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HITS Daily Double

I.B. BAD: MARKETSHARE MOVES HAVE RIVALS SEEING RED

MARKETSHARE MERRY-GO-ROUND: The latest internal leak from the bible is that it may eliminate reporting label marketshare other than owned and operated labels, or eliminate label marketshare altogether, in reaction to recent label realignments. Because the mag’s present regime doesn’t understand the business, they don’t know how to respond to the mess they’ve made. All of BB’s data is provided by SoundScan, and unhappy labels are putting pressure on both to make changes or else. The current SoundScan deal made by bible prexy John Amato is for one year only, adding to the drama. Here’s the latest issue that has them flummoxed.

The addition of RED to Columbia is being viewed by some as a tactical ploy intended to rattle the competition and by others as an unabashed marketshare grab—with Rob Stringer bolting on some marketshare of his own (to use his terminology) in response to enhancements made at UMG during the last two years at both Republic and Capitol. But there’s more involved in the move than mere bragging rights, and many inside Sony see a possibly substantial upside to the new alignment.

Connecting Stringer to RED means Sony’s indie-distribution division, led by the well regarded Bob Morelli, will now have access to one of the best closing teams in the business, making the already successful RED brand that much more attractive and competitive in the luring of new labels and acts. While the RED-Columbia relationship is still evolving and it’s unclear how big a role Columbia may play in the future, word is that the bandwidth is available for Morelli to access if he feels it’s needed.

Whatever the motivation within Sony, some of the UMG label bosses are unhappy about the move and vocal in denouncing it, with Monte Lipman colorfully (especially amid 50 Shades mania) modifying Stringer’s coinage from “bolt-on” to “strap-on” marketshare. Sony counters that there’s no difference between the Columbia-RED relationship and that between Caroline and UMG’s labels.


Despite the complaints, the addition of RED’s 5.3% in frontline share and 3.4% TEA year to date doesn’t automatically vault Columbia past Republic. Looking at the year so far, Republic remains on top of Columbia despite the addition of RED in frontline 15.4% to 13%, although Columbia takes a narrow lead in TEA 10.8% to 10.7%.

In TEA year-to-date, Republic’s labels—David Massey’s Island (2.5%), Scott Borchetta’s Big Machine (2.3%), Slim and Baby’s Cash Money (2.0%) and the JV Republic Nashville (.4%)—collectively account for 7.2%, or roughly two-thirds of Republic’s 10.7%. These stats underscore the fact that, by virtue of its very business model, Republic has itself become a distribution center, but one armed with mighty promotion capabilities, in essence redefining the traditional structure and philosophy of the major label. Republic is nothing like RED or Caroline; instead it’s a new hybrid, structurally if superficially resembling PolyGram Label Group in the 1990s. That so-called “super-label” combined Chris Blackwell’s Island, Russell SimmonsDef Jam (with his road manager Lyor Cohen also involved) and Roger AmesLondon, as well as Polydor, putting these three larger-than-life personalities under one roof.

The third marketshare dominator, Capitol Music Group, was created when Steve Barnett cobbled together a group of long-moribund EMI companies and relatively quickly managed to break three British-signed acts in Bastille, Sam Smith and 5 Seconds of Summer. These dramatic success stories made CMG competitive and a destination of choice for acts for the first time in years.

Marketshare isn’t a preoccupation at every major, however. Interscope’s John Janick and Steve Berman, for example, say they’re not interested in chasing marketshare or being on a bogus “most powerful” list, nor are they into making razor-thin deals accompanied by big advances. They’re focused instead on profitability, a sector in which IGA has been at or near the top since Janick fully took control of the company. IGA’s 2014 profits are believed to have been north of $100m last year, a feat they accomplished while maintaining an extremely artist-friendly environment. Janick’s DNA as a successful self-financed entrepreneur helps drive this business philosophy.

But no “pure” label had a better 2014 than Stringer’s state-of-the art Columbia operation. And with the almighty Adele on the way, the odds are that no rival will better Stringer this year.

LOST IN TRANSLATION: Sony Music is not being spun off, as some media outlets erroneously reported last week. Sony Corp. made it clear that music and film are two of the primary sectors it is committed to moving forward as the company realigns itself following several years of huge loses. Doug Morris’ surging music group is expected to show another increase in profits for the third consecutive year at the close of the company’s fiscal year on 3/31. Sony Music insiders are bullish about the number of new acts they broke in 2014, including Pharrell, Pentatonix, Hozier, Meghan Trainor, A Great Big World and KONGOS.

NAMES IN THE RUMOR MILL: Howard Appelbaum, Michael Lange, Daniel Ek, Rob Wells, Ashley Tabor, Sonny Takhar and Jason Flom.