14 DAY TRIAL // In the past months, EMI has proved to be a valuable ally for Apple, helping start the DRM-free music age and opening the doors for Amazon and others to follow, not to mention giving Apple an advantage in negotiating with the other labels. However, this might change in the future as EMI has agreed to be bought by equity firm Terra Firma for ?3.2 billion including debt.
This news is not exactly a surprise, as the EMI Group has been the subject of bid speculation for the past year, due to its struggling business. It had already rejected a takeover bid from its US industry rival Warner Music. EMI's board of directors recommended the 265-per-share offer from Terra Firma, but the deal must now be approved by the firm's shareholders.
Terra Firma is run by Guy Hands, one of the UK's leading financiers, who said that the deal would allow EMI to 'build on its current position as one of the world's leading music companies and accelerate the development of its digital and online strategy to fully exploit this long-term growth opportunity.'
It will be interesting to see where EMI stands on the DRM issue after all of this. The deals with Apple and Amazon have helped open the way, and have given Apple an invaluable advantage in negotiating with the other major music labels. Whether or not DRM-free tracks will continue to be part of that "digital and online strategy" remains to be seen, but regardless of what happens, the doors that were opened and the deals that were made will make it hard for the other labels not to follow to some degree. The other music labels have had no qualms with expressing their reluctance to offer DRM free tacks and criticize EMI's move, though they continue to run 'tests.'