30 days of ideas – 21: Nationalise EMI


Photo by Dunechaser

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

  1. The other way of following first
  2. Now we’re up and dancing
  3. 30 days of ideas – 01: Keymash
  4. 30 days of ideas – 02: Radio Alerts
  5. 30 days of ideas – 03: Only Famous (a romantic comedy)
  6. 30 days of ideas – 04: Modcasts
  7. 30 days of ideas – 05: Numberless Calendar
  8. 30 days of ideas – 06: SpringCleanr
  9. 30 days of ideas – 07: Street Gallery
  10. 30 days of ideas – 08: Smart Business Cards
  11. 30 days of ideas – 09: Recordings in Concert
  12. 30 days of ideas – 10: Vinyl scanner
  13. 30 days of ideas – 11: Photo Stack-and-Scan
  14. 30 days of ideas – 12: A Box of Cool
  15. 30 days of ideas – 13: Karaoke-Tube Celebstar Idol
  16. 30 days of ideas – 14: I Made You A Tape
  17. 30 days of ideas – 15: Newspaper download codes
  18. 30 days of ideas – 16: Pebble Splash
  19. 30 days of ideas – 17: Digital radio, somewhere useful
  20. 30 days of ideas – 18: Public domain music collection
  21. 30 days of ideas – 19: Blog cast-list automator
  22. 30 days of ideas – 20: The Retirement Pile
  23. 30 days of ideas – 21: Nationalise EMI
  24. 30 days of ideas – 22: The Stainless Steel Rat (the movie)
  25. 30 days of ideas – 23: WordPress Bandcampify template
  26. 30 days of ideas – 24: Rollercoasters as public transport
  27. 30 days of ideas – 25: Next-gen personalised music radio
  28. 30 days of ideas – 26: New Music Trust
  29. 30 days of ideas – 27: Tamagotchi Gardening
  30. 30 days of ideas – 28: Charity shop clothing subscription
  31. 30 days of ideas – 29: ‘Now Playing’ social music app
  32. 30 days of ideas – 30: House of Spare Ideas
  33. Mixtape for You by Ray Kuyvenhoven
  34. What can you do in 30 days?

16 Responses to “30 days of ideas – 21: Nationalise EMI”

  1. @camfots says:

    nice idea apart from the inconvenient fact Britian is even more broke than EMI. EMI should buy the UK and make some A&R asshole Prime Minister.

    Seriously though, we can’t afford to nationalise nothin’- a bloated media company (which as you rightly identify probably still lines it’s magic golden hamster cages with £50 notes)is waaaaay doen the list of stuff we should spend taxpayers money on.

  2. @IanTrombone says:

    Hi Andrew,

    As suggested on Twitter I thought I’d follow up with something more then 140 characters long. My major concern with ‘bailing out’ EMI like we did with the banks is that this simply will not work as a long term solution. Like with the banks all nationalising EMI would do is transfer the responsibility of a failing business to someone else, in this case an already en -debted and in some people’s eyes failing business of UK inc. Many people thought the bail out solution would be an end to our finiancial woes but it seems to be still going on and will for some time. I think the problem here lies in the way EMI is being run, how can any kind of business expect to be successful with “(like the 90%+ of EMI catalogue decaying in the vaults and currently unavailable for sale)” is beyond me. Why should we have to come and bail them out for their bad decisions?

    What really vexes me is that these failing dinosaurs of record companies control the entire industry, and largely what the buying public have access to music-wise and yet are still not managing to break even? This is what I meant by EMI (and the other big three) stifiling creativity. Ever tried to get your band’s record played on the radio or distributed traditionally? It’s not easy I can tell you, because the big guys hold all the cards.

    This is exactly the kind of mentality that let to the dot-com bubble bursting. People were throwing huge amounts of money at ideas that didn’t deserve it with no thought, seemingly, as to whether this was a good idea or not. I see this directly paralleled in a bail out scheme. Throwing money at EMI won’t solve their ills and if they can’t keep up, even due to ‘market conditions’.

    Yeah it would be a shame to lose all the music and culture that they have provided over the years but the Coliseum still stands in Rome, and incidentally rakes in the cash, many years after the fall of the Roman Empire and so will the music. It may even turn out the file sharing picks up the slack, how’s that for a turn of events? Beside this could be the shake up that the other big three need to get their arses into gear and maybe make some room in a crowded controlled industry for something new, and different. Not enough of that about in my opinion.

    Ian

  3. Lee Jarvis says:

    I shall probably reply later with a more thought-out response, but my initial reaction is that if it is being done elsewhere, then why shouldn’t bailouts apply to British culture? Unscrupulous banks (and in the US, bloated car companies that hoarded and misspent profits for decades) have a piece of the pie, why not something creative that once contributed to the pride of the nation? Obviously there should be conditions applied that help restore some functionality and creative interests (Dubber for VP?!).

