Guy Hands Double-Talk

Isn’t it amazing that someone just as detached and out of it as the OLD regime at EMI is now in charge of the NEW regime?

If you were looking for innovative thinking, don’t go to Mr. Hands.  Who is already playing defense.

Did you follow the Zucker brouhaha?  How Apple has ruined the music business?  Yup, refusing to allow variable pricing.  NBC just wanted to test one show at $2.99, and see what happened.  But the mercurial Steve Jobs wouldn’t allow them to do it.  Bad boy Steve, you won’t cough up some of your iPod money, so we’re OUT!

Whoa!  Yes, you had to follow the story to learn that Zucker/NBC asked for a piece of the iPod to know how delusional Zucker and NBC are.  But how did Apple respond to this heinous attack upon its reputation?  With SILENCE!

And, if you’re gonna say something, why not make a point?

Steve Jobs has weighed in a couple of times in the last year.  He wrote about DRM and opening the iPhone up to third party applications.  His essays were fully comprehensible.  Mr. Hands?  Sounds like a guy who went to business school.  He went on for paragraphs and all we’re left with is head-scratching.  Huh?

OF COURSE WE KNOW YOU PRIVATE EQUITY GUYS ARE PRICKS!  For the "New York Post" to speculate that you’re getting cold feet about your investment and are selling assets to get your money back demonstrates lack of sophistication.  And you fall for it?  As if Wall Street cares about the NEW YORK POST?  Even casual students of the music business have seen this movie before, with Warner.  You want to get back as much of your investment as soon as possible.  Meanwhile, cleaning up your balance sheet and making your company attractive to third parties, so you can sell out, hopefully on Wall Street, getting ALL of your investment back and STILL owning a respectable piece of the company, with control.  That’s not brain surgery, that’s Private Equity 101.

But, EMI isn’t an inert company.  It’s in the MUSIC business.  Where is the insight into the MUSIC business in your missive Mr. Hands?

Build confidence in your troops by saying you’re gonna bring in outsiders, who haven’t got guaranteed major label paychecks, to solve your problems.  These third parties WILL SAY ANYTHING FOR A CHECK!  Don’t you get it, if you want new people, you need TRULY new people, without histories, without debts…oftentimes paid back in the hiring of their cronies.

Say something new Mr. Hands.  Say you’re gonna hire Mark Zuckerberg’s roommate.  Say you’re going to hire a hundred college students and let them promulgate solutions.  Say you’re gonna shut down the new music business and just be a catalog and publishing licensing company.  Tell us HOW YOU’RE GONNA MAKE MONEY!  Tell us HOW YOU’RE GONNA SAVE THE BUSINESS!  You’ve stated EMI and the music industry are in crisis, WHERE ARE THE SOLUTIONS!

Complaining that the artists only want advances and aren’t willing to work hard for the money is SO wrong-headed as to demonstrate the kind of ignorance that proves why you never should have purchased the company.  Just phone up Michael Rapino.  Who tried to lower concert guarantees for the good of the industry.  Howard Kaufman wouldn’t cave and Michael Rapino gave up.  Who are the acts, and their representatives, who are going to have sympathy for private equity/EMI and take less money whilst giving up more.  Maybe the Eagles, who just got thirty mil from Wal-Mart?  How about Madonna, who made almost twenty million for essentially NOTHING!  Or Radiohead, who made more in one day than they could EVER make putting their record out through you.

Or maybe you’re counting on new acts.  Managed by unknowns.  But those unknowns also want nothing to do with you.  They understand the Net, they’re gonna do it for themselves.  Why should they cut YOU in on the action and get cents on the dollar, and be told what to do to boot?

You want to save EMI?  Add value to the equation.  Be even BETTER for the artists.  Be like CDBaby and pay every two weeks instead of twice a year.  Have transparent accounting.  Give the acts creative control.  Give them fifty cents on the dollar.  And, while you’re at it, license P2P.  Your problem isn’t the acts, but DISTRIBUTION!  You’re not getting paid for your wares and your recorded music revenue is dropping every day. You’re in a crisis and you’re worried about what the "New York Post" has to say?  God.  And you wonder why tech triumphs over music.

You can read Guy Hands’ letter to his troops at:,
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