CD slump, EMI chops 2,000 jobs

THE UK-based music label EMI has announced a massive restructuring, with plans to sack 1,500 to 2,000 staff as the company tries to come to grips with the digital economy.

EMI Group chairman Guy Hands said the changes were a fundamental reshaping of the company’s Recorded Music division to reflect the changing nature of the industry.

The company is struggling in an industry where global sales of recorded music have fallen 20 per cent since 2000.

And though the company says it will put in place a plan to open new revenue streams like enhanced digital services. It also wants to improve its relationship with artists, based on transparency and trust.

But Mr Hands has been accused by one of its biggest selling artists, Robbie Williams – who has sold more than 70 million albums – of behaving like a “plantation owner”. Williams says he is “on strike” over the way he says the company treats artists.

The restructuring involves a lot of consolidation and old-fashioned cost-cutting. It would let the group “capture significant efficiencies.” The company will fire between 1,500 and 2,000 staff.

“We have spent a long time looking intensely at EMI and the problems faced by its Recorded Music division which, like the rest of the music industry, has been struggling to respond to the challenges posed by a digital environment, Mr Hands said.

We believe we have devised a new revolutionary structure for the group etc etc blah blah, he said.

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EMI spells no-more-DRM

RECORD label EMI has broken from the rest of the industry and announced plans to start selling music free of software copy-protection measures through Apple’s iTunes music download service.

Analysts are already calling the announcement the beginning of the end for current copy-protection measures. Called Digital Rights Management (DRM) software, copy-protection is seen by many as an unnecessary inconvenience to consumers.

Others say DRM is anti-competitive. The DRM used on Apple’s iTunes does not work with other services, and does not work with devices other than the Apple iPod – locking customers into the iPod hardware platform.

The EMI/Apple announcement comes as European Union competition regulators said they were broadening an investigation of the iTunes service to determine whether its rights management policies were anti-competitive.

The EMI-Apple service will let customers pay a premium US.30 cents (A.37 cents) more for a copy of songs without copy-protection.

The deal, announced this week by EMI chief executive Eric Nicoli and Apple chief Steve Jobs would cover the entire EMI catalogue – except The Beatles. The Beatles back-catalogue has yet to be released to download sites in any form, although Mr Nicoli said the company was “working on it.”

But while The Beatles’ tracks won’t be on offer in the new format, all other EMI artists – from Coldplay, the Rolling Stones and Norah Jones – will be.

Mr Jobs had recently called on the record industry to change its policies on copy protection. He has said it did not make sense for the industry to sell music through CDs (which accounts for 90 per cent of global sales) without copy-protection, and then to add DRM to the sales online.

Apple said the DRM-free tracks from EMI would be offered at higher quality 256kbps AAC encoding. The current versions available today use 128kbps encoding.

IN addition to the greater convenience of the DRM-free versions, the companies said they believed customers would be prepared to pay a 30 cent premium for better quality downloads.

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