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EMI to allow downloading
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June 5, 2001: 3:11 a.m. ET
Report: UK-based music giant to sign deal to allow 'burning' from Internet
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LONDON (CNN) - EMI is to allow downloading of its catalogue onto CDs in the first move by a music giant to legitimise so-called "burning", a report said.
EMI, whose artists include Robbie Williams and Janet Jackson, is set to announce a deal with U.S. digital company Roxio to develop a secure way of reproducing songs on to blank CDs, the Financial Times reported.
EMI and Roxio have yet to agree a pricing structure but one of the options could be pay-per-burn, the report said.
Revenue for copyright owners from CD burning is unlikely to be substantial initially but it is key to the success of online sales, the FT cited Roxio Chief Executive Chris Gorog as saying.
The move comes as the UK-based company explores ways to cut its manufacturing and distribution costs following its failure to merge with German rival BMG, the music arm of privately held Bertelsmann.
After the collapse of talks earlier this month, EMI said it could save "tens of millions of pounds" a year by rationalising its back-office functions, possibly in partnership with a rival.
The company has already made moves to outsource some of its CD-making business and has been striking deals with Internet companies over different forms of digital distribution.
The BMG deal, which was EMI's second attempt in 18 months to merge with a rival after similar talks with Warner Music collapsed, would have resulted in annual cost savings of about £200 million ($284 million).
Analysts have put pressure on EMI to find operational savings because of concerns about the long-term growth of the mature recorded music market.
"Digital distribution of music through a subscription service does not work without burning," said Roxio's Gorog in the report.
"People do not want to listen to music on their PCs but in their cars or on a Walkman. I don't know of many parties where everyone gathers round a computer," he said. 
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