Thursday 27 September 2012

NOW That's what I call complete bollocks

From The Sun:

THE party could be over for pop institution NOW That’s What I Call Music. As part of Universal’s takeover of EMI, the record label must sell EMI’s 50 per cent stake in the classic compilation brand.

Unless someone invests in the 29-year-old album series, it will end with NOW 83 in November..

I think NOW is safe because it still makes so much money. No other compilation brand comes close to its 100million sales. And if NOW were to be taken out of the mix for labels and artists — it would leave a huge hole in their earnings.


The reason why the NOW albums were always so good is because it was a collaboration between several major record labels, who all allowed their most popular hits to go on it. For sure, it was initiated/managed by Virgin/EMI together, but in those days, there were still half a dozen major (of whom EMI were just one) and dozens of minor record labels; it needed somebody to get the ball rolling to everybody's mutual benefit.

But so what, either the NOW series makes money or it doesn't. And it does. Further, NOW is not a business in the traditional sense, it's just a brand name or a boxful of contracts (a bit like Bernie Ecclestone - the entire assets of his Formula One empire would fit in a briefcase as it's all just contracts). NOW has few or no employees, no pressing plant, no assets, no artists under contract, it has nothing other than itself and the fact that people go and buy NOW albums by force of habit (I've got every one from 49 onwards).

So EMI does not actually need to sell its stake to anybody and nobody needs to buy it, and nobody needs to invest in it either (there's nothing to invest in). EMI can just cease involvement and whoever currently owns the other half just gets on with it.

It's then entirely up to Universal-EMI to negotiate how much royalties it wants for allowing hits from its own roster to appear on NOW albums in future. So there's no reason to assume that Universal-EMI will end up worse off for abandoning its stake in NOW - instead of EMI getting half the net profits after paying royalties to all the other record labels (which no doubt includes Universal anyway)for using their songs, Universal-EMI gets the royalties up front and Virgin's residual profit share is correspondingly smaller.

7 comments:

H said...

I remember when it was "Now That's What I Call Music" with no number after it and it was advertised by a rather truculent talking pig... Happy days.

Mark Wadsworth said...

H, surely, the first one didn't have a number, but the second one was called "...2" and so on?

H said...

Well, it was the first one then. I'll never be able to forget the pig.

SumoKing said...

There was a big copyright/royalties spat issued in Canada over the "exploit now pay later" compilation tactics used by some record companies to just shove whatever they liked on a compilation album while hoping the original 'artist' didn't notice.

It was particularly interesting because self same record companies were complaining that pirate downloads deprived 'artists' of money and would lead to the death of the music industry.

(to be fair I think Canada had changed its royalty law along the way somewhere as well)

So long story short it doesn't matter who buys the Trademark because the practise is to just shove on whatever song you like and fend off the musician until you have your profits in.

In fact it would possibly make more sense for someone to set up a shell company, give it a big floating charge secured loan, diddle the musos with a few Now albums and then fold the thing and repeat, always repeat.

Mark Wadsworth said...

H, probably worth a fortune if it's on vinyl and in good nick.

SK, yes, but NOW is a brand in its own right (with a lot of goodwill, i.e. mugs like me who just buy them without question).

You'd struggle to shift your own 'NOW' albums and shops would know straight away you're a con artist. If you use a similar name, then people won't buy them in large numbers and NOW will sue you for trademark infringement.

So artists and labels like having their songs on proper NOW albums(reach wider audience, get royalties); and NOW like using all their songs (make loads of money for a few telephone calls).

Robin Smith said...

Is it fair to say that copyright partially comes out of economic rent? There is at least some community created protection in it. At least some surely? And the longer that privilege goes on the greater the proportion is rent, the less is earned. Intangible goodwill in a brand trademark too? Certainly there is little goodwill in the skill of the employees as per Bernie.

I looked at copyright over the world and it seems pretty uniform eveywhere. Lifetime + 50 or sometimes 70 years.

WTF? We are being fleeced.

Robin Smith said...

I propose all copyright has a flat lifetime of 7 years. The natural cycle for it. Or 49 years if people are fussy.