EMI announces restructuring plans

Troubled music giant EMI will today announce major restructuring plans.

Elio Leoni-Sceti, chief executive of the company's recorded music division, will unveil the plans at a presentation to staff. The Italian Executive will announce that the business will be split into three distinct global units: new music, catalogue and music services, and with an increase in marketing resources, according to the Financial Times. The online music service EMI.com will launch this December.

But Leoni-Sceti will also reveal a massive increase in first-half earnings following new owner Terra Firma's controversial cost-cutting measures at the company. In the six months leading up to September 30, EMI earned £59m before tax, depreciation and amortisation, following a £14m loss last year.

Leoni Sceti said: "EMI is absolutely not bankrupt, far from it. EMI has never been in such a financially sound situation. Terra Firma is a solid financial owner and is committed to this company … and committed to putting in more equity if it is required."

However, he will also tell staff today that the company "is still in the very early stages of its renaissance and the road ahead will not be smooth or easy".

EMI has faced a revolt from major artists, with big hitters like Radiohead and Sir Paul McCartney walking away since Terra Firma took over the company in August 2007, slashing jobs and the artist roster. Thom Yorke compared them to "a confused bull in a china shop".

The label's winter release schedule is heavy on big, established acts like Tom Jones, Sarah Brightman and Coldplay.

But Claire Enders of Enders Analysis believes that insufficient investment in new artists will remain their biggest problem in the digital age: "The longest term problem is EMI's creative problem. If you do not provide attractive new music you cannot generate sufficient income out of digital downloads and ringtones. Tom Jones and Sarah Brightman are not going to set the world alight."


Original article here