Record Companies Squeeze Blood From Stones They Already Own

By now even your grandparents know that a guy selling pencils in a tin cup is going to have better luck moving units than a major label selling CDs these days. So the big boys–including Universal, Warner, EMI, and others–have perhaps inevitably begun hoovering up management and promotional properties, finding new ways to shake loose change from the pockets of the artists they’ve already groomed. Hoping to shovel money at a potentially good idea for a change, many have made substantial investments:

Warner Music said it had invested around $110 million to increase its stake in artist management company Front Line Management, whose clients include Jimmy Buffet, Neil Diamond and Christina Aguilera.

“While the overall music business, including management, touring, sponsorship, merchandising …, is growing, the recording business at present is not,” Bronfman said.

EMI has invested almost as much in a British management firm, and Warner recently hooked up with rap management powerhouse Violator for merchandising deals. Still, as analysts have pointed out, it’s hard to imagine anyone but the most naive or desperate thinking that a major label has its best business interests at heart, allowing it to have even partial control of management decisions regarding non-CD revenue in an era where everything other than recorded music is where you make your rent money. Meanwhile journalists and promoters can look forward to even bigger headaches when dealing with major label artists’ always approachable publicists and managers.

Music Companies Seek New Money In Old Partners [Yahoo via Reuters]