View Full Version : EMI still "scared", it's all because of piracy.
Sckott
05-22-2002, 07:27 AM
Glum music industry outlook plagues EMI
Posted by Source: Yahoo.com 22 May - 15:45 -
Kyle SGMS used our newssubmit to tell us that one of the big record labels, EMI, has announced bad results. While still paying big artists millions of dollars, they blame piracy for their losses.
Comapies revenues tumbled to 2.446 billion pounds compared with a previous 2.673 billion and analyst forecasts of 2.45 billion. Sales for the overall industry fell five percent last year.
EMI, home to artists such as Radiohead and Kylie Minogue, posted a sharp but expected 40 percent fall in adjusted pre-tax profit and said its radical overhaul was going to plan in spite of an industry ravaged by an economic slowdown and piracy.
The world's third biggest music company saw its battered stock slide as much as seven percent as analysts took fright after a post-results meeting, despite the British group's insistence that it would deliver improved results this year.
"(EMI) faces so much of a struggle with piracy and they need to find a way to protect themselves. Sales are falling and there are a number of factors to take into consideration, such as the HMV float not going well," Martin Dobson, head dealer at Natwest Securities in London.
In a drive to clear the decks and improve its chances of discovering top acts, EMI unveiled an extensive overhaul in March with 1,800 job cuts and 400 artists scrapped from its roster. EMI said at the time it had not paid enough attention to what the business was really about -- generating big-name stars.
They are also still reorganizing the company, cutting a lot of jobs. Core earnings fell to 241.9 million pounds, from 389.5 million.
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Don't forget this is a corporation. They think and act like a corporation. Their first consideration is to the share holders. Their second consideration is their own short and long term growth, including financial forecasts, internal and external efficiencies, product development, marketing, etc.
Did they make 241.9 million pounds? No. They lost 147.6 million pounds. This is probably comparing Q1 for this year to Q1 from last year. Q1 means the first quarter of the year or the first three months. Bad news for the stock markets. Bad news for the share holders. Bad news for EMI. Layoffs, dropping artists, etc. are ways to improve.
I can see why they want to generate big name stars, too. Why spend $ for limo's, promotional materials, finacing tours, etc. for those 400 artists when you should be putting your resources towards a 'big name star' like Mariah C? Get rid of the low return properties and focus on your core assets. Makes sense, in a corporate viewpoint.
I'd hope that those 400 artists would be snapped up by rivals or even form their own company somehow....
MagicAlex
05-22-2002, 07:49 AM
And, to quote, here's two of their biggest problems...
"EMI said at the time it had not paid enough attention to what the business was really about -- generating big-name stars."
It's not about big-named stars...that's what's hurting them. It's about music! Get a clue!
"They are also still reorganizing the company, cutting a lot of jobs. Core earnings fell to 241.9 million pounds, from 389.5 million."
The only cuts that will be made will be to the people who actually work to make a product...the top execs will get raises after all the cuts and they get to sit around to determine that what they need is bigger 'teen-pop' stars and better copy protection....
Just for fun...I predict that if they reissued the Beatles catalogue taken from the original masters and done right, possibly by Steve himself, then they could make up for alot of their losses.
Originally posted by MagicAlex
It's not about big-named stars...that's what's hurting them. It's about music! Get a clue!
No man, it's not! You can go from being the head of an energy company - Gas and Oil - to the head of EMI - same difference! Corporate profits! Cut staff! Churn out those remasters in the most cost efficient way - lower costs = bigger profits! CDs are just a product! Artists are just a product! That's what it's all about! That's the reality.
I'm just joking, I hope you realize. The above paragraph is waaay out in left field. You are correct - they have lost focus! And I do believe that's the way they think! As a corporation..... not music lovers. :(
Sckott
05-22-2002, 08:07 AM
Originally posted by MagicAlex
It's not about big-named stars...that's what's hurting them. It's about music! Get a clue!
Actually, for us, it's the music. For the Visa touting, thong purchasing, gap guys and gap guurls (Hey, I shop at the Gap too, but I don't look like a teeny bopper) it's about IMAGE. If you gave some chick years ago a Ricky Martin tape, they'd think it was hokey or "ok". Once they saw him shake his bon-bon, it made a lot of jelly-brains buy his record. :( Sad....
