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(Again) The Real Emi Plan Continues To Unfold
January 18, 2008
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"The music business shows exciting growth potential, but the environment remains extremely challenging. In order to thrive and meet the demands of a rapidly evolving and dynamic music market, we must rethink our operations..."
-- Then EMI Chief Executive Eric Nicoli, back in February 2007, announcing that Capitol Records would be "merged" with Virgin Records here in the U.S.Back in May of last year I wrote the following after it was announced (after months of speculation) that EMI had finally been sold.
"Maybe Terra Firma Capital Partners is really sincere in their initial sound bytes about re-invigorating the company. Maybe pigs will fly someday also. But, do you really believe any capital investment company buying a music company today is going to wait long for any return on their investment? And how many investment firms that buy any company in any industry, have plans to actually grow the companies they buy? How many truly buy companies with thorough understanding of that company's core competencies? If you read any money/financial pages in any media, you'll find that in almost all cases that capital investment firms buy companies for one reason primarily: to break them up, and in turn generate big returns on the initial investment...
So I guess we'll have to take a "wait and see" on this one. But, I don't hold high hopes at this point for EMI's future. EMI themselves saw the handwriting (okay, the red ink) on the spreadsheets for too long and merged Capitol Records with Virgin back in February to cut losses and save $200 million annually. Of course that wasn't enough, and they knew it. But, it made the company look a whole lot better on paper to any possible buyer."
This week, only seven months after the purchase, Terra Firma's Guy Hands said the following: "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. 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? Mr. Hands plans to cut 2,000 jobs at EMI. (You can read the full story below )
No sooner had Mr. Hands made his announcement came the news that yet more talent has chosen to leave EMI. The Rolling Stones announced their decision to release their new album, "Shine A Light" (which will accompany a Martin Scorsese film of the same name that features two live shows the band performed in New York in 2006), through rival Universal Music in March.
While an EMI spokesperson said the Stones' deal only covers this one album, and that it was planned to be released via Universal as a soundtrack, other industry sources said the band is considering its options with all the changes happening at the company. The Stones' EMI deal is reportedly up in May.
When Mr. Nicoli announced almost a year ago that (for all intent and purposes) Capitol Records was going bye-bye, he said, "By bringing Capitol and Virgin into one label group, we will be better equipped than ever to promote and nurture artistic talent."
To that I said, "I for one, do not see how these changes 'better equip than ever' the new Capitol Music Group to 'promote and nurture artistic talent.' Perhaps Mr. Nicoli will expand on those possibilities at some future date. But, I don't know how diminishing size enables any label to stay on equal footing competitively." ('The Capitol Records Thing', DISC&DAT, February 2,2007)
It's not that I expect any company not to cut overhead when corporate survival is at stake. Indeed, when it serves a company's best interests, it is the responsibility of management to take steps necessary to remain fiscally sound. Now it will be Mr. Hands' chance. He's up at bat now, but I think he'll find it difficult assuring EMI's roster of artists (and any he hopes to attract) how he expects EMI to stay on equal footing against the competition after he makes the planned changes.
With artists like Paul McCartney and Radiohead already severing ties to EMI, and others like Coldplay and Robbie Williams (and now possibly the Rolling Stones) speaking out publicly about their concerns about what's happening, Mr. Hands better get "the spin" out there as fast as possible.
This week, Wall Street Journal writer Jim Fusilli had this to say about the situation: "If EMI remembers that talent and a point of view are required to make a great recording, and that great talent is precious and must be served, its reorganization has a better chance to succeed. EMI tells us it will begin doing what it should have been doing all along --signing fewer acts, developing the ones with potential, then marshaling its resources to market their records and ensure they're properly compensated. Such a change may be offensive to [Robbie] Williams and his coddled ilk, but for those of us who yearn for new, adventurous music that we can buy easily and enjoy, it's a hint of good news."
Wow. What a commentary. Let's analyze that one.
First: "talent and a point of view are required to make a great recording." Talent is absolutely required, but exactly what "point of view" is Mr. Fusilli referring to? That's a pretty amorphous statement. I'd expect to hear it that kind of statement from any of the political candidates filling up cable news time with the sound bytes we keep hearing after each state caucus. But I dunno, in the context here, I sure would like more clarity about whatever "point of view" Mr. Fusilli is talking about.
Next: "EMI tells us it will begin doing what it should have been doing all along -- signing fewer acts, developing the ones with potential, then marshaling its resources to market their records and ensure they're properly compensated." Really? Gee, it seems to me that an overwhelming amount of criticism in the press and elsewhere was levied against all the major labels in the past decade or so for NOT signing enough new talent. While signing fewer acts in hopes of "marshaling its resources" sounds great on paper, signing fewer acts means the labels better be damn sure fewer acts can generate more revenues. That might work for small boutique independent labels; it won't work for the EMI, SonyBMG, Universal and WMG.
