In 1897, two American businessmen, William Barry Owen and Frank Dorian moved to Europe to create a market for recorded sounds. Owen came to London where he started the Gramophone Company, and Dorian went to Paris to start the Columbia Phonograph Company. Both relied entirely on American suppliers for records and machines to play them. Since the American music did not appeal to the European audience, Owen was joined in London by Fred Gaisberg, a sound engineer, to create the first European disc recording studio in 1898.
By the time the First World War broke out in August 1914, around one third of the British households owned some kind of gramophone. Each year some 13 million records were sold.
By 1930, the two companies were forced to merge due to the great depression. The formed a single business called Electric and Musical Industries Ltd (EMI).
EMI Records started out in a difficult time of depression but they still managed to make important popular and classical records, thanks to recordings by contemporary idols like Gracie Fields, George Formby and Ray Noble and the New Mayfair Orchestra.
During the Second World War, EMI kept making records, and by the time the war ended in 1945, there was a massive demand for records of the Glenn Miller Orchestra and Frank Sinatra.
1957 saw the beginning of Rock and Roll, which at the time seemed to be a strictly American form of music. EMI soon created the basis of the 1960's revolution in British rock and pop music by contracting such artists as Adam Faith, Helen Shapiro and Cliff Richard. In the 60's EMI was of course the record company that contracted the Beatles, the most popular group in pop music ever. In the mid-60's, EMI created the label Harvest to house the so- called 'progressive' or 'underground' musicians like Deep Purple and its most celebrated group Pink Floyd. Of the many British rock groups signed to EMI during the 1970s, Queen was the most flamboyant. They became most famous for their epic "Bohemian Rhapsody", but fronted by Freddie Mercury, one of the truly great men in pop music, the group scored many platinum albums around the world. In the mid-1970s, EMI managing director Bob Mercer signed Kate Bush. Subsequently, EMI released her albums The Kick Inside, Lionheart, Never For Ever, The Dreaming, Hounds Of Love, The Whole Story, The Sensual World, The Red Shoes and Aerial, plus all the associated singles and the box sets The Singles File and This Woman's Work Anthology 1978-1990.
After the announcement that EMI had sustained a loss of £260 million in 2006, EMI was acquired by Terra Firma Capital Partners in August 2007 which purchased it for £4.2 billion. Following the transition, several important artists including Radiohead walked away from the label, while other artists such as Paul McCartney had seen the writing on the wall and left ahead of the takeover.
In February 2010, EMI Group reported pre-tax losses of £1.75 billion for the year ended March 2009, including write-downs on the value of its music catalogue. Citigroup (which held $4 billion in debt) took 100% ownership of EMI Group from Terra Firma Capital Partners on February 1, 2011, writing off £2.2 billion of debt and reducing EMI's debt load by 65%. The group was put up for sale. A month later, it was announced that EMI has sold its recorded music operations to Universal Music Group for £1.2 billion and its music publishing operations to a Sony-led consortium for $2.2 billion.
On 12 November 2011, it was announced that EMI would sell its recorded music operations to Universal Music Group (UMG) for £1.2 billion ($1.9 billion) and its music publishing operations to Sony/ATV Music Publishing-for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. In March 2012, the European Union opened an investigation into Universal's purchase of EMI's recorded music division and had asked rivals and consumer groups whether the deal will result in higher prices and shut out competitors.
On 21 September 2012, the sale of EMI to UMG was approved in both Europe and the United States by the European Commission and the Federal Trade Commission respectively. The European Commission approved the deal, however, under the condition that the merged company divest itself of one third of its total operations to other companies with a proven track record in the music industry. To comply with this condition, UMG divested V2 Records, Parlophone Records, Sanctuary Records, Chrysalis Records, Mute Records, EMI Classics, Virgin Classics, and EMI's regional labels across Europe. These labels were operated separately under the name "Parlophone Label Group", pending their sale. Universal would, however, retain its ownership of the Beatles' library (moved to the newly formed Calderstone Productions) and Robbie Williams' Chrysalis recordings.
Universal Music Group completed its acquisition of EMI on 28 September 2012, followed by worldwide compliance and complete rebranding by 1 April 2013. In compliance the conditions of the European Commission, on 22 December 2012, Universal Music Group sold the Mute catalogue, previously property of EMI, to German-based music rights company BMG. On 8 February 2013, Warner Music Group signed an agreement to acquire Parlophone, Chrysalis Records, EMI Classics, Virgin Classics and some of EMI's regional labels across Europe for US$765 million (£487 million).
Universal Music will continue to operate EMI entities it is retaining using the EMI name and has formed Virgin EMI Records as a UMG label unit in the UK. The former EMI Records Ltd. was renamed Parlophone Records Ltd. in 2013, when Warner Music Group acquired Parlophone Music Group which has the rights to the old EMI Records catalogue.