Revealed: EMI Lost $1.2 Billion In 2007
Published Oct 27, 2008If things didnt look bleak for EMI before, they sure do now. According to recently released figures, the major label home of artists such as Coldplay and Lily Allen suffered a $1.2-billion loss in this financial year, which marks a far bigger decline than last years drop of $455 million.
The root of the problem, the report says, is a "poor operational system, with EMI focusing on an extremely high spending model (such as dishing out high executive salaries), overly traditional artist-label relationships and poor reporting of data in regards to artist profits.
Despite EMIs big-name roster and thriving publishing business, this system has caused the label to rank dead last among its major label peers, with a decline of physical CD sales at EMI falling 45 percent from 2005 to 2007, even though, as the Los Angeles Times points out, the average market decline was 19 percent. Also, EMIs digital music sales are lagging compared to the other majors, the report says.
"EMI Music had a history of signing great artists but had not adapted sufficiently to the changing consumer market for music, the report states. "[T]here should be no false expectations. EMI cannot be turned around overnight.
EMI spokesman Neil Bennett told the Los Angeles Times that since the end of financial year, the label has moved forward. "An awful lot has happened since then," he says. "EMI is a company going through radical change."