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Tuesday, May 22, 2007

The greatest recording organisation in the world

After years of doing the courtship dance with Warners, EMI is selling out to a private equity firm. There's a lot of not very well informed talk on the radio this morning about DRM and its supposedly magical effect on the business model but as Bob Lefsetz says, the mainstream record business appears to be finished. "There are no longer dominant acts that people believe in, only minor ones with relatively small colonies of believers. And if you don't have believers, you're fucked. Better off to manage a jam band than to own the masters of a pop group."
He may be right but the other big issue, with all mainstream record companies, has to be costs.
The other week I got a call from EMI asking me to do a voiceover for a John Cale ad to run on a couple of digital rock stations. I turned up at the appointed time at one of those flash Soho sound studios where there are two leggy girls on reception and they bring you coffee in designer cups. When the rep from EMI turned up - late because for some reason they'd ordered a car to deliver them into the West End during rush hour - it took about two minutes to do the ad. The studio is bound to have put in a four figure bill for their services, on a job that I could have done on my Mac at home.
The point of this story is, big record companies still make records in the only way they know how - expensively. Bob Geldof said years ago that bands were taking too long to make records and throwing too much money at the problem. It was true then and it's even truer now. Just go and look at the credits on a mainstream rock album and count the number of studios. Now imagine how much had to be spent on flights and hotels just to get between them. In the last ten years TV and film have done a far better job of adjusting their costs to the size of a fragmenting market than the record companies have. Despite the regular rounds of redundancies it seems to me that there are more people in the HQs of the big record companies than there were back in the days when the cotton was high. Many of them are doing jobs that either don't require doing or could be freelanced out.
When EMI wanted a cover for the first Beatles album in 1963 they called in Angus McBean who arrived in reception, looked up at the staircase, lay down on the floor, got them to look over and banged off half a dozen frames. "That's it," he said.
There's a lesson there.

7 comments:

  1. All good and true, but when the first Beatles album came out EMI's quarterly accounts weren't relying on the success of the album in the same way that they might do now. Didn't the half-year figures for 2006 included business asumptions based on the sales of the last Gorillaz and Robbie albums? When the figures at stake are that high is it any surprise that they spend as they do?

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  2. Having read at the weekend that the hugely talented Tara Palmer Tompkinson makes over £1m a year from her tv work, I can only agree that tv companies have done well in adjusting their costs....

    The advantage tv companies have over record companies is that they still have greater control over their distribution. Although a lot of people have access to a lot of channels, most people still only watch a few.

    As technology progresses it will make it easier for people to make professional looking programmes for next to nothing in the same way you can make great sounding records for virtually nothing. This, coupled with the main channels share steadily eroding might lead to tv companies running as efficient, streamlined businesses, but I think they have some way to go yet.

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  3. I get the impression that the overwhelming majority of the money that record companies spend is trying to insure against failure and the fact is that 99% of records fail.

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  4. Just curious. On which digital rock stations can I pick up the John Cale ad? I wanna hear this piece of extravagant spending (and yes, I am major Cale freak too).

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  5. While you're discussing EMI, Angus McBean & those priceless Beatles pictures...
    4/10/2007
    Cleaner Sued Over Trashed Pictures, Including 1963 Beatles Photo Session
    LONDON (AP) - Boxes of photographic material - including the only remaining original transparencies from a 1963 Beatles photo session - were thrown out by a cleaner despite a note warning they weren't trash, a lawsuit filed in Britain's High Court claims.

    Apple Corps. Ltd., guardian of the Fab Four's commercial interests, and EMI Records Ltd., which distributes the Beatles' music, filed the lawsuit against the cleaning company, Crystal Services PLC, earlier this year.

    The lawsuit, obtained Tuesday by The Associated Press, says more than 450 photographs, negatives and transparencies were lost, most of which were EMI's photographic archive from 1997.

    Some of the material may be replaceable, the claim acknowledges, but one box included seven transparencies of Beatles photos taken in 1963 by Angus McBean. The photos were used on the cover of 'Please Please Me,' the Beatles' first official album, and the 'Red Album,' a compilation released in 1973.

    They were 'the only remaining original material from the photography from this session, and were historically important and valuable,' the lawsuit says.

    It asks for the market value of the Beatles' material, which is estimated at $1.4 million, as well as other costs.

    Apple Corps., EMI Records and Crystal Services all declined to comment.

    The lawsuit alleges that one night in January 2001, a cleaner from Crystal Services was working in EMI's west London office.

    The photographs and negatives were stacked in three boxes - awaiting transfer to the company's archives - and had a note on top saying 'not rubbish - do not remove,' according to the lawsuit.

    'The cleaner removed the photographic material and disposed of it by placing it for compaction in a waste compactor and collection by refuse collectors,' the lawsuit says. 'The compacted waste was removed by refuse collectors, and despite EMI's best efforts, the photographic material was irretrievably lost.'

    According to the Daily Telegraph, Crystal Services' statement of defense disputes most of the claims made by EMI and Apple, including that there was a note on the boxes saying not to remove them.

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  6. To follow on from the comment that 99% of records fail, there is an interesting analysis of the US music business at http://www.coolfer.com/blog/archives/2007/05/another_look_at.php. According to this, 75% of new releases in 2006 sold less than 100 copies.

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