Customer Solution Case Study
/ / EMI Music Develops its Digital Business Through Strategic Technology Agreement
Overview
Country or Region:United Kingdom
Industry:Media and Entertainment
Customer Profile
EMI Music is the world’s largest independent music company, operating directly in 50 countries, and representing more than 1,000 artists spanning all musical tastes and genres.
Business Situation
EMI Music needed to implement new technologies and simplify its global technology environment to aid business reactivity and change.
Solution
EMI Music has formed a strategic, global partnership with Microsoft to work on a series of core change projects that span all business processes.
Benefits
Shared experience drives innovation
Secures the future through technology
Global knowledge and skills ensure success
Seamless music experience from creation to delivery
Reduced costs and increased revenue / “Microsoft technologies support all of our business processes from… the studio through to the distribution of the music either to a digital partner or to our manufacturing plants globally.”
Andrew Hickey, Chief Technology Officer, EMI Music
EMI Music, a global leader in the music industry, is evolving its business to capitalise on the opportunities created by the digital revolution. The company has embarked on a global technology transformation project, and is working with Microsoft on a series of core technology change programmes. Through the transformation, EMI Music is taking advantage of Microsoft products and technologies, as well as its global reach, to simplify its systems and to ensure it builds on existing market success and develops its position as a digital leader.
Situation
The current generation thinks and acts digitally. The ability to download music, sometimes illegally and free of charge, has been the norm for many people for the last several years. However, the tide is turning toward legitimate digital music services. According to the International Federation of Phonographic Industries, the retail value of digital music sales in the first half of 2005 rose to U.S.$790million, from $220million in the same period in 2004. The portable device market is exploding as well, giving consumers the ability to experience music across a variety of channels—from personal computers and mobile phones to satellite receivers and gaming consoles. And the ability to purchase music on these platforms is arriving at a furious pace.
Companies like EMI Music must take advantage of these new market dynamics and cater to consumer demands through multiple, cost-effective channels.
EMI Music’s traditional model has been very successful. But as any successful business knows, being able to evolve the business model to respond to changing business demands is what generates sustainable success. To this end, EMI Music, which operates directly in 50 countries and licenses its music to another 20 countries around the world, has been investing wisely in artists, its people, and technology to ensure it remains a market leader with a reputation for delivering the high-quality products that have become synonymous with the EMI Music brand.
Over the last three years, EMI has been executing a clear strategy for growth by developing and marketing long-term global superstars, combating increasingly widespread music piracy, and capitalising on the emerging digital market.
James Anderson, Chief Information Officer, EMI Music, says: “Market changes are forcing everyone to think digitally. We are constantly trying to better understand consumer behaviour and how consumers want to purchase and listen to music.
“The new digital world is one of tremendous opportunity, but to capitalise on it, we are teaching ourselves and others to change the way we have thought and acted for the last 20 years. We recognised early on that technology is a big part of our future, and now it’s a question of how fast do we change and how big that change will be.”
Solution
One of the key components in EMI Music’s strategy is a global technology transformation process, called Digitising EMI Music. To complement the company’s rich resource pool of business and technical innovators, EMI formed a strategic, global partnership with Microsoft as part of a Global Enterprise Agreement. This partnership would ensure a successful transformation from the old world of physical music to the new world of digital music and all that it brings.
Microsoft and EMI Music already had an existing relationship created through the use of Microsoft® desktop and server products. This new partnership is focused on identifying technologies that will drive business value and growth both now and in the future.
Andrew Hickey, Chief Technology Officer, EMI Music, says:“Technology is becoming increasingly important as this industry is undergoing so many changes at any one time. The technology that consumers use to enjoy music is changing, as are the distribution models that we must use to meet demand. Digital demand means that we have a more complex set of products and delivery and payment channels so we need to implement a more sophisticated technology set.
“EMI Music is an innovative company. We have always embraced technology to drive value for our employees, artists, shareholders and, ultimately customers. We will continue to do so in the digital world.”
EMI Music is working with Microsoft to lay the foundations for the future through a series of core change projects. Hickey says: “Microsoft technologies support all of our business processes from the creation of the music in the studio through to the distribution of the music either to a digital partner or to our manufacturing plants globally. This partnership is critical to the success of what we want to achieve.”
The change projects include:
A global project called Evolve replaces the previous sales and finance systems that EMI had used globally, onto a single environment. Based on SAP R/3 software, the Microsoft Windows Server™2003 operating system, Microsoft SQL Server™ 2000, and Microsoft BizTalk® Server 2004, the new system improves the way EMI Music handles physical and digital sales, and provides a consolidated view of the company's global financial position. Microsoft Windows Server 2003, SQL Server 2000, and BizTalk Server 2004 are part of Microsoft Windows Server System™ integrated server software.
