• 
• 

Published on December 5, 2007

The company cited pirated products, which caused a steep decline in sales over the past four years.

The group said it was withdrawing from physical distribution in Thailand to focus more on digital music instead.

Last year, the company suffered a 33-per-cent drop in sales. Conversely, the digital-music business, which has only recently become established here, is growing fast, mainly through mobile-phone channels.

JF Cecillon, chairman and chief executive officer of EMI Music International, said in the announcement that the group would rather focus its physical marketing and distribution resources on those Asian markets that delivered the greatest value to its artists.

The group has taken the decision to withdraw from physical distribution in Thailand but will continue to capitalise on the emerging digital market here.

However, the digital operation will be run via its Southeast Asia regional office's digital team.

In the announcement, EMI Music Thailand said it would become redundant by the end of the month. The group is consulting its Thai staff and expects to complete its withdrawal from the physical market in next year's first quarter.

"This has been a difficult decision, but I believe that it is the best way forward for EMI and our artists, enabling us to reduce uneconomical overheads and switch the focus of  investment to the growing digital market," the chairman said.

A music-industry source said the parent company informed the staff this week that it would close the local subsidiary, due to accumulated losses. However, the group is maintaining its interest in digital music by transferring the business to its Malaysian network.

"It's a domino effect emanating from the widespread counterfeiting of products here, which has forced nearly 30 per cent of music shops around the country to shut down," the source said.

The group has also downsized its operations in Singapore and Hong Kong and plans to restructure its operations worldwide, in order to reduce losses.

The major restructuring was implemented after private-equity firm Terra Firma acquired the group.

EMI Music Thailand employs 22 staff. The parent company is required to pay at least 10 months' compensation under Thai labour laws, with an extra three months' compensation.

Achara Pongvutitham

 The Nation