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Warner Music Group

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Warner Music Group Corp.
Company typePublic (NYSE: WMG)
IndustryMusic & Entertainment
Founded1929 (as MPHC)
2003 (as WMG)
Headquarters
New York, NY, United States
Key people
Edgar Bronfman Jr., Chairman & CEO, Lyor Cohen, North American Chairman and CEO, Seymour Stein, Vice President, Kevin Liles
RevenueIncrease $3.385 Billion (USD; 2007)[2]
790,000,000 United States dollar (2023) Edit this on Wikidata
Decrease $21.0 Million (USD; 2007)
Number of employees
4,000 (as of 2008)
WebsiteWMG.com

Warner Music Group (WMG) is the third-largest business group and family of record labels in the recording industry, making it one of the "big four" record companies. The current incarnation of the company was formed in 2003 when it was spun-off by Time Warner, and as a result, Time Warner no longer retains any ownership. Warner Music Group also has a music publishing arm- Warner/Chappell Music.

History

WMG's roots in what became Time Warner date back to the founding of Warner Bros. Records as a division of the Warner Bros. movie studio in 1958, in reaction to one of its contracted actors, Tab Hunter scoring a hit for Dot Records, a division of Paramount Pictures. In 1963, Warner Bros. purchased Reprise Records, founded by Frank Sinatra three years earlier so that he could have more creative control over his recordings. Reprise was operated in conjunction with Warner Bros Records.

After Warner Bros. was sold to Seven Arts Productions in 1967 (forming Warner Bros.-Seven Arts), it purchased Atlantic Records, now WMG's oldest label. For the next two years, Atlantic and its subsidiary label Atco Records were operated separately from WBR and Reprise.

In 1969, Warner Bros.-Seven Arts was sold to the Kinney National Company. Kinney (later to be known as Warner Communications) combined the operations of all of its record labels. The following year, Kinney bought Elektra Records and its sister label Nonesuch Records, and assembled the labels into a group known as Warner-Elektra-Atlantic, also called WEA for short, or Warner Music Group. The WEA name was also used as a label outside the U.S.

In the mid-1970s, WEA expanded by purchasing Asylum Records and Sire Records. The former was merged with Elektra to form Elektra-Asylum, though the separate names would still be used as well. The latter became a sublabel of WBR.

WEA's labels also distributed a number of otherwise independent labels. For example, Warner Bros. distributed Straight Records, DiscReet Records, Bizarre Records, Bearsville Records, and Geffen Records (the latter was sold to MCA in 1990). Atlantic Records distributed Swan Song Records.

In 1989, it was announced that Warner Communications was to merge with Time Inc. to form Time Warner, a transaction that was completed in 1990.

Atlantic started two new subsidiary labels in the early 1990s: EastWest Records (which absorbed Atco Records) and Interscope Records. The former was later absorbed into Elektra, and the latter was also sold to MCA in 1995.

Looking to reduce its debt load, Time Warner -- the corporate successsor to Warner Communications -- sold the company in 2004 to a group of investors led by Edgar Bronfman Jr. for US$2.6 billion. This spinoff was completed on February 27, 2004. In the 2004 transition to independent ownership, WMG hired record industry heavyweight Lyor Cohen from Universal Music Group (the result of the merger between the PolyGram and MCA label families) to attempt to reduce cost and increase performance. Contrary to common belief, Time Warner no longer retains any ownership in WMG, though it had the option to re-acquire up to 20% of WMG for three years following the closing of the transaction.[1] WMG's current logo is the former Warner Communications logo and is used under license by its former parent who retains full ownership and control of the Warner trademark. [2]

On May 3, 2006, WMG apparently rejected a buyout offer from EMI.[3] Then WMG offered to buy EMI and it also rejected the offer. In August 2007, EMI was purchased by Terra Firma Capital Partners.[4] Talk of a possible WMG acquisition of EMI was fanned once again in 2009 after WMG executed a bond offering for $1.1 billion, which brought to light WMG’s relatively strong financial position, which was contrasted with the weakened and debt-laden state of EMI.[5]

In 2006, also acquired Rykodisc (home of the Frank Zappa catalog) and Roadrunner Records.[citation needed]

On December 27, 2007, Warner announced that it would sell digital music without Digital Rights Management through AmazonMP3, making it the third major label to do so.[6] In 2008, the New York Times reported that WMG’s Atlantic Records became the first major record label to generate more than half of its music sales in the U.S. from digital products.[7]

In 2007, Warner/Chappell sent a Cease and Desist letter to Walter Ritter, the creator of a freeware program called PearLyrics that was used to find lyrics of songs using the internet. In response to wide negative publicity, it subsequently apologized and offered to cooperate with him on the application. However, no subsequent overtures seem to have been made, and the software remains unavailable.[8]

WMG was the first major media company to form a strategic relationship with YouTube, effectively embracing a business model around user-generated content. The arrangement with YouTube required that royalties be paid based on the number of views that videos featuring music from WMG artists received. However in December 2008, negotiations between the two companies broke down, and as a result, clips on YouTube featuring WMG music recordings have had their audio removed or blocked completely and replaced with a message indicating copyright infringement.