The Global Repertoire System provides a single global view of the artists, releases, and music products from the company's music labels around the world. This is based on a single, central SQL Server 2000 database and the Active Directory® directory service.
A portal called Pulse, gives people access to a wide variety of management information including sales data, market research, and consumer insight, which empowers them with the right information to react quickly to market changes. Pulse is based on Microsoft Office SharePoint® Portal Server 2003, also part of Windows Server System; Active Directory; and Panorama NovaView.
The Marketing Hub is a single location that EMI Music's marketing executives can visit to access marketing assets for its global family of artists. Users can share marketing best practice on priority artists around the world using the system, which is based on the Microsoft .NET Framework.
Simon Hayward, Business Manager, Media & Entertainment, Microsoft, says: “By delivering integrated solutions built on innovative software, Microsoft and its partners are helping EMI increase operational efficiency and effectiveness, and provide rich collaboration between production, planning, budgeting, management, and media creation—while simultaneously helping them enhance the consumer’s experience of musical content and services.”
Benefits
Developing EMI Music’s Agile Digital Business
EMI Music already has a reputation as a market leader with sophisticated technology and processes that support its business model. The digital world throws up many new challenges that impact the whole music ecosystem from creation through to management and delivery of music assets.
Anderson says: “When we strike a relationship with an artist it is based on a collective goal that we make that collaboration a success. To fulfill our part of the agreement, we need, amongst other things, to be able to deliver projects on time and with precision. The digital world requires great people, systems, and processes that can adapt and respond to new and existing challenges quickly and efficiently.”
A single central repository of assets for exploitation across the globe is making EMI Music more agile and helping the company expose artists to new territories quickly and effectively. This is also helping the company to respond more rapidly to customer and consumer demand.
Evolution through Industry Partnership
Both EMI Music and Microsoft are leaders in their respective fields. The combination of such expertise and insight is a great mix not just for the two companies but also for the industry as a whole. Innovation in any market raises the bar and encourages all players to deliver higher-quality products and services.
Anderson says: “This partnership provides a tremendous opportunity for the complementary skills of Microsoft and EMI Music to work together. Having Microsoft as a partner provides us with a global environment, global skills and local knowledge, and a unique insight into how we can reach and tap into consumer behaviour. Likewise, in working with us, Microsoft can further develop its knowledge of the music market so that it can lead its own industry in the approach to the new digital content environment.”
Hayward adds: “EMI is at the forefront of the changes happening within the music industry, and has its finger on the pulse of how music is being consumed globally. By working together, both companies can share key learnings about how consumers are using technology to listen to music now and in the future.”
Transforming the Music Experience
EMI Music is committed to meeting and exceeding consumer expectations with the products it delivers to market, whether in physical or digital form. ”Digitising EMI” is not purely an IT replacement project. It’s all about streamlining processes and doing what the company already does well, but better. It will deliver value for all involved in the creation, management, delivery and, ultimately, the music experience.
As well as aiding the company’s digital capabilities, the technology transformation project will also enhance EMI Music’s physical delivery platforms so that the traditional model also becomes more efficient.
Anderson says: “No aspect of our business will be left unchanged by what we are doing. We have been pragmatic in our approach to this project to make it more manageable and selected Microsoft technologies because of the flexibility and simplicity we gain.”
Reducing Cost, Increasing Revenue
The technology change programme will yield substantial revenue benefits and cost savings for EMI Music, and at the same time make the company more effective in the digital music environment.
Real-time sales information, available to any operating company within EMI Music around the world, will aid operating decisions and help develop successful artists more effectively.
Hickey says: “We’re realising a number of real revenue benefits, as well as cost savings based on streamlined processes and the efficiencies of managing a simplified, global platform.”
Securing the Future of the Industry
Like its peers, EMI Music has always been under pressure to combat piracy and ensure the secure management of assets. Technology has been a key enabler in combating traditional piracy methods. But unfortunately, as the technology to combat piracy becomes more sophisticated, so do the methods by which hackers use to circumvent those technologies. Another aspect that the EMI and Microsoft partnership seeks to facilitate is the secure exchange of knowledge and products globally.
Hayward says: “EMI Music can use Microsoft technology to securely deliver music internally, as well as delivering new and innovative products to music consumers.
Hickey adds: “Our vision is to have a much more simplified platform globally based around a single set of technologies, and we’re looking to leverage our existing investment in Microsoft technology to help achieve that goal.”
Microsoft Windows Server System
Microsoft Windows Server System is a comprehensive, integrated, and interoperable server infrastructure that helps reduce the complexity and costs of building, deploying, connecting, and operating agile business solutions. Windows Server System helps customers create new value for their business through the strategic use of their IT assets. With the Windows Server operating system as its foundation, Windows Server System delivers dependable infrastructure for data management and analysis; enterprise integration; customer, partner, and employee portals; business process automation; communications and collaboration; and core IT operations including security, deployment, and systems management.
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