When Universal Music announced its deal to buy Downtown Music yesterday, the mega-major was keen to position the $775 million acquisition as being driven by its distribution and label services division Virgin Music Group, “one of the world’s leading partners to independent music entrepreneurs”.
Today, Beggars Group founder Martin Mills says that this is nothing more than a “cynical use” of the Virgin brand that was “once synonymous with independent entrepreneurship”, and that Universal is set on “utter dominance and control”.
That statement comes as part of IMPALA’s call for regulators to strike down the deal, saying that it expects competition authorities in key jurisdictions to investigate and block Universal’s “land grab” and that “the time has come for cutting UMG’s market position back”.
In a robust statement, IMPALA Executive Chair Helen Smith says “this is a huge market share grab by UMG and seriously reduces independent routes to market”, adding “we look to the new European Commission to set the standard internationally” by instigating an investigation into the deal.
In its announcement of the acquisition, Universal said that Virgin and Downtown together would “offer the independent music community a dynamic and innovative global infrastructure”. But this, says Mills, is just “another step on the road of UMG’s pretence to be the independents’ fairy godmother”. He then warns, “there’s a wolf under that cape”.
IMPALA, the pan-European trade group of the indie sector, has plenty of experience putting pressure on competition regulators, especially the European Union regulator, when one of the majors looks to dramatically boost its market dominance through a big acquisition. And that process has already begun with the Downtown deal, which comes almost exactly two months after Universal announced it had taken outright ownership of [PIAS], another key independent distributor in Europe.
The European Commission now has a leading role to play, according to IMPALA President Francesca Trainini. Investigating the Universal/Downtown deal is, she says, an “opportunity for the new Commission to establish a clear agenda on concentration in the music market”.
The EC’s competition regulators should also remember what happened when Universal bought the EMI record company in 2012, the trade body adds. Chair Dario Draštata explains that, back then, “UMG was forced by the EC to make the biggest set of divestments of any merger ever approved in any sector”, and there were restrictions on its digital deals and other acquisitions for ten years.
“And now UMG – still the biggest music company in the world – is acquiring one of the biggest indie distributors”, Draštata continues, “just after acquiring one of the biggest independents in Europe. This would create a fundamental shift in the competitive dynamics of the music market”.
It’s not just indie labels that are speaking out against Universal’s big Downtown deal, because Downtown also provides services to songwriters and independent publishers, including via its Songtrust business.
To that end, the IMPF - the global trade group for independent publishers - says it is “saddened and concerned” about Universal's Downtown deal. “While independent music publishing continues to grow in value internationally”, it adds, “should this sale go ahead, it will mean further market concentration, which in turn will damage the diversity of the music industry ecosystem, harm competition and ultimately reduce choice for songwriters and publishers alike”.
In its statement yesterday, Universal admitted that its Downtown acquisition was subject to regulatory approval, adding that it expects the transaction to close in the second half of 2025.
