EMI On The Way Up?

Thoughts + Business

In a report by The Hollywood Reporter Lars Brandle of Billboard writes that EMI has posted a £59m profit in Q2 of 2008, up from the loss of £45m just a year ago. Of course it about a year since Guy Hands took over to overhaul the music major.

In January I wrote a post about the overhaul of the company, predicting that Guy Hands business approach on music production and sales will be very beneficial. Seems that cost reduction and streamlining are starting to take effect. Like Guy Hands claim The Hollywood Reporter's article:

It is already clear to me that what is emerging at EMI is not only a far leaner organization, but a more focused and effective one as well, and better aligned with the interests of our artists. An organization that is becoming much better placed to serve artists and customers alike, and to give our talented people the opportunity and the tools to produce their best work.

Right, I agree that the company is much better and focused. Bringing business to the obese music business, that rotted the industry in the late 90's and early 00's, is nothing but beneficial for both the artists and customers. However, I wish to raise few points.

- By being more focused, how much fewer artists EMI serves today? Is the focus only on the most profitable albums or is the still experimental and risk taking mentality in the company's A&R sector?

- Is EMI still holding on for the Digital Right Management systems. If it is, how satisfied the customers are?

- How much EMI has contributed on developing digital distribution systems during the last 12 months?


I must admit I don't know the answers on these. However, seems that EMI is turning the tide and getting back on its feet, but me as an Artist Management, has to question the means this is archived. Good management in the creative field would has to involve innovation like in any business. Investing to the future is the only way to guarantee a continued success.

At the moment EMI is boasting about profitability and cost reductions (mainly be laying off 2000 employees). Is Guy Hands is one of the "New Olympians", the global elite of investors who oppose state intervention until they need a government bail-out? Much of the problems of the credit crunch is because of the free traders, who are no longer driven by comparative advantage, rather the ability to maximise profits by cutting costs. Therefore, I wish there would be a report on the creative output as well.

EMI challenge - finally a major wakes up

Thoughts + Business

Guy Hands has realised that the music industry's investments are not delivering much. And that it is a massive task to turnaround a institutional company like EMI. In his blognote, Gerd Leonhard sites the Digital Music News article:

EMI needs to be able to capitalize on A&R's creative output and respond to consumer trends rapidly, and on a global scale. This means that we will move from a regional business model to a global functional model in which the primary reporting lines are aligned to the functions and not to geographical location.

I think Guy Hands has shown his experience as venture capitalist and business leader by boldly going into an industry that has stagnated because of its unwillingness to adapt. Reasons for the stagnation are many I believe. Through my own experience, I would argue one of the reasons to be leaders who are very incapable of analysing and are living by the words "sex, drugs and rock ' roll".

Music is often seen as art. Well, it is when you just concentrate on the production. We have to remember that it becomes a business when the artists and labels want to get some income from it. At that point, you HAVE to be to able realise changes and adapt to the fast changing business environment.

Guy Hands is actually doing this. I give my praise to him as he seems to be one of the few ones with enough balls to change a music major. Many in the music industry talk about EMI sinking, but I beg them to explain why. If I would be an artist, I would definitely stay. Finally EMI is awake.