Uncle Al
05-22-2002, 08:47 AM
Many think that poor music has hurt record sales, many claim big buck contracts - the record companies blame piracy. I think the mind set of the target audience (probably 13 to 25 year olds) has changed.
When I was 16 years old with a $20 bill burning in my pocket, I could buy 3 record albums and grab a magazine and some lunch, and more than likely - that's what I did. Todays 16 year old - with $65 - can buy three CD's, or 3 DVD's, or a video game and either a DVD or CD. and grab some lunch (if he borrows another $5 from his buddy). I always thought the record companies missed their oportunities by not expanding more vigorously into other forms of home entertainment.
My son could have grabbed the Green Day Greatest Hits CD - but opted out for the corresponding DVD and a Sony Playstation game with his cash stash. There is simply more competition in the home entertainment field than there used to be - and the current generation has no sentimental need to prefer one format over another.
Originally posted by Uncle Al
There is simply more competition in the home entertainment field than there used to be - and the current generation has no sentimental need to prefer one format over another.
You are 100% correct, Al.
RetroSmith
05-22-2002, 10:37 AM
>>>And Lets not forget one other MAJOR factor.
Cd prices are WAY TOO HIGH.
No Way should a new Britney Spears Cd with 2 good songs and the rest filler be 17.99 at Borders.
If the Majors re-preiced their product accordingly, they would see Piracy shrink to only the Die Hards who insist on downloading.
95% of the rest would pay the 9 bucks for a legal CD and have the artwork, Cd quality audio, ect.
It always amazed me that the Record Companies blame their Huge Losses on the high school kids who are downloading all that music to their Macs.
Hey guys....the high school kids DONT HAVE ANY DISPOSABLE INCOME and wouldnt be buying all the music they d/l anyway. Thats NOT why EMI lost all that money...they lost it because of BAD MANAGEMENT decisions and poor pricing.
But, of course, the executives need to cover their asses so they blame piracy.
It seems to me for every one good (mind you not great, but good) act out there, there seems to be an endless stream of want-a-be's and has beens that follow. Most record companies sign up several acts in the hopes one will generate money. The sad thing along with this idea, is that many very good and talented people will get lost, ignored or forgetten before there time would have come. One thing I will say for internet file shareing, new acts have a better chance of makeing it there than any other way (or time in history).
And it is true, 25 years ago, my entertainment list did not include buying movies, video games, endless array of sports hobbies, computers, cell phones and pagers. And I am sure not being hip and young, I missed many things.
The last big hurrah for music really was the advent of the CD. This was the biggest cash cow of all times for music. Not only was sales stellar for new acts, but the baby boomers repurchased most of the thier old vinyl treasures on cd. CD offered a better sound for the buck that vinyl could not do for the average user. LP's scratched and wore out, cd's seemed near indestructable. Also the set of a cd player did not require skill or patience that good lp play back required. All this to joe six pac was a god send. SO the 80-90's really was the last hurrah for music play back. We may have some big comeback, who knows. But with MP-3's, a lack of focus in music, and corperate fears (read-copy protection) it is not a good time overall for music, record companies and artist's.
Originally posted by mikey5967
And Lets not forget one other MAJOR factor.
Cd prices are WAY TOO HIGH.
Didn't the Industry promise a reduction in prices? Whatever happened to that?!
95% of the rest would pay the 9 bucks for a legal CD and have the artwork, Cd quality audio, ect.
I agree, and the resultant sales volume would really spike up.
....the high school kids DONT HAVE ANY DISPOSABLE INCOME and wouldnt be buying all the music they d/l anyway.
Good point.
Beagle
05-22-2002, 11:34 AM
Originally posted by mikey5967
It always amazed me that the Record Companies blame their Huge Losses on the high school kids who are downloading all that music to their Macs.
Hey guys....the high school kids DONT HAVE ANY DISPOSABLE INCOMEWhy don't they have any disposable income? When I was in high school I had lots of money to spend on music. I mowed lawns, shovelled snow, painted houses/garages. My teenage son goes to school and works 5 evenings a week and Sundays, and he buys lots of music as well as accessories for his guitar. If kids have no disposable income it's because they are lazyass spoiled slobs or they spend their money on stupidities like drugs, tattoos, make-up and overpriced clothes, assuming they actually get off their *** or get out of their own puke to go somewhere other than in front of a computer or mall door.
