UK News

from Breakingviews:

Music gods again divert EMI’s destiny

By Jeffrey Goldfarb The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The music gods have meddled again with EMI’s destiny. In the minds of financiers and industry wags, the union of the British music group - home to the Beatles and the Beastie Boys - with U.S. rival Warner Music was just a matter of time. But the star-crossed match has been knocked off course again by the sale of EMI’s two divisions to Sony and Vivendi’s Universal Music.

EMI’s path to this point has been torturous. An overleveraged buyout in 2007 led to seizure of the music company by lender Citigroup earlier this year. The bank, a reluctant owner, appeared to have a quick way out when billionaire Len Blavatnik acquired Warner soon after. The logic for a deal is nearly as compelling as it was when the two companies first tried to merge in 2000. EMI and Warner remain the runts among the four majors, complement each other geographically and present cost-cutting opportunities.

Yet Universal, the world’s largest music company, and number-two Sony have bold plans of their own. With twice as much revenue as Warner but about the same operating margin, Universal needs cost reductions to capitalize on its scale. Though it’s paying a rich seven times EBITDA through March for EMI’s recorded music business, it expects about $160 million of annual savings. Taxed and capitalized, those should cover over half the $1.9 billion purchase price.

For Sony’s part, taking control of EMI’s music publishing business for $2.2 billion would vault it to the top spot in the sector. It would also leave the rival BMG partnership established by private equity firm KKR and German media group Bertelsmann still lacking the anchor asset it had been seeking to give it serious clout.

Still, EMI’s fate is not quite sealed. Citi made sure Universal assumed all the regulatory risk on the deal. Though Universal plans to sell 500 million euros of assets, U.S. and European trustbusters will still have plenty of questions. In some countries, the enlarged Universal would control over 40 percent of the market; in the United States, it would have about a 38 percent share. The competition review may take a year or more. This isn’t necessarily the day the music died for Warner and EMI.

Previous version incorrectly stated revenue comparison in third paragraph

from Fan Fare:

Laden in Red – Chris de Burgh sells fine wines

"The Lady in Red" singer Chris de Burgh has decided to cash in on surging prices for fine wines, offering 320 bottles and 84 magnums of mainly red varieties at Christie's in March which are expected to fetch in the region of 200,000 pounds ($320,000).

“Looking at the economics of the wine trade and how the business of selling wine fluctuates, I decided now was the right time," he said in a statement. Not surprising -- Asian buyers, particularly from China, have piled into the wine market in the last two years sending prices soaring. Christie's sold wine worth $71.2 million in 2010, a whopping 70 percent increase over 2009, and fellow musician Andrew Lloyd Webber made a cool 3.5 million pounds from a much larger wine sale in Hong Kong last month.

De Burgh, his wife and daughter now prefer drinking white, so parting with some of the world's finest clarets may be easier to bear.

Among the highlights from de Burgh's temperature-controlled wine room at his home in Ireland is a 12 bottle case of Château Lafite-Rothschild, vintage 1945, estimated to fetch 12-16,000 pounds. (How much that works out per sip I'm not sure, but per glass it's around 220 pounds). The bottles are still in the original straw which protected them since the end of World War Two. "Considering the dramatic events that were unfolding across Europe and particularly in France at that time, it’s extraordinary that one of the finest wines of the century was made then," de Burgh said.

The highest value lot is a vertical collection of 62 magnums of Château Mouton-Rothschild, vintages 1945-2005, expected to sell for 70-90,000 pounds.

from Fan Fare:

Can Tempah turn BRIT nods into awards?

He's leader of the pack in terms of BRIT nominations tonight, but can London rapper Tinie Tempah convert them into prizes when the awards ceremony is held on Feb. 15? Bookmakers would have us believe that British pop's biggest night could be one of disappointment, not delirium, with Ladbrokes backing the 22-year-old to scoop just one of his four nods, and arguably the least prestigious of them all -- Best Breakthrough Act.

