EU Commission: Competition - 30/12/08

EUROPEAN PARLIAMENT QUESTIONS SONYBMG APPROVALS
"The elected European Parliament has challenged the European Commission about it's speedy decision earlier this year to allow Sony Music to buy Bertelsmann out of the two companies' joint venture record company, SonyBMG, which put the second biggest music firm in the world into the ownership of one organisation, Sony Corp.

They also question the Commission's wider policy regarding allowing such big companies to be created in the music and cultural industries without safeguards to protect smaller independent firms - in essence questioning the approval of the SonyBMG merger in the first place." [CMUDaily]

Sony BMG Merger Still Under Scrutiny December 23, 2008
"The European Parliament continues to seek further scrutiny of the Sony BMG merger, although the major has since demerged and will officially be renamed Sony Music Entertainment in 2009. EC Commissioner for competition Neelie Kroes has six weeks to provide a written explanation regarding competition in the music market." [Billboard]

The standard of proof in EC merger control: the implications of the Sony BMG saga
"One of the most important developments in EC competition policy during 2006 was the Court of First Instance’s (CFI) Impala v. Commission judgment annulling the European Commission’s approval of the merger between the music units of Sony and Bertelsmann. It harshly criticized the Commission’s Decision because it found that the evidence relied on was not capable of substantiating the conclusion. This was the first time that a merger decision was annulled for not meeting the requisite legal standard for authorizing the merger. Consequently, the CFI raised fundamental questions about the standard of proof incumbent on the Commission in its merger review procedures. On July 10, 2008, the European Court of Justice overturned Impala, yet it did not resolve the fundamental question underlying the judicial review of the Sony BMG Decision; does the Commission have the necessary resources and expertise to meet the Community Court’s standard of proof? This paper addresses the wider implications of the Sony BMG saga for the Commission’s future handling of complex merger investigations. It argues that the Commission may have set itself an impossible precedent in the second approval of the merger. While the Commission has made a substantial attempt to meet the high standard of proof imposed by the Community Courts, it is doubtful that it will be able to jump the fence again in a similar fashion under normal procedural circumstances." [IES]

Pan-European Indie Label Group Attacks EC’s Decision to Allow Sony Corporation Buyout of Sony BMG (Because In Other Parts of the World, People Actually Freak Out When This Shit Happens)
"Thanks to the European Commission’s decision to let Sony Corporation gobble up Sony BMG, we’re one step closer to a multi-headed monster that will be known as Sony Music Entertainment Inc. The EC’s 2007 decision to allow the merger means that Sony Corporation of America is now free to acquire the 50% share held by Bertelsmann AG of Germany in Sony BMG. Yikes." [TinyMixTapes]

Music News Bulletin - 07/11/08

Collaborative music site MixMatchMusic seeks first institutional round November 4, 2008
"Two months after its official launch, collaborative music platform developer MixMatchMusic Ltd. is seeking a first round of venture funding of up to $3 million. According to founding CEO Charles Feinn, the company has begun meeting with VCs but hasn't received any term sheets yet. The startup has three full-time employees and has been subsisting on a friends-and-family round since being formed last year. (The company was among several that presented at last month's SanFran MusicTech Summit, an event I wrote about here.)" [TheDeal]

Sony and Bertelsmann End Their Partnership in Music
Sony and Bertelsmann said on Tuesday they would unravel their joint venture in music, ending a four-year partnership that has generated more dissonance than harmony. [OopsTime]

EMI announces restructuring plans 07/11/08
"Troubled music giant EMI will today announce major restructuring plans.

Elio Leoni-Sceti, chief executive of the company's recorded music division, will unveil the plans at a presentation to staff. The Italian Executive will announce that the business will be split into three distinct global units: new music, catalogue and music services, and with an increase in marketing resources, according to the Financial Times. The online music service EMI.com will launch this December." [Guardian]

In Defense Of Major Labels 3-11-08
"Sometimes you write something and it gets taken the wrong way. Last week, for instance, a post about EMI criticized the prevailing online consensus about the free-ness of music. Now, since the post didn't say anything about the many bad things major labels do, some thought that the post was taking the side of major labels and the RIAA. Not true, but fair enough. One of the problems with blogs as a platform is that they make it much easier to criticize things other people say than to offer a cohesive and nuanced position of your own. Here, then, is one take on the decline and fall of the music business and related issues (the RIAA, DMCA, downloading, layoffs, indie as a model, creative commons, etc.). The bottom line: everyone is going to have to accept that things are going to get a little worse." [Idolator]

