|Industry Music entertainment|
|Former type Private company (31 March 1931–28 September 2012)
Subsidiary (28 September 2012-present)|
Fate Broken up: EMI Music Publishing acquired by consortium led by: Sony/ATV Music Publishing and comprising Sony Corporation of America The Estate of Michael Jackson Mubadala Development Company PJSC Jynwel Capital Limited The Blackstone Group's GSO Capital Partners LP David Geffen Parlophone, Chrysalis Records, EMI Classics, Virgin Classics and EMI Records' Belgian, Czech, Danish, French, Norwegian, Portuguese, Spanish, Slovak and Swedish operations acquired by: Warner Music Group Bulk of recording business acquired by: Universal Music Group Mute Records back catalog and Virgin Music Publishing sold to: BMG Rights Management
Predecessor Columbia Graphophone Company Gramophone Company
Successor EMI Music Publishing Virgin EMI Records EMI Records Nashville Minos EMI EMI Taiwan
Founded 31 March 1931; 85 years ago (1931-03-31)
EMI (officially EMI Group Limited, originally an initialism for Electric and Musical Industries and often known as EMI Records and EMI Music) was a British multinational conglomerate founded in March 1931 and was based in London. At the time of its break-up in 2012, it was the fourth-largest business group and family of record labels in the recording industry and was one of the big four record companies (now the big three). Its EMI Records Ltd. group of record labels included EMI Records, Parlophone, Virgin Records and Capitol Records. EMI also had a major publishing arm, EMI Music Publishing—also based in London with offices globally.
- Blumlein and radar
- Computers and CT Scanner
- Aftermath of demerger from Thorn
- Terra Firma takeover
- Citigroup ownership
- SonyUniversal sale
- EMI Leisure
- EMI Music Publishing
- CD price fixing
The company was once a constituent of the FTSE 100 Index, but faced financial troubles and USD $4 billion in debt, leading to its acquisition by Citigroup in February 2011. Citigroup's ownership was temporary, as it announced in November 2011 that it would sell its music arm to Vivendi's Universal Music Group for $1.9 billion, and EMI's publishing business to a Sony/ATV consortium for around $2.2 billion. Other members of the Sony consortium include the Estate of Michael Jackson, The Blackstone Group, and Abu Dhabi–owned investment fund Mubadala Development Company.
Electric and Musical Industries Ltd was formed in March 1931 by the merger of the Columbia Graphophone Company and the Gramophone Company, with its "His Master's Voice" record label, firms that have a history extending back to the origins of recorded sound. The new vertically integrated company produced sound recordings as well as recording and playback equipment.
The company's gramophone manufacturing led to forty years of success with larger-scale electronics and electrical engineering.
Blumlein and radar
Alan Blumlein, an engineer employed by EMI, conducted a great deal of pioneering research into stereo sound recording many years prior to the practical implementation of the technique in the early 1950s. He was killed in 1942 whilst conducting flight trials on an experimental H2S radar set.
During and after World War II, the EMI Laboratories in Hayes, Hillingdon developed radar equipment (including the receiver section of the British Army's GL-II anti-aircraft fire-control radar), microwave devices such as the reflex klystron oscillator (having played a crucial role in the development of early production types following on from the British Admiralty Signal School's pioneering NR89, the so-called "Sutton tube"), electro-optic devices such as infra-red image converters, and eventually guided missiles employing analogue computers.
Post-war, the company resumed its involvement in making broadcasting equipment, notably providing the BBC's second television transmitter at Sutton Coldfield. It also manufactured broadcast television cameras for British television production companies as well as for the BBC. The commercial television ITV companies also used them alongside cameras made by Pye and Marconi. Their best-remembered piece of broadcast television equipment was the EMI 2001 colour television camera, which became the mainstay of much of the British television industry from the end of the 1960s until the early 1990s. Exports of this piece of equipment were low, however, and EMI left this area of product manufacture.
The company was also for many years an internationally respected manufacturer of photomultipliers. This part of the business was transferred to Thorn as part of Thorn-EMI, then later became the independent concern Electron Tubes Ltd.
Computers and CT Scanner
In 1958 the EMIDEC 1100, the UK's first commercially available all-transistor computer, was developed at Hayes under the leadership of Godfrey Hounsfield, an electrical engineer at EMI.
