EMI Takes Its Music DigitalEMI Takes Its Music Digital

EMI Music is building a digital infrastructure to distribute and share content globally with help from Microsoft Corp. and SAP AG, the company said Friday.

The five-year strategy is estimated to cost between $133 million and $176 million for software, hardware, training and education. "We are refreshing the entire infrastructure," said Andrew Hickey, chief technology officer at EMI Music, which represents artists from the Beatles to Coldplay to the Rolling Stones.

For Hickey, it's clear EMI Music must have an IT infrastructure that supports digital content. Today, digital content sales through Web sites, such as iTunes, MSN Music, Yahoo Music and RealNetwork Rhapsody, contribute a mere 5 percent to EMI Music's annual revenue. That is expected to reach 25 percent within five years.

EMI Music has been working on the project since 2003. The company has digitized the 311,000 recordings that have been mastered through its 100-year history. All are available on a digital storage platform. Those who market EMI's artists have security clearance to index and access the content to license more easily movie studios and television networks. The platform is based on Microsoft SQL Server technology and Active Directory.

Similar to the movie industry's shift to digital cinema distribution, the music industry is looking toward digital content to repurpose for specific market segments and mediums from motion pictures to video games to cellular phones. For EMI Music, about 77 percent of revenue from digital content comes from ring tones, 14 percent from ring backs and master ring tones, and nine percent from music download.

Cellular phones, for example, have been the tool in which music artists market their songs through ring tones, for example, said Stephen Stapleton, director for Microsoft's Europe, Middle East and Africa Media & Entertainment group. "EMI can secure the content and assure the rights are managed through the correct distribution channel," he said.

Then there is the transaction management project. One instance of SAP AG's mySAP is being deployed around the world. The enterprise resource planning platform (ERP) will run on a Microsoft infrastructure -- Microsoft SQL Server for the database and Microsoft BizTalk to integrate with legacy systems.

The project is a third complete, mostly in Europe. Japan will roll out in the next few months, followed by North America. The goal is to improve EMI's "order-to-cash cycle from retailers," Hicky said. "We are live in the United Kingdom and Ireland, which is one of our more profitable markets."

Timing is critical. And it's become more important to coordinate and communicate details on information for 200 million CDs EMI Music releases each year. There is a need to coordinate financial investments in a specific region with where artists will perform live or television specials. Projects today are managed globally. So, the company set up a management portal based on SharePoint Portal Server 2003, Active Directory service and the Panorama NovaView 5 proactive business management solution allows EMI to respond to business changes in real time.

Music pre-release information is shared with EMI executives globally to improve decision-making processes. "A minor miracle happens every morning at 9:30 GMT, all the sales from the previous sales from the previous day arrive in a central database to give executives and managers access to our sales position on any title," Hickey said.