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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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