• Financial Times, Wednesday, February 14, 2007 10:47 AM

In stark contrast to its music industry cousins, record label EMI is moving toward the anti-digital rights management side of the fence. Now we know why: the music giant lowered expectations for its recorded music division. Instead of the expected 6% to 10% year-over decline in the year to March, the company said it's more likely to be in the neighborhood of 15$. Following the announcement, the label's shares plunged 20%.

EMI's under-fire management clearly understands that it needs to do something radical. That something is dropping its insistence that its recordings be protected by DRM software. It's ironic, because in many ways, EMI was seen as a laggard in adopting a digital strategy.

Nothing concrete has come from the company itself, although some music executives from several leading online music retailers and Internet radio sites say the record company, which has long blamed its weaker position among music's "Big Four" to its London location, is poised to make all or at least some of its catalog available in the DRM-free MP3 format. Given the recent downgrade in its expected sales, EMI would do well to make that announcement as soon as possible.

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