Thursday, January 17, 2008

Inside EMI

There's a wonderful piece in today's Telegraph by Robert Sandall, who was at Virgin a decade ago, explaining just how badly run EMI was. Virgin refused to be part of its parent company:

Round at ours, EMI was spoken of, if at all, in the same dismissive tones as real commercial rivals such as Sony or Warners. Contact with the corporate HQ, only a couple of miles away in West London, was minimal, and we competed fiercely with the mothership whenever we got the chance.

I vividly remember the jubilation in the Virgin building when EMI's great white hope, Robbie Williams, failed to make number one with his first solo single, Freedom. Our joy at the dismissal of a senior EMI manager following an onboard incident with a female flight attendant was unbounded. We swaggered outrageously in the year when, thanks to the soaraway Spice Girls, Virgin UK reported more profit than its EMI parent.

But if Virgin saw itself as cooler than its Dad, its fake-indie sublabel replicated the relationship:
The guys who ran our faux-indie Hut label - home to the Verve and Placebo - were desperate to keep their operation out of the hands of Virgin's in-house press and marketing teams, whom they viewed as too corporate to be trusted with hypersensitive types such as Richard Ashcroft.

Clearly, it's going to be easy for Hands to sack 2,000 people - he can just prune off the people who refuse to accept they're part of a major label.

Sandall makes the point that when times were good, the lack of any corporate coherence wasn't a problem; it was only when the cash started running out that things got bad.

He is a little unfair, though:
Becoming the most successful record label on the planet encouraged EMI to embark on a long and giddy expansion programme that saw it merge with the TV rental business Thorn, and acquire large stakes in the retail sector, notably in HMV record stores and the booksellers, Dillons and Waterstones.

The vast amount of time and money spent on those failed hook-ups would have been better used tightening up the business itself and, more specifically, investing in the digital download market that EMI, like all the other majors, chose initially to view as a threat rather than an opportunity.

It's arguable that this is true of the Waterstones takeover - although that was a decision taken by the HMV shops management team rather than the people running the record business; but the Thorn-EMI merger happened in 1977. We're no fans of the major labels, but suggesting it was short-sighted to not be investing in digital downloads two years before CDs were invented seems a little harsh.


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