Editor's note: Lack seems to be hinting at further Hi-Rez reduction. In a quiet move last year, Sony-BMG all but eliminated SACD from their vocabulary. Could DualDisc fall next? The comments offer a sobering dose of reality, and raise even more questions about what a major label will look like in five years. According to Andy Lack, that may not be a pretty picture, with the CEO casting a jealous eye towards smaller, independent labels. But the space remains volatile, with mobile music and entrants like Yahoo potentially causing a big revenue pop. Still, a straight-line projection puts the industry in a tough position in several years, with digital sales outlets showing only modest progress so far. That could set the stage for even more major label consolidation, though a difficult regulatory approval process could discourage a merger attempt. Sony BMG chief Andy Lack continued to point to some tough years ahead, with more cost-cutting on the way. While Lack praised the onset of new sales formats like DualDiscs, paid downloads and ringtones, he did not see them driving overall company growth in the next few years. Speaking at the Reuters Telecoms, Media and Technology Summit in Paris last week, Lack commented that the new formats are mainly "staunching the bleeding of the loss of revenue on the top line," with the next few years likely to be lean ones. That will set the stage for even more cost-cutting, with the CEO pointing to "too many lawyers and accountants and too few A&R people on a relative basis."
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