EMI bidding war won’t damage artists, labels

The music biz is on its toes right now as the second round of bidding for the auction of EMI Music draws near.

EMI, which holds labels such as Capitol Records and Parlophone Records, is being auctioned off by its current owner Citigroup after operating in the red for an untimely period of time.

But what is EMI? And what does this auction mean for the average music fan?

EMI is one of the largest record companies in the world and has a powerhouse catalogue. Think of the money it would cost to buy The Beatles, Queen, Coldplay and Katy Perry. Their recording and publishing contracts, the song and sound copyrights — this bidding war isn’t just another drop in the bucket. And yet with a catalogue as impressive and deep as this, EMI has been struggling to operate profitably.

But it’s no secret that EMI has struggled in the past. Recent evidence of the company’s strategy to recoup some lost income was manifested in the Beatles catalogue being available for purchase on iTunes. The decision was certainly influenced by Citigroup’s intention to recover money indebted by EMI.

While selling The Beatles’ records on iTunes has definitely achieved success, the biggest source of revenue for Citi will be selling publishing copyrights and the like from all of EMI’s artists.

The biggest players in the auction are Warner Music Group, Sony/ATV Music and BMG Rights Management. The plan after all is to sell the publishing division (EMI Music Publishing) separately from the EMI record company. This will allow Citigroup to attract more potential sellers and have a better chance of reaping the benefits of each division while avoiding some sort of “bundle deal.” After second-round bidding is completed Oct. 5, one company will be that much closer to being a whole lot bigger.

But fear not! Your favorite artists will likely stay on their respective labels and keep doing what they do best — making the music you want to hear. The only difference will be the parent record company and profiting off of album and single sales.