EMI's CEO Admits Company 'Lost Touch' But Doesn't Seem To Know How To Fix It

from the perhaps-by-not-suing-everyone dept

Well, this is rather incredible. EMI was one of the major labels that, for a brief period of time, seemed like it might actually have figured stuff out. You see, it got taken over by some folks from outside the recording industry, and they talked about how they needed to pay attention to experiments like Radiohead’s and learn how to better respond to customer desires like that. That was two years ago. The company was also the first of the major labels to dump DRM. It then pulled back on its support for the RIAA and IFPI (after threatening to withdraw completely), saying that the strategy of suing fans was a dead end. On top of all that, it hired some Silicon Valley techies. For a while, we actually thought EMI might be the most interesting of the major record labels to follow.

But… old habits die really hard, apparently. The company has been suing pretty much every innovative startup that comes along, often targeting execs personally in attempts to bankrupt them. Sometimes it’s been going after hobbyists or investors beyond just the actual companies. Often times, the company seems to be negotiating with innovators on the one hand, while filing unexpected lawsuits at the same time. One of the key techies it hired, Doug Merrill from Google, left after less than a year. More recently, the company refused to agree to more reasonable (but still high) streaming rates to get music back on YouTube in the UK.

Basically, it appears that EMI said it wanted to do something new, but couldn’t resist doing everything it could to snuff out innovation. It takes more than words to actually convince both consumers and musicians that you’re really adapting. Is it any wonder that people aren’t fans? EMI’s CEO is now admitting that the company “lost touch” with consumers:

“Music is in demand and the demand is growing all the time, but we’ve clearly lost touch with our consumers. I passionately believe that if we listen to our consumers, this gap will become our opportunity.”

Ok, so start listening! STOP SUING INNOVATORS. Stop suing executives and investors in those innovators. Stop using lawsuits as a negotiation tactic. Start focusing on giving fans what they want. Start focusing on enabling new business models that work for artists. Stop thinking about getting a transaction on every piece of music played, but start looking at ways to use the music to create additional products people want to buy. Stop trying to limit users and limit musicians. Enable them both. Also, over a year ago, Topspin’s Ian Rogers wrote a brilliant open letter to EMI execs suggesting a rather smart way it could leverage its existing artist relationships. It doesn’t seem like EMI listened at all.

If EMI wants help in listening, why not contact some of us who have been presenting solutions and showing what works? We’re not that hard to reach, and I’m sure plenty of folks in our community would be more than willing to provide some incredibly useful suggestions.

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Comments on “EMI's CEO Admits Company 'Lost Touch' But Doesn't Seem To Know How To Fix It”

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BullJustin (profile) says:

If you don't know, ask!

The key to remember is that if your business focus is to help others AND you can find a way to make money at it, you will succeed. If your focus is to get as much money as you can, you will fail.

They need, as Mike suggests, to ask their consumers what they want, what they are willing to pay for it, and then provide it to them. They ought to spend at least 10% of their effort on crazy R&D ideas to see what works and if they can monetize it. With the way business moves today, if you stagnate you die.

SteveD (profile) says:

Re: If you don't know, ask!

I don’t think its a case of them not knowing what their customers want, rather its a case of them knowing what they want but having no idea how to make money from it.

The problem isn’t leveraging ‘as much money as they can’, rather getting as much money as they used to make with analogue sales. EMI was bought by a private equity firm; if they have to shrink the company significantly to return it to profitability they risk ever making a decent return on their investment.

Speaking of which, the latest rumours are that the EMI owners are looking to write-off a significant portion of their debt to CityBank: http://www.hypebot.com/hypebot/2009/07/is-emi-in-deep-fiancial-trouble.html

Monarch says:

Re: Re:

Most consumers aren’t advocating to make music free, but just lower the prices!

