EMI Music has just purchased Digital Stores Limited, a company which provides online stores for artists including The Beatles, Queen & Oasis.
The acquisition is a logical one for EMI, which is in need of revenue streams outside of physical and online music sales. Although the business has been improving since the 2007 purchase by private equity firm Terra Firma, they still lost more than 600 million euros last year.
It also dovetails nicely with the recent trend of labels signing artists to 360 deals. These deals give the label a cut of everything from merchandise to tour revenue, and are becoming an increasingly important part of the modern music business.
Owning a company like Digital Stores also has a lot of potential for selling services to artists not otherwise affilliated with EMI. Both artists on other major labels and those who wouldn’t be signing with any major become potential revenue sources.
If they manage it well, this could be a key part of EMI’s transformation from a traditional label to an all around music marketing and artist services company. Of course any of the major labels could have done that already.
The stumbling block has never been capability. What they’ve lacked has been the will to change. As long as executives are fixated on preserving a dead business model that will remain a problem.
This purchase seems like a good move, but the follow through will determine just how successful it is.
Result for: music market
According to sources close to the talks, it appears the U.S. Justice Department has been looking into whether Apple “unfairly dominates” the digital music market with its popular iTunes store.
The sources say the Justice Department has been contacting music labels and other digital music providers, asking broad questions about the nature of the market in general, and Apple’s role in it.
The new inquiries may have been stemmed by accusations in March that Apple was using its giant market share lead to prevent rival Amazon MP3 from debuting new songs exclusively before they hit iTunes a day or two later.
The iTunes store currently has about 70 percent market share, with Amazon trailing at around 9 percent.
Global music sales have fallen from $26.5 billion at the start of the decade to just $17 billion last year, even as digital music sales have exploded.
Result for: music market
According to sources close to the talks, it appears the U.S. Justice Department has been looking into whether Apple “unfairly dominates” the digital music market with its popular iTunes store.
The sources say the Justice Department has been contacting music labels and other digital music providers, asking broad questions about the nature of the market in general, and Apple’s role in it.
The new inquiries may have been stemmed by accusations in March that Apple was using its giant market share lead to prevent rival Amazon MP3 from debuting new songs exclusively before they hit iTunes a day or two later.
The iTunes store currently has about 70 percent market share, with Amazon trailing at around 9 percent.
Global music sales have fallen from $26.5 billion at the start of the decade to just $17 billion last year, even as digital music sales have exploded.
