EU, US allow Universal and EMI to decline together

It's been a long, slow process, but today both the EU and American authorities have sighed and said it'll be fine for the two decaying bodies to merge themselves into a single, leeching exercise.

As part of the deal, some chunks of EMI will be cut off and left to flounder on their own - Parlophone will be looking for a new, different owner to manage its decline.

Experts nodded wisely at the news that the Universal-EMI merger will finally happen, noting that formal EU approval officially kick starts the long, slow process towards Universal-EMI merging with Warners.

UMG lob even more out the balloon

Is the hot-air-balloon of the UMG takeover of EMI rising high enough yet?

Apparently not - even throwing Parlophone (except the good bits) out of the merged company isn't pleasing European regulators, and so UMG is now looking about for other parts of the company to divest in order to keep everyone happy.

If it keeps agreeing to sell off bits at this rate, Universal might wind up smaller than it was before it tried to swallow EMI. The whole thing is starting to feel like the sort of 'what is point' that Quentin Letts might feel like investigating.

Universal takeover of EMI hits more grief

In Europe, Universal are pleading with the EU like a dumped boyfriend trying to respark a relationship ("How about if I stop with the Parlophoning? Babes, I'll get rid of Virgin if you want me to...").

Now the EMI takeover is running into trouble in the US, with the Senate starting to wonder if it's good news. MediaGuardian reports on the meddling:

Senators Herb Kohl and Mike Lee, the chairman and ranking member of the Senate antitrust subcommittee respectively, have written a six-page letter to FTC chairman Jon Leibowitz urging him to closely scrutinise the deal to see if it will substantially injure competition in violation of anti-trust laws.

The letter raises several concerns, including that the new combined company could threaten the development of new digital music services and that CD prices could rise.

"We believe this proposed acquisition presents significant competition issues significant competition issues that merit careful FTC review to ensure that the transaction is not likely to cause substantial harm to competition in the affected markets," the letter says.

Universal could always play the "hey, we already act like a monopoly - that's what the RIAA is for" card. But that might not help.

Universal throw more stuff away from EMI takeover

Universal is now so desperately scared of not being able to takeover EMI that it has proposed a deal whereby it'd offload European rights to the EMI catalogue:

EMI chief executive Roger Faxon has written an internal email to his staff outlining which parts of the music business Universal has proposed to sell off, including Mute, Chrysalis (excluding the Robbie Williams catalogue) and Ensign labels.

Included in that disposal would be the Pink Floyd catalogue and the recently concluded new deal with Guetta, along with his catalogue.

Pink Floyd's EMI catalogue includes Dark Side of the Moon, Wish You Were Here and The Wall – albums that still sell extensively and are believed to bring in millions of pounds a year.

Faxon said the divestments only relate to the exploitation of EMI's repertoire in Europe.

It's an interesting move - if only because it might raise a question for American regulators about why Universal thinks a combination of it and EMI would distort the European marketplace, but not the US?

Offloading Parlophone

As Universal continue to try throwing things out the basket to see if their EMI takeover can get lift-off, the latest plan is to try and flog Parlophone to BMG.

Yes, yes, BMG had stopped being in the recorded music business when it withdrew from what is now Sony alone, but that doesn't mean it wouldn't be interested in getting back into such a vibrant, profit-loaded sector, right?

There is a slight problem with the plan, thought. The idea is to convince that the EU that the embiggened Universal wouldn't control too much of the market for the biggest selling acts, but, says MediaGuardian:

One source with knowledge of the situation said that any potential sale of Parlophone, one of EMI's most famous labels, would include Universal "cherry picking" key artists to keep such as the Beatles and, potentially, Coldplay.

It's like those hoarding programmes where the guy agrees to get rid of his enormous collection of plastic horses, only to get to the shop and announce that he's keeping all the dappled ones.

