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Wednesday, January 09, 2008

EMI: who's driving?

It's not really surprising that Tony Wadsworth, the CEO of EMI Music in the UK, has decided that he can't get on with the new owners Terra Firma and has left. When people pay a fortune for companies they tend to quickly come to the conclusion that they're more likely to get their way if they part company with the incumbent management. It's a shame for Tony, who is an excellent bloke and a record man to his fingertips, but it could be that they don't want a record man any more. They can see that the old way of doing things is not going to make back the £2.1bn Terra Firma paid and bring them a profit on top. This is the kind of dynamic that you see again and again when somebody buys an old business and tries to wish a new model into life. It's no use expecting the current engineer to do things in a different way. But the problem is without an engineer they haven't a clue which levers to pull. Everybody knows that the old way of doing the record business is dead. But the new way has not yet been born.