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Recent history of the major label and attempts to engage with digital tech.

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  1. 2. = <ul><li>Imprints: Angel, Astralwerks, Blue Note, Capitol, Capitol Nashville, EMI, EMI Classics, EMI CMG, EMI Televisa Music, Manhattan, Mute, Narada, Parlophone and Virgin </li></ul><ul><li>Back catalogues: The Beatles, The Beach Boys, David Bowie, Maria Callas, Nat King Cole, Miles Davis, Herbert von Karajan, John Lennon, Dean Martin, Paul McCartney, Yehudi Menuhin, Pink Floyd, Queen, Frank Sinatra </li></ul><ul><li>New Artists: Lily Allen, Corinne Bailey Rae, Beastie Boys, Coldplay, Depeche Mode, Gorillaz, Al Green, Iron Maiden, Norah Jones, Lenny Kravitz, Kylie, Moby, Katy Perry, Joss Stone, 30 Seconds To Mars, KT Tunstall, Keith Urban and Robbie Williams; </li></ul>
  2. 3. Impact of digital downloading <ul><li>In May 2007 the company announced it had made a £260m loss for 2006/2007. </li></ul><ul><li>Its share of the British album market dropped from 16% to 9%. </li></ul><ul><li>In August 2007, private equity group Terra Firma bought the firm for £3.2bn </li></ul><ul><li>Initially, shares increased by 3.8% but then dropped. </li></ul>can’t be arsed to change?
  3. 4. <ul><li>Feb 2000 - EMI Recorded Music announce that it has teamed with Supertracks to create a system to digitally distribute music </li></ul><ul><li>Also has a deal by this point with liquid audio . </li></ul>tried!
  4. 5. t seemed to be working. <ul><li>Nov 2004 – EMI sees a 600% rise in download sales </li></ul><ul><ul><li>What happened in 2003? </li></ul></ul><ul><li>Digital (music) represents a key driver for future industry growth Eric Nicoli, EMI chairman </li></ul><ul><li>CDs, however, still account for most of EMI's turnover, and overall sales fell at EMI by 11.4% during the first half of 2004. </li></ul>
  5. 6. <ul><li>Mobile phones are also providing a line to future revenue sources through ringtones and other innovations and EMI said it sees &quot;exciting opportunities&quot;. </li></ul><ul><li>A mobile phone memory card featuring music and videos by EMI artist Robbie Williams was issued. </li></ul><ul><li>(Williams was signed on an £80million deal, the second largest in music history.) </li></ul>‘ ve seen the future (2004)
  6. 7. What happened to m <ul><li>May 2005 - The world's third largest music firm, EMI, has suffered a 13% fall in profits after delays to two key albums from revenue-drivers Coldplay and Gorillaz. </li></ul><ul><li>Poor artist management, described by Sir Paul McCartney as ‘a treadmill’ began to haunt the company </li></ul>?
  7. 8. If there’s one group you don’t mess with… <ul><li>On December 15, 2005, Apple Records, the record label representing the Beatles, launched a suit against EMI for non-payment of royalties. The suit alleged that EMI have withheld $50 million from the record label. </li></ul>Egg on face?
  8. 9. <ul><li>2006 - The music group posted a 13% rise in pre-tax profits to £159.3m </li></ul><ul><li>Digital music sales now account for 5.5% of the music division's annual revenues </li></ul><ul><li>Digital music sales experienced the strongest growth, more than doubling to £112.1m from £46.9m last year. </li></ul><ul><li>&quot;EMI Music has significantly outperformed the industry, gaining market share in almost all territories including the US,&quot; EMI chairman Eric Nicoli said. </li></ul>‘ ve bucked the trend!
