AS THE 1970s were fading into the 1980s and punks were making way for new romantics, EMI—the record company that had brought the world The Beatles—was struggling to keep up with British pop's ever-changing moods, and got bought up by a humble lightbulb-maker. A cruel joke did the rounds among some employees: “What's the difference between EMI and the Titanic? At least the Titanic had a couple of decent bands on board when it went down.”



Thirty years and various demergers, takeovers, restructurings and buy-outs later, EMI now has some highly successful artists, such as Katy Perry (pictured), Coldplay and Robbie Williams. Financially speaking, however, it is struggling to survive, groaning under a heavy debt burden in an era of file-sharing and iTunes-downloading, in which music fans expect to pay far less than they used to for songs—if anything at all.



In recent days EMI's owner, Terra Firma, a private-equity firm, has had to pump in fresh capital because it had breached its banking covenants. On June 18th it announced drastic management changes and an important strategic shift. Two of its bosses, Charles Allen and John Birt, will leave, and the head of EMI's music-publishing division, Roger Faxon, will become chief executive of the whole company. EMI also announced that it would “reposition itself as a comprehensive rights-management company serving artists and songwriters worldwide”. Rough translation: owning and exploiting the copyright to songs, rather than selling recordings of songs, is where the money's going to be from now on.



Private-equity firms like Terra Firma have been keen on media companies, even ones in declining industries, because they throw off a lot of cash. Essentially, Terra Firma's miscalculation with EMI was that it declined much faster than the private-equity firm had expected. However, the music-publishing side has not done anything like as badly as the better known part of the business, that of signing up new singers and bands, and putting out their recordings.



EMI's music-publishing side has remained well-regarded because, under Mr Faxon, it has been so innovative. It has succeeded in getting its songs used in more films, television shows and advertisements, for which handsome royalties are charged. Music publishers have done well out of the boom in music-oriented television shows, from “American Idol” to “Glee”. EMI still faces a considerable struggle to emerge from under its debt mountain and pursue its new business model, but at least it now has a plausible strategy, and a boss who seems to know how to make it work.

Read on: As CD sales keep falling, digital music sales keep rising