Big 4 record labels ‘ripe for government bailout’

[rdc2007]

Big 4 record labels ‘ripe for government bailout’

With the US already authorising billions of dollars in taxpayer money for American banks, the four major labels (and Merlin) are similarly, “ripe for a government bailout,” says Tommy Silverman in an A2IM (American Association of Independent Music) post.
The Big 4 are:

• Vivendi Universal (France)
• Sony BMG (Japan and Germany)
• EMI (Britain
• Warner Music (US, but controlled by a Canadian)

“The U.S. recording industry, worth $14 billion in retail value when George W. Bush took office, has fallen to $9 billion today,” says Silverman in a “modest proposal for government intervention”.

“Rock & Roll did more to bring about the fall of the Soviet Union than the CIA,”" he says. “A strong music business is a matter of national security.”"
Just as the government, “prevented a Dubai company from safeguarding American ports,” it should, “take steps to stop rock & roll from slipping away to foreign control,” he states. “At the very least, they should fund the purchase of the Elvis Presley catalog back from the Japanese.”

If the Big 4 had spent as much time and money establishing themselves as major users of P2P technology in the 21st digital century, instead of launching bizarre campaigns to sue their own customers into becoming compliant consumers of corporate ‘product,’ and trying to gain exclusive control of how, and by whom, music is distributed online, they’d now be sitting pretty.

But, “Like the auto industry, the music business needs loan guarantees to retool to adapt to new technology,” says Silverman, adding »»»

The government should fund a five-year, $25 billion loan package industry to pay for artist development and marketing and retooling for and adaptation to new technologies during the transition period. As a condition, it would limit salaries and bonuses and temporarily eliminate golden parachutes for top executives.


The labels could also benefit from FCC rules requiring all radio stations to play at least 50% American content, at least 50% developing artists and at least 30% independent acts. The budget of Voice of America should be increased, from $160 million to $300 million a year, and Scott Shannon and Barry Mayo should be appointed to run the organization. Their mission would be to increase audience from 94 million to 2 billion while using American music to influence foreign culture.


Between 2000 and last year, the number of new releases rose from 35,515 to 79,695, according to Nielsen SoundScan. This increase in production has created an album glut, which the government could reduce by paying labels not to release albums, as it has done for agricultural commodities. It should also establish a fund to buy back 20% of all U.S. artist CD returns, which it could then distribute to developing nations to further spread American influence.


What remains perfectly clear is that the recording industry is ripe for a government bailout, long overdue for the support that almost all other countries recording industries get. The industry is worthy of that investment as benefits accrue not only to the companies but also through trickle down to publishers, radio, venues, artist managers, booking agents, merch companies, CD and component manufacturing facilities, recording studios and their employees. Through a strong American music business and strong American music, we bolster consumer confidence which, at its core, drives the financial markets and America’s standard of living.


The U.S. spends around $695 billion a year on defense so it would be a bargain to support the American music industry and stabilize National and global security. Now, more than ever, America needs the recording industry’s creative musical genius to infect the world with the sound and soul of America.

Stay tuned.