running a small record label ? maybe the EU wants to send you a questionnaire. http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT33ZOA41BC EU poses merger questions By Deborah Hargreaves in Brussels Published: July 23 2000 21:15GMT | Last Updated: July 24 2000 09:45GM The European Commission is asking small record companies how effectively they can compete in a rapidly consolidating market. A second round of questionnaires has gone out to independent record groups as part of the Commission's inquiry into the mergers of AOL with Time Warner and the EMI and Time Warner music businesses. The questionnaire asks companies how many artists they are bidding for and whether they can compete for all types of artists. It also asks how much money independents spend on promotion and whether they can adopt the same strategy as the majors. The Commission is investigating market share in the industry and whether it is possible for independent companies to increase market share by offering discounts and promotions. The independents have argued that they will be disadvantaged in a market dominated by a few huge players with enormous marketing and promotional budgets. Philippe Kern, secretary general for Impala, the independent music companies' association, said that the latest consolidation could leave the three giants with 90 per cent of the music distribution. At the same time, 60 per cent of CDs are sold in hypermarkets which stock about 200 titles compared with around 200,000 titles in a traditional record store. He said only the large companies could buy shelf space in hypermarkets and the majors also dominated radio and TV advertising. EU antitrust officials are trying to establish whether the market for downloading music from the internet is separate from sales made in stores. Mr Kern believes that downloading from a website is not a new market sector as it will substitute for sales in shops. "The internet is a way for smaller companies to compete with the majors," he said. "But if the Commission allows consolidation without safeguards, this opportunity would be denied them."
