EMI hands out the bad news on jobs

Evening Standard and Press Association

 

 

Music giant EMI is to axe up to a third of its workforce and push for corporate sponsorship of its bands under a 'revolutionary' overhaul announced today.

 

The firm's private equity owner Terra Firma, led by financier Guy Hands, said as many as 2,000 jobs will go in the next six months to help save £200m a year and enable the label to meet the 'challenges' of the digital age. A third of the cuts will take place in the UK.

 

Other planned changes include beefing up and changing the roles of EMI's talent spotting network, nearly halving the marketing spend, and the elimination of 'significant' duplications within the group.

 

The turnaround is aimed at the recorded music arm of EMI - whose artists include Coldplay, Robbie Williams and Lily Allen - and which has struggled with falling CD sales across the industry due to digital downloading and piracy. The company made pre-tax losses of £263.6m last year. Terra Firma took over the business last summer in a £3.2bn deal.

 

Hands has outlined how he wants to see EMI's talent spotters - currently around 6% of the recorded music arm's 4,400 staff - concentrate on scouting and maximising artist potential. A new unit called music services is being set up to maximise the artists' potential and co-ordinate how their music is sold and retailed.

 

Initiatives include helping performers and bands to 'monetise their work' through sponsorship deals with firms, similar to those in the football industry, and linking up local bands with local businesses.

 

Hands has already upset some big names and there have been reports that Robbie Willimas has effectively gone on strike. Today The Verve threatened to withhold its next album until it receives assurances about EMI's financial health and a commitment that the record will be marketed competitively.

 

A delegation of band managers led by Jazz Summers - representing The Verve and Snow Patrol - was expected to meet Hands in Kensington today. The Verve - who reformed to create their first album since 1997's Urban Hymns - may not deliver it in June as scheduled.

 

Summers said he would advise the band to do the same as Robbie Williams when he meets them later this week. 'Why would we deliver a record when EMI is cutting back on the marketing and is in financial difficulty? I am going to tell Guy Hands I want assurances,' said Summers.

 

He was angry that Hands wants to reduce the advances paid to artists, saying: 'He has not got a clue of what this business is about. You only have big advances because you are not getting any royalties.'

 

He said performers could sell as many as 3m albums without seeing a single royalty payment because the value of CDs has fallen while marketing and distribution costs have risen.

 

Yesterday it emerged that Hands had sent a placatory note to EMI artists and agents but failed to conceal their email addresses in the 'bcc' blind copy box. Consequently they can all now co-ordinate their protests.

 

In an interview with Sky News this afternoon, Hands denied Robbie Williams had refused to work on a new album. 'His manager was saying that, and it's very different to have a manager who's getting a percentage of the advances saying that to Robbie (saying it),' he said.

 

'Robbie is still working in the studio, but he's working at a slower pace, which is appropriate to producing the best music he can, and that's something we at EMI support him in.'

 

He said Terra Firma's status as a private equity company was an advantage in the music industry, as it enabled it to allow artists the time they needed to produce their work without the pressure of hitting quarterly targets.

 

Hands admitted he found his negative portrayal in the media hurtful, but said his job was not to win popularity contests. 'My job is to make sure that EMI, which is a great British institution, can be as successful in the future we have been in the past.'

 

thisismon ey

Interesting article :huh:

http://www.timesonline.co.uk/tol/comment/c...icle3207048.ece

 

 

The Guy to save the music industry?

The new boss of EMI is arrogant and cackhanded; but the record labels need to be shaken upPete Paphides

It might just be that there's a side to Guy Hands that, so far, has yet to be represented in the reports about his takeover of EMI. As the beleaguered record company attempts to manage a freefall in morale, you find yourself attempting to squeeze out a teaspoon of sympathy for the venture capitalist from Terra Firma. In these difficult times for the music industry, Mr Hands's business acumen surely can't hurt, can it? Well no. But without an understanding of the main commodity - musical talent and the egos and insecurities that go with it - EMI's new owner has landed himself a far bigger task than he may have imagined two months ago.

 

But he must surely be learning fast. Radiohead and Sir Paul McCartney have left EMI. Robbie Williams and the Rolling Stones appear to want out. Coldplay are said to be closely watching the situation. Only superannuated metal relics Iron Maiden have taken the opportunity to assure everyone that they would be pledging their support to the company - a declaration that sounded suspiciously like a plea for mercy from the new regime.

