EMI blows £25m a year on old CDs
p2pnet news | Music:- EMI pays £25m a year to scrap unsold CDs.
Eighty five percent of artists are ” lossmaking” and Warner Music, EMI, Vivendi Universal and Sony BMG, are, “stuck with a model designed for a world that has changed and gone forever”.
£25 million equals almost $50,000,000 at today’s rates.
And that’s only for one record company.
So let’s see. Four times $50M …..
That’s a staggering $200,000,000 ! And it could be a lot more given EMI is only number three on the Big 4 list, with Warner bringing up the rear.
How many starving artists and music industry support workers would that allow the “devastated” labels to take care of?
Both revalations come in a Financial Times story which goes on Hands’ diagnosis is:
… the industry is stuck in the past, full of executives living off glory days from the launch of the CD, managing flabby bureaucracies, and refusing to face the challenges of the internet.
The story adds:
“Hands remembers how after his £700m-plus purchase of Angel Trains, a privatised rail franchise, headlines quickly changed from ‘Hands overpays by 20 per cent’ to ‘The Great Train Robbery’.
“The karaoke fan is aiming for a similar turnaround in the music industry, which he hopes will cheer his name in future, not boo him off the stage.”
(Cheers, Rusty)
Also See:-
Financial Times – EMI chief confident of ability to call a new tune, January 14, 2008
Use free p2pnet newsfeeds for your site. It’s really easy!
Subscribe
to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.phpNet access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details. Download here.
January 23rd, 2008 at 8:49 am
85% of bands lose money only because of the misleading accounting methods used by record companies such as farming out work to wholly owned subsidiaries who shamelessly overcharge for artwork, packaging, shipping etc. guaranteeing the subsidiaries DO make money on every transaction. Why is it so unlikely that the ridiculous figure for destroying cds is inflated likewise. If EMI scraps 100 million cds a year it still costs more to destroy them than to stamp them out. Rubbish.
January 23rd, 2008 at 9:01 am
has noone told them that you don’t need to store big warehouses full of bits if you would sell “perfect digital copies” (no dear RIAA lawyers, that does not mean mp3 but FLAC!) and that it costs nearly nothing to get rid of them?
January 23rd, 2008 at 12:23 pm
Good! This is $200,000,000 they don’t have to corrupt judges, and members of the governement or to operate their extortion center and their shady lawers.
Please Majors continue making tons of CD by the hundred of millions and we will buy them by the truck load I swear! (Fingers crossed) We particularly enjoy the Britney slut CD Honest! (When they are free as frisbees and under cup pad just like the AOL CD. You remumber? Thank you AOL!)
January 23rd, 2008 at 3:14 pm
They are over shipping cds at around 20%. So not only are they sending far more than they need to but then paying again to destroy those not sold. Dropping the 20% would save money at both ends, the pressing as well as the destroying. But then again, it’s the pirates causing all the troubles. Thank heavens the industry doesn’t need to do any real changes to make it efficent.
Of course it must be nice as well to have discretionary funds for “flowers” that include anything but flowers. After all, the wining and dining of potential rock stars has to include the drugs, wine, women, and songs at someone’s cost. Maybe they can get the pirates in on that one as well in some manner.