As Sony Music Publishing moves to take full control of EMI Music Publishing, European independent trade body Impala says a deal on this scale – and the market consolidation it will deliver – must be stopped.
It has lodged a complaint with the European Commission, urging the deal be derailed as it believes it will have serious negative repercussions for smaller players in the market.
“Our view is that the transaction has to be blocked,” said Helen Smith, executive chair of Impala. “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. That would be the best outcome not only for competition but also for cultural diversity and consumer choice.”
EMI Music Publishing was sold in 2012 as a result of Terra Firma losing control of EMI, the company it bought in 2007 for £4.2bn. On the recorded side, Universal acquired most of its assets, but had to divest key parts (with Warner acquiring most of Parlophone), including certain catalogue divestments made to the independents.
Sony acquired EMI Music Publishing at the same time for $2.2bn – but did so as part of a consortium which also included Mubadala Development. Earlier this year, however, Sony bought out Mubadala’s 60% stake in EMI and the remaining 10% from the Michael Jackson estate.
Back in 2016, Sony also bought out the Jackson estate’s 50% share in Sony/ATV Music Publishing for $750m. Impala says this consolidation by stealth, if approved by the regulators, would mean that Sony would go from owning 2.16m compositions to owning 4.21m.
Impala fears that this could give Sony too much power, especially in regard to digital negotiations, because of its bulked up publishing interests as well as its ownership of the second-largest record company in the world.
“No music company globally would hold so much power,” argued Smith. “Sony would be able to dictate terms to online services, dominate playlists, control collecting societies and capture all key routes to market, at the expense of online services, competitors, authors, and consumers. This would be seismic.”