EMI halts talks about selling DRM-free music

“EMI Group Plc and online music sellers including Microsoft Corp. halted talks aimed at removing copyright protection from songs because they couldn’t agree on the size of an advance payment, people briefed on the offer said,” Dina Bass and Andy Fixmer report for Bloomberg.

Bass and Fixmer report, “EMI, the third-largest music company, demanded an upfront payment to compensate for its risk in releasing the music without software that prevents copying, the people said. The retailers countered with a lower offer, which EMI rejected, and negotiations are now on hold, the people said.”

“Discussions included Microsoft, Apple Inc., RealNetworks Inc., Yahoo! Inc. and Amazon.com Inc., and a deal with some of them seemed close two weeks ago, the people said. CD sales slid last year, giving the idea traction as record companies look to reverse their fortunes. An announcement with London-based EMI had been planned for as early as Feb. 9, one of the people said,” Bass and Fixmer report.

“‘It’s a setback,’ Harold Vogel, an independent media analyst in New York, said in an interview. ‘That this industry fights every change tooth-and-nail is not helping reverse the tide.’ Talks have been further complicated by Warner Music Group Corp.’s efforts to buy EMI. Warner Chief Executive Officer Edgar Bronfman opposes offering music without the copyright software,” Bass and Fixmer report.

Full article here.
Stupidity, shortsightedness, and greed make for a dangerous cocktail. The Middlebronfman will ultimately be eliminated.

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Warner Music approaches EMI in possible takeover bid – February 20, 2007
Windows Vista’s DRM is bad news – February 14, 2007
Warner’s DRM-loving Middlebronfman warns wireless industry it may lose music market to Apple iPhone – February 14, 2007
Monster Cable announces full support of Apple CEO Steve Jobs’ call for DRM-free music – February 13, 2007
EMI may sell entire music catalog DRM-free – February 09, 2007
Recording Industry Association of America wants their DRM, calls for Apple to license FairPlay – February 08, 2007
Warner’s Middlebronfman: Jobs’ DRM-free music call ‘without logic and merit, we’ll not abandon DRM’ – February 08, 2007
Dvorak: Apple CEO Steve Jobs is dead right about DRM – February 07, 2007
Apple’s Jobs jolts music industry; Zune exec calls Jobs’ call for DRM-free music ‘irresponsible’ – February 07, 2007
Apple CEO Steve Jobs’ posts rare open letter: ‘Thoughts on Music’ – calls for DRM-free music – February 06, 2007
Norwegian Ombudsman: Apple’s FairPlay DRM is illegal in Norway – January 24, 2007
Major music labels ponder DRM-free future – January 23, 2007
Warner’s Middlebronfman: ‘We sell our songs through iPods, but we don’t have share of iPod revenue’ – October 05, 2005
Warner music exec discusses decapitation strategy for Apple iTunes Music Store – September 28, 2005
Warner CEO Bronfman: Apple iTunes Music Store’s 99-cent-per-song model unfair – September 23, 2005

25 Comments

  1. The recent decline in CD sales followed a period of atypically high sales, which happened to coincide with the old, free, Napster. There is no conclusive evidence that online sharing either decreased or increased music sales but the long term trend shows that the music industry has been doing OK.

    What has clearly changed is that communication has improved which includes direct communication between manufacturer and customer, that’s what the music industry is trying to stop.

  2. DRM is all smoke and mirrors, what’s really at stake here is an outdated business model and the RIAA and company know it. It was always just a shell game anyways culminating in an annual “love fest” like the Grammys/Oscars. And those events were merely confirmation that the marketing/payola etc. were enough to dupe the average consumer into thinking they had purchased the latest and greatest.

    The internet basically removes this entire industry out of the equation (including the bought off radio programmers who playlist for hundreds and hundreds of stations across the country). Internet radio is how I discover new music and there is almost always a link to either iTunes for digital download or a site that sells a hard copy i.e. a CD. Don’t need huge dollars in marketing, distribution, payola, stamps, etc. which are always billed bake to the artist anyway. It’s win-win for artist and consumer but not the so called industry.

    I suspect that most people reading this don’t need an “evening at the Oscars” or a Grammy love fest to tell them what to watch or listen to.

  3. EMI man: …in return for a lump sum payment.
    M$ man [distracted]: Pay? Uh…yes, we’d pay. We’re paying almost everyone…. [Smiles]

    EMI: So, how much would you be willing to offer us, uh…for the rights?
    M$ [eyes narrowing]: We’re prepared to offer you $50 million for the right to put our own DRM on your music.

    EMI: Uh…this is for the <u>no-DRM</u> rights. For selling…
    M$ [interrupting]: I know, you sell it unencumbered, we protect it. It’s what we do; what we’re good at.

    EMI: But you’re already doing that! What do you think we’re asking for here?

