European Antitrust Agency 2007 Music Industry Analysis (Sony BMG Case)


Accurate, detailed and recent information about the true performance of record music companies is hard to get. So we must be thankful for the European Antitrust Agency (EEA) for publishing this analysis on their website (here).

It is about the Sony BMG merger, started in 2004 and eventually completed in 2008. This report from October 2007 presents the rationale for the approval of the deal. The EEA apparently were diligent on their mission, and investigated all possible hypotheses where the merger might cause “economic harm” (higher prices, less diversity etc.). The great thing about that is this investigation requires asking for a huge lot of internal information from the involved companies. And given the implications of the analysis, the companies actually provided the stuff. At the same time, all opposing parties to the merger were eager to provide any kind of information that could prevent it.

So the EEA guys had a lot to work on. Just an example: they collected from the four majors data related to all transactions of chart albums between January 2002 and June 2006 with their main 20 customers in the 15 affected national markets.

The end result is the 339 page report I linked above. Unfortunately, this is the “public” version: the juiciest numbers were replaced in brackets by ranges of values or even a dot.  Even so, there is still a lot of informational juice to extract from it and that what I just did.

The following series of 19 posts present the most interesting facts. Here is the full table of contents:

  1. Introduction
  2. European Majors and Independent Record Companies
  3. Defining the European Music Market
  4. Market Share per Company per Country (2006)
  5. Breakdown of Company Sales per Country (2006)
  6. European Market-share Evolution (2000-2006)
  7. The Importance of New Releases Sales Participation in Total All Sales
  8. Importance of the 20 first weeks in total sales of an album
  9. Importance of top 50 albums to Sony BMG sales
  10. Economics of New Albums
  11. Importance of Chart Albums for Sony BMG
  12. Comparison of Budget vs Sales for Top 20 Albums
  13. Origin of Recorded Music
  14. Artist Roster
  15. Analysis of the cost structure
  16. Pricing
  17. Staff Rotation
  18. Customers
  19. Investigation of theories of harm
  20. Overall analysis

Important disclaimer: I tried to keep my summary as concise as possible. For example, a statement in the original document that is ‘claimed’ by one label (a ‘notifying party’, to be exact) and then ‘accepted’ by antitrust agency is presented here as a simple statement of fact. In the same line, a “Contracting Party to the EEA (European Economic Area) Agreement” is referred as just a “country”. Anyway, in case of any doubt or controversy, the original PDF is linked above.


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