Indie labels urge EU to block Sony’s $2.3b bid for EMI, warning “No music company globally would hold so much power”
Independent music labels group Impala has called on European Union antitrust regulators to block Sony Corp’s $2.3 billion offer for control of EMI’s music publishing division.
The deal would give the Japanese conglomerate rights to 2.1 million more songs, bringing its total catalogue to 4.21 million.
That would make it the world’s biggest music publisher – and give it too much market power.
Sony’s new CEO Kenichiro Yoshida has eyed the EMI takeover as one of his priorities for the growth of the company.
Sony owns a 30% stake in EMI, and last month acquired Michael Jackson’s 10% share for $287.5 million.
Now it wants to acquire the 60% stake currently owned by Mubadala Investment Company for $2.3 billion.
In 2012, the EU competition enforcer greenlit Sony and Mubadala’s buy into EMI Music Publishing on the condition they sell four catalogues and musical works of 12 composers.
But such conditions will not be sufficient if Sony gets its way.
Helen Smith, Impala’s executive chair warned: “No music company globally would hold so much power.
“The market needs big operators, but not when they are allowed to acquire so much power that they start to strangle it and squeeze out the independents who are the ones taking the risks.”
She added that 80% of new releases come from independent labels.
Smith said that Sony would have “immense bargaining power” to be able to negotiate online rights for both its recording and publishing catalogues, push its global repertoire on radio and online platforms (“Sony’s position as an indispensable trading partner for online services would be significantly reinforced”), and draw more songwriters with bigger cheques.
Impala adds: “If permitted, this transaction would also harm collecting societies, songwriters and composers, and consumers who would face higher charges for music services.”
Smith also drew the scenario where the company’s culture would move from promoting local language repertoire to big name English-language hits.
“Blocking seems to be the only outcome as it is difficult to see how remedies could help in this case,” Smith said.
Impala will submit its comments to the European Commission this week.
“Our view is that the transaction has to be blocked. EMI would have a better future as a stand-alone operation or combined with another smaller music company to make a more effective competitor to the majors.”