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Must See: ECC Objects To Universal’s EMI Music Purchase

Published: Wednesday 20th Jun 2012 by David

If Universal Music‘s plans to purchase EMI‘s recorded music department, the above (Katy Perry & Nicki Minaj) might just become label mates, marking one of the ‘grandest’ acquisitions to take place in label history.

However, in what many a critic saw coming a mile away, the European Competition Commission has objected to the deal, sending Universal a list of issues it has with the proposition.

A proposition, which will see Universal own 40% of  the industry’s recorded music market.

Details below…

Back in April, the ECC approved the CitiGroup‘s $2.2 billion sale of EMI Music Publishing to Sony ATV after the company faced financial woes amounting to a debt totaling  $4 billion.

However despite giving the green light to Sony’s deal, this week saw the ECC send a list of issues it has found with Universal’s bid, reportedly outlining the unfair threat it may pose to rival labels and digital outlets.

During a speech in Switzerland last week the commission’s Joaquin Almunia expressed:

Ultimately, we will need to make sure that, in this already concentrated market, the company that would emerge from the deal would not be in a position to shape the future landscape in the digital music market to the detriment of users and artists.

A company with a large and popular catalogue can have significant market power over digital platforms, which would have a keen interest to strike a deal with it. Competition authorities have the responsibility to monitor these market developments and allow all participants to play their part.

This, days before Universal  CEO Lucien Grainge and EMI chief Roger Faxon will ‘duke it out’ with Beggars Group‘s Martin Mills,  former Warner CEO Edgar Bronfman Jr, and Public Knowledge president Gigi Sohn in front of a US senate antitrust subcommittee.

The latter three being against the deal and the former in favor of it.

The EEC have until September 6th to come to a decision.

Our two cents:

Though the merger would be all kinds of beneficial for acts at either group on financial and international promo (Vivendi also owns France’s Le Grand Journal), it is worth asking what this really means for us– the consumer.

Yes, while greater finances might see album prices from the proposed label drop in turn, it would also be within the power to raise prices- forcing customers to either accept the cost or stop buying LP’s altogether.

This, being the last thing anyone wants.

However, seeing as the deal will more than likely have to comply with rules set by the ECC, we do see the argument for it.

So what do you think?

Source.

Is the merger a good idea?

Comments 15

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  1. Lax June 20, 2012

    These money folks knows no boundaries when it come
    to spending that money, amazing. These two artist look
    like the entertainers they truly or.

  2. BEYONCE’S WEAVE June 20, 2012

    Economies of scale will result into cheaper music is my argument.

  3. LTM (Wide Awake) June 20, 2012

    So basically they are afraid that if Universal buys EMI they will be able to monopolize the music industry? Or am I wrong?

    • AalexisR June 20, 2012

      That seems to be the biggest concern.

    • Vegas Girl June 21, 2012

      I almost feel like that’s already happening, Universal is already massive and seem to have many of their artists dominating radio AirPlay,etc and now the EEC is fearful that they’ll dominate digital (and subsequentially the entire industry)with this deal, which I have no doubt they would. I already hate that so few major groups exist, they control all of what we the consumers hear and buy. It’s bad enough already.

  4. NOBITCHASSNESS June 20, 2012

    Katy & Nicki to do a remake of “Girls Just Wanna Have Fun”.

  5. Alexis Carrington June 20, 2012

    monopolies are always dangerous. Side note: isn’t it interesting how a post that doesn’t include female singers, gay cattiness, or Chris Brown gets such few hits on this site?

    • QueenOfTheNavy June 20, 2012

      i kind of like it this way. these kind of posts are for those of us who really care about the industry and it allows for intellectual debate without the usual shade fest the rihanna beyonce threads have.

      still not sure what i think about the merger though, i dont trust monopoly’s, i think emi should split itself even further and sell some of its shares to Warner, at least then we’d have a fair system.

      Btw I live for your avi so get your life:

      • Alexis Carrington June 20, 2012

        LMAO. Even though I hate this expression, it’s the only fitting response, “YAAAAASSSSSSS!”

      • Stans Make Me LOL June 21, 2012

        still not sure what i think about the merger though, i dont trust monopoly’s, i think emi should split itself even further and sell some of its shares to Warner, at least then we’d have a fair system.

        I agree with this statement.
        The merger will also make it more difficult for new artists to get a record deal and more difficult for those who which to work in the industry to get a job. A bad deal all round (except for Universal of course).

  6. TellYourGirlfriend June 20, 2012

    i love when you guys do post like these, the other sites wouldnt touch stories like these with a barge pole.

    @beyonceweave i see what you’re saying but its not fair on everyone else, think about how screwed up the charts would be if most of the acts came from the exact same label

  7. Selenator June 20, 2012

    I agree with @QueenOfTheNavy. Selling to Universal only is a dumb idea. EMI owns the rights to a lot of poplar artist (which makes it hard to see how they are bankrupt), if Universal brought them all, they would basically own the music industry.

  8. CM June 20, 2012

    True. The new label would be able to spread out its releases so that they can monopolize the charts as well. At that point they would begin to raise prices and such.

  9. I.D. June 21, 2012

    One person/company/entity owning so much and wielding so much power is never good. It then dictates and moulds the future as is seen fit, and reduces diversity from different perspectives and different views. Rupert Murdoch is a prime example. When Mark Zuckerberg bought Instagram, I thought that it’s only the beginning, and I think the same in this situation if the acquisition goes ahead.

    It will probably lead to certain artists being favoured above others and getting EVEN MORE airtime than they do now. The same artists will be heard time and time again on radio stations and music channels and will become more monotonous than it already is. They will dominate the airwaves, and the artists on independent labels will struggle even more to be heard.

    Power should be shared, not not dictated by one.

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