LONDON Nov 28 British music industry major EMI
wants to cut its funding to the industry's trade bodies, a
source familiar with the situation told Reuters on Wednesday,
which could deal a blow to the fight against music piracy.
The source said EMI, which was recently taken over by
private equity group Terra Firma, was looking at ways to
"substantially" reduce the amount it pays trade groups.
The groups, the International Federation of the Phonographic
Industry (IFPI), the Recording Industry Association of America
(RIAA) and other national associations, represent music
companies and the fight against illegal piracy.
They receive funding from the four major music groups --
EMI, Warner WMG.N, Sony BMG and Universal -- and hundreds of
small independent labels.
The IFPI said it believed the four majors give approximately
64 million pounds ($132.1 million) each year to itself, the RIAA
and many other national associations.
The other majors were not available for comment, but a
separate industry source said at least one of the major music
companies is known to strongly support the associations and
EMI is undergoing a strategic review after being bought by
Terra Firma for 2.4 billion pounds ($4.95 billion).
Like all music groups, it has been hit hard by online piracy
and falling CD sales, despite the efforts of the trade groups to
combat the problem.
The IFPI said on Wednesday it was engaged in annual budget
decisions and "as one would expect in this market, there is a
focus on efficiencies and savings".
It declined to give any further details but added that it
was also engaged in a very full agenda to promote the rights of
its member record companies.
EMI, Terra Firma, the BPI and RIAA were all unavailable to
Illegal file-sharing is estimated to cost the music industry
billions of dollars a year in revenues. In response, the trade
bodies have launched legal action and called upon Internet
service providers to block the activity.
Analysts at UBS said any move to reduce the funding to trade
bodies could hamper the industry's efforts to fight piracy and
protect music copyright.
(Reporting by Kate Holton, editing by Will Waterman)