In response to A2IM’s July 30, 2012 Press Release: A2IM on Universal/EMI News – “Negative Impact on Music Consumers is Clear”, Billboard Magazine printed this follow-up news item: Pressure Mounts For Universal Music To Make U.S. Concessions on EMI Deal by Ed Christman.
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For Immediate Release
July 30, 2012
American Association of Independent Music (”A2IM”) President Rich Bengloff’s statement on Universal’s proposed European Commission concession package related to its proposed acquisition of EMI:
A2IM members read with interest Friday’s news reports about the submission of Universal’s proposed concession package, in regards to the proposed acquisition of EMI’s recorded music business, that was sent to the European Commission. If the news reports are correct, almost all of the proposed divestitures and behavioral remedies are focused entirely overseas – creating a major problem for U.S. consumers, artists, labels and the technology companies they work with.
As we have noted in prior statements, “the increased concentration of copyright ownership, historically, has always hurt the Independent label community in terms of achieving economic parity and market access.” With no divestitures or operating remedies proposed for the U.S. – the world’s largest music market and home to the vast majority of the technology companies who work with the music community – the negative impact on music consumers and emerging technology companies is clear. Such market concentration will diminish healthy competition, providing one dominant market leader damaging clout in terms of both consumer pricing and the means with which music is made available. The effect on both promotional access and monetization for independent music labels and artists is equally clear. Approval of such an acquisition with no U.S. remedies will further constrain our resources (with higher potential distribution fees and less money available to create diverse music for consumers both very probable). We continue to join our European Impala Independent music label colleagues in their concern over this acquisition and reiterate A2IM’s opposition to this transaction and, given Universal’s penchance to monopolize the marketplace, we call on the FTC to take the required steps to insure that this transaction is blocked so that it does not move forward.
There was a great deal of press pick-up on our Press Release which will hopefully have an effect on the FTC deliberations. Please see links to three of the press items below.
A2IM is a not-for-profit trade organization serving the Independent music community as a unified voice representing a sector that comprises over 30% of the music industry’s market share in the United States (and almost 40% of SoundScan digital sales). The organization represents the Independents’ interests in the marketplace, in the media, on Capitol Hill, and as part of the global music community. A2IM is headquartered in New York City.
The organization’s board of directors is composed of the following: Daptone Records General Manager Cathy Bauer; Sub Pop VP of Business Affairs Eric Brown; Epitaph General Manager Dave Hansen; Yep Roc Records Co-Owner Tor Hansen; Alligator Records Founder/CEO Bruce Iglauer; The Beggars Group Founder/CEO Martin Mills; Glassnote Records General Manager Chris Scully; Naxos of America CEO Jim Selby; Tommy Boy CEO/Founder Tom Silverman; Jagjaguwar/Dead Oceans/Secretly Canadian Founder/Co-Owner Darius Van Arman; Razor & Tie COO Victor Zaraya.
For more information, or to become a member, please visit www.A2IM.org.
For press information on A2IM, please contact Elizabeth Lutz [email@example.com], David McTiernan [firstname.lastname@example.org], or Rebecca Shapiro [email@example.com] at Shore Fire Media, 718.522.7171.
The proposed acquisitions by Universal Music of EMI’s recorded music group and Sony Music of EMI Publishing are being reviewed by the FTC in the United States and the European Commission in Europe. The review process continues and the EU announced a more detailed investigation by the EU last week. Read more background from our AIM colleagues in the U.K. and Impala colleagues in Europe.
F.B.T. Productions sued Universal on behalf of the publisher’s share they control from Eminem’s compositions saying that digital downloads were not subject to the contract royalty rate but instead was licensing income subject to a 50% payout as Eminem’s contract was signed in 1998, predated the digital era, and did not address digital downloads. The U.S. 9th Circuit Court of Appeals in San Francisco ruled last year that the artist and his producers were entitled to be paid this 50 percent of the sale price, and, unfortunately yesterday the Supreme Court ruled that they would not review the lower court decision. Read more here.
Universal Music Group noted in a statement, “the case has always been about one agreement with very unique language . . . as it has been made clear during this case, the ruling has no bearing on any other recording agreement and does not create any legal precedent”.
We think most music labels would agree with Universal Music Group that these are CD replacement sales and not ancillary licensing income. What to do now? A2IM does not give legal advice but we do want to share that some of our members are following Universal’s lead and taking the position that the Eminem case does not set precedent but relates to the wording in his particular contract only and that each contract needs to be interpreted individually. Then a label can negotiate a contract amendment, presuming the artist doesn’t want to go to court, and come up with an amicable solution/contract amendment. Again we will not be giving legal advice but anyone wanting to discuss this further can call us at A2IM.