The new owner of EMI has admitted that reinventing the music conglom has proved much harder than he expected. Speaking at what I'm sure was a riveting conference of private equity chiefs in Munich, Terra Firma/EMI boss Guy Hands told his money buddies more about one of the highest profile private equity purchases of the last twelve months, admitting: "The strategy we have is exactly the same as planned, the issue is the execution. Emotionally and physically it's a lot tougher to do than we expected".
He also further dissed the culture at EMI before his arrival, saying that the major's 260 A&R execs had far too much power, and that the other 4500 employees, including those with sales and marketing expertise, had too little influence on what artists the company worked with and how their albums were promoted. That, he said, contributed to the high number of artists who got nowhere near to providing returns on their investments.
According to Reuters, he later referred to one unspecified EMI label which, over three years, spent five times more money on marketing than they generated in gross CD revenue. He recalled telling the A&Rs in the imprint: "I said to them, you could have just put a £50 note on the outside of every CD and you probably would have done a better job ... and then we wouldn't have had to employ you".
Of course Hands and his Terra Firma team has done quite a lot of bitching about working practices at EMI since they acquired the major, both on and off the record, and he admitted that "people don't like to hear things like that" after delivering his fifty pound note anecdote. But he said that 90% of his A&R team had accepted without much controversy his proposals to give marketing people much more autonomy over how the record company markets their acts.