Filed under: Rumors, Products and services, Starbucks (SBUX)
Rumors now frequently circulate about large music acts leaving their long-term record labels. Last spring Paul McCartney defected from EMI after 45 years to join Starbucks‘ (NASDAQ: SBUX) Hear Music label. Madonna left Warner Music Group (NYSE: WMG) last fall. Other artists have followed suit, while some who are still signed have started speaking out against their labels. In this most current case, Irish rock band U2 is rumored to be leaving Vivendi’s Universal Music Group to sign up with Live Nation (NYSE: LYV).
Even though I wouldn’t blame the artists for leaving their labels, as long as it is in their ideal interests and increases fans accessibility to the music, it is certainly going to affect the record industry long-term if the defections continue. At the same time, many critics and bloggers would point out that the acts switching labels are already past their prime — their big hits and money-making lies with albums that came while they were at the labels. That might be true for acts like McCartney, U2, and Madonna, but the best example of this — Radiohead — is hardly through making the large hits they enjoyed while with a major record label.
Radiohead, if you remember, is that “little” band that caused such a stir last October when it decided to release its new album, In Rainbows, to fans in a pay-what-you-want model. When the album was released on CD earlier this year it hit #1 in numerous charts around the world.
Obviously, none of these acts would have achieved such massive successes without major record labels, and it is impossible to state that the future of the record industry is without music labels. These rumors and the actual occurrences indicate that companies like Live Nation and Starbucks, while not necessarily oriented primarily for music distribution, are making better gains than the labels. This won’t be ignored for long so the rumors might cease, and only indicates the movement music acts are making for the time being.
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