The restructuring of EMI will result in the elimination of between 1,500 and 2,000 jobs, and artists will be asked to work with EMI in creating revenue streams beyond the sales of recorded music.
Under the restructuring announced Tuesday by EMI Group chairman Guy Hands at a theater in London, EMI’s labels — among them Capitol, Virgin, Parlophone and Blue Note — will be completely focused on A&R. The sales, marketing, manufacturing and distribution operations of the individual labels will be merged.
The changes will be implemented over the next six months. One-third of the cuts will be made in the U.K., where EMI is based. The recorded music division, which has about 4,500 employees, will be the most affected. Cuts at EMI’s music publishing business, which is in far better shape, will be less drastic.
Most crucial for artists, though, is Hands’ statement that EMI intends to work with them beyond the realm of recorded music. He said EMI’s goal is to open “new income streams such as enhanced digital services and corporate sponsorship arrangements.”
He did not go so far to indicate that EMI would be looking to make more 360 deals, such as the ones the conglom has with Robbie Williams and Korn in which the artist and label create a partnership for all of the band’s income.
Following the announcement, the Verve became the latest act to say it wants assurances that its next album will be properly supported before the band hands over finished music. Managers for Robbie Williams and Coldplay have expressed similar concerns.
Hands noted that the changes are to make EMI “profitable and sustainable” and that resources will be pumped into A&R. EMI has been struggling to generate hits, create superstar artists and retain key artists over the past 10 years. Radiohead and Paul McCartney were the latest to defect; the company lost Janet Jackson after her final record for Virgin flopped; and it had a costly and unfruitful relationship with Mariah Carey, who made a successful comeback with Universal Music’s Island imprint.
Hands’ Terra Firma fund has been reviewing the company and its practices since it purchased EMI in August. Many of the measures, he said, have come at the suggestion of staff, artists or their managers.
“We believe we have devised a new revolutionary structure for the group that will improve every area of the business,” Hands said.
EMI employees on hand for the announcements told Daily Variety that the presentations were upbeat and inspiring, although the way in which Hands wants the business relationship to change between artists and the company may be easier said than done.
Norah Jones, the Beastie Boys and the Rolling Stones are among EMI artists. Artists on the labels’ catalogs include the Beatles, Frank Sinatra, Beach Boys and Radiohead.
(Gordon Masson in London contributed to this report.)