If I was a shareholder in EMI, the big question I'd be keen to hear answered this week would be - what exactly are you planning to use my £100 million for?
As the home to some of the world's biggest artists - who continue to be as popular as ever, despite the company's insistence that the massive defecit is due to the recession and the "continuing rapid decline of the physical market" - one would think EMI would be able to maintain a strong position in the industry. The analysis this week of the company's position hints towards continued mismanagement and bad deals.
Like many sectors, the music industry is beginning to fall foul of lack of trust and transparency. Music fans are turning away from physical products and refusing to pay what they now believe to be too high a price for compact discs - which have for most become obsolete anways. Fans don't respect big record labels. But they are still investing time and money in the music and artists that they love. The superbrands under EMI - Kylie, Coldplay, Pet Shop Boys, The Beatles - all have huge asset potential beyond recorded music.
Its the equivalent of Unilever somehow suddenly failing to release that people still need deodorant.
EMI has stated that it will be producing a new business strategy in return for continued investment. Surely this is too late - especially if the business plan is just "more of the same but with emphasis of digital and less on physical products". They are going to have to come up with something remarkable, and fast. It is no wonder that the big players continue to get left behind, with faulty strategy resulting in both artists and music fans turning their backs. If they havent been paying attention, everything is changing. Keep up and stay ahead, or the banks will take control. And if that happens, another formerly great British business will certainly be over.
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