

Russian tycoon buys Warner Music for $3.3bn - swombat
http://www.theregister.co.uk/2011/05/06/warner_music_going_going_gone/

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ibagrak
It's helpful to think of the flow of capital acquired through privatization of
Russian state property into US-based and EU-based businesses as a form of
money laundering. It's about legitimizing these assets and moving them farther
away from the source of their original dubious provenance. DST investments are
yet another instance of that.

From the value perspective these investments don't seem to make much sense,
but value is not the primary objective, or not the only objective in this
case. It's also about legitimization and moving assets outside of purview of
those who could potentially reclaim them.

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joe_the_user
_"Having made his fortune in property and the former Russian nationalised
industries, Blavatnik has faith that content companies are where future growth
will be..."_

Having much experience in the profitable Russian rackets, he believes that the
American racket known as "intellectual property" has far to go! I guess he'll
buy some patent trolls next.

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sp332
The article says he made his money in property and subsidized industries. I
don't really know, but I'm afraid this might mean he's even more likely to
pursue stupid property laws and continue antagonizing Warner's customers. Does
anyone have a better idea of what might change at WM as a result of this deal?

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m3mnoch
this makes me wonder if music is about to be unlocked. all it really takes is
for one of the majors to realize that music is a service and not a product and
completely disrupt the music industry. similar to the monetization strategy of
social games -- spend money chasing the people who will pay by giving them
reasons to buy rather than throwing good money after bad by litigating against
people who won't pay in trying to recoup some silly notion of a 'lost sale.'

then again... this is the self-destructive music industry we're talking about
here.

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simonsarris
By "Russian tycoon" they mean "The US-based business of Russian-born, US-
educated, US-residing-since-1978 tycoon"

His company has also been a significant stakeholder in Warner Music since
2004.

~~~
ropers
Does the "tycoon" hold US or Russian citizenship (or both)?

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Vmabuza
I dont know about this really. Buying a record label nowadays is like buying a
social networking site- Its waste of cash

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kgermino
>>...in a $3.3bn deal. The company's $1.9bn debt is also transferred to its
new owner, valuing Warner at $1.3bn.

Wouldn't [Value of Warner] = [Price Paid] + [Debts]? Or am I missing
something.

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joe_the_user
"a $3.3bn deal" sounds to me like just "puff". He paid 1.3bn for the company
and took on the company's debt. The transfering of debts adds to the amount of
money involved with the deal but not how much he effectively paid for WB (IE,
one presumes that by gaining control of WB, he gained control of the assets
which hypothetically backed the 1.9bn debt so whether he owes the debt or
whether warner-which-he-controls owes the debt doesn't change anything except
to make some bankers feel more secure).

~~~
kgermino
what your saying sounds like it's right, I think it makes more sense than what
I said anyway. Thanks.

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rumblestrut
In other news allofmp3.com has announced an expansion of its Warner Music
library ...

~~~
rumblestrut
Wow. Voted down. Does the HN crowd have no sense of humor?

~~~
fedd
i guess partly doesn't, partly does, but prefer funny things be at the last
pages of newspaper

~~~
rumblestrut
Newspaper ... what is this thing you speak of?

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lyime
This is really interesting.

A friend and I were discussing the other day. Apple just needs to buy all the
4 big music record labels. Perhaps other technology companies should just buy
them up (Google/MS). The reasoning behind this is well, these companies have
their own agenda and they simply don't get it. Record labels seem to be on
this self distractive path built upon ego and short term thinking. They
clearly are afraid to embrace the internet culture (see Amazon cloud
player/licensing) and other innovative distribution channels.

Why do I think a tech company should buy these labels? I don't think the
labels have a product mind set. What is the last innovative product apart from
the CD that has come from labels. Even talking about the CD, there has been no
incremental improvements in that technology over the last 10 year when it
comes to music. They are simply not in the business of creating a product for
the consumer.

Music is all about experience and great products can improve that experience
and potentially open up more revenue streams.

Maybe this guy is on to something.

(ps - Passionate about this space. Working on a music startup @mugasha)

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lotusleaf1987
Apple doesn't need to buy the Big 4, they're quickly disrupting them. The Big
4 used to offer, publicity, promotion, and distribution--now iTunes does all
of that. Record labels are dinosaurs who are unwilling or incapable of
adapting to survive.

~~~
lyime
Apple is not competing with the record labels, so they can't disrupt them.

Labels are not going anywhere, artists need labels for various reasons. The
function of labels is changing which is what is interesting. They labels are
hesitant to change their model.

~~~
sp332
The Model T didn't compete with buggy-whip makers, but disrupted them all the
same.

