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Universal Music Group's takeover of competitor EMI, along with the sale of EMI's music publishing business to Sony, have the potential to thwart innovation in digital music, drive up prices and minimize choices for consumers, Public Knowledge and Media Access Project told the Federal Trade Commission (FTC) today.
In a letter to the agency, the two groups noted that the purchase would reduce the number of major record labels from four to three, giving the combined UMG/EMI company about 40 percent of sales. Similarly, the sale of the music publishing business would "give it a significant blocking position" by allowing it to control 32 percent of publishing revenues worldwide. A combined company would hold publishing rights to 64 of the Billboard Hot 100 titles from 2011, the groups said.
The letter noted: "In essence, the two majors’ whims would control the emergence of new distribution options for the entire industry. Digital services that do not require performance rights or non-statutory mechanical rights in music publishing would still come up against Universal, as the dominant player in recorded music, while services requiring performance rights licenses or non-statutory mechanical rights licenses would need to deal with both Universal and Sony, on each company’s own terms, in order to launch a viable service."
The letter is here.