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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 perceived size - 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 the IFPI's routinely-published - and widely-referenced - "Investing In Music" report because of its potentially damaging marketshare counts. In fact, it appears the report may now be delayed until after the European Union finishes reviewing the merger.
Now, the question is whether Universal Music will take the extraordinary step of recategorizing its own marketshare tallies with Soundscan. Traditionally, Soundscan counts any artist signed or distributed by a major label - even if 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.
Written while listening to Chase & Status.
Anthony Polis Thursday, June 28, 2012
"even an indie label could take its ball to another distributor overnight"
Really? Overnight?
paulr Thursday, June 28, 2012
Figuratively speaking, yes.
The point I'm making is that there are options in this environment. Just like, I could decide to move to an entirely different colocation server facility 'overnight,' but you're right, there are all sorts of one-time costs and transfer issues to think about. Not to mention contracts I have, support details, etc. etc. etc. So, it wouldn't be this Friday, maybe two, three, for four Fridays from now if we really got a move on (and depending on how much money I wanted to eat).
/paul
Visitor Friday, June 29, 2012
Let it be forever known, market share MATTERS!
That question has been asked increduously by DMN commenters suggesting that market share used to matter. From Edgar's own mouth, this is how digital deal terms are negotiated/determined.
Dig deeper and find that the major labels are assigned market share even for those labels/artists that they only distribute physical products for (even if the same label/artist handles digital directly or via a different digital distributor, i.e. iTunes direct).
A common clause found in distribution agreements offered by major label owned distributors is that the distributed label will not have a stand alone identifiable market share. It's an important step to get indie labels to understand that market share matters and to not allow that clause to stand in their final executed agreement.
SoundScan is a paid for service so you can only see the details/results of the above by purchasing one of their market share reports. But if you purchase that report (or have a friend who has access to SoundScan who can run it for you) take a look and try to find the market share for indie labels distributed by a major label distributor. It's eye opening.
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