The record industry is in turmoil. We’ve known that for a long time. But today, the news comes that Guy Hands is desperately trying to stave off a firesale by doing some sort of deal with the other major record labels to manage its catalogue.
I’ve been reading a book recently (actually, listening to the 21-hour audiobook) called Too Big To Fail by Andrew Ross Sorkin. It’s about (among other things) the collapse of Lehman Brothers and the impact on the global financial system. Not my usual choice of subject matter, but the storytelling in it is pretty great.
Anyway – the parallels between Lehman boss Richard Fuld trying to do last minute deals at any cost 18 months ago in an effort to save Lehman and “avert economic catastrophe” (as if he wasn’t already in the middle of one), and the current EMI situation are striking to say the least.
EMI needs to find £150m by next week in order to stop Citigroup taking control. But the choices are not simply bankruptcy or collusion. There’s a third way. EMI could be nationalised.
Music business socialism?
Okay, so this started more as a provocation than an ‘idea’ as such – though the more I consider it, the more convinced I am that this could be a viable proposition. It might sound absurd with respect to what is one of the most corporate capitalist sectors of industry, but it’s definitely worth considering.
After all, a case could be made that things that are of significant worth to the British public, economically and culturally speaking, should theoretically be in the ownership of the British public. Especially when those assets are under serious threat as a result of private ownership mismanagement and ‘market conditions’.
Rather than have the rights to some of the most important British cultural treasures in the hands of a billionaire tax exile, a private equity firm and a transnational bank – and in imminent danger of having them simply flogged off to who knows where just to dispense with what has become, in financial terms, a ‘toxic asset’ – it would make sense to put them into public ownership.
A public service remit for EMI
Imagine a major record label with a public service remit. After all, they’re a media organisation just like any other – so why not?
Charged with a responsibility for quality programming, to serve minority interests, to increase access and participation, and to make available cultural assets (like the 90%+ of EMI catalogue decaying in the vaults and currently unavailable for sale), the organisation could provide a wealth of value to the British taxpayer.
Besides – as the BPI is forever pointing out, the record industry is worth masses in exports, employment and economic activity. They insist it’s vital to protect and support that industry. I can think of no better way to do that than place it into the custodial care of the citizenry and their representatives.
Lehman’s fate isn’t the only path
After the intense flurry of activity to generate capital in order to save the investment bank, Lehman was ultimately put into bankruptcy. But they weren’t the only ones struggling in that way, and theirs wasn’t the only outcome.
Bear Stearns was ‘saved’ (or, at least – its assets were protected) with a NY Federal Reserve assisted buyout by JP Morgan Chase. Fannie Mae and Freddie Mac were taken over by the US Treasury. The Royal Bank of Scotland Group was nationalised when the British Government took a controlling share in the company.
The purpose of these state interventions was to calm the market, protect private investors and stabilise the economy. All fine and good. Even better, legislation is being put into place (not enough, and not sufficiently quickly, but it’s happening) to regulate what the banks can do.
Record labels often compare themselves to banks anyway
Ultimately, the recording industry is in the business of giving loans (or ‘advances’) and profiting by maximising the returns on those loans (everything is recoupable). So there’s not that big a leap to be made here.
There’s an opportunity to step in and preserve a large slice of the nation’s popular music culture, regulate the industry to prevent the outrageous excess, and ensure that the company acts in the interest of the public, rather than the (utterly failed) profiteering motives of its corporate shareholders.
EMI is in crisis. Rather than watch them burn, and then see the assets (some of them national cultural treasures) flogged off in a firesale to multinational conglomerates that care only for their potential market upside, and not for their place in our heritage and national identity – let’s do the right thing, step in and nationalise EMI.
Table of contents for 30 Days of Ideas
- The other way of following first
- Now we’re up and dancing
- 30 days of ideas – 01: Keymash
- 30 days of ideas – 02: Radio Alerts
- 30 days of ideas – 03: Only Famous (a romantic comedy)
- 30 days of ideas – 04: Modcasts
- 30 days of ideas – 05: Numberless Calendar
- 30 days of ideas – 06: SpringCleanr
- 30 days of ideas – 07: Street Gallery
- 30 days of ideas – 08: Smart Business Cards
- 30 days of ideas – 09: Recordings in Concert
- 30 days of ideas – 10: Vinyl scanner
- 30 days of ideas – 11: Photo Stack-and-Scan
- 30 days of ideas – 12: A Box of Cool
- 30 days of ideas – 13: Karaoke-Tube Celebstar Idol
- 30 days of ideas – 14: I Made You A Tape
- 30 days of ideas – 15: Newspaper download codes
- 30 days of ideas – 16: Pebble Splash
- 30 days of ideas – 17: Digital radio, somewhere useful
- 30 days of ideas – 18: Public domain music collection
- 30 days of ideas – 19: Blog cast-list automator
- 30 days of ideas – 20: The Retirement Pile
- 30 days of ideas – 21: Nationalise EMI
- 30 days of ideas – 22: The Stainless Steel Rat (the movie)
- 30 days of ideas – 23: WordPress Bandcampify template
- 30 days of ideas – 24: Rollercoasters as public transport
- 30 days of ideas – 25: Next-gen personalised music radio
- 30 days of ideas – 26: New Music Trust
- 30 days of ideas – 27: Tamagotchi Gardening
- 30 days of ideas – 28: Charity shop clothing subscription
- 30 days of ideas – 29: ‘Now Playing’ social music app
- 30 days of ideas – 30: House of Spare Ideas
- Mixtape for You by Ray Kuyvenhoven
- What can you do in 30 days?