The new owner of record label EMI is enforcing tight restrictions on new artist signings and marketing budgets in a bid to get the firm back on track.
There are also fears that job losses could happen among the 5500 workforce at EMI, which is home to artists including Kylie Minogue, Lily Allen and Coldplay.
Guy Hands' private equity firm Terra Firma completed the takeover of the record label for £4 billion including debt in August. In the same month as the takeover first-quarter revenues had slipped by 5.1 per cent.
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Guy Hands, the chief of Terra Firma, is planning to tell the staff of EMI in mid-January what he sees in the company that the legions of doubters do not.
Some of his plans have already emerged from presentations to potential co-investors and from the memos that have been e-mailed around a gossipy industry.
At the heart of his optimism is an analysis that EMI is an asset-rich but poorly managed business that is ready to make fundamental changes precisely because of the turmoil in which the music industry finds itself.
Many analysts agree, but some have been startled by the aggressive assumptions that Terra Firma has made.
According to one presentation, it expects EMI's recorded music business to deliver £528m ($1bn) in earnings before interest, tax, depreciation and amortisation by 2012, up from just £61m in 2007.
The projection assumes a huge increase in online revenues, a rapid take-up of mobile subscription and download services, and heavy cost cuts. To get there, Terra Firma will step up EMI's use of social networking sites to find acts, shift its marketing towards digital sales and digitise more of its catalogue.
Mr Hands has also let it be known that he is looking to acquire independent labels, and has left open the prospect of a more transforming deal - such as a move into touring and artist management or a revival of merger talks with Warner Music.
Even in the steadier publishing business, Terra Firma expects to more than double ebitda, from £107m to £221m over the period. Much of this will come from catalogue acquisitions, which could add £40m to EMI Music Publishing's net publisher share.
Less headline-grabbing group-wide initiatives such as centralising procurement, back office and IT functions could also save tens of millions of pounds.
The ambition is to reinvest some of the savings into developing new talent.
The challenge will be to ensure that artists are not scared off by the turmoil.
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