Now That’s What They Called Synergy! 10 Years of Pooling Hit Singles 3/11/08
"In commemorating the first decade of the Now That’s What I Call Music! album series in the United States, Wednesday’s New York Times does a fine job running down the relevant stats: 29 volumes in the main series! 61 million in sales! 12 Britney Spears songs! But the piece fails to mention the core reason that the series—also celebrating a quarter-century in Britain, where it started—launched over here in the first place: the U.S. labels’ murder of the commercial single." [Idolator]

Music News Bulletin: 24/10/08

What lies ahead for Sony Music?
"Since Sony purchased BMG's half of the companies' joint venture, people have wondered what Sony will do to make the acquisition pay off. Leadership under one roof is a good start. That should have a positive impact by itself. Integration was brought up in the Sony Corp. press release that announced the acquisition. Said Sir Howard Stringer,

This acquisition will allow us to achieve a deeper and more robust integration between the wide-ranging global assets of the music company and Sony's products, operating companies and affiliates. It enables us to offer a total entertainment experience to consumers." [Coolfer]

Sony seeks to harmonize music, electronics
"Now that Sony Corp. and Bertelsmann AG have broken off their troubled relationship, known as Sony BMG, the Japanese company hopes to harmonize its consumer electronics and its music, a duo that was badly out of sync.

The music business combination four years ago made Sony BMG the world's No. 2 record label, generating savings and pre-empting other industry consolidation. But the venture's cost-cutting didn't keep pace with falling CD sales, and the two companies' digital strategies didn't jibe. So they called it quits, and Sony bought out its partner for $900 million in a deal that closed Oct. 1.

Selling its 50 percent stake will let Bertelsmann refocus on its growing TV, magazines and book publishing businesses. And full ownership of the music venture gives Sony control of a medium it can use to drive electronics sales, just as it is using wholly owned Sony Pictures to help sell the Bravia line of TVs. The new company is called Sony Music Entertainment Inc.

"It's nice to see Sony at least trying to line up some of their content efforts with their hardware," said Michael Gartenberg, vice president of global strategy for Jupiter Media. "Up until now, the left hand never seemed to know what the right hand was doing."" [RecordOfTheDay]

Click here to read more from the Music News Bulletin

Music News Bulletin - 23/10/08

Sony completes buyout of Bertelsmann's stake in music label October 2, 2008
"Bertelsmann AG's planned divestiture from the Sony BMG Music Entertainment Inc. joint venture is now complete, as Sony Corp. [SNE] announced that it had bought out the German media giant's 50% stake. The sale, rumored for months and announced Aug. 5, was approved by EU regulators in mid-September.

The newly renamed Sony Music Entertainment Inc. will be a wholly-owned subsidiary of Sony Corp. Bertelsmann's stake was valued at $900 million, but an additional $300 million in cash on the company's balance sheet pushed the value of the deal up to $1.2 billion." [TheDeal]

Play.com Steps Up Music Download Battle With 3 Million DRM-free Tracks From All Four Majors 10 Oct 2008
"UK e-tailer Play.com has stepped into the music download battle by signing the four major music labels to its PlayDigital online store to offer more than 3 million DRM-free MP3 tracks that can be played on any device. In a move directly aimed at iTunes, tracks and albums currently being sold at a cheaper price than at the Apple- owned store. More details at sister site paidContent.co.uk." [PaidContent]

Baidu Unveils New Internet Song Channel October 22, 2008
"After Google (GOOG) launched a free genuine music search service, Chinese search engine Baidu (BIDU) has now also taken action to resolve the problems brought by pirated music and the search company ahs launched a channel for newly published songs and music.

The new channel, which is entitled "New Song Debut", is a cooperation with seven record companies, including Emperor Entertainment Group, Ocean Butterflies Music Group, EMI Music, Music Nation, Rock Records & Tapes, Huayi Brothers and B in Music." [ChinaNews]

Blip.fm raises funding, CEO Yasuda discusses reorg October 23, 2008
"Fuzz Artists Inc. chief executive Jeff Yasuda revealed to me Monday at the SanFran MusicTech Summit that his company has raised additional funding in support of its Blip.fm social music playlisting service. We followed up that brief conversation with a longer one, in which he offered additional details on the fundraising and his plans for the company.

