So, if we had to pick which corporate entity has secured the most CMU time in 2007 it would have to be the United Kingdom's very own major record company, Electric And Musical Industries. Yes, it's been a busy year at EMI. And the EMI07 file started to fill out almost as soon as the year had begun, when the boss of EMI Group Eric Nicoli announced he was firing the two chiefs of the major music firm's recorded music business - Alain Levy and David Munns. Nicoli, previously chief of the EMI Group parent company, took personal control of EMI Music and began a pretty radical restructure of the major's recorded music operations. The suddenness and nature of their departure was pretty embarrassing for Levy and Munns, though to compensate they got the thrill of watching Nicoli himself being axed just eight months later, after new boys on the block - private equity outfit Terra Firma - moved in. It's still not clear if Nicoli knew he was for the axe when he and his board approved Terra Firma's offer to buy the EMI Group, but the new owners were barely through the door before his departure was announced, and leaked documents from the equity chiefs since their arrival at EMI have been pretty damning of Levy, Munns and Nicoli's leadership.
Terra Firma's purchase of EMI brought to an end one of the long running CMU stories of recent years - the will they won't they EMI Warner merger story. After various attempts by EMI to buy Warner, and vice versa, in 2006, there was more talk of the two smaller majors merging in the early part of the year - with Warner chief Edgar Bronfmann Jr seemingly pretty confident such a merger could gain approval from European Commission competition officials, despite the 2006 European Court ruling that criticised the earlier merger of Sony Music and BMG. But Nicoli never seemed so convinced an EMI Warner merger would jump the regulatory hurdles and so sought other ways to tackle his company's continued financial woes. Among the strategies considered were mortgaging the more profitable EMI Music Publishing to help fund the development of the flagging recorded music business, and also finding an investment outfit willing to take the major out of public hands and provide some direct investment. In the end it was the latter that Nicoli and the EMI board went for - approving a buyout deal proposed by private equity firm Terra Firma. It took a while for EMI's existing shareholders to sell, and rival bids from other consortiums and long time suitor Warner Music were much rumoured, but in the end Terra Firma succeeded, their top man Guy Hands took the top job at the major, and Nicoli was gone.
But it's since Hands arrival at EMI that things have got interesting. He quickly discovered what those of us in the music business but outside the major record companies have been saying for some time - that the major labels are sitting on some brilliant assets, but trying to capitalise on those assets with a business model that has long been on the slide. It's interesting to see an outsider who is so openly critical of the outdated record industry sitting at the top of a major record company. The challenge for Hands, though, is to identify how a record company should be capitalising on its assets, and quickly. And that will no doubt prove to be the tricky bit. I mean, it's not like EMI's rivals haven't been trying to find the business models for a while now, and with only limited success. Is that because old school record industry types just aren't up to it, and what is needed is a totally new approach? Quite possibly. Though whether a man from an investment background is the right guy to be leading a radical overhaul in a company that needs to be able to deal with unpredictable artists remains to be seen. Many aren't convinced.
And that includes the artists. And their managers. Since Hands took over at EMI some artists have expressed concern about the new regime at the major - most notably Radiohead who, out of contract, chose to take their new long player not to their old label but to independent XL, seemingly because of concerns regarding Hands' leadership. And last week the manager of one of EMI's biggest artists, Robbie Williams, implied that Robbie was quite likely to not renew his deal with the major when his current contract expires next year. Though to be fair, those comments had nothing to do with the new leadership at EMI, and more to do with a power shift that is currently occurring in the music business, and which seemed to gain pace in 2007. The shift of power from the labels to the artists and management. And to be fair to Hands, he, more than anyone, seemed to be very aware of that shift.