Warner Music Group’s Bright Future
If I were Warner Music Group BMOC Edgar Bronfman and I had a band like World Leader Pretend waiting in the wings, I just might be a little more apt to stand firm on Linkin Park’s financial demands, too. (He’s got Metallica as well — the other world’s biggest rock band.)
I saw the New Orleans four-piece recently at a New York City club. My interest had been piqued by early demos and Rubble-Rousing Misspent Bouts, a promising four-song EP and I expected a good show. And I got a very, very good show. Singer Keith Ferguson, more or less the focal point of the band, performs with a wunderkind’s ease that combines talent and honesty in a way New York audiences don’t get to see very often. And their songs…such a rare flair for memorable songwriting. Their ability to match a simple piano riff with an incisive lyrical hook has few peers.
From a purely business point of view, I’d say WMG has an artist that can be nurtured into a very successful and long career. World Leader Pretend has the ability to attract fans from various walks of life — they can reach the mainstream Wal-Mart shoppers, the more refined and “adult” tastes of shoppers at chains such as Borders and Barnes & Noble, the more progressive shoppers of Tower and Virgin chains, and even the hard-to-impress early adopters at indie retail. Radio should embrace the band’s music, and there’s a lot of opportunity to license the band’s music (i.e. the new radio).
The music business is always a guessing game. Nobody knows exactly how listeners will react and how hard a band will work toward stardom. Nothing’s a sure thing, but World Leader Pretend takes a lot of the guesswork out of it.
Warner Music’s Income Statement: Lossy
Speaking of Warner Music Group, “>it announced its second quarter earnings yesterday — or lack of earnings, rather. As always with corporate earnings releases, a positive spin was applied and certain areas received more attention than others. Revenue growth got top billing; it was up 4.4% to $767 million. Digital growth was given a spotlight; digital revenue grew to $35 million from $25 million last quarter. That’s only 4.6% of total revenue but the growth in one quarter was astounding: 40%. That $10 million increase in digital sales is far better than the $5 million increase in the music publishing division.
These are top line numbers, which of course do not indicate what divisions represent the greatest share of expenses. One big expense that’s on the (unaudited) income statement is a $35 million interest expense — an expense so great that it wiped out the entire $27 million operating income. That will be lower in the future after the company’s IPO proceeds pay down its debt.
Rolling Stone’s Plan A
Yesterday the New York Times’ business section had a piece on Rolling Stone’s new editor (registration required) and its shift toward what founder Jann Wenner calls its “core values.”
“Core values?” Easy translation. Anybody who has read a few layoff-time press releases or has been employed by a company in dire financial straits knows that a company always goes back to Plan A (“core values”) only when Plan B has failed.
Plan B was an attempt to lure young male readers who can’t be bothered with article subjects more weighty than cleavage and sports. One funny sentence: “(General manager of Wenner Media Kent) Brownridge said that Rolling Stone ’s rivals, particularly Blender , were losing ground, although the circulations of Maxim and FHM were still significantly higher than Rolling Stone ’s.”
Sounds like a problem to me. Rolling Stone shouldn’t have to compete against ADD-fostering magazines like Maxim and FHM . It’s always been smarter than those rags, no matter how much they tried to dumb in down in recent years. C’mon, magazines, let’s get the word count up. Leave brevity to the blogs. Let’s see if you can print an article over 400 words for a change.
The Killers Meet A Controversy
It hasn’t been mentioned by the American media — as far as I’ve seen — but The Killers’ song “Where Is She?” is still a controversy in the UK. The song was written about a 14-year-old Scottish girl who was murdered by her boyfriend. Singer Brandon Flowers has apologized to the family of the murdered teenager, reports say. “I came across kind of badly…I’d hate to cause offense or further hurt because of it,” he said in a statement to the Sunday Herald . It’s been reported that the song will appear on the band’s follow-up to their hit debut, Hot Fuss .
Glenn works in the music industry in New York City. He writes about the industry and music in general at his blog, Coolfer.