EMI has been struggling for a while now. In fact struggling is probably an understatement. Bought by Guy Hands a few years back now for around £3 billion, in today’s climate (and based on EMI’s continued slide into financial armageddon) surely the banks will soon call in their debt?

EMI claimed at the end of December, that its last 6 months had been positive resulting in cash being generated. Perhaps the slide into financial doom is over? March will be the important month in 2009 as thats when its banker checks the state of the finances, making sure they are in line with the risk and expectations required for the finance to continue and not be called in. 

However, as a huge part of EMI’s sales are in the UK, and as the UK music industry had an awful xmas (due to music sales switching to games, and the lack of coverage on the high street due to the Woolworths situation) one wonders if EMI will find that their position is not quite as positive as they had hoped?

Its rumoured that they are shutting down the world famous Olympic Studios. Recording studios in London (and the developed world) have been finding it tough going for some time, especially the large studios. EMI will concentrate on Abbey Roads, a studio which in recent years has diversified. Abbey Roads has become a specialist venue, and tv studio (home to Live at Abbey Roads - a Channel 4 TV series). Meanwhile its name and facility mix allows it to continue to be used for large budget games/films and top recording artists from around the world. However, the next 12 months will be crucial for Abbey Roads too as its fate is wrapped up in EMI’s. 

EMI needs to work out what it does and how. It doesn’t really have the time to be ‘experimenting’ in the market place and should either streamline down in a particular direction or raise the finance to move aggressively into a new market or distribution platform. It seems, though, that they either lack the direction, don’t know what the future holds (and hence are hedging their bets) or lack the finance to move aggressively to where they want due to the amount of debt they are burdened with. CNET reports that EMI are to launch their own download store, quoting a spokeswoman saying it is where they can ”experiment with new digital platforms.” Well surely the whole download store idea is not exactly something which needs much experimentation? We have Itunes, Amazon, Nokia, Napster, Emusic and many many more? What is EMI bringing to the party?

Ultimately those with a financial stake in the company will at some point ask - how best can our investment maintain or increase its value? Even if ‘turning the company around’ is slowly working, would we be better served by selling it whole, or in parts, to other companies with the direction, resources and finances to make best of the great assets locked into EMI and its heritage.