Music, as they say, is the international language – not English, Chinese or whatever. Notice, we even sometimes love a foreign song without really understanding what the lyrics mean; but simply because of the melody, we grow fond of it. The wordings, well, they end up as some magic spell so to say.
But what would happen if two of the biggest players in the music industry merges? Well, some two weeks ago, Universal and EMI was finally given the go signal to merge; however splitting EMI into two, with recorded music going to Universal for around $1.9B and its publishing business to Sony for $2.2B.
The other side of music is really about domination… and money. This is why many reacted when Universal and EMI were still in merger talks and until now. See, the music industry is one of the most “compressed” industries with only 4 real players in this planet – Universal, Warren, Sony, and EMI. But now, it’s down to three. Obviously, those against the merger were worried of unfair competition in the making, of fewer or controlled choices, of the innovation factor among others.
Yet, the merging companies got their approval from EU and FTC citing “different portfolios” and Universal’s agreement to sell 60% of EMI’s businesses in Europe, according to revenue. Universal thrives on popular artists while EMI, though with big names of its own, is more on older titles. This explains the need to sell some of EMI’s businesses – to combat monopoly.
Still, why would Universal want EMI if this would only leave them with just about 40% of the business? And why would EMI want to sell if they are only 4 players in the field? First, to up-end competition. For the second question – struggles, mainly due to piracy.
And this brings us to the real issues of this industry.
This is actually the real competitor of the Big 4, err 3. Piracy is one price to pay for technology and it’s not going to be easy to stop this. Music giants could only push for tougher anti-piracy laws and actions with various agencies and governments but you could only give a good fight by lowering product prices, doing more promotional events, concerts and tie-ups, and asking the artists themselves to appeal to their audience.
Clearly, if one is really after profits, all the Big 3 needs to do now is to “rival” iTunes and not simply offer licensing terms to digital platforms; hence, connive and create a digital platform themselves. Come to think of it, they are even “closer to the sources” than Steve Jobs and iTunes. On the other hand, stiffer licensing could develop grudges at first but would be better for digital platforms than having a bigger rival snuff them out. Lastly, tie-up with big smartphone companies.
When an industry with little players becomes littler, one has to understand that even more profit is in the bag; thus, as the Leader, the focus now should not simply be on profits but on the welfare of emerging artists, tinkerers, unexplored or underdeveloped areas, and more choices for music lovers. Be more socially responsible.
Remember, Music is Arts. Do not let Arts be spoiled by money, stained by bribery, or messed up by profits, but think for the fans you owe and help those in the industry reach their potential. Explore. Their success is your legacy.
What’s your take?