LONDON – Independent record trade body IMPALA calls on regulators to investigate Universal Music Group takeover [PIAS] There were concerns that the deal would limit competition in the global recording industry and “narrow the choices available to artists and labels.”
[PIAS] co-founder kenny gates and Michelle Lambert Earlier this week, they announced that they would sell the remaining stake in the independent label to Universal Music Group (UMG), which already holds a 49% stake in the company, for an undisclosed amount.
The deal gives UMG full ownership [PIAS]service department [Integral]Provides physical and digital distribution services to over 100 independent label partners including the ATO, Beggars Group and Secretly Group, and will merge with Virgin Music Group.
Also controlled by UMG as a result of the stock sale [PIAS] Label Group is home to independent labels Play It Again Sam, harmonia mundi, Spinefarm, Source and partner labels such as ATO, Heavenly, Mute and Transgressive. Despite the change in ownership, [PIAS] said its label group business will remain fully autonomous.
In response, IMPALA and several of its associated national trade groups called on the competition watchdog to launch an investigation into what it called “uncontrolled concentration in the music market”. [which] Still a serious problem.
“The most important thing is that UMG acquired [PIAS] will increase the strength [UMG] Across Europe and beyond, including the UK and the US, IMPALA anticipates action by regulators in these jurisdictions,” the Brussels-based organization, which represents Europe, said in a press release on Friday (October 10). 6,000+ independent music companies.
Helen SmithIMPALA executive chair says she ‘expects’ regulators to review [PIAS] The acquisition “and answers the question the industry is asking: How can UMG gain more market share when it’s already considered too big?”
“The stock deal is one thing, this is another thing,” Smith said, calling on competition officials to assess how the deal would affect the physical and digital music markets, including distribution services, “and the impact on competitors, digital services.” , artists and fans.
Geert de BlairThe chairman of the Belgian BIMA Association said that although the Belgian market owes a debt of gratitude [PIAS] In a bid to show entrepreneurs what is possible, the impact of UMG’s acquisition of the company on the independent music business “will be structural, significant and long-lasting”.
“This is completely different than a share deal because Universal Music Group took over [PIAS]. Entire independent sectors will lose scale and stability. Incremental changes in major corporate markets take advantage of the disproportionate influence in the hands of a small number of companies. Every time this happens, the result is more control over market developments,” de Blair said in a statement.
IMPALA president backs call for inquiry Dario de la Statata It said the deal strengthens Universal Music Group’s market share, “eliminates a major competitor” and “narrows the choice of artists and labels.”
Universal Music Group (UMG) and [PIAS] A request for comment was not returned when contacted. advertising billboard.
acquisition [PIAS] The takeover by the world’s largest music company further expands the dominant market share enjoyed by UMG after a 10-year ban on music giants acquiring certain music companies or catalogs in Europe expired.
The European Commission imposed these restrictions on UMG in 2012 as a condition of the company’s $1.9 billion acquisition of EMI. As part of that process, the EU executive forced UMG to spin off the Parlophone label group, which was acquired by Warner Music Group (WMG) for about $750 million, and sell off various EMI entities in Europe, as well as Chrysalis, Mute, Shelter and Collaborative Music Labels.
In order to obtain regulatory approval to acquire EMI, UMG pledged not to reacquire any of the assets it had sold for 10 years, nor to re-sign any artists signed to the labels it had divested from. Just months after the decade-long ban expired in September 2022, Universal acquired a 49% minority stake in the company. [PIAS]which houses some previously off-limits catalogue, including collaborative music.
On Tuesday (October 15), UMG announced it had expanded its minority stake to full ownership following Gates and Lambert’s decision to sell their controlling stake.
acquisition [PIAS] by UMG is part of a growing trend of major labels looking to the independent music space to increase their market share, either by enhancing distribution services for independent artists and labels, or by investing in or acquiring independent music companies.
In 2019, UMG acquired independent distribution and marketing company Ingrooves Music Group. A year later, Sony Music acquired J. OwenQ&A acquired its digital distribution and recording services company Human Re Sources, followed in 2021 by acquiring artist services company AWAL and Kobalt Neighboring Rights from Kobalt Music Group.
Major independent label acquisitions over the past decade include WMG’s acquisition of Netherlands-based Spinnin’ Records in 2017, and Sony Music’s acquisition of British dance label Ministry of Sound in 2016.
On a smaller scale, WMG has been steadily growing its recorded music interests in Central and Eastern Europe, buying minority stakes in Croatian Dancing Bear Music, Slovenian independent label NIKA and Serbian Mascom. This week, WMG Benelux announced the acquisition of Dutch label Cloud 9 Recordings.
Drastata, who is also president of RUNDA, the Balkan independent brands trade association, said the practice was becoming “a problem across Europe” when it came to the pursuit of major independent brands by major brands.
“The independent industry losing such a large player exacerbates the competitive impact and the risk that this trend will continue,” de la Statata said in a statement. “For years we have been hinting at a gradual rise to dominance. problem, it’s time to take a new competitive approach to solve it.”