In the early 1970s, with financial support by the UK Department of Health and Social Security as well as EMI research investment, Hounsfield developed the first CT scanner, a device which revolutionised medical imaging. In 1973 EMI was awarded a prestigious Queen's Award for Technological Innovation for what was then called the EMI scanner, and in 1979 Hounsfield won the Nobel Prize for his accomplishment.
After brief, but brilliant, success in the medical imaging field, EMI's manufacturing activities were sold off to other companies, notably Thorn (see Thorn EMI). Subsequently, development and manufacturing activities were sold off to other companies and work moved to other towns such as Crawley and Wells.
Emihus Electronics, based in Glenrothes, Scotland, was owned 51% by Hughes Aircraft, of California, US, and 49% by EMI. It manufactured integrated circuits electrolytic capacitors and, for a short period in the mid-1970s, hand-held calculators under the Gemini name.
Early in its life, the Gramophone Company established subsidiary operations in a number of other countries in the British Commonwealth, including India, Australia and New Zealand. Gramophone's (later EMI's) Australian and New Zealand subsidiaries dominated the popular music industries in those countries from the 1920s until the 1960s, when other locally owned labels (such as Festival Records) began to challenge the near monopoly of EMI. Over 150,000 78-rpm recordings from around the world are held in EMI's temperature-controlled archive in Hayes, some of which have been released on CD since 2008 by Honest Jon's Records.
In 1931, the year the company was formed, it opened the legendary recording studios at Abbey Road, London. During the 1930s and 1940s, its roster of artists included Arturo Toscanini, Sir Edward Elgar, and Otto Klemperer, among many others. During this time EMI appointed its first A&R managers. These included George Martin, who later brought the Beatles into the EMI fold.
When the Gramophone Company merged with the Columbia Graphophone Company (including Columbia's subsidiary label Parlophone) in 1931, the new Anglo-American group was incorporated as Electric & Musical Industries Ltd. At this point RCA had a majority shareholding in the new company, giving RCA chair David Sarnoff a seat on the EMI board.
However, EMI was subsequently forced to sell Columbia USA due to anti-trust action taken by its American competitors. By this time the record industry had been hit hard by the Depression and in 1934 a much-diminished Columbia USA was purchased for just US$70,500 by ARC-BRC (American Record Corporation–Brunswick Record Company), which also acquired the OKeh label.
RCA sold its stake in EMI in 1935, but due to its earlier takeover of the Victor label in 1929, RCA retained the North and South American rights to the "Nipper" trademark. In other countries, the dog-and-phonograph logo was used by the EMI subsidiary label HMV, even though the slogan itself would be retained by RCA along with the logo.
In 1938 ARC-Brunswick was taken over by CBS, which then sold the American Brunswick label to American Decca Records, which along with its other properties, Vocalion Records and Aeolian Vocalion Records, used it as a subsidiary budget label afterward. CBS then operated Columbia as its flagship label in both the United States and Canada.
EMI retained the rights to the Columbia name in most other territories including the UK, Australia and New Zealand. It continued to operate the label with moderate success until 1973, when it was retired and replaced by the EMI Records imprint, making records with the Columbia Records label manufactured outside North America between 1972 and 1992 rare.
In 1990, following a series of major takeovers that saw CBS Records acquired by the Sony Corporation of Japan, EMI sold its remaining rights to the Columbia name to Sony and the label is now operated exclusively throughout the world by Sony Music Entertainment; except in Japan where the trade mark is owned by Columbia Music Entertainment.
EMI released its first LPs in 1952 and its first stereophonic recordings in 1955 (first on reel-to-reel tape and then LPs, beginning in 1958). In 1957, to replace the loss of its long-established licensing arrangements with RCA Victor and Columbia Records (Columbia USA cut its ties with EMI in 1951), EMI entered the American market by acquiring 96% of the stock for Capitol Records USA.
From 1960 to 1995 their "EMI House" corporate headquarters was located at 20 Manchester Square London, England, the stairwell from which was featured on the cover of the Beatles' Please Please Me album. In addition, an unused shot from the Please Please Me photo session, featuring the boys in short hair and cleancut attire, was used for the cover of the Beatles' first double-disc greatest-hits compilation entitled 1962–1966 (aka "The Red Album"). In 1969, Angus McBean took a matching group photograph featuring the boys in long hair and beards to contrast with the earlier cleancut image to show that the boys could have appeal across a wide range of audiences. This photo was originally intended for the Get Back album which later was entitled Let It Be. The photo was used instead for the cover of the Beatles' second greatest-hits double-disc compilation entitled 1967–1970 (aka "The Blue Album"). (The two compilations were released in 1973.)
