Pending major label mergers kept the music industry rumour mill afloat in 2003. Renewed interest in the further consolidation of the music industry followed a 2002 European Court ruling over a merger within the travel industry. EU competition regulators had initially blocked a move that would see the travel industry dominated by three key players - but European Courts overruled that decision. That convinced senior execs at the major record companies that EU competition regulators would no longer be able to block the consolidation of the music industry to four major players like they had in 2000 when EMI and Warners had proposed a merger. And so every combination of major label merger started to be proposed from those inside and outside the record companies.
Everyone initially thought that any merger would involve Warner Music - especially when the major's parent company AOL Time Warner reported huge financial problems. BMG were the first to enter negotiations with Warner bosses. When those fell through EMI started talks. But after all that talking, Warner decided to sell its music division to former Universal Music owner Edgar Bronfmann Jnr, who made a last minute bid after failing in his attempt to buy Universal's film and TV companies.
In the end it was Sony Music, who had previously stayed out of any merger talks, who announced a merger deal. Sony will merge their recorded music operations with Bertlesmann's BMG in 2004 - assuming the assumption that EU regulators won't oppose any deal rings true. The trade body for European independent labels - IMPALA - has pledged to fight the merger all the way, so nothing should be taken as read just yet.