EMI Music: A 70 Year Legacy
EMI Music Germany is the German national subsidiary of EMI, one of the world's largest music producers. An industry leader with a 70-year legacy, EMI Music Germany GmbH & Co. KG was re-established in its current form in 2002 and is headquartered in Cologne. The company owns the labels Capitol Music (Cologne), Virgin Music (Berlin) and EMI Catalogue Marketing (Cologne). Its roughly 300 employees work at locations in Germany, Austria, Switzerland and the Benelux countries. EMI Music has more than 1,500 artists under contract globally, and operates 58 sites.
With its broad organization and far-reaching marketing efforts, EMI Music Germany's decision-makers must be agile and decisive. Being an executive in the music industry means preparing your decisions systematically, monitoring the effects of your decisions directly, and adjusting your strategy rapidly whenever necessary. Contrary to other markets, the music business does not follow a linear pattern but is focused on the time of release of each new recording. Fast, efficient and flexible business intelligence analysis is of vital importance for all management levels of EMI Music Germany.
Managing and Assessing Performance in Real-time
Robbie Williams, Norah Jones, Nigel Kennedy, Herbert Grönemeier, The Spice Girls – those are just a few of the illustrious names from the roster of EMI artists. The company has more than 1,500 artists under contract globally. When a new music recording is published, its success largely depends on the precise timing of the release. All marketing and sales activities must be aligned to culminate in that point in time. Radio stations must be supplied with samples, advertisements and commercial announcements must be inserted, video clips must be produced and delivered to music TV stations, and sales collateral must be created and distributed to all points of sale. Finally, the CDs or DVDs must be available in sufficient numbers at the stores.
All these activities must not only be planned in detail based on realistic assumptions, but also monitored in real-time while in progress to take full advantage of the narrow time window during which the sales prospects for new recording are optimal. "Performance assessment at the touch of a button," is how Klaus Giesenow, director of information technology at EMI Music Germany, summarizes the requirements for the business intelligence software and data assets for which he is responsible.
Delivering Multiple Executive Views of Information
Each department of the enterprise has its specific analytic needs, and those needs can vary widely. Marketing, product or channel managers are product-focused. They need accurate information to prepare activities, and real-time feedback to assess business performance. Sales managers are primarily interested in getting the right number of copies delivered to the right place at the right time. They want to know how many items have been sold, focusing on commercial aspects. Controllers and corporate executives, on the other hand, mainly look for revenue information, as well as profitability figures for each respective label and the company as a whole.
All departments run segment analysis on current data, as well as long-term trend analysis. Day by day, 50,000 new electronic records of items sold have to be analyzed. 25 million such records are generated each year. Enabling users to analyze this data by defining custom queries that often cover several years allows them to detect trends and patterns while providing crucial information for planning.
Analytics Requirements: High Flexibility + High Performance
What further complicates the matter is the volatility of the music market. The possibility of downloading music from the Internet has given rise to entirely new sales strategies. In addition, companies acquired by EMI (often maintaining their separate labels) must be integrated into the enterprise. Another new challenge is so-called distribution deals that allow small, independent labels to use the sales and logistics infrastructure of a larger company, such as EMI, so they can fully devote their own resources to looking after their artists and marketing their recordings.
The rapidly changing market constantly forces EMI to adjust its organizational structure, adapt its product portfolio and sales channels, or rearrange its regions, product groupings and sales infrastructure. "During the last decade we restructured almost once a year," Giesenow reports.
The company's BI systems must be flexible enough to support new structures when analyzing data and handle additional users without compromising performance. All this needs to be accomplished using one single, uniform, comprehensive database to ensure meaningful trend analysis. But EMI's enormous, complex data assets are a major challenge in terms of processing speed. "Running complex analysis on a daily basis requires a solution that delivers an appropriate amount of performance and flexibility," Giesenow stresses.
Millions of Data Records
EMI has not always been able to meet all these requirements. When the enterprise began using BI analysis, they opted for a conventional reporting approach using a traditional relational database. To handle the company's enormous data volumes, the IT department had to pre-aggregate data for specific decision processes based on criteria such as products, dealers, regions, divisions, etc. But this method drastically limited query flexibility. Furthermore, as the overall data volume continued to grow, batch runtimes became longer and longer. Each time the enterprise was restructured, all aggregated tables had to be rebuilt. The cost of adapting the BI resources time and time again amounted to 30 to 50 employee days per year, says Giesenow. In addition, the availability of historical data for online analysis was quite limited.
