New owner pledges to invest in artists at struggling EMI

The head of the private equity owner of EMI, the home of Robbie Williams and Coldplay, yesterday unveiled his vision for turning around the famous music label amid challenging industry conditions.

Guy Hands, chief executive and founder of Terra Firma, vowed to retain the group's recorded music division and to invest in artists big and small to restore the company's fortunes following its £2.4bn buyout.

The deal ended months of speculation over the future of EMI - which had endured a rollercoaster period of several years - and had led to the departure of chief executive Eric Nicoli.

Some analysts predicted Terra Firma would sell the recorded music side and retain EMI's profitable publishing division, but yesterday Mr Hands said that he was confident of overhauling EMI's model to make it less reliable on huge selling artists. "We're determined to keep that part of the business and we're determined to make it viable," he said, following a speech at the Royal Television Society media convention in Cambridge.

EMI was a "classic example" of Terra Firma's strategy to "look for the worst businesses we can find in the most challenging sector", and the firm was "just hoping EMI is as bad as we think it is".

Terra Firma made its name with several high profile turnaround stories. Its plan for EMI is expected to create a structure in which lower selling artists with more niche appeal can still be profitable. "The independent record labels are a lot livelier," said Mr Hands. "The vision of EMI is to be big enough to do everything we can for every artist, but small enough to care for every artist."

Mr Hands, who attended the Mercury Music prize and has been touring artists and their managers, added: "What you've got is an incredible history. It's extraordinary. They have a real love for EMI. But they need EMI to serve their artists in a way that is better than any of the other majors."

As well as the general malaise surrounding the industry due to the increase in digital piracy, EMI was hampered by a poor release schedule in 2007 and an over-reliance on a handful of big name artists.

Earlier at the RTS convention, Rupert Murdoch's most senior lieutenant had warned British broadcasters they must adapt to the digital landscape or wither on the vine.

Peter Chernin, the News Corporation chief operating officer who oversees large swathes of the company's media empire, told senior executives they must be willing to undergo a huge cultural shift and not be afraid of failure.

"There are huge rewards for those who innovate, and death to those who do not," he told delegates in Cambridge. The age of "dictatorship" was over for major media groups.

"Right now there are more than 300 million people around the world watching video content online. It's a fundamental shift that completely democratises our business. And democracy can be scary, especially when we've been used to living in a totalitarian state," he said.

Broadcasters have been wrestling with the challenge of maintaining revenues and viewers in the face of exploding choice and fragmenting media options. But, said Mr Chernin, media groups were well placed to benefit from an unprecedented period of technological change.

"The kneejerk reaction is to take potshots at what you don't understand. To dismiss user-generated content as crap, and blogs as unauthoritative, is not only unproductive but a waste of time," he said.

Fragmentation was having a positive effect on creativity, he believed. "The middle is dead, and that's the greatest thing that has ever happened. The bland, safe, central middle is never coming back."

And Mr Chernin echoed Mr Hands by saying companies should concentrate on big blockbusters at one end of the market and high quality niche offerings at the other.

Daily Telegraph editor Will Lewis has attacked what he called the the "leftwing bias" of broadcasters and said his newspaper intended to challenge them on the internet.

Mr Lewis, speaking at the RTS Cambridge convention yesterday, said he had been "staggered" by the amount of bias he had found in broadcasting.

"There is a lack of choice despite the amount of programming in terms of the leftwing bias we have in broadcasting which has staggered us," he said. "We are providing a different sort of programming for the millions of people in the UK who don't believe in the leftwing prism. The internet is incredibly liberating in that respect."

He said the Telegraph had decided not to follow the traditional broadcasters' way of doing things in its move into television with its partner ITN.

Mr Lewis said the changes he had implemented at the Telegraph, including a move to a new integrated newsroom in London's Victoria, had given an added focus to its website.

Source: http://business.guardian.co.uk/story/0,,2169767,00.html