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Some BMG insiders claim the company's red ink is being spilled to the tune of more than $50 million, while Bertie biggie Thomas Middelhoff issued an internal memo calling for a "cultural revolution" within the company.

WHICH WAY YOU GOING, BMG?

German Media Conglom Ponders Future In Wake Of Losses... Won't Involve Invading Poland
by I.B. Bad

Industry lips are flapping furiously over the future of BMG and can you blame them?

First, there was BMG topper Rolf Schmidt-Holtz's statement that his company would not realize a profit this year, leading to additional chatter of how big those losses really are.

Some BMG insiders claim the company's red ink is being spilled to the tune of more than $50 million, while Bertie biggie Thomas Middelhoff issued an internal memo calling for a "cultural revolution" within the company, entailing a series of cost-cutting "disposals," including the dumping of "unprofitable" units.

Does this mean Bertie will now undertake the Herculean task of seeking a buyer for their BMG music holdings? Who would ante up for such a package? And what exactly are they buying? How much is a world-wide distribution system worth in an age of technological uncertainty over how music (and entertainment) product will be sold in the future?

Amid all this uncertainty, the shadow of Jive chief Clive Calder, who recently shifted his Canadian distribution from BMG to EMI, looms large. With his U.S. pact up next month, industry wags are wagging over the possibility of a similar maneuver Stateside. While that would not greatly affect BMG's bottom line, its impact on marketshare would be massive and greatly dim the glow of a company that recently climbed as high as second place in that derby.

How does BMG's 20% ownership of Jive play out in the game? Some point to a BMG buyout of the company and subsequent appointment of Calder to BMG Chief as an answer to their leadership vacuum. Most think Calder just wants his 20% back. Is he willing to remain with BMG in the U.S. in exchange for it? Some say his move to EMI Canada is a shot at Middelhoff that could foreshadow more activity with old pal Ken Berry.

There's a lot more action than in the first 90 minutes of "Pearl Harbor," that's for sure.

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