Thursday, September 04, 2003

DON’T SHOOT THE PEOPLE LIVING OFF THE BACKS OF THE PIANO PLAYER: David Munns, the vice-chairman of EMI, has written an article for BBC News Online to tell us that stealing is bad, mmmkay? Let’s see what he has to say…

The music industry came in for quite a kicking from users in the BBC News Online article on UK record sales and prices.
The gap between the perception of how record companies like EMI work and the actual reality is now a chasm.

“the gap between how we’d like you to think about us and what you actually think about is a chasm”, surely? And why use ‘chasm’ to indicate a large gap? Why not ‘a gap as wide as the difference between US and UK CD prices?’

Investing in new artists and music is not a 100% science.
Thousands of new albums and singles are released every year in every conceivable genre. We use our best judgements on what we think people will like.
Sometimes we're right, sometimes we're wrong, but no one can force anybody to like or dislike something, and that includes us.

Well, yeah, EMI does stick out a load of old rubbish, it’s true, and no amount of clever marketing will make some of the old nags’ buttocks you release move off the shelf. And while you can’t guarantee that every record you put out will be a top seller, this constant whining about the things you ‘invest’ in which don’t recoup is a bit cod - any company expects some failures; but the big labels have become so poor at the job they’re supposed to do it’s more a surprise when they manage a rare success.

Various accusations of "greed" were thrown at record companies in the piece.
EMI is a business which means that yes, we are trying to make profits, but what business isn't?

A lot of other businesses in the arts and media sectors, actually - they believe that what they produce is for the public good, and so set out not to make a supernormal profit but just to break even. Of course, it wouldn’t work for everybody. But there’s no reason why a well-run record label couldn’t be established on co-operative principles.

Our financial statements are all publicly available for anyone who wants to look at them, and no one could say they show excessive profitability.

Third of a billion pounds last year, wasn’t it? Hardly small change, especially in what EMI tries to portray as a risky, tricky, cash-draining business. Of course, normally the labels would also point to all the staff they keep employed off the back of the records bought by the public, but having dumped hundreds of people last year they can hardly claim to be using their ‘investments’ to keep their postrooms and cleaners in gainful employment.

When it comes to the internet, EMI has made the vast majority of its music available online, and we're working hard to add more all the time. We also now sell singles online as soon as they appear on the radio.

Yeah, you’ve finally gotten round to it – although the tracks aren’t available to everyone and in Europe come wrapped in a confusing, over-priced, Microsoft-powered mush. Its galling to hear the boss of a major label talking as if they have been at the cutting edge of music on the web – at least a little acceptance that they’ve spent the last five years first fighting the very idea of music online, and now have given in to the inevitable in a foot-dragging fashion is called for?

I sometimes wonder if it's because music is intangible that people forget that there are many more costs involved than merely manufacturing a piece of plastic.
There's a lot that goes into the retail price - VAT, retailer's cut, distribution costs, advertising and other marketing costs, producers' fees and studio time, not to mention the artists and songwriters who need to be paid.
Manufacturing a CD is only one very small part of the total cost yet that is the one that people focus on.

No, no it’s not. Artists and songwriters get paid very little, thanks to the machinations of the labels and stinking contracts they sign when they’re young and hungry – the sort of dodgy contracts that George Michael and Prince get overturned aren’t the exception; its just you have to be incredibly successful to fight your way out of the sharp practices. Most bands don’t make shit. And yet EMI makes a third of a billion quid after their costs have been taken out.

Who knows what it costs to manufacture perfume? Who cares?

Eh? Where did that come from? For what it’s worth, perfume costs very, very little to manufacture – the main costs are in the marketing and packaging, although even that doesn’t explain the high price of the stuff. Perfume costs a lot, simply because you’re buying something for the status of it. Cheap perfume wouldn’t sell. This is basic, schoolboy economics and yet the vice president of EMI doesn’t appear to understand it. That would make me think carefully if I were an EMI shareholder. And is he really trying to compare a Robbie Williams CD with a bottle of Dior?

And whatever any of us feel about the price of anything, that doesn't justify stealing.
Illegal file-sharing is theft under copyright law.
Is it okay to shoplift if you disagree with the prices a shop charges? Would you steal a Mercedes and justify it by saying it was because you couldn't afford one?

This is, of course, spurious and he knows it. The analogy doesn’t work because stealing a Mercedes and listening to music on your computer isn’t the same thing. When Jeffrey Archer was caught taking those suits out of the store, he claimed he was just trying them on. Which was, of course, bollocks. But, mostly, when people download music, they are just seeing what the music looks like in the light. It’s often a first step to buying lots more. And the sort of people who download because they wouldn’t buy a CD normally don’t represent lost sales. What’s interesting is that EMI seem to view their product as just another commodity.

We love music too, but without some profits we won't be able to invest in more music in the future.

Let’s just pretend that a third of a billion quid is something more than “some profits.” But you’re rubbish at working out what the public like; if you do sign a good band you don’t give them long enough to make a couple of mistakes before they bloom but drop them in order to pump more money into vaudeville hoofers like Williams; you blow millions on Mariah Carey when anyone could have told you she was little more than a laughing stock. Why would it be a bad thing if you stopped pouring money away? If we do believe that EMI is in danger of going tits-up, maybe that’d be a good thing. Maybe it’d create a space for people who can cope with the music world as it is, rather than as it was fifty years ago, to have a go at actually releasing records which add to the gaiety of our nation.

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