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Record company upheaval

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February 10, 1999 - The following article is taken from the English Q Magazine, February 1999 issue. It details some of the problems surrounding the music world in general and Seagram, owner of a.o. MCA records in particular. I do not know whether any of the problems signalled in the article have any impact on Kim's new album, but nonetheless I felt it interesting enough to include here.

Universal has started the greatest restructuring in the history of the entire music industry. According to industry sources, the Universal Music Group, which owns MCA, is laying off close to 500 employees in the US and releases about 250 artists from their contracts! As far as I know, Kim has not been affected by this restructure, but then again, I haven't heard from anyone who would know this. More news when I hear about it!

The biggest record industry upheaval in the world... ever!

Labels to be axed! Bands to be dropped! Staff to be sacked!

It is thought that the $11 billion merger of PolyGram Records and its associated companies Island and Mercury into the Seagram group (which also includes the record labels Universal and MCA) will be very bad news for artists. It's suggested that unprofitable bands will be dropped and staff may be cut by up to 3,000.
In the UK, staff at the labels received a letter on December 11 which revealed there will be "job losses" estimated at 80, although insiders believe this is a conservative figure. The turmoil within the group created by Seagram CEO Edgar Bronfman Jr, who once wrote a Cher B-side, has already undermined the companies' A&R departments' effectiveness for most of 1998.

Band managers complain that PolyGram and MCA/Universal have been afraid to commit to new record deals since news of the planned merger emerged early 1998. Other managers have pulled out of signing contracts with the labels, with one claiming, "no manager would, would they? There's too much uncertainty about what's going to happen at Mercury, Polydor, London, Island and Universal. You could sign with people that just won't be there next year."

Although the record companies are tight-lipped about which bands are going to be axed, any PolyGram/Universal artist who is currently in debt to their record company is at risk. Seagram have pledged to cut $300m off the annual operating costs of PolyGram and Universal, primarily through slimming down their rosters and losing staff.

At Polydor where Shed Seven were recently dropped, acts such as Audioweb and Silver Sun will be concerned about the changes because they've both recently released unsuccessful albums. Lodger and Carrie are in danger at Island while the recent failure of high-profile artists Alisha's Attic and Dina Carroll places them at risk.

The merger will give the new conglomerate 24 percent of the global music market at a time of severe downturn in record sales after the buoyant start to the 90's, and when Internet distribution threatens record companies, marketing departments and record stores alike.