The Man Who Sold the World Music

On a sweaty stage in the W Hotel in Times Square during the EMI after-Grammy awards party, one of America's hottest hip hop bands, NERD, interrupted their performance to pay tribute to Martin Bandier.

"Respect to Marty Bandier, the best motherfucking music publisher in the world," the lead singer told a slightly bemused audience.

Mr Bandier is not a household name but to many of the biggest acts in the business he is a star in his own right. Performers from a cranberry juice-sipping Diana Ross to Dave Grohl, the former Nirvana guitarist whose new band the Foo Fighters won best rock performance, lined up to schmooze the tuxedo-wearing Mr Bandier as the night progressed.

The next day, in his office on the Avenue of the Americas, a not visibly hungover Mr Bandier, head thrown back, is guffawing so much at one of his own stories that by the time he calms down the unfeasibly large cigar perched between his fingers needs relighting.

The gregarious American boss of EMI's music publishing arm is recounting, with a mixture of horror and amusement, how he recently struck a licensing agreement with an undertaking firm.

The funeral directors wanted to sell videos looking back at the lives of the deceased and were looking for permission to use misty-eyed songs from the EMI back catalogue as soundtracks.

"Sounds pretty gross, doesn't it?" Mr Bandier chuckles. "Not my sort of thing at all. Still, they seemed to think there was a demand for it."

The 60-year-old former lawyer is explaining how synchronisation - the business of selling songs to be used in films, advertising or even funeral videos - has become the fastest growing part of the music publishing business and supported the profits of a British institution through one of the darkest periods in its history.

In turn it has made the white-haired New Yorker the highest paid director of a British company, with a pay package of more than £5m last year.

He has all the trappings of success an outsider might imagine he would have. From his desk in a tennis court-sized office, with boardroom attached, he can press a button that raises the blinds to offer a sweeping view of the Manhattan skyline and Central Park. On the walls are dozens of platinum discs, signed photos from stars he has worked with and a framed copy of an original song score scrawled by Elvis on Las Vegas Hilton-headed notepaper.

The flip side of the business is the dozens of cuddly toys that sit alongside the humidor - a reminder that while he may generate one third of EMI's profits, Mr Bandier's is not always the glamour end of the business.

Each of them sings a song: Father Christmas trills, Santa Claus is Coming to Town; a Henry VIII paperweight sings, of course, I'm Henry VIII, I am; Speedy Gonzalez bashes out La Bamba and a golf bag plays Drives Me Crazy while the clubs inside wiggle.

Mr Bandier admits it is a schlocky collection but his enthusiasm is infectious. "Come on! They're cute, they're funny. OK, there's nothing artistic about them but at the end of the day they put a smile on your face."

There are some limits to what Mr Bandier will do in the pursuit of profit.

A few years ago he turned down a request from a health care group to license the music for Over There, a patriotic rallying cry for American forces in the first world war. The company wanted to rename the tune Under Here with reworked lyrics persuading women to use their brand of underarm deodorant. "We were offered a gargantuan sum of money but sometimes you just have to say no," he says. "This is one of America's most important anthems."

Amid the volatility of the hit-driven industry, music publishing - which makes money from owning the copyright to a song rather than selling recordings - offers a valuable source of stability. Record companies may swing in and out of favour, depending on who their hottest acts are, but radio stations keep playing classic tracks no matter who the owner of the intellectual property is. Each time a record is played, EMI takes a fee.

Under Mr Bandier's guidance EMI has built up the biggest music publishing library in the world. It now owns more than a million songs in 44 countries.

"Every time one of our songs is performed, we get paid for it. It doesn't make a difference who does it or how, the cash comes to us. Most artists now understand that we can be a good way of making extra money. The artist has a right to say they don't want their song being featured in an advert or sung by a doll and we'll honour that, but it's not the Bible we're writing here."

Despite EMI's strength in music publishing, its track record of selling albums in the US has been poor, trailing that of the other majors - Universal Music, Warner Records, Sony and BMG.

Grammy reward

Mr Bandier believes the eight Grammys that jazz singer Norah Jones picked up little more than a year after EMI discovered her waiting on tables in New York - along with strong sales from British band Coldplay - may be a turning point for the recorded music side of the business.

"They could have opened the door for EMI in the US, making it a first choice for artists here rather than the place they go when they can't do a deal with the others."

After the excitement of the Grammy awards dies down, Mr Bandier will be fully focused on closing EMI music publishing's £110m acquisition of Jobete, the Motown back catalogue he has been trying to buy for almost two decades. Built by the legendary Berry Gordie, songs on the roster include tracks by Marvin Gaye, Smokey Robinson, the Jackson 5 and Stevie Wonder.

"It's the greatest American body of music produced during the 20th century. The Jobete library contains 100 number one records, can you believe that? Do you know how difficult it is to become number one? It's black music that became universal music and became heard in the capitals of Europe, as well as Detroit".

It is a deal that EMI, with debts of more than £1bn, can barely afford, and Mr Bandier is unlikely to be able to pursue any more big transactions until profits at the recorded music division return. The timing of that will be influenced by how quickly the record industry is able to combat the threat to intellectual property rights posed by internet piracy.

Many executives fear it will take years to resolve the problem, but Mr Bandier is more optimistic. "I'm positive the industry will have this squared away by the end of the year and come out the other end stronger and better." He believes a recent initiative by PC maker Gateway, which has released a computer with 5,000 songs pre-installed on the hard disk which users can pay to download, is a model for the future. "It will be like having a retail store in every home."

Mr Bandier points to the phenomenal recent sales of the debut album from 50 Cent, a rapper at rival Universal Music, as evidence that people are still willing to pay for music.

"He sold 1.7m albums in just two weeks and to the demographic that is doing the most downloads. I mean, how bad a shape can this business be in?" He admits that many of the problems the music industry is facing are of its own making, but the culture, he claims, is changing. "We pay attention to detail and run the business as if we owned it. We're entrepreneurial, and no one is wasteful here.

"There has been excess in the recorded music side but that's changing. We've had to go through some shake-outs and people are starting to think very carefully about the money they spend on videos and albums. But at the same time, making an album is not like making a neck tie. It doesn't just roll off an assembly line - it takes time and money to develop and doesn't always come off."

Hirsute suit

Mr Bandier's break into the industry came in his early 20s, when he was working in a downtown law firm.

"The senior partner wanted someone to work on a deal with a record company, looked at my long hair and said I was the man to do it. I never looked back." He formed his first music business in 1975, scoring a hit with Barbra Streisand's My Heart Belongs to You.

He saw the business through various incarnations, gently expanding catalogue sales in commercial, films, sound recordings and stage productions. In 1989 he sold out to Thorn EMI for $295m.

The windfall bought him a spectacular home in the Hamptons in New York, holidays in the Caribbean and all the golf lessons he could ever want.

Despite the industry going through one of the most difficult periods in his lifetime and this being a young man's game, he appears to have no intention of retiring early.

"The music business is like the alcohol business. We drink when we're happy, we drink when we're sad. We just continue drinking because we enjoy it."

The CV

Age 60

Education University of Syracuse, history and government affairs. Law doctorate at Brooklyn Law

Career Worked for a Manhattan law firm; moved to legal department of LeFrank Organisation, a building firm, rising to senior vice-president. Co-founder of Entertainment Company in 1975; left about 10 years later to co-found Entertainment Music Company, followed in 1987 by SBK Entertainment World. Sold SBK to Thorn EMI in 1989, becoming vice chairman as part of the deal. Became chairman and chief executive of EMI publishing in 1991

Family Lives in New York with wife and three children

Interests Classically trained pianist; keen golfer