Universal-EMI merger catches in The Voice

Here's some fun: the ill-fated deal to funnel off the acts from the UK version of The Voice to Universal hasn't just lumbered the label with a barn full of unsaleable singers; it's a mighty spoke in the deal to bring Universal and EMI together, too. MediaGuardian explains:

The European commission document is understood to have raised the spectre of "over exposure" that the enlarged Universal Music will get across all manner of media platforms and markets. If combined, the two companies would distribute 41% of music sold worldwide.

A particular concern of the commission's is the share of airtime Universal artists would get on radio and key TV shows – it is understood that the Universal-dominated BBC talent show The Voice is raised as an example – where three of the four judges, will.i.am, Jessie J and Tom Jones, are signed up to labels owned by the company.

Obviously, there are plenty of other examples of how one company dominating the music industry is bad for everyone (effectively, the way they sing with the one note of the RIAA-IFPI cartel proves how rotten that is), but how amusing if the attempt to hammer a super-major falls down in part because of The Voice.

Executives haunted for all time, when they close their eyes, by a vision of Jessie J spinning round on a chair yelling "this is how Team Jessie does it" over and over and over.

UMG-EMI merger goes to Washington

The US Senate is currently grinding through a decision on whether it should smile upon the merger of Universal and EMI. Yesterday senators held a hearing to allow themselves to be better informed before (meeting shadowy lobbyists, accepting small envelopes and) delivering their verdict.

As MusicAlly reports, much of the focus was on the digital music market. Warner's Edgar Bronfman Junior fretted that the 50% of biggest-selling artists held by the new Universal would allow it to decide which digital services thrived, and which wilted:

”At 50% of the hits, Universal can say no to anything”

Universal were shocked, shocked, at the suggestion they might use their new superpowers for anything but good:

UMG boss Lucian Grainge disagreed.

“The thought that we would constrict our artists who we’ve invested in, and construct the investment we make in EMI to dissolve the market would be commercial suicide,” he told the hearing. “We would be insane not to license, develop, make our music available through as many platforms, through as many retailers as possible.”

Yes, the idea of a major label trying to use its catalogue to strangle upstart, disruptive businesses and technologies - where would anyone get an idea like that, eh?

You suspect, though, that Bronfman is less worried about the idea of record companies taking on digital companies than he is about the new company's greater heft within the RIAA, the majors' preferred choice of digital closedown.

Sony suddenly comes up with a digital strategy

It might be a little late in the day, but Sony seems to have decided to try taking digital music seriously.

It had owned 51% of the incorrectly named IODA - "Independent" Online Distribution Alliance - and now it's going to buy up the rest, in order to be able to merge it with the other significant American digital distributor, The Orchard. Sony will then own about half of the new company, which will be called The Orchard.

Keeping it? This is a fairly dull post, but probably quite significant: as a label, Sony is as clueless as its competitors about how to make money online; as a distributor, it might well be getting its act together.

MySpace: You can't expect lots of visitors in a little month

Against a background of mutterings about a possible merger with Vevo, the team in charge of MySpace desperately try to keep up spirits and value.

Mike Jones, CEO, talks to Business Insider and tries to explain the collapsing audience figures:

BI: When I look at MySpace traffic charts, just from ComScore or any of the outside auditors, it looks like a crumbling mess – a halving year-over-year situation. What numbers are you guys looking at to have a more optimistic picture? Please explain.

MJ: That's a fair question. First, February was a short month where we and a lot of other sites were impacted.

Yes, Mike. February 2011 was a short month. I'm pretty certain Febuary 2010 was also pretty short, too, so how does that explain a year-on-year fall?

Still, next year there's an extra day in February. Something to cling too.

Jones then tries to explain how 'audience tumbling away' is actually some sort of delicate rebalancing act:

In addition to that, we have an expected audience shift. We launched a new product in November, we've substantially changed the value proposition for our audience, and we expect that we're going to be changing the nature of our registered userbase, which is something that's been impacting us on our monthly metric basis.

What Comscore doesn't necessarily capture for us is the internal metrics that show success against the strategy.

What Jones appears to be saying is that because fewer people are coming, that's making the visitor numbers look bad.

But the strategy - oh, think of the strategy!

