By Nic Fildes                                                                     

EMI has revealed that its CD sales collapsed 20 per cent in the first three months of its financial year, double the industry rate of decline, blaming a "light release schedule".

Despite having high-profile artists such as The Beatles, Coldplay and Lily Allen on its books, EMI has struggled against its rivals - most notably Universal Music - over recent years.

Last week, it agreed to be taken private by investment firm Terra Firma, run by financier Guy Hands, for £2.4bn despite years of on-off talks with its closest rival Warner Music.

Despite analysts believing that a tie-up between the two music companies would help both music giants cope better with tough market conditions, Warner Music did not lodge a rival bid to take over its competitor, paving the way for Mr Hands to buy the company outright.

EMI's struggle to revive sales was undermined by a collapse in sales of CDs during the first quarter. The decline in physical music sales was partially offset by a 26 per cent rise in digital revenue. The company said it has seen "encouraging" indications that its decision to sell downloadable music unencumbered by anti-piracy software had started to bear fruit. Across digital and CD formats, EMI's music revenue fell over 13 per cent.

Overall, EMI's sales fell over 5 per cent compared to last year despite a 12 per cent rise in revenue at its publishing division.