 

At Mr Hands's recent powerpoint presentation to staff, sources say that the frosty reception was accentuated by the half-hearted applause of “maybe four or five people at the front”. Nevertheless, once you had decoded the corporate jargon it was hard to deny that Mr Hands's presentation touched on a few key truths. In words that will surely have tumbleweed of portent blowing through Iron Maiden's tresses, he said: “One of the issues we will be addressing is the sheer size of our roster. In the past, we have followed the industry model of signing up as many artists as possible, while taking huge bets on a few.”

 

Big labels have been working to a business model left over from the days when even their unsuccessful artists could expect to sell 50,000 copies of an album. These days, any singer-songwriter who shifts that amount is doing well. But major labels still like to invest big if they think they stand any chance of recouping that investment. Once a band makes it, the label maximises its profit, preferably by making them tour one album for three years rather than having them release two more, potentially unprofitable, albums annually. But CD sales are in such decline that even this way of doing things doesn't work.

 

Whatever anti-piracy measures a record company implements before an album's release, people can still get a decent counterfeit copy from illegal file-sharing sites. Once, the enemy was the T-shirt vendors outside the venues or the record fair bootlegger. Now, by selling freshly burned official “bootlegs” as soon as a gig has finished (usually £15 a throw), the companies are moving in on this patch.

 

The music industry knows it needs a new business model. The current buzzphrase is the 360-degree deal, the direction that EMI is likely to take. Instead of record companies just making recording deals with artists, a 360-degree deal is one in which the label gets a share of the more lucrative merchandise and tour revenues. Whether it is resourceful or mercenary, Mr Hands will tell you that an extant business is better than no business at all.

 

Budding artists looking for their big break, need to ask themselves what they feel about this stuff before crossing the corporate threshold. They also need to ask what do they want? Fame - or merely the chance to get their music heard, without the ego-fluffing paraphernalia that goes with it? If Simon Cowell can be said to have had one genius idea in his life, it's to realise that, at their crudest, big record companies are stardom brokers - milking the novelty value from a never-ending stock of fame-hungry young singers. And as long as people want to be pop stars, these labels will adapt, not disappear.

 

Perhaps that's how EMI will proceed: as a fame factory. But if it did it would lose something important. The reason to sign the money-spinning pop acts - if necessary, on 360-degree deals - is that they help to subsidise the acts that set a label apart as an art-based enterprise rather than a run-of-the-mill company.

 

In the 1960s, Polydor had both James Last and the Velvet Undergound. In the 1980s, Columbia had both Bros and Leonard Cohen. What is Mr Hands going to do with prestigious loss-leaders such as Kraftwerk, who for 20 years have been turning up to their Düsseldorf studio to work on material that may never see the light of day?

 

On any big label, there are artists that are kept to show other would-be musicians that this is a good place to be creative. Mr Hands's PR gaffes have been bad enough, but when key EMI staff such as the CEO Tony Wadsworth - arguably Britain's most proven nurturer of musical talent - start to walk, a tough job becomes almost impossible. (At Mr Wadsworth's leaving party earlier this week, Radiohead revealed their allegiances by showing up.)

 

Once a big company loses those acts, it also loses any remaining reason for new artists to consider signing with it. That's why artists are already turning to smaller labels to manage their music. Domino - home to Arctic Monkeys and Franz Ferdinand - is a good example of a label that cuts its cloth according to realistic expectations of what an artist is likely to achieve. Low-selling artists are encouraged to hold on to their day jobs, but have their modest recording costs paid for; while a group such as Arctic Monkeys has a global marketing strategy mapped out for it.

 

Perhaps Guy Hands has something similarly flexible in mind for EMI. If so, he has a funny way of showing it. In his presentation, he said that “the most important thing we can do as an organisation and as an industry is to...get consumers to pay [for music].” The madness is that, more than any other band over the past decade, Radiohead built up trust with their fans by making music that meant a lot to people, music that fans were willing to purchase. That's why they were worth the millions that Mr Hands didn't give them.

 

It's not that all of his ideas are awful. Rather, it's the arrogance of their execution that seems set to trigger an exodus.