It doesn't show that we've roughly doubled our mobile traffic in the last few months because of products that we've offered on the mobile platforms.

Given the massive boom in the number of Smartphones, you'd expect a rise in mobile traffic. It does you little good if all you're doing is shifting what's left of your audience from one platform to another.

It doesn't show an increase around our content products.

The bits that are doing well are doing well.

I would say we're going into a new market that's an extremely large market of entertainment content. I think that we're migrating portions of our current audience against that strategy. We're attracting new audience against that strategy and we have a portion of our audience that's a legacy audience that has to decide whether they want to be a part of that strategy.

I think this sort of talk from the management - "you're part of our oldest audience, so shape up or ship out" - might be the reason why MySpace is broken.

Warners: Back in the real world

More interesting than Bronfman's honking about how people giving him money in return for listening to his products isn't a viable business model was his greasing of the cake tin for a possible merger with EMI.

Assuming Guy Hands loses his bid to stop the effective owners of EMI from selling up, Bronfman certainly isn't ruling out a hook-up. In fact, he's spraying breath freshener, kicking the dirty pants under the bed and putting on a sexy CD in preparation:

“We feel consolidation certainly is possible,” Edgar Bronfman Jr told analysts on a conference call to discuss Warner’s first-quarter earnings, saying the regulatory climate had not hardened since the European Commission’s 2007 approval of the merger between Sony Music and BMG.

Mr Bronfman tempered his remarks by saying he hoped EMI would be able to “resolve its difficulties” in a way that strengthened the music industry.

"But" he continued, "you know the way two friends will do that thing where they agree they'll marry if neither has got married by the time they're forty? Well..."

Guy Hands is pulling the same face he made when Bronfman muttered "have you ever heard the phrase 'friends with benefits'?"

It might be out of Hands, erm, hands, though, reckons the FT:

“They are marching towards a transaction of some sorts,” said Richard Greenfield of Pali Research. Warner had been “hoarding cash” over recent quarters and could find “hundreds of millions of dollars” in savings from such a deal, he added.

The potential for savings by only having one bunch of clueless accountants bumbling around wishing it was still 1985 is certainly huge. Somehow, I'm betting those aren't the costs that get taken out.

Ticketmaster/Live Nation: Go on, do it

The age of pretend choice in major live events ticketing is drawing to a close, as America follows Britian in indicated governmental relaxity with a Ticketmaster/LiveNation merger.

The Justice Department have pretended to be all strict and pretend to insist on countermeasures:

Under the proposed settlement, Ticketmaster must sell its Paciolan ticketing unit to Comcast-Spectacor which has already signed a letter of intent, or to another company approved by the Justice Department, the agency said.

Additionally, the merged company would be barred from retaliating against any venue owner that uses another company's ticketing or promotional services and must license its primary ticketing software to Anschutz Entertainment Group, the Justice Department said.

Ticketmaster are said to be happy to do this, just as soon as they've jacked up the mysterious booking fee to maximum.

Ticketmaster: Competition Commission smile

It's the most wonderful time of the year; the time when people slip out unpopular announcements in the hope that nobody notices.

Like the Competition Commission's decision that, actually, the creation of a Ticketmaster/LiveNation behemoth won't crush the customers under its weight:

[A]fter lobbying from the two companies which argued that critics had overstated their influence in the music industry, the commission dropped its opposition. Christopher Clarke, deputy chair of the commission, admitted it was "unusual" for the competition watchdog to change its mind in this way.

A key plank in the commission's ruling was the damage that could be caused to German ticketing firm CTS Eventim, which signed a deal with Live Nation to expand into the UK in 2007. Now, though, the commission has accepted Live Nation's argument that CTS will not lose out, and that it would be complicated and unfair to force the merged entity to sell off its UK ticketing arm.

Oh, it would be complicated, would it? Oh, how frightfully rotten that would be. You wouldn't want to make the otherwise completely zipless union of two totally separate companies to become a little complicated, would you? Not if the only thing it would do would be to stop a massive corporation stitching up the live music market in the UK.

Ticketmaster/Live Nation - not so fast...

