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BASCA calls for Sony’s EMI deals to be blocked

By | Published on Monday 1 October 2018

BASCA

The British Academy Of Songwriters, Composers And Authors – BASCA to its best mates – has joined pan-European indie label trade group IMPALA in speaking out against Sony’s bid to take complete control of the EMI Music Publishing catalogue. The songwriter group says the proposed deal will create a “major-superpower” in music rights that will “limit creator choice” and “potentially undermine the future autonomy of creator rights”.

Sony Corp, of course, led a consortium to buy the old EMI Music Publishing business in 2012, appointing its own music publisher, Sony/ATV, to administrate the EMI rights. Earlier this year it announced its intent to buy out all but one of the other investors involved in the 2012 deal. It then subsequently confirmed that a separate arrangement had been agreed with the Michael Jackson estate, which also had a stake in the EMI catalogue.

Those transactions would therefore make EMI Music Publishing a wholly-owned subsidiary of Sony Corp, which would presumably properly merge it with Sony/ATV. Once the entertainment conglom’s global music publishing business is a combined wholly-owned entity, it could more closely align Sony/ATV with the Sony Music record company. Especially once long-term Sony/ATV boss Marty Bandier has stood down next year.

The deals are subject to regulator approval, and Sony formally filed its paperwork with competition regulators in Europe ten days ago. The European Commission now has a month to consider the proposals after which time it can either approve the transactions or instigate a fuller six-month investigation. After that, it could either green light the deals, block them, or push for remedies to counter competition law concerns.

In a statement this morning, BASCA noted that: “Sony is already the largest music publisher in the world, as well as the second biggest music label. If this sale goes through Sony stand to nearly double their publishing catalogue, growing it from 2.16 million to 4.21 million compositions, securing a potential hegemony of the global music market”.

“Combined with Sony’s label interests”, the BASCA statement continued, “this merger would effectively create a ‘major-superpower’ with new capability to dominate licensing markets and – via direct online licensing deals – raise serious implications for the autonomy of collective rights management”.

Collective licensing is much more common on the songs side of the music business, with the collecting societies – or collective management organisations – often controlling some elements of the song copyrights directly. This reduces the power of the music publishers to an extent, especially in Continental Europe. And the power of the societies may well be used as an argument by Sony/ATV as to why its proposed acquisition of EMI Music Publishing outright doesn’t create competition issues.

Though songwriters often argue that the big publishers have too much influence over certain collecting societies. Meanwhile in the digital space the bigger publishers have moved to direct licensing of Anglo-American repertoire, albeit in partnership with the societies which, outside the US, control the performing right element of these works.

Expanding on BASCA’s concerns over Sony’s proposed EMI deals, the organisation’s Chair, Crispin Hunt, referenced the European Parliament’s recent backing of safe harbour reforms in the draft new European Copyright Directive. These should increase the liabilities of user-upload platforms like YouTube. That reform is about ensuring certain web-giants don’t distort the digital music market, but there should be similar concerns about music majors becoming so dominant that they can skew things to their advantage, Hunt reckons.

He said: “At a time when the EU is looking to restore a balanced, diverse and competitive online marketplace for music, to allow the concentration of market leverage in this way seems antithetical to that purpose. As yet, there appears little evidence that the unchallengeable dogma of the market-share-music-model will successfully deliver the flourishing musical environment that consumers desire”.

“Sony is a great music company”, he acknowledges, “indeed they acquired, publish and service much of my catalogue”. But, Hunt goes on, “if we are to heed the economic lessons of ‘too big to fail’, it seems incautious to concede near absolute control of the music market to one player. Setting up the music ecosystem so that it once again runs on competition as opposed to oligopoly is the key to a flourishing market, both online and off”.

As for the impact Sony’s expansion in the songs business could have on the collective licensing system, Hunt says: “While we recognise the advantage of large music companies in securing value for collective licenses, we also note that large catalogues can exert an asymmetric influence on CMOs. Naturally, such catalogues tend to optimise policies for the convenience of the big guys, which could disadvantage the expanding indie and self-releasing sector. The CMO network provides a critical lifeline for most music creators and indie publishers alike. Gigantic catalogues can be good for business – but a Titanic one?”

Speaking for the BASCA Songwriters Committee, songwriter and journalist Helienne Lindvall, references her own experience of a past merger of two other music publishing majors.

“Creators should expect that their copyrights will be known to the publisher and exploited fully”, she says. “They should also expect their publishers to work closely with them on a personal level to develop their careers. The opposite has been found to be true for songwriters and composers – including myself – when their rights are transferred from their original publisher to a corporation such as Sony, in merging vast catalogues”.

The organisation concludes by confirming that “BASCA is seeking for the Sony transaction to be blocked in favour of EMI being run as a standalone business or else combined with smaller music companies to guarantee a fair and competitive market for European talent”.

IMPALA, which has opposed a number of mergers between major music rights companies over the years, is also calling on EC regulators to block the deal. It said last week: “The only solution is to block the deal now. This is necessary to avoid long term harm for consumers as well as other players in the music sector, from writers to streaming services, independent publishers, collecting societies and record companies”.



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