Warner Music wants to buy EMI
p2pnet.net news:- The on again off again marriage between Big 4 Organized Music cartel members Warner Music, US, and Britain’s EMI is on again. Fourth, or is it fifth, time lucky?
“Warner Music Group Corp. confirmed today, in response to EMI Group plc’s (”EMI”) announcement of earlier today, that it has approached EMI about a possible acquisition of the entire equity of EMI,” says a statement.
If this comes off, the Big 4 will become the Big 3, the other members being Sony BMG (Japan and Germany), whose merger was, and still is, marred by ongoing objections from IMPALA, the independents group, and France’s Vivendi Universal.
The new Warner EMI would still be the junior member of the cartel.
“WMG approached EMI on January 24, 2007, following WMG having obtained the agreement of the Independent Music Publishers and Labels Association (IMPALA) to provide full and complete support for the acquisition of EMI by WMG before the European Commission and other relevant regulatory authorities in light of commitments to enhance competition and market access.”
Warner says if it makes an offer for EMI “within the meaning of the U.K. Takeover Code, it has agreed with IMPALA, subject to the closing of such an offer, to implement “certain measures”.
What this boils down to is: IMPALA now appears to be onside, having been concerned about how a merger of the two corporate music industry companies might affect is members.
Almost a year ago news of the possibiity of a wedding between Warner and EMI surfaced. Again. They had tried to merge before.
Warner says in its statement the “measures” would include:
* providing specified funding for (but taking no equity participation in) the recently announced Merlin initiative, the new global digital rights licensing platform established by the independent music labels to represent the world’s independent music sector;
* ensuring the divestiture of certain recorded music assets to reinforce the market power of the independent sector; and
* pursuing various other behavioral commitments which have the aim of benefiting the recorded music market as a whole and, in particular, the independent music sector.
“WMG believes that the agreement reached with IMPALA and the measures envisaged under it, by setting a new framework for the relationship between a combined WMG and EMI and the independent music sector, which is designed to enhance competition across the industry, improves the prospects for regulatory approval of a combination of WMG and EMI,” it declares.
“The agreement between WMG and IMPALA does not require IMPALA to change its position in relation to any other pending regulatory and legal proceedings. IMPALA will maintain its position that the Sony/BMG and Universal/BMG transactions continue to raise competition issues unless suitable remedies are offered.”
But, “insiders were shocked by the promise to support the tie-up in return for assurances of funding for the smaller labels’ newly launched digital licensing and anti-piracy group, Merlin,’ says The Guardian.
“It just seems outrageous,” it quotes one as declaring. “It just smacks of an absence of scruples.”
Competition lawyers questioned how much IMPALA support for Warner would actually help an EMI takeover succeed given its stance on Sony BMG, says the story, going on:
“Angelo Basu, at the law firm Pinsent Masons, said the European commission would be likely to question why Impala saw a move from five to four major music labels as a bad thing where Sony BMG was concerned but acceptable when it came to Warner and EMI. The independents maintain that Warner is the most willing to cooperate on reviving flagging music sales but Mr Basu said that may have little effect.”
“The European commission are not too keen on behavioural measures as they are hard to police,” The Guardian has him saying. Furthermore, the commission would be canvassing industry opinion on the latest merger bid and, “Sony BMG will be quite keen to take on Impala’s old role.”
EMI recently announced a major re-shuffle of its cabinet and also expressed doubts about the viability of DRM (Digital Restrictions Management) consumer control.
Would the new company subscribe to the same heretical thoughts, or revert to the party line that all consumers are inherently crooked and will steal from the Big 4 at any and every opportunity and must therefore be constantly threatened with jail and lawsuits, as well as unworkable “copyright protection” applications?
Also See:
on again off again – EMI, Warner merger?, April 24, 2006
statement – Proposal to Acquire EMI Group, February 20, 2007
major re-shuffle – EMI: Nicoli to the Rescue!, January 13, 2007
viability of DRM – Drop DRM, boost sales, say execs, February 15, 2007
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February 21st, 2007 at 12:42 pm
It’s obvious what Warner is trying to do this time around. Warner wants to prevent fellow company EMI from dropping DRM given Warner’s flat out refusal to drop DRM themselves, as stated in their reply to Jobs’ letter. By merging the compnay, EMI can either be talked out of or forced from using DRM-free technologies by Warner.