Are you sick about hearing of the industry’s demise? Corporate acquisitions and how we’re all just pawns in a blue-chip end-game? How the big fish just keep eating the medium size fish? Small fish are no longer interesting.
Ok, so we’re talking about EMI and how us Indies think it’s the worst thing in the world that Universal have bought them. Yes, the big fish. Let’s be clear, Universal have bought EMI ‘when’ it’s gone through the monopolies and mergers commission. Yes, we know, it’ll get approved with some jockeying and positioning. But is it really a bad thing?
Well, we’re an Indie and it changes absolutely nothing for us and likely, it’s the same for most smaller indies.
So…to the bad. How many real major labels exist now? In Corporate terms…3. Sony, Universal and Warner (Warner to a lesser extent as it relates to the Corporate scale of things in Monolithic terms, market share-wise, they are half a major now). In the late 80’s how many standalone major labels? Nearly 15. So this road has been an inevitable path to be trodden since the rise of the Internet if not before. So quarterly results now matter for Wall Street and in a market for recorded music that is shrinking in units and revenue, the Corporate animal needs to be fed a potent mixture of acquisition to gain market share (especially, if the market is not growing) and new revenue streams in the ‘core business’ to achieve the Corporate end-game. Growth. Can’t grow organically? Buy it.
Working for a Corporate for so many years, our boss will tell you that the hunger for growth and share, drives most of the key decisions and actions. So, with a positive operating profit, EMI was a no-brainer for Universal. And let’s not forget, Sony ATV bought the publishing catalogue if 100,000’s of song rights. What a great way to be number 1 market share overnight!
Some complain, but if you were Lucian Grange? You’d make this decision every day of the week.
Ok, we get there’s less players in the majors, it may in some cases make some roads harder to tread (which remains to be seen) but, hey! The innovation is still with the Indies. Regardless of the ‘Adele’ factor, business for Indies this year has never been better, even if you take the A-Factor out of the equation. Anything that’s cutting edge and innovative creatively, is usually Indie.
But what about the good of this takeover?
We know people who work at EMI and one thing that is important is that Sony and Universal both fundamentally understand what they have. This is their core business and we expect EMI will flourish under the new owners. Is that a bad thing for the creative industries and jobs in the UK and around the world? Can you really say that under the previous owners? They couldn’t make the numbers add up and ran the business on very shaky foundations. EMI artists and employees alike were nervous on so many levels. At least they have some stability now and can move forward. It’s a better thing that EMI are still around, it could have been much worse for this proud company.
EMI are to remain a standalone operation and not be absorbed as a vanity-label for their new owners and this is a good thing for all concerned. In the Corporate world the only company that should be worried about the takeover is Warner and how they will hold on to and grow share. Indies don’t care too much for growing share and making nice on Wall Street. We have our own things to worry about or prioritise things that are important to us.
So, this leaves the Beggars Group as the leading UK music company/label. And they are not happy about the EMI takeover. Let’s not forget Beggars has the biggest album of the year and maybe the decade. They are Independent however the scale of their success is ‘Major’. They innovate and are driven by a passion for the music, not by what Wall Street needs. The Independent sector is in rude health and on the back of a huge growth spurt, regardless of the A-Factor.
When Universal buy Beggars. That’s the time to worry.