And finally: "Such a change may be offensive to [Robbie] Williams and his coddled ilk, but for those of us who yearn for new, adventurous music that we can buy easily and enjoy, it's a hint of good news." Well, Mr. Fusilli will have to explain in a bit more detail for us all how signing fewer acts will likely result in us all enjoying "new adventurous music." Signing fewer acts means fewer will succeed. As Bruce Hornsby sang, "That's just the way it is." So how Mr. Fusilli sees this is as "a hint of good news" for us all is beyond me.
The music (and the entertainment business in general, for that matter) has always been about trying to succeed with each and every new offering. But the fact is that it just isn't that easy. If signing fewer acts was any guarantee of better odds at success, I assume all the labels would have done so years ago. Many years ago. If it was that easy to break new talent, major labels wouldn't have to have large diversified rosters. They could exist by signing fewer artists. But as anybody who has been in the business, or knows the business can tell you, signing real talent is no guarantee that it will sell. So signing fewer artists limits real potential growth for major labels in today's marketplace.
Somebody has said, "Much of what is called investment is actually nothing more than mergers and acquisitions, and of course mergers and acquisitions are generally accompanied by downsizing."
And so it goes. And so it goes.
And Now This...
My thanks to attorney Ray Beckerman for forwarding this article to me after I printed my comments in the newsletter last week about The Washington Post retracting its RIAA story. As a member of the Electronic Frontier Foundation, Ray has been active, along with his colleague Ty Rogers, in representing consumers targeted by the RIAA for file sharing. In August 2005 he started Recording Industry vs. The People (http://recordingindustryvspeople.blogspot.com), a blog devoted to collecting information about the RIAA's lawsuits against consumers.
I thought I was right in saying what I said initially, and this article more than confirms my initial criticism, and for that matter, the criticism of the Washington Post's writer in retrospect.
This is a MUST-read for any of you who still might believe the RIAA functions in the industry's best interests:
RIAA Believes MP3s Are A Crime: Why This Matters -- Updated
From WIRED magazine
In the confusion following the Washington Post's RIAA story, and its subsequent "correction," journalists and advocacy groups alike are missing an important fact: the RIAA has repeatedly taken the position that ripping mp3s from CDs you own is illegal, and it's using that argument to harm consumers. Journalists, policy watchers and even copyright experts who fail to understand this risk helping the RIAA's ongoing crusade to cripple technology. For those who still maintain the RIAA does not believe that mp3s are a crime, there are two very clear pieces of evidence...
Read the rest here: http://tinyurl.com/yrlyyg.
RIAA Goes After "Personal Use" Doctrine
From PC MagazineNo longer content to sue MP3-downloading students, now the industry is targeting customers who rip purchased CDs to their computers.
We've all read about the Recording Industry Association of America (RIAA), its recently acquired taste for blood, and its quest to sue every student and grandma in the country for downloading mp3s. After a few years of constant subpoenas and news coverage, it finally seemed as if this effort was petering out. Now the RIAA has a new angle: Sue people who rip tracks from purchased CDs onto their computers. The implications are far-reaching and dangerous.
Suing customers for ripping CDs is an attack against fair use that, if successful, would reverse legal precedents and give some momentum to the slow effort to eliminate all consumer recording devices. This would include VCRs, CD burners, DVD burners, DVRs and even copying machines.
Read more about it by clicking here.
From Major to Minor
From The EconomistLast year was terrible for the recorded-music majors. The next few years are likely to be even worse.
IN 2006, EMI, the world's fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits. At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. "That was the moment we realized the game was completely up," says a person who was there.
"In 2007 it became clear that the recorded-music industry is contracting and that it will be a very different beast from what it was in the 20th century," says Mark Mulligan, an analyst at JupiterResearch. Last year several big-name artists bypassed the record labels altogether. Madonna left Warner Music to strike a deal with Live Nation, a concert promoter, and the Eagles distributed a best-selling album in America without any help from a record label. Radiohead, a British band, deserted EMI to release an album over the Internet. These were isolated, unusual deals, by artists whose careers had already brought years of profits to the big music companies. But they made the labels look irrelevant and will no doubt prompt other artists to think about leaving them too.
Read more about it by clicking here.
