Universal Is Now Taking Active Steps to Reduce Its Marketshare...
So, mine is smaller than yours? Seems like an extraordinary utterance in the ego-heavy world of the major label. But faced with a seriously lopsided, post-merger marketshare, Universal Music Group now appears to be taking active steps to reduce its marketshare tallies - and win deal approval. Which could ultimately mean a shift away from counting indie recordings that it merely distributes, but doesn't actually control.
None other than Warner Music Group ex-Chairman Edgar Bronfman Jr. started spilling the beans to Senators last week. We jumped back into the videotape and found this hint.
Universal has tried to portray its marketshare as lower than it actually is by excluding labels that it distributes. But that's disingenuous. Owned and distributed marketshare is the metric Universal uses when talking to potential purchasers of its parent Vivendi shares, that's the metric it uses when seeking better economics from the Copyright Royalty Board, and most importantly, that's the metric is uses when negotiating the terms of its digital deals. When it comes to market power, especially in digital where marketshare includes all music under distribution, there is no distinction between music that is distributed and music that is owned.
This is suddently starting to bleed into other areas. The New York Post is now reporting that Universal held up a routinely-published - and widely-referenced - "Investing In Music" report from the IFPI because of its potentially-damaging marketshare counts. In fact, it appears the report could be delayed until after the European Union finishes reviewing the merger.
Universal... is being blamed for delaying the release of the marketshare report while it tries to gain regulatory approval for its proposed $1.9 billion takeover of EMI's recorded music business...
Now, the question is whether Universal Music will take the extraordinary step of recategorizing its own marketshare tallies with Soundscan. Traditionally, Soundscan counts any signed or distributed by a label - even an indie label could take its ball to another distributor overnight. That's a battle indies have been fighting unsuccessfully for years, but oddly, may suddenly be winning in the context of this massive merger.