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Digital distribution of music has changed the way we experience music and has begun to level the playing field between major record labels, independent labels, and unsigned artists. But major labels still dominate the market, controlling which new digital services live and die.
Now, major record label Universal Music Group (UMG) is attempting to acquire another major label, EMI. This would result in two companies—UMG and Sony—controlling almost 70% of the recorded music market.
Public Knowledge's Position
Public Knowledge believes that that type of market power would raise prices, harm independent labels and unsigned artists, and stunt the growth of innovation in the music industry. At such a high rate of consolidation, no new digital music service could exist without the blessing of UMG and Sony (and only those that do business on UMG and Sony’s terms would get their blessing).
Competition among production and distribution intermediaries in the music industry ultimately gives more choice to musicians and leads to better market offerings for their fans. Competition among distributors increases the diversity of choices for consumers, empowering consumers to choose the services that best fit their needs at the best price. If one or two major labels obtain enough influence to stifle the development of new digital music services, those services never will be able to gain traction in the marketplace, and potential competitors will fail, not on their merits but based on the service’s inability to strike a deal with an inordinately powerful supplier. As a result, both musicians and audiences will suffer for lack of innovative competitors in the online music service marketplace.
What you can do to help
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- Give policy makers a piece of your mind: act now.
For more information
- Read our whitepaper, The Case Against UMG-EMI
- Read PK President Gigi Sohn's testimony before the Senate Antitrust Subcommittee.
- Read Staff Attorney Jodie Griffin's blog post OMG, UMG! Why Four Major Labels Are Better Than Three.
- Read our letter to the Senate Antitrust Subcommittee.
- Read our letter to the Federal Trade Commission, asking them to further scrutinize the proposed merger.