In Search of Talent

Do A&R talent scouts have a role in the era of Simon Cowell? (www.record-producer.com)

EMI, along with the likes of Universal, Warner and Sony, are one of the major international music groups. The group consists of a large number of individual record labels. Each label purports to preside over it’s own particular niche in the music industry. E.g. The record label Parlophone deal mainly with guitar/rock acts such as Coldplay and Radiohead, whilst Capitol Records mainly deal with acts in the US market such as Red Hot Chili Peppers.

EMI were acquired earlier this year by the private equity firm Terra Firma. Major private equity buyouts have been a hub of activity in the financial world this year. Private equity firms typically operate by subjecting an acquired company to severe management rigor. Departments, processes, staff members are all rinsed out and kept taut.

The music industry is still trying to come to terms with the Internet and mp3 media format. It has attempted to restrain online activities such as ‘illegal file sharing’ through a combination of pursuing technological and legal initiatives. Nevertheless, CD sales are only a proportion of what they used to amass and the long term returns for record labels of the marketplace for legal music downloads is difficult to ascertain.

Terra Frima’s interest in EMI was somewhat of a surprise given the sustained turmoil and degrading prospects for the conventional music industry. It could only be assumed that the private equity firm believed that their interventions could sufficiently steer EMI to meet the evolving direction of the music industry. Accordingly the FT started reporting the typical restrictions one would expect a private equity firm to impose upon an acquired company. However, it was interesting to note that Terra Firma’s interventions were mainly to affect EMI’s support processes such as marketing and administration, rather than core processes such as the ‘creative’ role of A&R talent scouts.

A&R talent scouts entail much of the romanticism of the music industry (local band given their big break etc etc…). However, the scope of their operations has been heavily impeded in the current era of popular music as artists are increasingly manufactured on realty TV shows or emerge as online social phenomena, rather than discovered in the traditional sense. It will be interesting to observe whether EMI’s decision to largely preserve the remit of the A&R talent scout yields the proportionate returns of budding new music acts that Terra Firma’s faith deserves.