It to the integration into a larger whole

A week of the decision of the Commission on the purchase of BMG Publishing project, activity Edition Bertelsmann music, Universal Music, a subsidiary of Vivendi, Patrick Zelnik, President European Union Impala, which brings together producers and Naïve independent European and Isabelle Wekstein, lawyer of the Union, return on the reasons for their opposition to the marriage.

Project for the purchase of BMG Publishing by Universal Music, the European Commission seems to be moving toward a thorough investigation. Do you have the feeling to be heard by the Commission

Isabelle Wekstein. Yes. It has the feeling that the European Commission intends to make a thorough analysis of this record, which is complex. In particular, the sending of questionnaires shows that she questioned some of the players in the market and that it merely not simple responses made by Universal Music and BMG Publishing. These two groups including indicate that this reconciliation project poses no problem, because their respective market shares are small.

Why you just feel that this project of fusion beyond simple marriage of the numbers three and four of the sector

I. W. Because BMG Publishing and Universal Music market share is not simply measured by income generated by their respective catalogues. The size of the catalogue, its nature, its international character, the control of all the rights Edition and production in some cases provide a catalog of publishing that it acquires a value well beyond the amount of generated from this catalogue.

Beyond market shares, that should be taken into account

I. W. It must also take into account the concept of market power, which is different from that of market share. In 2000, in the consideration of the proposed merger between EMI and Warner Music, the Commission, very sustained at the time in this reasoning by Universal Music, had said clearly that the market power of the entity that was created by this reconciliation would be far superior to its single market share. Because there is a multiplier effect, due to the so-called "negative" rights When it controls the rights Edition of multiple catalogs, a company has a very important power to dismiss these rights to third parties by allowing or denying their use as it sees fit. By controlling for example that a part of the work, it has power over all the work. These negative rights give it power beyond mere market share. On the other hand, this fusion of the Edition must be put in perspective with the position of Universal Music in recorded music, namely that of world number one to the disk. Do not disconnect the production of the Edition. Holdings of works are most of the time, outside concerts, via exploitation of recorded music, such as synchronization, the marketing of CD, sound or audiovisual broadcasting. Gold being the world leader in phonographic production would necessarily enhance the market power of the combined entity, which would also become world number one for the Edition.

To defend their project, Universal Music and BMG Publishing say that the publishing market is less concentrated than that of production, and therefore much more competitive with a multitude of very dynamic players. Are you disputing this analysis

Patrick Zelnik. It takes less investment in effect to create a company as a production company, hence more competitive appearance and the presence of more independent in a market which is more heritage. That said, do not watch this market at a given time, but consider it in time. Today shows that the majors of the disc have created their publishing companies to diversify production to editing, and they put a lot of money. However independent publishers less money than they have to attract artists, hence the position of these majors, are present in production.

I. W. The majors also require songwriters under contract of production that they repatriate home their rights for editing.

You then raise the problems of vertical integration

I. w. Yes. Cannot understand this merger Edition-only level, cannot be the disconnect from the rest. It to the integration into a larger whole. In the Vivendi group, there are also mobile telephony with SFR, television and film with Canal and StudioCanal, games with Vivendi Games.

P. z. Vivendi has huge entertainment market, that should be taken into account. By example, if the income is so-called "synchronization", i.e. the operation of the copyright for the advertising, television or cinema, this implies, on the one hand, the producer, holder of the registration rights and on the other, the editor. Holding both production and publishing rights to control the rights of all the links in the chain for farms which generate much income. You can also promote the exploitation of its catalogue in the media.

Are you also worried for diversity

I. W. In General, the concentrations lead to less diversity. It is also valid for the Edition. Whatever else the number works or recordings that exist, the qualitative supply with and the reality of what is really operated. Publishers sign with less authors and will focus on the most profitable of them.