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Email Confirmation
Jun 18 2008
1:35PM
EDT
Guy Hands: The End of EMI And Another Blow To The Music Industry?
Blaise Zerega doesn't like what he hears: Private equity's ownership of the storied EMI music label will be disastrous for the long-term health of the company and for music lovers. As reported by the NYT, the company's new direction may fatten the wallet of Guy Hands, head of Terra Firma, which purchased EMI for $6.4 billion almost a year ago, but to my ears it sounds like little more than a classic PE play: buy a struggling company, jettison anything that isn't profitable, cut costs, and then fiip what's left.
It seems that Hands' strategy is to stop spending money on signing new talent -- hence the deep cuts for A&R, and focus instead on selling its backlist of songs which it owns publishing rights to -- music from the Beatles, for instance. This is particularly short-sighted. If you cut off the spring, the lake will go dry. No matter for Terra Firma, which undoubtedly hopes to have an exit before things get too arid.
While the music business has always been just that -- a business, by doing this Terra Firma reduces music to little bits of intellectual property whose publishing rights it can buy and sell. Call it the ultimate commoditization. Call it the end of EMI as a cultural icon.
It seems that Hands' strategy is to stop spending money on signing new talent -- hence the deep cuts for A&R, and focus instead on selling its backlist of songs which it owns publishing rights to -- music from the Beatles, for instance. This is particularly short-sighted. If you cut off the spring, the lake will go dry. No matter for Terra Firma, which undoubtedly hopes to have an exit before things get too arid.
While the music business has always been just that -- a business, by doing this Terra Firma reduces music to little bits of intellectual property whose publishing rights it can buy and sell. Call it the ultimate commoditization. Call it the end of EMI as a cultural icon.
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