I did not intend that this blog should only be about EMI. I do think about other things and I promise I will write about them. Love, death and the future of the planet spring to mind.
Meanwhile though, a few current thoughts about where optimism has gone. The takeover of EMI by Terra Firma caused me some optimism last year. Their pronouncements about their strategic direction, their desire to completely rebuild the model and to adopt a clearly digital approach, connect artists directly with fans, work closely with social networks, expand participation into other areas of musical activity, all seem to be essential elements in the creation of a new paradigm (sorry about that word – but it is sometimes justifiable) for an entire industry. Who knows, they might even begin to consider the clear need for blanket licensing of ISPs in order to monetise all that P2P – certainly telling the BPI and RIAA to stop suing the customers on their behalf seemed like positive moves.
And, although it’s painful, the need to let a lot of people go from the organisation seems almost inevitable. It’s very hard to turn a super-tanker when it’s fully laden. It may even be momentarily justifiable to scare a few artists off to lighten the load. What’s being done at EMI is only what is required at each of the major labels if they are to be transformed and survive – and although they are hated in their current form – and are never likely to be perceived as benign – major industries probably need some very big, major players as well as a healthy indie crowd too.
But things don’t seem to be turning out so well at NEW EMI and it’s interesting to observe.
Rumours circulating at Midem last week suggested that the new management team may have started to discover some royalty and accounting issues in the precious publishing side of the business which may lead to assets being written down by as much as 30%. A certain naivety in due dilligence about the significance of royalty structures or a certain obscurity to contracts that are only now becoming more clear? No doubt time will tell – my lips are sealed.
More apparent however, is the inevitable culture clash that’s taking place between the private equity, pure rationality approach and the music business, the people are the business approach. This does not have to be unproductive. But unfortunately it seems to be damagingly the case with Terra Firma and EMI currently.
You can probably discount the defection of a few major artists – Radiohead I’ve already talked about – The Rolling Stones never sell any records and haven’t done for years. Coldplay and Robbie Williams are rather more significant – although many say the latter is nearing the end – I suspect he is a world-class entertainer who will continue to carry a major audience for a very long time to come – and Coldplay continue to straddle the line between mainstream accessiblity and some vestigial, credibility among the more musically literate. If EMI can’t retain acts of that stature not only is it damaging to their bottom line and revenue projections, but it sends a massive message to the rest of the artist community.
The tone and stance of Terra Firma to the artists of EMI has not been well received. At a meeting of some 200 managers, the atmosphere was allegedly chilly to say the least. Critical comments by Tim Clark (Williams’ manager) in the FT have led to threats of litigation from Hands. According to Clark, “he’s gone rock’n’roll – he’s got blacked out limo’s, body guards, the lot”. There is a history of top level execs in a similar position going “native” in some way and making themselves embarrassing and absurd in the process. It doesn’t usually happen this fast though!
Meanwhile, an idea of centralised marketing seems to be emerging from the company which is also worrying. It seems to display a lack of understanding of the value of cultural positioning and the uniqueness of individual artist’s fanbases that require to be addressed in different ways – not with a single voice emerging from a single marketing team.
The degree to which marketing music is an inexact art is hard to underestimate. Of course some would argue that it’s therefore some kind of law of probability that if you throw enough of it at the wall then some of it will stick. But in this day of individuated artists and differentiated fans, the law of the long tail says “talk to me with an individual voice and treat me as an individual”. Commercially, you might say that to all the girls but culturally you’ve got to be smart and sensitive to artists’ needs and what fans are in to, to hope to get this right. The grass roots is where it’s at now – online the great levelling is happening – and some very finely honed tools are needed to reap what you sow here, dedicated applications which are currently not in the hands of the majors at all.
At the heart of this is a question which is almost about the cultural credibility of the organisation. Now, as we know, this has little or nothing to do with commercial success – on the face of it. There is a big area of music that doesn’t worry about cultural credibility at all – the reality TV, X Factor swathe of MOR pop does reach big audiences. BMG in particular has been pretty successful in this area. If that’s what Mr Hands is thinking of in the transformation of EMI, then perhaps he is doing the right thing.
It’s hard to read though. Certainly the legacy of catalogue (which presumably is what he invested in) is not about that area of music at all. EMI, Virgin, Parlophone, Capitol, Blue Note – these are labels who grew up with particular flavours, tastes, and acquired significance. Although they may have dabbled in the ephemeral pop tastes of the moment, they also had a sense of quality, a sense of responsibility to their artists to nurture their careers – but also to steer them – sometimes meaningfully sometimes misguidedly in some musical direction. Lots of artists famously complain about the labels’ A&R folk not understanding them and not trusting their directions, but as many great records made it out into the world with the help of the label as despite them.
It’s not clear where this kind of sensibility is on Mr Hands’ agenda. But, no matter which part of the market you target – and as a major – presumably these days you’re targeting all of it – having some credibility among the artist community and their quixotic managers is a primary ingredient – that seems to be missing from the new EMI. It’s nowhere near a lost cause yet – but the question that needs asking now is how will Electro-Magnetic Industries – get their magnetism back?