There you have it. A hard statistic as to how one of the biggest record labels in the world is doing in the digital age of music. The answer: not very well at all. To expand upon the woes of WMG, securities analyst SmarTrend has pointed out that WMG is now $1.9 billion in debt and has the worst debt-earnings ratio in the entire entertainment industry.The fact that one of the big labels is suffering this badly is, in and of itself, a glaring indicator to the fact that the old ways are coming to an end.
If you need another, that same report mentioned that Wall Street analysts are expecting to hear any moment now that Warner Bros. is selling off WMG. And why wouldn’t they? $1.9 billion in debt? Almost a decade of bleeding money? We’re talking about the same company that couldn’t wait to sell World Championship Wrestling for losing a tenth of that total inside of less than two years!
And to add insult to injury, Amazon.com sent out a letter to all of the labels regarding licensing for Amazon’s recent launch of Cloud Drive and Cloud Player. The letter...well, Digital Music News’s headline for the story sums it up as: “Dear Labels, Go F**k Yourself. Love, Amazon.”
The letter, in part, read:
There has been a lot of discussion as to whether Cloud Drive and Cloud Player require licenses from content owners. Here's why they do not:
(1) Cloud Drive is a general online storage service for all digital files, not unlike Google Docs, Microsoft SkyDrive and any number of other internet file backup services. It's your external hard-drive in the cloud. It requires a license from content owners no more than those other internet file back-up services do and no more than makers of external hard drives for PCs do.
(2) Cloud Player is a media management and playback application not unlike Windows Media Player and any number of other media management applications that let customers manage and play their music. It requires a license from content owners no more than those applications do.