A Week of Wackiness

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This is Celia Hirschman with On the Beat for KCRW.

This week, the record industry once again proves that there's no business like show business. With monopolies running the show, things are getting very entertaining.

Take for example The Rolling Stones. This week, they announced they'd be leaving their current deal with EMI and putting all their music into Universal. At first blush, it looked like a great steal for Universal, who locked them into a long-term multi-album deal. But when you realize that the band is well into their 60's and they haven't had a big hit record in decades, that sizeable undisclosed advance Universal is paying may not look good on balance sheets. Their last album, a soundtrack to Martin Scorsese's film about them, has only sold 100,000 copies. Mick and the boys don't earn their dough from record sales -- they are the largest grossing live band in history. None of their touring dollars will be going to Universal.

And in related news, the Stones' publishing company, Abkco, just filed a lawsuit against rapper Lil' Wayne. Lil' Wayne released his own version of the Stones song, "Play with Fire" on his latest Carter 3 album. Normally, cover tunes get a compulsory nod from writers and publishers -- if it's a straight up cover tune. But "Playing with Fire" (Lil' Wayne changed the name), is wildly obscene and the publishers and band object. What it means is that Abkco, representing the interests of the Stones and their future record label Universal, are suing Lil' Wayne and his record label, Universal. Talk about incestuous relationships!

This kind of problem occurs regularly in an industry where only a handful of companies own most of the game board. The upside is that outside law firms everywhere have an opportunity to build their client base. Universal will have to hire outside counsel to represent their interests in Lil' Wayne, and counsel to represent their interest in The Rolling Stones. It doesn't get much weirder than this.

And, speaking of weird, it's looking like D-I-V-O-R-C-E for Sony BMG. The Financial Times reported earlier this month that the two giant labels who merged four years ago are now seeking legal separation. Apparently, Sony is offering almost a billion dollars to buy Bertlesmann out of the marriage. It was never a comfortable union. The companies merged in 2004, with the approval of the European Trade Commission. A European Court annulled the decision in 2006, following complaints by the European indie label coalition, IMPALA, based on the merger creating an unfair monopoly. Following a lengthy investigation, a higher court approved the merger. But IMPALA noted it might appeal again, and the case would then go right back to the European Courts for a new decision. Now Sony/BMG have thrown in the towel. Clearly the merger was not working. Yesterday, Sony BMG posted losses for their first fiscal quarter of 2008 for $49 million.

And speaking of unfair monopolies, XM and Sirius have finally gotten the green light from the FCC to merge companies. The new company, called Sirius XM, will be announcing major changes in programming in the coming months. To all the current satellite subscribers, congratulations. This sixteen-month fight was obviously worth your efforts. To the rest of the public who vehemently objected to one company producing our content in the sky, sorry. The country deserved better.

This is Celia Hirschman for On the Beat on KCRW.