Under new ownership, UK major label EMI seems set to accelerate the evolution of the digital media industry.

EMI was recently acquired by private equity group, Terra Firma, and is now under the control of financier, Guy Hands.

Hands sent a stiff memo to EMI staff last week, warning the company to "embrace digital or die".

According to The Telegraph he told staff: "The recorded music industry... has for too long been dependent on how many CDs can be sold. Rather than embracing digitalisation and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand."

He praised former EMI act Radiohead for its move to make its music available online to fans at whatever price they wanted to pay as "a wake-up call which we should all welcome."

Hands is also reported to have been "surprised" at the salaries paid to second-tier EMI executives. These salaries are causing ill-will among the label's artist roster, who feel they are subsidising excessive executive lifestyles.

In a major sea-change, Hands is understood to favour a move away from the existing business model in which artists are paid large advances toward one in which labels subsidise tours or recordings in exchange for a smaller - and more equitable - cut of any profits.

The executive is also interested in exploring new profit opportunities for labels in the digital age.

Record sale revenues in the UK have fallen over £130m since 2004.

EMI is emerging as the most forward-thinking major, offering music free of rights-restriction to customers through a wide number of partners.

The company is also thought to have been instrumental in working with Apple and The Beatles to slowly bring music from George Harrison, Paul McCartney, John Lennon and Ringo Starr to iTunes.