I feel like this is just another attempt to destroy the independent record store. My room mate runs one of said stores, since the sales of CDs have dropped out, he's had to modify his inventory first from new CDs to used CDs, then used CDs to used CDs and DVDs, then new and used CDs and DVDs, then vinyl, then stereo equipment, toys, music magazines, movie posters, and finally to buying electronics to sell on eBay. The cd section of the store is dwarfed by the DVD section, which is overshadowed by the vinyl section, but CD sales still account for the 'rent' money.
So if the independent has to buy off of chains like Walmart, then what about Walmart's censorship policies? Will I ever be able to buy subversive CDs ever again? Or will this just be the beginning of yet another middle person in the supply chain, once again causing the prices of new CDs to rise?
My band has decided to just stay out of it. We're going the Ben Folds route; release everything on 7" vinyl singles, with an available digital download. That way they get their album artwork, and the files to go on their iPods and such.
On the other hand, though, it makes deviously good business sense for EMI to work this way. By limiting themselves to large volume wholesale, their job becomes increasingly easier, so you really can't blame them for being shrewd.
I'm still gonna have to go get my pitchfork and torch on this one though, as a card carrying independent musician, I am fundamentally opposed to anything EMI does, or any of the other big four for that matter.