Latest News from the Industry

Impala: The EMI Acquisition Will Be ‘Blocked Outright’…

There’s just one little problem with the planned purchases of EMI: they might not happen! According to a stern email just sent to Digital Music News by indie consortium Impala, a combination of Universal Music Group and EMI is highly likely to catch the ire of European regulators.  ”Given that Brussels has taken a previous decision that Universal should not be any bigger, we would expect the sale to Universal to be blocked outright, even if it offers to increase the divestments it is prepared to make,” said Helen Smith, Executive Chair of IMPALA.  ”The same would apply to Sony if it buys EMI publishing.”

This is Impala’s moment to stir a tsunami, and Smith pointed to a board meeting in less than 10 days.  ”Impala takes the view that even if Universal proposes to increase the £500 million divestments it is prepared to make, the deal will not be accepted,” Smith continued.  

But wait: who cares about Impala, anyway?  Universal Music Group, Citigroup, Sony, and a bunch of investors that include David Geffen, that’s who.  Impala is the group that successfully forced a second review of the Sony BMG joint venture in 2007, a massive distraction of paperwork, formalities, and government meetings.  The Sony BMG carriage pushed through those muddied tracks, though ultimately, the ill-fated handshake was canceled for broader reasons.

Now, Impala is threatening a similar muscle-flex.  And before the ink was dry on the EMI negotiation, Impala promised to issue a strong challenge.  ”The last time the European Commission looked at Universal, it ordered the company to sell off assets to cut it down to an acceptable size,” the group continued.  ”Since that decision, Universal has grown, which makes it even less likely that the regulators would accept any new acquisitions.

There’s another piece of luggage in the baggage set: Live Nation.  After Universal Music announced a fairly substantial tie-up with the concert giant, Impala issued formal complaints with the European Commission.  So we’ll just add this to the pile.

EMI Says There Won’t Be Any ‘Transaction-Related Layoffs’…

Great news: you just might have a job come Christmas, after all.  As Citigroup now shifts its attention towards transfering the deeds, CEO-for-now Roger Faxon assured the troops that their jobs were safe.    

That is, for at least a few more weeks, or as long as Faxon himself still has a gig. “During this transition period it is business as usual for us,” Faxon emailed staffers worldwide.  ”That means we will continue to implement our current plans and drive the performance of the business. However, to be very clear we are not planning any transaction-related layoffs, in anticipation of the completion.”

Meanwhile, more details and doubts are creeping into the discussion.  Some are seriously questioning whether European regulators will allow the largest major label - ie, Universal Music Group - to get even bigger, at least without a protracted review and/or serious concessions.  And, indie consortium Impala has pretty overt designs to destroy this deal.

Faxon noted that both deals will face regulatory reviews.  But publishing could fly under-the-radar and receive a rubber-stamp.

And on the topic of EMI Music Publishing, more details on the Sony/ATV-led consortium of investors emerged ahead of the weekend.  Perhaps most interestingly, the seemingly-retired billionaire David Geffen and the Michael Jackson estate are part of the consortium, though others include Mubadala Development Company, Jynwel Capital Limited, the Blackstone Group’s GSO Capital Partners.

Collectively, that investment powerhouse helped to outbid BMG Rights Management with a $2.2 billion bid, and win one of the most valuable collections of publishing assets in the world. “Their willingness to step up to Citi’s valuation of the business won the day,” Faxon said.

Study: FM Radio Is Still the Biggest Source for Music Discovery…

One of the oldest platforms is still the biggest vehicle for new music discovery, even among more dedicated music fans. In a just-released joint study from NPD Group and NARM, FM (and AM) radio consistently emerged as the most important place for discovery, with word-of-mouth falling second.    

You’d think platforms like Pandora and places like Pitchfork would beat out local stations and their repetitive playlists, at least among more dedicated music fans.  But among the most dialed-in, ‘committed’ music fans, radio was first, then word-of-mouth, then places like YouTube.  This is a group that spends an average of $267 per year, plus an additional $139 on live shows.

View the Committed breakdown

Streaming sources like Pandora, VEVO, and YouTube are definitely in the picture, and a continuing expansion into apps and smartphones will help.  Perhaps unsurprisingly, Spotify and iTunes are nowhere to be found on this list.

The story gets even more traditional with another group, an older and more ‘comfortable’ segment often raised on radio.  Here, it’s all about broadcast and word-of-mouth, with a less tech-heavy top-ten.

View the Comfortable breakdown

Turns out radio is still a gigantic bullhorn, but also a fairly dumb one.  Instead of stirring excited fans to action, most have no idea what they just listened to.  Instead, they’re listening to ads, a deejay, or the next song.  ”The lack of ‘back announcing’ is a pain point that inhibits consumers of all grades from shopping more,” the researchers relayed.  ”They don’t know exactly what to shop for.”

Roundup

* Vivendi is now addressing rumors that it only plans to fatten Universal Music Group in order to flip it to the highest bidder. “We haven’t grown Universal Music with two major transactions [BMG Music Publishing in 2006 and EMI] just to spin it off,” Vivendi chief Jean-Bernard Levy told the Financial Times.  Levy also pointed to plans to save 100 million pounds ($161 million) through the EMI consolidation, while simultaneously boosting spending on newer artists.

* Jay-Z is now managing a PR mini-disaster. After printing Occupy Wall Street-inspired shirts, it was revealed that none of the profits were going back to the protest effort itself.  The Rocawear shirts, modified to read ‘Occupy All Streets,’ have been pulled from the site.

* Google has mailed invites to a Google Music splash on Wednesday in Los Angeles, though Universal Music Group appears to be the only licensed major.  EMI would theoretically fall under the UMG umbrella, though the recent acquisition isn’t yet approved or finalized.  Warner Music Group and Sony Music Entertainment are still not licensed - and probably won’t be finalized by Wednesday - according to multiple sources.

* The Federal Trade Commission (FTC) is now expected to announce a privacy-related agreement with Facebook, one that could require the network to notify users when any terms related to data-sharing change.

* What’s more lucrative than an iTunes download for Coldplay?  A full-blown stadium tour, that’s what. The band has now announced a number of dates for its summer 2012 stadium tour, starting May 29th at Ricoh Stadium in Coventry.

Source: Digital Music News

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