Michaël Majster, founding companion at Paris-based Majster & Nehmé and a 30-year authorized veteran, described the data-related fears as stemming “extra from fantasy or paranoia than from a concrete, reasonable, and rational evaluation”.
Throughout his profession, Majster has represented each multi-platinum and rising artists in France, plus outstanding impartial file labels and distributors, and a significant music writer. He has not represented UMG or Downtown.
He’s rated within the prime tier of music regulation practitioners in France by the industry-standard Décideurs Leaders League.
In July, some 200 workers of impartial music firms and commerce our bodies signed a letter citing information considerations about UMG’s potential acquisition of Downtown subsidiariesFUGA and Curve Royalty Methods.
The letter contended that UMG’s possession of those subsidiaries would grant it entry to delicate information from impartial labels, akin to “distribution data – together with artists and tune developments, and efficiency on digital platforms [plus] essential enterprise data akin to pricing, contractual phrases and strategic relationships”.
Majster argued that a lot of this information is already “simply publicly out there or accessible” by current market intelligence companies.
“I don’t see how this Downtown information offers any perception that UMG doesn’t have already got.”
Michaël Majster, Majster & Nehmé
“You’ll be able to see the variety of streams for every title on Spotify, for instance,” he famous, including that labels routinely use specialised instruments like Luminate and Chartmetric for in-depth market evaluation.
“When [I’m] negotiating on behalf of artists with a significant like UMG it’s clear to me that [Universal] already has extremely refined instruments that permit it to grasp the music market and all market developments,” Majster mentioned.
“Buying Downtown won’t change the state of affairs considerably on this respect.”
Europe’s competitors regulator confirmed in July that it had opened an in-depth (Section 2) inquiry into UMG’s proposed $775 million acquisition of Downtown, following an preliminary Section 1 investigation.
The EC has cited preliminary considerations that the transaction could permit UMG to “scale back competitors within the wholesale marketplace for the distribution of recorded music within the European Financial Space by buying commercially delicate information of its rival file labels.”
The unique November 26 deadline for the investigation’s completion was not too long ago prolonged to December 10.
Addressing particular considerations about UMG accessing artist royalty information through Curve Royalty Methods, Majster questioned the sensible worth of doing so for the main.
“I don’t perceive how the info mirrored in artists’ royalty statements may very well be of any curiosity in any way to a label [considering signing them],” he mentioned.
“If you enter into negotiations with an artist — whether or not by their supervisor, their lawyer, or immediately with the artist — you may merely request this data,” Majster mentioned, noting that competing labels often obtain the identical data concurrently throughout bidding wars.
“Negotiations are primarily based extra on what an artist needs to attain sooner or later, which isn’t essentially correlated with what they’ve already of their contracts.”
“I don’t perceive how the info mirrored in artists’ royalty statements may very well be of any curiosity in any way to a label… If you enter into negotiations with an artist, you may merely request this data.”
Michaël Majster, Majster & Nehmé
Addressing fears about UMG utilizing Downtown or FUGA’s information to determine rising artists and signal them forward of impartial labels, Majster was skeptical.
“The whole market has a lot entry to information,” he mentioned. “They’ll all see the streams on a weekly foundation of each tune on the earth in each nation.
“I don’t see how this Downtown information offers any perception that UMG doesn’t have already got.”
He pointed to current major-owned distribution companies – Sony‘s the Orchard, Common’s Virgin Music Group, and Warner‘s ADA – as proof.
“If the [internal partner label] information from a distributor was so necessary, then we might have already seen the disruptive results on the enterprise of the majors utilizing their information from, for instance, The Orchard, Virgin [Music Group], and ADA to benefit themselves. Has anybody actually felt that?”
Common has proposed buying Downtown (plus FUGA and Curve) by its indie-servicing division, Virgin Music Group (VMG).
Earlier this yr, VMG co-CEOs JT Myers and Nat Pastor addressed inner information safety considerations in a letter to workers, stating: “Betraying the belief our purchasers have bestowed on us could be self-destructive: they might shortly, and fairly rightly, finish the connection. Which is why we’re proud to say that because the day we entered this enterprise, we have now by no means had a single grievance of misuse of consumer data of any form.”
Majster emphasised that any information misuse by a Downtown-owning UMG would set off extreme penalties: “Any misuse of this information would trigger vital reputational injury and will end in extreme sanctions from the competent authorities within the varied European international locations.”
He famous that such information would sometimes fall beneath GDPR protections in Europe, and would possible be lined by confidentiality agreements between Curve and its purchasers.
Crucially, he famous the absence of documented circumstances of main labels misusing distribution or companies information thus far. “By no means!” he acknowledged when requested about such cases over the previous decade, including that considerations round potential UMG information misuse seem to lack particular examples of problematic practices.
“No particular circumstances are given [by critics of the Downtown deal] for instance these fears or any probably problematic practices,” Majster noticed.
UMG has maintained confidence that its Downtown acquisition will create “an improved providing within the rising and extremely aggressive label companies class.”Music Enterprise Worldwide