 

 

This article is very sarcastic, but makes some good points, and also for once mentions the fact Rudebox sold 4.5m copies. That is the first time I have ever seen that fact actually printed in the media (not including the interview with Neil but he said it not the media), so the journalist should get an award for being unique :grin:

 

 

Rob Story

http://estb.msn.com/i/FA/B1F8FBFB65EE5F5F31B7C37C43092.jpg

Tom Townshend thinks Robbie Williams' threat to go on strike is ill-conceived…

 

Robbie Williams has gone on strike. And we know a lot of you are going to be very worried by this news. How will it affect you day to day? Will Rock DJ have to be rationed? Will the army have to be called in to sing Angels at weddings and funerals? Do Take That have to go silent every time they get to one of Rob's old lines in Never Forget lest they be branded 'scabs'? It's going to be tough but together we'll make it through.

 

So what's behind what appears, on the surface, to be prima donna industrial action?

 

Last summer, Williams' record label EMI was purchased by the private equity firm Terra Firma, following the label's disastrous £260 million loss in profits (that's your fault if you downloaded the Gorillaz album illegally.) The new owners, headed by a Mr Guy Hands (brilliant comedy name), are expected to announce job cuts and massive structural changes, not least the suggestion that the promotion of a new record be directly proportioned to how hard the artist in question is willing to work in support of it.

 

 

Mr Hands was quoted in the Financial Times complaining that, "Some [artists] unfortunately simply focus on negotiating for the maximum advance... which are often never repaid". So like a new boss turning up on his first day and banning fag breaks, the workers, such as Williams and Coldplay are feeling something must be done to protect their right to spend years in the studio mucking about before disappearing off to hot countries to watch the royalties roll in.

 

This is what Robbie Williams' manager, Tim Clark, told The Times: "The question is, 'Should Robbie deliver the new album he is due to release to EMI?' We have to say the answer is 'no'".

 

We think you'll find, if you read the record breaking £80 million, six album, contract Robbie signed in 2002, that the answer is 'yes'. And if George Michael's cripplingly expensive battle to leave Sony, for similar complaints, set a precedent then we think you'll find that'll be the judge's answer too.

 

What it is about EMI that Williams feels particularly upset about isn't immediately clear. Clark goes on to say, "They do not have anyone in the digital sphere capable of doing the job required."

 

Allow us to be 'Kids' just for a second, but is anyone else thrilled at the idea of working in a digital sphere? We imagine it'd be like The Matrix – only rounder.

 

Sorry, we digress. It's probably no coincidence that these outbursts come so soon after former EMI artists Radiohead proved that giving away one's album free on the net could still result in massive physical album sales – on both sides of the Atlantic.

 

The gimmick, masterminded by the band themselves, would clearly be something Williams would like to try. But perhaps the label feels his fans are less trustworthy; would anyone really have paid for Rudebox if they didn't have to?

 

But it's not all self, self, self. The Robbie camp believes Terra Firma are going to "decimate their staff." So rather than protecting his own interests, this is Robbie standing up for the little guy; the humble record company employee whose fingers are reduced to mere bleeding stumps from years of trying to fit CDs precisely onto those knobbly spindles in the middle of the case without snapping them off (sadly, few are successful). Mr Williams - pop's own Arthur Scargill - is downing tools (and tiger pants) in solidarity for his fellow workers.

 

It brings a lump to the throat.

 

 

Perhaps the most troubling comment comes when Mr Clark describes Guy Hands as acting like a "plantation owner". What a distasteful and poorly chosen phrase to use. Is he daring to compare the plight of tens of millions of African slaves with the fifteenth richest musician in the country? Let's hope not.

 

Separating the issue from the ego, for a moment, does Robbie have a genuine case to make? Does the industry need to change, and should that revolution be led from inside?

 

Complaining about one's record label has been the pastime of the recording artist since contracts began. Early soul and blues performers were treated appallingly, with little or no royalties paid. Even The Beatles initial deal with EMI (them again) guaranteed a measly one penny per record sold – to be split between the fab four of them! But in these days of million pound advances for anyone threatening to be the next big thing, it's surely harder for us working folk to feel sympathy.

 

One mistake musicians make is to expect their paymasters to be sympathetic to their 'art'. But it's called the music industry for a reason – it's an industry. Their job is to sell products, nothing more. And you don't get very far in business promoting products that all evidence suggests are unpopular.

 

The familiar whine that the record label didn't support the record is usually the refusal to accept that no one liked the record enough for them to bother. It's hard not to hear echoes of that in Robbie's mistrust of EMI.

 

Did the Rudebox album sell badly because those given the job of selling it failed, or were its relatively poor results (it still shifted four and a half million copies) because people didn't like what they heard?