Given that, working on their own, Ticketmaster and LiveNation hardly work in the consumer's interest, it's perhaps unsurprising that the Competition Commission has come out against them uniting into one near-Monopoly.

Only a massive monopoly ticketbeast can save music, says massive monopoly ticketbeast

The proposals to merge Ticketmaster and LiveNation into a single focus of hatred and disgust have come before the wise lawmakers on Capitol Hill, with attempts to save the entire US economy taking back seat to hearings on the plan:

The subcommittee on antitrust, competition policy and consumer rights used the approximately 90-minute hearing to discuss how the possible merger could affect ticket prices, the impact it would have on new ticketing businesses wanting to enter the marketplace and how it might expose sales data from rival promoters, among other issues.

They also crammed in a few questions on what it would mean for Guam, the likelihood of life on other planets and why gorillas don't keep evolving into people. After all, you'd find it difficult to fill an hour and a half with just the future of live music.

The CEOs of the two companies went to Washington, to tell everyone how great their new world would be made. Live Nation president/CEO Michael Rapino and Ticketmaster CEO Irving Azoff can hardly wait to be allowed to make out in public. It's not just a new world they're proposing - it's a whole different world. One with different physics in:

"Artists don't sit around and say, 'Let's raise prices,'" said Azoff, who also heads up Ticketmaster's Front Line Management, which has a roster of more than 200 acts. "If we're successful in doing this, I for sure think we'll be able to show that ticket prices will go down, because it will create a bigger pot of money for artists from other avenues in their careers."

Ah yes. Because merging a giant promotion company with a giant ticket agency is an action which generates large pots of money from out of nowhere. Like when you open a self-seal envelope in the dark and it makes blue light. That's exactly the way this will make money.

Let's buy Azoff's starling claim for just a moment, and imagine Kid Rock and his manager getting ready to set prices for his shows next summer.

- Hey, Kid, you were going to charge thirty bucks a ticket, right?
- Yeah
- Did you know that the geological collision of Ticketmaster and LiveNation has created huge new pots of money?
- No... can we have some of that money?
- Yes. Yes, we can.
- Right. So... given that we've got all this new money, do we want to drop the prices of tickets any?
- Do we have to? Because of the new money?
- Well... no. But we could. We could share our good fortune with the fans.
[long, awkward pause]
- Okay, thirty bucks a ticket it is.
- Plus booking fee.
- Plus booking fee.

And that fee is where the real trouble lies. Sure, bands might not put up their prices simply because Evil and Evil have become Consolidated Evil, but surely the whole being-less-competition-in-the-music-ticketing-business might very well force up the fees being charged on top of the ticket price?

I could be wrong, though. Apparently the concert-goers will welcome their new twin-faced, one-bodied overlords with in-street merry jigging:

Rapino said the combined companies would not hurt music fans or rival businesses. "This deal would benefit them as we spur competition and innovation," he said. "If we don't make significant changes to the business model and if we don't build new structures, we may be back here in the future for another hearing on the death of the American music industry."

Nothing spurs competition like having a single, unassailable corporate monolith at the heart of an industry. Who does TicketNation think is going to be competing with them, as they suck up every ticket deal for every venue of any size in the US? Does he think that the free market will suddenly spur everyone to travel to Boise to go and see jugbands as a result of the merger?

Still: you've got it there in black and white - if you don't let the executives share a board table, you will kill music. Think hard, and picture a world where LiveNation does a bit of ticketing and mostly promotes, and Ticketmaster does a bit of management but mostly charges scandalous mark-ups on ticket prices. What does that world sound like? It's silent, isn't it? Even the birds will stop singing if this merger is allowed to fail.

It's as serious as that.

Still, there's all those other ticketing businesses:

Azoff argued that the merger could bring new opportunities for existing ticketing companies. "We've been told and we believe that if this merger were approved, that many of our larger clients would opt out," he said, pointing out that Ticketmaster has about 11,000 clients. "From hearing all the comments that I hear, I think that so many people would be upset about this merger that I'm sure a lot of our clients would leave."

