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EMI's most pressing need is the revitalization of its U.K. A&R department, which was once the engine that powered the company worldwide.

I.B. BAD ON WHAT’S NEXT FOR EMI

Resilient Company Has a New Lease on Life and Big Hits, but Recent Losses Will It Harder to Find and Develop the Next Coldplay or Katy Perry
Most expected EMI to undertake a reorganization once the company had resolved its immediate financial issues with Citigroup, but to date there has been no word about such a move. This lack of decisive action puts the focus squarely on EMI Music head Charles Allen, who has kept a strangely low profile since the company got its financing, causing some to question the agenda of the former TV executive.

EMI’s most pressing need is the revitalization of its U.K. A&R department, which was once the engine that powered the company worldwide through the signing and development of such breakthrough acts as Radiohead, Blur, Robbie Williams, The Verve, the Rolling Stones, Coldplay, Gorillaz and Corinne Bailey Rae.

But during the Guy Hands era, the U.K. pipeline has virtually dried up, and many place the blame on the unconventional revamping of EMI Music’s infrastructure following Hands and Terra Firma’s 2007 acquisition of the company, which separated A&R and marketing, while splitting A&R itself into a U.K./North American unit under Nick Gatfield and the rest of the world under Billy Mann.

The A&R department took a pair of major hits this month with the departures of U.K. veteran Chris Briggs and U.S. exec Chris Anokute. The latter, a close associate of hitmaker Dr. Luke, brought Katy Perry to the label with Angelica Cob-Baehler and A&R’d her 2008 breakthrough as well as the upcoming follow-up, including Perry’s current hit “California Gurls” (with 525k paid downloads in just two weeks). The album is expected to be one of the year’s biggest.

Concurrently, rumors began to spread that Gatfield may also be jumping ship, to Sony Music U.K.

EMI’s most significant artist development stories under the current regime have come out of the U.S., with the Mike Dungan-led Capitol Nashville contributing mightily via Lady Antebellum (2.1m) and Darius Rucker (1.4m), whose next release should be set up for the Lady A treatment.

On the macro level, while Ronn Werre is firmly holding the reins of EMI’s North American operations, it remains unclear who possesses the expertise to lead the rest of the world. Though David Kassler, EMI’s COO outside North America, is well liked, the company’s rank and file believes that the Terra Firma alumnus’ lack of music business experience makes him under-qualified to fill this leadership position.

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