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Terra Firma’s plans for turning EMI around supposedly include cutting $58 million (£29 million) off A&R and marketing budgets “by using social networks and user-generated websites like MySpace to discover and promote talent”.
New York Post (via Silicon Valley Insider) obtained a presentation the private equity owner is touting, showing it wants to cut $223 million (£107 million) from EMI Music and “improve its investment by two to 3.9 times through a mix of cost cuts, dramatically improved digital revenues and strategic acquisitions”. And Terra reckons it can improve online and mobile download margins $700 million (£337 million) by 2012 to grow cash flow from $43 million (£20.7 million) to $1.1 billion (£530 million). What isn’t clear is exactly how this will happen. EMI is still appointing to its advisory investor board and, whilst it may be intent on milking the digital cow much more, it’s certain that competitors are thinking the same thing.