Smaller Labels Less Threatened By UMG-EMI Merger Than Majors

ALL ACCESS reported opponents of the UNIVERSAL MUSIC GROUP’s $1.9 billion bid for EMI’s record labels are asking the Senate Judiciary subcommittee on antitrust issues to examine the deal, raising the possibility of Senate hearings.

The issue for many is that the combined company would have control of more than 40% of the overall music market and 45% of country music, reports THE TENNESSEAN, which adds “UNIVERSAL — whose country music label is UNIVERSAL MUSIC NASHVILLE — has spent at least $200,000 to lobby the Senate on competition policy since late last year, according to lobbying disclosure forms. WARNER MUSIC GROUP, which opposes the deal, has spent at least $154,000 to lobby the House and Senate.”

 Whether you’ve got four majors in town or three majors — it’s still the same battle for us, but there’s one less Goliath. 

WMG CEO STEPHEN COOPER told the paper the deal, “would significantly impair the competitiveness of the recorded music and music publishing markets, harming consumers, industry employees, recording artists, songwriters, physical and digital retailers, and our emerging digital services.”

Smaller labels don’t share that view.

“Whether you’ve got four majors in town or three majors — it’s still the same battle for us, but there’s one less Goliath,” said AVERAGE JOES ENTERTAINMENT Pres. TOM BALDRICA, while BIGGER PICTURE GROUP CEO DAVID ROBKIN told THE TENNESSEAN “the merger might even help independent labels, which attract artists precisely because they aren’t big, mainstream companies.”

“We’re competing not necessarily based on dollars, but based on time available and creativity and flexibility, and I think that’s something that as companies consolidate and get bigger — it actually creates opportunity for us,” ROBKIN said.

BIG MACHINE RECORDS CEO SCOTT BORCHETTA added, “consolidation doesn’t matter as much in a digital world.”

“When the major labels controlled the distribution channels, it was a different deal, but now the barrier to entry is literally turning on your computer,” he said. “If I continue to make great records by great artists, nobody can stop us.”

Source: http://www.allaccess.com