EMI Announces Fundamental Restructuring; Changes To Roll Over Next Six Months

New Mgmt., Staff Cuts, New Artist Deals Coming

Those major changes ALL ACCESS reported that are coming to EMI (NET NEWS 1/14) have begun with a major restructuring of management, and will continue to roll out over the next six months, according to an internal EMI webcast this morning, lead by TERRA FIRMA CEO GUY HANDS.

ALL ACCESS has learned that EMI's management structure has ROGER AMES as Pres./NORTH AMERICA and U.K., ASHLEY UNWIN as COO/N.A. and U.K, JF CECILLION as Pres. International Labels, CHRIS ROLING as COO/International Labels, BILLY MANN Global Creative Officer and CARYN TOMLINSON as SVP Artist Relations in a "Labels/A&R division.

We believe we have devised a new revolutionary structure for the group that will improve every area of the business. In short it will make EMI's music more valuable for the company and its artists alike.

In "Music Services, MARK HODGKINSON is EVP/Global Marketing, DAVID KASSLER EVP Artist Projects, RONN WERRE EVP/Global Sales, MARK CLASPER EVP/Marketing Sales & Operations and STEPHEN ALEXANDER as EVP/Studios & Archive.

HANDS commented: "We have spent a long time looking intensely at EMI and the problems faced by its Recorded Music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment.

"We believe we have devised a new revolutionary structure for the group that will improve every area of the business. In short, it will make EMI's music more valuable for the company and its artists alike, HANDS added. "The changes we are announcing today will ensure that this iconic company will be creating wonderful music in a way that is profitable and sustainable."

The Changes Detailed

* Repositioning EMI’s labels to ensure they will be completely focused on A&R and maximizing the potential of all their artists. 

* Developing a new partnership with artists, based on transparency and trust, and helping all artists monetize the value of their work by opening new income streams such as enhanced digital services and corporate sponsorship arrangements.

* Bringing together all the group’s key support activities including sales, marketing, manufacturing and distribution into a single division with a unified global leadership. 

* The elimination of significant duplications within the group to simplify processes and reduce waste.

Report: Artist Advances To End

In a dramatic demonstration of the economic toll of digital piracy on the music industry, THE LOS ANGELES TIMES reports that EMI is still expected to trim more than a quarter of the LONDON-based company's employees and radically alter the way it does business to further cut costs.

Two executives inside EMI told THE TIMES that EMI will become the first major label to eliminate the large advances that customarily are paid in the industry to proven artists. For instance, British pop singer ROBBIE WILLIAMS reportedly got an advance worth $150 million when he signed with EMI in 2002. His future advances could be in jeopardy because of his disappointing sales.

EMI instead will pay retroactive compensation based on how well a recording sells, one of the executives said.

The approach will likely take the record company out of the running for top acts, which can negotiate bigger advances from UNIVERSAL MUSIC GROUP, SONY BMG or WARNER MUSIC GROUP, the executives said. A severe cutback in advances means that "you're not competitive anymore for A-list talent. You're asking to be outbid," the source said.

HANDS will decrease marketing spending but invest more in artist development, the two executives said. Striking deals with smaller bands that sell fewer albums could be more practical today, at a time when well-established bands are less dependent on the marketing muscle of a major label.

"The status quo hasn't exactly worked," the other executive said. "We can put the emphasis on a good-quality record that doesn't sell a million, but a profitable quarter-million."

Artist Manager Meetings Set

In keeping with his open style about the future, HANDS has invited artist managers to a meeting tomorrow (1/16) in NEW YORK, NASHVILLE on THURSDAY (1/17), and in LOS ANGELES next THURSDAY (1/24), to keep them abreast of the new structure and how it will affect their artists.

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