In 2008, WMG, Universal Music, Sony BMG, EMI and the Indies (via Merlin) together with The Orchard licensed the full repertoire to the new concept of Spotify in order to fight piracy with a legal way of music streaming.[9]

Music Publishing

Warner/Chappell Music dates back to 1811 and the creation of Chappell & Company, a sheet music and instrument merchant in London. In 1929, Jack Warner, president of Warner Bros. Pictures Inc., founded Music Publishers Holding Company (MPHC) to acquire music copyrights as a means of providing inexpensive music for films and, in 1987, Warner Bros.' corporate parent, Warner Communications, acquired Chappell & Company. Among the historic compositions of which the publishing rights are controlled by WMG are the works of Cole Porter, Richard Rodgers and Lorenz Hart. Its printed music operation, Warner Bros. Publications, was sold to Alfred Publishing on June 1, 2005.

List of Warner labels

Further information: List of Warner labels

Controversy

In December 2008, negotiations broke down between WMG and Youtube's parent, Google.[10] As a result, Warner Music Group has continuously blocked or muted videos on Youtube which feature music recordings belonging to their labels or to their publishing arm, Warner/Chappell Music, citing copyright infringement. Although the majority of the blocked videos are not official content of WMG, they include WMG recordings in a minor way normally covered by Fair Use. Many of these claims to copyright violation not only affect artists who are under record labels owned or distributed by WMG, but also to artists who have songs published and controlled by Warner/Chappell, regardless of label. This makes the association between non-WMG artists and WMG much less apparent to Youtube users as music publishers, unlike record labels, generally do not brand themselves to their recordings. Muting also occurred to clips featuring people covering a song by a WMG artist or of a song controlled by Warner/Chappell. The response from Youtube users on affected videos has been overwhelmingly negative towards WMG.[11] Notably, Seattle band Death Cab for Cutie was affected when music videos streamed on their website from their Atlantic Records albums Plans and Narrow Stairs were removed by WMG.[12]

With the rise of music video games, CEO Edgar Bronfman, Jr. has complained that "The amount being paid to the music industry, even though [these] games are entirely dependent on the content we own and control, is far too small," and he concluded that "we will not license to those games."[13] A Wired magazine article claimed that Rock Band publisher MTV Games has boycotted WMG as a result, but both parties have claimed this to be untrue. WMG has not made any new content deals with MTV Games since August 2008.[14] This had led to a backlash against WMG by fans of these games.

See also

References

  1. ^ http://investors.wmg.com/phoenix.zhtml?c=182480&p=irol-newsArticle&ID=708718&highlight=
  2. ^ When Time Warner sold its publishing division to Hachette Livre in 2006, the following legend appeared on its newly published books until Warner Books was renamed Grand Central Publishing: “Warner Books and the W logo are trademarks of Time Warner Inc. or an affiliated company. Used under license by Hachette Book Group USA, which is not affiliated with Time Warner Inc.” However, such legal fineprint notice has ever appeared on any Warner Music product since it was sold by Time Warner.
  3. ^ "Warner Music Group Statement Regarding EMI Proposal". WMG. 3 May 2006. Retrieved 20 March 2009.
  4. ^ "Profile: British music giant EMI". BBC News. 15 January 2008. Retrieved 20 March 2009.
  5. ^ http://www.billboard.biz/bbbiz/search/article_display.jsp?vnu_content_id=1003975772
  6. ^ Leeds, Jeff (December 28, 2007). "Amazon to Sell Warner Music Minus Copy Protection". The New York Times. Retrieved 28 December 2007.
  7. ^ http://www.nytimes.com/2008/11/26/business/media/26music.html
  8. ^ "What ever happened to pearLyrics?". December 12, 2006. Retrieved 9 August 2008.
  9. ^ PR Newswire Europe Ltd.
  10. ^ [1]
  11. ^ http://www.hollywoodtoday.net/2008/12/21/warner-music-group-pulls-the-plug-on-youtube/
  12. ^ "Death Cab Caught in Warner/YouTube Fight". Pitchfork Media. 28 January 2009. Retrieved 20 March 2009.
  13. ^ "Why the Music Industry Hates Guitar Hero". February 23, 2009. Retrieved 4 February 2009.
  14. ^ "MTV Games, Warner: No 'Rock Band' Boycott Of WMG Artists". March 2, 2009. Retrieved 2 March 2009.
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