Embrace digital or die, EMI told

This has been coming for a long time. Big Music has been dragged kicking and screaming towards the digital realm. CD sales have been going down hill for years now and Artists are starting to branch out on their own without the top heavy Major label costs involved in promotion which gets inflated and taken off the top of the residuals. Not to mention the CD customer paying an average $15 a CD for one or two good songs from an album. Now the new owner of EMI, Britain’s largest music group, has warned that the industry will not survive if it continues to rely on CD sales alone.

Guy Hands, the financier whose private equity group, Terra Firma, bought EMI in August, told staff in a confidential e-mail last week that the industry had been too slow to embrace the digital revolution.

Hands’ letter was in response to the decision by Radiohead, one of the biggest bands nurtured by EMI but now out of contract with the label, to release their latest album via the internet and at a price decided by fans.

In the e-mail, sent to staff on Friday, Hands described Radiohead’s action as “a wake-up call which we should all welcome and respond to with creativity and energy”.

“The recorded music industry… has for too long been dependent on how many CDs can be sold,” he wrote. “Rather than embracing digitalisation and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand.”

Many record label bosses believe it is the duty of successful bands to stick with the companies that nurtured them so that their earnings can subsidise new talent. However, bands complain that too much of their money is used to subsidise lavish lifestyles for label bosses.

Full Story: Telegraph UK