As Universal finalises its divestment plan to try and win approval for the EMI bid, the independent music sector seems completely divided on what it could mean for them.
Reuteurs reported yesterday that Universal has a week to declare concessions to persuade European regulators to accept their £1.22bn acquisition. Clearly, Universal will want to get rid of assets that won’t ruin the appeal of the deal for investors, leading to all kinds of speculation as to what could end up in the hands of the independent sector.
Following the controversy of IMPALA President Patrick Zelnick seemingly going AWOL last week, further divisions have emerged with the Indie sector split down the middle on the result of the merger and the proposed divestments.
AIM Chief Executive and Chairman Alison Wenham sent a letter to Music Week stating that the trade association remained ‘unmoved’, concluding: “In particular, the group think the divestment package is weak - catalogue is increasingly less valuable. The proposal offers no solution to the difficulties of gaining access to media. Whilst we accept a solution is not within Universal’s gift, a company controlling nearly 60% of the all-important new release market means they will control upwards of 60% of media coverage. And most importantly, the loss of a major competitor in EMI to the largest music company will leave a gaping hole in the market for artists, narrowing choice to a simplistic level”.
Meanwhile, Domino owner Laurence Bell, PIAS Boss Kenny Gate and Mute’s Daniel Miller all backed the deal, with Bell saying: "I’ve seen the concessions and I think they’re very impressive. This seems a genuine move”.
Bella Union’s Simon Raymonde shared AIM’s concerns, saying: "[Universal] increasing their market share by a few percent via the acquisition of EMI may not SEEM such a big deal ('what's a few percent between friends?') but Universal will want to continue to shape and create digital music services of the future to their own benefit, and such an artificial merger can only spell trouble for smaller labels, and the artists, by monopolising the digital markets”.
The debate rages on!