Today, Universal Music Group (UMG) is taking its case to absorb EMI Music to U.S. lawmakers, and they have some big names in the music industry testifying.U MG would purchase EMI’s music catalog from Citigroup for $1.9 billion. The worry amongst those opposed to the merger is that it would create a “super-major label” with 41% market share and the power to dictate terms of digital distribution of music.
Live Nation CEO Irving Azoof, on the other hand, thinks that competition in digital music services should make the UMG-EMI merger less of a concern. “With services like iTunes, CD Baby, Top Spin, Reverb Nation, Pro Tools, Facebook, Spotify – you name it – artists can do everything themselves very professionally,” said Azoff in written testimony to be submitted to the Senate Judiciary Committee’s antitrust subcommittee.
Not everyone shares Azoff’s opinion, though. As Public Knowledge’s Gigi Sohn, who will be testifying today, writes, “This would be bad for consumers, who benefit from lower prices and more choice in a world with more new services and fewer middlemen. And as our friends at the Future of Music Coalition have so artfully said, these new services also benefit both independent music labels and unsigned artists.”
New digital services provide that kind of access and as a result have been wildly popular – in 2011 alone, consumers bought 1.3 billion singles and 100 million albums at a cost of nearly $2.5 billion. A combined UMG-EMI is a threat not only to the current services that exist (and there aren’t that many to begin with), but especially to any future ones that might arise.
Some are concerned that a powerful UMG-EMI super label would not be inclined to offer their music to new digital music service start-ups, which have been the evolving music distribution in the Internet age, not the big labels.
The Senate Judiciary Committee, of course, cannot rule on the merger—that power is entrusted to the Federal Trade Commission. However, if the Senate is seen to be rather cool with the deal, then perhaps this could influence the FTC’s delibration.
According to Reuters, other witnesses expected to testify at the hearing are EMI Group Chief Executive Officer Roger Faxon and merger critics Warner Director Edgar Bronfman, Jr., Beggars Group Chairman Martin Mills and Gigi Sohn, president of Public Knowledge.