Citi to sell EMI units for $4.1 billion

[Gurn Blanston]

Not all of EMI's catalog is digitized.  Same with UMG and Sony/BMG.  The sale of EMI may bode poorly for items languishing in vaults.  Just as thousands of titles were lost in the transition from 78s to LPs, and from LPs to CDs, many titles will be lost in the transition from physical media to download only, at least for future consumers. 

As to expense, well, there is backup, server replacement, energy costs, etc, in addition to labor, so from a bean counting outlook there may be areas to trim costs.  I can imagine a scenario where cost models are built comparing delivering 100% of the current digital catalog vs. the top 500 titles and some special interest items, and so on.  Obviously, I'd like to see everything made available, but I doubt that happens.  Perhaps I'll be pleasantly surprised.

No, that's true, all the music ISN'T digitized. I was postulating a scenario where that got done, simply so the music was preserved. But the electricity, backups, all that stuff; well yes, there is an ongoing cost involved, but I would wager it is far less than trying to preserve all those old tapes. Can you imagine that expense?  They could just shrug that off if they digitized and not have lost anything. 

[Todd]

but I would wager it is far less than trying to preserve all those old tapes.

That would be interesting to know.  Given how a lot of firms still store data backups on tape at off-site facilities, and sometimes multiple facilities for disaster recovery purposes, incurring those expenses that cost could be large as well, though one would think that the specific costs of storing music tapes is higher.  Alas, some companies have not always put the money into proper preservation.

Something else I would like to know is if everything that has been digitized is still available to the firms themselves.  I've worked for a couple large firms (albeit in finance), and database size and server utilization were big issues, and the IT department was always looking for ways to save on expenses.  It makes me wonder if at music companies any low-selling titles were ever deleted to save a few bucks.  Were any inadvertently deleted?  Were any mislabeled?  My experience leads me to think all of those things may have occurred. 

Of course, when looking at digitized content, one must consider obsolescence as well.  While everyone and their grandmother can use MP3 or FLAC today, will that be the case in ten, twenty, or thirty years?  Will all titles digitized in today's formats be updated to future formats?  This applies to other content as well (movies, photos, text stored electronically only, etc).  I have my doubts.  From an archival perspective, the best, longest lasting solution are metal masters from the 78s era. 

[Brian]

eg the wonderful old Finlandia material lying dormant in Warner's vaults

Guess what: a lot of Finlandia is on Naxos Music Library and Naxos' MP3 store. I don't know what share of the total 265 albums is, but if anyone can make a go of uploading and digitizing the forgotten EMI vaults, it's Klaus Heymann.

[The new erato]

Guess what: a lot of Finlandia is on Naxos Music Library and Naxos' MP3 store. I don't know what share of the total 265 albums is, but if anyone can make a go of uploading and digitizing the forgotten EMI vaults, it's Klaus Heymann.

OTOH I won't go the download route, I have a (maybe) romantic attachment to physical product. As long as physical produce is available, I'm stocking up my library.

They can stream all they want, to paraphrase George Gershwin: It's not for me.

[Scarpia]

They can stream all they want, to paraphrase George Gershwin: It's not for me.

I am not interested in compressed audio, but if I've purchased a few FLAC files from Hyperion and Universal when the physical media has been out of print.  Now the choice is typically between compressed download and uncompressed physical media.  If physical media is off the table, I think that the labels will have to offer uncompressed downloads, or risk loosing a bit slice of their customer base.

[Scarpia]

That would be interesting to know.  Given how a lot of firms still store data backups on tape at off-site facilities, and sometimes multiple facilities for disaster recovery purposes, incurring those expenses that cost could be large as well, though one would think that the specific costs of storing music tapes is higher.  Alas, some companies have not always put the money into proper preservation.

According to my back-of-the envelope calculation, the entire EMI catalog from the LP era at CD resolution would fit on a single hard drive.  The storage requirements would not be a problem.    Maintaining an e-commerce site with that many selections to keep track of would be a bigger challenge.

[Todd]

According to my back-of-the envelope calculation, the entire EMI catalog from the LP era at CD resolution would fit on a single hard drive.

Possibly, though I have my doubts (how many recordings did EMI and its subsidiaries release in the last 50-60 years?), but my experience with IT departments is such that critical files are never just stored on one cheap box and backed up on Carbonite or a competitor, and as you point out, building and maintaining a site has costs.  Given the apparently thin margins in the classical music business, hopes for access to all digitized content for any one label at a low price may not come to fruition.  If delivering the content digitally was especially profitable, one would think more companies would be doing it right now. 

[Gurn Blanston]

If delivering the content digitally was especially profitable, one would think more companies would be doing it right now.

Inertia.

[Scarpia]

If delivering the content digitally was especially profitable, one would think more companies would be doing it right now.

Huh?  They are doing it now.  Universal has almost everything they have available in FLAC.  Same for Hyperion and Chandos.  The others, including EMI, have their stuff on amazon mp3 or iTunes.   But if EMI classics (or any other classical label) is going to stop issuing CDs they will have to make a lossless format available, or loose their serious customers.
 

[Gurn Blanston]

Huh?  They are doing it now.  Universal has almost everything they have available in FLAC.  Same for Hyperion and Chandos.  The others, including EMI, have their stuff on amazon mp3 or iTunes.   But if EMI classics (or any other classical label) is going to stop issuing CDs they will have to make a lossless format available, or loose their serious customers.

