EMI To Merge Two Largest US Labels
January 26, 2007, 17 years ago
According to Theaustralian.news.com.au, EMI last night (January 25th) announced plans to merge its two principal American record labels, Capitol and Virgin, in a move that will trigger hundreds of redundancies as the British company fights to cut costs. The combined operation will be headed by Virgin Records boss Jason Flom, leaving Andy Slater, his opposite number at Capitol, out of a job, in the first step towards achieving £110 million in annual cost savings.
Mr Flom, who at Warner Music’s Atlantic Records helped to discover TWISTED SISTER and TORI AMOS, becomes the key executive in North America, with the task of ending EMI’s long record of failing to discover successful US acts.
Although EMI is the world’s third-largest record company, it runs a poor fourth in the US. Last year its album market share was 10.2 per cent well behind its closest rival, Warner Music, which ended 2006 on 18.1 per cent. Universal Music had a share of 31.6 per cent.
EMI employs just over 2,000 people in the US. In a letter to staff, Eric Nicoli, chief executive of EMI, said that the “changes won’t be easy” but added they are “absolutely necessary for our business to succeed in a world where fans are ever more demanding and expect instant access to their favourite artists and music”.
The memo also indicated that EMI would “focus on building our digital capability” — a tacit admission that the company is behind its rivals. EMI is the only one of the four music majors to have failed to sign a licensing agreement with YouTube.
