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A Book That Should Not Have Been Written -
on September 12, 2010
Napster made music available free online in 1999. Since then, revenue from music and licensing in the U.S. has fallen by more than half ($14+ billion to just over $6 billion), and album and CD sales fell from 785 million in 2000 to 378 million in 2009, an all-time low. Sales in the first six months of 2010 fell another 11% (Jeff Baker, "The Oregonian"). A second major negative signal for the industry participants was Apple's introduction of the iTunes store in 2003; it is now the world's largest music seller, and takes 22 cents from every 99 cent sale, leaving not much for the music companies. A third was the growth of Wal-Mart and Best Buy into major music retailers. A fourth was Tower Records entering bankruptcy (for the first time) in 2004.
Thus, it doesn't take much insight to guess that Edgar Bronfman's sale of the family's stake in Seagram to acquire Warner Music Group in 2004 was not going to go well. (One might also guess that his skipping both college and business school didn't help his decision-making; in 1973 he tried songwriting instead.) Reportedly this process lost the family some $3 billion. Regardless, after an IPO at $16.17 in 2005, it is now at $4.99, with a capitalization of $710 million. That would make Bronfman's share about $85 million. The 'good news,' per author Goodman, is that Bronfman and his fellow investors got their initial purchase investment back through the IPO.
Bottom-Line: Readers will be left wondering what the value is of reading a book about a silver-spooned bumbler who made a very bad investment. Worse yet, a book that also stumbles around and lacks acute business perspective.