EMI Chiefs’ Lost Bonuses, Digital Gains, And Vinyl Relics

IIf you hold to some bizarre idea that 2012 will be a quiet year for the music industry, think again. It’s hard to imagine drama to rival the protracted sale of EMI last year, but it seems that we have just that by account of figures suggesting that EMI chiefs missed out on up to £41 million worth of bonuses.

The Guardian recently reported that filings with Companies House show that bonus schemes were in place to pay senior managers as much as £41 million were business to go according to plan.

Citigroup, the former owner of EMI, apparently cancelled any prospect of such payments upon its acquisition of EMI.

But it wasn’t all clever business dealings on behalf of Citigroup.

Citigroup was to incur huge losses on its loans to EMI. It’s hardly surprising that the bank’s loans to the record label would sustain a dramatic decrease as a result.

Meanwhile, it’s not all doom and gloom for the music industries top dogs.

The Nielsen Company and Billboard have published their 2011 Music Industry Report.

Published annually, this year’s report was striking for the revelation that “[f]or the first time, digital music sales are larger than physical sales; accounting for 50.3% of all music purchases in 2011”.

And although Dotted Music will always support digital music sales, it’s important to note that there is a lot of work to do before the music industry can be said to have adapted to technological pressures.

It’s worrying, for instance, that CD album sales still more than doubly exceed digital album sales. Does this represent the consumer’s insurmountable desire to acquire a physical copy of the album, or could more be done to encourage the consumption of digital music? It is indeed likely that pricing strategies inhibit the consumer, discouraging the consumption of digital albums.

However, the increasing popularity of digital album sales (a 19.5% increase on last year’s figures) has almost certainly encouraged the 36.3% increase in Vinyl LP album sales, with 3.9 million units shifted in 2011, a Nielsen sales record.

With digital gains and vinyl surprises tensely juxtaposed , 2012 promises to be at least as dramatic as the last.

Samuel Agini is the Editor of ANdrew Apanov’s Dotted Music.