AfterDawn: News

EMI opts to keep DRM

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

Written by: James Delahunty @ 26 Feb 2007 6:34

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• 3 comments

• Auslander

  treat people like criminals and what else can you expect them to be?
  
  
  to EMI

  26.2.2007 07:18 #1

• duckNrun

  No big surprise here that they decided to stick with the outdated, costly and unwanted methods that they are used to.
  
  I fully agree with the writer that this could have been a boon to EMI. Heck look at the independant labels.:
  
  Quote:Unfortunately, digital sales have not filled up the gap for major labels, but have been successful for IndependentsThe BIG 4 have to answer this question? WHY are the independants selling more?
  
  --Is it because the Big 4 can't attract and keep talent that the consumers want to hear? Certainly not! There is a reason they are called the Big 4
  
  --Are the downloads from the independants more valuable to the consumer and hence spurring on sales? Most likely the answer. But instead of embracing this method the major players scoff that without DRM they couldn't function and protect the same music that they sell on DRM free CD's that can be traded and upoloaded willy nilly!
  
  -- Are fans of independant music are more comfortable with digital items? No!
  
  -- Do fans of independant music have more expendable income to spend on music than fans of music produced by the 'Machine' that is the Big 4?
  
  
  If the answer IS in fact #1, #3 or #4 then the Big 4 are just basically screwed because there is not much that they can do to change those facts short of spending even more money on attracting talent (and maybe giving said talent more freedom to take risks and create music that may take years to build a true following like in the old days), providing classes to help people to become more comfortable with the media, reduce their prices so that their poor fans can afford to purchase their music.
  
  Under these choices the most logical and reasonable thing to do would be to jump on the #2 bandwagon and at least experiment with DRM free downloads. So what if 10 million DRM free songs get bought and even shared, these are songs already being shared via the CD! Fact is Yahoo Music has already done the investigative work and found that when they have offered DRM free songs for sale those tracks sell at a rate higher than they did when they had DRM!
  
  So exactly when are these music mogul Dinosaurs either going to evolve or become extinct? Personally I am hoping for extinction!

  26.2.2007 10:18 #2

• borhan9

  This should not be surprising due to the fact that they figure any protection is better than none. But they forget to realise that people out there will break the protection regardless.

  26.2.2007 11:40 #3