Yasuda hit up Fuzz's existing angel investors for the company's fourth installment of capital since 2005, although the total funding for his operation remains less than $10 million. He declined to name the investors. The entrepreneur said in May that unidentified individuals connected with Google Inc. [GOOG] have invested in the past. The round remains open, with room for first-time backers to participate, Yasuda added." [TheDeal]

Music News Bulletin - 20/10/08

Bertelsmann today launches its new BMG Rights Management business, promising tailor-made services for songwriters and performers who want support in “the creation, marketing and licensing, collection and accounting, as well as advance financing of their music repertoire”
"The new organisation launches with a selection of European music catalogues that the company retained from the former Sony BMG portfolio. These include works from more than 200 artists and the company is planning to expand on this, initially with further European acts.
Bertelsmann says that its “core competency” will be “advising songwriters and performers in building their repertoire, supporting them with marketing and licensing services, and providing transparent coverage of all their rights management needs”. It will also provide financing during the rights-building process." [MusicWeek] [BillBoard]

The Mechanical-Copyright Protection Society (MCPS) has announced new rates and blanket licensing deals for UK independent production companies using library music
"The Independent Production Company (IPC) licence provides access to over 300,000 pieces of music from 150 music libraries covering all genres and styles.
The efficient ‘one-stop-shop’ system means only one application is required for all music use to be covered." [MusicWeek]

Online music piracy fell by 10% in 2008, according to new findings from Entertainment Media Research
"The company’s latest Digital Music Survey attributes the fall to the changing attitudes of internet service providers to piracy –earlier this year ISPs agreed to send letters to customers it suspects are sharing files under pressure from the BPI. he survey, which polls 1,500 UK consumers, also point to the popularity of music videos on YouTube as a further sign for optimism among the music industry." [MusicWeek]

U.K. Government Aims For ‘Digital Britain’
"The U.K. government is to develop a "Digital Britain" action plan in an effort to ensure the U.K. will be at the forefront of innovation and investment in the digital and communications industries. The report will be led by the first minister for communications, technology and broadcasting, Stephen Carter. The government says the sector is worth £52 billion ($89.9 billion) a year to the economy." [BillBoard]

Bush Signs Controversial Anti-Piracy Law
"U.S. President George W. Bush signed into law on Monday a controversial bill that would stiffen penalties for movie and music piracy at the federal level. The law creates an intellectual property czar who will report directly to the president on how to better protect copyrights both domestically and internationally. The Justice Department had argued that the creation of this position would undermine its authority." [BillBoard]

Music News Bulletin - 06/08/08

Why is Bertelsmann selling, and Sony buying? August 5, 2008
"Tuesday's news confirmed what reports speculated since March. Sony Corp. is acquiring the 50% stake in its Sony BMG joint venture with Bertelsmann AG it didn't own for $1.2 billion. In March, Bertelsmann CEO Hartmut Ostrowski hired Morgan Stanley to conduct a global strategic review of the German media giant after poor earnings in 2007, which it blamed on its Direct Group book club activities (sold to Phoenix's Najafi Cos.) and settlement costs related to now-legitimate file-sharing site Napster. It also sold its BMG Music Publishing division for $2.1 billion to Vivendi SA." [TheDeal]

Sony pays $1.2bn to buy out Bertelsmann from Sony BMG August 6th, 2008
"After protracted negotiations, Sony is now the full owner of Sony BMG, having paid former partner Bertelsmann Media Group $1.2 billion to buy out its 50% stake. The company will be renamed as Sony Music Entertainment, and will sit within Sony’s North American division." [MusicAlly]

Sony Takes It All August 06, 2008
"There's not much surprise - although their corporate pages don't mention it anywhere - that Sony has bought out Bertelsmann's stake in Sony BMG.

Well, no surprise that it's happened - it's been expected all week - but you'd have to wonder why Sony is so excited. The analysts line is that this is going to make it easier to integrate Sony music product into other Sony businesses; but we can't imagine that the poorly organised Sony corporate structure is going to make it any easier just because there's three letters gone from the letterhead.

You wonder if the real plan is to make it more-or-less impossible for anyone investigating the original merger of Sony and BMG to enforce a divorce, while allowing Bertelsmann to escape a sector in which it has lost heart." [XRRF]

O2 UK launches My Play Music Store With Sony BMG (UK)
"O2 UK, following the footsteps of Vodafone, will now be doing a music play of it’s own with Sony BMG. MyPlay is now added to its O2 Active portal, that offers videos, full-track downloads and realtones in a store. The uniqueness of My Play is that users get to music “simply by clicking on artist microsites as their gateway into the store”." [WirelessFederation]

EU Public Affairs Monitor - 30/07/08

Bertelsmania comes to Luxembourg 11 July 2008
"They don't come much longer and more complex than Case C-413/06 P Bertelsmann and Sony Corporation of America v Impala, yesterday's decision of the Court of Justice of the European Communities in a case that, while not actually being an IP case, says a lot about how the ECJ views the concentration of IP rights -- even weak ones like copyrights.

