The Wall Street Journal-20080117-The Strong Will Survive at EMI
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The Strong Will Survive at EMI
It remains to be seen whether EMI's reorganization of its music division, announced Tuesday, will matter to consumers. But if we can take EMI and its parent, Terra Firma Capital Partners, at their word, the changes could improve the way talented rock and pop musicians and their music will be discovered, nurtured, recorded and marketed by the struggling giant.
Though coverage of the announcement focused on job cuts to about one-third of EMI's staff and the anticipated trimming of some promising but profitless bands from its roster, the company had other things to say, many of them a sensible reaction to continuing lost market share and similar streamlining by competitors. (Of the four major labels -- the Universal Music Group, Sony BMG Music Entertainment and Warner Music Group are the others -- EMI is last in revenue and market share.) The company says it will focus on developing artists and help open new income streams for them. It will centralize sales and marketing, and slash its roster of artists -- only 5% of the 13,000 now under contract make a profit. According to our Aaron O. Patrick, it will cease its practice of shipping ludicrous amounts of product to vendors with little regard to retail sales; each year, some 35 million CDs were returned to the company to be destroyed.
EMI acts Coldplay, the Verve and Robbie Williams are said to be threatening to withhold their forthcoming albums, in part as a show of support for the departing head of the music division, Tony Wadsworth. Mr. Wadsworth has been described as the "artists' ally," but I'd bet that many of the label's 13,000 acts never received the hand-holding from him that those big names did. It's been reported that he'll be succeeded by Roger Ames, the former Warner Music chairman who is currently in charge of EMI's North American operations. So much for the charge that "bean counters" are running the group.
If it sounds to you like EMI is recasting itself to do what a record company should, you are right. It says it will be "completely focused on A&R to maximize the potential of all its artists." This could be wonderful news. A&R, or Artists and Repertoire -- that part of the organization that finds and develops talent -- is typically under- resourced these days, to the detriment of bands and singers who lack focus or need time to mature. Of course, companies invest heavily in those acts with the greatest commercial potential. But for music lovers, nothing beats a deep talent pool of varied musicians who are encouraged to grow and get the best from their gifts. For the label, this may be where the next superstar resides.
As for the rest of its new strategy, a major corporation should be able to, as EMI puts it, "monetize" the value of the artists' work by finding additional sources of revenue. And given that EMI is home to such brands as Astralwerks, Blue Note, Capitol and Capitol Nashville, Virgin and various EMI-named brands, it must have some redundancy in sales and marketing. The silo mentality encourages the segregation of consumers, and I'd contend that there are jazz artists on Blue Note who would appeal to Virgin's rock base and that Astralwerks has several electronica artists who might find an audience among modern jazz fans.
Some of EMI's announcement is worrisome, to be sure. We're told that the company's initiatives are a reaction to "the rapidly changing nature of the music industry" and "the challenges posed by a digital environment," which suggests an emphasis on delivery systems. If you're like me, how you get your music -- whether on CD from a mom- and-pop record store or via a digital download -- matters much less than its quality. Meanwhile, one of EMI's labels recently sent me Ringo Starr's new album on a plastic wristband with a USB link. I'm still trying to figure out what I'm supposed to do with it.
EMI simply hasn't developed new talent as well as its competitors, especially in the U.S., though it has had some successes in country music. If you look at its noncatalog roster -- which excludes the Beatles, the Beach Boys, John Coltrane, Pink Floyd and its other perennials -- it seems like EMI has an awful lot of artists who neither sell very well nor have much to say. The group has only two albums on this week's Billboard top 50 -- Keith Urban's "Greatest Hits" and J. Holiday's "Back of My Lac." This year, it garnered 52 nominations for Grammy awards, but these include gospel and classical recordings, where sales are much less than in pop, and three of them are for engineering. Though EMI insiders might argue, they don't have many artists who are dynamic and progressive, and those they do have are buried under a bloated, slow-to-act corporate structure.
This is not a cutting-edge company. They're the guys who let Radiohead and Paul McCartney get away -- not to another major label but to the lure of new distribution channels: Radiohead sold its new album online, allowing consumers to chose the price to pay -- it's now available as a traditional CD and is No. 1 on the Billboard charts. Mr. McCartney sold his 2007 release, "Memory Almost Full," at Starbucks.
Nowhere in Tuesday's announcement is there a reference to talent or musicianship. You may think the word "artist," which appears often in the statement, implies those things, but it doesn't. In the music business, an artist doesn't have to make art. He's just a guy under contract. 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 Mr. 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.
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Mr. Fusilli is the Journal's rock and pop music critic.
