AS EXPECTED, IMPALA OPPOSES VIRGIN/DOWNTOWN DEAL

Like clockwork, European independent trade association IMPALA has raised concerns about the acquisition of Downtown Music Holdings LLC by UMG’s Virgin Music Group, describing it as a “land grab” that “seriously reduces independent routes to market.”

In a statement released following news of yesterday’s deal, IMPALA Executive Chair Helen Smith said, “We expect competition authorities in key jurisdictions to carry out thorough investigations and block these deals.”

IMPALA describes the acquisition as “part of a clear commercial strategy to target independent distribution to gain market share and control.” Referencing UMG’s acquisition of independent label and services company [PIAS] in October, the org says the Downtown deal accounts “for a significant portion of the independent sector's delivery to digital services.”

This, it posits, squeezes the independents further in an already very concentrated market and helps UMG move deeper into the market for distribution and services for labels and artists. “This means more market share and gives UMG control over the opposition,” IMPALA continued. UMG’s ongoing copyright infringement lawsuit against Believe and Tunecore, it believes, is another part of this strategy.

Smith suggests that UMG’s market position be cut back to what was set by the European Commission when the company tried to buy EMI in 2012 and was required to make a number of divestments, alongside its digital deals being supervised for 10 years.

Martin Mills, founder of Beggars Group, also issued a strongly worded statement: "The cynical use of the Virgin brand, once synonymous with independent entrepreneurship, should not hide the fact that this is about utter dominance and control. Paradoxically, UMG’s artist-centric stance means it has already disenfranchised millions of artists whose rights they are now acquiring. This is another step on the road of UMG's pretense to be the independents' fairy godmother. But there’s a wolf under that cape.”

IMPALA likewise points a finger at Sony and Warner for buying stakes in leading independent-music companies in national markets across Europe and elsewhere. “When we look at how the market has evolved, it’s clear that the majors are carving up the world among them," the org said. "IMPALA calls on regulators to intervene and stop this trend. This goes beyond the independent sector; it's diversity as a whole that is at stake and this will impact fans in Europe and across the world.”