EMI Faces 2,000 Job Cuts
From cnet.comGuy Hands, the private equity owner of EMI Group, plans to cut up to 2,000 jobs at the ailing British music company, in a plan to rebuild the group which has sparked fury from some of its biggest acts.
Hands, previously best known for investment in waste management and pubs, on Tuesday unveiled his plan to make the home to The Beatles more artist-driven after it was hit by online piracy, falling CD sales and a poor release schedule. The worldwide cuts will come at EMI's troubled recorded music division, which has some 4,500 staff of a group total of around 5,500. The shakeup, in which between 1,500 and 2,000 jobs will go, is designed to boost its roster of talent and increase Internet sales while reducing costs by $393 million a year.
Read more about it by clicking here.
Perspective:Recording Industry Should Brace For More Bad News
From cnet.comThe recording industry is facing yet more bad news. Forget about Warner Music Group's plummeting stock price, or the shrinking retail floor space. Forget about EMI's announcement this week that it's cutting 1,500 to 2,000 jobs. At least the new owners of EMI are recognizing that they bought into a dead industry and are trying to confront it head-on with significant changes in business strategy. It remains to be seen if the suits who now own EMI can navigate the shark-infested waters of a business that feeds on schadenfreude.
The big problem that EMI, and by extension the rest of the industry, faces is the sudden stampede of brand-name artists away from the traditional recording companies. The Eagles are with Wal-Mart, Madonna left Warner for Live Nation, a concert promotion company. EMI has lost Paul McCartney and Radiohead, and Coldplay is said to be threatening to leave. Last week, the label's biggest seller, Robbie Williams, announced that he too would be leaving the label. All pretty devastating. Record companies have always depended on the revenue and cash flow generated from platinum-selling artists to finance new talent. If that revenue stream disappears, how can they compete?
Read more about it by clicking here.
DRM Is Dead, But Watermarks Rise From Its Ashes
From WIRED magazineWith all of the Big Four record labels now jettisoning digital rights management, music fans have every reason to rejoice. But consumer advocates are singing a note of caution, as the music industry experiments with digital-watermarking technology as a DRM substitute. Watermarking offers copyright protection by letting a company track music that finds its way to illegal peer-to-peer networks. At its most precise, a watermark could encode a unique serial number that a music company could match to the original purchaser. So far, though, labels say they won't do that: Warner and EMI have not embraced watermarking at all, while Sony's and Universal's DRM-free lineups contain "anonymous" watermarks that won't trace to an individual.
Still, privacy advocates were quick to point out that the watermarking is likely to produce fresh, empirical data that copyright material is ping-ponging across peer-to-peer sites -- data the industry would use in its ongoing bid to tighten copyright controls, and to browbeat internet service providers to implement large-scale copyright-filtering operations.
Read more about it by clicking here.
Apple May Need to Play Better with Others
To continue to thrive in both music and video downloads, Apple must improve how it deals with content makers -- or risk being left behind
From BUSINESS WEEK
If this year's Macworld Conference & Expo follows form, Apple Chief Executive Steve Jobs will pull the curtain back on a new device or two that will capture the consuming public's fancy. Early word, for example, is that he'll announce a slick new sub-notebook that, if successful, could help make mainstream a product that until now has occupied only a niche. That's what Apple did for digital music players with the iPod and for smartphones with the iPhone.
But for Apple to make the most of its peerless products, experts say it will need to improve relations with the folks who create the content to run on them, especially after the series of spats that marked 2007. Recall the refusal by Universal Music Group, the world's largest record label, to re-up its long-term contract to supply music to Apple's iTunes Store, or the move by General Electric's NBC Universal to pull its TV shows from iTunes.
Read more about it by clicking here.
"American Idol" Returns...With Planned Changes In Store
From USA TODAYEach January, it's the sound of soaring television ratings: the sometimes off-key (or worse) singing by contestants on "American Idol," the pop-culture phenomenon on Fox that is the USA's most-watched show.
With the writers strike still in place, it looks like the shows rating might be better than ever. And there will be changes this season as well. Now the producers will let the singers play musical instruments during their performances in the first combined gathering of audition survivors, known as the Hollywood Round. And there's more...
Read more about it by clicking here.
Review: Zune Music Store Rings Sweet and Sour
From PC MagazineWill anyone ever overthrow iTunes? Well, the much-improved Zune Marketplace earns high marks for style and music subscriptions, among its many enhancements. This iteration of the marketplace is head and shoulders above its year-old predecessor. There are a couple of spots, though, where it does fall shy of the iTunes mark.
Read more about it by clicking here.
