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Now that the extravagant “flowers” bill has come down, EMI’s turnaround certainly looks on track. The label may not have to report its earnings publicly since it was taken private by Guy Hands’ Terra Firma, but Hands sent a letter to staff to say it clocked Q1 pre-tax earnings of £59.2 million, Reuters noted – up from Q107’s £47.1 million loss. Revenue in the quarter was up 61 percent to £288.1 million.
How’d he do it? Hands quickly realised, upon his arrival, that EMI was making far too little money on new releases and most of its cash on back-catalogue. Cutting up to 2,000 jobs will also help cashflow, if not morale – Hands’ January turnaround plan, involving that move, pledged to make annual savings of £200 million, so the Q1 report looks on-track. But Hands cautioned: “As we all know, the recorded music business is extremely volatile and we cannot count on future quarters always being this good.” The company was losing money hand over fist in former CEO Eric Nicoli’s final days, though it was under him the label became the first major to try DRM-free tracks.
Not content with releasing their album independently, however, former EMI staple Radiohead has now partnered with Google (NSDQ: GOOG) on its latest release. The search site has launched a special section to host the visually stunning video for the ethereal House Of Cards track; the vid is also available as an iGoogle gadget and there’s a related iGoogle homepage theme. It’s a typical enough example of digital marketing for music, but rarely does Google partner in such a way – there was, a spokesman told me, “a confluence of interests”.
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