Indie label collective IMPALA to challenge Tencent’s UMG purchase
European non-profit trade association IMPALA has formally announced its plan to challenge Tencent‘s potential Universal Music Group deal—a purchase of up to 20 percent of the global music corporation. The decision from IMPALA comes in light of concerns that the Tencent transaction will impact the entire music ecosystem and risk harming both consumers, independents, and competitors in the process. As a body of independent labels, IMPALA and its mission are dedicated to growing the independent music sector.
Tencent Holdings and UMG owners Vivendi began discussions of acquisition earlier this year in August. The initial sale detailed a 10 percent stake in UMG with €3 billion ($3.3 billion) valuation based on a total valuation of €30 billion ($33 billion). Undeniably the majority player in the Chinese digital music market with an estimated 80-90 percent share, Tencent not only operates China’s leading streaming services including QQ Music, Kugou, and Kuwu, but also has minority stakes in Spotify and India’s Gaana.
In regards to Tencent’s prospective UMG deal, IMPALA believes small companies and independents will be the first to lose out.
“Even at a low level of shareholding, we believe the risk of harm for consumers and competitors from such a transaction would be a concern because of the impact in both the digital market and the music sector, with independents being squeezed further and artists also losing out”, stated Executive Chair Helen Smith.
H/T: Billboard
Categories: News