Amazon.com And Pepsi Partner For Free Download Promo
Amazon.com and Pepsi have teamed up in a nearly yearlong promotion that gives consumers access to more than 3.25 million songs free of digital rights management restrictions (DRM) from 270,000 artists through Amazon mp3, a DRM-free music service introduced in September.
Read more about it by clicking here.
Apple Unveils New 'MacBook Air' At MacWorld
At MacWorld this week, Apple's Steve Jobs Jobs took the stage, unwound the string on a standard-sized manila office envelope and slid out Apple's new ultra-thin MacBook Air notebook computer.
The MacBook Air is a new class of laptop, even though it has a design similar to its MacBook Pro brethren. What makes this ultra-portable different from the MacBook Pros and everything else in the industry is its thickness, or rather, lack thereof. It measures 0.76 inches deep at the back, tapering down to 0.16 inches as you move toward the front bezel. That's simply unheard of for a 13-inch ultra-portable. The MacBook Air weighs in at 3 pounds and includes features that the rumor sites had long been predicting, including a 13-inch LED screen and an optional SSD drive. It lacks an internal optical drive, and the (very) limited number of connectivity ports will raise eyebrows, but the $1,799 starting price, standard-voltage processing parts, and full-size keyboard make up for its few limitations.
Read more about it by clicking here.
CHRISTINA'S A MOM
Christina Aguilera and husband Jordan Bratman welcomed their first child, a boy, last Friday at L.A.'s Cedars Sinai Hospital.
FROM THE BIG SCREEN TO THE GREAT WHITE WAY
Everyone's favorite ogre is headed for Broadway. "Shrek the Musical" is due to open for preview performances in November in a theater to be announced
AS EXPECTED
Daniel Day-Lewis won the Golden Globe for Best Actor in a Drama Film, for his role in "There Will be Blood."
THAT WAS FAST
Eddie Murphy and Tracey Edmonds have parted ways after two weeks of marriage, according to People magazine. The couple wed Jan. 1st in a non-legally binding ceremony in Bora Bora, and after that, things obviously went downhill at record speed.
IF YOU HAVEN'T SEEN THIS SERIES YET, TRY AND DO SO
AMC's new series "Mad Men" won the Golden Globe for Best TV drama. The show, about the 1960s-era advertising biz, is stylish and slick, very well written, and produced by "Sopranos" co-producer Matthew Weiner. AMC already renewed it for a second season. Series star Jon Hamm beat out four household names to win for acting in a drama as well.
THE "OPRAH-FICATION" OF AMERICA MARCHES ON
Oprah Winfrey's apparent quest for world domination marches on. The Queen of Daytime and Discovery Communications announced a deal Tuesday under which the Discovery Health network will be turned over to Winfrey next year, becoming OWN-the Oprah Winfrey Network.
SHE DIDN'T SAY "NO, NO, YOU'RE NOT THE ONE FOR ME" TO THIS ONE
KT Tunstall has gotten engaged to her drummer boyfriend, Luke Bullen, after he popped the question on Christmas Day. No wedding date announced yet.
THIS SHOULD BE INTERESTING
Paula Abdul is allegedly in talks to perform live at the Super Bowl on Feb. 3rd. Remember folks, she's a judge on "American Ido"l telling people each week they are not on key, their pitch isn't right, etc...so let's see just how great she does. And if she dares to lip-synch, I can't wait to hear what Simon might say.
AND SO SHOULD THIS
"American Idol" judge (and Grammy-winning producer) Randy Jackson will release 'Randy Jackson's Music Club, Vol. 1' on his Dream Merchant 21 label. on March 11th. The album will include tracks by fellow reality judge Paula Abdul, Mariah Carey, Joss Stone, Travis Tritt, Richie Sambora, and "Idol" contestants Katharine McPhee and Elliot Yamin. The first single, "Dance Like There's No Tomorrow," is Abdul's first recording in over a decade. Other participants in the collection include country star John Rich, R&B legend Sam Moore, and gospel's Bebe Winans.
IT'S BEEN SOME TIME, AND SHE NEEDED SOME PRESS
Upon arriving at New Zealand's Auckland International Airport Sunday, Björk attacked a newspaper photographer who snapped her picture against her wishes.
PASSING
A great industry friend, Cy Leslie, a former chairman and CEO of MGM/UA Home Entertainment Group, died of heart failure Jan. 6th in Roslyn, N.Y. He was 85. Cy founded Pickwick International in 1953 and for over 25 years as chairman, he made Pickwick into an internationally known company, and was named Record Industry Man of The Year in 1975. Cy was also a Director of the T.J. Martell Foundation for Leukemia, Cancer and AIDS Research.
Because So Many Of You Frequently Ask...
