Five big record companies (Sony, BMG, Warner Music Group and EMI) are negotiating to work together in a new venture for manufacturing CDs. This according to the Wall Street Journal.
The companies need to cut back on costs because their sales are going down. If they work together and make their own CD factory, it will save costs.
Spurred in part by the failure of recent merger proposals in the music industry, as well as deteriorating market conditions, at least four of the five big companies have had talks about several different possible combinations, the sources say, according to the report. |
The newspaper said the joint ventures would take over CD manufacturing and some of the distribution functions, such as warehousing and shipping, and would allow record concerns to close some of their CD factories in the United States and reduce overcapacity.
The record companies know that any joint ventures would be scrutinized closely by antitrust regulators, potentially limiting them to areas not considered competitive, the report said, citing its sources.
Only Universal is not in the talks. Probably because Universal is the biggest, and therefor does not need a cooperation.
Perhaps their management could take a look at lowering the prices for CDs. Maybe more people would buy CDs legally in the shops and they would make more profit. I wonder if record companies even bothered to investigate this option?
Source: Yahoo
