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Beatles Not Included in Apple/EMI Deal

Apple Inc. and EMI Group Plc will reveal a ground-breaking deal on Monday for Apple to sell the music label’s songs free from copy protection limits, the Wall
Street Journal reported on Sunday.

The report said music giant EMI plans to sell “significant amounts” of its catalog without anti-piracy software, citing people familiar with the matter, and that the music label is considering not only Apple’s iTunes stores but other outlets.

However, a separate source familiar with the situation told
Reuters a Beatles deal was not the focus of Monday’s event.

“There is no Beatles’ announcement,” the source said.

EMI has acted as the distributor for the Beatles since the early 1960s, but the Fab Four’s music holding company Apple
Corps Ltd. has been a high-profile hold-out from Internet music services like Apple’s iTunes.

Spokesmen for Apple and EMI declined to comment on the newspaper report.

EMI said earlier on Sunday that the company will hold a news conference on Monday at its London headquarters, where EMI
Chief Executive Eric Nicoli will be joined by Apple Chief
Executive and co-founder Steve Jobs.

A live Webcast of the event, which will feature “a special live performance,” will be available at http://www.emigroup.com beginning at 1 p.m. local time in London (1200 GMT).

Earlier this year, Jobs called on the world’s four major record companies, including EMI, to start selling songs online without copy-protection software, known as DRM, for digital rights management. DRM software is designed to thwart piracy but also makes using music cumbersome for many consumers.

Jobs argued that there appeared to be no benefit for the record companies in selling more than 90 percent of their music without DRM on compact discs, while selling the remaining small percentage of music online encumbered with DRM.

Executives at several rival record companies said they expected EMI to drop DRM but questioned whether EMI had done sufficient market research to justify the move.

“It’s problematic,” said one executive. “EMI haven’t tested it enough so they don’t know what the market reaction is going to be to open MP3s.”

MP3s are an open audio format that allows digital music fans to share songs or albums with other listeners. The music industry has shunned the standard in favor of formats that require some form of copy protection.

“The issues are will MP3s help expand the market and how will it affect piracy? We just don’t know,” the executive said.

All the major record companies have experimented with digital music sales without anti-piracy with varying results.

EMI’s biggest market test was with Norah Jones’ single
“Thinking About You” in January, while Sony BMG tested the market with Jessica Simpson’s “A Public Affair” last summer.

In an e-mail to reporters, EMI said the two companies would announce “an exciting new digital offering.” The e-mail sparked speculation among bloggers and news media that the announcement could involve putting the Beatles’ music catalog online.

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