The new owner of EMI has said he will drop artists the music group believes are not working hard enough and will overhaul the company’s own executives’ pay packages, the Financial Times reported.

EMI, which has Cold Play, the Rolling Stones and Kylie Minogue on its roster, also threatened to withdraw stars’ lucrative advances if record sales are disappointing.
CEO of Terra Firma Guy Hands said the company would in the future be “more selective in whom we choose to work with.”

While many spend huge amounts of time working with their label to promote, perfect and endorse their music, some unfortunately simply focus on negotiating for the maximum advance … advances which are often never repaid,” Hands said.

The company, which Terra Firma bought for $4.9 billion, has been plagued in the past by late delivery of albums by some of its biggest acts.

Hands also criticized EMI’s “compensation and management system put in place over the last 20 years which does not encourage the right behaviors or reward the right actions.”

“What worries me is that the existing structures have been put in over a couple of decades and unpicking them in a way that releases the good in the company is not going to happen overnight,”.

The bottom line: What is he really saying? That he paid to much for EMI? Basically, he spent 4.9 billion dollars and he can’t get the biggest acts to record and put out music. Hands is crying because he has to pay more and motivate artists to put out records in a shrinking business.

Physical and digital sales this week were up +7.6% for W/E 11/4/07. Sales were down (-16.9%) from the same week last year.Â
Year-to-date business is down (-14.7%).Â

Sales trends…
Chains were up +42% from LW,
Independents were up +18%,
Mass Merchants were up +295%,
and Non-Traditional was up +54%.
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Jay Z ‘American Gangster’ 424,959k
Eagles ‘Long Road Out of Eden’ 359k
Garth Brooks ‘Ulimate Hits’ 351k
Josh Groban ‘Noel’ 115k
Britney Spears ‘Blackout’ 86k
Kid Rock ‘Rock n Roll Jesus’ 35k
Bruce Springsteen ‘Magic’ 30k
Daughtry 20k
Seether ‘Exile on t…’ 20k
Paramore ‘Riot!’ 14k
Feist ‘Reminder’ 13k
Maroon 5 ‘It Wont Be Soon…’ 12k
Finger Eleven “Them Vs You’ 10k

The Silicon Valley article discusses the downfall of Warner stock and retailers cutting back on floorspace for CD’s. Some think big boxes may cut more than 30% of dedicated music space.

If you look at the history of CD sales physical outlets have changed throughout the years. The record biz has never been in the situation of figuring out where to sell music.

The record industry is making 1/10 of what they could be making. They are selling songs rather than an album. Music is in the digital age, the outlets will be digital.

We have two people fighting. The label wants to sell at retail and Apple wants to sell digitally.

The body of work from an artist is not judged anymore. Its all about the song and the song sales. Until the psychology of consumer is more concerned about the body of work, you will see dramatic changes in retail space.

It’s no wonder the record biz is in the situation because the last couple of years the album content has been de-valued. Even prior to entering the digital age, columnists and reviewers would write that only one or two great songs were on an album setting the stage for a singles world.

EMI removes Radiohead Ad: The saga between Radiohead and EMI continue when the band’s former label removed a misleading ad for the group’s back catalogue from the internet.

Anyone typing in Radiohead into Google would see an ad at the top of the search results reading: “Radiohead – New Album ‘Rainbow’ now available as boxset”.

The ad was not directed the “discbox” edition of In Rainbows but to a website where EMI subsidiary Parlophone is selling a box-set of the seven albums Radiohead recorded while they were still signed to the label.

Its been said that EMI is trying to compete with its former charges’ independent release. While EMI has denied this, the ad (visible in a screengrab from Friday, above) raises new questions about the label’s
motives. (The Guardian)

Are Games More Relevant Than Radio? Guitar Hero III sold over $115 million in its first week, making it the best launch in the company’s history. Not only is Guitar Hero popular among gamers but it also exposes new music. For instance, Roadrunner Records said that sales of Dragon Force’s album “Inhuman Rampage” increased 126% week-on-week in the wake of Guitar Hero III’s release. Slipknot, another Roadrunner artist featured in the game, also saw its album sales increase. EA’s Steve Schnur asserted that games were now more relevant than radio when it comes to promoting new music.

According the NY Post, Terra Firma CEO Guy Hands is telling prospective partners that they can nearly quadruple their money in the struggling major label and cash out within five years.

Terra Firma plans to improve its EMI investment by cutting costs…

The cost cutting includes reducing A&R and marketing costs by 58 million by using social networks and user generated web sites like Myspace to discover and promote talent, cut $31 million in sales and distribution, and improve the recorded music businesses’ cash flow by driving over $700 million in from
online and mobile music. Terra Firma also has $100 million set aside for purchases of small indie labels. (NY Post)