UMG And EMI On Capitol Hill Today; New Zealand OK's The Deal
June 21, 2012 at 3:02 PM (PT)
UNIVERSAL MUSIC GROUP's proposed $1.9 billion purchase of EMI MUSIC was defended in written and oral testimony by executives of the companies before a Senate antitrust committee on TODAY (6/21), while drawing more fire from other labels and consumer groups reports the WALL STREET JOURNAL.
EMI CEO ROGER FAXON told the panel that pricing of music is not "within the gift of record companies" but is rather dictated by a market controlled by APPLE and AMAZON, which account for 90% of digital sales and 80% of digital revenue. EMI CEO LUCIAN GRANGE added that adding EMI's product to UNIVERSAL's would help revitalize EMI.
Meanwhile, CEO EDGAR BRONFMAN JR. of WARNER MUSIC GROUP, which would be second (with 19%) to a combined UNIVERSAL/EMI (29%) in U.S. market share, testified in a written filing that the acquisition would thwart innovation, with UNIVERSAL/EMI ("one innovation-stifling dominant player") wielding enough market clout to "prevent any new service it perceives as disruptive from launching successfully." Indie label owner BEGGARS GROUP CEO MARTIN MILLS wrote that UNIVERSAL/EMI would have an unfair advantage in signing acts and accessing distribution and retail, while PUBLIC KNOWLEDGE and CONSUMER FEDERATION OF AMERICA President GIGI SOHN wrote that the post-acquisition UNIVERSAL would hold 68 of the BILLBOARD Hot 100 for 2011, and that allowing the deal to go through would result in higher fees for services or the failure of new services to launch.
The EUROPEAN COMMISSION is likely to rule on the deal by SEPTEMBER 6th.
Meanwhile, Down Under
UNIVERSAL's acquisition of EMI MUSIC "has been fully approved by regulators in NEW ZEALAND," reports MUSIC WEEK. "The NEW ZEALAND COMMERCE COMMISSION notified UNIVERSAL that they had given the nod to the deal -- becoming the first jurisdiction in the world to do so.
A UNIVERSAL spokesperson told MUSIC WEEK: "The NZCC undertook a very thorough investigative process under chairman Dr MARK BERRY, working with our legal team and with UNIVERSAL MUSIC NEW ZEALAND Managing Director ADAM HOLT."