Some questions have been raised concerning the future of music giant EMI, after Terra Firma's $6.4bn purchase of the company. But one thing that's unlikely to be affected by EMI's changing ownership is its decision to offer DRM-free digital music tracks via the iTunes Music Store.
Last month, Apple and EMI announced that the iTunes Music Store would offer EMI's entire music catalogue without any DRM (digital-rights management) restrictions. The tracks would sell for $1.29 each - 30 cents more than the standard iTunes download - and come encoded at a higher bitrate. EMI's DRM-free offerings were slated to appear this month.
Neither EMI nor Apple would comment on whether the record label's purchase this week might delay the arrival of DRM-free music at iTunes. But one industry analyst expects the launch to happen as scheduled.
"EMI made its decision to sidestep DRM in part to demonstrate its forward-thinking strategy, so potential purchasers would see greater value in the company," said Aram Sinnreich, founder and managing partner of Radar Research, a Los Angeles media consulting firm. "They can't renege on the deals very easily without the value of the company plummeting."
Sinnreich believes EMI made a good decision to offer its catalogue without DRM restrictions. The question now is whether new owners Terra Firma will keep the forward-thinking strategies the record label has developed over the past year. While Sinnreich believes it will, that is the one part of the deal that remains unanswered.
"It's the only way for record companies to have a role in the emerging digital marketplace," said Sinnreich.
Even though EMI executives and Apple think selling DRM-free music is a good idea, that opinion is not necessarily shared by other record company executives. When Steve Jobs called on music companies to drop DRM restrictions from their offerings in an open letter this February, Warner Music CEO Edgar Bronfman reacted by calling the proposal "completely without merit".
"We advocate the continued use of DRM," Bronfman said at the time. "The notion that music does not deserve the same protection as software, film, video games or other intellectual property, simply because there is an unprotected legacy product in the physical world, is completely without logic or merit."
Sinnreich says that attitude is part of the problem facing the music industry. "Record companies are very conservative and very resistant to change and are only willing to take risks when they are in a desperate situation - they just don't see how desperate it already is."
Sinnreich believes the other record companies will follow EMI's lead eventually. What it will take is lost market share and seeing sales going up for EMI artists.