It may seem like an insignificant dot on the music industry landscape at the moment. But if EMI, one of the Big Four record labels, goes through with its plan to “substantially” reduce the amount of money it gives to trade organizations, maybe, just maybe, it will help force these groups to re-examine their legal strategies and continue the push for DRM-free music.
Guy Hands, Terra Firms’s chief executive officer, sent letters to the industry’s two largest trade groups — the Recording Industry Association of America (RIAA) and the International Federation of the Phonographic Industry (IFPI) — threatening to slash EMI’s annual funding to the organizations by at least half, The Financial Times and Reuters reported. Terra Firma, a private equity firm, bought the financially-troubled EMI in May for nearly $5 billion. Hands has been stripping costs since then and has been questioning the return on investment in supporting the RIAA and IFPI.
EMI, the first major label to make its catalog available without digital rights management, contributes about $25 million a year to the groups, and the four major recording labels (which include Warner, Sony BMG, and Universal) give approximately $132 million annually to the RIAA, IFPI, and other smaller trade organizations.
With less money, The FT, Reuters, Ars Technica, and others speculate (or is daydreaming?) that maybe the RIAA will re-examine its legal strategy and possibly open the door a bit wider for the elimination of DRM, which consumers and some retailers want to end.
Here’s hoping that Hands goes through with his threat to slash funding for organizations hellbent on suing music listeners and pursuing the failing DRM strategy. Maybe next year, this insignificant dot might actually connect with other events in the music industry to bring about the end of DRM.