Citibank to Sell EMI to UMG and Sony

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EMI logo

"Electric & Musical Industries Ltd"

After many years of speculation, one of the oldest music companies, EMI will finally be broken up in Citibank’s imminent sale of its recording and publishing businesses to Universal and Sony.

It is a sad day for the music business, as we know what happens when Universal takes over a company: Lew Wasserman made the template. They will take the superstars only and lose everything else unless it has a huge potential or pr liability.  It’s a proven way to run a talent-oriented corporation, but my heart sinks thinking of the workers who will be cut as a result.  And of course we are down to three majors from six in the 90s.

On the other hand, the merger with UMG also creates a possibility for a new sort of model.  Just this week, music data firm The Echo Nest and EMI Records announced OpenEMI, which is a developer’s platform based on the label’s catalog.  It’s the first time a company has allowed out all their data content, and it could create incredible apps and services that the company will own a piece of automatically.

As mentioned on the Echo Nest blog, “App developers can dream up all kinds of new ways to interact with music in a special EMI developer sandbox we built, using their own ingenuity and the wide array of The Echo Nest’s tools — dynamic playlist APIs, open source audio fingerprinting, personalization APIs, audio analysis, remix software, and much more.”

Yes it will be huge to have the Stones and Beatles under the same roof for many years to come. But it’s also possible that the really exciting part of the merger is that OpenEMI will have even more funding, improved philosophical alignment, bigger artists to work with and better access to marketing channels.

Remember what we learned in the Universal-PolyGram merger – it’s about squeezing the vendors. With OpenEMI, the company is setting itself up for the vendor and artist relationships of the future.  Let’s “give it a minute” and see how things turn out.

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