Essential’s Chadwick Corrects Grainge’s Statement To US Senate Judiciary

Essential Music & Marketing MD Mike Chadwick has issued a statement to the US Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights taking issue with Lucian Grainge selectively quoting him to support the Universal/EMI merger.Grainge quoted selectively from an expansive interview Music Week magazine held with Mike Chadwick earlier in the year, to argue that Chadwick felt the merger was a positive step for the business – whereas in fact, Chadwick's interview offered a more balanced view in which he questioned whether the merger would be good for the music business and stated that he found huge conglomerates “a bit scary”.Chadwick’s new statement clarified that while Essential (which is a sales, distribution and services company and part of the Cooking Vinyl group) tends not to compete on label or artist signings with Universal or EMI, he was clear that the concentration of market power that would result from the merger would be a negative step for the industry and for independents.Said Chadwick: “My considered view is the increase in market share and market power of the merged company would give it too much leverage with important gatekeepers such as radio, TV, music magazines and other media, as well as across retail. Therefore, although the transaction could free up certain artists, given Universal's enhanced market power, those artists would have significant difficulty in accessing media and commercial outlets on level terms. A merger would also enhance Universal's ability to abuse its dominant position in the emerging digital market and this would be certain to disadvantage independents in their ability to compete across the world” Chadwick’s statement in full:STATEMENT BY ESSENTIAL MUSIC & MARKETING MD MIKE CHADWICKLucian Grainge's testimony to the Subcommitee on Antitrust, Competition Policy and Consumer Rights last week contained a selective quote from an expansive interview I gave Music Week magazine in the UK earlier this year. Mr Grainge suggested that I believed the proposed merger was a positive step for the business. In fact, my interview offered a view in which I questioned whether the merger would be good for the music business.To clarify further, my company is a sales, distribution and services company and tends not to compete on label or artist signings with Universal or EMI, however I nevertheless believe that the concentration of market power that would result from the merger would be a negative step for the industry and for independents.My considered view is the increase in market share and market power of the merged company would give it too much leverage with important gatekeepers such as radio, TV, music magazines and other media, as well as across retail. Therefore, although the transaction could free up certain artists, given Universal's enhanced market power, those artists would have significant difficulty in accessing media and commercial outlets on level terms. A merger would also enhance Universal's ability to abuse its dominant position in the emerging digital market and this would be certain to disadvantage independents in their ability to compete across the world.About Essential Music & MarketingEssential Music & Marketing has been redefining the roles of distributor and record label since its inception in 2003 by Mike Chadwick, former MD Vital Distribution and Martin Goldschmidt, owner of Cooking Vinyl Records.Essential is part of the Cooking Vinyl group, which comprises of Cooking Vinyl Records, Essential Music & Marketing and Cooking Vinyl Music Publishing, which is run by Paul Kinder, a former director at Chrysalis.   Essential expanded into North America in late 2011 by opening an office in New York, run by Erik Gilbert.www.essential-music.com