(RockAndMetal.com) (11/16/03)

By Michael Bennett

BRUSSELS, BELGIUM - European independent music companies oppose the joint venture announced last week between BMG and Sony and also the planned merger between EMI and Warner.

IMPALA, the independents' body in Brussels, is confident that any and all such mergers by the majors will be blocked because of the impact on competition.

The independents do not accept that these moves are a valid response to the crisis in the recording sector which needs less rather than more concentration.

The independents object because further market concentration causes more damage to competition in the music market, reduces consumer choice and severely impacts cultural diversity.

It will enhance the majors' dominance to the detriment of the independents who represent the entrepreneurial and creative part of the music market.

This was the European Commission's conclusion the last time EMI and Warner attempted to merge in 2000. The specificities of the music market mean that the EU's assessment that five majors is acceptable and four or three is not, remains valid regardless of changing market conditions.

The independents point out that the crisis in the recording sector is mainly the result of supply problems and the majors' trading practices, which are themselves the product of concentration.

Legitimate recorded music and methods of supplying it to consumers have become less attractive and less seductive. The industry has failed to listen. This is the real crisis.

Further concentration will simply exacerbate the cause. Concentration kills diversity and music. The remedy is more competition and less concentration.

The independents are concerned about the negative impact across the whole value chain from record companies to publishers to artists, performers, employees, managers, retailers, composers, writers, collecting societies and of course consumers.

The independents will formally oppose the deals through IMPALA.

Michel Lambot, IMPALA President and Director of Play It Again Sam/Vital said: "What is important is competition and market access. It is remarkable that the parties are even attempting this race, which highlights the weakness of their case."

"In one word we are not against the majors but prefer to see six of them rather than three or four." "It is also of a primary importance not to leave three or four multinational groups deciding with Apple and Microsoft what will be the future of artistic creation and artist remuneration."

Patrick Zelnik, IMPALA Vice President and President of Naive said: "We are confident that the Commission will block these moves because of their impact on competition and cultural diversity. The crisis in the record business is on the supply side not the demand side."

"The parties are hiding behind market decline. Further concentration will simply exacerbate the problem. What is required is new business models that are meaningful to the consumer and effective competition."

Martin Mills, IMPALA Board Member and Chair of Beggars Group said: "This is about dominance, control and manipulation. This is not about music. Do we want more Universals? Look what that has brought us."

"There may be a crisis in recorded music but there has never been more demand for music. As record companies it is our task to meet this demand by being technology and artist friendly. We need to be imaginative and serve music fans."

IMPALA is the international trade association devoted to representing the interests of independent record companies and publishers and to promoting the expansion and competitiveness of independent music in the interest of cultural diversity.

IMPALA was established in April 2000 to help independent record companies and music publishers represent their own agenda and organise themselves in the face of increasing concentration in the music sector dominated by 5 majors.

The independents are world leaders in terms of R&D and discovering new music and artists. Despite this, they face increasingly complex barriers to trade and severe market access problems. Their market share is in decline and fluctuates widely from territory to territory.

Although specific strong markets such as the UK pull the independents' share across Europe up to 20.8%, this does not reflect market reality in the majority of European territories, where the share of the independents is considerably lower.

IMPALA has over 1,800 members, including many of the top independents: Divino Music Media (Spain), Beggars Group (UK), Epitaph (US/NL), Playground, MNW, Gazelle (Sweden), Naive (France), Edel Music (Germany), PIAS Group (Belgium), Roadrunner (The Netherlands), V2 Music Group (UK), and Wagram (France).

IMPALA also claims several international trade associations from Norway (FONO) France (UPFI), the UK (AIM), Germany (VUT), and Sweden (SOM) as active members.

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