The ultimate issue for Rubin is, what strategy will he and Barnett devise to make Columbia a viable operation, as CD sales continue their precipitous decline?


The Rick Rubin Era Begins Emphatically, iTunes Keeps Getting Bigger, EMI Serves Itself Up to Private Equity, Azoff Pulls Another Slick Move
Columbia is getting an extreme makeover at the dawn of the Rick Rubin era, as the marketshare leader attempts to reinvent itself in order to maintain its competitive edge in the approaching post-CD age. Just days ago, Rubin and Steve Barnett put a key piece of the puzzle in place, bringing in Mark DiDia, who was Rubin’s trusted right-hand man at American Recordings before moving over to Capitol. The highly regarded veteran will run the label’s day-to-day operations, with all departments other than A&R reporting to him, working without a title, in keeping with Columbia’s new policy. With DiDia in place, look for Barnett to attend to big-picture issues such as maintaining his strong relationships with the label’s stable of multi-platinum acts, as everyone at the label jointly reports to him and Rubin. EVP Bruce Tyler and SVP Marketing Barbara Jones are out, as Columbia’s new guard further distances itself from the former regime, suggesting that Rubin is wasting no time making his presence felt beyond the creative area, including the overhauling of A&R, which is high on his list of initial priorities, according to label insiders... The ultimate issue for Rubin is, of course, what strategy will he and Barnett devise to make Columbia a viable operation, as CD sales continue their precipitous decline?... As Doug Morris and Jimmy Iovine continue to roll the dice with the Justin Timberlake label deal, their recent bet on Octone Records is already paying off with the powerhouse first week of Maroon 5. But that isn’t all that’s noteworthy about the band’s impressive bow. As year-to-date sales continue to lag by more than 15%, and during an era characterized by the fickleness of fans, Maroon 5’s 427k debut follows right on the heels of Linkin Park’s 625k for a combined 1.05 million in first-week sales. The fact that neither has had a record out in more than four years suggests that fan loyalty remains a key factor, even in the P2P age. Additionally, more than 100k of the Maroon 5 tally came from the iTunes Music Store—outselling Best Buy, Target and Wal-Mart, and breaking the online retail record of 80k set by Linkin Park just a week earlier… Those 180k Linkin Park and Maroon 5 albums sold by iTunes in consecutive weeks represent nearly one-fifth of those two albums’ total first-week sales, as Steve Jobs gains even more leverage at a crucial point in the renegotiations with the major labels. Apple’s ever-growing percentage of an ever-shrinking market has wonderers wondering whether the majors would dare to follow through with their rumored threats to remove their product from iTunes, when the labels clearly can’t afford to do without the only online retailer that matters… It appears that EMI has chosen Terra Firma as its savior, at least in the short term, barring a significantly greater bid from another private equity concern. Most believe that Terra Firma gunslinger Guy Hands secured the deal by assuring EMI management that he has no intention of selling off the company in pieces, which would not only keep EMI intact (as other potential suitors appeared to be eager to do) and under the Union Jack, but also assure the continued employment of company executives. That said, Terra Firma is in the business of buying low and selling high, like every other private equity entity, causing theorists to theorize just what Hands has in mind for his ultimate play. Could Warner Music be part of his end game, assuming the EC approves Sony BMG?… Irving Azoff, who is unquestionably one of the savviest dealmakers in all of showbiz, pulled off another coup two weeks ago by deftly positioning his management company between a pair of potential buyers in Barry Diller’s IAC, the parent company of Ticketmaster, and Live Nation. Azoff was clearly well aware of the relationship between the two companies, which generate annual revenues of tens of millions of dollars in ticket service charges. It’s believed that Live Nation had a plan in place to do its own ticketing, thus increasing its take considerably; and if the concert power had nabbed Azoff’s company, it would have had a better chance of pulling off the plan because of Azoff’s roster of superstar touring acts. Some believe Live Nation was on the verge of closing the deal with Azoff, only to be outflanked in the eleventh hour by Diller, who bought out T.H. Lee and Bain to secure a majority stake in the company. So Live Nation was thwarted, Ticketmaster kept its revenue stream open and Azoff once again came off looking like the smartest guy in the room… Names in the Rumor Mill: Don Passman, Michael Rapino, Jim Caparro, Gary Stiffelman, Marty Bandier and Jim Fifield.
Dynamic duos (12/3a)
She'd make one helluva CEO. (12/3a)
Ch-chingle bells (12/3a)
Adele is money. (12/3a)
Reshuffling the deck (12/3a)

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