Wednesday, September 26, 2012

FTC Approves Universal Music's Acquisition of EMI

Well, it's official. Last Friday, the FTC gave a "thumbs up" to Universal Music Group, allowing the company to move forward with it's acquisition of EMI's recorded music division. Needless to say, this has sparked a lot of discussion and debate within the music industry.

Many feel that, even with UMG's planned divestments, this approval puts too much power into the hands of UMG. Controlling such a large percentage of music copyrights could suppress healthy market competition, affecting the diversity of choices that consumers are exposed to as well as the prices they pay for this music. Similarly, UMG could have much more of an influence on the success of new music technology services as they decide whether or not to license music to that service, and if so under what terms.

The American Association of Independent Music (A2IM) has been outspoken in their position against this merger. They recently posted a response to the FTC's announcement standing by their position, and linking through to more in-depth explanations about the negative effects this merger will have on the industry.

Read statements from both A2IM and IMPALA (A2IM's European counterpart) here:

Of course, UMG and other parties with aligned interests (i.e. Live Nation) see things differently. According to Lucian Grainge (CEO of UMG), "EMI has been underinvested for a long while", and he intends to pour a lot of money back into the brand and associated labels. "To have a healthy, strong Capitol Records and Virgin Music is a good thing for the music industry. We will bring more investments by entrepreneurs and musicians than there have been for a long time. We will be doubling the A&R investment these labels have been making in recent years, and that will work its way through the industry ecosystem.

Read Billboard's interview with Lucian Grainge here:

What do you think this means for the industry? Please leave your comments and any links to other good articles below!

More Coverage:

"Universal Music's Acquisition of EMI Approved by Federal Trade Commission" from Billboard

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