EMI soothes trade body

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EMIhas made peace with the music industry’s international trade association, more than three months after its private equity owner threatened to cut its annual funding for its activities in half or pull out altogether.

The International Federation of the Phonographic Industry said it had been able to retain EMI, now owned by Guy Hands’ Terra Firma group, after agreeing to undisclosed cuts to its costs.

Jean-Francois Cecillon, head of EMI Music’s international labels, said: “Together we have been able to find solutions which we believe are achievable whilst maintaining what the IFPI does best in representing our industry.”

One music industry executive familiar with the discussions said more than half of the IFPI’s funding came from national associations, but EMI had been able to make a substantial cut to its direct contribution.

John Kennedy, chairman and chief executive of IFPI, said: “We were certainly asked to make some changes, but that’s something we expected. I’ve been running the organisation for three years and every year I’ve tried to reflect the fact that the music industry is in more difficulty.”

The IFPI was able to point to several successes in recent months. Its lobbying, alongside European pop stars such as Johnny Hallyday and Carla Bruni, helped persuade European Commissioner Charlie McCreevy to review the differences in copyright protection for composers and performers.

Michael Cashman, MEP, said: “Without their persistent, well-informed lobbying we would not have got that result.”

Legislators have also begun to heed the IFPI’s call for internet service providers to be held responsible for piracy over their networks.

Lucian Grainge, chairman and chief executive of Universal Music International, said: “We’re all in it together. I’m pleased they stayed.” Trade associations were “absolutely vital”, he said. “We don’t passively sign the cheques every year because we’re stupid.”

Mr Kennedy said initial estimates that EMI’s spending on trade associations amounted to $250m a year were “completely incorrect”. An EMI spokesman would not comment on the figure, or on how the agreement would cut its outlays.

EMI is now expected to hold similar discussions with national trade bodies, such as the BPI in the UK.

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