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Universal Music Takes Matters into its Own Hands

Posted By Barry Ritholtz On December 1, 2004 @ 10:19 am In Finance,Media,Music | Comments Disabled



It seems that Universal Music Group has finally gotten tired of the declining number of outlets for their "product." From Clearchannel’s consolidation of FM radio to the shift of MTV away from, well, Music Television, distribution channels for Universal’s music — outside of the dreaded P2P — are becoming fewer and further between.

They have long been complaining that cable channels no longer play their latest music videos. So the music behemoth did what all the labels should have done when they realized their channels were narrowing (1996 forward):  They are creating their own satellite TV music channel.

Here’s an excerpt from today’s NYT [1]:

"Universal Music, a unit of Vivendi, is in talks to put [an MTV like] channel on Dish Network, owned by EchoStar Communications, executives said. Universal is aiming to have the channel, which would feature videos from its roster of acts, on screens in the first or second quarter of next year, they added.

Universal has been developing the idea with Andy Schuon, who resigned in January as the head of programming for the Infinity radio unit of Viacom Inc. and who once worked as a top programmer at Viacom’s MTV network, the executives said.

Entrepreneurs inside and outside the music business have been exploring whether viewers would embrace a new outlet in a music video market that MTV has dominated for more than two decades. Cablevision’s Fuse channel, introduced early last year, quickly earned a following but lacks MTV’s wide distribution. Fuse is also carried on the Dish Network, which says it has more than 10 million subscribers.

Record executives often complain about how MTV has discarded its original focus on music. MTV executives say shows like "Punk’d" attract a bigger audience than a basic rotation of music videos, and they note that a spinoff channel, MTV2, emphasizes lesser-known acts."

Interestingly, the labels tried this same idea before (1994), but it was nixed "amid a Justice Department antitrust inquiry." Considering that this was BEFORE any radio consolidation began, and while MTV was still playing music videos. Given the industry’s long history of anti-competitive behavior, its not surprising that the DoJ looked askance at the idea.

Now that competition in the space has faded, there should be no objection to a new entrant into musical programming / broadcasting; Consider the film/TV distribution model established by Disney/ABC, Universal Pictures/NBC, and Paramount Pictures/CBS. There shouldn’t be an issue with Unoversal estabishing a similar TV channel outlet for promoting their music.

Its amazing that 10 years later, they are finally getting around to this again; I have yet to hear of anyone mentioning a radio network — an "Air America [2]" for new music type thing. It just goes to show you how little the industry actually understands about their consumers, products and distribution. Quite astounding, when you think about it . . .


Universal Music Is in Talks to Create Satellite TV Channel [3]
New York Times, December 1, 2004
http://www.nytimes.com/2004/12/01/business/media/01video.html [1]

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URL to article: http://www.ritholtz.com/blog/2004/12/universal-music-takes-matters-into-its-own-hands/

URLs in this post:

[1] NYT: http://www.nytimes.com/2004/12/01/business/media/01video.html

[2] Air America: http://www.airamericaradio.com/

[3] Universal Music Is in Talks to Create Satellite TV Channel: http://www.nytimes.com/2004/12/01/business/media/01video.html?ex=1259643600&en=93b04e9642386ae0&ei=5090&partner=rssuserland

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