Friday, January 12, 2007

Changes At EMI

It is sad to read about the firing of the two senior managers at EMI, Alain Levy and David Munns. Not for them of course – they have more money than they’ll ever need. No, sad for the people lower down the career ladder who have been so screwed by their mis-management. Expect to see many other senior managers ‘leave’ this year. For 2007 looks as though it is going to be the last year the record company is going to exist in its current form.


The shake up in the industry has been happening for many years, and yet, if you look at the deals being done by record companies you would think it is still the first year of the internet’s existence. Let me qualify that – it’s not the deals that have been done, it’s the deals that HAVEN’T been done. No deal with an MP3 company, No deal with P2P, no deal with live promoters or merchandise companies, no new artiste royalty deals, no new deals with digital retailers, subscription services or mobile phone companies. In today’s environment there should be new deals announced every day. And yet the complete silence on new deals and business models is deafening.


The reason? Look at the age and character of the current chairmen and senior managers. When was the last time they even BOUGHT A CD, never mind downloaded a track. When did they last attempt to rip a CD or struggle to transfer a DRM’s track they’d downloaded onto a device. When did they last have to decide whether to spend £10 on a new album or use the money to pay for a pack of 50 blank CDR’s? The record industry is going to have to get far smaller before it gets bigger, and which senior manager is going to have a 10 year vision when this year’s bonus depends on them selling more CD’s? It’s very sad for the people within the companies who are dedicated, work long hours and love the music they work with, and yet are being let down by a group of men who no longer have any connection with the market they’re serving.


Want proof? My old Sony chairman, Rob Stringer – now in charge of Sony BMG’s entire music division – had an iPod in his desk for 2 years before he even turned it on… imagine, the future of the music business sitting in his desk drawer for TWO WHOLE YEARS before he thought it may be worth taking a look at. If that’s senior management vision, then no wonder the business is in the shape it currently finds itself in.

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