5 of the turnover of Universal Music in the third quarter

If the Union Impala, which brings together producers independent European, is strongly opposed to its buyout of BMG Publishing, the music of Bertelsmann publishing activity project, Universal Music, poster frankly his optimistic about getting the green light from the Commission European. Less than a week after the notification of the operation, which opens a first period of five weeks before a possible investigation of Brussels services, Universal Music feels indeed convinced that the operation does not affect competition. "It's a reconciliation between the numbers three and four of music publishing in Europe, in a fragmented market where independents hold 40 of the market and where competition is strong." "In addition, the barriers to entry do not exist in the area of music publishing, which makes it very dynamic market between publishers", it strikes at Universal Music.

Many arguments which the subsidiary Vivendi drive, already a world leader in the field of music recorded, should persuade the Board of the propriety of the operation. But the current context the music industry, after canceling last summer by European justice in the authorization given by the Commission at the merger between Sony Music and BMG in the drive, weighs at least for the implementation of a survey of the Commission.

In five weeks, it is unlikely that Nelly Kroes services have the time to examine the record and all its implications on the music industry. Impala, which had denounced the operation after its announcement, must soon occur to reiterate his opposition and alert the Commission services. For the Union, the world that deal with Universal Music in recorded music and music publishing in would an actor with too much weight.

Unique opportunity

The operation is important for Universal Music. It must allow it to double its market share in the music publishing in Europe to 22 (see chart) and exceed EMI Publishing, first European and world editor in the field of music. The French group is needed: as shown in its turnover for the third quarter, published yesterday, its growth is down in music. Activity declined by 5 (taking into account the effects of foreign exchange), and this despite the boom in sales of music in digital format (126 million euros, an increase of 88) who represented 11.5 of the turnover of Universal Music in the third quarter. Sales of music on physical media (CD, DVD) remain too erratic, with a development which is impossible to predict.

In this context, the music publishing is an active key to a major as Universal Music: revenues from this branch, whose growth is more regular than those of the disk, do not only sales of discs but also depend on all the possible uses of music (advertising, video games, concerts, theatre...). Most of rights, more the effect of size is full and smooth the results of the major... An opportunity as the sale of an asset of the size of BMG Publishing and his rights over a million titles is too scarce (the opportunity of a "Decade" according to Universal Music) to be ignored. And Vivendi did not hesitate to EUR 1.63 billion to win the auction...