A month after news of Apple Computer's start-up subscription music service, reports began circulating that the company was negotiating to buy Universal Music Group, the dominant player in the global music market. The rumored buyout, first reported April 10, was variously quoted at $5–6 billion. The discussions between Apple and UMG may have been blown out of proportion; by April 12 the New York Times was suggesting that Apple might invest in UMG, but was in no position to make an outright acquisition.
The nascent satellite radio industry has entered a critical phase, with both XM Radio and Sirius Satellite Radio posting losses for the fourth quarter. Combined, the two companies have yet to sign up a half-million subscribers.
Job cutbacks are one inevitable result of sustained sales declines. In late March, the ailing music industry began to shed excess workers in an effort to reach profitability, with Sony Music and Bertelsmann Music Group announcing significant reductions in their workforces.
Alleged unauthorized copying of compact discs will cost Technicolor, Inc. approximately $2.3 million. On March 26, the Southern California disc replicator agreed to settle a case brought against it last year by the Recording Industry Association of America (RIAA), in which the RIAA charged that workers at one of Technicolor's disc plants had made and distributed batches of illegal copies. The total of the settlement was less than 10% of the amount originally sought by the RIAA.
The US music industry is fighting a war on several fronts—industrial piracy in foreign countries, casual piracy in the States, unhappiness among consumers, and disagreements with artists (see related story).
Mergers and acquisitions are among the oldest tactics for commercial ventures that want to increase their power and presence. They are also increasingly popular in the non-commercial sector, according to a March 14 Associated Press report.
Wiz stores in bankruptcy: Only a week after being acquired from Cablevision by GBO Electronics Acquisition LLC, The Wiz stores initiated a bankruptcy petition in the District of Delaware to "maximize company assets," according to a March 14 press release from TW Inc., as The Wiz is now known. The 17-store electronics chain is seeking protection from creditors under Chapter 11 of US bankruptcy law and approval to conduct going-out-of-business sales at its stores in the New York metro area.