Universal Music Group (UMG) has now acquired 100% of [PIAS] – Independent sector not exactly happy and wants investigation
Universal Music Group (UMG) has now acquired 100% of [PIAS]
Universal Music Group (UMG) has completed its acquisition of 100% of the independent music giant [PIAS], a deal met with mixed reactions from the independent sector as you will read below. UMG, the world’s largest music company, first acquired a 49% stake in [PIAS] in 2022, but as of October 15, 2024, it now holds full ownership.
Impala, a representative body for over 6,000 independent music companies across Europe, voiced its unease in a mail sent out earlier today. Helen Smith, Executive Chair of IMPALA, expressed concerns about UMG’s growing market dominance, noting that the acquisition leaves a “huge hole” in the independent sector.
With [PIAS] no longer classified as an independent company, the loss of one of the sector’s key players could limit options for both artists and labels seeking alternatives to the major label system. Smith also pointed out that UMG had previously been restricted from making major acquisitions by the European Commission following its 2012 purchase of EMI, a restriction that has since expired.
Smith expects regulators to investigate the acquisition “and answer the question the industry is asking about how it is possible for UMG to gain more market share after it was already considered too big. We would expect both physical and digital markets to be assessed including for distribution services, as well as the impact on competitors, digital services, artists and fans. A share deal is one thing, this is something else.”
Impala chair Dario Draštata added: “This type of creeping power is an issue across Europe. Apart from strengthening UMG in terms of market share, it eliminates a principal competitor and should be investigated. It also narrows options for artists and labels. It is not a question of an arithmetical increase of market share points by one major, but rather a sea change in the competitive dynamics of the music market, to the severe detriment of competitors and consumers. Sony has been doing the same and we see similar moves in Central and Eastern Europe with Warner Music Group buying stakes in several leading independent music companies across the region. The loss of such big players for the independent sector compounds the competitive impact and the risk is that this trend will continue. We have been signalling the problem of creeping dominance for many years and it’s time for a new competition approach to address this question.”
New strategies and finances for indie sector
Impala also points to ongoing work on innovative solutions on the finance side to provide independents with different options, as well as opportunities to develop new approaches.
Smith adds that Impala want to see more independent companies like [PIAS] not fewer. “We need a revamp of exit strategy options, new solutions to access finance, provide tax incentives and grow our market share. A review of whether competition is fit for purpose in today’s music market is also in order, and proper solutions for issues like the RAAP case. Above all, it’s about a combination of strategies that put diversity at the top of the pyramid. There are plenty of solutions and we urge the whole market to join us on this exercise. It is credit to Michel and Kenny that the [PIAS] example is the springboard to re-opening these discussions.”
Despite the concerns, some also see potential opportunities. Kenny Gates, co-founder of [PIAS], reassured that while UMG now owns the company, [PIAS] will remain operationally autonomous, maintaining its independent ethos. Gates also referred to UMG’s resources and global reach, saying that the acquisition would help [PIAS] and its artists continue to grow on a global scale, without compromising their core values.
About Impala
Impala was established in 2000 and now represents over 6000 independent music companies in Europe. 99% of Europe’s music companies are small, micro and medium businesses and self-releasing artists who produce more than 80% of all new releases and account for 80% of the sector’s jobs.
Impala’s mission is to grow the independent music sector sustainably, return more value to artists, promote diversity and entrepreneurship, improve political access, inspire change, and increase access to finance.
Impala works on a range of key issues for its members, runs various award schemes and has a programme aimed at businesses who want to develop a strategic relationship with the European independent sector – Friends of IMPALA.
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