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BMG boss says it’s EMI’s recordings he wants
By CMU Editorial | Published on Tuesday 21 December 2010
Isn’t it the Bible that foretells how the Terra Firma dynasty will one day fall, leaving a group of Citi elders to distribute the songs of the god EMI to the German King Bertie, while handing over the EMI church’s many phonographs to a strange mysterious man called Edgar? I’m pretty sure that’s all predicting somewhere in the middle of Revelation.
Anyway, it seems the bible might be wrong on this one too. Because, in an end-of-year Music Week interview with the man atop what has probably been the most acquisitive music company in 2010, it’s revealed BMG has its eyes on EMI’s recordings catalogue, not its publishing business.
As much previously reported, it has been widely assumed that if – and possibly when – equity group Terra Firma hands over the keys to EMI to Citigroup, unable or unwilling to inject any more money into the flagging music major to keep it within the terms of its multi-billion pound Citi loan, the US bank would likely split the firm into two, selling the EMI record company and music publishing business separately. Warner Music has long been seen as a buyer for the record labels, while it’s been thought BMG would buy EMI Publishing.
But, says BMG CEO Hartwig Masuch in his enlightening interview with Music Week: “Integrating EMI’s publishing [with the rest of BMG] would be tough, but if you look at the recorded side, it is a different story. We are increasingly moving into representing master catalogues and EMI is the iconic catalogue. We are more confident these days; it is no secret we are more interested in rights to masters than publishing”.
Of course, it has always been the plan that the all new BMG – launched after German media giant Bertelsmann sold its old publishing business to Universal and record labels to Sony – would be a truly integrated music rights operation, managing and monetising both publishing and sound recording rights side by side. But, with a few notable exceptions, most of BMG’s catalogue acquisitions to date have been concerned with the lyric and melody copyrights of a conventional music publisher, not sound recording copyrights of a record label.
Buying EMI’s recordings catalogue would redress the balance and make BMG as important a player in the recordings side of the music industry as it has become in music publishing. Meanwhile, the thought of BMG acquiring EMI Music rather than EMI Publishing opens up whole new avenues of speculation.
BMG has previously indicated that it isn’t especially interested in the costly and risky side of running a traditional record company, which might be bad news for the EMI labels as they currently stand. Would a BMG acquisition of the EMI record company turn it into primarily a catalogue operation? God knows EMI, like all the majors, is vastly under using its catalogue.
But, that said, a lot of EMI Music’s current successes are in its new artist operations, and its music services division, which also primarily works with new talent. Perhaps Masuch recognises this and would keep much of the existing EMI Music structure in place. The inner workings of the EMI labels are, after all, now much more efficient than those of their major label rivals following all the Terra Firma instigated cut backs of recent years.
On the other hand, if Warner were to buy EMI Music, presumably they’d merge the EMI labels with their existing recordings business. So, perhaps, for the EMI record companies, a BMG purchase would be much more palatable than being absorbed by Warner Music. And would Warner then bid for EMI Publishing instead? Or would that leave the way for Imagem or another equity group to buy EMI’s indisputably valuable publishing catalogue?
Of course, all this speculation is based on the assumption Terra Firma will hand over EMI to Citigroup sooner rather than later, and that the bank will decide there is more money to be made by splitting the London music firm up rather than selling it as a whole.
EMI chief Roger Faxon has argued that, with his business plan which, like BMG, seeks to integrate publishing and sound recording operations, it will become increasingly hard to split up the two EMI businesses. And in the long term he is probably right. But talk of integration at EMI has, so far, been mainly just that – talk – and as everyone seems to think the big sale will happen in the first half of 2011, splitting up EMI Music from EMI Publishing won’t be all that difficult.
If, when and how this will all happen remains to be seen. Meantime, I’m going to return to the scriptures to see if there are any other metaphorical clues.
