In a bid to revitalize the finances of its stagnating music labels, EMI Group has named former Polygram topper Alain Levy chairman and CEO of its recorded music unit, replacing Ken Berry.
Move wagers the fortunes of EMI, whose lack of major new signings has dropped it to last place in U.S. market share among the big five music congloms, on a business-savvy Frenchman who is credited with turning the tide for Polygram with a series of canny investments.
Last month, EMI issued a 20% profit warning for 2001 after a rosy first-quarter profit outlook turned out to be unduly optimistic. Berry, 49, had been charged with building the British music giant’s label businesses in the U.S., including the Capitol and Virgin imprints.
That has proved extraordinarily difficult in the current market, with album sales on the decline and uncertainty looming over the role of music on the Internet. Exacerbating EMI’s troubles was a pair of failed merger attempts — first with AOL Time Warner and then Bertelsmann.
Berry, who has been at the helm for five years, also recently faced criticism for the signing of pop diva Mariah Carey to Virgin for the record-breaking price of more than $80 million. Carey’s first release for Virgin, the soundtrack to her film bow, “Glitter,” had a tepid opening in the charts and has yet to go gold.
Levy had a good track record at Polygram, which was folded into Universal in 1998. Exec played a key role in Polygram’s acquisition of several imprints, including Island and later Def Jam, which are among the top performers in the Universal Music Group stable.
Over the past couple of years, however, he has been associated — admittedly without a key role — with a handful of failures, including U.K. pay-per-view movie outfit Digital Broadcasting Co. and Swedish online music retailer Boxman.
Prior to Polygram, Levy’s credits include an executive stint at CBS Records (now Sony Music). Levy, 54, will report to Eric Nicoli, chairman of EMI Group, which includes the giant EMI Music Publishing division.
Meanwhile, fellow ex-Polygram exec David Munns has been appointed vice chairman of EMI Recorded Music. Included in Munns’ brief will be overseeing global marketing.
Levy and Munns will be based in London for the time being.
Their appointments also point to Nicoli’s authority over EMI, after a long-standing debate in industry circles over whether he or Berry held sway over the company’s board. Nicoli replaced Colin Southgate as chairman two years ago.
“We are committed to improving the operating performance of EMI Recorded Music,” Nicoli said. “In these challenging market conditions, Alain brings a unique blend of creative, commercial, strategic and leadership skills to take the business forward to the next level.”
EMI shares have collapsed to a fifth of their value a year ago. The group is worth about £1.9 billion ($2.76 billion).
EMI Music Publishing, headed by New York-based Martin Bandier, is unaffected by the changes. It is expected to post flat profits for the year.
EMI’s most recent major success was the Beatles “1” compilation, which has sold more than 25 million copies worldwide. Included in the company’s roster are the Rolling Stones, Robbie Williams, Radiohead, Lenny Kravitz and Janet Jackson.