Terra Firma Has No Plans To Sell EMI, Aims For Mid-Level Hits

A report at The Guardian says private equity firm Terra Firma has no plans to sell EMI. Said Guy Hands in an address to the Royal Television Society:
"We are determined to keep that part of the business and we are determined to make it viable. ... We look for the worst business we can find in the most challenged sector and we get really happy if it's really, really bad. EMI, our most recent investment, is a classic example. We're just hoping EMI is as bad as we think it is."
Hands indicated he wants EMI to survive less on big hits (a lot easier a task since Radiohead's contract expired) and more on less successful titles. "The vision of EMI is to be big enough to do everything we can for every artist, but small enough to care for every artist." Of course, with hits selling less and the marketplace becoming more fractured, that kind of goal almost goes without saying. There's no way around scaling down one's goals.
Selling less of more is easier said than done. It's an imperative that has been said all decade and nobody at a major has figured out how to do it. The best way to do it, in my opinion, is to sign artists to contracts that bring in other revenue streams such as touring and merchandise. That lowers the risk inherant to every new artist. EMI has not made the acquisitions and joint ventures that its competitors have made to position itself for such contracts.
If Terra Firma plans on succeeding just with music and publishing, and honestly wants to lower the threshold for success, there is one option: Act like an indie. That means operating on a thin and lower-paid staff with fewer resources. It would be a double-edged sword, though, since that kind of operation would be limiting in the end.
As for that thin staff...the Times Online read something in Hands' speech that The Guardian did not. Dan Sabbagh thought Hands' statement about getting away from "the cult of the hit" was a hint "at what are likely to be deep job cuts in EMI’s 5,500-strong workforce."

http://www.coolfer.com/blog/archives/emi/