Rock Records (滾石), the largest home-grown record label, yesterday downplayed rumors that it was on the brink of a financial crisis because of a looming deadline to repay a sizeable bank loan. The rumors come at a time when the global music industry is facing a huge drop in sales due to music piracy.
"We are not having a financial crisis right now," Jeromy Yau (
But Yau said the company would raise enough money by a July 1 deadline to repay the NT$120 million loan, adding that its operations and schedule for issuing new albums in the second half of this year remained intact.
Rock, which has a strong lineup including top-selling band May Day (
Rock and Cash Box signed a draft agreement on Feb. 21 this year, allowing the karaoke chain to use the record company's intellectual property for NT$280 million. To honor the deal, Cash Box issued 24 checks to Rock. Later, Rock used 11 checks out of the 24 as collateral to get NT$120 million in loans from local banks. As the two companies failed to sign a formal contract as scheduled on April 5, Cash Box applied for the court's approval to nullify the draft agreement and to stop payment on the checks, which were dated July 1.
"We have to protect our rights," Eric Leu (
Cash Box judged that Rock failed to sign the contract as it perhaps regretted the agreed-upon terms of NT$280 million that Cash Box would pay for the music copyrights, Leu said.
The company however did not rule out the possibility of resuming collaboration with Rock, as long as the company expresses goodwill in the future, he added.
Rock, established in 1980, is the largest local record company, and competes against foreign music companies like Sony Music Entertainment Taiwan and Warner Music Taiwan.
The pop music giant, which has been suffering from the weakness of the Chinese-language music industry, has encountered financial hardship several times before, including a takeover by Tom.com Ltd, a media company owned by Hong Kong billionaire Li Ka-shing (
"Rock's harshest challenge comes from the country's rampant music piracy that has been doing great harm to the Chinese music industry," Yau said.
The output of Taiwan's music industry dropped to an alarming NT$4.4 billion last year from over NT$13 billion in 1997, according to the International Federation of the Phonographic Industry (IFPI).
"Rampant music piracy, including unauthorized peer-to-peer file sharing and illegal copying of disks and MP3s, has been eating away at Taiwan's music industry," said Robin Lee (李瑞斌), IFPI's secretary-general.
This would ultimately have the greatest impact on consumers if the industry should die of piracy, he added.
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