In a statement this morning, EMI revealed plans for a ‘fundamental restructuring’ of its recorded music division. This will involve a greater focus on A&R (talent-spotting), new deals to help artists make more money from their back catalogue, and centralising support functions. Its new chairman, Terra Firma boss Guy Hands, reckons this will save the label £200m a year.
The new owners said the changes have come about after an ‘intense three-month consultation review of the business’, and suggested that many of the ideas had come directly from staff. Although presumably that doesn’t include the 2,000 EMI employees worldwide who are likely to get the boot as a result.
The buyout firm thinks the changes will ‘enable the group to become the world’s most innovative, artist-friendly and consumer-focused music company’. However, all the signs so far suggest that the artists beg to differ. Radiohead have already walked out (joining Sir Paul McCartney, who previously deserted EMI for Starbucks pre-Hands); Coldplay are apparently considering their options (after the departure of EMI's UK boss), and Robbie Williams is planning to go on strike. Today reports suggest that The Verve and Snow Patrol are also starting to grumble. The label hasn’t taken so much stick since it sacked the Sex Pistols, who went on to slam them in song as ‘stupid fools who stand in line’. If it keeps losing its top-earners at this rate, it’s not going to have any new records left to sell.
There’s definitely been a major culture clash here. There’s always been tension in the record industry between the artists and the money men, which has allowed the talent to get away with a thoroughly cosseted existence (remember the Pink Floyd classic ‘Have a Cigar’? ‘And did we tell you the name of the game, boy, we call it riding the gravy train’).
Hands has clearly been shocked by some of the industry’s excesses, and in the new digital age, he’s probably right that all the big record labels need to adapt or die. Unless they get leaner and meaner, they won’t survive the onslaught of the internet. Naturally the artists will see him as a presumptuous bean-counter when he starts trying to make them sing for their supper – but it may yet turn out that this radical overhaul is the only way to revive EMI’s fortunes. So this is basically kill or cure - Hands will either end up with a world-class record company or a world-class dog.
But either way, it won’t be much consolation to those 2000 ex-employees...