    Lee J.

  4. Piewacket says:

    This outdated way of distributing music should be allowed to die gracefully , we all know it will in the end might as well be sooner than later . Musicians have been screwed long enough by these Shylocks , with the internet connectivity available now bands can distribute and market their own music and not be held in servitude to these conglomerates

  5. Nick Moreton says:

    @Piewacket
    In the words of Meatloaf, “you took the words right out of my mouth”

  6. Dubber says:

    Just to be clear – nationalisation doesn’t mean bail out. It’s not like we give them truckloads of money to solve their debt issues, and then they carry on doing what they did and being what they were…

    Nationalisation means: ‘You’ve screwed this up – and so now we own it. All of us. And we’re going to run it for the benefit of music, for the benefit of culture and for the benefit of artists. And by the way – you’re fired.’

  7. @camfots says:

    Nationalisation means public money underwriting and paying the debt and operating costs of a big stupid corporation that is increasingly irrelevant.
    And since when did governments run things well?
    And, also, the music is or should be the property of the artist, not the holding company who funded its creation. The holding company should get a cut for services rendered, that’s all.

  8. Andrew Cowie says:

    It’s interesting to see a return to a pre-Thatcher attitude to public ownership. When I started voting the Government ran the trains, it owned shipyards, steel works, coal mines, car companies, all the utility companies and a huge portfolio of housing stock, all of which the Tories sold off. They also de-regulated the financial services industry which led directly to the current financial crisis so some return to pre-Thatcher values is to be expected but the bank bail out and the stunning level of national debt it required is unlikely to win the public over to a wider policy of transferring the private losses of unprofitable and uncompetitive businesses to the tax-paying public.

  9. @camfots says:

    It’s true we owned and ran things but it cost us huge amounts and they were often run very badly.
    Getting off the point I suppose but Thatcher is a red herring term. Thatcher was the often unpleasant result of a reasonable political movement that had a perfectly valid point about the enormous state and how wasteful and slow it was. Like everything else we are on the curve of an endless cycle. Unfortunately for Dubbers idea, it’s the wrong curve at the moment.

  10. Phil Cooper says:

    What sickens, annoys and makes me sad is the fact that some very historical, archived music will end up in the hands of bodies out for a quick buck… No love for what has gone into the music they are about to get their hands on!!!

    Boo!!!!

  11. @iantrombone says:

    Er, Phil; do you think that EMI weren’t just out for a quick buck and actually cared abut the music? If you base a sociaety on economic values then you are bound to the economic structure of do well or fail. Why are we bending the rules for these bloated fat cats instead of getting the next generation some help and meking some space for the next guy? (Granted they may well turn into bloated fatcats themselves but nothing ventured nothing gained!)

    @camfots Can’t say I’m old enough to have any real recolection of Thatcher or Major and thee way they did things. Stand to reason though that we shouldn’t let people who lie for a living run things.

    Ian

  12. Kyla says:

    There’s a similar discussion happening on the No Depression website currently. Grant Alden raises the question what happens to our musical legacy in this digital age and as record labels struggle and possibly go out of business. What happens to their catalogs and how do we ensure that musical history be protected? As more artists self-release who takes charge of those catalogs so the music is not lost when those artists exit the business or grow bored with it? Nationalizing and the idea of independent public trusts have been floated in the comments. Interesting and important questions to ponder.
    http://www.nodepression.com/profiles/blogs/who-then-is-in-charge-of-our

  13. Deanna Chitwood says:

    I will have to agree with Phil Cooper about having the music ending up in someone elses care. It reminds me of Chess Records a.k.a Cadillac Records, when the record company goes backrupt and falls to pieces. It could have been prevented with better management. The records were destroyed by new owners of the “Chess Records” building but luckily the master tapes were survived. I guess what I’m trying to say is that we have already experieced something similar to EMI and we can’t repeat history. Learn from it and learn to prevent it.

  14. Darnell Bradshaw says:

    I enjoyed the article but the main thing that bothered me is that how there is no real love for music any more!! I mean its there somewhat, but where is the craving to be the best? It seems like every artist that comes out is trynna be the next celebritity instead of being know for their creativity.

  15. Jon Fletcher says:

    I think a lot of the public service side of this idea already happens through Arts Council and other funding- I’d certainly agree that there should be more of it.
    I’d favour changes to copyright law meaning that on bankruptcy of a label the rights either revert to the artist or go straight into the public domain. Another suggestion I’ve come across (wish I could remember where) is a a “use it or lose it” clause where copyright in a sound recording expires 5 years after release unless the owner continues to make it available.

  16. John Popham says:

    Perhaps nationalisation is a non-starter in the current financial and political climate. But, what about mutualisation? A commonly-owned body with the remit to nurture and foster new talent.

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