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Memo to EMI: Technology is the key

New EMI chief Guy Hands sent a memo to all EMI employees giving some assurances about the future of the company, but with surprisingly little emphasis on technology.

Guy Hands is the head of equity firm Terra Firma, which took over music label EMI earlier this year. A few days ago, Hands sent a memo to all EMI employees outlining his basic vision for the company, and Hits Daily Double got ahold of the memo and published it.

Guy Hands
Guy Hands, head of Terra Firma, which owns EMI Terra Firma

As with most corporate memos, it's short on specifics--these communications always get leaked, so executives are naturally careful with them. But it's surprising to me how little mention he makes of digital technology. After a cursory note that technology should be "seen as an enabler, rather than a threat," the subject never comes up again.

Ironically, EMI has taken some tech-savvy steps this year. Notably, it was the first of the big four to offer its songs for download without digital rights management protection, allowing users to transfer them among multiple devices without restriction. According to an analysis by music-industry blog Coolfer, this gamble appears to be paying off: EMI's share of the digital market has gone up, even as its share of CD sales has gone down. In other words, EMI hasn't had as many high-profile releases as its competitors--hence, the decline in CD share--but despite this, its digital sales have gone up. You could reasonably credit the lack of DRM as a reason, although it might also be due to high-profile artists (such as the individual Beatles' solo albums) coming online after years of not being available.

Again, corporate memos are notoriously bland, but I'd expect at least a few specific areas of concentration. Should EMI push to release its entire back catalog digitally? What about subscriptions as a sales model? How can a music label cooperate with Web sites to earn money from crazes like social networking and online video? Will EMI try to reduce Apple's power over digital downloads, and what steps might they take to do that? Should labels change how they compensate artists to make up for the lower production and distribution costs of downloads? These are some of the questions EMI and the other labels are wrestling with, and it would have been interesting to see them addressed, or at least acknowledged.