The ECJ was asked to rule on an appeal against the decision of the Court of First Instance (CFI). That court, in a controversial decision, annulled the European Commission's approval of a 2004 merger between Sony Music and BMG. According to the CFI, the examination into whether there was already collective market dominance in the music industry, and whether that dominance might grow following the Sony BMG deal, was too cursory." [IPKitten]

Did MEPs vote to cut off copyright infringers' internet?
"The Registry reports that Members of the European Parlioament (MEPs) may have accidentally included measures forcing ISPs to cut off internet access for those who infringe copyright through dowloading. The test calls for "cooperation" between ISPs and those "interested in the protection and promotion of lawful content". The trouble is, no one quite knows what "cooperation" means, including Malcolm Harbor, one of the MEPs responsible for the text." [IPKitten]

International Confederation Condemns U.S. Orphan Works Act
"CIAGP is the visual arts division of CISAC. CIAGP collectively acts for over 100,000 artists, photographers and illustrators through artists rights societies in 31 countries. CISAC works towards increased recognition and protection of creators' rights. Founded in 1926, CISAC is a non-profit organization headquartered in Paris."

Well, well, well. Hundreds of thousands of artists around the world have come out against orphan works. And you know what? They managed to do it without taking money from Michael Petricone, Gary Shapiro, or the Digital Freedom Campaign. Or Google for that matter. In fact, these artists are probably the only ones who haven't taken the king's shilling." [MusicTechPolicy]

Music News Bulletin - 29/07/08

Music for fuel: It's harder than ever to jam econo
"It's harder than ever to jam econo. Mike Watt of The Minutemen coined that phrase—"We jam econo"—in the '80s to mean rocking, especially on the road, in the most efficient, thrifty way possible. But as the numbers at gas pumps continue to rise without signs of improvement, several local bands and their national counterparts are trying to keep touring on the cheap. Some may not be able to keep up or, worse still, get started." [IndieWeek]

Last FM pays out - but not everyone's happy
"Last.FM has started to pay artists directly for music listened to through its website. Good news, huh? Perhaps. But not everyone is thrilled. Merlin, one of the independent label umbrella groups, has issued a grumpy statement:
“The Program announced today does not appear to offer any compensation for any past illegal use of repertoire. It is unclear to us whether or not the terms and conditions of the Program are intended to prevent master owners pursuing such compensation."" [XRRF]

Napster looking ripe for a takeover July 18
"Shares in music subscription service provider Napster Inc. [NAPS] have lost so much value that its cash assets may now be worth more than its market capitalization, meaning that the business itself would have negative value. Napster had $69.8 million in cash, cash equivalents and short-term investments, according to regulatory filings; the company's street value dipped as low as $50.2 million this week. Recent takeover speculation may have fueled a minor comeback, although Napster's market capitalization stands at about $65.5 million in midday trading." [TheDeal]

Will Sony pony up for BMG venture? July 29, 2008
"It's almost certain they'll blame the Internet. But it'll be hard to muster any sympathy for Bertelsmann AG when it finally sells its half of the Sony BMG music venture to its partner. After all, the German media behemoth has made billions from its online investments. Though neither Bertelsmann nor Sony Corp. will talk, both the FT and Nikkei recently have found leaks, saying the Japanese group will soon pony up as much as $1.5 billion to once again reign alone over its own label -- albeit one with one less competitor." [TheDeal]

EU Commission: Competition - 28/07/08

Rebalancing EC Merger Control: The ECJ’s Judgment in Case C-413/06 P (Bertelsmann and Sony) July 28th, 2008
"On July 10, 2008, the European Court of Justice overturned the European Court of First Instance’s Impala judgment, which had previously quashed the European Commission’s clearance decision of the Sony/BMG merger. Even though the ECJ judgment contains no groundbreaking novelties, it brings some important clarifications with regard to a number of procedural and substantive issues of EC merger control law.