As a Las Vegas resident, during the course of the year I get several dozen e-mails from readers asking me which hotel(s) I recommend here for those coming here for either business or personal reasons (and what restauarants to eat at, shows to see, etc.).
I think there are several great properties here in the city, but the ONE that I always recommend for the best possible experience is The Venetian. There's just no other hotel in the city that offers a larger standard room (each room a suite) and such amenities, and with the shopping available at The Grand Canal Shoppes, some of the best restaurants in the city operated by some of world's greatest chefs (Wolfgang Puck, Joachim Splichal, Emeril Lagasse, just to name a few), the entertainment offered (Blue Man Group, The Phantom Of The Opera, Jersey Boys), and Canyon Ranch Spa, it's hard to beat all this hotel offers.
This month The Venetian opened its sister property, The Palazzo (check it out at www.palazzo.com ), and it looks every bit as grand as The Venetian.
No, this is NOT a paid advertisement...I just get tired of writing e-mails to people with the same recommendation time after time. So if you are planning a trip to Las Vegas, check out The Venetian or The Palazzo ... it's the place I'd recommend.
Quotes of the week
"The strike impasse is speeding the end of Hollywood filmmaking and television production. There are more union contracts coming up for renewal, and already unionists are crossing union lines. IATSE is urging its members to go right on through. Insults are being exchanged, faces will be bashed and fatalities are a possibility. Does a dying Hollywood need a civil war today to hasten its erosion?"
-- Longtime Hollywood publicist Julian Myers in Variety, who feels the WGA stalemate is a harbinger of ill things for the industry. And if the writers don't settle this strike soon, things are going to go from bad to worse very quickly."Anyone who doesn't get bored in an audition is a liar. Ninety percent (of the singers), I absolutely hate. We're on the hunt to find a new star. At the point I think we've found someone, I'm in a good mood. That's probably three minutes a day. Paula would sit there 20 hours a day, 365 days a year loving it, because she loves being on TV."
-- "American Idol's" main man, Simon Cowell, in USA TODAY."They totally ignored me. It was bizarre. It was a kick in the teeth. They didn't return my phone calls or e-mails for three weeks. I'm trying to find out what's behind it. Probably a good thing I'm no longer with them -- mild understatement. Unless it's them trying to tell me something ... Hello! It feels like I'm spent, as if I've completely run out of energy."
-- Annie Lennox, on being dropped by SonyBMG."Technology is here to free us from the grip of history. That's why I'm thankful to the Internet. That's why I'm thankful to this form of (music) release because in many ways it set me free ...You're dealing with myself, an artist not everyone has heard of and not everyone is going to necessarily try if they have to pay for it. Giving them the opportunity to get it for free from us I think was a really positive and intelligent choice ... And that's what leaves me not feeling disappointed because we all know that artists earn the most from touring. So it doesn't work against me giving it away."
-- Saul Williams, artist/musician, talking to cnet.com about his (and producer Trent Reznor's) online experiment modeled after Radiohead's, with is new album "The Inevitable Rise and Liberation of NiggyTardust""What does Britney Spears and Unfitney (The Major Labels) have in common? Both are time bombs waiting to explode."
-- Jerry Del Colliano, in his INSIDE MUSIC MEDIA blog posting 'Britney and Unfitney (The Big Four Labels)', http://tinyurl.com/yu9ckr
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Rock Song Takes Pro-Rock Stance
LOS ANGELES-A fist-pumping spokesperson for the rock and roll song "Rock You" declared the new track's unwavering pro-rock stance Monday amid a deluge of blistering guitar solos and monster drum fills. "In addition to its steadfast pledge to rock you into the night, 'Rock You' also intends to rock at least until the morning light, and does not care what any authority figures may say at this time," public relations associate Mark Boudreaux said. "Furthermore, rock and roll is here to stay." Boudreaux added that lame asses, poseurs, and mama's boys opposed to the song's militant pro-rock agenda could face a long, uphill battle if the song's prediction that rock will never die proves true.
Read the rest and laugh here: http://www.theonion.com/content/news_briefs/rock_song_takes_pro_rock.
The Blogs
Check out a great blog by Jerry Del Colliano, the Director Executive Programs, Clinical Professor Music Industry & Recording Arts, at the Thornton School of Music,University of Southern California, by clicking here: http://www.insidemusicmedia.blogspot.com.
Box Office
Check The Daily & Weekly Box Office (and more film info) at: www.boxofficemojo.com.
TinyURL
Check out www.tinyurl.com where you can make a smaller URL that will work for any webpage you wish to link to or reference. (As you can see, I'm using it in my news stories above!)
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