| Warner Music To Be Sold To Bronfman’s Investment Group – Will DVD-Audio Lose Its Biggest Supporter? |
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| Home Theater News Industry-Trade News | |
| Written by Jerry Del Colliano | |
| Monday, 24 November 2003 | |
 Reports
today say TimeWarner will rid itself of the their vast music operations
to an investment group lead by former Seagram’s CEO, Edgar Bronfman for
2.6 billion (U.S.) dollars. The Bronfman investment group beat out a
bid from EMI (currently the 3rd largest music company) and comes as
Sony Music and BMG have just entered into a musical merger. This deal has been predicted for weeks and rids TimeWarner of an unprofitable asset which should help them show a short to mid-term profit – a move designed to please Wall Street. Some sources online say EMI is now a takeover target but no possible suitors were mentioned. Plans for what Bronfman and his investment team intend to do with WEA have not been made public but with a rich back catalog of artists and many viable current artists, WEA could return to profitability.  In
terms of the on-going audio format war between SACD and DVD-Audio, the
sale of WEA is a potentially huge move. Warner Brothers (WEA) has been
the biggest driving force behind the DVD-Audio format however nothing
has been said about whether or not the new group will still carry the
torch for the format. Sources inside of WEA did not return calls asking
for comment by the time of publishing. Consumer electronics pundits say
WEA will remain dedicated to DVD-Audio to keep Sony (and Philips) from
another windfall of royalties that could come from commercial success
of a media that would replace the CD. People close to the transaction are extraordinarily tight lipped about the details of the deal. The reality may be that WEA’s problems as a record company might be far greater than the format war and they may not have a plan other than the current release schedule for DVD-Audio. In terms of overall profitability, the new WEA might be well suited figuring out how to get more out of their underperforming roster of artists (Metallica comes to mind) as well as not losing big name artists to free agency (insert Van Halen here). Another factor in the new WEA’s support of DVD-Audio might be if BMG defects from its mild support of DVD-Audio to SACD now that they are in bed with Sony Music. Another possibility as a stipulation of the deal could be that the new WEA would have to continue their support of the DVD-Audio format as a term of the acquisition. At this point, those waiting to see which format will replace the CD will have to wait and see what happens next. Like this article? Bookmark and share with any of the sites below.        |
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