Music vs private equity

The private equity takeover of EMI continues to be quite a fun saga to follow, for all the wrong reasons. It's difficult to feel much sympathy either for Terra Firma boss Guy Hands or the prima donna music superstars like Robbie Williams. When Robbie Williams accuses Hands of acting like a plantation owner you know that perspective has been lost.

Hands' latest comments that they need to take power away from the A&R men and give it to the 'suits' is bound to provoke the gag reflex in many of us. Equally he, presumably unwittingly, does a good job of making A&R men sound dead cool and creative:

"someone who gets up late in the day, listens to lots of music, goes to clubs, spends his time with artists and has a knack of knowing what would sell"

Sounds like a pretty cool job to me!

But he's a fairly smart cookie, and I can't help feeling that he's onto something when he suggests that the music industry (and investment banks) gets things right by accident, or in spite of itself, rather than by design:

"In years to come investment banks will be seen as a classic case study of a businesses doing very very well making ever increasing profits year after year but that very success hiding where profits were really being made. To give you an example that is close to my heart, it reminds me of EMI and all the major record labels in the 1990s believing their success was due to their personal genius and ability to find and market new music, when in fact it was only due to the baby boom generation replacing their vinyl with CDs."