EMI's classical artists of the period were largely limited to the prestigious British orchestras, such as the Philharmonia Orchestra and London Symphony Orchestra. During the era of the long-playing record (LP), very few US orchestras had their principal recording contracts with EMI, one notable exception being that of the Pittsburgh Symphony Orchestra, especially during the tenure of William Steinberg.
From the late 1950s to the early 1970s, the company enjoyed huge success in the popular music field under the management of Sir Joseph Lockwood. The strong combination of EMI and its subsidiary labels (including Parlophone, HMV, Columbia and Capitol Records) along with a roster of stellar groups such as the Hollies, the Shadows, the Beach Boys and the Beatles along with hit solo performers such as Frank Sinatra, Cliff Richard, and Nat 'King' Cole, made EMI the best-known and most successful recording company in the world at that time.
In 1967, while shifting their pop and rock music roster to Columbia and Parlophone, EMI converted HMV solely to a classical music label exclusively. For the emerging progressive rock genre including Pink Floyd, who had debuted on Columbia, EMI established a new subsidiary label, Harvest Records, two years later.
In 1971, Electric & Musical Industries changed its name to EMI Ltd. and on 1 January 1973 EMI phased out most of its heritage labels and replacing them with the EMI imprint. On 1 July 1973 the Gramophone Company subsidiary (The Gramophone Co. Ltd.) was renamed EMI Records Ltd as well, and in February 1979, EMI Ltd acquired United Artists Records and with it their subsidiary labels Liberty Records and Imperial Records.
Eight months later, Thorn Electrical Industries merged with EMI Ltd. to form Thorn EMI.
Ten years later in 1989, Thorn EMI bought a 50% interest in Chrysalis Records, completing the buyout two years later. Six months after completing the buyout of Chrysalis, Thorn EMI bought Virgin Records from Richard Branson in one of its highest-profile and most expensive acquisitions in record music history. In 1992, Thorn EMI entered the Christian music market by acquiring Sparrow Records.
Aftermath of demerger from Thorn
Due to the increasing divergence of business models, Thorn EMI shareholders voted in favour of demerger proposals on 16 August 1996. The resulting media company was now known as EMI Group PLC.
Since the 1930s, the Baak Doi label headquartered in Shanghai had been published under the EMI banner and since then, EMI had also been the dominant label in the cantopop market in Hong Kong until the genre's decline in the mid-1980s. Between the years 2004–2006, EMI then completely and totally divested itself from the c-pop market, and after that, all Hong Kong music artists previously associated with EMI have had their music published by Gold Label, a concern unaffiliated with EMI and with which EMI does not hold any interest.
On 21 November 2000, Streamwaves and EMI signed a deal licensing EMI's catalogue in a digital format for their online streaming music service. This was the first time EMI had licensed any of its catalogue to a streaming music website.
Pop star Robbie Williams signed a six-album deal in 2002 paying him over £80 million ($157 million), which was not only the biggest recording contract in British music history at the time, but also the second biggest in music history behind that of Michael Jackson.
Apple Records, the record label representing The Beatles, launched a suit against EMI for non-payment of royalties on 15 December 2005. The suit alleged that EMI had withheld $50 million from the record label; however, an EMI spokesman noted that audits of record label accounts are not that unusual, confirming at least two hundred such audits performed on the label, but that these audits rarely result in legal action. A legal settlement was announced on 12 April 2007 and terms were undisclosed.
On 2 April 2007, EMI announced it would be releasing its music in DRM-free formats. These were to be issued in AAC format, which gave higher quality for the same bitrate compared with the ubiquitous MP3 format. The music would be distributed via Apple's iTunes Store (under the iTunes Plus category).
Tracks were to cost $1.29/€1.29/£0.99. Legacy tracks with FairPlay DRM would still be available for $0.99/€0.99/£0.79 – albeit with lower quality sound and DRM restrictions still in place. Users would be able to 'upgrade' the EMI tracks that they had already bought for $0.30/€0.30/£0.20. Albums were also to be available at the same price as their lower quality, DRM counterparts and music videos from EMI would also be DRM-free. The higher-quality, DRM-free files became available worldwide on iTunes on 30 May 2007, and were expected to appear on other music download services soon thereafter.
Following this decision, Universal Music Group also announced sales of DRM-free music (which was described as an experiment).
