EMI aims for virtual profits

Guy Hands has signed up the creator of Second Life, in a bid to propel EMI into the digital age...

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Last Updated: 06 Nov 2012

Cory Ondrejka, who as CTO of Linden Lab dreamed up virtual world Second Life, has been appointed as senior vice-president of digital strategy at the ailing EMI. It’s the latest plank in the controversial rebuilding programme of Guy Hands, the Terra Firma private equity boss who bought the record label for £2.5bn last year and has since been busy wrangling with lots of pampered rock stars.

Second Life, for the uninitiated, is a slightly peculiar virtual world where users (or Residents, as they’re called) create online avatars that can socialise, interact and even trade with each other. It even has its own currency, the Linden dollar, which users can accumulate by investing in virtual real estate, shares and so on – and since there’s now a mechanism for exchanging this into real dollars (in a way we don’t entirely understand), we’re already starting to see the first Second Life millionaires. Making millions out of thin air – no wonder Hands wanted to apply its lessons to the music business…

As chief technology officer of Linden Lab, Ondrejka was one of the brains behind the Second Life ‘metaverse’, which has already attracted over 13m users. Now it seems that Hands wants him to repeat the trick at EMI, perhaps by building some kind of digital environment that makes it easier for us to buy EMI tunes online. Hands clearly believes that digital distribution is the way forward, given that he’s already hired ex-Google exec Douglas Merrill to run that part of the business. But will we be any more likely to buy the new Coldplay album just because we get to buy it from a Chris Martin avatar? Probably quite the reverse, in that particular case…

Then again, you can see the attraction for Hands. He’s spent the last year trying to cut costs by slashing EMI’s roster of artists and curbing some of the music industry’s notorious excesses – which has not surprisingly earned him criticism from artists like Radiohead and Robbie Williams (possibly aghast at the idea that anyone would try to run a music business on sound financial principles). By switching to a virtual record business, he could solve all his problems at a stroke: after all, rock avatars can be relied upon not to spend millions of pounds on scented candles and jars of M&Ms with the yellow ones taken out – and if they trash a hotel room or drive cars into swimming pools, it’s a lot cheaper to clean up the virtual damage.
 
Besides, at the rate EMI is going, Hands has got a lot more chance of turning a decent profit in virtual dollars than he has with the real thing...

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