I quit buying music a long time ago. Doesn’t mean I download it for free, just means I listen to my satelite radio rather than purchase. Yeah I’d like to purchase digital copies of everything. The problem is, CD’s are too expensive, even to me, $0.99 per track is TOO expensive. A couple years ago, I through out about 200 cassettes that I’d originally purchased. About 7 years ago, my Ex got the CD collection of over 150 CD’s we purchased together. I do not feel like paying somewhere in the neighborhood of $6000.00 to replace that music. Lower that price EMI and other record lables and I might start purchasing it again. I mean I buy DVD’s out of the bargain bins at WalMart for old movies I’d like to own, why not CD bargin bins also.

PRMan (profile) says:

Pandora's free...

And since I started listening to it, I have bought more music this year than in the last 5 years combined.

Pandora gives me what I want: a medium to hard rock Christian station. Those are difficult to find in the “real” world, but trivial to set up on Pandora.

As a result, I discovered a ton of great music I wanted in my car on my iPod. Free -> sales. (Most of this music is not copyright 2009. It’s copyright 2004-2008, the 5 years after the music industry killed internet radio. You don’t hear, you don’t buy.)

Athiest says:

Re: Pandora's free...

Christian hard rock? since when is that a genera, but that’s beside the point.

How about the record labels decide to stop charging people for data, and instead leverage concerts and merchandise. People who want to listen to music have a finite budget, the music industry should start channeling that money to tangible things like music, and concerts, instead of wasting it away printing plastic disks.

At the same time, the consumers can listen to all the music they could possibly want without fear of lawsuits. Everyone is happy except for the collection societies, who are running scam worth more than Madoff when put together.

Anonymous Coward says:

Re: Re: Pandora's free...

“How about the record labels decide to stop charging people for data, and instead leverage concerts and merchandise.”

Because that model unfairly shifts the economic burden to a very small group of people. I think of it as no different from the federal government coming along and adding a $2 a gallon tax to gas to pay for public transit. It makes a very small group of people pay for the larger group to get something for nothing. In the end, the smaller group just joins the bigger group, and there isn’t anyone left to pay for it.

Free music and more expensive concerts isn’t a long term workable formula, too many leeches and very few people actually paying for it to run.

MarksAngel (profile) says:

I won’t complain about paying for music, but I will complain about over paying for it. until they come up with a better model there are going to be troubles.

Most Music has been free for a long time now(read->public radio), Why pay to listen to it, also why should webcasters have to pay different fees then radio stations? It makes no sense.

The whole “Music Industry” has gone to hell in a handbag and it’s going to take a lot to pull it out.

Anonymous Coward says:

Re: Re:

Public radio music isn’t free – it’s just without financial cost to you. Your cost is your attention to advertising and the actions that enough people take as a result of hearing that advertising.

There is no free lunch, just some of them don’t require that you take money out of your pocket.

Hephaestus (profile) says:

Open standards is the answer to this ...

“Basically, it appears that EMI said it wanted to do something new, but couldn’t resist doing everything it could to snuff out innovation.”

With a set of open standards (we are working on it), ratings, and contracts spread across all music sites, it would be impossible for the innovation to be snuffed out. EMI etc would be forced to compete on an open playing field with no hope of preventing the inevitable.

Dave (profile) says:

Re: Bullsh*t

Do you think Twitter would be as big as it is right now if it weren’t for hundreds of software developers “riding their coat tails” to make Twitter more useful? Would the iPhone be as useful with no one but Apple designing the apps to make it so?

Here in the 21st century, you have to let 3rd-party developers into your ecosystem to make your product more useful to the people. As long as the RIAA continues to lock these developers out by suing them and squeezing every last dime out of them, they will lose in the eyes of the public. Period.

Diana Grinshaw says:

EMI Artist Relations

There is a continued effort to focus on artist relations at EMI by the office of the CEO. Support from EMI chief Elio Leoni-Sceti and Terra Firma’s Guy Hands to Edna Abad, Vice President of Artist Relations North America, has been aligning the artist relations team to take advantage of the continued progress the company is making, as well as bringing together their formidable business skills and respective management experiences. EMI will continue to strengthen the company’s relationship with artists and the creative community, secure its global reach and provide great entertainment to music lovers around the world.

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