Back to that IMPALA agreement, and as the UK's Association Of Independent Music meets again this week to discuss the previously reported opposition among some of its membership to the recently announced agreement between the pan-European trade body and Warner Music, Germany's independent labels body VUT has given the indie/major alliance its backing.
As you no doubt remember, in the agreement, IMPALA have said they will not oppose a Warner takeover of EMI, should one be attempted, in return for undertakings by Warner to aid the indie sector and especially its new digital rights venture Merlin. The deal, announced on 20 Feb, surprised many in the independent sector who had not been consulted about the alliance, with two UK labels, Ministry Of Sound and Gut, resigning from AIM, an IMPALA affiliate, in protest. Ministry have gone further by demanding that IMPALA release all documentation relating to the deal, while claiming AIM is constitutionally bound to oppose any deal that enables further consolidation in the major label sector.
One of Ministry Of Sound's objections to the IMPALA/Warner deal is the secrecy that seems to have surrounded it, and one of the people they said had been kept in the dark about the whole thing was Konrad von Lohneysen, who represents the independent sector on the German division of labels trade body IFPI. However, the body that specifically exists to represent the same indie labels, VUT, announced on Friday that its board had voted to back the IMPALA/Warner arrangement.
The German trade body's president, Mark Chung, said the specifics of the IMPALA/Warner deal, which remain confidential and have so far not been shared with those UK indies who oppose it, are attractive, and beneficial to the interests of the wider independent sector. The deal is known to include Warner support for Merlin, which makes the deal more attractive for those indie labels who hope to benefit from the new cross-sector digital rights venture. But Chung stressed that the Merlin benefits are not the be all and end all of the Warner agreement.
According to Billboard, Chung said: "It goes without saying that considerable funds are required to make Merlin powerful and effective, [but we] would have accepted this contract even without that financial support [because Warner] accepts a model in which the independents are strong, competitive players in the market and therefore better partners".
Whether the UK's AIM can offer similar backing remains to be seen. IMPALA issued a statement on Friday which indirectly knocked back Ministry's demands that all documentation relating to the IMPALA/Warner deal should be shared with the members of all affiliated indie trade bodies. As previously reported, Ministry have said they will not discuss the matter further until such documentation is made available, and available without having to sign what they describe as the overly restrictive non-disclosure agreement Warner have forced all participating representatives into signing so far. But IMPALA said in a statement on Friday: "The Board of IMPALA has decided, in its judgment of the best interests of its members, to limit any further circulation or disclosure of the Warner agreement until such time as the parties agree that it may be fully publicly disclosed, and further fully informed discussion is possible. IMPALA is continuing the process of consulting with local associations, and accepts that this may mean that certain of them nonetheless may not be able to confirm their position until full disclosure is possible".
Of course, as Ministry, the most vocal opponents to the IMPALA/Warner deal, have said they are resigning from AIM anyway, it may be that the UK body will be able to give the deal its formal backing, despite there being opposition within the UK indie sector. Unless, of course, Ministry can, as they have kind of implied, take legal action against the association to force them to block the IMPALA/Warner arrangement, on the grounds that backing the deal would go against the constitution that founded the trade body.
Should the AIM board decide to back IMPALA despite opposition within, and assuming Ministry do not or cannot take legal action to force the trade body to do otherwise, it will be interesting to see if Ministry bosses can form an alliance with other dissenting indies and other bodies against further major label consolidation (likely to include some artist managers, indie publishers and retailers) and successfully block an EMI Warner deal without IMPALA. If so, the IMPALA/Warner deal becomes pretty redundant anyway because, as far as we're aware, Warner's commitments to the indie sector and Merlin only kick in if and when an EMI Warner deal is completed. (And, of course, given our top story today, this whole dispute might be redundant anyway - it is not a foregone conclusion there'll be an EMI Warner merger either way).