  9. 10. And then…
  10. 11. November 2006 <ul><li>EMI reported profits of £18.6m in the six months to 30 September, down from £41m last year. </li></ul><ul><li>Profits would have been lower but for a 68% rise in sales of digital downloads sold through outlets such as iTunes. </li></ul><ul><li>It received £73.7m from digital sales and said it expected the new wave of MP3 players would boost this arm of the business. </li></ul><ul><li>&quot;We believe the fundamentals remain in place for the music market to return to growth driven by digital development,&quot; EMI said. </li></ul>
  11. 12. <ul><li>September 2006 – “EMI Music Publishing has become the latest firm to sign a deal to make its music catalogue available on a free legal downloads service. </li></ul><ul><li>Under the deal, online music service Spiralfrog will offer work from EMI's artists - which include the Arctic Monkeys and Eminem - online in the US. </li></ul><ul><li>New York-based Spiralfrog will launch its service in December and make its money by carrying adverts on the site.” </li></ul>
  12. 13. Continuing commitment to digital formats – April 2007 <ul><li>On 2 April 2007, EMI announced it would begin releasing its music in DRM-free formats. Initially they are rolling out in superior sounding high-bitrate AAC format via Apple's iTunes Store. </li></ul><ul><li>Legacy tracks with FairPlay DRM will still be available albeit with lower quality sound and DRM restrictions still in place. (Fairplay DRM will play on iTunes software and one single computer.) </li></ul><ul><li>Users will be able to ‘upgrade’ the EMI tracks that they have already bought for </li></ul><ul><li>Albums are available at the same price as their lower quality, DRM counterparts. </li></ul><ul><li>Music videos from EMI will also be DRM-free. </li></ul>
  13. 14. <ul><li>In May 2007 the company announced it had made a £260m loss for 2006/2007. </li></ul><ul><li>Its share of the British album market also dropped from 16% to 9% last year. </li></ul><ul><li>In August 2007, private equity group Terra Firma bought the firm for £3.2bn </li></ul><ul><li>Shares increased by 3.8% </li></ul>Why?
  14. 15. <ul><li>In the UK, EMI revealed that physical sales declined by an estimated 11.8 per cent in the year, while digital sales increased by 79.7 per cent to give a total market decline of 8.8 per cent over the 2006/07 financial year. </li></ul><ul><li>EMI blames general worsening market conditions.   </li></ul>
  15. 16. The Fallout <ul><li>Eric Nocoli walks </li></ul><ul><li>EMI's UK chief executive Tony Wadsworth left the company after 25 years. </li></ul><ul><li>Sir Paul McCartney left the label </li></ul><ul><li>Radiohead left the label – “EMI is in a state of flux. It's been taken over by somebody who's never owned a record company before, Guy Hands and Terra Firma, and they don't realise what they're dealing with…Terra Firma doesn't understand the music industry.“ </li></ul><ul><li>The Rolling Stones sign a one album deal with Universal, then transfer to EMI’s rival when their EMI contract expires. </li></ul><ul><li>Coldplay considered it’s future with the label. </li></ul>
  16. 17. dying? <ul><li>Physical sales dropped year on year for the years leading up to the takeover. </li></ul><ul><li>Poor management of back catalogue products displeased their artists. </li></ul><ul><li>Lack of inventiveness with marketing strategy and artist management. </li></ul><ul><li>Showing a continuing commitment to digital formats is not enough! </li></ul>Why
  17. 18. The future? <ul><li>EMI had around 5,200 employees when it was taken over by the Guy Hands-led group and this is likely to fall to around 2,700 by the end of the restructuring process. </li></ul>
  18. 22. September 2008
  19. 23. Marketing online <ul><li>Viral marketing: The buzzwords viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives (such as product sales) through self-replicating viral processes, passed on from user to user. </li></ul><ul><li>It can be word-of-mouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the form of video clips, interactive Flash games, advergames, ebooks, brandable software, images, or even text messages. </li></ul>
  20. 24. <ul><li>http://www.parlophone.co.uk/ </li></ul>
  21. 27. Viral Marketing for Lily Allen <ul><li>http://www.lilyallenmusic.com/lily/fear </li></ul><ul><li>A ‘retro’ game, released in December 2008. </li></ul><ul><li>Free mp3 sampler of latest album if you complete the game </li></ul><ul><li>Musicians have perhaps the greatest viral product: the music itself. </li></ul>
  22. 29. Viral Marketing <ul><li>Viral marketing is an excellent example of how p2p has been used by the industry to promote music. </li></ul><ul><ul><li>Free tracks on iTunes </li></ul></ul><ul><ul><li>Samples or live tracks from bands </li></ul></ul><ul><ul><li>Games </li></ul></ul><ul><ul><li>Live videos </li></ul></ul>
  23. 32. Sample question: <ul><li>Discuss the issues raised by an institution’s need to target specific audiences within a media industry which you have studied. </li></ul><ul><li>Bullet point plan. </li></ul>