CASE STUDY: EMI Group, PLC CD Pricing in the recorded music industry

Company Overview

Electric & Musical Industries (EMI) was established in 1931. EMI Group, PLC is the world 3rd largest music company which based in London. It is the world largest independent music company, not being a unit, subsidiary or division of a larger conglomerate corporation. EMI’s business is comprised of two main group; EMI Recorded Music and EMI Music Publishing. EMI Recorded Music accounted for 81.6% of EMI Group, PLC sales and 59.3% of the company’s operating profit in fiscal 2003.
EMI Recorded Music has over 100 recording labels featuring some of the greatest rock and pop artists in recorded music history. Its major recording label includes: Capital Record and Capital Record Nashville, Chrysalis, EMI Classics, Java Records, Mosaic Records and many more. Its artist with major albums in 2002 and 2003 included: David Bowie, The Beatles, Blue, Cold play, Norah Jones, Queen and many more. EMI Music Publishing owns the rights to more than one million musical compositions, which its market, licenses and sell. Royalties derived from EMI-owned compositions for the sale of music in the CD format comprised 53% of EMI Music Publishing revenue in fiscal 2003. Performance income derived from the public performance of song in EMI catalog, accounted for 25% of EMI Music Publishing revenue. Among the major music compositions and catalogues is “getting better” (The Beatles), James Bond Theme, We Will Rock You (Queen), Mamma Mia (ABBA) and Our House (Madness).
[pic]

Problem Statement
How EMI Group, PLC has to access and response to the likely impact of UMG’s pricing initiative action on the recorded music industry.

SWOT Analysis
Strength
Strong global presence - EMI Group, PLC has a worldwide market in nearly 50 countries; among its major market are