EMI – OPPOSITION TO UNIVERSAL AND SONY MOUNTS AS REPORTS CIRCULATE OF REGULATORY FILINGS IN EUROPE
Brussels, 26th January 2012
As reports circulate of regulatory filings in Europe weeks after the USA, independent music companies confirm their opposition to the proposed sale of EMI to Universal and Sony, the world’s biggest music companies. Protest is also spreading at national level, following initiatives led by independent associations such as AIM in the UK, while European body IMPALA fully expects regulators in both the USA and Europe to block the transactions outright.
Helen Smith, Executive Chair of IMPALA, commented: “Neither the USA nor Europe wants to see the music sector become a two-horse race, devoid of competition from any other companies.”
IMPALA also confirmed it has already made initial submissions to both the FTC and the European Commission, setting out the concerns of the independent sector regarding the plan by Universal and Sony to carve up EMI, their second closest rival, between them.
Recent statistics show that, although independent artists account for 80% of all new releases, they make up less than 6% of the Top 100 for airplay and downloads across Europe. The EC has ruled that control of the Top 100 is important because it makes up 60-80% of online revenues. More diversity would be expected in the Top 1000, but even there, fewer than 10% of the artists are independent.
A new report by Emmanuel Legrand for EMO and Eurosonic/Noorderslag highlights that Universal/EMI and Sony alone would account for 76% of the Top 200 European airplay and downloads. The report also shows that USA repertoire dominates key European territories, accounting for 50% of radio play and download sales.
This new evidence will concern the regulators when the weighing up whether two companies should control such a large proportion of the world’s music, in terms of both recording and publishing.
Reports in the past few days indicate that ratings agency Moody’s has placed the credit score of Universal’s owner, French media giant Vivendi, on review for a downgrade because of the “regulatory risks”, confirming wider concerns that Universal might have bitten off more than it can chew.
IMPALA was established in April 2000 to represent European independent music companies. One of IMPALA’s missions is to keep the music market as open and competitive as possible. IMPALA has an impressive record on competition cases in the music sector. The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence. It also won a landmark judgment in 2006 in the Sony/BMG case, and when Sony acquired 30% of EMI publishing in 2012, it was at the cost of significant divestments. The biggest set of remedies proportionately ever in a merger case was secured later that year, when UMG was forced to sell two thirds of EMI records and had to accept ten years of scrutiny over the terms of its digital deals. When WMG bought Parlophone in 2013, IMPALA secured a hefty divestments package for its members. On top of mergers, IMPALA has also been involved in other anti-trust cases involving the music sector, such as the abuse complaint against YouTube in 2014 and the call for regulating unfair business practices by large online players. IMPALA has also submitted observations on Apple’s bid to acquire Shazam. See the organisation’s other key achievements in IMPALA’s milestones.
IMPALA – Independent Music Companies Association
Rue des Deux Eglises 37-39, 1000, Brussels, BELGIUM
+32 2 503 31 38