Now sources say that Warner is in serious discussions with Sony Music for a distribution deal, leaving the former major label as little more than a big production company. Even though Warner has a huge hit with Michael Bublé’s Christmas album, that’s really it. Sources say that the upcoming Warner release schedule is as barren as the Mojave Desert and with nothing in the pipeline and only one big holiday seller, the company will eventually be forced to make a lot of cuts. In fact, according to another source, “They’ll [WMG] have to just keep cutting and cutting until finally they just won’t be able to do the job any longer”. Right now it looks as though the company may have a very hard time being competitive.
Sony, of course, will do anything they can to pump themselves up. You just know that the Sony brass is going crazy over the fact that Lucian Grainge has suddenly come out of nowhere to become the undisputed King of the World in what is now a two-horse race. Sony execs may think that cutting a distribution deal with Warner may give them bragging rights to the extra market share when in reality it’s nothing more than scrapping around for crumbs. Every little bit helps, I suppose.
We can discuss the pros and cons of a Sony/WMG distribution deal and Warner’s future after having doubled their losses last quarter, but to what end? The more important question is “How will all of this effect Lyor’s bonus?”