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Monday
Mar302009

EMI is screwed. Utterly screwed.

An article on All Things Digital caught my eye this morning. At face value, it’s just another one of those reports about people coming and going at the top end of the major record labels. Douglas Merrill, formerly CIO of Google, then Head of Digital for EMI, has left the building.

And it’s not surprising that Merrill was unable to singlehandedly reverse the fortunes of the label. He could have had the greatest strategy in the world - but the end goal was the wrong one, so his efforts would have been to no avail regardless of what he did.

And it’s this line from the internal memo at EMI that gives the game away:

I am delighted to announce that Cory Ondrejka is appointed to the newly-created position of Executive Vice President, Digital Marketing.

Digital Marketing. That’s the top job at EMI for digital strategy. Marketing.

What exactly are you going to be marketing, Mr Ondrejka? There is not a marketing problem to be solved at EMI. It’s a problem of purpose.

Your organisation has still not realised that Digital is not a format shift like the one from records to CDs. It’s a complete paradigm shift like the one that occurred when sheet music as the dominant mode of consumption was 99.9% replaced by recorded music as the dominant mode of consumption.

EVP in charge of promoting nostalgia

It would make sense for EMI to have an EVP of Digital Marketing only if the vast majority of the other jobs at EMI were already digitally focused. If EMI declared: “the idea around which our entire empire is built is no longer valid, and we need to completely rethink our purpose and our business” - then there’d be some hope, and something to market.

I was briefly encouraged when Merrill joined EMI. I thought that perhaps this was the thin end of the wedge - the first foray into new categories of thinking at that kind of organisation, which may spearhead necessary and radical changes in that industry. But his hands were clearly tied - and the relentless corporate logic characteristic of major record labels plods on toward its own near-oblivion.

I say near-oblivion, because it’s true that some companies still make money selling sheet music. Likewise, ‘selling recordings of music’ is taking its place next to ‘selling dots on a page’ as a marginal and far more modest stream of music business activity.

CDs, as Lefsetz rightly points out, are not dead. Nor are sales of mp3s as if they were invisible CDs. I mean, let’s not get hysterical about the ‘death of the labels’. Not being important anymore is not death - it’s just lonely and disappointing.

And if EMI is marginalised in the new music ecology to the extent that their recording businesses marginalised sheet music publishing, they’re still going to need someone to do their marketing for them on the internet. Someone in charge of promoting and selling items of nostalgia.

Reader Comments (6)

I love your title of "EVP in charge of promoting nostalgia."

Consider, though, that major labels spend almost no time promoting and packaging their catalog for a digital world. Decade-based nostalgia is a huge selling point - just look at all the mileage business has gotten out of the 80s lately. We've been creeping into the 90s over the last few months, which will see attention given to artists and entertainment from that era. Why don't major labels lead the charge in creating focused communities around nostalgia?! Isn't catalog their most valuable asset? Why not pull out all the stops to promote it? Why NOT have an EVP of Nostalgia Marketing???

March 30 | Unregistered CommenterTaylor Trask

EMI gets singled out in just about all of these discussions about the shifting paradigms of the recorded music industry. What are the other labels doing differently?

March 30 | Unregistered CommenterBeth

I believe that you are correct that this is a major paradigm shift in the way the music business will continue to grow in the future. The problem is that the majors still have quarterly profits to show to shareholders or stock prices will fall and jobs will be cut more than what they are already. How can a company like EMI begin to show that they are moving towards a future of sustainability and profits? I suspect by hiring qualified people and creating positions that will bring the profits the investors are looking for. It seems that although it may not make sense right now it will bring a much more focused EMI to the future. Now that being said.

If EMI wants to target this digital revolution as it seems that they do because of their restructuring then they must put into effect a strategy that employs digital content as a backbone to their artists. They can obviously can no longer expect music to be the sole provider of their bottom line. The music business and artists careers are now (for better or worse) about brand equity. This is the business model that is working for digital/social media. It's about building a brand around the music and creating revenue streams from that brand since the music revenue is not sustainable any longer. I think that EMI and any other 'major' needs to look at their artists as individual strategic partnerships from the beginning. If the music business were to look at artists in this way then they would be able to see how they could leverage the internet to best expose the artist for as little cost as possible and build a foundation of loyal fans. These fans want interesting content that keeps them participating in their favorite artists and the development of their careers.

Word of mouth is always your best marketing tool when promoting a brand. What better WoM can you have that creating an interesting marketing campaign that keeps your fans returning for content day after day and month after month. Fans want to be stimulated into something that they can feel a part of. Something that is real and not contrived. They want to feel connected and be a part of the music that has effected their lives. In whatever way that might be. This just deepens the relationship that fans have with their music. This is the connection that EMI and any company in the music industry that wants success for their artists to have.

March 30 | Unregistered CommenterDale Adams

Maybe EMI should employ the same idea as one Canadian company who recently advertised for the position of secretary as " The Director of First Impressions". Business speak at it's finest but one lesson that Majors could follow. What is our first impression of record labels. All knowing/ all powerful? Maybe Once. Now? Anachronistic affairs of the purse overtaken by the digital age.

Only question is on a large scale who is going to take their place? Terry McBride. I had hoped so but maybe the model isn't quite right especially since his top two acts have crumbled or jumped ship to Azoff and Co.

Andrew Dubber. CEO of the future?

March 30 | Unregistered CommenterJamie H

The sad/eye-rollingly forseeable* thing about all this is that almost anyone - even laypeople - could see that big music giants like EMI had to change their entire outlook on selling music the moment music became tradable online.

The fact that a lot chose to either stumble on blindly or make their own dumb attempts at controlling the uncontrollable maybe suggests that if or when they fold, musicians and the record-buying public might be better off after all.

*delete as appropriate

I guess this is a step in the right direction - incredible it's taken this long ! Still effectively a marketing exercise, although the A&R drop-box is an interesting touch - I wonder if they will actually pay attention to what's dropped in it ?

March 31 | Unregistered CommenterIan Shepherd

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