Business News Week In Five

CMU Digest – 1 Mar 2013

By | Published on Friday 1 March 2013

Universal Music

The five biggest stories in the music business this week…

01: Universal completed its EMI divestment obligations by selling a stake in Now! to Sony and the Co-op company to [PIAS]. The mega-major agreed to sell off nearly two thirds of EMI’s European catalogues and operations and some of its own periphery units in Europe to get regulator approval of its wider acquisition of the EMI record company. All of the deals, including this week’s arrangements with Sony and [PIAS], will now need to be approved by the European Commission, though with the indie label community formally supporting the biggest, Warner’s acquisition of the majority of the EMI assets for sale, few expect any major issues at that stage. Sources close to the deal making say Universal will net in the region of £600 million from its various deals, not far of half what it paid for the EMI recorded music business outright. CMU report | Variety article

02: The IFPI revealed that the global recorded music market grew slightly, by 0.3%, in 2012, the first growth in the record industry since 1999. The record label trade body said this was a sign the sector was turning a corner, and that the digital music business was starting to mature. Factors behind the good news include the continued growth of downloading, subscription and ad-based services gaining momentum, the growth of smart phone and tablet usage, and the emergence of successful legit services in some markets that have not traditionally generated much revenue for the record business. Of course, even with the slight growth, the record industry is still 40% smaller than it was in the late 1990s, and some question if it will ever return to those heights again, though, of course, the exploitation of sound recordings is just one strand of the wider music industry. While the UK market did not see growth in 2012, British music was behind the world’s two most successful artists of the year in terms of record sales, Adele and One Direction, who between them outsold the five next biggest record selling acts combined. CMU report | Guardian report

03: The BPI won three more web-block injunctions, this time against Fenopy, H33t and Kickass Torrents. It means the UK’s six main internet service providers – Sky, BT, Everything Everywhere, TalkTalk, O2 and Virgin Media – will have to block their customers from accessing these file-sharing sites. BPI boss Geoff Taylor said “blocking illegal sites helps ensure that the legal digital market can grow and labels can continue to sign and develop new talent”, but the Open Rights Group said widespread web-blocking would “encourage new forms of distributed infringement” and that “the BPI should be mindful that their tactics may have the opposite effect to their intention, by legitimising and promoting resistance to their actions”. CMU report | ORG statement

04: Three-strikes went live in the US. Well, the Copyright Alert System went live, via which a number of US internet service providers will voluntarily send letters to customers believed to accessing unlicensed sources of content. Unlike in France, New Zealand and (in theory) the UK, this graduated response system is not the result of new laws. Up to five warning letters are likely to be sent under the American programme, with final sanctions for those who ignore the warnings likely to vary according to ISP. CMU report | PC Mag report

05: Bertelsmann took complete control of BMG, the music rights company it founded in 2008 (having sold off the original BMG record company and publishing business). Equity group KKR had been a partner in the new BMG since very early on, providing the cash that enabled a prolific period of acquisition making the firm a significant player in music rights worldwide. Rumours that KKR would exit the venture had circulated for sometime, but the New York Post reported a deal was “imminent” last week. Bertelsmann announced it would take full control of the BMG business this morning. CMU report | FT report

In the CMU this week, good times galore with Doldrums leading the conversation, Jack Cooper from Mazes choosing the tunes, and Chris Cooke and Andy Malt solving all the world’s problems via the latest CMU Podcast. Approving also went on, mainly in relation to The Deer Tracks, King Tuff, Linnea Olsson and Yeah Yeah Yeahs. This morning we started listening to the full David Bowie album stream on iTunes. And we may, or may not, have been enjoyed watching Harry Styles’ balls being attacked by a Scottish shoe from every possible angle. Take that, official Villain Of The Year (according to those ever trusty NME readers, who possibly don’t have a great grasp of what constitutes villainy).

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