Guy Hands, the boss of London-based EMI (Electric and Musical Industries) just announced that the once giant producer of musical records is going to cut another 2,000 employees from its staff of 5,500 worldwide. That news is a sad reminder to the people of Jacksonville of the company’s past retrenchings in its local plant.
EMI used to be a major employer in Jacksonville. It was founded in 1897 in Britain as The Gramophone Company. Two years later, it bought Francis Barraud's painting entitled “His Master's Voice” (HMV), and adopted the image as its trademark, still used today as HMV.
The company changed its name to EMI when in 1957 it acquired Capitol Records, then a major U.S. label featuring Nat King Cole, Bobby Darin, Tennessee Ford, Judy Garland, the Kingston Trio, Dean Martin, Liza Minnelli, Dinah Shore, and Frank Sinatra. Ol’ Blue Eyes, however, left the label already in 1961.
In 1965 Capitol Records opened a production facility in Jacksonville, brought 48 album-pressing machines from Scranton, Pennsylvania, and converted them from manual to automatic operation. By 1966, the music of the Beach Boys and the Beatles, who had been signed in 1962, made up 90 percent of the 50,000 records daily produced here. This number eventually increased to as many as 110,000. I remember a local wag calling the Jacksonville plant “the house the Beatles built.”
EMI released its first compact disc recordings in 1983. Subsequently it expanded to over 300 sales outlets worldwide.
By the late 1990s, however, EMI began struggling with falling CD sales. Not unexpectedly, it came under takeover threats, one of them from Seagram, the world’s largest distiller of alcohol and owner of Universal’s music and film business.
Last May, EMI announced pretax losses of some $500 million in 2006-07 while its share of the British music recording market dropped from 16 to 9 percent. In August, after EMI had rejected a bid from rival Warner Music, Terra Firma, a private British equity group, bought the company for $4.7 billion.
In describing the impact of EMI’s belt-tightening measures, a correspondent for British Sky Broadcasting reflected upon the past: "Ten years ago, money was swilling around the industry--you couldn't move for the sound of champagne glasses clinking. Now, the whole industry seems to be down on its luck, claiming it's barely making enough money to survive. The irony is that fans are happy to pay out huge amounts to see a band play live, but they want CDs and downloads for next to nothing."
Guy Hands, now the CEO of Terra Firma, blames a "bloated bureaucracy" and lavish spending in the 1990s for EMI’s troubles. He wants to reduce as much as $394 million in costs annually. This belt-tightening, however, angers many of EMI’s artists. Some are reconsidering their association with the company, among them the Rolling Stones, adherents to the Capitol label for more than 20 years. British singer and songwriter Robbie Williams said he might withhold his next album to protest the company’s cuts. "We are looking at a dwindling EMI," says the British Screen Digest. "They've been losing some marquée talent. If the Stones leave, we are looking at an increase in the speed of the decline.”