IMPALA raises red flag on Universal and Sony bids for EMI

Brussels, 8 November 2011

IMPALA, the European independent music companies’ body confirmed today that it would oppose any attempt by the Universal and Sony duopoly to buy EMI. This follows  reports over the weekend that Universal might be back in the race to buy EMI.  Sony is understood to remain one of the bidders on the publishing side.  Independent companies believe reinforcing the duopoly would be the worst  possible outcome of the EMI negotiations - for music, those who make it and  those who want to access it.

The organisation has requested the EC to investigate all possible options to intervene. Indeed the EC has already highlighted the dangers of Universal’s power. The concerns cover not only music but also the vital online and mobile market, despite the fact that certain players there are much larger. In its UniversalBMG merger decision, the EC said this is because Universal is an indispensable trading partner, noting it controls more than half the world’s music in publishing and recording. The EC and the European courts also raised concerns about Sony’s market power in the infamous SonyBMG cases. More recently IMPALA asked the EC to look into Universal’s moves in the live sector via its tie-up with Live Nation.  

Even if Universal or Sony attempts to construct a deal for EMI with a third party or with divestments, it would still increase their market power in the opinion of IMPALA. IMPALA believes that the regulators would not be convinced by such an approach and points out that, even if they did, it could end up in the courts. The independents consider that the buyer would still have to sell at the end of the day at huge cost.

As far as Warner’s bid is concerned, IMPALA’s position is that it could help balance the duopoly but would still need substantial remedies as it would increase the competitive  gap for the independents. IMPALA believes a solution should be possible  because of the precedent from 2007 when Warner already recognised the importance of the independent sector and demonstrated its willingness to find far-reaching remedies.  

Helen Smith, Executive Chair, IMPALA: “We have always said our position is no mergers without remedies and we know from 2007 that it is possible to find a solution which is far-reaching enough. Our problem with  Universal, however, is that we believe it is simply too big already to be  allowed to gain more power and we have the same concerns over Sony buying EMI publishing. Making such a duopoly more powerful goes completely against the basic principles of competition in cultural markets.”

IMPALA was established in April 2000 to represent independent music companies. 99% of Europe’s music companies are small or medium sized enterprises (SMEs). Known as the “independents”, they are world leaders in terms of innovation and discovering new music and artists - they produce more than 80% of all new releases. The independents also produce 80% of the sector’s jobs.

The potential of the sector is enormous. Key investment, online and market access measures are expected to be put in place at European and national level for the independents and other cultural and creative SMEs - now officially recognised by the EU as “the drivers of growth, job creation and innovation”. Fostering Europe's economy of culture and diversity is one of Europe’s top priorities in becoming the world's leading knowledge economy. Culture is a bigger earner than any of chemicals, automobiles or ICT manufacturing and provides more than 3% of Europe's jobs.

IMPALA has 4,000 members including the top independents: !K7 (Germany), Anaconda Productions (Poland), Beggars Group (UK), Cosmos Music Group (Sweden), CLS Music (Hungary), CNR (NL), Cooking Vinyl (UK), Edel (Germany), Epitaph (US/NL), Everlasting (Spain), Gazell (Sweden), Kobalt (Sweden), Menart (Croatia), Musicvertrieb (Switzerland), Naïve (France), [PIAS] Entertainment Group (Benelux, UK and France), Playground (Sweden), Red Bullet (NL), Wagram (France), as well as national trade associations from the UK (AIM), France (UPFI), Germany (VUT), Spain (UFI), Italy (PMI), Belgium (BIMA), Denmark (DUP), Netherlands (STOMP),  Norway (FONO), Israel (PIL), Finland (Indieco) and Sweden (SOM).

IMPALA has its own award schemes to promote cultural diversity and new talent and highlight the artistic contribution of independent music. IMPALA award winning artists include Efterklang, Adele, Radiohead, Arctic Monkeys, Carla Bruni, Manu Chao, Corneille, Katie Melua, Franz Ferdinand, The Prodigy, Placebo and Ibrahim Ferrer (Buena Vista Social Club).

Please visit , call +32 2 503 31 38 or contact IMPALA on