EMI: DRM stays

Talks break up

By Andrew Orlowski • Get more from this author

Posted in Financial News, 26th February 2007 15:07 GMT

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EMI has broken off talks with digital music download services about providing a DRM-free repertoire.

EMI was always tipped as the most likely of the "Big Four" to break ranks with its peers and supply music unencumbered by DRM. It's the smallest of the four major labels, the only one that isn't part of a major entertainment conglomerate, it's seen two mergers with larger partners scuppered in recent years - and it's in an ominous financial position.

The group axed chairman and CEO Alain Levy in January and announced it needs to make £110m of cuts this year. EMI turned over £867m in the six months ending October, with a pre-tax profit of £18.6m.

The record business has seen physical sales fall by 10 to 15 per cent but digital sales haven't made up the gap. But digital has been a boon for the burgeoning independent sector, which has few qualms about selling DRM-free music to services such as eMusic, Yahoo!, Music and Bleep.

According to reports, EMI had asked the online stores for large upfront payments to guarantee their revenue.

EMI last week confirmed that it had received an approach from Warner Group, but no formal bid had yet been made. You can read that statement on the endearingly 1995-era EMI Group website, here.

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