EMI has just licensed their electronica catalogue to Beatport. It seems like EMI are now going to license their catalogue to pretty much anyone at any price.
EMI says it’s giving Beatport a license to sell its tracks in North America, Europe and Australasia, including those from The Chemical Brothers, Kraftwerk and LCD Soundsystem.
Beatport has been going since 2004 and, as Moby wrote: “The average cost for a track on Beatport is twice or three times the cost of a track on iTunes (which makes sense, as the tracks are a lot longer).”
UK major label EMI this week railed against Apple’s iTunes in the body of its latest annual financial statement.
EMI are unanimous in their praise for Apple’s achievements in online music sales, but resent the huge slice of the music sales market the company has carved out. In other words they want Apple to be a large player in the online music space, but they want to see a few other services step up and compete with them on marketshare. Apple is now the biggest music retailer in the US for both the digital market and the overall music market.
This gives Apple too much control, label bosses feel. Now EMI has found this sufficiently significant to warn that a key risk to the music industry is:
“The substantial dependence on a limited number of online music stores, in particular the iTunes Store, for the online sale of music recordings, and the resultant significant influence that they can exert over the pricing structure for online music stores.”
This warning was included within the company’s most recent financial statement, in which the label confirmed continued decline in CD sales, but said digital revenues now accounted for 8.1 percent of music publishing revenues, up from 7.4 percent in the same period last year.
There are a lot of reports floating around that EMI is two weeks away from announcing some huge changes! The key change wil be a drastic reorganisation which would lead to loads more layoffs.
The key point here is that EMI will be moving either distribution, sales and some marketing functions to one of the other three major record labels (EMI should think about moving all their digital distribution straight over to RouteNote!!).
Additionally, some reports are suggesting that EMIs reorganisation will securitize some of its successful publishing catalogue, which would provide EMI with some much needed upfront cash.
The gap between major artists and independent artists is shrinking and this prominant in EMIs struggles to become profitable!
Here at RouteNote we have been keeping a close eye on the situation with OK Go and EMI. Now that OK Go have been able to get out of their EMI contract they are in the process of setting up their own label. The new label is dubbed Paracadute Records.
Paracadute has also announced that they will be getting distribution through RED, owned by Sony Music.
The full situation is as follows: EMI Music holds the rights to the older catalog, though the latest EMI release – Of The Blue Colour of the Sky – is now getting a fresh re-release under Paracadute/RED in July.
Its very interesting to see that OK Go choose a Sony related service, and I’m sure EMI aren’t going to be very happy.
It has been reported that Sir Paul McCartney has dumped EMI in favour of independent record label Concord Music Group. EMI had previously handled almost his 2 dozen albums of McCartney solo and fronting Wings under an exclusive license.
This seems like another major blow for EMI, but this was kind of expected as McCartney worked with Concord on a 2007 album and a 2009 CD/DVD hybrid “Good Evening New York City.
Guy Hands’s Terra Firm may have to ask clients for triple the amount to keep EMI afloat until 2015.
Terra Firma plans to raise 360 million pounds ($551 million) by the middle of June, which would allow the company to comply with its covenants over the next five years, said the person, who declined to be identified because the information is private. The record label of Coldplay, Queen and Pink Floyd had previously considered seeking 120 million pounds, enough to meet obligations until 2011.
The private-equity firm has written down about 90 percent of its 1.5 billion-pound investment in the music company, which accounts for about a third of its fund, a person close to the matter said previously. EMI said yesterday it is preparing a long-term business plan to secure additional funds and the project will be completed by mid-June.
The story of’s EMI’s purchase, and the company’s subsequent struggles to maintain its debt is one that we’ve featured a fair bit, and now the speculation about their move to raise cash by licensing out their publishing division to another label is becoming clearer. According to an article in The Times they’ve been in talks with all three of the other major labels (UMG, Warner, Sony BMG) about taking over the exploitation of their catalogue for a five year period, for a sum in the neighbourhood of $400 million. This would essentially solve their cash flow problems (The Times thinks until about 2014), but would also mean that the major source of revenue had been taken out of the business.
Buying breathing space with a deal like this would give them time to make economies and find alternative sources of revenue without CitiBank breathing down their neck, but would probably also see one of their competitors releasing compilations like crazy, milking whatever they can out of the asset in their short license period. Doubtless EMI think this is a better solution than being thrown to the wolves that are gathering outside Brook Green – KKR, a private equity group, is in talks with Warner Music to launch a break-up bid for EMI.
Record industry trade Hits Daily Double has gone through the numbers for Q1 of 2010 to see how the major label marketshare is shaping up. Sony has been gaining some great marketshare from Universal, Im guessing that is mainly because of the huge success of Simon Cowell’s record label. Hits has more analysis. Free registration is required.
As most people know OK Go is no longer part of EMI as they have been having a big disagreement about their music videos being embedded. OK Go’s latest video “This Too Shall Pass” hit about 3.5 million views.
It appears that OK Go is enjoying the independence because they have just created a video called Business Meeting where the band is meeting “with the heads of their new label to discuss their options.” It turns out their new label heads are a couple of dogs with clothes on. This could be OK Go’s latest viral video.
Guy Hands and his team at the high flying venture capital firm Terra Firma have been chewing sour grapes ever since their purchase of recording giant EMI for £2.4 billion. They have been in court with their lenders Citibank over bad advice during the sale of the label, and have been practically walking on water to meet the huge cash demand of the interest payments on their gigantic loan (although they stopped short of selling off the Abbey Rd. Studios to get a cash fix). Now they are again scrabbling around to find £120 million to plug a covenant breach on the same loan, and a deal is in the offing from WMG to buy the still-profitable music publishing arm of EMI, an asset it’s been coveting over the garden fence for decades. Any bid for the £1.2 billion publishing arm is probably going to be made after EMI have cleared or defaulted on their next interest payment, in the first case, making an offer to EMI and Terra Firma, and in the second, talking to their creditor Citi if the company goes into receivership.
