Is this the beginning of the endgame? Not really, it’s more like the raising of the curtain on the last act of the endgame. At least that’s the way it feels to me. Whilst it’s not over yet, and Warners are expected not to roll over, private equities’ impending purchase of EMI signals a fundamental, probably terminal change of course for one of the biggest record labels (and the oldest, with its roots going back to Emile Berliner, the granddaddy of the music industry, in the late 19th Century)
In the same way PolyGram bought Island, Motown and A&M for their catalogues primarily (although they got U2 as a bonus with
You have to feel for any artist tied into EMI now, those brokers and money men don’t want to be in the risky business of developing artists, providing tour support, making grossly overpriced videos that nobody watches but artistic egos and pushy managers insist on; or for that matter dealing with those bloated egos on a day to day basis.
All this in a market that has collapsed some 20% in the past year.
Nope, these guys want that largely passive income…that glowing catalogue of masters and songs, those little cash cows, and nothing else. Anything apart from that that requires any effort will be turned into quick cash by the new owners…perhaps with a sale to Warners, who’s Edgar Bronfman, still may want the odd thing, or contract as some sort of compensation, assuming of course his shareholders are willing to let him. But even Warners feels like its winding back its operation to little more than catalogue exploitation, with some 400 layoffs across the company (none of which seem to be at the senior executive level), and any desire to buy EMI was about that risk free cashflow.
It all comes at a perfect time for both EMI, and any potential purchaser, as Coldplay aside, they have virtually no signed acts of any consequence to the market place. Sure there is Norah, but her second album largely died, and there are lots of interesting bits and pieces, but most are licensed, rather than signed. When, as a label, your biggest assets are a couple of groups you signed decades ago, it’s time to fold.