 

However, Williams is right to be concerned that EMI may not be capable of the job he entrusted them with. The music industry is a huge, slow, lumbering beast, run by people who stopped having to buy records at least 30 years ago and have long since lost the ability to tell good from bad, hype from talent or arse from elbow. The business is structured so that no one can afford to take risks, which creates a situation of stagnation and repetition – only daring to embrace change when the bandwagon is parked outside their door honking its horn impatiently.

 

But this is not news. It has always been the case. And Robbie Williams, having already been a major recording artist for RCA, should have known this when he took the contract with EMI.

 

It's like getting married to a girlfriend with a history of infidelity and then filing for divorce because you caught her defrocking the vicar immediately after the ceremony.

 

Did Robbie think he'd be different? Did he think he could change them? Did he somehow believe that by ticking the part of the contract that asked if he'd like artistic approval it would mean they'd actually listen to his ideas? If you want total control of your musical output then keep total control of your musical output and release it yourself. If you want 80 million quid then prepare to be shafted. To use a crude analogy, no one spends that kind of cash on a hooker then asks her what she'd like to do.

 

Does the music industry need to change? Of course it does. Is it making the kind of insane, panicked decisions seen only during the crumbling of empires? Without a doubt. Labels spent so long running scared of downloads they're too far behind to catch up.

 

They're now at the mercy of shareholders who have no tolerance for the small, money-haemorrhaging division of the multi-national corporation they invested in – hence the jobs cut and acts axed.

 

But is Robbie going to change that by withholding his songs and sulking away in his LA mansion? Perhaps he should consider just how highly the record company value his entertainment before he makes such a rash decision. A spokesperson for the label told The Times: "Robbie Williams is clearly an important artist but only represented in his best year less than one per cent of the worldwide revenues of EMI." Ouch.

 

Unless the Robster can organise an all-out picket line, with the Pet Shop Boys, Blur and Chris Martin waving placards, we're not sure EMI's new owners are going to lose too much sleep about the missing sequel to Swing When You're Winning.

 

 

Link: http://entertainment.uk.msn.com/musi...7238388&vv=550

A really long (3 page) article about Guy Hands if anyone wants to read it. Robbie is mentioned of course.

 

 

Here

 

http://www.telegraph.co.uk/news/main.jhtml.../19/nemi119.xml

http://business.timesonline.co.uk/tol/busi...icle3215561.ece

 

 

From The Sunday TimesJanuary 20, 2008

 

Hands in challenge to music industry

James Ashton

GUY HANDS is throwing down the gauntlet to the rest of the music industry to match his much-criticised turnround plan for EMI.

 

“I would like to be as big as the big three [music groups] and bigger,” he said, after visiting EMI staff in New York and Nashville to explain his scheme to strip out £200m of costs and reengage with music-buying consumers.

 

“We have a sensible plan to survive. The other labels need to have a plan to do that. They haven’t put anything forward yet. I would hate to find that we are the largest simply because the others have died.”

 

That seems unlikely for some time because Universal dwarfs EMI, particularly on its home British turf, where it has been losing market share. Hands’s Terra Firma is also fighting a rear-guard action to hold on to top-selling artists such as the Rolling Stones and Robbie Williams.

 

Hands is adamant that he won’t pay “ludicrous sums” to retain talent. “People move from label to label over time. The thing we are doing differently is that we are being realistic with what we are willing to pay in advances,” he said.

 

He is talking to artists at other labels to try to persuade them to defect to EMI, which announced last week that it was cutting up to 2,000 jobs and stripping record labels of their traditional sales and marketing role. He has told investors he wants recorded-music profits to soar from £60m to £528m by 2012.

 

But Hands remains at odds with the music-industry trade bodies, including the piracy-fight-ing International Federation of the Phonographic Industry, and is set to cancel EMI’s membership by March. He claims the issue is not the annual cost, but more to do with how the industry has bullied consumers into buying music on its own terms.

 

“The trade bodies need to change the way they operate,” he argues. “If they change, EMI will remain a member. If not, EMI will leave. I have a very, very strong view that we can’t cajole and sue our customers into buying music.”

 

Many artists from EMI’s 14,000-strong roster will be kept on but have their releases distributed only digitally in future to make them economically viable. The company is also examining plans to pair some performers with corporate sponsors. Hands, who is also bidding for the music publisher Chrysalis, hopes to line up a new chief executive by the end of June.

