Recent discussions between EMI Group and music retailers were aimed at removing DRM on songs, but an upfront payment agreement couldn't be reached, and talks have stalled according to The Seattle Times on Saturday.

The music retailers included Apple, Microsoft, RealNetworks, Yahoo and Amazon.

EMI wanted an agreement that included a large upfront payment to compensate them for illegal copying, and the retailers presented a counter offer that was lower. An agreement couldn't be reached, and talks have stalled.

The matter is made more difficult because Warner Music has wanted to buy EMI, and Warner's CEO Edgar Bronfman opposes music sold with out the traditional protection mechanisms.

The feeling in the industry is that the first music company to strike such a deal with major music on-line retailers would set a precedent, and the other labels, under pressure, would be compelled to follow suit.

"Ultimately the industry will have to do go down this road," Harold Vogel, a media analyst said. "I would have thought the industry would have been further along at this point."

Meanwhile, overall music sales continue to decline. Many music company executives have hoped that on-line sales would make up for the losses in CD sales. If that doesn't happen, the music industry will eventually be faced with much tougher decisions about how to promote and sell their music.