On the topic, I can't really feel much pain when I read "revenues tumbled to 2.446 billion pounds compared with a previous 2.673 billion and analyst forecasts of 2.45 billion. Sales for the overall industry fell five percent last year". Think of the poor farmers and what they have to go through to keep afloat.
MagicAlex
05-22-2002, 11:35 AM
Originally posted by Uncle Al
There is simply more competition in the home entertainment field than there used to be
Big Al, I agree that competition between formats is a deciding factor as to where a person's money goes but you must also agree that alot of this money, no matter which format one chooses, eventually goes in the same deep pockets.
The game, DVD & CD industries all work within the same corporate models and I dare say have a very similar philosophy about how they produce their products and market them to us consumers.
I have to say we are basically 'force-fed' most of what we claim we want and then are blamed when the marketing strategies fail. Just my reflections.
Grant
05-22-2002, 11:54 AM
Somewhere in the 50s and 60s when the big three (Capitol, Columbia and RCA) realized how much money there was in rock & roll it was all over. And when they started either buying up smaller labels or their masters, and offering popular acts big contracts, it was all over..
In the 70s when NARAS awards for recording excellence became important, and when the RIAA started awarding platinum awards it was all over.
When the companies realized they could make more money from the sale of LPs than 45s it was all over.
My point? It's always been about money. But the bigger these companies get, the worse it gets for the music.
Joel Cairo
05-22-2002, 12:28 PM
I have to agree with Grant about one thing...
...when a Grammy starts to acquire any kind of perceived value, it's probably time to start hoarding gold and start stocking the fallout shelter with Dinty Moore and a can opener. :D
-Kevin
RetroSmith
05-22-2002, 12:37 PM
[QUOTE]Originally posted by Beagle
[B]Why don't they have any disposable income? When I was in high school I had lots of money to spend on music. If kids have no disposable income it's because they are lazyass spoiled slobs or they spend their money on stupidities like drugs, tattoos, make-up and overpriced clothes
>>>>>Because High School kids dont work full time, they dont make much more than minimum wage when they DO, then they buy OTHER things with what money they do have. They dont have anywhere near the disposable income that we adults who work full time do. I dont even think thats a point of argument.
I think most of us here on this board are the kind of customer that the majors make their money on, we who buy 5 Cd Box Sets for 110$, remasters even after we HAVE the same songs on a previous CD, buy a CD for one new track or remix, ect. We're the cash cows. Know how many times I've bought the first 10 Beatles hits?? Probably 9 or 10 times EACH by now, between 45s, LPs, comps, Cds, remasters, Red and Blue Lps and then Cds, etc, etc, etc,. Thats where the real money is for the majors.
The High School kids who trade MP3s arent a factor, they would buy very little of the music anyway. They buy video games, clothes, etc. The executives need to blame piracy, because then they can say "It wasnt our fault" we lost 121,000,000 this year.
Because if it WAS their fault, they would get the boot. Cant have that, of course.
Let ME run EMI for one year. I'll have Steve remaster The Beatles on LP, Cassette, regular CD, and DVD-A. Every single Beatles track in the vaults, including ALL unreleased songs or alternate takes would be available as a download in mono or stereo for a flat fee of 1.99. I'll put up a website asking music fans what the top 100 EMI owned Lps they want reissued...then I'd reissue them in all formats including downloadable files. It doesnt take a genius.
Give the customers what THEY SAY they want, not what YOU SAY they want and you'll make money!!!!
Uncle Al
05-22-2002, 12:53 PM
Originally posted by MagicAlex
Big Al, I agree that competition between formats is a deciding factor as to where a person's money goes but you must also agree that alot of this money, no matter which format one chooses, eventually goes in the same deep pockets.
Yes, but they do not count it that way. They tell you that "Green Days Greatest Hits" sold below expectations - so many percentage points below target, but they never mention the DVD was a blockbuster...
Originally posted by mikey5967
Hey guys....the high school kids DONT HAVE ANY DISPOSABLE INCOME and wouldnt be buying all the music they d/l anyway
Well, if your selling Brittany, JayLo, Janet, Blink182 - who are you selling them too?
