Everything about The Emi totally explained
The
EMI Group is a
British music company comprising the major
record company EMI Music –which operates several labels, based in
Kensington in
London,
England,
United Kingdom– and
EMI Music Publishing
, based in
New York. EMI Music is one of the
"big four" record companies, making it among the largest in the world.
EMI has been owned by
Terra Firma Capital Partners since August 2007.
Guy Hands, the new owner of EMI, came with restructuring plans to cut 1500–2000 jobs After brief, but brilliant, success in the medical imaging field, EMI's manufacturing activities were sold off to other companies, notably Thorn (see
Thorn EMI). Subsequently development and manufacturing activities were sold off to other companies and work moved to other towns such as Crawley and Wells.
Music
Early in its life, the company established subsidiary operations in a number of other countries in the
British Commonwealth, including
India,
Australia and
New Zealand. EMI's Australian and New Zealand subsidiaries dominated the popular music industries in those countries from the
1920s until the 1960s, when other locally owned labels (such as
Festival Records) began to challenge EMI's market near monopoly.
In 1931, the year the company was formed, it opened the legendary recording studios at
Abbey Road, London. During the
1930s and
1940s, its roster of artists included
Arturo Toscanini,
Sir Edward Elgar, and
Otto Klemperer, among many others. During this time EMI appointed its first
A&R managers. These included
George Martin, who later brought
The Beatles into the EMI fold.
EMI released its first LPs in 1952 and its first stereophonic recordings in 1955 (first on reel-to-reel tape and then LPs, beginning in 1958).
In
1957, to replace the loss of its long-established licensing arrangements with
RCA Victor and
Columbia Records (Columbia USA cut its ties with EMI in
1951), EMI entered the American market by acquiring 96% of the stock of
Capitol Records. From 1960 to 1995 their HQ, "EMI House" was at 20
Manchester Square. The stairwell is on the cover of The Beatles "Please Please Me" album.
Its classical artists were largely limited to the prestigious British orchestras, such as the
Philharmonia Orchestra. During the LP era very few U.S. orchestras had EMI as their principal recording company; an exception was the
Pittsburgh Symphony, particularly during the years of
William Steinberg's leadership, also
Carmen Dragon who conducted the
Hollywood Bowl Symphony Orchestra.
Under the management of
Sir Joseph Lockwood, during the late 1950s, 1960s and early 1970s the company enjoyed huge success in the
popular music field. The groups and solo artists signed to EMI and its subsidiary labels -- including
Parlophone,
HMV and
Columbia Graphophone and Capitol Records -- made EMI the best-known and most successful recording company in the world at that time, with a roster that included scores of major pop acts of the period including
The Beatles,
The Beach Boys,
The Hollies,
Cilla Black and
Pink Floyd.
By
1967 EMI converted HMV to an exclusive
classical music label, shifting HMV's
pop music roster to Columbia. In
1969, EMI established a new subsidiary label,
Harvest Records, which signed groups in the emerging
progressive rock genre, including
Pink Floyd.
Electric & Musical Industries changed its name to EMI Ltd in
1971 and the subsidiary Gramophone Company became EMI Records Ltd in
1973. In
1972, EMI replaced the Columbia label with
EMI Records. In February
1979, EMI Ltd. acquired
United Artists Records.
In October of 1979
THORN Electrical Industries merged with EMI Ltd. to form
Thorn EMI.
In
1989 Thorn EMI bought a 50% interest in
Chrysalis Records, buying the outstanding 50% in
1991. In one of its highest-profile and most expensive acquisitions, Thorn EMI took over
Richard Branson's
Virgin Records in 1992.
On August 16, 1996, Thorn EMI shareholders voted in favour of demerger proposals. The resulting media company was known by the name EMI Group PLC.
Since the 1930s,
Shanghai's
Baak Doi had been published under the EMI label. Since then, EMI had also been the dominant label in the
cantopop market in
Hong Kong. EMI divested totally from the
c-pop market between the years 2004-2006. After that, all Hong Kong music artists previously associated with EMI have had their music published by
Gold Label, a concern unaffiliated with EMI and with which EMI doesn't hold any interest.
On
2nd April 2007, EMI announced it would begin releasing its music in
DRM-free formats. Initially they're rolling out in superior sounding high-bitrate AAC format via Apple's
iTunes Store (under the iTunes Plus category) . The tracks will cost $1.29/€1.29/£0.99. Legacy tracks with
FairPlay DRM will still be available for $0.99/€0.99/£0.79 - albeit with lower quality sound and DRM restrictions still in place. Users will be able to ‘upgrade’ the EMI tracks that they've already bought for $0.30/€0.30/£0.20. Albums are available at the same price as their lower quality, DRM counterparts. Music videos from EMI will also be DRM-free. The higher-quality, DRM-free files became available worldwide on iTunes on May 30, 2007, and are expected to show up on other music download services soon.
