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Report: EMI will crack down on artists
LONDON - The new owner of EMI Group PLC has said he will drop artists the music group believes are not working hard enough and will overhaul the company's own executives' pay packages, the Financial Times reported Friday.
EMI, which has Coldplay, the Rolling Stones and Kylie Minogue on its roster, also threatened to withdraw stars' lucrative advances if record sales are disappointing, the FT said, quoting an internal memo to staff from the chief executive of the private equity firm that bought the company in August.
Guy Hands, the CEO of Terra Firma Capital Partners, said the company would in the future be "more selective in whom we choose to work with."
"While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating for the maximum advance ... advances which are often never repaid," Hands said.
The report said the memo did not name any artists. The company, which Terra Firma bought for $4.9 billion, has been plagued in the past by late delivery of albums by some of its biggest acts.
Hands also criticized EMI's "compensation and management system put in place over the last 20 years which does not encourage the right behaviors or reward the right actions."
"What worries me is that the existing structures have been put in over a couple of decades and unpicking them in a way that releases the good in the company is not going to happen overnight," he added.
EMI did not immediately return a call for comment Friday.
User Comments
(These do not necessarily reflect the beliefs of this site)
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gdZiemann
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Date: November 3, 2007 @ 1:07 AM
the company would in the future be "more selective in whom we choose to work with."
Taken out of context, this sounds like a good idea. The industry has a 90% failure rate. But the future selectivity will not be based on talent so much as a lack of negotiating skills.
"...some unfortunately simply focus on negotiating for the maximum advance ... advances which are often never repaid..."
Gee, and it only took about 40 years of being promising royalties which never appeared before the artists wised up enough to take as much money up front as possible.
Now the artists are suddenly supposed to accept less and believe that they'll actually get the royalties now. Did the contract terms change? How about accounting methods? Robert Fripp is currently auditing EMI and there appear to be some, uh, irregularities. Surprise! Has an EMI artist ever conducted an audit and found out that EMI didn't owe them money? I'd bet not.
Crack down on the artists? Go for it. They're not going independent fast enough for my liking anyway. |
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ChillinBuzz
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Date: November 3, 2007 @ 11:24 AM
Terra Firma Capital Partners... A private equity firm. It seems these kind of firms have been popping up all over the place in recent years... Is this the way some businesses are acquiring others without playing into anti-competitive rules? What happens if another "private equity firm" acquires another major label, then the two firms merge?
As for those advances never getting paid back... Overproducing CDs, limiting the studio/producers used by artists, tons of hidden charges in the contract and now a cut from merch and tour profits... Come on, these labels have been raking in billions. Plus I seriously doubt he'll overhaul wages to his staff, more likely they'll screw it right out of the artists again.
Bands, artists, anyone thinking that a deal with the big boys is the way to go... BACK OUT NOW! |
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pepe512000
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Date: November 3, 2007 @ 11:51 AM
Lets see now, the record industry has alienated most of their paying customers, so why not now start vexing the artists, the ones they have left anyway.
I have never in my lifetime seen an organization so willing to "deliberately"? set out to destroy themselves! Go figure~~~~ |
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gdZiemann
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Date: November 4, 2007 @ 4:09 PM
I'd like to partially back off on my criticism, having actually read the Financial Times story. The article on this page left out significant key points in order to arrive at the desired headline.
From my own site...
EMI's new boss is Guy Hands, CEO of the Terra Firma group which purchased the UK-based record company a few months ago. The Financial Times reports that Mr. Hands "promised 'fundamental change' in how EMI approached the music business, but warned that artists would have to meet their side of the bargain."
This is the first thing Mr. Hands wants to see changed, having noticed that some artists "unfortunately simply focus on negotiating for the maximum advance . . . advances which are often never repaid."
Perhaps Mr. Hands is not aware of the music industry's long history of screwing over the artists ("previous investments have been in pubs, landfill sites and cinemas," notes Financial Times). Even legacy acts like The Beatles and King Crimson still have to audit and sue EMI on a regular basis to collect royalties properly due them which have been "overlooked" by the label's crack accounting team. Of course, there are several ways to prevent artists from earning royalties, some of which are actually legal, even if they can't cross the bar to be considered ethical, like CDs that were counted as returns, but "accidentally" found their way back into the market.
For 40 years, it has been up to the artists to catch their label screwing them over, and, even when they do, they're still lucky to get 10 percent of what was actually skimmed from their royalties. As a defense against these practices, the artists simply started asking for more money up front. Then it didn't matter so much that they never got a royalty check. In fact, the current attitude is that if you DO ever receive a royalty check, your attorney has failed to negotiate properly.
So the new plan is for the artists to trust the record label? Again? Come on, Charlie Brown, Lucy promises she won't pull the football away at the last second this time and laugh at you for being a chump, like she's done every single time in the past.
Good luck with that.
But wait. There's some misdirection going on here. Look at the BBC's version of this story. And this one at Boycott-RIAA. In both versions, you get the "focus on negotiating for the maximum advance" quote, coupled with, "It will be open to us to choose which artists we wish to work with and promote." It comes off sounding like a threat to only hire acts with poor negotiating skills, even though EMI has always been able to choose which artists they work with and promote.
In Hand's defense, he actually said that this new selectivity will not occur until "EMI's own standards had been raised" and he uses words that many in the music biz have long ago banished from their vocabulary, like "honesty, transparency and performance."
He has already identified one of the prime reasons the industry has such a dismal failure rate -- execs get a big bonus for signing bands, with no consideration to the talent or marketability of the act, much less the potential to recover the investment. This lets a persuasive exec with bad taste make a pile of money by signing crappy bands, which explains a lot of things.
The other thing Hands has going for him is that he's talked to current and former execs from the other three majors, coming to the conclusion that "we have not seen many who, in our view, add anything."
You can't argue with that.
So it's really too early to assess EMI's new owners. While the idea of introducing honesty and transparency into the music business is promising, it is just a promise at this point. The artists have heard lots of promises.
And the audience wants to know if EMI is going to stop suing people. |
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pessimist
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Date: November 4, 2007 @ 5:47 PM
George, thanks for this information and the balance it provides.
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gdZiemann
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Date: November 4, 2007 @ 10:51 PM
I wasn't really trying to be balanced, just accurate. I NEVER try to be balanced. It's a journalistic exercise that usually serves only to obscure the truth, which is always decidedly one-sided. |
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medwardl
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Date: November 5, 2007 @ 9:54 PM
I'm perfectly ok with this now that they are alienating artists i give it another 10 years tops be for riaa is done. |
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RaidHHI
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Date: November 7, 2007 @ 12:01 AM
I hope it doesn't take another 10 years. This is starting to get expensive. :)
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