EMI Loses U.K. Ruling Over Sale of Pink Floyd Singles (Update3)
March 11, 2010, 5:10 PM EST(Adds additional EMI comment in sixth paragraph.)
By James Lumley and Erik Larson
March 11 (Bloomberg) -- EMI Group Ltd. should only sell the music of Pink Floyd, the band that recorded the best-selling album “The Dark Side of the Moon,” in full album format and can’t sell single songs online, a London judge ruled today.
The band, which sought clarification of their more than 10- year-old EMI recording contract, argued the agreement calls for albums to be sold as a whole with tracks in a specific order and not as singles, as they are on Apple Inc.’s online iTunes store.
“There is nothing in the terms ‘album’ or ‘record’ to suggest they apply to the physical product only,” Justice Andrew Morritt said in his judgment, which was a preliminary ruling in the case.
More consumers are buying music online and shunning older formats. Digital sales of music accounted for 27 percent of revenue at the biggest record companies last year and global revenue from music via the Internet and mobile phones rose 12 percent to $4.2 billion in 2009, the International Federation of the Phonographic Industry said in January.
EMI said in a statement that the ruling doesn’t immediately halt online sales of Pink Floyd songs and that additional arguments will need to be heard in the dispute, and that the case will go on “for some time.”
“We’re huge fans of Pink Floyd, whose great catalogue we have been representing for more than 40 years,” EMI said in an e-mailed statement.
‘Physical Product’
While Pink Floyd’s lawyer, Robert Howe, argued the contract restriction should include music sold over the Internet, EMI’s lawyers claimed it only applied to the “physical product” such as compact discs and vinyl records.
The ruling gives Pink Floyd leverage to seek more royalties if the band decides to allow single-song sales in the future, said Ian Karet, an intellectual property lawyer with Linklaters LLP in London, who isn’t involved in the case.
“At the time the contract was signed, it is unlikely they were foreseeing online sales,” Karet said in a phone interview. “Everybody in the music industry is looking to extract whatever value they can at this point.”
EMI, owned by Guy Hands’ Terra Firma Capital Partners Ltd. private equity group, was granted a request to have part of the judgment relating to royalties given without the media present.
The case is Pink Floyd Music Ltd. v. EMI Records Ltd., 666/09, High Court of Justice, Chancery Division (London).
--With assistance from Lindsay Fortado in London. Editors: Peter Chapman, Anthony Aarons
To contact the reporter on this story: James Lumley in London at jlumley1@bloomberg.net; Lindsay Fortado in London at lfortado@bloomberg.net.
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
