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Posted on 01/10/2003 6:41:37 AM PST by kellynla
Thomas D. Mottola, one of the most recognizable executives in the music business, abruptly resigned Thursday as head of Sony Music Entertainment, instantly becoming a symbol of the recording industry's inability to reverse plunging profits and surging piracy.
(Excerpt) Read more at latimes.com ...
Calling Mottola "a symbol of the recording industry's inability to reverse plunging profits and surging piracy" is ludicrous. The faltering industry suffers from plain old bad music! They are completely overlooking the baby boomers' musical tastes. Hopefully, there will be many more Mottolas fired in the near future.
A huge database of individual songs, new and old, searchable by artist, year, and song title (maybe other ways, too, that I can't think of) and easily downloadable onto CDs for a per-song charge on a person's credit card is a dynamite idea. If they had been on the ball, the music companies would already have either gotten together on one huge database format or each done their own with the music each controls. I wonder if they have suffered enough declines in profit so that they will start thinking into the future, now. Maybe the new Sony exec will do so.
I have had that happen so many times. Who hasn't?
About the company you cite, I am afraid I don't know anything about its circumstances.
Any company that would put up a huge block of music for fee-downloading would have to have legal title to all the songs, make both finding the songs and downloading as easy as possible to do, and set the right price (couldn't be too high because pirating is "free"). I think it would take a consortium of the big music companies or each big music company on its own to put its entire collection out for a per-song fee.
I feel that if they don't do something like this, so that people can make their own CDs (like they are doing already with pirating) then the music companies are just going to continue to bleed money.
The money is in the "stars".
Joni Mitchel had it absolutely right when she called it "the star makin' machinery". That is what it is!
If you really return the control of the music selection and purchase to the consumer, without controling the release, the play list, the hype, etc., etc. you lose the real money.
Would anyone buy ANY Brittany Spears "music" without the packaging and the hype?
The music industry simply can't allow the consumers to package their own music. There's not enough money in it!
BTW, my older daughter was once very fond of a group called Nine Inch Nails, I think, or something like that. It seems their stuff was pretty nasty, and I never realized. My daughter has turned out just fine, is happily married, working and in grad school and never was misbehaving at any time she lived at home, either. I never thought to listen to any of the music because she was always a trustworthy girl and a good student. Who knew?
In their own way, they embargo a lot of music, and control the development and marketing of certain musical styles.
I believe that if they were to allow unfettered access to the music libraries, then musical tastes would develop somewhat less impacted by their promotional flash.
This would likely yield more "stars" fewer "super stars" and an overall reduction in the control over the market that they enjoy and a reduction in their income.
Don't forget, if a music talent doesn't have a major label behind him or her, that talent is going to have a tough time getting much farther than playing every night in some bars.
Broad, internet access to music will remove the big label's hands from the controls.
At least, I think it will.
Pop Music's Diva Maker Ends
His Reign as Sony Music CEO
By JENNIFER ORDONEZ
Staff Reporter of THE WALL STREET JOURNAL
Against a backdrop of plummeting music sales, Thomas D. Mottola, the music mogul credited with shepherding hit makers like Mariah Carey and Jennifer Lopez to superstardom, is stepping down as chairman and chief executive of Sony Corp.'s Sony Music Entertainment to start his own label.
The departure of Mr. Mottola, head of Sony's music operations since 1998 and one of the most powerful executives in the music business, has been rumored for months, although the timing took the industry by surprise.
The move comes as profits have sagged at Sony Music and music-industry sales have fallen sharply for the second year in a row. People familiar with the matter say tensions between Mr. Mottola and top management at the Tokyo-based parent company have increased.
Mr. Mottola denied that his relations with Sony Corp.'s top management have been strained. "My relationship with Tokyo has never been better," he said, adding that he had been thinking about leaving for about a year. He said the move was "about me continuing to be in control of my own destiny." With the music industry "in a time of crisis," he added, the opportunities to be successful with a new model "are going to be better than ever."
Sony's world-wide sales and its share of the U.S. music market have held steady over the past year. But its operating income in fiscal 2002 fell 1.6%, and Sony actually lost money for the first two quarters of the 2003 fiscal year. Sony has blamed the declines on digital swapping of songs on the Internet, a major problem for all five major music companies.
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But Sony also has had difficulty lining up with the public's tastes recently. In 2002, it had only one top 10 album in the U.S., according to Nielsen Soundscan: "Home," from the Dixie Chicks, which went on to sell nearly 3.7 million copies in the U.S. after Sony settled a long-running lawsuit with the group last summer. The company did have strong-selling albums by Bruce Springsteen and Latin crossover pop artist Shakira, one of Mr. Mottola's recent success stories.
Hoping to fight the sales malaise, Mr. Mottola recently had been touting plans to find new potential revenue sources for Sony Music, such as advertising deals involving artists on its labels.
There have been a few such arrangements -- a marketing deal involving Sony artist Celine Dion and Chrysler automobiles, for example -- but the plan hasn't yet come into full view. Mr. Mottola had also talked about Sony Music having a role in managing some artists' careers.
Mr. Mottola's new company is expected to be a partnership with Sony Corp. Mr. Mottola described it as a "total entertainment company" that would include music, marketing, online ventures and management. A person familiar with the matter said Mr. Mottola expects to continue his business and artistic relationships with many top Sony acts he helped develop, including Ms. Lopez, Shakira and Ms. Dion.
The tough-talking Mr. Mottola has long been one of the music industry's most visible players. He joined Sony in 1988 and became chief operating officer of the music group in 1993. While at Sony, he married two pop stars, Mariah Carey, who recorded for Sony at the time, and later, Latin singer Thalia. Last year, Michael Jackson, once one of the company's top artists, publicly called Mr. Mottola "devilish" and launched a series of bizarre public protests against him.
At Sony, Mr. Mottola has sought to operate the music group as autonomously as possible, relying on a close-knit group of executives including Executive Vice President Michele Anthony, who handled much of the business negotiations at the music group, and Don Ienner, chief of Columbia Records. Mr. Mottola, who began his career as a music manager dealing with acts like Hall and Oates, was strongest at shepherding talent, going so far as to select the right producer for a particular song, while many business details were handled by lieutenants including Ms. Anthony.
Mr. Mottola also is known for having one of the industry's most lucrative contracts: People familiar with the matter say he makes more than $7 million annually with incentives that can nearly triple that in a good year.
Mr. Mottola's contract was set to expire in 2004, and he has been in discussions with Sony for several months about his future. But his independence, which Sony's corporate bosses tolerated during more flush times, has increasingly been called into question recently, as the Tokyo brass sought more oversight of the music group, according to people familiar with the matter.
Sony didn't immediately name a successor, but it is expected to do so soon. A person familiar with the matter said the new music chief would come from outside the company. Sony said that Mr. Mottola's successor, who will be named in the next few days, would have a strong business background and financial experience. The knowledgeable person said the remainder of Sony's top music management is expected to remain intact for the immediate future.
Whoever it is, Mr. Mottola's successor will have their work cut out for them. Analysts say the music industry will remain a difficult business for the next few years, and they don't expect things to improve for Sony or the industry at large anytime soon. "There's going to be no topline growth and retail is going to be in worse shape," said Michael Nathanson, at Sanford C. Bernstein & Co.
-- Martin Peers contributed to this article.
Write to Jennifer Ordonez at jennifer.ordonez@wsj.com
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