EMI's New Owner
Threatens Artists - Or Not
By George Ziemann -- November 3, 2007
EMI's new boss is Guy Hands,
CEO of the Terra Firma group which purchased the UK-based record
company a few months ago. The
Financial Times reports that Mr. Hands "promised 'fundamental
change' in how EMI approached the music business, but warned
that artists would have to meet their side of the bargain."
This is the first thing Mr.
Hands wants to see changed, having noticed that some artists
"unfortunately simply focus on negotiating for the maximum
advance . . . advances which are often never repaid."
Perhaps Mr. Hands is not aware
of the music industry's long history of screwing over the artists
("previous investments have been in pubs, landfill sites
and cinemas," notes Financial Times). Even legacy acts like
The Beatles and King Crimson still have to audit and sue EMI
on a regular basis to collect royalties properly due them which
have been "overlooked" by the label's crack accounting
team. Of course, there are several ways to prevent artists from
earning royalties, some of which are actually legal, even if
they can't cross the bar to be considered ethical, like CDs that
were counted as returns, but "accidentally"
found their way back into the market.
For 40 years, it has been up
to the artists to catch their label screwing them over, and,
even when they do, they're still lucky to get 10 percent of what
was actually skimmed from their royalties. As a defense against
these practices, the artists simply started asking for more money
up front. Then it didn't matter so much that they never got a
royalty check. In fact, the current attitude is that if you DO
ever receive a royalty check, your attorney has failed to negotiate
properly.
So the new plan is for the
artists to trust the record label? Again? Come on, Charlie Brown,
Lucy promises she won't pull the football away at the last second
this time and laugh at you for being a chump, like she's done
every single time in the past.
Good luck with that.
But wait. There's some misdirection
going on here. Look at the BBC's
version of this story. And this
one at Boycott-RIAA. In both versions, you get the "focus
on negotiating for the maximum advance" quote, coupled with,
"It will be open to us to choose which artists we wish to
work with and promote." It comes off sounding like a threat
to only hire acts with poor negotiating skills, even though EMI
has always been able to choose which artists they work
with and promote.
In Hand's defense, he actually
said that this new selectivity will not occur until "EMI's
own standards had been raised" and he uses words that many
in the music biz have long ago banished from their vocabulary,
like "honesty, transparency and performance."
He has already identified one
of the prime reasons the industry has such a dismal failure rate
-- execs get a big bonus for signing bands, with no consideration
to the talent or marketability of the act, much less the potential
to recover the investment. This lets a persuasive exec with bad
taste make a pile of money by signing crappy bands, which explains
a lot of things.
The other thing Hands has going
for him is that he's talked to current and former execs from
the other three majors, coming to the conclusion that "we
have not seen many who, in our view, add anything."
You can't argue with that.
So it's really too early to
assess EMI's new owners. While the idea of introducing honesty
and transparency into the music business is promising, it is
just a promise at this point. The artists have heard lots of
promises.
And the audience wants to know
if EMI is going to stop suing people.
EMI Tries Selling MP3 Files
December 6, 2006 -- Universal Music tried it first
with a Jessica Simpson song. EMI
has decided to sell a total of three songs in mp3 format.
Why?
"By selling MP3s, recording
companies can ensure they can be played on Apple Computer Inc.'s
market-leading iPod players without going through Apple's iTunes
Music Store."
The iPod plays mp3s!! It's
only taken three and a half years for EMI to figure this out.
We expect them to realize that higher bitrates than 128k exist
by 2009 at the latest.
October, 2006 -- The lawsuit, filed in Manhattan's
state Supreme Court, accuses EMI and Capitol Records Inc. of
violating a half-dozen agreements by "willfully and knowingly
underreporting royalties" by hiding the "true use and
disposition of Lennon's recordings." Ono's three-page filing,
which included a summons and notice but no detailed complaint,
also accuses EMI and Capitol of "intentionally and systematically
rendering dishonest and grossly deficient accounting statements."
Sept. 2006 -- From BBC (but rearranged into actual
paragraphs) -- The surviving members of the Beatles are to sue
music companies EMI and Capitol Records, after a New York State Supreme Court judge
denied EMI's request for the claim to be thrown out. The lawsuit
was triggered by an audit of the companies' books from the period
1994 to 1999, which the band says uncovered allegedly deceitful
behaviour.
The lawsuit, filed in December,
claims EMI and its affiliate Capitol wrongly classified copies
of Beatles recordings as destroyed or damaged "scrap"
but then secretly sold them. It
also alleges the number of units sold was under-reported, and
the firms classified some recordings as "promotional"
and as a result non-royalty bearing, but then sold the material.
Sir Paul McCartney, Ringo Starr
and relations of George Harrison and John Lennon want at least
£13.2m ($25m) in damages. They claim the record companies
used fraudulent schemes to "pocket millions of dollars"
due to the band.
The group also seek to reclaim
rights to all the Liverpool band's master recordings.
Follow-Up April 12, 2007
-- From
the BBC:
The Beatles have agreed a deal
with music giant EMI to settle the band's battle for £30m
in unpaid royalties. Sir Paul McCartney, Ringo Starr and the
widows of John Lennon and George Harrison took legal action in
2005, claiming money from album sales.
"I can confirm that we
have reached a mutually acceptable settlement and that we are
not going to say anything more than that," an EMI spokeswoman
said.
|