In May 2006, EMI attempted to buy Warner Music Group, which would have reduced the world's four largest record companies (Big Four) to three; however, the bid was rejected. Warner Music Group launched a Pac-Man defence, offering to buy EMI. EMI rejected the $4.6bn offer.
Terra Firma takeover
After a dramatic 7% decline in the British market share, from 16% to 9%, and the announcement that it had sustained a loss of £260 million in 2006/2007, in August 2007 EMI was acquired by Terra Firma Capital Partners, which purchased it for £4.2 billion.
Following the transition, several artists including Radiohead left EMI, while other artists such as Paul McCartney had left ahead of the takeover. At the same time, the Rolling Stones signed a one-album deal with Interscope Records/Universal Music Group outside of its contract with EMI, which expired on February 2008, and then in July 2008 signed a new long term deal with Universal Music Group.
The Terra Firma takeover is also reported to have been the catalyst behind a lawsuit filed by Pink Floyd over unpaid royalties. In January 2011 Pink Floyd signed a new global agreement with EMI.
Around the same time, Guy Hands, CEO of Terra Firma Capital Partners, came to EMI with restructuring plans to cut between 1,500 and 2,000 jobs and to reduce costs by £200 million a year. As a result, the UK chief executive Tony Wadsworth left EMI after 25 years in January 2008. The cuts were planned to take effect over the year 2008, and would affect up to a third of EMI's 5,500 staff. Thirty Seconds to Mars tried to exit their contract with EMI following the layoff of its staff and due to unpaid royalties, prompting the label to file a lawsuit for $30 million citing breach of contract. The suit was later settled following a defence based on a contract case involving actress Olivia de Havilland decades before. Jared Leto explained, "The California Appeals Court ruled that no service contract in California is valid after seven years, and it became known as the De Havilland Law after she used it to get out of her contract with Warner Bros." Many industry watchers viewed the suit as a punitive harassment meant to scare other musicians. The band's troubles with the label resonate through their third studio album This Is War (2009) and were the subject of the 2012 documentary Artifact.
Another EMI singer Joss Stone battled the label, and offered to forfeit £2 million to be released from her contract. Stone has said that after EMI was taken over by Terra Firma, her relationship with the label had soured and that there is "no working relationship". In an interview with BBC 6music, Róisín Murphy clearly stated that she left the label as well because of similar disagreements. She also commented on the difficulties she had while recording her second solo album Overpowered.
In 2008, EMI withdrew from the South-East Asian market entirely, forcing its large roster of acts to search out contracts with other unaffiliated labels. As a result, the South-East Asian market was the only region in the world where EMI was not in operation, although the record label continued to operate in Hong Kong and Indonesia (which is currently named Arka Music Indonesia). The Chinese and Taiwanese operation of EMI as well as the Hong Kong branch of Gold Label, was sold to Typhoon Group and reformed as Gold Typhoon. The Philippine branch of EMI changed its name to PolyEast Records, and is now a joint venture between EMI itself and Pied Piper Records Corporation. The physical audio and video products of the label have been distributed in South-East Asia by Warner Music Group since December 2008, while new EMI releases in China and Taiwan, were distributed under Gold Typhoon which was previously known as EMI Music China and EMI Music Taiwan, respectively. Meanwhile, the Korean branch of EMI (known as EMI Korea Limited) had its physical releases distributed by Warner Music Korea. EMI Music Japan, the Japanese EMI branch, remains unchanged from the reflection of Toshiba's divestiture to the business by EMI buying the whole branch way back July 2007, making it a full subsidiary.
In July 2009, there were reports that EMI would not sell CDs to independent album retailers in a bid to cut costs, but in fact only a handful of small physical retailers were affected.
In February 2010, EMI Group reported pre-tax losses of £1.75 billion for the year ended March 2009, including write-downs on the value of its music catalogue. In addition, KPMG issued a going concern warning on the holding company's accounts regarding an ability to remain solvent.
Citigroup (which held $4 billion in debt) took 100% ownership of EMI Group from Terra Firma Capital Partners on 1 February 2011, writing off £2.2 billion of debt and reducing EMI's debt load by 65%. The group was put up for sale and final bids were due by 5 October 2011.
