GUY HANDS is throwing down the gauntlet to the rest of the music industry to match his much-criticised turnround plan for EMI.

“I would like to be as big as the big three [music groups] and bigger,” he said, after visiting EMI staff in New York and Nashville to explain his scheme to strip out £200m of costs and reengage with music-buying consumers.

“We have a sensible plan to survive. The other labels need to have a plan to do that. They haven’t put anything forward yet. I would hate to find that we are the largest simply because the others have died.”

That seems unlikely for some time because Universal dwarfs EMI, particularly on its home British turf, where it has been losing market share. Hands’s Terra Firma is also fighting a rear-guard action to hold on to top-selling artists such as the Rolling Stones and Robbie Williams.

Hands is adamant that he won’t pay “ludicrous sums” to retain talent. “People move from label to label over time. The thing we are doing differently is that we are being realistic with what we are willing to pay in advances,” he said.

He is talking to artists at other labels to try to persuade them to defect to EMI, which announced last week that it was cutting up to 2,000 jobs and stripping record labels of their traditional sales and marketing role. He has told investors he wants recorded-music profits to soar from £60m to £528m by 2012.

But Hands remains at odds with the music-industry trade bodies, including the piracy-fight-ing International Federation of the Phonographic Industry, and is set to cancel EMI’s membership by March. He claims the issue is not the annual cost, but more to do with how the industry has bullied consumers into buying music on its own terms.

“The trade bodies need to change the way they operate,” he argues. “If they change, EMI will remain a member. If not, EMI will leave. I have a very, very strong view that we can’t cajole and sue our customers into buying music.”

Many artists from EMI’s 14,000-strong roster will be kept on but have their releases distributed only digitally in future to make them economically viable. The company is also examining plans to pair some performers with corporate sponsors. Hands, who is also bidding for the music publisher Chrysalis, hopes to line up a new chief executive by the end of June.

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