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Household company executive to lead up EMI

Richard Driver — Tue, 08 Jul 2008 13:02:00 EST

Filed under: Rumors, Management, Industry, Consumer Experience, Marketing and Advertising

British based EMI Group reported to the Associated Press on Monday that the company has recruited Rome-native Elio Leoni-Sceti, a former vice president of household products company Reckitt Benckiser, to lead up its recorded music division. Guy Hands, the CEO of Terra Firma (the private equity firm that bought EMI last September) also reported that he will back away from leadership "to become non-executive chairman of EMI." According to the AP, Leoni-Sceti was formerly a "brand manager at Procter & Gamble before moving to Reckitt Benckiser in 1992" and eventually moving up to lead the European division of the company by 2005.

Last month, leaders for EMI's North American branches, including Capitol Records president Lee Trink, left the company due to Terra Firma's preference for no presidents over the label branches in EMI. In the meantime, representatives and leaders for the music company's Artists and Repertoire divisions were given greater leverage and more power over the running of the labels, even though the plan left artists without the traditional representation that label presidents had provided. This news came on the edge of Coldplay releasing Viva la Vida or Death and All His Friends, with many rumors pointing to that album as a savior of sorts for EMI in 2008.

Since then, Coldplay's album has scored huge around the globe but EMI has fallen to only holding 9% of the music market in the first half of 2008. Guy Hands told the AP that Leoni-Sceti "joins [EMI] at the right time to shape, drive and lead EMI to become the world's most artist-focused and consumer-friendly music company." The new executive may fulfill Hands hopes with his background in brand managing and household products, marketing music in new ways and attracting a larger consumer base.

Household company executive to lead up EMI originally appeared on BloggingStocks on Tue, 08 Jul 2008 13:02:00 EST. Please see our terms for use of feeds.

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In the wake of massive cuts, EMI CEO talks painful changes, but are they new?

Richard Driver — Tue, 15 Jan 2008 18:08:00 EST

Filed under: Bad News, Consumer Experience, Rants and Raves, Employees

After the announcement that EMI Group plc (ADR) (OTC: EMIPY) will cut between 1,500 and 2,000 jobs around the world with the goal of saving almost $400 million a year, head Guy Hands made a presentation on the changes he and his consultants feel are necessary for the survival of the music industry. A key component of his presentation was the remark that the changes would not occur "without pain," signaling the "end to the industry model of 'signing up as many artists as possible, while taking huge bets on a few.'"

The push seems aimed at "embracing consumers' needs in the era of digital music." The painful changes he speaks about are nothing more than the commentary the music industry has faced from critics in recent years, and a cut to save money is painful to those who lose their jobs. It is not painful however, if your ideas about the changes do not differ significantly from what critics have stated for so long. If you look at the music industry and disregard its failing business model for a model designed for equity, then the painful changes are only going to be multiplied.

According to Billboard.com, "Hands told staffers that the overall challenge was to move to a structure which can best monetize artists' music in a market where the CD is no longer so dominant, and where many consumers have become used to not paying for music." The problem is that this discussion is centered around music as a commodity that consumers need, and that simply is not the case. If consumers are not used to paying for music, and it is a commodity, then a simply monthly fee like a water or gas bill would provide the simple fix while allowing consumers access to the large quantities of music produced every year. As usual, that type of arrangement speaks directly against the monetary value placed on music, as it turns music into something easily shared and gains are taken from the industry. Is that any different than "an era where consumers are not paying for it" though?

In the wake of massive cuts, EMI CEO talks painful changes, but are they new? originally appeared on BloggingStocks on Tue, 15 Jan 2008 18:08:00 EST. Please see our terms for use of feeds.

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EMI memo divulges new digital plan

Richard Driver — Wed, 10 Oct 2007 17:20:00 EST

Filed under: Press Releases, Competitive Strategy, Media World

Guy Hands, the Terra Firma executive, who is now the "top executive" at EMI, recently warned staff that record labels need to let the CD go and embrace digital "opportunities" if the industry is to survive in the expanding market, according to a report by Billboard. Terra Firma is a private equity firm based in London that succeeded in buying out EMI in late July and since then both EMI and Terra Firma have been quiet about the direction EMI would go in any business model.

Citing the recent move by Radiohead to take their music directly to the fans (Radiohead was previously an EMI "act"), Billboard reports that Hands "proposed labels act more like venture capitalists" taking both profits and losses from artists recording and touring -- in direct opposition to the standard model of paying artists up front for album production. If that becomes operating procedure, EMI's move in April to discontinue use of Digital Rights Management technology could soon by overshadowed by more "pioneering" and inventive ideas, hopefully designed to give fans better access to the music they crave.

While it is not surprising that the new executives in charge of EMI would shake up the tired model, it is quite telling that a leaked memo as revealing as this could only come in the wake of Radiohead's move for their new album In Rainbows. It seems all too apparent that the record labels needed a very stable artist to make the first move toward a more fan-based market, as opposed to any label risking a move away from the tried and failing model that Hands' cites. EMI is apparently the first label to embrace these new ideas, as was indicated by the DRM move, but hopefully the bigger companies will follow suit in due time. How long can they sit on their "hands?"

EMI memo divulges new digital plan originally appeared on BloggingStocks on Wed, 10 Oct 2007 17:20:00 EST. Please see our terms for use of feeds.

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KKR gets Alliance Boots - finally

Tom Taulli — Tue, 24 Apr 2007 12:38:00 EST

Filed under: Private Equity

Over the past week, there's been a big battle for the control of Alliance Boots, which is the biggest pharmacy chain in the UK.

Billionaire Guy Hands broke up a bid from KKR and Stefano Pessina (who is also a billionaire). As a result, Alliance's stock price went into a tizzy.

But, it does look like there is a lot of potential for Alliance, in terms of cost cutting and expansion opportunities. So why not pay a little extra?

That's what KKR did today, according to a story in the Wall Street Journal [paid service].

The new bid? It's a cool $22.2 billion. As far as I can tell, it's a pretty good deal for shareholders. It comes to roughly a 40% premium.

And Hands also thinks so. He said that he has abandoned his pursuit of Alliance.

Now, it's up to KKR to figure things out.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

KKR gets Alliance Boots - finally originally appeared on BloggingStocks on Tue, 24 Apr 2007 12:38:00 EST. Please see our terms for use of feeds.

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