On 12 November 2011, it was announced that EMI would sell its recorded music operations to Universal Music Group (UMG) for £1.2 billion ($1.9 billion) and its music publishing operations to Sony/ATV Music Publishing-for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. However, IMPALA has said that it would fight the merger. In March 2012, the European Union opened an investigation into Universal's purchase of EMI's recorded music division and had asked rivals and consumer groups whether the deal will result in higher prices and shut out competitors.
On 21 September 2012, the sale of EMI to UMG was approved in both Europe and the United States by the European Commission and the Federal Trade Commission respectively. The European Commission approved the deal, however, under the condition that the merged company divest itself of one third of its total operations to other companies with a proven track record in the music industry. To comply with this condition, UMG divested V2 Records, Parlophone Records, Sanctuary Records, Chrysalis Records, Mute Records, EMI Classics, Virgin Classics, and EMI's regional labels across Europe. These labels were operated separately under the name "Parlophone Label Group", pending their sale. Universal would, however, retain its ownership of the Beatles' library (moved to the newly formed Capitol Records UK) and Robbie Williams' Chrysalis recordings.
Universal Music Group completed its acquisition of EMI on 28 September 2012, followed by worldwide compliance and complete rebranding by 1 April 2013. In compliance the conditions of the European Commission, Universal Music Group sold to German-based music rights company BMG the Mute catalogue, previously property of EMI on 22 December 2012. On 8 February 2013, Warner Music Group signed an agreement to acquire Parlophone, Chrysalis Records, EMI Classics, Virgin Classics and some of EMI's regional labels across Europe for US$765 million (£487 million). Regulatory approval was received on 15 May 2013.
Universal Music will continue to operate EMI entities it is retaining using the EMI name and has formed Virgin EMI Records as a UMG label unit in the UK. The former EMI Records Ltd. was renamed Parlophone Records Ltd. in 2013, when Warner Music Group acquired Parlophone Music Group which has the rights to the old EMI Records catalogue.
Warner Music incorporated EMI Classics and Virgin Classics into its Warner Classics unit with the EMI Classics artist roster and catalogue absorbed into the Warner Classics label and the Virgin Classics artist roster and catalogue absorbed into the revived Erato Records label.
On 14 November 2013, EMI's Middle Eastern branch was folded into Universal Music, causing the distribution of Warner Music Group's releases in that region to be moved to Universal Music.
On 30 June 2014, Universal Music Group was re-established EMI in Taiwan, with A-Mei, Rainie Yang and Show Luo signing first to the label.
In May 2016 the history of record label was examined in the hour-long BBC documentary EMI: The Inside Story.
EMI Leisure, formed in April 1974, was, by the late 1970s, a prominent operator of cinemas, hotels and restaurants, with its leisure business contributing 15% of group revenues. This business was the subject of a management buy-out in 1982 led by Lord Delfont.
EMI Music Publishing
As well as the well-known record label the group also owned EMI Music Publishing, which was the largest music publisher in the world. EMI Music Publishing has won the Music Week Award for Publisher of the Year every year for over 10 years; in 2009, for the first time in history the award was shared jointly with Universal Music Publishing. As is often the case in the music industry, the publishing arm and record label are very separate businesses.
EMI administered the publishing rights of over 1.3 million songs, controlling the libraries of artists such as Jay-Z, Beyoncé, deadmau5, Timo Maas, Dragon, the Prodigy, Megadeth, the Black Eyed Peas, Bloc Party, My Chemical Romance, Avicii, Cannibal Corpse, the Crystal Method, Quarashi, Dragpipe, Avenged Sevenfold, Slipknot, MSTRKRFT, and Sean Paul.
EMI's music publishing operations were sold to a consortium led by Sony/ATV Music Publishing in 2012; BMG acquired the music publishing libraries of Virgin Music (which EMI held) and Famous Music UK (which Sony/ATV held).
CD price fixing
Between 1995 and 2000 music companies were found to have used illegal marketing agreements such as minimum advertised pricing to artificially inflate prices of compact discs in order to end price wars by discounters such as Best Buy and Target in the early 1990s.
A settlement in 2002 included the music publishers and distributors; Sony Music, Warner Music, Bertelsmann Music Group, EMI and Universal Music. In restitution for price fixing they agreed to pay a $67.4 million fine and distribute $75.7 million in CDs to public and non-profit groups but admitted no wrongdoing. It is estimated customers were overcharged by nearly $500 million and up to $5 per album.
On internet freedom day in January 2013, EMI evoked controversy after the removal of Martin Luther King Jr's "I Have a Dream" speech due to copyright violation.