Of course it was difficult to be too sympathetic to the major record labels when, for the first time in years, most of them were enjoying considerable commercial success. Although helped by the new digital revenue streams (primarily revenues from download sales and the new 'realtone' ringtones), it was the growth of album sales in a number of territories, including the UK, that really helped the major record companies slowly recover financially.
Some (OK, mainly CMU) might argue that the impact of illegal downloading on the majors has long been exaggerated, and that the difficulties in the music space in recent years was more the result of the excessive spending and a reliance on short term teen pop acts in the late nineties. With the creative side of the music business in good health this year there was a real reason for music fans to invest in new album releases - hence a change in fortune for the music industry.
Of course the major labels would surely argue their recent commercial prosperity is down to the restructuring and downsizing label execs have been conducting in recent years. Certainly Sony and BMG would be keen to stress that such downsizing is essential to compete in the modern music industry, given that that was pretty much their justification for merging this year.
The new super major is only just starting to properly integrate its operations (and lay off its workforce), but that integration will no doubt be fully completed before the efforts of the independent labels to overturn the European Union decision to allow the merger in the first place ever gets to court. Given that the EU courts will almost certainly be unable to stop the SonyBMG merger now that it is underway, some might question why IMPALA, the pan-European body for independent record labels, are bothering to fight the EU decision at all.
Some have suggested that IMPALA's legal action is designed more to discourage EMI and Warner Music - both now independent from the major entertainment groups - from attempting to merge in order to equal SonyBMG and the Universal Music Group in size. Neither EMI nor Warner are officially interested in a merger, but insiders from both indicate such a merger isn't completely off the agenda.
However, perhaps the two majors will lead mergers of a different type in 2005. We've been rambling on about the need for major record labels to diversify in order to survive for years. At last we are hearing an increasing number of label insiders saying that the majors may now adopt a strategy similar to that taken by pioneering label / promoter / management company Sanctuary Music - ie operating in a number of different areas within the music business. With that in mind, as the year ends the rumour mill suggests Warner are seriously considering acquiring key players in artist management in the first quarter of 2005.