On Thursday, the Warner Music Group announced that it has created a brand new leadership position, a Chief Operating Officer (COO) chair made specifically for Rob Wiesenthal, the deal broker guru who will be leaving Sony to join Warner.
Wiesenthal is a known master of strategic expansion, which most likely means acquisitions left and right for Warner. While at Sony, Wiesenthal helped Sony buy important assets in the music industry to give the electronics company a foothold in a new form of media. Warner may not be branching out quite so much, but it is certainly interested in expanding its music content rights and reclaiming some of its bygone profits.
Hard hit by falling profits in both 2011 and 2012, the new COO appointment may give Warner the much-needed boost it has been waiting for. The growth of digital music (plus pirating) has been troubling the company for years now. As profit margins thin, Warner has been forced to increase the rights it holds to music content to make up the difference.
“I’m thrilled to join Warner Music at this exciting time for both the company and the industry. Throughout my career I’ve worked closely with media and entertainment executives in helping them identify new ways to enhance their business and to find opportunities for growth, including developing and executing innovative business models,” said Wiesenthal in the Warner Music Group news release. “Atlantic Records, Warner Bros. Records and Warner/Chappell are among the most respected brands in music, with exceptional recording artists, songwriters and employees.”
The first enhancement Wiesenthal is expected to make is the acquisition of content rights from EMI Music, a European music business that was recently sold to the Universal Music Group, but only on the condition that Universal sells a third of EMI’s assets. Whoever makes the winning bid for these assets will have control of several key European music labels, plus the rights to release EMI music on a global level. Warner needs these assets, and badly, to stay competitive. Bringing in Wiesenthal is a direct warning to rivals like Sony and BMG that the company intends to play hardball with the EMI sale and similar acquisitions on an international level.
Currently, the music publishing world is showing a flurry of acquisitions as companies buy, sell, and split in an effort to make money and secure rights to the most valuable content. In this digital age it comes as no surprise that rights to use music in any form have become so important. It is also clear that the future of such major label holders is international. Holding Asylum, Atlantic, and other American labels is no longer enough to ensure success. Now content – and legal content ownership – is becoming a big deal (literally) in Europe, Asia, Latin America, and the rest of the globe.
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