The Warner and BMG merger is looking more likely after BMG parent company Bertlesmann approached the European Commission for a test response yesterday.
EU approval is important because it was their competition commission that blocked an EMI Warners merger a few years back, and Warners won't want to go through the cost of that process again unless a victory is all but guaranteed. Major label execs hope that a European Court ruling that overturned a decision by the competition commission with regards mergers in the travel industry will make them more willing to approved a merger in the music industry. If EU approval looks likely Warners will have to start talking to US competition regulators.
If a Warner/BMG merger did take place the new conglomerate would control a massive 32% of the music market in the US and 20% in Europe, becoming the biggest music company by far.
If it does go ahead word is the six main labels owned by the two groups in the US (Warner Brothers, Elektra, Atlantic, RCA, Arista and Jive) would be squeezed into four – inevitably dropping many bands in the process.
It is likely Warners would take the lead in any merged music company, with Bertlesmann concentrating on its publishing ventures.