What If Steve Jobs Bought EMI?

On the various blogs that focus on Apple Computers, the Macolytes are following up Steve Jobs’ open letter on music by imagining he’s about to start a record label. Dream on!

Why would anyone want to start a record label when a perfectly good one is for sale? And not just any label, but one with The Beatles, Pink Floyd, Coldplay, The Rolling Stones, Gorillaz, Kraftwerk, Norah Jones and the catalogues of David Bowie, The Beach Boys and Radiohead.

EMI is in trouble. The share price is sliding inexorably downward. Chairman Eric Nicoli is doing everything a man with a background in biscuits would do – cut costs and sell off real estate. But when that includes closing the evocative US label Capitol (home of The Beatles!) and selling the unique Capitol Building (where Sinatra recorded his most important works), one must conclude the Board understand nothing about musical brand value and equity, or why anyone with half an interest in music would want to buy the company.

On the other hand, Steve Jobs owns both Apple and Pixar, two companies with extraordinary brand equity. Pixar is a boutique animation film company driven by high creativity and a 100% success ratio. Anyone who knows the Pixar name will see their output purely because it’s from Pixar.

Owning Pixar isn’t that different from owning a music label. Especially one with The Beatles and all those other guys on it. Indeed, bring in The Beatles and Pink Floyd and make it a joint venture. They wouldn’t even need to fund it. What entrepreneur could resist the allure of rubbing shoulders with Steve, Paul, Ringo and Floyd, just for stumping up a few hundred million dollars? Jobs could probably fund it from his golfing buddies.

So, what if Steve Jobs bought EMI?

He should do what he does best, invest it with brand equity and value by making it small, creative and different. In other words head forward by going backwards.

Strange as it may seem, before mega-labels there were companies whose records were bought purely because it was on that label. Island, Immediate, Stax, Atlantic, Elektra, Blue Note, Vanguard, Warner, Deutsche Gramophone; all had distinct identities defined by the men who owned and ran them. Tough men, who knew and loved music. They built brand identity and trust from working with musicians they believed in. Atlantic spent years turning Ray Charles from a Nat King Cole copy into The Genius; Deutsche Gramophone made Von Karajan into a global star – in classical music!; Chris Blackwell and Bob Marley patiently developed a world-class reggae over three albums before breaking The Wailers into global consciousness.

Blackwell once told me he gave an artist three albums to succeed. He also told me that if he couldn’t understand an artist’s music he signed them on the basis it must be interesting. Interestingly, Blackwell’s music interest was a hobby from his real business, a place to have fun.

Steve should make EMI a musical Pixar. Strip it down to the greatest music catalogue there is and a deliberately small group of artists that can develop and grow over several albums; even some artists making music you can’t understand. Recognise that the modern audience wants to hear music almost as 24/7 wallpaper and price it accordingly. Throw out the DRM and use all the marketing and methods the online music audience works with from MySpace to YouTube to Last.fm to file sharing; maybe even an exclusive discount on iTunes. (I’m leaving out CDs and the physical business, but that’s also ripe for a rewrite.) In other words, a company that Thinks Different.

Perhaps the three words most alien to the music business are Honesty, Transparency, and Trust. Embrace those three in all dealings with both artists and audience and EMI could achieve something DRM never will: respect. Stop treating your customer like a thief and he might stop stealing.

Why would Steve want to do this? A report from Q Research points out that 85 per cent of young people aged between 11-25 years old own an MP3 player (mainly iPods). It also reveals that while 45 per cent of the sample group pay nothing for their music, almost a third spend up to £5 a month with 3 per cent spending £25 or more each month. That’s an interesting commercial start point.

Steve has changed the face of computing, regenerated animated film, created commercial online music…why not reinvent the music business? Besides, sometimes moguls just like to have fun.