Majors pushed Tower over the edge, now the minors feel the pain
I was impressed with the Digital Music weblog’s further digging on Tower Records’ demise… Majors pushed Tower over the edge, now the minors feel the pain:
The final nail in the coffin that sent Tower Records spiraling into its second bankruptcy came when three of the big four labels stopped shipping product and demanded payment to resume. Tower, unable to order new major label music had no choice but to file bankruptcy, and the rest is history.
What you may not have realized though, and what interests me most is, the major labels had very little to risk when they sent Tower into its final death throes. When Tower filled for bankruptcy the first time, the major labels asked the bankruptcy court to become secured creditors. When Tower toppled, its weight fell squarely on the competition of the majors; scores of independent labels for who Tower Records meant big business. The major labels will be paid just behind the banks who financed Tower’s attempt at recovery, but well before the minor labels who compete with the majors for shelf space.
(Via The Digital Music Weblog.)Tweet