Is the RIAA as we know it about to disappear? As rumors continue to swirl that EMI will pull its funding from music trade groups like the RIAA and IFPI, an IFPI spokesman tells Ars that the group is in the middle of a major internal review of its operations.
That review will include a look at the “structure and operation of the organisation and its relationship with the national groups, with a view to finding greater efficiencies and cutting costs,” we’re told. That leaves open the possibility that the review could lead to a merger of the IFPI and RIAA, which is the largest (and most expensive) of the “national groups.” If that happens, the “RIAA” might disappear even as its work continues.
The comments from the IFPI fit with a new story in Variety which claims that EMI will pull funding from the trade groups by March 31 unless major changes are made. Consolidating the two groups appears to be one of the options on the table.
Losing one of its four pillars would come as a huge blow to both the IFPI and the RIAA, and the review now in progress is an attempt to retool the trade groups’ missions to better serve the record labels that fund most of their operations.
While EMI’s threat to pull its funding might seem like a cost-cutting measure, Variety’s source claims that isn’t the case at all. Rather, “Functions and structure need to make sense to all major labels. Right now, funding them doesn’t make sense.”
EMI has been unhappy with the trade groups’ work for some time. Back in November, we noted that EMI was considering a major cut to its funding of industry trade groups. EMI, the smallest of the four major labels, was recently purchased by a private equity fund that is looking to reinvigorate the label and cut expenses.
EMI was the first of the majors to drop DRM at iTunes and Amazon, moves that have made its digital music a more attractive option. But if EMI can force a restructuring of the IFPI and RIAA, the impact could be just as significant for the industry.