Somebody better tell all artists under the EMI umbrella to hurry & cash whatever checks they got laying around. They might even consider only accepting future payments in gold or shillings, as the company is reporting a $1.2 billion dollar loss.
The loss stems from “poor” operational performance, according to the company, which cites in particular a high-spending culture (including high executive salaries), overly traditional artist relationships and poor reporting of data related to artist profitability.
Those practices meant that, despite EMI’s strong artist roster and well-performing publishing business, the company finances suffered. EMI lost its third-place rank among the labels to Warner Music Group in 2006. Physical CD sales for the label fell 45% from 2005 to 2007, the report notes, even though the average market decline was 19%. Also, the label’s digital music revenue has had slower growth than the industry overall.
With staggering losses of this size, you can’t blame it on downloading, not even if you look @ EMI’s strategical gamble with offering DRM free downloads via iTunes. Personally, that initiative & their terse attitude towards the RIAA were two of the reasons I’ve championed for EMI to come out on top. But even if every blog around shared the Death And All His Friends, that would only be a drop in the bucket when you’re singing to a numerical tune this high, which trumps last year’s loss of $455 million. And true enough, it boils down to their restructuring efforts after the Terra Firma takeover & high exec salaries. Good, old fashioned, Matt Millen-styled mismanagement @ it’s finest with no stop-gap measures in place to slow down the leaks.
If I were an EMI employee, I don’t think I would be counting on that Christmas bonus this year.