Universal Music Claims Piracy Justifies Monopoly, Wants The Power To Control Digital Music Services

from the say-what-now? dept

Unnamed sources at Universal have briefed journalists that the competitive threat of digital piracy means consolidation should be permitted. Critics have pointed out that the merged entity's 40+ per cent market share would make it the king-maker for digital music services – and that no service would then survive without Universal's catalogue.

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In a short article discussing how European antitrust officials don't appear to be too keen on Universal Music buying up EMI , and turning Universal Music (already the largest music label) into a truly dominant player in the market, there's this little tidbit:We were just discussing how the labels were looking to turn the screws on Spotify to try to wrench even greater profits out of the still unprofitable company. But really, when you put these two sentences side-by-side, it just shows how ridiculous the major labels -- and particularly Universal Music -- are today. Because of "piracy," it needs to be able to merge to create an even larger aggregator of back catalog music... to restrict that same music from appearing on new and innovative digital music platforms, unless those platforms pay more than is reasonable.Get it? Universal Music's response to piracy is to create more piracy and limit innovation. The geniuses at the company (and, remember, this is the company whose former CEO once admitted that he was too clueless to even hire someone who might explain how modern digital technology worked -- and who not only didn't get fired for this admission, but was able to leverage his cluelessness into a new job running Sony Music last year) are basically saying that the only way they can compete with "piracy" is to so dominate the market that any company offering a music service has to do a deal on their terms, or not include its catalog. In other words, it wants veto power (and the power to extract ridiculous and unsupportable rents) on music service innovations.Of course, that's a really stupid plan for a bunch of reasons, but let's call out the two big ones. First, the company's problems are not caused by "piracy", but by a stubborn unwillingness to adapt to a changing market. Second, restricting innovation in the digital music space will actuallythe amount of infringement, by (1) making it unprofitable for most companies to be in that space and (2) limiting true innovation and the necessary competition among services that leads to the kind of new innovations that consumers want. Instead, it'll just drive them to go back to what works: open infringement.

Filed Under: digital music services, monopolies, music, recording industry

Companies: emi, universal music