If it’s broken, you’d better fix it – EMI

Today’s FT carried an interview with Guy Hands of Terra Firma on the subject of EMI.

Amongst several stats trotted out, one section stood out for me:

Mr Hands also hinted at a clear-out of EMI Music’s roster of 14,000 artists, saying just 200 of them made most of its revenues.

About 85 per cent of artists lose money for their labels, he said, and EMI spends £70m a year subsidising the 15 per cent who never produce an album. The group has exceeded marketing budgets by about £60m a year, he added, and wastes £25m a year scrapping unsold CDs.

Leaving aside artist productivity and profitability, most businesses try to convert their “waste” into some scrap value, be it returned newsprint or whatever. That they have to destroy CDs is bizarre – why not get someone to come and take them away for instance.

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