September 25, 2009

By By Ed Christman, N.Y.

Rhino Entertainment has laid off about 20% of its staff, due to declining physical sales, sources confirm, as part of a strategic realignment of the company's business mandate.

In total, some 30-40 staffers were let go, mainly staffers who worked with creating physical product. So far this year, CD sales are down about 20%, according to Nielsen SoundScan. The company, known for its comprehensive boxsets, will continue to release music physically, but there likely will be a cutback in the number of overall releases from the label, and some releases may only be available digitally, sources say.

The Warner Music Group issued a statement on the restructuring. "As a result of the fundamental transformation of the physical new release and catalog business, Rhino Entertainment is evolving. Part of that evolution involves a shift from serving primarily as a catalog and reissue company to one that handles WMG's global digital catal initiatives, film, television, video game and commercial licensing, and name and likeness representation for legendary artists.

"Reflecting those changes, Rhino has also reduced a number of staff positions to focus resources in the fastest-growing areas of thebusiness. This is consistent with our previously announced strategy to evolve the business in order to drive long-term growth at Rhino provide our artists with the most effective resources, and offer fans even more ways to experience great music."

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