And so it's finally happened, music history has been made. Nearly three years after EMI, whose artists include Robbie Williams, Coldplay and the Beatles, was bought by private equity firm Terra Firm for £4.2 billion ($US6.5 billion), the record label has been acquired by investment bank Citigroup after Terra Firma's Guy Hands discovered he had paid too much and was unable to repay the loan.
The BBC reports that Citigroup will eventually sell EMI, probably to Warner Brothers. Forbes says other suspects could include Bertelsmann, the German conglomerate that sold the majority of its music assets to Sony in 2008. Even Google or Apple might be among the buyers. "Rumors of a Google-backed cloud-based music service have been flying around for quite awhile, and Apple certainly has the cash to buy EMI. But whether either would risk a plunge into the music business remains to be seen."
But then, why would anyone buy it? CD sales in the US fell by 12.8% in the US last year. The music business, like the newspaper industry, has been transformed by the digital technologies.
In 2002, David Bowie famously said: "The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it's not going to happen. I'm fully confident that copyright, for instance, will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing. Music itself is going to become like running water or electricity. So it's like, just take advantage of these last few years because none of this is ever going to happen again."
It's a pity the industry didn't listen to him back then. What's happened to EMI is part of that story. It's just that Guy Hands, and the rest of the industry, couldn't see the writing on the wall.
Interestingly enough, the Citigroup acquisition comes a few weeks after EMI struck a deal with Pink Floyd. That's the band that wrote the song "Money". As the band said, that stuff is the root of all evil today, but if you ask for a raise it's no surprise that they're giving none away.
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