EMI Considering Outsourced US-Based Distribution

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EMI Music is attempting to outsource its US-based distribution chores, according to a raft of recent reports.

The duties could be picked up by rivals Universal Music Group, Sony Music Entertainment, or Warner Music Group.  Just recently, EMI outsourced various physical distribution and marketing functions in southeast Asia to Warner Music, part of a strategic deal designed to eliminate redundancies in the region.  Other outsourcing moves have happened in the United Kingdom.

The latest discussions appear to surround physical distribution only.  Various sales and marketing efforts, as well as certain content licensing options, may also be under discussion.

In its simplest sense, physical distribution refers to the production of CDs, and the packaging and carting of those discs to brick-and-mortar stores nationwide.  But distribution also includes a number of related activities, including product positioning at retailers.  That is worth retaining, though the development follows the disclosure of a massive financial loss.  During the fiscal year ending March 31st, EMI Group shed an immense 757 million pounds, or roughly $1.23 billion.  The extreme drop was caused by a sinking CD, as well as a variety of accounting rewrites.