08/02/13

IMPALA Statement: Warner's purchase of Parlophone expected to counter music duopoly

 

With the announcement of Warner Music's successful bid for the Parlophone group, IMPALA sees the news as a step towards tackling the duopolisation of the music market by the two market leaders Universal and Sony.

The Parlophone group represents the biggest part of the divestments Universal gave up to win EC approval to buy EMI's recorded music operations last year. The Uni/EMI merger, along with the Sony/EMI merger met with opposition from IMPALA, the European trade body of independent music companies. IMPALA has confronted head on the series of mergers which have destroyed effective competition in the music market.

The two market leaders have been in an ever-stronger position on both publishing and recording over the past decade. Reacting to reports last month that Sony and BMG were conducting a joint bid for Parlophone, IMPALA raised concerns that the divestment process would simply reinforce the duopoly.

It is now hoped that strengthening Warner will help counter balance the duopoly across the whole market – digital, physical, access to radio etc.  At the same time, the gap with the independents will widen and this must be addressed, not only by reinforcing competition among the leaders but by strengthening the independents and allowing them to compete more effectively.

Helen Smith, Executive Chair of IMPALA said "We would expect to see a significant re-balancing effect as a result of this, after all, "two's company, three's a crowd". A stronger competitor to the Universal/Sony duopoly should make the market more open at all levels and give artists new opportunities. At the same time, we would expect this to be complemented by significant strengthening of the independent sector."

About IMPALA
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 The first EMI/Warner merger was withdrawn in 2001 following objections from the EU after IMPALA intervened, in its first year of existence.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.

 

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