The judgment is of particular interest because the ECJ commented for the first time on the CFI's Airtours criteria for the establishment of collective dominance. With regard to procedural issues, the ECJ largely restores the pre-Impala situation and reduces the uncertainty and imbalance caused by the CFI’s judgment as to the importance of the statement of objections (“SO”), the conduct of merger control proceedings before and after the adoption of a SO, and the standard of proof and of adequate reasoning that the Commission has to respect when drafting merger control decisions." [GlobalCompetitionPolicy]

The European Commission’s Reexamination of the SonyBMG Merger: A Precedent-Setting Attempt to Jump the Fence July 22nd, 2008
"On July 13, 2006, the European Court of First Instance annulled the European Commission’s decision authorizing the creation of Sony BMG, a joint venture incorporating the worldwide recorded music businesses of Sony and Bertelsmann. In its 2004 clearance decision, the Commission had concluded that the merger would not create or strengthen a collective dominance position on the part of the majors (i.e., Universal, Sony BMG, Warner, and EMI). In Impala v. Commission, however, the CFI harshly criticized the decision because it found that the evidence relied on by the Commission was not capable of substantiating this conclusion.

Notwithstanding the fact that the European Court of Justice has now set aside Impala because of a number of identified errors of law, the judgment continues to raise fundamental questions about the standard of proof incumbent on the Commission when dealing with merger cases. The 2004 Sony/BMG decision indeed should be seen in light of the CFI’s consecutive annulment of three prohibition decisions in 2002: Airtours v. Commission, Schneider Electric v. Commission, and Tetra Laval v. Commission. The resoluteness by which the CFI criticized the Commission for its analysis of the evidence and questioned the rigor of its decisions in these judgments was unprecedented. The three judgments, which were delivered over a five-month period, gave rise to a flood of criticism of the Commission’s merger analysis and opened a debate about the economic soundness of its decisions." [GlobalCompetitionPolicy]

Bertelsmann and Sony Judgment: Welcome Clarity for EC Merger Review from the EU’s Highest Court July 28th, 2008
"On July 10, 2008, the European Court of Justice gave judgment setting aside a ruling of the European Court of First Instance in an appeal brought by Impala, a third-party complainant, against the clearance of the SonyBMG joint venture by the European Commission in August 2004. The CFI’s judgment was the first (and so far, the only) time the CFI had overturned an unconditional merger clearance decision under the EC Merger Regulation.

As the ECJ Advocate General noted, the appeal presented the EU’s highest court with an opportunity to develop its case law in the field of merger control, in particular with regard to the extent of investigation and reasoning required of the Commission when it approves a merger transaction. Merger cases are only rarely considered by the ECJ and this judgment, which was delivered by a Grand Chamber of 13 judges, has emphasized a number of important procedural safeguards for parties to mergers, which had been called into question by the CFI’s earlier ruling." [GlobalCompetitionPolicy]

The Court of Justice sets aside the Judgment of the Court of First Instance relating to the Sony BMG Joint Venture July 10th, 2008
"The Court of First Instance committed errors of law in concluding that the Commission’s decision approving the joint venture was vitiated by manifest errors of assessment and was inadequately reasoned.

The following is an excerpt of the ECJ's judgment. To read the entire judgment on the ECJ's website, click on the URL link in the column on the left.

On 19 July 2004, the Commission approved the concentration of the global recorded music businesses of Bertelsmann AG and Sony (with the exception of Sony’s activities in Japan) into three newly-created companies to be operated under the name Sony BMG." [GlobalCompetitionPolicy]

IES Working Paper 4/2008
"One of the most important developments in EC competition policy during 2006 was the Court of First Instance’s (CFI) Impala v. Commission judgment annulling the European Commission’s approval of the merger between the music units of Sony and Bertelsmann. It harshly criticized the Commission’s Decision because it found that the evidence relied on was not capable of substantiating the conclusion. This was the first time that a merger decision was annulled for not meeting the requisite legal standard for authorizing the merger. Consequently, the CFI raised fundamental questions about the standard of proof incumbent on the Commission in its merger review procedures. On July 10, 2008, the European Court of Justice overturned Impala, yet it did not resolve the fundamental question underlying the judicial review of the Sony BMG Decision; does the Commission have the necessary resources and expertise to meet the Community Court’s standard of proof? This paper addresses the wider implications of the Sony BMG saga for the Commission’s future handling of complex merger investigations. It argues that the Commission may have set itself an impossible precedent in the second approval of the merger. While the Commission has made a substantial attempt to meet the high standard of proof imposed by the Community Courts, it is doubtful that it will be able to jump the fence again in a similar fashion under normal procedural circumstances." [IES]

EU Commission: Competition - 30/06/08

Impala appeals Sony BMG decision: Says European Commission made errors
“ European independent music companies trade association Impala has launched another appeal with the European Commission contesting regulators' clearance of the Sony BMG merger. Brussels-based Impala said Monday that it lodged an appeal on Friday with the EC's Court of First Instance in Luxembourg, in which it challenges the EC's unconditional authorization of the recorded music joint-venture.” [AdamArgitWagner]