AIM Launches Campaign Against Break-Up and Sale of EMI

AIM members are actively supporting the UK industry calls for a review of the proposed break-up and sale of EMI Music, and are launching a campaign to inform constituency MPs about this vital issue.

The increasing concentration of the music market in the hands of a decreasing number of gigantic multinationals has undoubtedly damaged competition. AIM's position is that the proposed sale of EMI threatens further damage so great that it must be reviewed and resisted by the UK Coalition Government with the full support of the Opposition on what really should not be a Party issue.
 
In the letter to MPs AIM members will completely support the comments made by AIM co-founder Martin Mills MBE, who heads the Beggars Group which has done so much for music talent in the UK.  “This looks like breath-taking arrogance. It’s hard to imagine this acquisition being approved, given Universal’s existing dominance in an over-concentrated market. Even greater dominance would be bad news for almost everyone involved in the art and business of music.”

DRAFT LETTER FOR AIM MEMBERS TO SEND TO MP'S


Dear...

The independent music sector is the true and acknowledged creative force in the music industry. Independent companies are world leaders in terms of innovation and discovering new music and performing talent: we produce 80% of all new releases and in Europe alone we provide 80% of the jobs in the music industry.

I am writing to you as the (owner /founder/head of…)  XXX (label/company name)  and independent music company which is based in your constituency.

As hardworking, flexible and entrepreneurial SMEs, independent music companies, from micro-businesses to companies with annual turnover in millions, are adapting to and succeeding in an increasingly difficult global market. Adele is one good example of an outstanding independent success story – but there could and should be more (see below). And UK music repertoire is second only to that of the USA in terms of earnings from performance rights.

Independents can and do launch and support talent, and win market share in an already distorted market. But market distortion must not be allowed to become even greater. If the sale of EMI is allowed to go through, the combined market share in the recorded music market would be around 50% - 10% more than the threshold at which the OFT should be involved.

The increasing concentration of the music market in the hands of a decreasing number of gigantic multinationals has undoubtedly damaged competition. The proposed sale of EMI threatens further damage so great that it must be reviewed and resisted by the UK Coalition Government with the full support of the Opposition on what really should not be a Party issue.

Though the details may shift as this story develops, the stark central fact is that EMI has announced deals which will split its global music operation and will result in the sale of  its recorded music division  to Universal Music (for £1.2bn), while its music publishing division will go to Sony (for £1.4bn).

This move will undoubtedly concentrate the global music market still further into the hands of two dominant major companies – Universal and Sony. That itself is enough to demand that the UK Government looks closely at, and opposes the proposed sale of the only UK major music company to the remaining gigantic multinational, whose monopolistic position has already been a cause of market decline.

The total value of the current two proposed sales trumps by about 8% the offer for EMI as a whole made to Citigroup by Warner Music only a few weeks ago. If the deals with Universal and Sony are allowed to go ahead Warner Music will effectively be relegated in size to a position where it can offer no real global competition, and the global music market will be in the control of just two huge companies- one French and one Japanese.

Representing the independent music sector the European trade body IMPALA has, with the full backing of the UK trade association AIM of which my company is a member, announced that it will oppose both sales with the regulators.

IMPALA points out that the last time the European Commission looked at Universal it ordered the company to sell off assets to cut it down to an acceptable size. But Universal has continued to grow – and now plans another huge acquisition. In the case of the sale of EMI publishing to Sony IMPALA points out that Brussels has already investigated concentration of  in the music publishing market (in the Universal/BMG case) and has given a very clear indication of what the maximum size of a major publishing interest should be. The EMI/Sony deal would far exceed this.  The basic principles of competition in cultural markets do not tolerate making either Sony or Universal more powerful.

I completely support the comments made by AIM co-founder Martin Mills MBE, who heads the Beggars Group which has done so much for music talent in the UK.  “This looks like breath-taking arrogance. It’s hard to imagine this acquisition being approved, given Universal’s existing dominance in an over-concentrated market. Even greater dominance would be bad news for almost everyone involved in the art and business of music.” And looking to the global digital market, where independent music entrepreneurship is particularly inventive and forward-looking, I also support the remarks of Charles Caldas, the CEO of the digital rights agency for the independent music sector – that this is a setback for the digital market, because the EMI recorded music deal puts even more power in the hands of the company most likely to try and shape services into what is most advantageous to itself, at the expense of the digital ecosystem, the development of the digital economy, and competition. With Universal at 50% market share, competition will be history and they can and will dictate the market in every respect.

I strongly urge you to raise this issue in Parliament and with the Secretary of State for Business, Innovation and Skills. We are asking that that the likely effects of these proposed sales on competition, retail, consumer choice and the growth of monopolistic power in the music industry are fully examined, and the proper outcome for the benefit of the industry as a whole and the industry in the UK in particular is achieved. That outcome, we strongly believe, cannot include this break-up and sale of EMI as proposed.

 Sign off

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