EMI Records, Copy Control, High-end CD players

As reported today on CNN (actually old news), EMI records profits are suffering due to delays in 2 widely anticipated albums (Coldplay and Gorillaz). (see article below for details). Well I just bought the new Gorillaz disc (Demon Days) which has the dreaded Copy Control (Canadian version of disc) and like the last EMI Copy Control disc that I purchased I found that I cannot play it on my emmlabs CDSD/DCC2 without constant snaps and crackles (not unlike LP noise). For some reason, the UK versions of certain discs will play on my machine.

As long as EMI continues to use this dreadful technology which may prevent playback in certain high-end and low-end machines (e.g. certain car players), I hope that many people continue to illegally share EMI music and refuse to buy their new discs to help reduce their profits further. This technology protects no one, as I just ripped the disc in my PowerBook on iTunes, and if I wanted I could widely distribute on the internet. (Not that I have any intention of doing that) Yet, here I paid for this disc legally and I can't even listen to it, as it reportedly does not meet RedBook standards. Given that Chris Martin of Coldplay (your trusted artist) doesn't give a crap about EMI and its shareholders, why should I as one of your last paying customers. I suspect the same thing will happen with Coldplay's new album X&Y, which I suspect will be Copy Controlled and unlistenable on certain players (like emmLabs).

Coldplay casts chill on EMI profit (CNN REPORT: MAY 24, 2005)

LONDON, England (Reuters) -- Britain's EMI Group, the world's third-largest music company, said on Tuesday its full-year profit fell after delays in two key albums from Coldplay and Gorillaz.

The company said it was hopeful the popularity of digital services like Apple's iTunes would return global music sales to positive territory this year, but declined to give specific forecasts.

"We feel confident that growth in digital (music sales) will outstrip any further declines in physical (music)," Chairman Eric Nicoli said in a conference call with reporters. "We expect to achieve market share growth, but we don't know yet what the market will do."

Shares fell 2.1 percent to 236 pence by 0820 GMT.

"EMI talk about a 'still challenging trading environment' but have some quite positive things to say about improvements in operational performance and the potential for digital," Cazenove said in a research note.

EMI, whose artists also include Radiohead and Norah Jones, said pretax profit before goodwill and exceptional items was £141.9 million ($259.5 million) in the year to March 31, against £163.3 million a year earlier.

Turnover declined 8.4 percent to £1.94 billion, with a lower rate of decline in the beleaguered French and German markets, improvement in Japan and Latin America, and a "softened" North America.

At constant currencies, turnover fell 5.1 percent, with EMI Music Publishing turnover up 4.9 percent and EMI Music turnover down 7.4 percent. The numbers were in line with the company's forecasts from earlier this year, when it warned that delays in the Gorillaz and Coldplay albums would push their release dates into the current fiscal year.

Coldplay lead singer Chris Martin caused a stir last week when he expressed a decided lack of concern over the financial impact on his record company.

"I don't really care about EMI. I'm not concerned about that," he told Reuters. "I think shareholders are the greatest evil of this modern world."

Asked about Martin's remarks, Nicoli said: "I think Chris will have had a smile on his face when he said that. Chris is an artist, not a stockbroker."

The music industry is counting on digital music sales to drive new growth, even though they currently only make up a few percentage points of current sales. It is also pursuing a strategy of aggressively going after illicit file-sharers with lawsuits.

EMI's digital music sales grew to £49.7 million from £15.1 million a year earlier.

"We remain confident that digital music will drive the industry forward at attractive growth rates in the coming years and that it will become a significantly larger proportion of our business," the company said.

EMI has tried twice over the past five years to merge with Warner Music, the fourth-largest music company, which completed an initial public offering earlier this month. Many analysts expect the companies to eventually discuss a tie-up in order to compete more effectively with their larger rivals Universal Music and Sony-BMG.

"The fact that Warner is a public company is interesting. We think it's good to have another publicly quoted music company that attracts investor interest to the sector," Nicoli said. "We have no intent of doing any more speculation on the subject of consolidation."