Current Events

What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram What Happened In 1996        In 1996, the music industry struck disaster. "Growth in the $12 billion record industry, which for more than a decade has ranged from 12% to 20% annually,...slowed to nearly a standstill, and people in the business can’t agree why. All that is certain is that a malaise is sweeping every facet of music - its production, distribution, and consumption. Four of the industry’s six major record labels have made extensive staff cuts"(Strauss 1).        Several of the country’s biggest chain record stores and hundreds of independent shops have declared bankruptcy, gone out of business, or put their stores up for sale. New albums from well-known artists like R.E.M. and Pearl Jam have sold way below their expected sales. Even with holiday shopping, "music executives are wondering where the music fans are"(1).        Russ Solomon, the president of Tower Records says, "We don’t have any teen idols, which in the past has been very important. Record companies have been busy trying to create new technology like the mini-disk and the digital cassette, which have been flops, instead of focusing on the music"(qtd. in Strauss 1). What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram Award Shows        This year(1998), Sean "Puffy" Combs has been banned from performing at the Grammies because he performed at the American Music Awards(Crowe 1). Michael Greene, the CEO of the National Association of Recording Arts & Science, says they did this because in 1994, Whitney Houston not only performed at the American Music Awards, but also made eight trips to the podium to accept her trophies, performed the opening number at the Grammies. They believe this led to a ratings drop the first quarter of the show. There had never been a ratings dip at the beginning of the show before(8).        The competition of the two shows hurt the artists. "A memorable performance on either show could result in millions of dollars in album sales"(8). Performances have benefited an endless list of artists including Alanis Morissette, Bonnie Raitt, Toni Braxton, and Joan Osborn(8). This is probably because it’s the first time consumers can connect the songs with the artists(8). What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram Disney        Walt Disney Co. has made Bob Cavallo the chairman of the company’s "newly restructured record division"(Phillips 2). Cavallo, who has worked with such artists as Prince an Alanis Morissette, "signed a five-year, multimillion dollar deal with Disney"(2). He has worked in the industry for more than 30 years discovering artists like Lovin’ Spoonful, Earth, Wind, & Fire, Price, Green Day, Weezer, and Alanis Morissette.        Disney "has sunk more than $150 million into its Hollywood Records" since the label’s launch in 1989, but the company hasn’t been able to get a major hit in the rock market. There was a lot of "speculation" that Disney would shut down Hollywood Records after its purchase of Mammoth Records, home to the Squirrel Nut Zippers that gave Disney "its first hit with a breaking band"(2). But, Disney says that they will continue to sign rock/pop acts. "Disney’s latest moves also indicate that it has abandoned earlier plans to expand its presence in the record business by purchasing a global record conglomerate such as EMI Music"(2). What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram Viacom        Viacom, owner of Blockbuster Music, the 400 store sister of Blockbuster Video, has received an offer from the Torrance-based music retailer, Wherehouse Entertainment to buy it. In 1997, Blockbuster suffered a $2.5 million lost and closed 77 stores. The Wherehouse had recently suffered from bankruptcy, but is now "enjoying improved music sales." Blockbuster Music is worth an estimated value of $250 million(Matzer 5). What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram Seagram Buys Polygram        Seagram Co., which owns Universal Records, has just bought PolyGram. Universal’s weakness is its overseas market. This year, with a 3% overseas market share, it is last in the six major record companies in non-North American sales. PolyGram, on the other hand, has "dominated the same category" in the 90s. This year, it is second only to Sony with a 19% share of the overseas market(Hiltzik 1).        "Whereas mature markets such as the U.S. and Europe remain principally hit-driven, he said, sales in regions such as China are likely to grow explosively as international companies win marketing access to the countries for the first time"(5).        Experts say that people from other countries would rather listen to "well-recorded albums by indigenous artists" rather than top U.S. or British artists. While the artists with Universal had access to foreign markets, Universal was unable to develop foreign acts(5). What Happened In 1996 | Award Shows | Disney Viacom | Seagram Buys PolyGram