With today's EU approval of Universal's purchase of EMI and U.S. regulators expected to follow, the new realities of a music industry now 40% controlled by a single company, is sending shivers down the spines of many in the music tech community. Music licensing, particular for many of the more innovative services, just got much harder.
Universal Music already has a reputation as a tough negotiator, often demanding huge upfront payments. Now, all digital music innovation - whether a new service or just a new feature added to an existing service like Spotify or iTunes - that requires non-traditional licensing, must now make a deal with Universal. The only alternative is to launch unlicensed or without 40% of the new music sold globally.
"Universal's arrogance has paid off for them," states Beggars music group founder Martin Mills. "They have destroyed a significant competitor, and that even with these divestments their ability to dominate and control the market has reached even more unacceptable levels. Anyone trying to start a new digital service will be realizing that very soon, and we will continue to look to the regulators to monitor ongoing behaviour."