Last week, Sony told EU anti-trust regulators that it was ready to close its deal to acquire EMI music publishing. If the sale is approved, Sony, already a behemoth in the world of music publishing will nearly double their publishing catalogue, growing it from 2.16m to 4.21m compositions.
The deal, first announced in May, will see Sony pay a total of about $2.3 billion for EMI, which they are acquiring from the Abu Dhabi-based consortium Mudabala Investment.
The EU Competition Authority is conducting a preliminary review of the deal and has until October 26th to complete their initial assessment after which they will either clear the deal or recommend it for further review. In the event that a further review is required, the Commission will have an additional 90 working days to determine if the merger is in compliance with EU competition regulations.
“it seems incautious to concede near absolute control of the music market to one player”
BASCA, the British Academy of Songwriters, Composers & Authors contends that the deal is allowed to complete, that it would “effectively create a ‘major-superpower’ with a new capability to dominate licensing markets and (via direct online licensing deals) raise serious implications for the autonomy of collective rights management.”
“At a time when the EU is looking to restore a balanced, diverse and competitive online marketplace for music, to allow the concentration of market leverage in this way seems antithetical to that purpose. As yet, there appears little evidence that the (unchallengeable dogma of the) market-share-music-model will successfully deliver the flourishing musical environment that consumers desire. Sony is a great music company; indeed they acquired, publish and service much of my catalogue. But if we are to heed the economic lessons of ‘too big to fail’, it seems incautious to concede near absolute control of the music market to one player. Setting up the music ecosystem so that it once again runs on competition as opposed to oligopoly is the key to a flourishing market, both online and off,” said BASCA Chair, Crispin Hunt.
BASCA also expressed concerns that bringing EMI’s assets in-house under Sony would reduce competition, including service and choice for creators.
“Creators should expect that their copyrights will be known to the publisher and exploited fully. They should also expect their publishers to work closely with them on a personal level to develop their careers. The opposite has been found to be true for songwriters and composers – including myself – when their rights are transferred from their original publisher to a corporation such as Sony, in merging vast catalogues,” Hunt added.
IMPALA AGREES
Other stakeholders in the world of music publishing, including the IMPALA, an association of independent music publishers, is hoping that the Competition Authority will press Sony hard on the deal.
According to IMPALA, precedents set by the Commission in 2012, when it ruled that divestments were required for Sony to become a minority shareholder, indicate that Sony may face “stiff opposition” with the Commission.
“This transaction would disrupt competition and harm consumers in an already overly concentrated music market. Given recent precedents set by the European Commission, we believe Sony’s take over will face stiff opposition,” said Helen Smith, IMPALA’s Executive Chair.
“Sony’s power will be a particular concern in European countries where the EU already concluded in 2012 that Sony would control too much repertoire. The European Commission will be concerned about competition and higher consumer prices, as well as Sony’s recent moves to grab market share in the digital distribution market,” Smith added.
“The only solution is to block the deal now,” concluded Helen Smith. “This is necessary to avoid long-term harm for consumers as well as other players in the music sector, from writers to streaming services, independent publishers, collecting societies and record companies. It also goes against key European objectives in terms of cultural diversity and SMEs and cuts across the EU’s digital single market strategy.”