The breakthrough came when Sybase IQ was introduced. Today, the information stored in the operational database is replicated to the analytics server in near-real time. "Decision makers can now check the performance of the first half of the day as early as midday," Giesenow explains. "An analysis of 50,000 data records is something Sybase IQ handles on the fly. Thanks to data compression technology that reduces the volume of the operational data by a factor of ten, and thanks to the excellent system performance, we no longer depend on pre-aggregated data. Any query can access our full data assets. This means that historical data from 10 years, comprising 250 million records, is available for ad-hoc, long-term analysis at the touch of a button. Even those kinds of searches take no more than a few seconds."
Another important benefit is the scalability of Sybase IQ, Giesenow emphasizes, "What applies to other things in life also goes for BI: The more you have, the more you want. As the data volume increases steadily, so do the analyses we run, both in terms of variety and number. This is why we need technology flexible enough to meet new requirements with ease while keeping our total cost of ownership down."
What helps Giesenow achieve these goals is the combination of database software and hardware. Two IBM System p servers running AIX (p560Q) have been configured as a high-availability solution, comprising a High Availability Cluster Multi-Processing (HACMP) cluster with an underlying, fibre channel-based Storage Area Network (SAN). "This configuration, composed of perfectly-matched hardware components from a single source, has proved to be exceptionally powerful. In addition, it features an excellent high-availability concept, as well as high storage and CPU scalability," Giesenow emphasizes. "What is more, we have found that as few as 2 CPUs and a mere 3.4 GB of memory are entirely sufficient for Sybase IQ. These modest hardware requirements contribute significantly to our low TCO."
For the user front end, EMI Music opted in favor of a custom solution developed with PowerBuilder, rather than deploying a standard, off-the-shelf tool. According to Giesenow, this decision was made to accommodate the specific information needs of the music business. Additionally, EMI had been working successfully with PowerBuilder for years. "The DataWindow technology is especially useful in programming reports very rapidly."
To support individualized searches, the front end does not provide any predefined reports. "Instead, there are many options that allow each user to build his or her own view. Users can limit the time frame for a query as desired, combine any number of products or regions and define multiple criteria in a single query," Giesenow explains. "The SQL code is not generated until the query has been fully defined. All this would not be possible without the exceptional performance of Sybase IQ, which it owes to the indexing principle." Managers in any department can thus generate analysis as needed at the given moment.
• Marketing: When planning marketing campaigns, historical information from previous campaigns with comparable music titles can be evaluated in detail to provide key insight. Once the product has been published, the campaigns can be correlated with sales success. By analyzing the sales figures, marketers can determine whether the campaigns are achieving the desired results. If not, decision makers can respond flexibly by adapting their campaigns on the fly, adding promotional activities for the product in question, or re-allocating budgets if a product is not selling well.
• Sales: The sales department is in charge of ensuring that the right quantity of CDs reaches the market at the right time. Stores usually have limited storage space; in addition, several new recordings are often published at the same time. Planning errors can result in large amounts of disks being returned to the supplier. Campaigns therefore must be planned accurately and coordinated with the stores. A detailed analysis of past campaigns run at the same stores greatly helps the planning effort.
• Business Leadership and Controlling Department: At the executive level, profitability is a key objective. The controlling department reviews profitability calculations from the product-marketing department for upcoming marketing campaigns. Controlling compares these calculations with data from previous campaigns to check the plausibility of the sales goals, correlating that information with the planned campaigns and their cost proposals. Once a product has been launched, the controlling department monitors the development of sales and costs. It provides top executives continuously with up-to-date P&L calculations for all products of each label, as well as for all EMI labels together. It can initiate corrective action in near-real time whenever sales statistics deviate from the set course.
Well-Informed Business Planning
The future of EMI Music will bring along new requirements in terms of scalability, performance and flexibility. The volume of data available for BI analysis has grown substantially in recent years, boosted in part by the integration of other national subsidiaries: Austria and Switzerland were incorporated into the system in 2004, followed by the Benelux countries in 2006.
Meanwhile, new marketing activities are in the planning stages. EMI has been one of the first enterprises to set up a premium service on the Web jointly with Apple iTunes to allow users to download music without copy protection (DAM). This gives the buyer better audio quality while enhancing the listening experience.
Giesenow says, "Decisions such as this one are the result of detailed, pre-emptive analysis. By offering highly flexible, efficient evaluations based on exceptionally voluminous data assets, our IT department enables the enterprise to plan its business activities much better."