Not that the category is unimportant -- a BRIT is a BRIT after all, and, after a Grammy, perhaps music's most coveted statuette. But when you think that Tempah is in the running for best male solo, best British single and, most important of all, best British album, a Breakthrough prize alone may not be enough to keep him happy.

Elsewhere, the highlight of the nominations has to be Robert Plant, 40 years Tempah's senior but a giant of rock as Led Zeppelin lead singer and, shockingly, a first-time BRIT nominee, according to the organisers. Given the huge success of his solo career after Led Zeppelin ceased to be, it seems almost scandalous. Not a whole lot of love for the singer among voting members, obviously, and the possibility of a heartbreaker if he doesn't win. Or could it be celebration day? Enough bad Led Zeppelin puns.

Raging against the X Factor machine

Simon Cowell says the Internet campaign to keep X factor winner Joe McElderry from the coveted Christmas No. I  spot is aimed at him rather than the type of music the show produces.

He calls the campaign stupid.

But critics of the show loathe what they call the “karaoke” of X Factor and thousands have backed the push to get an anti-establishment track by American rockers Rage Against the Machine up into the top slot next week.

The band’s guitarist Tom Morello told the BBC: ”I think people are just fed-up of being spoonfed some overblown sugary ballad that sits on top of the charts. It’s a little dose of anarchy for the holidays, it’s good for the soul.”

It’s good for Sony too, analysts have noted, since both records are on its label.

Critics of the Internet campaign note that record numbers of viewers watched last weekend’s X Factor final and millions voted for McElderry. If so many people like him, why should he not be No. I they ask.

What do you think?

from FaithWorld:

Did Jesus headline Glastonbury before Springsteen?

Jesus Christ may have visited an English town now renowned for a raucous modern-day music festival to meet ancient druids, a new film argues.  "And Did Those Feet" explores the theory that Jesus accompanied Joseph of Arimathea on a visit to the area around the southern English town of Glastonbury.

The Glastonbury Festival held on a farm near the town draws some of the 21st century's biggest music stars such as Bruce Springsteen, Jay-Z, Neil Young and U2 to the world's largest open air music and arts festival.

Church of Scotland Minister and researcher for the film Gordon Strachan argues that Jesus may have come to Britain to further his education because the area was a stronghold of the ancient druids, then associated with ancient wisdom.

"There's no reason why Jesus shouldn't have come," Strachan told Reuters. "Glastonbury was very important in the ancient times, the tradition goes back to pre-Christian times ...  He probably came by boat with the traders. He had plenty of time and nobody knows what he did before he was 30."

Read the whole story here.

Follow FaithWorld on Twitter at RTRFaithWorld

Cutting off the music file-sharers

Repeat offenders who persist in illegally downloading music from file-sharing sites such as Limewire could be blocked from accessing the Web under government proposals.

“Technology and consumer behavior is fast-changing and it’s important that Ofcom has the flexibility to respond quickly to deal with unlawful file-sharing,” says Minister for Digital Britain Stephen Timms.

Opponents of the idea are more succinct. They say cutting people off is unnecessary and potentially illegal. Human rights have been invoked.

Business Secretary Lord Mandelson, they say, has been successfully leaned on by lobbyists for the creative industries whose products are being hijacked.

The music industry, which is losing millions through illegal downloads, is naturally  pleased. The industry body UK Music says: “UK Music is pleased that Government is proposing accelerated and proportionate action to meet their stated ambition of reducing illegal file-sharing by 70-80% within 2-3 years.”

What do you think? Is there a case for such drastic measures?

Related blog: Who benefits from a file-sharing crackdown?

from Fan Fare:

Carmen – “trollops, treachery, filthy vices”

Perhaps the world of opera could learn a thing or two about marketing to the masses. Long seen as the bastion of wealthy, ageing patrons and obsessive fans, opera houses say they are trying to reach out to a wider audience by bringing down ticket prices and beaming performances on to giant screens and into cinemas.