Since then
Universal Records has also announced sales of DRM-free music (which they described as an experiment).
Legal issues
On
December 15,
2005,
Apple Records, the record label representing the
Beatles, launched a suit against EMI for non-payment of royalties. The suit alleges that EMI have withheld $50 million from the record label. An EMI spokesman noted that audits of record label accounts are not unusual, confirming at least two hundred such audits have been performed, but that they rarely result in legal action. A legal settlement was announced on
April 12,
2007. Terms were undisclosed.
EMI and Warner Music Group
In May 2006, EMI attempted to buy
Warner Music Group, which would have reduced the world's four largest record companies (
Big Four) to three; however, the bid was rejected.
Warner Music Group launched a
Pac-Man defense, offering to buy EMI. EMI rejected the offer. Representatives from both sides are thought to be still having meetings and deciding if one company will buy the other, however the European Commission's decision to overturn a previous decision allowing a similar merger between Sony and BMG is likely to have raised issues as to the wisdom of pursuing such a move at this time.
By most measures, a merged company of EMI and WMG would be even bigger than Sony BMG. Concerns regarding the creation of a monopoly may mean WMG won't receive approval from the
European Commission. However Impala, a large independent, non-profit trade association of indie music labels, has given the Warner Music its blessings to acquire EMI, the third-largest music group. In return, it's suggested that the newly merged company will take responsibility for:
- providing specified funding for (but taking no equity participation in) the recently announced Merlin initiative, the new global digital rights licensing platform established by the independent music labels to represent the world’s independent music sector;
ensuring the divestiture of certain recorded music assets to reinforce the market power of the independent sector; and
pursuing various other behavioural commitments which have the aim of benefiting the recorded music market as a whole and, in particular, the independent music sector.
Terra Firma takeover
On May 21, 2007 the board of EMI Group publicly recommended to the shareholders a takeover bid by private equity firm Terra Firma Capital Partners valued at £3.2bn including debt. Dresdner Kleinwort acted as sole financial adviser and broker to Terra Firma. EMI's sales had declined dramatically in the recent months, making a loss of £260m in the past year. EMI's board of directors recommended the 265 pence per share offer from Terra Firma, however the deal needed to be approved by the firm's shareholders.
On June 14, 2006 EMI received an initial unsolicited alternative proposal from Warner Music to acquire all of the share capital of EMI for 315 pence per share in cash. The Board of EMI considered this proposal from Warner Music to be wholly unacceptable and unanimously rejected it.
The shares of EMI traded significantly higher than the offer price since the takeover offer, suggesting the takeover attempt would probably fail. Indeed, Terra Firma (Maltby) was only offered some 3% of the outstanding shares by 27 June 2007, while it wanted to acquire more than 90%. Terra Firma then extended the offer period by a week until July 4th 2007, but didn't obtain a significant amount of shares. Terra Firma subsequently extended its desperate bid by a further week until July 12th 2007. The shares continued to trade significantly above the offer price as holders realised the value of the company is much higher than the offer proposed by the private equity group. Terra Firma got no significant amount of shares tendered until July 12th, and extended the offer by a further week until July 19th, still not giving up. Terra Firma has now reached a 90% acceptance level, which allows the firm to declare the offer wholly unconditional and issue 429 notices, meaning that the now minority shareholders in the company are forced to sell.
EMI Group plc was delisted from the London Stock Exchange on September 18, 2007. Terra Firma bought EMI for £3.2 billion after a dramatic decline in sales, and announcement that EMI had incurred a £260 million loss for 2006/2007. At the same time, EMI's British market share dropped from 16% to 9%. Following the transition, several important artists walked out of EMI.
One of the Dance Dance Revolution female characters and dancers, EMI, is named after the record label company as well. Additionally, a selection of songs on the said game was licensed from Toshiba-EMI, a company which resulted from the joint-venture of EMI and Toshiba in Japan. Indeed, Konami regularly licenses music from Toshiba-EMI for their Bemani series of games.
Richard Branson owned a minority stake in EMI; he announced that he'd buy more shares in EMI if they merged with Warner Music Group.
A reference is made in the song "Randy Scouse Git" by The Monkees, in which The Beatles are referred to as "the four kings of EMI."
Pop-cyberpunk group Sigue Sigue Sputnik produced the single "Buy EMI", which is about the company.
As well as the well-known record label the group also holds EMI Music Publishing, which is the largest music publisher in the world. As is often the case in the music industry, the publishing arm and record label are very separate businesses.
Further Information
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