 

 

 

 

There may be trouble ah--eadddddd.......

 

http://www.thisismoney.co.uk/investing-and...=moretopstories

 

EMI row with music stars hots up

Financial Mail

27 January 2008, 3:11pm

EMI owner Guy Hands has demanded a retraction from Tim Clark, manager of Robbie Williams, after he accused Hands of behaving like a 'plantation owner' in his treatment of the singer.

Hands' lawyers wrote to Clark who also accused the private equity boss, who paid £3.2bn for EMI last year, of stumbling into the music industry through a 'vanity purchase'.

Clark has said the singer will withhold his next album, due for release in September, in protest at Hands' takeover of EMI.

 

Williams is contractually obliged to release his album through EMI and company sources have made it clear the music giant will sue if he does not.

 

Indie rock group Radiohead also fell out with EMI.

 

 

Geez this whole EMI thing has just turned to gobbledy goo :wacko:

Geez this whole EMI thing has just turned to gobbledy goo :wacko:

 

That is because nobody knows what is going on....... ^_^ .....it is all total speculation..... ;)

http://www.telegraph.co.uk/opinion/main.jh...3/02/do0204.xml

 

 

The idea is to record hits, not losses

By Dan Roberts

Last Updated: 12:01am GMT 02/03/2008

 

 

The pantomime villain of British music is feeling bruised. Guy Hands, the new owner of EMI Records, last week admitted his first few months in charge had been "emotionally and physically" draining as rock stars rebelled against his attempts to cut costs.

 

 

The characters could be from central casting. On one side, the philistine financier in a suit: determined to "monetise" music, a friend of frightfully uncool chaps like William Hague and, frankly, a man more likely to tap his foot politely to James Blunt than discover the next Arctic Monkeys. Opposing him, the appropriately-named Jazz Summers: manager of The Verve and Snow Patrol, achingly authentic, leader of a delegation of EMI talent complaining that Hands will hamfistedly crush creativity.

 

But the stereotypes are misleading. It is no exaggeration to say that who wins will determine the future of the British music industry. And it is not Hands who is the biggest threat.

 

EMI is the only remaining "major" headquartered in the UK. It is the commercial birthplace of many of our biggest bands and home to more than 12,000 acts worldwide. The trouble is that just three per cent of them make money. Hands's private equity fund, Terra Firma, has inherited a business with a capacity for losses far worse than many imagined. Some £1 billion is rumoured to have gone up in smoke over the last few years in the UK and US, much of it disguised through the legal, but dubious, practice of writing-off artist advances as an asset before any investment is ever recouped.

 

You can find evidence of such creative accounting treatment buried in old annual reports, but the scale of EMI's excess comes as a shock even by industry standards. This is a world, after all, where money described in the entertainments budget as "candles and flowers" is often a euphemism for less wholesome rock 'n' roll perks. But this is nit-picking compared to the real commercial crisis. EMI's support of so many unprofitable acts makes the British record industry look more like a giant subsidy for the trendy bars of Camden Town than the vital economic asset that culture ministers would have us believe.

 

Terra Firma's efforts to cut costs are focused not on candles but on "A&R men" - the "artists and repertoire" talent-spotters responsible for signing up so many unprofitable acts. Speaking this week to fellow private equity financiers in Germany, Hands didn't mince his words, describing the typical Artist & Repertoire executive as "someone who gets up late in the day, listens to lots of music, goes to clubs, spends his time with artists and has a knack of knowing what would sell". Except, he doesn't think the last bit is always the case.

 

The fear is that cutting back on support for up-and-coming bands will stifle the development of future megastars. Taken to an extreme, this is of course true. The problem is that even the megastars do not always bring in the money to justify their advances, leaving the industry dangerously exposed at a time when more and more fans are downloading music for free from the internet.

 

Instead, EMI's real profits come from unspeakably square genres like country & western. Trying to stem the losses in the new music business in the UK and US is the nice option. If it does not work, Hands seems just as likely to call their bluff and shut down the rock and pop division entirely.

 

None of this makes for easy listening, especially for music fans. It's been emotional for the artists too. Big names like Kylie Minogue and Robbie Williams are dependent on EMI investment to help them crack the US market, but are not getting their way as they used to. Forty years on from Sgt Pepper, this is the new culture war. Only this time, the suits are right: unless the creatives can clean up their act, there may not be a British music industry in another 40 years.