James Delahunty
26 Feb 2007 6:34
EMI, one of the world's big four major record companies, has opted to keep selling its music with Digital Rights Management (DRM) restrictions through online retailers. EMI is the smallest of the four majors and was tipped to be the most likely to sell DRM-free downloads on the Internet. As Apple CEO, Steve Jobs, pointed out, it is pointless to enforce restrictions on consumers of digital music when CDs are sold completely unprotected.
EMI axed its chairman and CEO Alain Levy in January and alone announced £110 million in cuts are needed this year. The company turned over £867 million in October, with a pre-tax profit of £18.6 million. Since sales of physical CDs have declined by up to 15% in recent years, record companies look at digital sales to fill the gap.
Unfortunately, digital sales have not filled up the gap for major labels, but have been successful for Independents. It was reported that EMI was considering selling DRM-free music through online retailers in exchange for large upfront payments to guarantee revenue. One can only speculate that talks broke down because no retailer would agree on a payment that would suit EMI, but walking away from what could have been a breakthrough in digital music sales might only hurt EMI as it does consumers.
Source:
The Register