The historical market for pre-recorded music - trendy music - fashionable music, has always been high school kids and young adults, college age. Who put Elvis and The Beatles on top? The Monkees? The Archies? Middle aged folk? Who is MTV aiming at? - not my 45 year old butt, fer sure.
I must have bought 600-800 albums between high school and college. THAT was where almost ALL of my disposable income went.
I contend that the young audience that has historically supported the music industry is now so fractured that they can't retrieve them in a traditional sense. It isn't copying, or over paid artists. They are not reaching their target audience in the numbers they are used to because the competion for their attention (and dollars) is too stiff.
So maybe they should cater to a more sophisticated and loyal audience. After all, there is no competition from video games to steer away MY dollars.
Grant
05-22-2002, 12:53 PM
Originally posted by Beagle
Why don't they have any disposable income? When I was in high school I had lots of money to spend on music. I mowed lawns, shovelled snow, painted houses/garages. My teenage son goes to school and works 5 evenings a week and Sundays, and he buys lots of music as well as accessories for his guitar. If kids have no disposable income it's because they are lazyass spoiled slobs or they spend their money on stupidities like drugs, tattoos, make-up and overpriced clothes, assuming they actually get off their *** or get out of their own puke to go somewhere other than in front of a computer or mall door.
The last time I looked times have changed! Teens today can't afford to throw their money at hobbies or buy music. College costs a LOT more. Nowadays, if you want to get a higher education you save what meager money you get. Financial aid doesn't bring in enough to live on. Parents don't make enough money because jobs are hard to come by and don't pay well, so kids often have to contrubute to the family income. As I recall, back then, many places didn't require car insurance. Now, most states do require it and it is expensive! If you want to work you have to drive. Many parents will not allow their children to work because they feel school comes first above and beyond everything else! Then there are thise kids who have sports or band (God bless 'em!). Those things are important as well.
As I ststed in another thread, I have been working with teens for two decades. There are certainly bad apples who could use a kick in the pants, but there are many more who don't fit your description.
Originally posted by mikey5967
Every single Beatles track in the vaults, including ALL unreleased songs or alternate takes would be available as a download in mono or stereo for a flat fee of 1.99. I'll put up a website asking music fans what the top 100 EMI owned Lps they want reissued...then I'd reissue them in all formats including downloadable files. It doesnt take a genius.
[/B]
Now why would anyone do that? Why would someone with business sense release music that would be bought by *everyone* for $19.99 for a paltry $1.99? That is a "loss" of $18.00 for each sale!
Because the public wants it? Heck, I want them to pay me to pick it up at the store! It costs me gas money! It ain't gonna happen.
You have to price the item at what value you think it will sell at. How many CDs would be sold at $19.99 when you can download it for $1.99? Your board of directors will fire you, man! Stock holders will sue!
Sorry, just my viewpoint.
But this is getting closer to the mark: All formats sounds better than downloadable only! What kind of copy protection do you think should be used to discourage... errr.... local entrepeneurs?
Grant
05-22-2002, 01:02 PM
Originally posted by Uncle Al
So maybe they should cater to a more sophisticated and loyal audience. After all, there is no competition from video games to steer away MY dollars.
Ummm, the older audience has also fractured. Many have left rock & roll for jazz, classical, and country music. You can't get some people to buy a new album by CSN or Neil Young anymore. Also, people are starting to have families later in life. That takes more money away from potential music sales. Let's not forget DVD movies! It used to be that when you walked into a record store you would see people buying music. Now they are all buying DVDs. The music section is empty!
In other words, if the companies shift gears and start marketing towards us, they have even MORE compettition for those disposable dollars.
Don't forget, Grant, that Flash In The Pan fads sell best. Pet Rocks! Lava Lamps! Finged jeans!
It's harder to fool old guys like Uncle Al and I (Brittney? Pffffft! No thanks!) and easier to fool the kiddies! And don't forget the old guys die off sooner....
.... depressed ...... :(
RetroSmith
05-22-2002, 01:09 PM
[QUOTE]Originally posted by Uncle Al
[B]
The historical market for pre-recorded music - trendy music - fashionable music, has always been high school kids and young adults, college age. Who put Elvis and The Beatles on top? The Monkees? The Archies? Middle aged folk? Who is MTV aiming at? - not my 45 year old butt, fer sure.
