have said they want to keep the company’s recorded music and publishing arms together.

Article source: http://dealbook.nytimes.com/2011/03/29/after-stellar-year-bertelsmann-thinks-deals/?partner=rss&emc=rss

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