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THE BUSINESS OF MUSIC www.musicweek.com


BIGINTERVIEW 12


The ex-N-Dubz man on going solo, his label and confounding industry expectations


Q&A 18


Having registered fresh success in the US, Ellie Goulding returns with her new album Halcyon


05.10.12 £5.15 21 PROFILE In-depth profile of the


influential publishing company you may never have heard of


BUYERS CIRCLING UMG/EMI DIVESTMENTS • INDIES REACT TO PIAS ACQUIRING CO-OPERATIVE MUSIC


Let the sell-offs commence T


MERGERS  BY TIM INGHAM


he first divestment sell- offs from Universal’s £1.2bn purchase of EMI


are due to be publicly confirmed within the next week, Music Week understands – with PIAS’s buyout of Co-Op already a done deal. Other assets on the table


include Parlophone and a 50% interest in the Now! brand in Europe – with Sony, Warner, BMG and Ministry Of Sound rumoured to be interested. In an open letter last week, a


number of Co-Op label partners hit out at the PIAS acquisition. Label bosses such as Heavenly Recordings’ Jeff Barrett and Lucky Number Music’s Stephen Richards warned that the deal meant “a key independent player on the music market being simply shot down by another” with the result that “choice will


be restricted in the future and businesses will suffer from it”. One name conspicuous by its


absence on the letter was Bella Union founder Simon Raymonde, who currently works with Co-Op and says he wasn’t consulted. He told Music Week: “I have been since last year discussing extending my agreement with Co-Op when it ends in December. That is currently still the position.” Other senior execs in the independent scene have given Music Week their thoughts on the PIAS deal, with the majority remaining unconcerned – though complaints have arisen from parties who believe rivals


“I think the creation of what might be termed a ‘super-indie’ could create strong competition to the majors’ alternatives and better leverage in a market with fewer customers” ADRIAN SEAR, DEMON MUSIC GROUP


weren’t given a fair chance to bid for Co-Op and other divestments. Demon Music Group


commercial director Adrian Sear told Music Week: “While I understand the frustration of independent labels to see a good company like Co-Op effectively


leave the market by this purchase, I believe PIAS to be a good distributor/partner. “I think the creation of what


might be termed a ‘super-indie’ could create strong competition to the majors’ alternatives and better leverage in a market with fewer customers and tougher retail/ digital terms. “Having said that, I would hope/expect that PIAS will continue to support the smaller indies and address the concerns of those that need financial help that was so prevalent with Co-Op.” Union Square Music founder


Peter Stack added: “I can see a lot of sense in it. PIAS are a


good company with a very strong independent ethic – if they apply that to Co-Op it will be in safe hands.” Absolute Marketing MD


Henry Semmence said: “There aren’t many people that could buy Co-Op and handle that business. PIAS were one of the few realistic options – just as there seems to only be a few realistic options for all of the assets being divested.” Essential Music and


Marketing MD, Mike Chadwick, said he did have concerns over PIAS’s subsequent market share following the Co-Op deal. However, he added: “On one


level, Co-Op being taken out of the market is good for [PIAS’s rivals]. It means one less competitor and one more space for other companies to move into.” PIAS insiders suggest that


the company is not planning to shed senior Co-Op managers following the buyout.


UK market to become centre of attention for Universal/EMI divestments


Universal’s EMI divestments will hit its new purchase’s operations most heavily in the UK, according to Music Week research. While EMI’s businesses in


the world’s top three music markets of the US, Japan and Germany will stay virtually intact, acts, labels and brands behind more than 40% of EMI’s UK album sales over the past 18 months will have to be offloaded to other companies to satisfy EC conditions.


European regulators last


month told Universal that it would have to sell off a long list of assets, including Parlophone but without the catalogues of The Beatles as a group and individuals, as a condition of it approving its $1.9bn (£1.2bn) takeover of EMI. Those divestments will be


most significantly felt in Europe, where EMI has a greater share of recorded music sales than in markets such as North America,


and in particular within its heartland of the UK. Exclusive Music Week analysis reveals that Universal will have to let go the artists and assets who delivered around 44% of EMI’s UK album sales in the 18 months to the end of June this year, according to Official Charts Company data. Artists behind six of EMI’s 10


biggest-selling artist albums in the UK over this period will be heading to rivals, including Coldplay, Tinie Tempah and


Kate Bush. It must also let go the artists responsible for six of the major’s 10 top singles during this time, five of which came from French superstar DJ David Guetta whose new deal with EMI was only announced in early July, just shortly before it emerged this would have to be torn up to satisfy EC regulators. Among the sell-offs that


shone the brightest during the 18 months were Pink Floyd’s catalogue, which was subject over


this time to a remasters overhaul, and EMI’s 50% share of the hugely-successful Now! compilation brand. Although the sell-offs will be


particularly painful to Universal, it does get to keep in Emeli Sandé the act behind the year’s biggest artist album in the UK. Her Virgin Records debut Our Version Of Events has to date sold around


735,000 copies domestically. See Music Week Business Analysis on pages 12 to 14


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