Column from April 3rd, 2000 issue
The internet music revolution would appear to be off for the moment as CD Now's shares are in freefall! Last week their shares dropped like 24% in a day and already the group's accountants are beginning to cast doubts on whether they can stay in business. To give you an idea of how much the stock market was lost the internet music bug, CD Now's shares are currently about $3.75 compared with a high last year of $23.25. CD Now had already openly acknowledged that it only had enough cash to stay in business until September, but even this might now be optimistic. Merchant bank Allen and Co has already been hired to try and find a buyer for a group, but hiring expensive suits when you pockets are empty doesn't sound like a great idea! The only good think it brings to mind though is a bunch of stock analysts getting ready to hurl themselves out of high-rise windows!
Now I wouldn't like to appear to be someone that sees reds under the bed at every turn, but couldn't it just be that Columbia House's brief flirtation with CD Now could have part of a mission to either take it over, or destabilize it? Think about it...., the major labels are control freaks: what better way to control their supposed next cash cow that to help find ways to put the independent out of business. Then they can fulfill their "big brother" ambitions and collect all that ignorant venture capital cash in a swag bag!
Another bit of activity at the business end of the music industry that not many have noticed this past week, is that Sanctuary (the entertainment company owned by, believe it or not, Iron Maiden) has paid £46 million to take over the Castle Music label and publisher. Sanctuary expects the deal to double its profitability which stood at £3.7 million last year before interest, tax and depreciation. The seller was the Rutland Trust which bought the then bankrupt Castle Music in 1998 for £18 million - a healthy little profit for a couple of years work! Castle brings a lot to the table with boring (but big) bands like Black Sabbath, Motorhead and Uriah Heep, but also some wider names like George Melly, Eric Clapton and The Kinks.
So how's this significant? Well, I believe we're beginning to see a trend where a new generation of weighty, powerful labels are going to be actually controlled by musicians - not accountants in wing-tip shoes or share price manipulators with a get rich quick scheme. That's what the music industry needs, people that understand how to do things for music's sake above everything else, maybe then we'll come out of a period which could easily equate to "The Dark Ages" in terms of what has happened to quality music of any kind!