    The M$ negotiator leans back on his chair, twiddles a pen, and glances at the ceiling.
    M$: You sure drive a hard bargain! We’re prepared to go to a hundred….

    EMI: A hundred mill’ a year for the right to sell our music <u>without</u> DRM…have I got that right?
    M$: Oh no! No-no-no-NO! We’ll use our <u>own</u> DRM, of course!

    EMI [bewildered]: We’re already doing that! What’s the 100-million for?
    M$: Exclusive digital download rights. We’d distribute to all our partners, of course, including Apple.

    EMI [flabbergasted, now]: That’s not on the table. You’re talking about something else!

    The M$ man reaches into his coat pocket, withdraws a prototype Phune, and slides it across the table until it clatters to a stop in front of the EMI man. A loose button pops off.

    It rings.

    EMI: He-hello?
    Phune: How are ya, Barney? It’s Bronfman here.<.i>

    EMI: <i>Is that you, Edgar?
    Phune: Yeah, we’re in a conference call with Gates, Glaser and Gorog.

    M$ man [sotto voce]: No DRM, eh? The three Stooges will fix’im….

  4. >norm e. wrote: You are taking a very very simplistic view. I know people that down load everything free. But they never listen to it.

    Hrm… I gave an example of how to calculate and quantify what sort of losses content companies face. To you that is overly simplistic?

    All you did was give a silly opinion and not add anything.

    ” You are taking a very very simplistic view.”
    (NO REASONING FOLLOWS)

    That’s somewhat elementary school.

    ” width=”19″ height=”19″ alt=”grin” style=”border:0;” />

  5. >”People who steal music would never have bought it in the first place, so you cant count it as a sale lost”

    To those who think this make sense… imagine a car thief. Would it not count as a lost sale if he always chose to steal cars?

    Your argument would read: “Well he never would’ve bought a car, so him stealing it shouldn’t count as a lost sale.”

    Your argument, as it relates to DRM, would further read: “So leave it unlocked with the key in the ignition.”

    You can apply this poor logic to all sorts of things:

    Software – Steal it
    eBooks – Steal it
    Cellphones – Steal it

    Hrm… how about GUN – Steal it, wouldn’t count as lost sales because the consumer would never have bought it himself.

    Purely RIDICULOUS logic!

    Answer this: At what point of the stealing process does it count as a lost sale?

  6. MPC Guy’

    Yah, guns and cars are just like electrons in a MP3 file.

    If you had ever downloaded music from a P2P site then you would have known that only 1 in 5 music files is good enough to even keep. 1 in 5 isn’t even a music file, it’s a piece of malware. 80% of the downloads go straight into that big trash can in the sky, and yet, the IRAA counts them as lost sales.

    Once you have succeeded in downloading something, thinking you might like it, 1 in 5 passes the do I like this shit test.

    For every download that the IRAA counts as a lost sale, in my experience, only 4 or 5% actually turns out to be kept and listened to regularly.

    I would say that if the IRAA says they lost 10 Billion Dollars, in reality it was far less than 1 Billion Dollars.

    DRM free, 180 kbps files at $1.00 apiece would end my P2P days.

  7. “Answer this: At what point of the stealing process does it count as a lost sale?”

    >Big Al wrote: only 1 in 5 music files is good enough to even keep.

    Okay got it.

    Only 1 in 5 stolen files should count, in your honest opinion.

  8. I have the perfect solution to this problem…

    Simply stop buying music from ANY AND ALL sources altogether… no iTunes, no CDs, no Napster, No Yahoo. No anything, AND…

    THIS NEXT PART IS VERY IMPORTANT:

    Write to the record labels that you will never buy music again as long as DRM is a part of the picture.

  9. I think that many people are missing the point about DRM, it isn’t about preventing piracy, as Steve pointed out DRM is meaningless unless all music is protected by it.

    For me the truth about DRM was alluded to by the Macrovision CEO, content providers want to have a world in which one license for a piece of content means one device, if you want to play your content on all your devices, living room, bedrooms, portable car etc. you will need to purchase additional licenses. They may even reduce the price of the individual license to appear to sweeten the deal. This is why the record companies will not let go of DRM.

    The one obstacle to this vision in the music area is the Apple fair play DRM terms of use, considered to be far too generous and given before they became a powerful force in music sales. Hence you do not see the record companies making any effort to support Apple’s position in it’s struggle with the European competition authorities. This is perfect for them, make DRM inter-operable, take away the market power for the music sellers and watch the DRM restrictions grow with every contract re-negotiation.

    Therefore the arguments being conducted around DRM are a complete smokescreen. EMI are just trying to appear reasonable, whilst making sure their financial demands remain unacceptable to the music stores. The word “fools” is frequently used to describe record companies on this site, on the contrary they know exactly what they are doing and their motives are more sinister than people realise.

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