EMI’s profit warning and promise of job cuts today followed hot on the heels of disappointing results from HMV that showed that despite picking up better Christmas sales the retailer and the music industry as a whole is still facing a tough time.
Digital has to be at the heart of these troubles with the music sector just one industry that is feeling the shockwaves of social and behavioural change that has been brought about by the digital revolution.
File sharing and illegal downloading is rife and the music industry has been too slow to react. With broadband speeds increasing it will only be a matter of time before the TV and film companies begin to feel the pinch as well.
Movie companies are slightly insulated from the pressures, as going to the cinema is a unique experience, but TV companies, who are already facing falling advertising revenues due to a fragmented audience, are at great risk.
Executives of major broadcasters around the world should take note of what has happened in the music world so they are not forced into major restructuring under the same circumstances as EMI and most likely HMV at some point in the future.
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