{"id":235312,"date":"2025-07-02T19:25:13","date_gmt":"2025-07-02T18:25:13","guid":{"rendered":"https:\/\/www.musicbusinessworldwide.com\/?p=235312"},"modified":"2025-07-02T20:27:59","modified_gmt":"2025-07-02T19:27:59","slug":"european-composer-songwriter-alliance-urges-eu-to-block-umgs-acquisition-of-downtown","status":"publish","type":"post","link":"https:\/\/www.musicbusinessworldwide.com\/european-composer-songwriter-alliance-urges-eu-to-block-umgs-acquisition-of-downtown\/","title":{"rendered":"European Composer & Songwriter Alliance urges EU to block UMG’s acquisition of Downtown"},"content":{"rendered":"

The European Composer & Songwriter Alliance<\/strong> (ECSA<\/strong>) issued an open letter to the European Commission on Wednesday (July 2) urging it to block Universal Music Group\u2019s planned acquisition of Downtown Music Holdings.<\/p>\n

The ECSA is an umbrella group of around 55 composer and songwriter associations in more than 25 European countries.<\/p>\n

\u201cAs the music market is already dominated by a handful of global players, the acquisition of Downtown Music would hinder fair competition across the music value chain and reduce the freedom of choice for composers and songwriters,\u201d ECSA wrote.<\/p>\n

\u201cWhile fair competition allows our members to make a choice between different publishers who can offer various services\u2026 at different rates, the acquisition of Downtown would exacerbate market concentration and further reduce the options available to composers and songwriters.\u201d<\/p>\n

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In April, the European Commission announced an initial investigation<\/a> into the deal under the EU Merger Regulation (EUMR). Although the value of the transaction didn\u2019t meet the EU\u2019s threshold for a competition investigation, it went ahead with it after a request from the Netherlands and Austria, whose national laws do allow for a probe of acquisitions of this size. UMG trades on the Euronext exchange in Amsterdam.<\/p>\n

In an update filed last month, the European Commission said it would issue an initial assessment<\/a> of the acquisition by July 22.<\/p>\n

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UMG’s Virgin Music Group announced last December<\/a> that it plans to acquire Downtown for USD $775 million<\/strong> (approximately EUR \u20ac737 million<\/strong>). Downtown has been purely a music services company ever since it sold its portfolio of music rights<\/a> to Concord<\/strong> for around $400 million<\/strong> in 2021.<\/p>\n

The company\u2019s core divisions include Artist & Label Services, Distribution, Royalties & Financial Services, and Music Publishing. Its portfolio of businesses includes distributors FUGA<\/strong> and CD Baby<\/strong>, Downtown Artist & Label Services<\/strong>, Curve Royalties<\/strong>, Downtown Music Publishing<\/strong><\/a> and Songtrust<\/strong>.<\/p>\n

“The acquisition of Downtown would exacerbate market concentration and further reduce the options available to composers and songwriters.\u201d<\/p>\n

European Composer & Songwriter Alliance<\/span><\/p><\/blockquote>\n

The ECSA argues that bringing Downtown\u2019s businesses under the UMG umbrella would \u201camplify the influence of UMG\u201d over collective management organizations (CMOs) and increase its ability to negotiate preferential rates with music streaming platforms, \u201cwith significant impact on other music companies and cultural diversity as a whole.\u201d<\/p>\n

It also used\u00a0the letter<\/a>\u00a0to criticize UMG\u2019s push for streaming services to shift to\u00a0an \u201cartist-centric\u201d payment model<\/a>, which, in general, reduces streaming royalty payments on tracks with low stream counts and rewards popular tracks and frequently searched-for artists.<\/span><\/p>\n

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Advocates of the artist-centric model argue that it reduces the incentive to commit streaming fraud and discourages uploading of low-quality audio tracks to skim a share of streaming royalties.<\/p>\n

The ECSA argues it results in the \u201cdemonetization of smaller creators and creat[es] a two-tier market \u2013 all without any consultation with creators and artists organizations who are directly impacted by them”.<\/p>\n

\u201cThe promise of the digital era was to create a level playing field for music creators, promoting cultural and musical diversity, and empowering artists, songwriters and composers. Instead, we are now seeing large multinationals hoovering up their competition and limiting our options and negotiation power,\u201d ECSA President Helienne Lindvall<\/strong> said.<\/p>\n

\u201cUMG acquiring Downtown would exacerbate this situation, with the corporation dominating every part of the industry, including distribution and rate setting. We urge the Commission to reverse this trend and help create a diverse and healthy music ecosystem that benefits all by blocking this deal.\u201d<\/p>\n

The ECSA also blamed the relatively small share of royalties that goes to songwriters, composers and publishers on \u201cthe major labels recording divisions\u2019 dominance over their respective publishing arms.\u201d<\/p>\n

“We are now seeing large multinationals hoovering up their competition and limiting our options and negotiation power.\u201d<\/p>\n

Helienne Lindvall, ECSA<\/span><\/p><\/blockquote>\n

By the ECSA\u2019s calculations, songwriters and publishers take a \u201cpaltry\u201d 15%<\/strong> of the royalty pie, while 55%<\/strong> goes to recording rights holders and the rest to streaming platforms.<\/p>\n

\u201cUMG\u2019s acquisition of Downtown would make it even less likely for music authors to ever get a fairer share of streaming revenues,\u201d the ECSA said.<\/p>\n

The European Commission is carrying out a \u201cPhase I\u201d investigation of the deal, in which it will determine whether or not UMGs\u2019 takeover of Downtown poses any serious competition concerns.<\/p>\n

If it determines that there are concerns, it will launch a more comprehensive \u201cPhase II\u201d investigation, which can end with a move to block the deal, or allow it to go forward, with or without conditions.<\/p>\n

The EC\u2019s statistics show<\/a> that around 90%<\/strong> of all cases are \u201cresolved in Phase I, generally without remedies,\u201d meaning that only about one in 10 cases move forward to Phase II.<\/p>\n

In a statement to MBW<\/em> in April, UMG said<\/a> it is \u201cconfident that we will close this acquisition in the second half of the year, on its original timeline.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The ECSA is an umbrella group of around 55 composer and songwriter associations in more than 25 European countries<\/p>\n","protected":false},"author":46,"featured_media":235316,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[75308,105564,371,134367,269],"class_list":["post-235312","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-downtown-music-holdings","tag-ecsa","tag-european-commission","tag-helienne-lindvall","tag-universal-music-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/235312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/users\/46"}],"replies":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/comments?post=235312"}],"version-history":[{"count":15,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/235312\/revisions"}],"predecessor-version":[{"id":235374,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/235312\/revisions\/235374"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media\/235316"}],"wp:attachment":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media?parent=235312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/categories?post=235312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/tags?post=235312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}