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Don Ienner Steps Down At Sony

Billy K.

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From The New York Times:

Sony BMG Music Entertainment yesterday announced the resignations of the top two executives at its Sony Music Label Group, less than four months after the company's owners appointed a new chief executive in a bid to resolve management discord.

The sudden departures of Don Ienner, chairman of the unit, and Michele Anthony, the president, ended the reign of two of music's most powerful executives—each known for an aggressive, bare-knuckled style—who in the last 17 years built the careers of artists like Destiny's Child, Pearl Jam and John Mayer.

The resignations came as Sony BMG's new chief executive, Rolf Schmidt-Holtz, has been revamping the company, which ranks as the industry's second-largest behind Vivendi's Universal Music Group.

Sony BMG said Rob Stringer, the chairman and chief executive of the company's British unit, would take over as president of the Sony label unit in the United States effective Sept. 1. Until then, the unit will report to Tim Bowen, Sony BMG's chief operating officer. Mr. Stringer is the brother of Sony's chairman, Sir Howard Stringer.

The shake-up is the latest jolt to hit the company since Sony and Bertelsmann formed it in 2004 by merging their worldwide music operations. Almost since the outset, the company has been plagued by infighting between executives from Sony Music Entertainment and Bertelsmann's BMG.

Since the creation of the venture, executives integrated many of Sony and BMG's international business units, but the two companies' American labels have continued to run essentially as separate companies. In the more than 18 months of the company's existence, executives have clashed over issues including executive pay, and marketing and promotion strategies.

Top executives on each side have remained fiercely protective of their operations.

The feud boiled over last year when Bertelsmann demanded the ouster of Andrew Lack, an executive from the Sony side who was the venture's first chief executive. In February, the companies reached a deal that resulted in Mr. Lack's switching jobs with Mr. Schmidt-Holtz, a Bertelsmann executive who had been the nonexecutive chairman of the venture.

After taking the reins, Mr. Schmidt-Holtz moved quickly to begin rearranging the organizational chart. In April, he scaled down Sony Music's Nashville division—which had reported to Mr. Ienner—and folded it into the bigger BMG unit there.

"The American recording industry has been built on fiefdoms," said one executive close to Sony BMG's management, who spoke on condition of anonymity because he wished to avoid further damage to the relationship between the parties. "Those fiefdoms are irrelevant today."

Mr. Ienner had less than a year left on his employment contract, according to executives close to him.

Recently, Mr. Ienner— who shuffled the management at the Columbia and Epic labels of Sony late last yea—had been planning to oust Columbia's president, Steve Greenberg, according to executives involved in Sony BMG's decision-making. Mr. Schmidt-Holtz had at first asked whether another role could be found at the company for Mr. Greenberg, who has been in the job for a little more than a year. Even with yesterday's moves, however, it remains doubtful whether Mr. Greenberg will stay.

Before becoming head of Sony's music operations, Mr. Ienner served as chairman of the company's Columbia Records label, which under his management cranked out a string of hits from artists like the Offspring and Bow Wow.

Ms. Anthony, a lawyer who once represented rock bands like Alice in Chains, has been one of Sony's top deal makers and legal advisers and has become one of the industry's most influential voices in shaping policies on battling piracy and other issues.

Both executives had been top lieutenants to Sony Music's former chairman, Thomas D. Mottola.

After an earlier shake-up resulted in Mr. Mottola's exit in early 2003, many industry insiders expected his successor to oust Mr. Ienner and Ms. Anthony. Instead, Sony Music's new chief, Mr. Lack, kept both of them. Since then, the company has moved to cut costs—but it has struggled to break through with new artists.

Sony's labels accounted for approximately 15.2 percent of sales of new releases at the end of 2002. Last year, the company's share of new releases was 12.4 percent, according to Nielsen SoundScan data.

This week, however, the company scored with a new album from the Dixie Chicks, which hit the national album sales chart at No. 1.

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Mike C. said:

It looks like Sony needs to get some concerts going to sell more CD's.

Depending on what Sony & BMG really want to do (and if there's any visionary grasp involved)-- it's far more complex than just "getting some concerts"-- it also involves looking to the future and embracing technology and understanding what the youth culture habits are...

Corporatations lack street smarts and always fail to comprehend the value of reading the pulse of kids and the younger consumers...

these days they need to think outside the box and grasp the new paradigms that are key to getting people exposed to music and what it takes to get an artist noticed...

old concepts like selling CDs are already difficult ways of turning profits, whereas dowloading & online availability of music of artists is the NEW avenue of choice... money can be made, but they need to do it with a new way of thinking (i.e. merchandise) and they need to respect artistic integrity (which will probably never happen-- Mo Ostin ain't gonna be called in for a pow wow anytime soon)...


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Good points, pierson. Merchandising is the number one way that Spain's soccer team is now THE top sport merchandiser in the world. That's counting any sport. Because of that approach, more people are going to their games. And yet, they are not the top soccer team around. In 2004-2005 Real Madrid made 186.2 million Euro dollars. Manchester United made 166.4 million.

Back to music- The youth seem to be into Hip-Hop alot. Some like other styles, like Jazz and Classical, too. But most might not be hearing those styles. Online seems the way to go, because, then, people will buy, and maybe see live concerts. Listening to short excerpts of songs gets everyone interested.

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I also agree that Pierson has some good points, but the problem is that the current target generation of music consumers are not the ones paying for downloaded music. They are using Peer-to-peer and Bit Torrents to download/share music. As a consumer in the 30 and up age group, all the record industry offers me is re-hashed greatest hits collections by the same artists. We also get the Digitally remastered edition followed by the dual-disc rendition of the same LP I bought 20 to 30 years ago. What's my incentive to purchase an recording. I'd rather dig through my stacks of LPs and digitize them myself and listen to those or create my own MP3's for my portable.

By the way....it will become very interesting since SonyBMG announced that new music is going to be released on copy-protected CDs and digital rights protected downloads.....talk about a nightmare! I'm guessing that this may end up hurting the Ipod and it's Itunes service over time!

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