The Sun tabloid in Britain has an alternative approach -- make opera sexy. After the doors of the notoriously pricey Royal Opera House were thrown open to Sun readers last year for a cut-price performance of Mozart's "Don Giovanni", a similar offer has been announced for Bizet's "Carmen" on October 3. All tickets will be priced between 7.50 and 30 pounds ($12-50), a far cry from regular prices of up to 230 pounds per seat, not including the exclusive boxes.

Its description of Carmen sounds like an advertisement for a night out at a lap dance club: "Georges Bizet's brilliant but tragic French opera, set in Seville around 1830, is packed with trollops, treachery, filthy vices and fabulous voices." It goes on to describe Carmen as a "slapper", a less-than-complimentary term describing a woman of, shall we say, easy virtue.

And here is what the most widely read British daily newspaper had to say about Don Giovanni: "More than 2,000 of you were treated to a night of blood, betrayal, ghosts and topless totty in the story about a bed-hopping stud who is dragged to hell for his wicked ways."

If London's Royal Opera House or the Metropolitan Opera in New York hired the Sun to write their programmes, they might just get the diverse audience they crave.

from The Great Debate UK:

Can anyone stop the dominance of iTunes?

**Tom Dunmore is Editor-in-Chief of Stuff magazine. The views expressed are his own.**

Amazon’s music download service has finally arrived in the UK. That’s great news for music fans, who will benefit from lower prices and greater choice - but it’s not going to save the music industry from the dominance of iTunes.

After all, Amazon’s download service has been running for a year in America, but it’s still way behind iTunes. In fact, even if you add all of Amazon’s CD sales into the mix, iTunes is still bigger.

Here in the UK, iTunes has well over 50 percent of the music download market (some put the figure as high as 80 percent). And that’s despite Amazon’s biggest online rival Play.com selling MP3 music at knockdown prices for the past six months. Why? Because neither Play.com nor Amazon can match Apple’s integration of iTunes software and iPod hardware.

More importantly for the music industry, despite all the new rivals in the download market, there’s nowhere near enough music being sold to make up for the slump in CD sales.

The last figures published by the BPI, the UK's music industry body, showed that total year-on-year album sales were down 5.5 percent. Digital sales were up, but not enough: 7.5million less CDs were sold in the first nine months of 2008 compared with the same period in 2007. Download album sales were up less than 3.5m.

And that was before the economic downturn really began to bite. To compound the music industry’s woes, the UK high street’s biggest music retailer, Woolworths, has gone into administration – along with its music distribution arm Entertainment UK.  Supermarkets are having to source their CDs direct from record companies, and megastore operator Zavvi has been forced to cancel all orders through its website.

Is file-sharing morally wrong?

A woman who shared a pinball game online has been ordered to pay 16,000 pounds in compensation and legal costs to its creator.

The Patents County Court in London ruled in favour of TopWare Interactive, a U.S. computer game developer that said she had infringed its copyright.

The case is the latest attempt by the entertainment industry to try to protect its music, games and films from growing threat of online piracy, which it says is killing business.

Quicker Internet connections have sparked a boom in people swapping music, films or TV programmes.

The Recording Industry Association of America says file sharing has hit profits, put songwriters out of work and made it harder for new bands to get a contract.

“The crime is theft,” it says on its website. “Everyone who makes, enjoys or earns a living in music is hurt.”

File sharers hotly dispute that argument.

Can music piracy be stopped?

Teenagers love music and films – but today’s generation don’t expect to pay for them when they can download them for free over the Internet.

The entertainment industry says it is losing millions of pounds from online piracy but Internet service providers have been reluctant to police the activities of their customers.

Now six of Britain’s largest Internet providers have agreed a plan to tackle piracy, agreeing to send warning letters to those suspected of illegal file-sharing.

If the tactic doesn’t succeed, sanctions could be introduced such as disconnection for those warned three times, or filtering to prevent illegal tracks from being downloaded.

What do you think? Are the plans fair and workable? Do you expect to get a warning letter?