"Radiohead's actions are a wake-up call which we should all welcome and respond to with creativity and energy."
——Guy Hands, EMI


Inspired by Radiohead, Hands Encourages Industry to Embrace Digital Revolution
Guy Hands, whose Terra Firma private equity company recently acquired EMI , is bullish on the digital music business, saying record labels should be more like music publishers in maximizing their artists' revenue streams.

In an interoffice email that went out to the troops today, Hands praises Radiohead's recent decision to allow fans to download the digital album at a price set by the consumer.

"In a digital world, it was inevitable that a band with the necessary financial resources and consumer recognition to be able to distribute their music directly to their fans would do so," he writes.

Hands insists "this is a welcome reminder of the new digital world in which we operate and the need to focus on the services we provide to our artists."

The EMI head breaks those artists down into three categories, including "established artists in whom we have invested heavily," "those with whom we are working to make really successful" and "new, start-up bands."

"We will need to give artists at all levels a deal this is fair to both sides, perhaps one that moves away from the large advances model of old and provides a true alignment of interests and transparency."

Hands goes on to talk about the need to develop revenue streams that "come from many channels and not just from CDs... In effect, the recorded music business needs to become more like the music publishing mbusiness which provides its writers multiple opportunmities for distribution oftheir product in order to maximize copyright fees and royalties."

He concludes: "The recorded music industry... has for too long been dependent on how many CDs can be sold. Rather than embracing digitalization and the opportunities it brings for promotion of product and distribution through multiple channels, it has stuck its head in the sand. Radiohead's actions are a wake-up call which we should all welcome and respond to with creativity and energy."