So, this is interesting. The Ministry Of Sound, in their capacity as one of the UK's leading independent record labels, quit the Association Of Independent Music on Friday because of the indie trade body's support of IMPALA's previously reported decision to back the Warner Music Group's ambitions to acquire EMI.
As previously reported, earlier last week IMPALA announced it would not oppose any attempt by Warner to merge with EMI, even though that would mean further consolidation in the major label sector, something the pan-European independents body has previously objected to. It said it would back a Warner takeover of EMI because the US based major had made commitments to protect the independent sector, and to assist with the building of the new independent digital rights body Merlin.
But Ministry said on Friday that it could not support IMPALA's stand on a possible EMI Warner merger, and that it was angry that AIM had backed IMPALA without first consulting all of its membership.
In a statement Ministry Of Sound Music Group MD Lohan Presencer told reporters he was "shocked and outraged" to not to have been consulted over this decision, adding that: "The ongoing consolidation of the major music industry has impacted negatively upon our music business in every way. The previous mergers of Universal/PolyGram and Sony/BMG have dramatically affected our level of support at retail, access to media, ability to license major owned catalogue for our compilations, and pricing. As the largest independent record company in Europe we were shocked not to have been consulted over this decision, nor were we kept informed of the negotiations between IMPALA and Warner Music. We feel so strongly about this issue that we cannot allow ourselves to be associated with this support in any way, and as a result have resigned our membership of AIM".
On Warner Music's commitments to help the indie sector in return for their support, he continued: "As far as we are concerned IMPALA support appears to have been bought by Warner in order to avoid the costly legal implications of another long winded merger investigation by the European Commission. On top of that we believe that any concessions made by Warner are in effect rhetoric and in reality impossible to enforce on a day-to-day operational basis. The music industry is a very fast moving business and should Warner choose not to honour its commitments, recourse through litigation is impractical, slow and too expensive for any independent to undertake".
Meanwhile, speaking to Billboard, he disputed claims by Beggars Group chief and IMPALA Chair Martin Mills that a market with three equally sized majors is better for the independent sector than the current situation of two giant and two smaller major record companies. Presencer: "Two smaller businesses combining doesn't necessarily make a major competitor to Universal, but that consolidation does [mean] they will have more power to leverage against smaller businesses. So I don't think it works up, but it impacts down".
Responding to Ministry's decision to quit her association, AIM chair Alison Wenham said in a statement on Friday: "Not everyone will always agree with positions which are taken on the issues affecting the market, and all companies are entirely at liberty to exercise their own views in whichever way they choose. Nothing has ever prevented others from taking their own position in respect of Warner EMI, or any other music industry merger in front of the Commission over the past seven years".
AIM stress that the majority of the indie labels they represent do back the IMPALA stand on EMI Warners, but Presencer, who plans to represent his company's opposition to any EMI Warner deal directly to the EU (should a formal acquisition be attempted), has said that any other independents who "feel they've been unfairly represented" should get in touch with him, confirming he would consider forming a new independents trade body if enough labels thought it necessary.