Brussels, 24th October 2025

A crucial element in reviewing mergers in the music sector is what’s at stake for the ecosystem and cultural diversity. A new paper published by IMPALA predicts that the proposed UMG/Downtown acquisition carries significant risks for both the quantity and diversity of independent releases.

Entitled “Universal/Downtown – Why does it matter from a cultural diversity perspective?”, IMPALA’s paper gathers various indicators of the independent sector’s contribution to diversity, including new release genres and investment in marketing. Factors making the market less open to developing new artists are also assessed.

Economic modelling by Professor Amelia Fletcher is referred to in the paper as demonstrating a direct line between reduction in revenues for independent labels and diversity and culture. Under the assumptions made, the findings are that even a small reduction in revenues can reduce the total number of releases as well as artist income. In addition, the lost releases would tend to be those which are less widely saleable, that is, those characterised by smaller genres or communities or non-English language music.

The paper is adapted from a confidential submission shared with the European Commission which complements other confidential economic analysis on various theories of harm demonstrating how the proposed transaction risks depriving the independent sector of significant resources.

IMPALA’s note concludes: “The impact of UMG buying Downtown on cultural diversity is an essential part of the competition assessment. Independent record companies have always been the promoters of cultural diversity and champions of new music. Professor Fletcher’s model is clear and the music market itself is even more vulnerable to concentration than before. If UMG buys Downtown, there will be a material detrimental impact on artistic cultural diversity within the EEA as a result of the independent labels generating less income and having less money to spend on new music.” 

Helen Smith, IMPALA’s Executive Chair commented: “It’s about balance. Big companies are important and so is collaboration, with the joint AI licensing project with Spotify as an example. At the same time, concerns have been raised about the health of the digital market and the ecosystem if the leader is allowed to become too big. The conclusions point to the risk of the independent sector losing revenue as a result and that means fewer and less diverse releases.”

Dario Draštata, Chair of IMPALA, President of regional association RUNDA Adria and Executive Director of Dallas Records added: “As the paper states, independents are the ones supporting smaller artists and less visible genres. Hindering them would have a direct and damaging impact on cultural diversity as a whole. In central and southern Europe, the risk of having less income to invest would be a big loss for our artists and for the region’s cultural diversity and huge potential in the digital market.”

Francesca Trainini, IMPALA President and Vice President of Italian association PMI commented: “These results really lay out what’s at stake. All eyes in the independent sector are on the European Commission to ensure the music market remains fair and competitive, one where true competition and diversity can thrive. Cultural diversity is one of Europe’s unique assets and it is right that this is enshrined at treaty level.”

Assessing impact on cultural diversity is part of the European Commission’s obligations under the European treaty and also the UNESCO convention. It was an important part of its analysis in UMG/EMI and other cases. The scope of assessment is also important because there is no presumption in favour of merging parties, as the European court found in the Sony/BMG appeal by IMPALA. All relevant theories of harm must be assessed.

Independent music leaders launched 100 Voices earlier this month featuring testimonies from over 100 business leaders across 20 countries explaining their concerns in their own words.

Helen Smith concluded: “This is a snapshot of the widespread concern within the independent community. It adds further weight to the more than 200 executives who signed a joint letter in July calling for an in-depth investigation into the deal, as well as to the many op-eds published by leaders across the sector.” 

Read the op-eds here from Kees van Weijen, Ruth Barlow, Birte Wiemann, Noemí Planas, and Helen Smith, as well as comments from Gee Davy in a Music Week feature.

Other key parts of the music sector have also warned of the worries they have about this acquisition, including authors and composers, managers, featured artists and independent publishers.

About IMPALA
IMPALA was established in 2000 and now represents over 6000 independent music companies in Europe. 99% of Europe’s music companies are small, micro and medium businesses and self-releasing artists. 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 and account for 80% of the sector’s jobs. IMPALA’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change, and increase access to finance. IMPALA works on a range of key issues for its members and started a new co-funded work programme as an EU cultural network in 2025. IMPALA runs various award schemes and has a programme aimed at businesses who want to develop a strategic relationship with the European independent sector – Friends of IMPALA