EMI changes Hands - and exposes industry woes

The music industry's woes - tumbling CD sales and the competition from online - get short shrift from that august organ of the money men, the Financial Times . Prompted by the £4 billion sale of recording industry giant EMI to private equity company Terra Firma, it asked:

"Is a brash but brainy outsider what the industry needs at a moment of crisis or will such culture clashes make him the latest wealthy amateur to fail on its glittering stage?". The question refers to the financier Guy Hands, who heads up Terra Firma, and who is, according to the FT, creating a number of cultural changes within the company.

The article does nothing to offer to offer comfort to industry executives and in fact offers a rather glum outlook for the immediate future. It predicts that retail shelf space for CDs will dramatically reduce in 2008, and that some record labels will disappear as online music promotion grows.

In a related piece , the FT describes how EMI's new owners are asking for EMI executives to provide greater financial justification for new projects including the provision of business plans before signing new artists or undertaking promotional activity.

From a policy-making perspective, the two articles provide food for thought at a time when the music industry continues to lobby heavily for a clampdown on music downloading. The general suggestion is that the industry's problems are caused as much by internal, as external, factors - and that the solutions will also be found internally.