>>>>>>Maybe then, but not now!!! Elvis and The Beatles have sold WAY more in REISSUES to older fans they they EVER sold while they were around. The first batch of Beatles Cds, reported by Billboard, outsold the original Lp releases more than 2 to 1.
When my dad was 45, he didnt have any Rock and Roll record collection to replace on cd. He had a few Big Band lps and that was it. Today, I'M almost 45 and I'M the one spending most of my money on music.
I agree that in the 50s and 60s, when Rock was new, that younger people supported the business. But that was a different time, a different world.
There is SO MUCH profit in reissues, because the music is there and already paid for.
Any idea how much EMI makes every year on Beatles Cds? Take those sales away and they are close to shutting the doors.
Today, there is an overlap in listening habits between kids and adults. Kids listen to *some* of what their parents do, parents listen to *some* of what their kids listen to. That sure didnt happen when I was a kid!! My teenage nieces, for example, love The Monkees, have every Cd including the box set. See what i mean?
Grant
05-22-2002, 01:13 PM
Originally posted by Gary
Don't forget, Grant, that Flash In The Pan fads sell best. Pet Rocks! Lava Lamps! Finged jeans!
It's harder to fool old guys like Uncle Al and I (Brittney? Pffffft! No thanks!) and easier to fool the kiddies! And don't forget the old guys die off sooner....
.... depressed ...... :(
I don't know any teens who are being fooled. Teens are way more hip and sophisticated than ever.
Originally posted by Grant
I don't know any teens who are being fooled. Teens are way more hip and sophisticated than ever.
Eh, well maybe it's me who's being fooled? ;)
Beagle
05-22-2002, 01:18 PM
Originally posted by mikey5967
Who would pay $110 for 5 CD's? I don't think that people who buy the box sets and buy the re-issues account for much of the sales in the overall scheme of things. I think it's the 10 million sales of Britney and Eminem.[B]Let ME run EMI for one year. I'll have Steve remaster The Beatles on LP, Cassette, regular CD, and DVD-A. Every single Beatles track in the vaults, including ALL unreleased songs or alternate takes would be available as a download in mono or stereo for a flat fee of 1.99. I'll put up a website asking music fans what the top 100 EMI owned Lps they want reissued...then I'd reissue them in all formats including downloadable files. It doesnt take a genius.
Give the customers what THEY SAY they want, not what YOU SAY they want and you'll make money!!!! I agree, it sounds wonderful but in the eyes of the suits, you are speaking for maybe a couple of hundred people, perhaps one thousand, for each title. That's what they think. They think in terms of guaranteed multi-million unit sales of the latest fad crap, not what music and sound lovers require. But if you had ONE outlet doing this for all the companies, it might be a go?
Uncle Al
05-22-2002, 01:22 PM
Originally posted by Grant
Ummm, the older audience has also fractured. Many have left rock & roll for jazz, classical, and country music. You can't get some people to buy a new album by CSN or Neil Young anymore. Also, people are starting to have families later in life. That takes more money away from potential music sales. Let's not forget DVD movies! It used to be that when you walked into a record store you would see people buying music. Now they are all buying DVDs. The music section is empty!
In other words, if the companies shift gears and start marketing towards us, they have even MORE compettition for those disposable dollars.
So sell us country music. Sell us classical. Maybe CSN & Y SHOULD be on an indie label with more limited ditribution and lower overhead. The industry still caters to the kids, and by your reasoning - they can't afford the product. Taking that logic a step further, maybe "file-swapping" does have a SEROIUS impact on their market. These kids are geting those songs somewhere.....
Hey, if you wanna cater to an older crowd you have to sell them in a different manner. How about $12.99 during "release week" for an artist's latest effort with a bonus of $6.49 for a catalog title purchased at the same time? Seems to me you can move old and new stock. How about offering the same deal for re-issues/re-masters. Just make it $18.99 for 2 discs from the same artist in a limited sale period. I could easily see myself checking out an artist that I never really explored if I could get 2 lp's for less than $20....
But I'm probably an exception - and not the rule.
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