The European Composer & Songwriter Alliance is the latest organisation to call on the European Union to block Universal Music’s deal to buy Downtown Music Holdings.
The organisation, which represents more than 30,000 professional songwriters and composers from 59 member organisations across Europe, argues that the transaction will further “exacerbate market concentration” in the music sector and “reduce the options available” to composers and songwriters when picking their business partners.
ECSA’s arguments for why European Commission regulators currently investigating the Downtown deal should block it share many of the concerns already expressed by indie label groups, though they also set out some specific issues of concern for songwriters.
“The promise of the digital era was to create a level playing field for music creators, promoting cultural and musical diversity, and empowering artists, songwriters and composers”, says ECSA President Helienne Lindvall. But, instead, “we are now seeing large multinationals hoovering up their competition and limiting our options and negotiation power”.
Universal acquiring Downtown will “exacerbate this situation”, she adds, “with the corporation dominating every part of the industry, including distribution and rate setting”. Lindvall then urges the European Commission’s competition regulators to “reverse this trend and help create a diverse and healthy music ecosystem that benefits all by blocking this deal”.
As well as being a major provider of distribution services to independent artists and labels via its CD Baby and FUGA businesses, Downtown also provides music publishing administration services to many independent publishers and songwriters, including via its Songtrust service.
When Universal’s Downtown deal was announced last December, global indie publisher trade body IMPF noted that the various publishing focused Downtown businesses were “valued members” of the indie community, and bringing them into common ownership with Universal Music Publishing will mean “further market concentration”, and “reduce choice for songwriters and publishers alike”.
One concern about Universal’s ever increasing market dominance in the record industry is that it will make it even easier for the major to put pressure on the streaming services to change their business models in a way that disadvantages independent artists and labels. As it has already done by forcing Spotify, Amazon and Deezer to introduce arbitrary thresholds to reduce payments to grassroots artists.
When it comes to music publishing, Universal could attempt to argue that - at least as far as continental European catalogue is concerned - it is collecting societies and not music publishers that negotiate deals with streaming services.
However, ECSA cautions that Universal’s acquisition of the Downtown publishing businesses will “amplify its influence” on those collecting societies, which could impact not only on streaming but on other key songwriter revenue streams too.
Plus, the dominance of the majors on the recordings side - and the pressure they can exert on the streaming services as a result - also impacts on songwriters, and not just those who are also artists.
“Songwriters are already negatively affected by the major labels recording divisions’ dominance over their respective publishing arms”, which, ECSA says, has contributed to the “lopsided slicing” of the digital pie, so that “a paltry 15%” of streaming revenues flows to writers and their publishers, while “labels take 55%” and “the streaming companies get the rest”.
Universal’s acquisition of Downtown, and the increased dominance of the major that comes with it, “would make it even less likely for: composers and songwriters “to ever get a fairer share of streaming revenues”, ECSA argues.
The songwriter group then notes how, last year, the European Parliament called on the Commission to introduce “a European industrial strategy for music to make the EU play a role in promoting the diversity of its artists and musical works”, and to “assess the impact of the high level of concentration on cultural diversity and authors’ remuneration”, noting that “competition between music streaming providers on the European market is dominated by a few global players”.
Allowing Universal to acquire Downtown “would contradict those overarching policy goals”, it says, and would also “be detrimental to a fair, healthy and competitive European music sector”.
The European Commission announced last month that it is investigating Universal’s bid to buy Downtown. It has until 22 Jul to complete its initial investigation into the Downtown deal, at which point it could launch a more detailed phase two investigation.