Not, of course, that anyone is upset at the merger. Azoff is quite blase about the prospect of other clients running to those other ticket agencies, such as... uh, the other ticket places. Almost as if, ooh, his new company would run a load of large venues, represent the management of several big bands and promote a sizeable chunk of America's live music.

As a general rule of thumb, if a manager is prepared to stand up in public and virtually hope that customers might take their business elsewhere, the customers are unlikely to be blue chip.

Some promoters are worried that Ticketmaster having a big promotions business of their own would leave their data open to being shown to the competition:

Rapino assured the subcommittee that Live Nation Entertainment's concert division "would not have access to the ticketing division data. He added, "the concert division should have no access to anything [...] any other promoter does in any building or anything in the ticketing business."

And, if we've learned one thing in the last twelve months, you can always rely on a massive corporation to be nothing other than totally trustworthy.

The newly merged Sirius-XM might get swallowed

Now merged, still struggling - and now Sirius XM is in talks with DirecTV's owner Liberty Media about a possible takeover.

Damn - I had drawn 'consumer-facing synergetic value release' in the sweepstake

Ticketmaster CEO Irving Azoff can't contain his excitement at the new, merged Live Nation-Ticketmaster hybrid:

"This merger will create a pipeline for all rights holders to reach their consumers, whether it is our team, an artist or a record company.

It is time that our business delivered forward thinking marketing solutions and we intend to do just that."

Let's just hope when they put tickets for forward thinking marketing pipelines on sale, they don't screw up, tell people they're sold out and try and offer them the same thing with a seventy-thousand per cent mark-up, eh?

Still, let's be fair - the man is honest. He didn't create a piece of meaningless, impenetrable marketing crapola to try and pretend there's anything in it for the consumers.

To be really fair, I should point out that Azoff wasn't using a clunking metaphor when he spoke of a pipeline; LiveNation Ticketmaster Don't Mention Ticketmaster are actually developing a pipeline to deliver musicians to customers. Early tests have been a bit buggy; the beta service was suspended when Jordan Knight was delivered at a dangerously high pressure and took out two family homes and a small dairy in Missouri.

Two become one: LiveNation, Ticketmaster complete merger

The board are still deciding if they'll just have one giant boot to tread on the face of gig-going humanity forever, or if they'll continue to use two smaller boots, but the Ticketmaster - LiveNation merger is go. The surprise? They're dropping the Ticketmaster name from the new company:

The combined company will be called Live Nation Entertainment.

The combined entity will have to try and somehow convince competition authorities that this isn't anti-competitive; if they can manage that they'll form into a single blob.

In future, only one company will gouge you for booking fees

The proposed merger of LiveNation and Ticketmaster into one single near-monopoly booking agency does have something going for it: with just one company, Live Nation Ticketmaster, to rail at, it's going to leave a fist free for waving at someone else.

Sony BMG ceases to be

Sony BMG has vanished, vanished a surely as a fairy circle at daybreak - the Japanese partner has completed purchase of the German half, and has announced it now wishes to be known as Valerie.

Sorry, no - got the paperwork muddled. That was an announcement in a postcard from my Uncle Terence. Actually, Sony's music wing will now be called Sony Music Entertainment Incorporated. It's hoping we'll learn to love it as SMEI, though, which is almost an anagram of Smile.

So, that new name, then: a twisted smile with a bit missing.

Sony takes it all

There's not much surprise - although their corporate pages don't mention it anywhere - that Sony has bought out Bertelsmann's stake in Sony BMG.

Well, no surprise that it's happened - it's been expected all week - but you'd have to wonder why Sony is so excited. The analysts line is that this is going to make it easier to integrate Sony music product into other Sony businesses; but we can't imagine that the poorly organised Sony corporate structure is going to make it any easier just because there's three letters gone from the letterhead.

You wonder if the real plan is to make it more-or-less impossible for anyone investigating the original merger of Sony and BMG to enforce a divorce, while allowing Bertelsmann to escape a sector in which it has lost heart.