EMI, the world’s third-biggest record company, said yesterday that it was coming closer to being able to charge higher prices for music downloads via the Apple iTunes service.

The music company, alongside some of its rivals, is keen for Apple to relax its insistence on a flat 79p/99c price for every single downloaded via the iTunes digital music store.

Alain Levy, head of EMI Music, said that he would like to see a “meaningful discount for new artists and some premium for a superstar act”.

Mr Levy said that EMI was in “intensive discussions” and expected that Apple would relent “in the next 12 months”.

EMI, which was reporting half-year results, declined to say what prices it wanted to see. However, Mr Levy said: “If you go from 99c to 98c, you are not achieving much.” Executives across the industry have suggested a price range from as little as 59p per single to £1.49 for certain stars.

Arguments over Apple’s pricing have raged in recent months as two other top record companies, Warner Music Group and SonyBMG, have indicated that they want Apple to be more flexible. Only the largest company, Universal Music, part of Vivendi Universal, agrees with Apple that a simple pricing structure will help to develop the market.

In September, Steve Jobs, Apple’s founder and chief executive, accused record companies of “getting a little greedy”.

A spokesman for Apple said: “With over 600 million songs sold on iTunes to date, customers fully understand what each song costs and don’t have to worry about what the price of a single song will be.”

Apple dominates the digital music market, with a share of around 75 per cent.

In the next few months the top four record companies will have to renew their contracts with iTunes in the United States, bringing the issue to a head. SonyBMG has already refused to license its acts to Apple’s service in Japan and Australia because of the pricing issue and a lack of compatibility with Sony’s digital music players.

EMI reported a 4.6 per cent increase in like-for-like sales in the first half, outpacing a 0.9 per cent decline in the overall market. The company was helped by Coldplay’s album X&Y, which sold 7.5 million copies, and Gorillaz’s Demon Days, which sold 3.4 million. EMI’s market share rose to 13.1 per cent from 12.5 per cent.

The late completion of both albums this year meant that the company was hit by a profits warning, but their delayed arrivals boosted the traditionally slower March-to- September half. EMI’s third top-selling album was A Bigger Bang from the Rolling Stones, with 2.3 million copies sold.

The company said that digital music now represented 5 per cent of recorded music sales, up from 1.8 per cent a year ago. Eric Nicoli, the executive chairman, predicted that the growth in digital music would bring industrywide sales back into positive terrority in “due course” — which could be “potentially next year”.

Mr Nicoli also said that the battle against digital piracy, which three years ago was threatening to kill off the music companies, “appears to be being contained” and he produced figures to show that the number of illegal downloaders had stayed roughly flat in the United States, despite a sharp increase in the number of fast- internet-users.

Overall, pre-tax income was £41 million, down 25 per cent, after higher financing charges, but operating profits were up 63 per cent at £87.3 million. The shares gained 10p to close at 226p. The interim dividend is unchanged at 2p.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive