Essential's Mike Chadwick Clarifies His Position on Universal-EMI

Merger With Senate

Mike Chadwick managing director of UK-based Essential Music & Marketing has
contacted the US Senate antitrust subcommittee to clarify his stance on the proposed
merging of Universal Music roup and EM!" according to Music #eek$
%uring last week&s Senate hearing e'amining the deal" Chadwick was (uoted from a
Music #eek )&* published last month" which he&d said in part+
!s ,the proposed merger- good for us. !t&s great for us+ there are loads of middle-level
artists who are perfect for us$ !f we sell /0"000 records" !&m happy - we don&t have to sell
a million records to make a profit$
*rtists who are unhappy gravitate towards companies like us$ 1hese huge amalgamations
or mergers are really good for the indies$ #hether it&s actually good for the music
business as a whole is a different matter entirely$
2pinion+ Universal-EM! Senate 3earings 4illed #ith Misinformation" Missed
2pportunities
Chadwick&s full statement to the Senate Subcommittee" according the Music #eek"
follows$ *t press time" a rep for Universal had not granted 5illboard$bi6&s re(uest for
comment$
7ucian rainge&s testimony to the Subcommitee on *ntitrust" Competition 8olicy and
Consumer 9ights last week contained a selective (uote from an e'pansive interview !
gave Music #eek maga6ine in the UK earlier this year$
Mr$ rainge suggested that ! believed the proposed merger was a positive step for the
business$ !n fact" my interview offered a view in which ! (uestioned whether the merger
would be good for the music business$
1o clarify further" my company is a sales" distribution and services company and tends
not to compete on label or artist signings with Universal or EM!" however ! nevertheless
believe that the concentration of market power that would result from the merger would
be a negative step for the industry and for independents$
My considered view is the increase in market share and market power of the merged
company would give it too much leverage with important gatekeepers such as radio" 1:"
music maga6ines and other media" as well as across retail$ 1here fore" although the
transaction could free up certain artists" given Universal&s enhanced market power" those
artists would have significant difficulty in accessing media and commercial outlets on
level terms$ * merger would also enhance Universal&s ability to abuse its dominant Mike
Chadwick position in the emerging digital market and this would be certain to
disadvantage independents in their ability to compete across the world$