True. I don't know about the rest of Universal, but I've bought several FLAC 'albums' from DG's website. Also a couple from Hyperion and Chandos. As long as it is lossless, has digital notes, and the physical media can't be had reasonably, I can live with FLAC downloads. I expect that someday I won't have a choice.

[Scarpia]

True. I don't know about the rest of Universal, but I've bought several FLAC 'albums' from DG's website. Also a couple from Hyperion and Chandos. As long as it is lossless, has digital notes, and the physical media can't be had reasonably, I can live with FLAC downloads. I expect that someday I won't have a choice.

From Hyperion I bought half of an out-of-print CD with Milhaud music for violin duet.  It was a reasonable experience.  From DG, I got part of an "Original Masters" box of the Janacek Quartet (only was interested in one short piece out of a big set).   That was the most convoluted internet checkout process I ever say, and the negative impression has prevented me from getting anything else from their site, even though there is stuff there that I really want.

[Todd]

Huh?  They are doing it now.

Not all of them.  A good number of titles I buy don't have even MP3 available right now.  The future is clear; physical media will disappear, but not all titles will make the move to the new frontier, and I would not be surprised if not all titles are released in lossless format going forward.  Will the companies lose their serious customers?  Probably not too many.  If a new <insert famous artist here> recording were released in MP3 only, consumers won't have much of a choice if they want to hear it.

Downloads can certainly be profitable on a per-unit basis - it costs as much or more to download a zero production cost FLAC as a CD at DG's online store - but classical music is not high volume, and I don't see that changing any time soon.  Hell, overall recorded music sales have dropped over the last ten years, and continue to do so.   

Now, perhaps someone can get their hands on the entire Koch catalog and reissue some of their stuff (Gotthard Kladetsky's LvB, for instance), or some old Valois recordings - I'm waiting for a WAV/FLAC/CD version of Robert Riefling's LvB cycle.  So far, no luck.

[Gurn Blanston]

Now, perhaps someone can get their hands on the entire Koch catalog and reissue some of their stuff (Gotthard Kladetsky's LvB, for instance), or some old Valois recordings - I'm waiting for a WAV/FLAC/CD version of Robert Riefling's LvB cycle.  So far, no luck.

The Koch/Schwann catalog got sold off about 3 years ago. I don't know where ALL of it went, but BIS bought a lot of it and remastered and re-released a modest amount. I was able to get all the Manfred Huss Haydn through BIS, for example. I don't know how much they ended up with and what went to others though. I, too, would love to see a bunch more of it hit the market.

[Brian]

If delivering the content digitally was especially profitable, one would think more companies would be doing it right now.

It's my understanding that Naxos makes most or all its profit on streaming services, 320kbps MP3s, and digital and physical distribution. Given that they're going to be the last distributor standing, it's a more sustainable model than hoping everyone buys Lang Lang's new Chopin CD.

[Todd]

Given that they're going to be the last distributor standing

Until the EU Competition Commissioner and/or the Justice Department Antitrust Division get whiff of monopoly brewing, that is.

You know what every label needs is a country music division.  Perhaps there's room for new crossovers.  Joshua Bell plays Charlie Daniels!

[Brian]

Until the EU Competition Commissioner and/or the Justice Department Antitrust Division get whiff of monopoly brewing, that is.

Honest question: is this an issue with current "dead" industries? e.g. does Justice monitor monopolies in typewriter manufacture or Kodak film development?

[North Star]

Honest question: is this an issue with current "dead" industries? e.g. does Justice monitor monopolies in typewriter manufacture or Kodak film development?

I've wondered about this, too - it's not like the people will suffer and the prices go up if this happens 

[Todd]

Honest question: is this an issue with current "dead" industries? e.g. does Justice monitor monopolies in typewriter manufacture or Kodak film development?

This thread got resurrected because of the news that the EU is forcing the divestiture of some assets for the UMG acquisition of EMI, so the answer appears to be yes.

[Brian]

http://mediadecoder.blogs.nytimes.com/2013/01/07/sony-and-bmg-are-said-to-team-up-on-bid-for-emi/

Sony and BMG, onetime partners in one of the music world's biggest mergers, are teaming up again on a bid to buy — and then divide between themselves — some of the recorded music assets of EMI, according to two people with direct knowledge of the talks between the companies.

The EMI assets are being sold by the Universal Music Group, which last year took over the company for $1.9 billion but is being required by the European Union to dispose of about a third of it to preserve competition.

The EMI labels up for sale include Parlophone, with acts like Coldplay and Gorillaz, along with EMI's extensive classical catalog and other labels and subsidiaries across Europe. Universal is said to be seeking at least $650 million for the divestments, according to these people, who spoke on the condition of anonymity because the talks were private.

The auction for EMI's recorded music assets is still in its early stages. Among the parties said to be interested in bidding are the Warner Music Group; Ronald O. Perelman's company, MacAndrews & Forbes; and the team of Simon Fuller, the founder of "American Idol," and Chris Blackwell, who founded Island Records.

[Opus106]

...according to these people, who spoke on the condition of anonymity because the talks were private.

That's the second time today I've come across a statement like that (in different news items, of course).

Let's hope Sony gets creative. (Okay, they won't.) Naxos should buy the classical portion! (Okay, they won't. )