In June 2008, EMI is a sad ship without captains, but there is still hope on the horizon.
Conversations that I've had with EMI staffers and several news reports provide a look inside a beleaguered EMI. Employee morale is extremely low as they wait...and wait for the axe to fall on 1500-2000 of their 5000 or so heads. Artists and managers share similar fears and frustrations over what has been a painfully slow reorganization process. "I just want to know if I have a job" and "We just want to know who will be left to talk to" are two refrains heard often from staff and artist reps respectively.
Sadly, the numbers may also be worse than feared. An analysis by McKinsey and KPMG found that EMI had lost $1.5 billion selling new music in the last five years alone. Only Beatles, Rolling Stones and other old catalog are keeping the company now laden with debt afloat.
"UNLOCKED YEARS OF INTERNAL BATTLES"
Some gave new owner Guy Hands the benefit of the doubt, but now his sometimes abrasive style and the lack of an obvious plan forward
are causing many artists and managers to look for any way out. Hands
for his part is giving no ground eyeing EMI's staff and artists with
disdain. "It was like we had unlocked years of internal battles with a
psychotherapy session,” he said. “It was extraordinary.”
For now Hands is left alone at the top. One by one, he's removed heads
of labels and other key execs. These may be needed moves, but he's
left demoralized crews without captains. His executive restaffing has
also been slow and in many cases he has no intention of ever filling
the posts.
HOPEFUL SIGNS
One bright spot has been a slew of digital appointments grabbing fresh
perspectives from the executive suites of Google and other tech
companies. But digital is just the delivery pipe whose value rises and
falls with the product being fed through it.
Coldplay is certainly delivering impressive early numbers topping most
charts worldwide. The Beatles are inching closer to unleashing the
digital floodgates. Today's reports indicate that the Rolling Stones
may not be leaving after all, and if they do that their lucrative
catalog may remain.
PUMPS WITHOUT GAS
What seems to be missing most at today's EMI is an awareness that the
signed artists with product in the pipeline need support and that new
artists need to be signed and nurtured. This is how profitable catalog
is created. One of Guy Hand's early successes was revitalizing gas stations on the
autobahn. From that experience he should have learned that all the
clean toilets in the world mean nothing if their isn't gas in the
pumps.
