Techdirt. Stories filed under "consolidation" Easily digestible tech news... http://www.techdirt.com/ en-us Techdirt. Stories filed under "consolidation"http://www.techdirt.com/images/td-88x31.gifhttp://www.techdirt.com/ Fri, 21 Sep 2012 11:28:48 PDT EMI Universal Deal Cleared, Giving One Company Veto Rights On Pretty Much Any New Music Service Mike Masnick http://www.techdirt.com/articles/20120921/11071820460/emi-universal-deal-cleared-giving-one-company-veto-rights-pretty-much-any-new-music-service.shtml http://www.techdirt.com/articles/20120921/11071820460/emi-universal-deal-cleared-giving-one-company-veto-rights-pretty-much-any-new-music-service.shtml both approved Universal Music's deal to buy EMI today. Under the terms from the EU, they will have to sell off some EMI assets, including the iconic Parlophone label. There is a part of me that thinks that the complaints against this deal are a bit overblown, seeing as it's about linking up two dinosaurs who've failed to adapt -- and bringing them together won't fix any of the major problems those two labels face. But there are some very real concerns about how this could impact innovation online. For better or for worse, setting up digital music services today requires doing deals with the major labels. If you're just doing webcasting (i.e., broadcast) there are agreed upon -- but insanely high -- rates you can use (more on that later today). However, if you're doing anything interactive or offering digital downloads, then you have to cut deals.

A story earlier this week at the Huffington Post, does a really nice job laying out how this deal effectively gives a few Universal Music execs veto power over any new music startup. Because if you're launching a music service today, you generally want it to offer a lot of popular music, and between Universal Music and EMI, they control a huge portion of that market -- much of it historical back catalog stuff, but also some of the more popular mega-acts today. The HuffPo writeup notes that Steve Jobs played the labels off of each other to get them to sign on to iTunes. But, today, the new UMG could control that process.
According to Paul Vidich, a former Warner Music executive who closed the iTunes deal, the pending merger between Universal and EMI could put an end to that state of affairs.

"Without a UMG-EMI license, they won't have a business," said Vidich, referring to new digital startups. "Within the new UMG-EMI there will be only a handful of senior executives who make these key licensing decisions. So this small group will become the gatekeepers for music startups that require these licenses. The psychology, pay packages and strategic interests of these executives will have an outsized impact on diversity and innovation in the entire online music industry."
Remember, Universal is the company whose former CEO, Doug Morris, once gleefully explained how he didn't understand technology and didn't even try to hire someone who did, because he wouldn't know how. Amazingly, his board let him keep his job for many years (he's since moved on to head up Sony Music). Morris' replacement at UMG, Lucian Grainge, has talked about how the CD format is important to the company's future. And he's now basically the guy with veto power over any new music service.

That does not bode well for the online digital music marketplace.

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]]> well-that-could-be-a-problem http://www.techdirt.com/comment_rss.php?sid=20120921/11071820460 Mon, 25 Feb 2008 04:01:00 PST EA Makes A Bid For Take Two: Soon You'll Be Able To Shoot John Madden In GTA Mike Masnick http://www.techdirt.com/articles/20080224/163805331.shtml http://www.techdirt.com/articles/20080224/163805331.shtml ActiBlizsion merger that someone was going to make a bid for Take Two Interactive, makers of the super popular (if controversial) Grand Theft Auto series of video games. Given Activision and Blizzard are focusing on their own merger, it probably makes sense that industry leader EA has stepped up to make the Take Two bid. EA apparently tried to get Take Two's board to agree to a deal, but when it turned EA's offer down (at a rather large premium), EA decided to go directly to the shareholders in a hostile bid. Take Two claims that the current offer undervalues the company (despite being a 64% premium on the stock price) because it expects the company's stock to rise after it releases the next edition of GTA in the spring. Of course, aren't stock prices supposed to reflect that kind of thing already?

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