What happens when you cross a creative industry with a private-equity shop? Ask Guy Hands, who just bought EMI:
What we are doing is taking the power away from the A&R guys and putting it with the suits – the guys who have to work out how to sell music. Trying to persuade 260 people to give up their power has been hard.
We had labels at EMI that were spending five times as much on marketing as their gross revenues. We told them you could stick a £50 note on the cover of a CD and have the same effect, and we also wouldn’t have to pay them. Those sorts of comments don’t go down too well.
John Gapper is sympathetic:
This seems to me one of the most interesting issues facing the industry. You could mount a good argument that the internet and digital distribution has undermined the rationale for the bloated A&R overhead. When new artists can be discovered on MySpace, it surely brings into question whether quite so many highly paid talent-spotters are necessary.
Highly-paid A&R people tend to proliferate in the industry because the big labels are made up of many smaller ones, each with their own infrastructure. I remember being struck years ago by a Vanity Fair article that detailed how many millions some A&R men were raking in.
We shall see whether Mr Hands wins this fight, or whether the A&R fraternity manage to use the bands to discredit the suits, the tactic they have employed thus far.
The recording industry as a whole seems to be very good at blaming everybody from college students with computers to, well, Mr Hands for the woes it currently faces. Chances of it stopping moaning? Nil, I think. Which is one reason why it’s going to die a protracted death and signally fail to reinvent itself for the 21st Century.